-----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, QmKSaqiF1iYfd/xwjSm5A3KOG6AQYww1Hnb1VDct5PqrRH0XUxwQp2ZFpJlxSngG NINhTc8i2n3BtbItj4/Kdw== 0000897069-97-000422.txt : 19971030 0000897069-97-000422.hdr.sgml : 19971030 ACCESSION NUMBER: 0000897069-97-000422 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19971028 EFFECTIVENESS DATE: 19971028 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HENLOPEN FUND CENTRAL INDEX KEY: 0000891944 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-52154 FILM NUMBER: 97702287 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-07168 FILM NUMBER: 97702288 BUSINESS ADDRESS: STREET 1: 400 WEST NINTH ST CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 3026543131 MAIL ADDRESS: STREET 1: 400 WEST 9TH STREET CITY: WILMINGTON STATE: DE ZIP: 19801 485BPOS 1 THE HENLOPEN FUND Registration No. 33-52154 __________________________________________________________________________ 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. 6 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. 7 [X] (Check appropriate box or boxes.) _________________________________ THE HENLOPEN FUND (Exact name of Registrant as Specified in Charter) Longwood Corporate Center, Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (Address of Principal Executive Offices) (Zip Code) (610) 925-0400 (Registrant's Telephone Number, including Area Code) Copy to: Michael L. Hershey Longwood Corporate Center Richard L. Teigen Suite 213 Foley & Lardner 415 McFarlan Road 777 East Wisconsin Avenue Kennett Square, Pennsylvania 19348 Milwaukee, Wisconsin 53202 (Name and Address of Agent for Service) Registrant has registered an indefinite number or amount of shares of beneficial interest, no par value, under the Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company Act of 1940, and filed its required Rule 24f-2 Notice for Registrant's fiscal year ended June 30, 1997 on August 28, 1997. Approximate Date of Proposed Public Offering: As soon as practicable after the Registration Statement becomes effective. It is proposed that this filing become effective (check appropriate box): [_] immediately upon filing pursuant to paragraph (b) [X] on October 31, 1997 pursuant to paragraph (b) [_] 60 days after filing pursuant to paragraph (a)(1) [_] on (date) pursuant to paragraph (a)(1) [_] 75 days after filing pursuant to paragraph (a)(2) [_] on (date) pursuant to paragraph (a)(2) of Rule 485 __________________________________________________________________________ The Exhibit Index is located at page __ of the sequential numbering system. Page 1 of __ Pages THE HENLOPEN FUND CROSS REFERENCE SHEET (Pursuant to Rule 481 showing the location in the Prospectus and the Statement of Additional Information of the responses to the Items of Parts A and B of Form N-1A.) Caption or Subheading in Prospectus Item No. on Form N-1A or Statement of Additional Information Part A - INFORMATION REQUIRED IN PROSPECTUS 1. Cover Page Cover Page 2. Synopsis Expense Information 3. Condensed Financial Financial Highlights; Performance Information Information 4. General Description Introduction; Investment Objective, Policies of Registrant and Risk 5. Management of the Management of the Fund; Brokerage Fund Transactions; Capital Structure 5A. Management's Discussion Management's Discussion of Fund Performance of Fund Performance 6. Capital Stock and Dividends, Distributions and Taxes; Other Securities Capital Structure; Shareholder Reports 7. Purchase of Securities Determination of Net Asset Value; Being Offered Purchase of Shares; Automatic Investment Plan; Dividend Reinvestment; Retirement Plans 8. Redemption or Repurchase Redemption of Shares 9. Legal Proceedings * PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and * History 13. Investment Objectives Investment Restrictions and Policies 14. Management of the Trustees and Officers of the Fund Registrant 15. Control Persons and Included in Prospectus under "Capital Principal Holders Structure"; Ownership of Management of Securities and Principal Shareholders 16. Investment Advisory Investment Adviser and Administrator; and Other Services Custodian; Independent Accountants 17. Brokerage Allocation Allocation of Portfolio Brokerage 18. Capital Stock and Included in Prospectus under Other Securities "Capital Structure" 19. Purchase, Redemption Included in Prospectus under and Pricing of "Determination of Net Asset Value"; Securities Being "Automatic Investment Plan"; Dividend Offered Reinvestment"; "Retirement Plans"; and Determination of Net Asset Value; Systematic Withdrawal Plan 20. Tax Status Taxes 21. Underwriters * 22. Calculation of Per- Performance Information formance Data 23. Financial Statements Financial Statements ____________________________ *Answer negative or inapplicable P R O S P E C T U S THE HENLOPEN FUND (THE HENLOPEN LOGO) A NO-LOAD MUTUAL FUND SEEKING LONG-TERM CAPITAL APPRECIATION BOARD OF TRUSTEES ROBERT J. FAHEY, JR. Director of Real Estate Investment Banking Cushman & Wakefield of Pennsylvania, Inc. Philadelphia, Pennsylvania MICHAEL L. HERSHEY Chairman, Landis Associates, Inc. Wilmington, Delaware STEPHEN L. HERSHEY, M.D. President, First State Orthopaedic Consultants, P.A. Newark, Delaware P. COLEMAN TOWNSEND, JR. President/CEO, Townsends, Inc. Wilmington, Delaware INVESTMENT ADVISER LANDIS ASSOCIATES, INC. Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 P R O S P E C T U S October 31, 1997 THE HENLOPEN FUND (THE HENLOPEN LOGO) The Henlopen Fund (the "Fund") is an open-end, diversified management investment company -- a mutual fund. Its primary investment objective is to produce long- term capital appreciation principally through investing in common stocks. Current income is a secondary investment objective. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This Prospectus sets forth concisely the information about the Fund that prospective investors should know before investing. Investors are advised to read this Prospectus and retain it for future reference. This Prospectus does not set forth all of the information included in the Registration Statement and Exhibits thereto which the Fund has filed with the Securities and Exchange Commission. A Statement of Additional Information, dated October 31, 1997, which is a part of such Registration Statement is incorporated by reference in this Prospectus. Copies of the Statement of Additional Information will be provided promptly without charge to each person to whom a Prospectus is delivered upon written or telephone request. Written requests should be made by writing to: The Henlopen Fund, Longwood Corporate Center, Suite 213, 415 McFarlan Road, Kennett Square, Pennsylvania 19348, Attn: Corporate Secretary, and telephone requests should be made by calling (610) 925-0400. THE HENLOPEN FUND Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (610) 925-0400 THE HENLOPEN FUND TABLE OF CONTENTS PAGE NO. -------- Expense Information 1 Financial Highlights 2 Introduction 3 Investment Objective, Policies and Risk 3 Management of the Fund 5 Determination of Net Asset Value 6 Purchase of Shares 6 Automatic Investment Plan 7 Redemption of Shares 8 Retirement Plans 9 Dividend Reinvestment 12 Dividends, Distributions and Taxes 12 Brokerage Transactions 12 Capital Structure 12 Shareholder Reports 13 Performance Information 13 Management's Discussion of Fund Performance 14 Share Purchase Application 16 EXPENSE INFORMATION SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Load Imposed on Purchases or Reinvested Dividends None Deferred Sales Load None Redemption Fee None* Exchange Fee None ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets) Management Fees 1.00% 12b-1 Fees None Other Expenses 0.57% ------ Total Fund Operating Expenses 1.57% ====== *A fee of $12.00 is charged for each wire redemption. Example: 1 Year 3 Years 5 Years 10 Years - ------- ------ ------- ------- -------- An investor would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2) redemption at the end of each time period: $16 $50 $86 $187 The purpose of the preceding table is to assist investors in understanding the various costs that an investor in the Fund will bear, directly or indirectly. THEY SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. See "MANAGEMENT OF THE FUND" for a more complete discussion of applicable management fees. The Annual Fund Operating Expenses are based on actual expenses incurred for the year ended June 30, 1997. The example assumes a 5% annual rate of return pursuant to requirements of the Securities and Exchange Commission. This hypothetical rate of return is not intended to be representative of past or future performance of the Fund. FINANCIAL HIGHLIGHTS (Selected data for each share of the Fund outstanding throughout each period) The Financial Highlights of the Fund should be read in conjunction with the Fund's financial statements and notes thereto included in the Fund's Annual Report to Shareholders. Further information about the performance of the Fund is also contained in the Fund's Annual Report to Shareholders, copies of which may be obtained without charge upon request.
For the Period For the Years Ended From 12/2/92* ----------------------------------------------- 6/30/97 6/30/96 6/30/95 6/30/94 to 6/30/93 --------- -------- -------- -------- --------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $17.47 $14.68 $11.67 $11.55 $10.00 Income from investment operations: Net investment loss(a) (0.08) (0.05) (0.11) (0.07) (0.02) Net realized and unrealized gains on investments 0.58 5.10 3.31 0.64 1.58 -------- -------- -------- -------- -------- Total from investment operations 0.50 5.05 3.20 0.57 1.56 Less distributions: Dividends from net investment income - 0 - - 0 - - 0 - - 0 - (0.01) Distributions from net realized gains (2.14) (2.26) (0.19) (0.45) - 0 - -------- -------- -------- -------- -------- Total from distributions (2.14) (2.26) (0.19) (0.45) (0.01) -------- -------- -------- -------- -------- Net asset value, end of period $15.83 $17.47 $14.68 $11.67 $11.55 ======== ======== ======== ======== ======== TOTAL INVESTMENT RETURN 5.0% 38.4% 27.8% 4.9% 28.5%** RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $28,979 $26,972 $11,685 $6,798 $1,062 Ratio of expenses (after reimbursement) to average net assets(b) 1.6% 1.8% 2.0% 2.0% 2.0%** Ratio of net investment loss to average net assets(c) (0.7)% (1.3)% (1.2)% (1.3)% (0.7)%** Portfolio turnover rate 140.6% 177.5% 147.8% 63.0% 54.0% Average commission rate paid(d) $0.0578 *Commencement of Operations. **Annualized. (a)Net investment loss per share is calculated using balances prior to consideration of adjustments for permanent book and tax differences. (b)Computed after giving effect to the adviser's expense limitation undertaking. If the Fund had paid all of its expenses, the ratio would have been 3.0% for the year ended June 30, 1994 and 11.5%** for the period ended June 30, 1993. (c)The ratio of net investment loss prior to the adviser's expense limitation undertaking to average net assets would have been (2.2%) for the year ended June 30, 1994 and (10.2%)** for the period ended June 30, 1993. (d)Disclosure required for fiscal years beginning after September 1, 1995.
INTRODUCTION The Fund was organized as a business trust under the laws of Delaware on September 17, 1992. The Fund is an open-end, diversified management investment company registered under the Investment Company Act of 1940. As an open-end investment company, it obtains its assets by continuously selling shares of beneficial interest, having no par value ("Shares"), to the public. Proceeds from such sales are invested by the Fund in securities of other companies. The resources of many investors are thus combined and each individual investor has an interest in every one of the securities owned thereby providing diversification in a variety of industries. The Fund's investment adviser furnishes experienced management to select and watch over its investments. As an open-end investment company, the Fund will redeem any of its outstanding Shares on demand of the owner at the next determined net asset value. INVESTMENT OBJECTIVE, POLICIES AND RISK The primary investment objective of the Fund is to produce long-term capital appreciation principally through investing in common stocks. Current income is a secondary investment objective. Landis Associates, Inc., the Fund's investment Adviser (the "Adviser"), anticipates that most of the time the major portion of the Fund's portfolio will be invested in common stocks. The Adviser purchases common stocks which it believes will appreciate significantly over a one to two-year period. It may purchase stocks of companies having market capitalizations ranging from less than $100 million to in excess of $5 billion. The Adviser will endeavor to find companies that, regardless of market capitalization size, enjoy a strong and growing position in their market niches and might be expected to continue to benefit from ongoing industry consolidation trends. It may purchase stocks with a strong earnings momentum if it believes that such stocks will appreciate significantly over a one to two-year period. However, it may also take a contrarian position and purchase out-of-favor common stocks if it believes they will appreciate significantly over a one to two-year period. At appropriate times in the business cycle the Adviser may purchase cyclical stocks. However, not more than 10% of the Fund's net assets may be invested in securities of unseasoned companies defined as companies having a record of less than three years of continuous operation, including the operation of any predecessor business of a company which came into existence as a result of a merger, consolidation, reorganization or purchase of substantially all of the assets of such predecessor business. In selecting investments the Adviser will consider various financial characteristics of the issuer, including historical sales and net income, debt/equity and price/earnings ratios and book value. In addition to the Adviser's internal fundamental research, the Adviser may also use external information sources such as research reports of broker/dealers, trade publications, customer and competitive reference checks, and meetings with management. Greater weight will be given to company specific factors, such as product or service development, than to general economic factors, such as interest rate changes, commodity price fluctuations, general stock market trends and foreign currency exchange values. Since the Fund's primary investment objective is to produce long-term capital appreciation, and current income is a secondary consideration in the selection of investments, a particular issuer's dividend history is not a primary consideration. Investors should be aware that since the major portion of the Fund's portfolio will normally be invested in common stocks, the Fund's net asset value may be subject to greater fluctuation than a portfolio containing a substantial amount of fixed-income securities. There can be no assurance that the primary objective of the Fund will be realized or that any income will be earned. Nor can there be any assurance that the Fund's portfolio will not decline in value. Except for temporary defensive purposes, the Fund intends to have at all times at least 70% of its total assets in common stocks which the Adviser believes offer opportunity for growth of capital. When the Adviser believes that securities other than common stocks offer opportunity for long-term capital appreciation, the Fund may invest up to 30% of its total assets in publicly distributed debt securities, preferred stocks, particularly those which are convertible into or carry rights to acquire common stocks, and warrants. Investments in publicly distributed debt securities and nonconvertible preferred stocks offer an opportunity for growth of capital during periods of declining interest rates, when the market value of such securities in general increases. The Fund will limit its investments in publicly distributed debt securities to those which have been assigned one of the three highest ratings of either Standard & Poor's Corporation (AAA, AA and A) or Moody's Investors Service, Inc. (Aaa, Aa and A). In the event a publicly distributed debt security is downgraded after investment, the Fund may retain such security unless it is rated less than investment grade (i.e., less than BBB by Standard & Poor's Corporation or Baa by Moody's Investors Service, Inc.). If it is downgraded below investment grade, the Fund will promptly dispose of such publicly distributed debt security. A description of the foregoing ratings is set forth in the Statement of Additional Information. Except for temporary defensive purposes, cash and money market instruments will be retained by the Fund only in amounts deemed adequate for current needs and to permit the Fund to take advantage of investment opportunities. The money market instruments in which the Fund may invest include conservative fixed- income securities, such as United States Treasury Bills, certificates of deposit of U.S. banks (provided that the bank has capital, surplus and undivided profits, as of the date of its most recently published annual financial statements, with a value in excess of $100,000,000 at the date of investment), commercial paper rated A-1 or better by Standard & Poor's Corporation, commercial paper master notes and repurchase agreements. Commercial paper master notes are unsecured promissory notes issued by corporations to finance short-term credit needs. They permit a series of short-term borrowings under a single note. Borrowings under commercial paper master notes are payable in whole or in part at any time, may be prepaid in whole or in part at any time, and bear interest at rates which are fixed to known lending rates and automatically adjusted when such known lending rates change. There is no secondary market for commercial paper master notes. The Adviser will monitor the creditworthiness of the issuer of the commercial paper master notes while any borrowings are outstanding. Repurchase agreements are agreements under which the seller of a security agrees at the time of sale to repurchase the security at an agreed time and price. The Fund will not enter into repurchase agreements with entities other than banks or invest over 5% of its net assets in repurchase agreements with maturities of more than seven days. If a seller of a repurchase agreement defaults and does not repurchase the security subject to the agreement, the Fund will look to the collateral security underlying the seller's repurchase agreement, including the securities subject to the repurchase agreement, for satisfaction of the seller's obligation to the Fund. In such event, the Fund might incur disposition costs in liquidating the collateral and might suffer a loss if the value of the collateral declines. In addition, if bankruptcy proceedings are instituted against a seller of a repurchase agreement, realization upon the collateral may be delayed or limited. The Fund does not intend to place emphasis on short-term trading profits. The Fund's annual portfolio turnover rate generally will not exceed 150%. The annual portfolio turnover rate indicates changes in the Fund's portfolio and is calculated by dividing the lesser of purchases or sales of portfolio securities (excluding securities having maturities at acquisition of one year or less) for the fiscal year, by the monthly average of the value of the portfolio securities (excluding securities having maturities at acquisition of one year or less) owned by the Fund during the fiscal year. The annual portfolio turnover rate may vary widely from year to year depending upon market conditions and prospects. High turnover (100% or more) in any year will result in the payment by the Fund from capital of above average amounts of brokerage commissions and could result in the payment by shareholders of above-average amounts of taxes on realized gains. Distributions to shareholders of such investment gains, to the extent they consist of net short-term capital gains, will be considered ordinary income for federal income tax purposes. The Fund will limit to 10% of its assets investments in securities of foreign issuers or in American Depository Receipts of such issuers. Such investments may involve risks which are in addition to the usual risks inherent in domestic investments. The value of the Fund's foreign investments may be significantly affected by changes in currency exchange rates and the Fund may incur costs in converting securities denominated in foreign currencies to U.S. dollars. In many countries, there is less publicly available information about issuers than is available in the reports and ratings published about companies in the United States. Additionally, foreign companies are not subject to uniform accounting, auditing and financial reporting standards. Dividends and interest on foreign securities may be subject to foreign withholding taxes, which would reduce the Fund's income without providing a tax credit for the Fund's stockholders. Although the Fund intends to invest in securities of foreign issuers domiciled in nations which the Fund's investment adviser considers as having stable and friendly governments, there is the possibility of expropriation, confiscatory taxation, currency blockage or political or social instability which could affect investments in those nations. Under certain circumstances the Fund may (a) invest in warrants, (b) temporarily borrow money from banks for emergency or extraordinary borrowings, (c) pledge its assets to secure borrowings, and (d) purchase securities of other investment companies. A more complete discussion of the circumstances in which the Fund may engage in these activities is included in the Fund's Statement of Additional Information. Except for the investment policies listed in this paragraph, the investment objective and the other policies described under this caption are not fundamental policies and may be changed without shareholder approval. Such changes may result in the Fund having investment objectives different from the objectives which the shareholder considered appropriate at the time of investment in the Fund. MANAGEMENT OF THE FUND As a Delaware business trust, the business and affairs of the Fund are managed under the direction of its Trustees. Under an investment advisory agreement (the "Agreement") with the Fund, Landis Associates, Inc. (the "Adviser"), Longwood Corporate Center, Suite 213, 415 McFarlan Road, Kennett Square, Pennsylvania 19348, furnishes continuous investment advisory services and management to the Fund. In addition to the Fund, the Adviser is the investment adviser to individual and institutional clients with substantial investment portfolios. As of September 30, 1997, the Adviser managed approximately $115 million in assets. The Adviser was organized in 1986 and is controlled by Michael L. Hershey, who is a director and the Chairman and President of the Adviser. The Adviser supervises and manages the investment portfolio of the Fund and, subject to such policies as the Trustees of the Fund may determine, directs the purchase or sale of investment securities in the day-to-day management of the Fund. Under the Agreement, the Adviser, at its own expense and without reimbursement from the Fund, will furnish office space and all necessary office facilities, equipment and executive personnel for making the investment decisions necessary for managing the Fund and maintaining its organization, and will pay the salaries and fees of all officers and directors of the Fund (except the fees paid to disinterested directors) and the printing and distribution cost of prospectuses mailed to persons other than existing shareholders. For the foregoing, the Adviser will receive a monthly fee of 1/12 of 1% (1.0% per annum) of the daily net assets of the Fund. The advisory fees paid in the fiscal year ended June 30, 1997 were equal to 1.0% of the Fund's average net assets. Michael L. Hershey, President and Chairman of the Board of the Adviser since he founded the firm in 1986, is primarily responsible for the day-to-day management of the Fund's portfolio. He has held this responsibility since the Fund commenced operations on December 2, 1992. Mr. Hershey also has served as Chairman, President, Treasurer and a Trustee of the Fund since it was organized in September, 1992. The Fund also has entered into an administration agreement (the "Administration Agreement") with Fiduciary Management, Inc. (the "Administrator"), 225 East Mason Street, Milwaukee, Wisconsin 53202. Under the Administration Agreement, the Administrator prepares and maintains the books, accounts and other documents required by the Act, calculates the Fund's net asset value, responds to shareholder inquiries, prepares the Fund's financial statements and tax returns, prepares certain reports and filings with the Securities and Exchange Commission and with state Blue Sky authorities, furnishes statistical and research data, clerical, accounting and bookkeeping services and stationery and office supplies, keeps and maintains the Fund's financial and accounting records and generally assists in all aspects of the Fund's operations. The Administrator, at its own expense and without reimbursement from the Fund, furnishes office space and all necessary office facilities, equipment and executive personnel for performing the services required to be performed by it under the Administration Agreement. For the foregoing, the Administrator receives from the Fund a monthly fee of 1/12 of 0.2% (0.2% per annum) of the first $30,000,000 of the Fund's average daily net assets, 1/12 of 0.1% (0.1% per annum) of the next $30,000,000 of the Fund's average daily net assets and 1/12 of 0.05% (0.05% per annum) of the average daily net assets of the Fund in excess of $30,000,000, subject to a fiscal year minimum of $20,000. DETERMINATION OF NET ASSET VALUE The per Share net asset value of the Fund is determined by dividing the total value of its net assets (meaning its assets less its liabilities) by the total number of its Shares outstanding at that time. The net asset value is determined as of the close of regular trading (currently 4:00 p.m. Eastern time) on the New York Stock Exchange on each day the New York Stock Exchange is open for trading. This determination is applicable to all transactions in Shares of the Fund prior to that time and after the previous time as of which net asset value was determined. Accordingly, purchase orders accepted or Shares tendered for redemption prior to the close of regular trading on a day the New York Stock Exchange is open for trading will be valued as of the close of trading, and purchase orders accepted or Shares tendered for redemption after that time will be valued as of the close of the next trading day. Securities traded on any national stock exchange or quoted on the Nasdaq National Market System will be valued on the basis of the last sale price on the date of valuation or, in the absence of any sale on that date, the most recent bid price. Other securities will be valued at the most recent bid price, if market quotations are readily available. Any securities for which there are no readily available market quotations and other assets will be valued at their fair value as determined in good faith by the Trustees. Odd lot differentials and brokerage commissions will be excluded in calculating values. PURCHASE OF SHARES Shares may be purchased directly from the Fund. A Share purchase application form is included at the back of this Prospectus. The price per Share is the next determined per Share net asset value after receipt of an application. Additional purchase applications may be obtained from the Fund. Purchase applications should be mailed directly to: The Henlopen Fund, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The U.S. Postal Service and other independent delivery services are not agents of the Fund. Therefore, deposit of purchase applications in the mail or with such services does not constitute receipt by Firstar Trust Company or the Fund. PLEASE DO NOT mail letters by overnight courier to the Post Office Box address. To purchase Shares by overnight or express mail, please use the following street address: The Henlopen Fund, c/o Firstar Trust Company, Mutual Fund Services, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202. All applications must be accompanied by payment in the form of a check drawn on a U.S. bank payable to The Henlopen Fund, or by direct wire transfer. Neither cash nor third-party checks will be accepted. Firstar Trust Company will charge a $20 fee against a shareholder's account for any payment check returned to the custodian. THE SHAREHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS A RESULT. Funds should be wired to: Firstar Bank of Milwaukee, N.A. 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 ABA #075000022 credit: Firstar Trust Company Account #112952137 further credit: The Henlopen Fund "name of shareholder and account number (if known)" The establishment of a new account or any additional purchases for an existing account by wire transfer should be preceded by a phone call to Firstar Trust Company at (800) 922-0224 to provide information for the account. A properly signed Share purchase application marked "Follow-up" must be sent for all new accounts opened by wire transfer. Applications are subject to acceptance by the Fund, and are not binding until so accepted. The Fund does not accept telephone orders for purchase of Shares and reserves the right to reject applications in whole or part. You may also invest in the Fund by purchasing Shares through a registered broker-dealer who may charge you a fee either at time of purchase or redemption. The fee, if charged, is retained by the broker-dealer and not remitted to the Fund or Adviser. The Trustees of the Fund have established $10,000 as the minimum initial purchase (except for Individual Retirement Account ("IRA") investments, where the minimum is $2,000 ($500 for Education IRAs) and 401(k) plans which have no minimums) and $1,000 as the minimum for any subsequent purchase (except through dividend reinvestment and 401(k) plans which have no minimums and for IRA investments, where the minimum is $500), which minimum amounts are subject to change at any time. Shareholders will receive written notification at least thirty days in advance of any changes in such minimum amounts. Investors may purchase Shares of the Fund through programs of services offered or administered by broker-dealers, financial institutions or other service providers ("Processing Intermediaries") that have entered into agreements with the Fund. Such Processing Intermediaries may become shareholders of record and may use procedures and impose restrictions in addition to or different from those applicable to shareholders who invest directly in the Fund. Certain services of the Fund may not be available or may be modified in connection with the programs provided by Processing Intermediaries. The Fund may only accept requests to purchase additional shares into an account in which the Processing Intermediary is the shareholder of record from the Processing Intermediary. The Fund may authorize one or more Processing Intermediaries (and other Processing Intermediaries properly designated thereby) to accept purchase orders on the Fund's behalf. In such event, the Fund will be deemed to have received a purchase order when the Processing Intermediary accepts the customer order, and the order will be priced at the Fund's net asset value next computed after it is accepted by the Processing Intermediary. Processing Intermediaries may charge fees or assess other charges for the services they provide to their customers. Any such fee or charge paid directly by shareholders is retained by the Processing Intermediary and is not remitted to the Fund or the Adviser. Additionally, the Adviser and/or the Fund may pay fees to Processing Intermediaries to compensate them for the services they provide. Program materials provided by the Processing Intermediary should be read in conjunction with the Prospectus before investing in this manner. Shares of the Fund may be purchased through Processing Intermediaries without regard to the Fund's minimum purchase requirement. Certain Processing Intermediaries that have entered into agreements with the Fund may enter purchase orders by telephone, with payment to follow the next business day as specified in the agreement. The Fund may effect such purchase orders at the net asset value next determined after receipt of the telephone purchase order. It is the responsibility of the Processing Intermediary to place the order with the Fund on a timely basis. If payment is not received within the time period specified in the agreement, the Processing Intermediary could be held liable for any resulting fees or losses. AUTOMATIC INVESTMENT PLAN The Fund offers an Automatic Investment Plan whereby a shareholder may automatically make purchases of Shares on a regular, convenient basis ($100 minimum per transaction). Under the Automatic Investment Plan, a shareholder's designated bank or other financial institution debits a preauthorized amount on the shareholder's account either monthly or quarterly and applies the amount to the purchase of Shares. A shareholder may make automatic withdrawals on any day he or she chooses. If such day is a weekend or holiday, the automatic withdrawal will be made on the next business day. The Automatic Investment Plan must be implemented with a financial institution that is a member of the Automated Clearing House ("ACH"). No service fee is currently charged by the Fund for participating in the Automatic Investment Plan. A $20 fee will be imposed by the transfer agent if sufficient funds are not available in the shareholder's account at the time of the automatic transaction. An application to establish the Automatic Investment Plan is included as part of the Share purchase application. REDEMPTION OF SHARES A shareholder may require the Fund to redeem his or her Shares in whole or in part at any time during normal business hours. Redemption requests must be made in writing and directed to: The Henlopen Fund, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The U.S. Postal Service and other independent delivery services are not agents of the Fund. Therefore, deposit of redemption requests in the mail or with such services does not constitute receipt by Firstar Trust Company or the Fund. Please do not mail letters by overnight courier to the Post Office Box address. Redemption requests sent by overnight or express mail should be directed to: The Henlopen Fund, c/o Firstar Trust Company, Mutual Fund Services, 3rd Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202. If a redemption request is inadvertently sent to the Fund, it will be forwarded to Firstar Trust Company, but the effective date of redemption will be delayed until the request is received by Firstar Trust Company. Requests for redemption by telegram and requests which are subject to any special conditions or which specify an effective date other than as provided herein cannot be honored. A request for redemption must be signed by the shareholder or shareholders exactly as the Shares are registered, including the signature of each joint owner, and must specify either the number of Shares or the dollar amount of Shares that are to be redeemed. If the proceeds of redemption are requested to be sent to an address or a person other than as the Shares to be redeemed are registered, each signature on the redemption request must be guaranteed by a commercial bank or trust company in the United States, a member firm of the New York Stock Exchange or any other eligible guarantor institution. Additional documentation may be required for redemptions by corporations, executors, administrators, trustees, guardians, or others who hold shares in a fiduciary or representative capacity or who are not natural persons. In case of any questions concerning the nature of such documentation, the Fund's transfer agent, Firstar Trust Company, should be contacted in advance at (800) 922-0224. Redemptions will not be effective or complete until all of the foregoing conditions, including receipt of all required documentation by Firstar Trust Company in its capacity as transfer agent, have been satisfied. Shareholders who have an IRA must indicate on their redemption requests whether or not to withhold federal income tax. Unless otherwise indicated, these redemptions, as well as redemptions of other retirement plans not involving a direct rollover to an eligible plan, will be subject to federal income tax withholding. The redemption price is the net asset value next determined after receipt by Firstar Trust Company in its capacity as transfer agent of the written request in proper form with all required documentation. The amount received may be more or less than the cost of the Shares redeemed. Proceeds for Shares redeemed will be mailed, wired or forwarded via Electronic Funds Transfer ("EFT") to the holder no later than the seventh day after receipt of the redemption request in proper form with all required documentation, except that when a purchase has been made by check, the Fund can hold payment on redemption until it is reasonably satisfied the check has cleared. (This may normally take up to 3 days from the purchase date for local personal or corporate checks and up to 7 days for other personal or corporate checks.) Firstar Trust Company currently charges a $12.00 fee for each payment made by wire of redemption proceeds, which will be deducted from the shareholder's account. Transfers made via EFT generally will take up to 3 business days to reach the shareholder's bank account. Shares of the Fund purchased through programs of services offered or administered by Processing Intermediaries that have entered into agreements with the Fund may be required to be redeemed through such programs. Such Processing Intermediaries may become shareholders of record and may use procedures and impose restrictions in addition to or different from those applicable to shareholders who redeem shares directly through the Fund. The Fund may only accept redemption requests for an account in which the Processing Intermediary is the shareholder of record from the Processing Intermediary. The Fund may authorize one or more Processing Intermediaries (and other Processing Intermediaries properly designated thereby) to accept redemption requests on the Fund's behalf. In such event, the Fund will be deemed to have received a redemption request when the Processing Intermediary accepts the customer request, and the redemption price will be the Fund's net asset value next computed after the customer redemption request is accepted by the Processing Intermediary. If a shareholder instructs Firstar Trust Company in writing, redemption requests may be made by telephone by CALLING ONLY FIRSTAR TRUST COMPANY, NOT THE FUND OR ITS ADVISER, at (800) 922-0224 or (414) 765-4124, provided the redemption proceeds are to be mailed, wired or forwarded via EFT to the shareholder's address or bank of record as shown on the records of the transfer agent. Proceeds redeemed by telephone will be mailed, wired or forwarded via EFT to an address or account other than that shown on the records of the transfer agent only if such has been prearranged by a written request sent via mail or facsimile copy to Firstar Trust Company. Such a request must be signed by the shareholder with signatures guaranteed as described above. Additional documentation may be requested from those who hold shares in a fiduciary or representative capacity or who are not natural persons. A shareholder may change his address by calling Firstar Trust Company at (800) 922-0224 or (414) 765- 4124. Any written redemption requests received within 30 days after an address change, whether such address change is made in writing or by telephone, must be accompanied by a signature guarantee. In addition, no telephone redemptions will be allowed within 30 days of an address change. The Fund reserves the right to refuse a telephone redemption request if it is believed advisable to do so. Redemption by telephone is not available for IRA accounts. PROCEDURES FOR TELEPHONE REDEMPTIONS MAY BE MODIFIED OR TERMINATED AT ANY TIME BY THE FUND OR FIRSTAR TRUST COMPANY. Neither the Fund nor Firstar Trust Company will be liable for following instructions for telephone redemption transactions that they reasonably believe to be genuine, provided reasonable procedures are used to confirm the genuineness of the telephone instructions, but may be liable for unauthorized transactions if they fail to follow such procedures. These procedures include requiring some form of personal identification prior to acting upon the telephone instructions and recording all telephone calls. During periods of substantial economic or market change, telephone redemptions may be difficult to implement. In the event a shareholder cannot contact Firstar Trust Company by telephone, he or she should make a redemption request in writing in the manner set forth above. To accommodate the current cash needs of investors, the Fund offers a SYSTEMATIC WITHDRAWAL PLAN pursuant to which a shareholder who owns Shares worth at least $50,000 at current net asset value may provide that a fixed sum ($500 minimum) will be distributed to him at regular intervals. A shareholder may make systematic withdrawal payments on any day he or she chooses. If such day is a weekend or holiday, the automatic withdrawal will be made on the next business day. Investors may elect to have such payments automatically deposited in their checking or savings accounts via wire or EFT. Firstar Trust Company currently charges a $12.00 fee for each payment made by wire of redemption proceeds, which will be deducted from the shareholder's account. See the Share purchase application form included at the back of this Prospectus for further information. In electing to participate in the Systematic Withdrawal Plan, investors should realize that within any given period the appreciation of their investment in the Fund may not be as great as the amount withdrawn. A more complete discussion of the Systematic Withdrawal Plan is included in the Fund's Statement of Additional Information. The right to redeem Shares of the Fund will be suspended for any period during which the New York Stock Exchange is closed because of financial conditions or any other extraordinary reason and may be suspended for any period during which (a) trading on the New York Stock Exchange is restricted pursuant to rules and regulations of the Securities and Exchange Commission, (b) the Securities and Exchange Commission has by order permitted such suspension or (c) an emergency, as defined by rules and regulations of the Securities and Exchange Commission, exists as a result of which it is not reasonably practicable for the Fund to dispose of its securities or fairly to determine the value of its net assets. RETIREMENT PLANS The Fund offers the following retirement plans that may be funded with purchases of Shares and may allow investors to shelter some of their income from taxes: INDIVIDUAL RETIREMENT ACCOUNTS Individual shareholders may establish their own tax-sheltered Individual Retirement Acccount ("IRA"). The Fund currently offers a Traditional IRA and, effective January 1, 1998, the Fund will offer three types of IRAs, including the Traditional IRA, that can be adopted by executing the appropriate Internal Revenue Service ("IRS") Form. Traditional IRA. In a Traditional IRA, amounts contributed to the IRA may be tax deductible at the time of contribution depending on whether the shareholder is an "active participant" in an employer-sponsored retirement plan and the shareholder's income. Distributions from a Traditional IRA will be taxed at distribution except to the extent that the distribution represents a return of the shareholder's own contributions for which the shareholder did not claim (or was not eligible to claim) a deduction. Distributions prior to age 59-1/2 may be subject to an additional 10% tax applicable to certain premature distributions. Distributions must commence by April 1 following the calendar year in which the shareholder attains age 70-1/2. Failure to begin distributions by this date (or distributions that do not equal certain minimum thresholds) may result in adverse tax consequences. Roth IRA. In a Roth IRA (sometimes known as American Dream IRA), amounts contributed to the IRA are taxed at the time of contribution, but distributions from the IRA are not subject to tax if the shareholder has held the IRA for certain minimum periods of time (generally, until age 59-1/2). Shareholders whose incomes exceed certain limits are ineligible to contribute to a Roth IRA. Distributions that do not satisfy the requirements for tax-free withdrawal are subject to income taxes (and possibly penalty taxes) to the extent that the distribution exceeds the shareholder's contributions to the IRA. The minimum distribution rules applicable to Traditional IRAs do not apply during the lifetime of the shareholder. Following the death of the shareholder, certain minimum distribution rules apply. For Traditional and Roth IRAs, the maximum annual contribution generally is equal to the lesser of $2,000 or 100% of the shareholder's compensation (earned income). An individual may also contribute to a Traditional IRA or Roth IRA on behalf of his or her spouse provided that the individual has sufficient compensation (earned income). Contributions to a Traditional IRA reduce the allowable contribution under a Roth IRA, and contributions to a Roth IRA reduce the allowable contribution to a Traditional IRA. Education IRA. In an Education IRA, contributions are made to an IRA maintained on behalf of a beneficiary under age 18. The maximum annual contribution is $500 per beneficiary. The contributions are not tax deductible when made. However, if amounts are used for certain educational purposes, neither the contributor nor the beneficiary of the IRA are taxed upon distribution. The beneficiary is subject to income (and possibly penalty taxes) on amounts withdrawn from an Education IRA that are not used for qualified educational purposes. Shareholders whose income exceeds certain limits are ineligible to contribute to an Education IRA. Under current IRS regulations, an IRA applicant must be furnished a disclosure statement containing information specified by the IRS. The applicant generally has the right to revoke his account within seven days after receiving the disclosure statement and obtain a full refund of his contributions. The custodian may, in its discretion, hold the initial contribution uninvested until the expiration of the seven-day revocation period. The custodian does not anticipate that it will exercise its discretion but reserves the right to do so. SIMPLIFIED EMPLOYEE PENSION PLAN A Traditional IRA may also be used in conjunction with a Simplified Employee Pension Plan ("SEP-IRA"). A SEP-IRA is established through execution of Form 5305-SEP together with a Traditional IRA established for each eligible employee. Generally, a SEP-IRA allows an employer (including a self-employed individual) to purchase Shares with tax deductible contributions not exceeding annually for any one participant 15% of compensation (disregarding for this purpose compensation in excess of $160,000 per year). The $160,000 compensation limit applies for 1998 and is adjusted periodically for cost of living increases. A number of special rules apply to SEP Plans, including a requirement that contributions generally be made on behalf of all employees of the employer (including for this purpose a sole proprietorship or partnership) who satisfy certain minimum participation requirements. SIMPLE IRA An IRA may also be used in connection with a SIMPLE Plan established by the shareholder's employer (or by a self-employed individual). When this is done, the IRA is known as a SIMPLE IRA, although it is similar to a Traditional IRA with the exceptions described below. Under a SIMPLE Plan, the shareholder may elect to have his or her employer make salary reduction contributions of up to $6,000 per year to the SIMPLE IRA. The $6,000 limit applies for 1997 and is adjusted periodically for cost of living increases. In addition, the employer will contribute certain amounts to the shareholder's SIMPLE IRA, either as a matching contribution to those participants who make salary reduction contributions or as a non-elective contribution to all eligible participants whether or not making salary reduction contributions. A number of special rules apply to SIMPLE Plans, including (1) a SIMPLE Plan generally is available only to employers with fewer than 100 employees; (2) contributions must be made on behalf of all employees of the employer (other than bargaining unit employees) who satisfy certain minimum participation requirements; (3) contributions are made to a special SIMPLE IRA that is separate and apart from the other IRAs of employees; (4) the early distribution excise tax (if otherwise applicable) is increased to 25% on withdrawals during the first two years of participation in a SIMPLEIRA; and (5) amounts withdrawn during the first two years of participation in a SIMPLE IRA may be rolled over tax-free only into another SIMPLE IRA (and not to a Traditional IRA or to a Roth IRA). A SIMPLE IRA is established by executing Form 5304-SIMPLE together with an IRA established for each eligible employee. 403(b)(7) CUSTODIAL ACCOUNT A 403(b)(7) Custodial Account is available for use in conjunction with the 403(b)(7) program established by certain educational organizations and other organizations that are exempt from tax under 501(c)(3) of the Internal Revenue Code, as amended ("Code"). Amounts contributed to the custodial account in accordance with the employer's 403(b)(7) program will be invested on a tax- deductible basis in Shares of the Fund. Various contribution limits apply with respect to 403(b)(7) arrangements. DEFINED CONTRIBUTION RETIREMENT PLAN (401(k)) A prototype defined contribution plan is available for employers who wish to purchase Shares of the Fund with tax deductible contributions. The plan consists of both profit sharing and money purchase pension components. The profit sharing component includes a Section 401(k) cash or deferred arrangement for employers who wish to allow eligible employees to elect to reduce their compensation and have such amounts contributed to the plan. The limit on employee salary reduction contributions is $9,500 annually (as adjusted for cost-of-living increases) although lower limits may apply as a result of non-discrimination requirements incorporated into the plan. The Fund has received an opinion letter from the IRS holding that the form of the prototype defined contribution retirement plan is acceptable under Section 401 of the Code. The maximum annual contribution that may be allocated to the account of any participant is generally the lesser of $30,000 or 25% of compensation (earned income). Compensation in excess of $160,000 (as periodically indexed for cost- of-living increases) is disregarded for this purpose. The maximum amount that is deductible by the employer depends upon whether the employer adopts both the profit sharing and money purchase components of the plan, or only one component. RETIREMENT PLAN FEES Firstar Trust Company, Milwaukee, Wisconsin, serves as trustee or custodian of the retirement plans. Firstar invests all cash contributions, dividends and capital gains distributions in shares of the Fund. For such services, the following fees are charged against the accounts of participants; $12.50 annual maintenance fee per participant account; $15 for transferring to a successor trustee or custodian; $15 for distribution(s) to a participant; and $15 for refunding any contribution in excess of the deductible limit. Firstar's fee schedule may be changed upon written notice. Requests for information and forms concerning the retirement plans should be directed to the Fund. Because a retirement program may involve commitments covering future years, it is important that the investment objective of the Fund be consistent with the participant's retirement objectives. Premature withdrawal from a retirement plan will result in adverse tax consequences. Consultation with a competent financial and tax advisor regarding the retirement plans is recommended. DIVIDEND REINVESTMENT Shareholders may elect to have all income dividends and capital gains distributions reinvested or paid in cash, or to have dividends reinvested and capital gains distributions paid in cash or capital gains distributions reinvested and income dividends paid in cash. Shareholders having dividends and/or capital gains distributions paid in cash may choose to have such amounts automatically deposited to their checking or savings accounts via EFT. Transfers via EFT generally will take up to 3 business days to reach the shareholder's bank account. See the Share purchase application form included at the back of this Prospectus for further information. If a shareholder does not specify an election, all income dividends and capital gains distributions will automatically be reinvested in full and fractional Shares calculated to the nearest 1,000th of a Share. Shares are purchased at the net asset value in effect on the business day after the dividend record date and are credited to the shareholder's account on the dividend payment date. Shareholders will be advised of the number of Shares purchased and the price following each reinvestment. An election to reinvest or receive dividends and distributions in cash will apply to all Shares registered in the same name, including those previously purchased. See "DIVIDENDS, DISTRIBUTIONS AND TAXES" for tax consequences. A shareholder may change an election at any time by notifying the Fund in writing. If such a notice is received between a dividend declaration date and payment date, it will become effective on the day following the payment date. The Fund may modify or terminate its dividend reinvestment program at any time on thirty days' written notice to participants. DIVIDENDS, DISTRIBUTIONS AND TAXES The Fund will endeavor to qualify as a "regulated investment company" under Subchapter M of the Code. Pursuant to the qualification requirements of Subchapter M, the Fund intends to distribute substantially all of its net investment income to its shareholders annually. The Fund also intends to distribute substantially all of its net capital gains less available capital loss carryovers annually and other income to reduce or avoid federal income and excise taxes. For federal income tax purposes, distributions by the Fund, whether invested in additional Shares or received in cash, will be taxable to the Fund's shareholders unless the shareholder is exempt from federal taxation. Shareholders will be notified annually as to the federal tax status of dividends and distributions. Distributions and redemptions may also be taxed under state and local tax laws. Investors are advised to consult their tax adviser concerning the application of state and local taxes. BROKERAGE TRANSACTIONS The Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of the Fund's portfolio securities. In placing purchase and sale orders for the Fund, it is the policy of the Adviser to seek the best execution of orders at the most favorable price in light of the overall quality of brokerage and research services provided. The Agreement permits the Adviser to pay a broker which provides brokerage and research services to the Adviser a commission for effecting securities transactions in excess of the amount another broker would have charged for executing the transaction, provided the Adviser believes this to be in the best interests of the Fund. The Fund may place portfolio orders with broker-dealers who recommend the purchase of Shares to clients, if the Adviser believes the commissions and transaction quality are comparable to that available from other brokers, and may allocate portfolio brokerage on that basis. CAPITAL STRUCTURE The Fund's authorized capital consists of an unlimited number of Shares. Shareholders are entitled: (i) to one vote per full Share; (ii) to such distributions as may be declared by the Fund's Trustees out of funds legally available; and (iii) upon liquidation, to participate ratably in the assets available for distribution. There are no conversion or sinking fund provisions applicable to the Shares, and the holders have no preemptive rights and may not cumulate their votes in the election of Trustees. Consequently, the holders of more than 50% of the Shares voting for the election of Trustees can elect all the Trustees, and in such event, the holders of the remaining Shares voting for the election of Trustees will not be able to elect any persons as Trustees. The Fund does not anticipate holding an annual meeting in any year in which the election of Trustees is not required to be acted on by shareholders under the Investment Company Act of 1940. The Fund's Trust Instrument contains provisions for the removal of Trustees by the shareholders. The Shares are redeemable and are transferable. All Shares issued and sold by the Fund will be fully paid and nonassessable. Fractional Shares entitle the holder of the same rights as whole Shares. Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202 acts as the Fund's transfer agent and dividend disbursing agent. The Fund will not issue certificates evidencing Shares purchased. Each shareholder's account will be credited with the number of Shares purchased, relieving shareholders of responsibility for safekeeping of certificates and the need to deliver them upon redemption. Written confirmations are issued for all purchases of Shares. Pursuant to the Trust Instrument, the Trustees may establish and designate one or more separate and distinct series of Shares, each of which shall be authorized to issue an unlimited number of Shares. In addition, the Trustees may, without obtaining any prior authorization or vote of shareholders, redesignate or reclassify any issued Shares of any series. In the event that more than one series is established, each Share outstanding, regardless of series, would still entitle its holder to one (1) vote. As a general matter, Shares would be voted in the aggregate and not by series, except where class voting would be required by the Investment Company Act of 1940 (e.g., change in investment policy or approval of an investment advisory agreement). All consideration received from the sale of Shares of any series, together with all income, earnings, profits and proceeds thereof, would belong to that series and would be charged with the liabilities in respect of that series and of that series' share of the general liabilities of the Fund in the proportion that the total net assets of the series bear to the total net assets of all series. The net asset value of a Share of any series would be based on the assets belonging to that series less the liabilities charged to that series, and dividends could be paid on Shares of any series only out of lawfully available assets belonging to that series. In the event of liquidation or dissolution of the Fund, the shareholders of each series would be entitled, out of the assets of the Fund available for distribution, to the assets belonging to that series. The Fund's Trust Instrument contains an express disclaimer of shareholder liability for its acts or obligations and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Fund or its Trustees. The Trust Instrument provides for indemnification and reimbursement of expenses out of the Fund's property for any shareholder held personally liable for its obligations. The Trust Instrument also provides that the Fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Fund and satisfy any judgment thereon. The Trust Instrument further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law, but nothing in the Trust Instrument protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. SHAREHOLDER REPORTS Shareholders will be provided at least semi-annually with a report showing the Fund's portfolio and other information and annually after the close of the Fund's fiscal year, which ends June 30, with an annual report containing audited financial statements. Shareholders who have questions about the Fund should write to: The Henlopen Fund, Longwood Corporate Center, Suite 213, 415 McFarlan Road, Kennett Square, Pennsylvania 19348, Attention: Corporate Secretary, or call (610) 925-0400. Questions about individual accounts may be directed toll free to Firstar Trust Company at (800) 922-0224. PERFORMANCE INFORMATION The Fund may provide from time to time in advertisements, reports to shareholders and other communications with shareholders its average annual compounded rate of return as well as its total return and cumulative total return. An average annual compounded rate of return refers to the rate of return which, if applied to an initial investment at the beginning of a stated period and compounded over the period, would result in the redeemable value of the investment at the end of the stated period assuming reinvestment of all dividends and distributions and reflecting the effect of all recurring fees. Total return and cumulative total return similarly reflect net investment income generated by, and the effect of any realized and unrealized appreciation or depreciation of, the underlying investments of the Fund for the stated period, assuming the reinvestment of all dividends and distributions and reflecting the effect of all recurring fees. Total return figures are not annualized or compounded and represent the aggregate percentage of dollar value change over the period in question. Cumulative total return reflects the Fund's total return since inception. An investor's principal in the Fund and the Fund's return are not guaranteed and will fluctuate according to market conditions. The Fund may compare its performance to other mutual funds with similar investment objectives and to the industry as a whole, as reported by Lipper Analytical Services, Inc., Morningstar, Inc., Money, Forbes, Business Week and Barron's magazines and The Wall Street Journal. (Lipper Analytical Services, Inc. and Morningstar, Inc. are independent fund ranking services that rank mutual funds based upon total return performance.) The Fund may also compare its performance to the Dow Jones Industrial Average, NASDAQ Composite Index, NASDAQ Industrials Index, Value Line Composite Index, the Standard & Poor's 500 Stock Index ("S&P 500 Index") and the Consumer Price Index. Such comparisons may be made in advertisements, shareholder reports or other communications to shareholders. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE Fiscal 1997 saw a continuation of the extremely favorable economic and financial environment that has formed the investment backdrop for the last several years. Economically, GDP growth exceeded 3% during the period, while expanding world trade, a strong dollar and a stable global political environment all contributed to the investor's feeling of well being. Financially, corporate profits remained robust while long term interest rates generally declined. These factors provided a strong stimulus for the continuation of the positive trend in stock prices. Throughout the year, money flows into equity mutual funds exceeded $15 billion/month and were a primary driver of increasing equity prices. From July 1996 to March 1997, much of this money flowed into index funds, which purchase mostly large capitalization companies. These money flows resulted in a market where large companies generally outperformed smaller ones of the type in which the Fund invests. Since April 1997, however, smaller companies have appreciated considerably and the valuation discrepancy between larger and smaller companies has diminished. During this period the Fund's investment performance improved as well. The Fund appreciated 5.0% for the fiscal year ended June 30, 1997. Throughout this period we maintained our strategy and our investment discipline. We continue to believe that superior long-term results will be generated by our approach. For the three years ending June 1997, the Fund has appreciated at an annual compounded rate of +22.9%. We look to invest in companies that have attained leadership positions within their market niches and are generating strong revenue and earnings growth. We will maintain a balanced, diversified portfolio and will exercise our established valuation and selection disciplines. COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE HENLOPEN FUND, S&P 500 INDEX AND LIPPER GROWTH FUND INDEX The Henlopen Fund S&P 500 Index Lipper Growth Fund Index 12/2/92* $10,000 $10,000 $10,000 12/31/92 $10,010 $10,162 $10,204 3/31/93 $10,821 $10,600 $10,507 6/30/93 $11,562 $10,643 $10,661 9/30/93 $12,450 $10,928 $11,173 12/31/93 $12,999 $11,183 $11,426 3/31/94 $12,760 $10,754 $11,084 6/30/94 $12,126 $10,792 $10,841 9/30/94 $12,853 $11,330 $11,373 12/31/94 $12,644 $11,325 $11,246 3/31/95 $13,583 $12,432 $12,059 6/30/95 $15,493 $13,600 $13,350 9/30/95 $17,819 $14,693 $14,562 12/31/95 $17,453 $15,576 $14,855 3/31/96 $19,233 $16,413 $15,590 6/30/96 $21,442 $17,140 $16,109 9/30/96 $21,024 $17,670 $16,568 12/31/96 $21,182 $19,143 $17,259 3/31/97 $20,072 $19,656 $17,199 6/30/97 $22,519 $23,088 $19,916 *December 2, 1992 inception date AVERAGE ANNUAL TOTAL RETURN 1-YEAR 5.0% since inception 12/2/92 19.4% Past performance is not predictive of future performance. THE HENLOPEN FUND SHARE PURCHASE APPLICATION Minimum Initial Investment $10,000 Minimum Subsequent Investment $1,000 - ----- This is a follow-up application (Investment by wire transfer. See page 6 of the Prospectus.) Mail Completed Application to: The Henlopen Fund c/o Firstar Trust Company Mutual Fund Services P.O. Box 701 Milwaukee, Wisconsin 53201-0701 Overnight Express Mail to: The Henlopen Fund c/o Firstar Trust Company Mutual Fund Services, 3rd Floor 615 E. Michigan Street Milwaukee, Wisconsin 53202 Use this form for individual, custodial, trust, profit-sharing or pension plan accounts, including self-directed IRA and 401(k) plans. DO NOT USE THIS FORM FOR THE HENLOPEN FUND-SPONSORED 401(K), 403(B)(7), IRA, SEP-IRA, SIMPLE IRA OR DEFINED CONTRIBUTION PLANS (KEOGH OR CORPORATE PROFIT-SHARING AND MONEY- PURCHASE) WHICH REQUIRE FORMS AVAILABLE FROM THE FUND. For information please call 1-800-922-0224 or 1-414-765-4124. A. INVESTMENT Please indicate the amount you wish to invest $ ---------------- ($10,000 minimum) - ------ By check enclosed payable to The Henlopen Fund Amount $ -------------- - ------ By wire (call first): 1-800-922-0224 or 1-414-765-4124 to set up account. Indicate total amount and date of wire $ ---------------- Date -------------- B. REGISTRATION - --- Individual - ------------------ ----- --------------------------------------------------- FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr) - --- Joint Owner* - ------------------ ----- --------------------------------------------------- FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr) *Registration will be Joint Tenancy with Rights of Survivorship (JTWROS) unless otherwise specified. - --- Gift to Minors - -------------------------------------------- ------ ----------------------- CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME - -------------------------------------------- ------ ----------------------- MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME - ------------------------- ---------------------------- -------------------- MINOR'S SOCIAL SECURITY # MINOR'S BIRTHDATE (Mo/Dy/Yr) STATE OF RESIDENCE - --- Corporation** (including Corporate Pension Plans),** Trust, Estate or Guardianship - ------------------------------------------------------------------------------- NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)*** - --- Partnership*** - ------------------------------------------------------------------------------- NAME OF TRUST/CORPORATION**/PARTNERSHIP - --- Other Entity*** - --------------------------------- ----------------------------------------- SOCIAL SECURITY #/TAX ID # DATE OF AGREEMENT (Mo/Dy/Yr) **Corporate Resolution is required. ***Additional documentation and certification may be requested. C.MAILING ADDRESS - ------------------------------------------------------- -------------------- STREET APT/SUITE - ------------------------------------------- -------------------- ------------ CITY STATE ZIP - ------------------------------------------- -------------------------------- DAYTIME PHONE # EVENING PHONE # - --- Duplicate Confirmation to: - --------------------------------------------- -------- -------------------- FIRST NAME MI LAST NAME - ------------------------------------------------------- -------------------- STREET APT/SUITE - ------------------------------------------- -------------------- ------------ CITY STATE ZIP D. DISTRIBUTION OPTIONS Capital gains & dividends will be reinvested if no option is selected. Capital Gains & Dividends Capital Gains & Dividends Reinvested ----- in Cash M Capital Gains in Cash & Capital Gains Reinvested & Dividends Reinvested ---- Dividends in Cash ----- If the distribution is to be paid in cash, specify payment method below: - ---- Send check to mailing address in Section C. - ---- Automatic deposit to my bank account via Electronic Funds Transfer ("EFT"). May take up to 3 business days to reach your bank account (complete bank information following). Your signed Application must be received at least 15 business days prior to initial transaction. An unsigned voided check (for checking accounts) or a savings account deposit slip is required with your Application. - ------------------------------------------------------------------------------ NAME(S) ON BANK ACCOUNT - --------------------------------------- ---------------------------------- BANK NAME ACCOUNT NUMBER - ------------------------------------------------------------------------------ BANK ADDRESS To ensure proper crediting of your bank account, please attach a voided check or a deposit slip. E. AUTOMATIC INVESTMENT PLAN Your signed application must be received at least 15 business days prior to initial transaction. Attach an unsigned, voided check (for checking accounts) or a savings account deposit slip and complete this form. I would like to establish an Automatic Investment Plan for The Henlopen Fund as described in the Prospectus. Based on these instructions, Firstar Trust Company as Transfer Agent for The Henlopen Fund, will automatically transfer money directly from my checking, NOW or savings account to purchase shares in The Henlopen Fund. I understand if the automatic purchase cannot be made due to insufficient funds, stop payment or any other reason, a $20 fee will be assessed. Please indicate the day of debit from bank account ---------------- (if not indicated then the 25th of the month will be selected) Start Date (month & year) ------------------- --- Monthly --- Quarterly Indicate amount to be withdrawn from my bank account $------------------------ (minimum $100) - ------------------------------------------------------------------------------ NAME(S) ON BANK ACCOUNT - ----------------------------------------- --------------------------------- BANK NAME ACCOUNT NUMBER - ------------------------------------------------------------------------------ BANK ADDRESS - ------------------------------------------------------------------------------ SIGNATURE OF BANK ACCOUNT OWNER SIGNATURE OF JOINT OWNER (if any) An unsigned voided check (for checking accounts) or a savings account deposit slip is required with your application. E. TELEPHONE REDEMPTION OPTIONS (800) 922-0224 or (414) 765-4124 Your signed Application must be received at least 15 business days prior to initial transaction. An unsigned voided check (for chicking accounts) or a savings account deposit slip is required with your Application. I (we) authorize The Henlopen Fund, to act upon my (our) telephone instructions to redeem shares from this account. Please check all that may apply. - --- The proceeds will be mailed to the address in Section C. - --- By wire. The proceeds of any redemption may be wired to your bank (complete bank information below). A wire fee of $12.00 will be charged. - --- By EFT. Proceeds generally take up to 3 business days to reach your bank (complete bank information below). - ------------------------------------------------------------------------------ NAME(S) ON BANK ACCOUNT - ------------------------------------------------------------------------------ BANK NAME ACCOUNT NUMBER - ------------------------------------------------------------------------------ BANK ADDRESS To ensure proper crediting of your bank account, please attach a voided check or a deposit slip. G. SYSTEMATIC WITHDRAWALS A balance of at least $50,000 is required for this option. I would like to withdraw from The Henlopen Fund $ --------------- ($500 minimum) as follows: - --- I would like to have payments made to me on or about the ---------- day of each month, or - --- I would like to have payments made to me on or about the day of the months that I have circled below: Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. - --- I would like to have payments automatically deposited to my bank account. Complete bank account information below. (A check will be mailed to the address in Section C if this box is not checked.) - ------------------------------------------------------------------------------ NAME(S) ON BANK ACCOUNT - ------------------------------------------------------------------------------ BANK NAME ACCOUNT NUMBER - ------------------------------------------------------------------------------ BANK ADDRESS To ensure proper crediting of your bank account, please attach a voided check or a deposit slip. H. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE Neither the Fund nor its transfer agent will be responsible for the authenticity of transaction instructions received by telephone, provided that reasonable security procedures have been followed. By selecting the options in Section (E, F or G), I hereby authorize the Fund to initiate debits/credits to my account at the bank indicated and for the bank to debit/credit the same to such account through the Automated Clearing House ("ACH") system. UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. - --------------------------------------- ------------------------------------ DATE (Mo/Dy/Yr) SIGNATURE OF OWNER* - --------------------------------------- ------------------------------------ DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any *If shares are to be registered in (1) joint names, both persons should sign, (2) a custodian for a minor, the custodian should sign, (3) a trust, the trustee(s) should sign, or (4) a corporation or other entity, an officer should sign and print name and title on space provided below. - ------------------------------------------------------------------------------ PRINT NAME AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FIRSTAR TRUST COMPANY 615 East Michigan Street Milwaukee, Wisconsin 53202 INDEPENDENT ACCOUNTANTS PRICE WATERHOUSE LLP 3100 Multifoods Tower 33 South Sixth Street Minneapolis, Minnesota 55402 LEGAL COUNSEL FOLEY & LARDNER 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 THE HENLOPEN FUND Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (610) 925-0400 STATEMENT OF ADDITIONAL INFORMATION October 31, 1997 THE HENLOPEN FUND Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 This Statement of Additional Information is not a Prospectus and should be read in conjunction with the Prospectus of The Henlopen Fund dated October 31, 1997. Requests for copies of the Prospectus should be made in writing to The Henlopen Fund, Longwood Corporate Center, Suite 213, 415 McFarlan Road, Kennett Square, Pennsylvania 19348, Attention: Corporate Secretary or by calling (610) 925-0400. THE HENLOPEN FUND Table of Contents Page No. Investment Restrictions ........................ 1 Trustees and Officers of the Fund .............. 3 Ownership of Management and Principal Shareholders.................................. 6 Investment Adviser and Administrator............ 7 Determination of Net Asset Value ............... 9 Systematic Withdrawal Plan ..................... 9 Allocation of Portfolio Brokerage .............. 10 Performance Information......................... 11 Custodian ...................................... 13 Taxes .......................................... 13 Shareholder Meetings ........................... 14 Independent Accountants ........................ 15 Financial Statements ........................... 15 Description of Securities Ratings............... 15 No person has been authorized to give any information or to make any representations other than those contained in this Statement of Additional Information and the Prospectus dated October 31, 1997, and, if given or made, such information or representations may not be relied upon as having been authorized by The Henlopen Fund. This Statement of Additional Information does not constitute an offer to sell securities. INVESTMENT RESTRICTIONS As set forth in the prospectus dated October 31, 1997, of The Henlopen Fund (the "Fund") under the caption "Investment Objective and Policies", the primary investment objective of the Fund is to produce long-term capital appreciation principally through investing in common stocks. Current income is a secondary investment objective. Consistent with its investment objectives, the Fund has adopted the following investment restrictions which are matters of fundamental policy and cannot be changed without approval of the holders of the lesser of: (i) 67% of the Fund's shares present or represented at a shareholder's meeting at which the holders of more than 50% of such shares are present or represented; or (ii) more than 50% of the outstanding shares of the Fund. 1. The Fund will not purchase securities on margin, participate in a joint-trading account, sell securities short, or write or invest in put or call options. The Fund's investments in warrants, valued at the lower of cost or market, will not exceed 5% of the value of the Fund's net assets. 2. The Fund will not borrow money or issue senior securities, except for temporary bank borrowings or for emergency or extraordinary purposes (but not for the purpose of purchase of investments) and then only in an amount not in excess of 5% of the value of its total assets and will not pledge any of its assets except to secure borrowings and then only to an extent not greater than 10% of the value of the Fund's net assets. The Fund will not purchase securities while it has any outstanding borrowings. 3. The Fund will not lend money, except by purchasing publicly distributed debt securities or entering into repurchase agreements; provided, however, that repurchase agreements maturing in more than seven days plus all other illiquid securities will not exceed 10% of the Fund's total assets. The Fund will not lend its portfolio securities. 4. The Fund will not purchase securities of other investment companies except (a) as part of a plan of merger, consolidation or reorganization approved by the shareholders of the Fund or (b) securities of registered closed-end investment companies on the open market where no commission or profit results, other than the usual and customary broker's commission and where as a result of such purchase the Fund would hold less than 3% of any class of securities, including voting securities, of any registered closed-end investment company and less than 5% of the Fund's assets, taken at current value, would be invested in securities of registered closed-end investment companies. 5. The Fund will not make investments for the purpose of exercising control or management of any company. 6. The Fund will limit its purchases of securities of any issuer (other than the United States or an instrumentality of the United States) in such a manner that it will satisfy at all times the requirements of Section 5(b)(1) of the Investment Company Act of 1940 (i.e., that at least 75% of the value of its total assets is represented by cash and cash items (including receivables), U.S. Government Securities, securities of other investment companies, and other securities for the purpose of the foregoing limited in respect of any one issuer to an amount not greater than 5% of the value of the total assets of the Fund and to not more than 10% of the outstanding voting securities of such issuer.) 7. The Fund will not concentrate 25% or more of the value of its total assets, determined at the time an investment is made, exclusive of U.S. Government securities, in securities issued by companies engaged in the same industry. 8. The Fund will not acquire or retain any security issued by a company, an officer or director of which is an officer or director of the Fund or an officer, director or other affiliated person of its investment adviser. 9. The Fund will not acquire or retain any security issued by a company if any of the directors or officers of the Fund, or directors, officers or other affiliated persons of its investment adviser beneficially own more than 1/2% of such company's securities and all of the above persons owning more than 1/2% own together more than 5% of its securities. 10. The Fund will not act as an underwriter or distributor of securities other than shares of the Fund and will not purchase any securities which are restricted from sale to the public without registration under the Securities Act of 1933, as amended. 11. The Fund will not purchase any interest in any oil, gas or any other mineral exploration or development program. 12. The Fund will not purchase or sell real estate or real estate mortgage loans. 13. The Fund will not purchase or sell commodities or commodities contracts, including futures contracts. TRUSTEES AND OFFICERS OF THE FUND The name, age, address, principal occupations during the past five years and other information with respect to each of the trustees and officers of the Fund are as follows: MICHAEL L. HERSHEY* Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (CHAIRMAN, PRESIDENT AND A TRUSTEE OF THE FUND) Mr. Hershey, age 58, is President and Chairman of the Board of Landis Associates, Inc., an investment advisory firm which he founded in 1986. Prior to that time, he served as President of Kalmar Investments, Inc., an investment advisory firm, from 1982 to 1986. Mr. Hershey attended Princeton University from 1956 to 1961. He has served as a director of Nematron Corporation, a manufacturer of industrial computers, since March, 1995. ROBERT J. FAHEY, JR. 2 Logan Square 20th Floor Philadelphia, Pennsylvania (TRUSTEE) Mr. Fahey, age 39, joined Cushman & Wakefield, a commercial real estate services firm and a Rockefeller Group Company, in 1985. He presently serves as a Director and Manager of Real Estate Investment Banking of Cushman & Wakefield's Financial Services Group in its Philadelphia, Pennsylvania office. Prior to joining Cushman & Wakefield, Mr. Fahey was associated for three years with Strouse, Greenberg & Co., Inc. as an Associate in the Mortgage Banking Group. Mr. Fahey graduated from Temple University in 1981 and is a candidate in the Masters of Business Administration program at Temple University. He is currently a part-time instructor of real estate finance in the graduate program at Temple. He is a member of the Urban Land Institute, the Mortgage Bankers Association, the National Association of Realtors and The World Affairs Council. __________________ * Mr. Michael L. Hershey and Dr. Stephen L. Hershey are trustees who are "interested persons" of the Fund as that term is defined in the Investment Company Act of 1940. STEPHEN L. HERSHEY, M.D.* 4745 Stanton-Ogletown Road Suite 225 Newark, Delaware (TRUSTEE) Dr. Hershey, age 56, has been associated with First State Orthopaedic Consultants, P.A. (formerly Wilmington Orthopaedic Consultants, P.A.) since 1978. He graduated from Kenyon College in 1963 and received his M.D. from Jefferson Medical College in 1968. He is a member of the American Medical Association, the American Academy of Orthopaedic Surgeons, the American College of Surgeons, the Southern Medical Association, the Jefferson Orthopaedic Society, the Delaware Society of Orthopaedic Surgeons (charter member), the New Castle County Medical Society and the Medical Society of Delaware. PAUL J. LARSON, C.F.A. Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (VICE PRESIDENT AND TREASURER) Mr. Larson, age 52, has been Vice President and Treasurer of the Fund since August, 1997. He joined Landis Associates, Inc., the Fund's investment adviser, as an investment manager in July, 1997. Prior to such time, he was an investment advisor with Kalmar Investments, Inc. from April, 1995 to October, 1996. From June, 1993 to April, 1995 he was employed by Ashford Capital Management as an investment advisor. From December, 1984 to August, 1993, Mr. Larson was employed by YMCA Retirement Fund, most recently as a Retirement Fund Manager. Mr. Larson received his B.S. degree from Rensselaer Polytechnic Institute in 1967 and his M.S. degree in 1968 also from Rensselaer Polytechnic Institute. He received his Chartered Financial Analyst designation in 1976. __________________ * Mr. Michael L. Hershey and Dr. Stephen L. Hershey are trustees who are "interested persons" of the Fund as that term is defined in the Investment Company Act of 1940. P. COLEMAN TOWNSEND, JR. 919 N. Market Street Mellon Bank Center, Suite 420 Wilmington, Delaware 19801 (TRUSTEE) Mr. Townsend, age 51, has been the President and Chief Executive Officer of Townsends, Inc., an agricultural business, since 1984. He graduated from the University of Delaware in 1969. Mr. Townsend is presently a member of the Board of Directors of the Baltimore Trust Company and the National Broiler Council. He is also a member of the Board of Visitors of Delaware State University and a member of the Foundation Board of Beebe Medical Center. LORENZO A. VILLALON Longwood Corporate Center Suite 213 415 McFarlan Road Kennett Square, Pennsylvania 19348 (VICE PRESIDENT AND SECRETARY) Mr. Villalon, age 46, has been Vice President and Secretary of the Fund since August, 1997. He was Vice President and Treasurer of the Fund from July, 1996 to August, 1997. He also has served as a research analyst with Landis Associates, Inc., the Fund's investment adviser, since November, 1995. Prior to such time, he was a research analyst with Friess Associates, Inc. from June, 1992 to November, 1995. From May, 1979 to May, 1992, he was employed by J.P. Morgan & Co., most recently as Vice President. Mr. Villalon received his B.A. degree from Haverford College and his M.B.A. degree from Wharton Graduate School. CAMILLE F. WILDES 225 East Mason Street Milwaukee, Wisconsin 53202 (VICE PRESIDENT/COMPLIANCE OFFICER) Ms. Wildes, age 45, is a Vice President of Fiduciary Management, Inc., the Fund's Administrator, and has been employed by such firm in various capacities since December, 1982. The Fund's standard method of compensating trustees is to pay each trustee who is not an officer of the Fund a fee of $250 for each meeting of the trustees attended. The Fund also may reimburse its trustees for travel expenses incurred in order to attend meetings of the trustees. During the fiscal year ended June 30, 1997, the Fund paid a total of $750 in fees to trustees who were not officers of the Fund. Mr. Michael L. Hershey and Dr. Stephen L. Hershey are brothers. The table below sets forth the compensation paid by the Fund to each of the current trustees of the Fund during the fiscal year ended June 30, 1997: COMPENSATION TABLE
Name of Estimated Annual Total Person Aggregate Pension or Retirement Benefits Upon Compensation Compensation Benefits Accrued As Retirement from Fund Paid from Fund Part of Fund Expenses to Trustees Michael L. Hershey $0 $0 $0 $0 Robert J. Fahey, Jr. $250 $0 $0 $250 Stephen L. Hershey, M.D. $250 $0 $0 $250 P. Coleman Townsend, Jr. $250 $0 $0 $250
OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS Set forth below are the names and addresses of all holders of the Fund's shares who as of September 30, 1997 beneficially owned more than 5% of the Fund's then outstanding shares, as well as the number of shares of the Fund beneficially owned by all officers and directors of the Fund as a group. Name and Address of Beneficial Owner Number of Shares Percent of Class Wilmington Trust Co., Custodian 490,944(1)(2) 25.52% FBO J. Eric May Trust c/o Mutual Funds 1100 North Market Street Wilmington, DE 19890-0001 Patterson & Co. 272,739(2) 14.18% c/o Corestates Bank P. O. Box 7829 Philadelphia, PA 19101-7829 Wilmington Trust Co., Trustee 111,278(2) 5.79% Richards Layton & Finger Money Purchase Pension Plan Dated 4/27/79 FBO R. Franklin Balotti #31896 1100 N. Market Street Wilmington, DE 19890-0001 Officers and Trustees as a Group (7 persons) 56,405 (3) 2.93% ___________________ (1) Excludes 81,255 shares held by Wilmington Trust Company, Trustee, FBO J. Eric May Charitable Remainder Trust dated May 30, 1995. (2) Consists solely of shares in one or more accounts managed by the Adviser and over which the Adviser has investment authority. (3) Excludes 1,015,454 shares in accounts managed by the Adviser and over which the Adviser has investment authority. By virtue of its share ownership, Wilmington Trust Company, as custodian FBO J. Eric May Trust, is deemed to control the Fund. In combination with the holders of more than 24.48% of the Fund's outstanding shares, it owns sufficient shares to approve or disapprove all matters brought before the Fund's shareholders. INVESTMENT ADVISER AND ADMINISTRATOR As set forth in the Prospectus under the caption "Management of the Fund" the investment adviser to the Fund is Landis Associates, Inc. (the "Adviser"). Pursuant to an investment advisory agreement between the Fund and the Adviser (the "Advisory Agreement") the Adviser furnishes continuous investment advisory services and management to the Fund. The Adviser is controlled by Michael L. Hershey, who owns 80% of its outstanding capital stock. Mr. Hershey is also Chairman, President, Treasurer and a trustee of the Fund. Dr. Stephen L. Hershey is a director of the Adviser. The Fund will pay all of its expenses not assumed by the Adviser including, but not limited to, the costs of preparing and printing its registration statements required under the Securities Act of 1933 and the Investment Company Act of 1940 and any amendments thereto, the expenses of registering its shares with the Securities and Exchange Commission and in the various states, the printing and distribution cost of prospectuses mailed to existing shareholders, the cost of trustee and officer liability insurance, reports to shareholders, reports to government authorities and proxy statements, interest charges, brokerage commissions, and expenses incurred in connection with portfolio transactions. The Fund will also pay the fees of trustees who are not officers of the Fund, salaries of administrative and clerical personnel, association membership dues, auditing and accounting services, fees and expenses of any custodian or trustees having custody of Fund assets, expenses of calculating the net asset value and repurchasing and redeeming shares, and charges and expenses of dividend disbursing agents, registrars, and share transfer agents, including the cost of keeping all necessary shareholder records and accounts and handling any problems relating thereto. The Adviser has undertaken to reimburse the Fund to the extent that the aggregate annual operating expenses, including the investment advisory fee but excluding interest, taxes, brokerage commissions and extraordinary items, exceed that percentage of the average net assets of the Fund for such year, as determined by valuations made as of the close of each business day of the year, which is the most restrictive percentage provided by the state laws of the various states in which the Common Stock is qualified for sale. As of the date of this Statement of Additional Information the shares of the Fund are not qualified for sale in any state that imposes an expense limitation. The Fund monitors its expense ratio at least on a monthly basis. If the accrued amount of the expenses of the Fund exceeds the expense limitation, the Fund creates an account receivable from the Adviser for the amount of such excess. In such a situation the monthly payment of the Adviser's fee will be reduced by the amount of such excess, subject to adjustment month by month during the balance of the Fund's fiscal year if accrued expenses thereafter fall below this limit. In addition to any reimbursement required under the most restrictive applicable expense limitation of state securities commissions described above, the Adviser has voluntarily undertaken to reimburse the Fund for expenses in excess of 2.0% of average net assets. Such voluntary reimbursements to the Fund may be modified or discontinued at any time by the Adviser. For services provided by the Adviser under the Advisory Agreement for the fiscal years ended June 30, 1997, 1996 and 1995, the Fund paid the Adviser $286,734, $181,554 and $91,873, respectively. No reimbursement was made during the fiscal years ended June 30, 1997, 1996 and 1995. The Advisory Agreement will remain in effect for as long as its continuance is specifically approved at least annually, by (i) the trustees of the Fund, or by the vote of a majority (as defined in the Investment Company Act of 1940) of the outstanding shares of the Fund, and (ii) by the vote of a majority of the trustees of the Fund who are not parties to the Advisory Agreement or interested persons of the Adviser, cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement provides that it may be terminated at any time without the payment of any penalty, by the trustees of the Fund or by vote of a majority of the Fund's shareholders, on sixty days written notice to the Adviser, and by the Adviser on the same notice to the Fund and that it shall be automatically terminated if it is assigned. As set forth in the Prospectus under the caption "Management of the Fund," the administrator to the Fund is Fiduciary Management, Inc. (the "Administrator"). The administration agreement entered into between the Fund and the Administrator (the "Administration Agreement") will remain in effect until terminated by either party. The Administration Agreement may be terminated at any time, without the payment of any penalty, by the trustees of the Fund upon the giving of ninety (90) days' written notice to the Administrator, or by the Administrator upon the giving of ninety (90) days' written notice to the Fund. For the fiscal years ended June 30, 1997, 1996 and 1995, the Fund paid the Administrator $56,926, $36,311 and $18,374, respectively, pursuant to the Administration Agreement. The Advisory Agreement and the Administration Agreement provide that the Adviser and Administrator, as the case may be, shall not be liable to the Fund or its shareholders for anything other than willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties. The Advisory Agreement and the Administration Agreement also provide that the Adviser and Administrator, as the case may be, and their officers, directors and employees may engage in other businesses, devote time and attention to any other business whether of a similar or dissimilar nature, and render investment advisory services to others. DETERMINATION OF NET ASSET VALUE As set forth in the Prospectus under the caption "Determination of Net Asset Value," the net asset value of the Fund will be determined as of the close of regular trading (currently 4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for trading. The New York Stock Exchange is open for trading Monday through Friday except New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Additionally, if any of the aforementioned holidays falls on a Saturday, the New York Stock Exchange will not be open for trading on the preceding Friday and when any such holiday falls on a Sunday, the New York Stock Exchange will not be open for trading on the succeeding Monday, unless unusual business conditions exist, such as the ending of a monthly or the yearly accounting period. SYSTEMATIC WITHDRAWAL PLAN A shareholder who owns Fund shares worth at least $50,000 at the current net asset value may, by completing either the appropriate portion of the share purchase application included in the Prospectus or an application which may be obtained from Firstar Trust Company, create a Systematic Withdrawal Plan from which a fixed sum will be paid to the shareholder at regular intervals. To establish the Systematic Withdrawal Plan, the shareholder deposits Fund shares with the Fund and appoints it as agent to effect redemptions of Fund shares held in the account for the purpose of making monthly or quarterly withdrawal payments of a fixed amount to the shareholder out of the account. The minimum amount of a withdrawal payment is $500. These payments will be made from the proceeds of periodic redemption of shares in the account at net asset value. Redemptions will be made monthly or quarterly on any day a shareholder chooses. If that day is a weekend or holiday, such redemption will be made on the next business day. The shareholder may elect to have payments automatically deposited to his or her checking or savings account. Establishment of a Systematic Withdrawal Plan constitutes an election by the shareholder to reinvest in additional Fund shares, at net asset value, all income dividends and capital gains distributions payable by the Fund on shares held in such account, and shares so acquired will be added to such account. The shareholder may deposit additional Fund shares in his account at any time. Withdrawal payments cannot be considered as yield or income on the shareholder's investment, since portions of each payment will normally consist of a return of capital. Depending on the size or the frequency of the disbursements requested, and the fluctuation in the value of the Fund's portfolio, redemptions for the purpose of making such disbursements may reduce or even exhaust the shareholder's account. The shareholder may vary the amount or frequency of withdrawal payments, temporarily discontinue them, or change the designated payee or payee's address, by notifying Firstar Trust Company in writing prior to the fifteenth day of the month preceding the next payment. ALLOCATION OF PORTFOLIO BROKERAGE Decisions to buy and sell securities for the Fund are made by the Adviser subject to review by the Fund's trustees. In placing purchase and sale orders for portfolio securities for the Fund, it is the policy of the Adviser to seek the best execution of orders at the most favorable price in light of the overall quality of brokerage and research services provided, as described in this and the following paragraph. In selecting brokers to effect portfolio transactions, the determination of what is expected to result in best execution at the most favorable price involves a number of largely judgmental considerations. Among these are the Adviser's evaluation of the broker's efficiency in executing and clearing transactions, block trading capability (including the broker's willingness to position securities) and the broker's financial strength and stability. The most favorable price to the Fund means the best net price without regard to the mix between purchase or sale price and commission, if any. Over-the-counter securities are generally purchased and sold directly with principal market makers who retain the difference in their cost in the security and its selling price. In some instances, the Adviser feels that better prices are available from non-principal market makers who are paid commissions directly. The Fund does not intend to market its shares through intermediary broker-dealers. However, the Fund may place portfolio orders with broker-dealers who recommend the purchase of shares to clients (if the Adviser believes the commissions and transaction quality are comparable to that available from other brokers) and may allocate portfolio brokerage on that basis. In allocating brokerage business for the Fund, the Adviser also takes into consideration the research, analytical, statistical and other information and services provided by the broker, such as general economic reports and information, reports or analyses of particular companies or industry groups, market timing and technical information, and the availability of the brokerage firm's analysts for consultation. While the Adviser believes these services have substantial value, they are considered supplemental to the Adviser's own efforts in the performance of its duties under the Advisory Agreement. Other clients of the Adviser may indirectly benefit from the availability of these services to the Adviser, and the Fund may indirectly benefit from services available to the Adviser as a result of transactions for other clients. The Advisory Agreement provides that the Adviser may cause the Fund to pay a broker which provides brokerage and research services to the Adviser a commission for effecting a securities transaction in excess of the amount another broker would have charged for effecting the transaction, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of brokerage and research services provided by the executing broker viewed in terms of either the particular transaction or the Adviser's overall responsibilities with respect to the Fund and the other accounts as to which he exercises investment discretion. Brokerage commissions paid by the Fund during the fiscal years ended June 30, 1997, 1996 and 1995, respectively, totaled $83,895 on total transactions of $28,175,647, $55,895 on total transactions of $19,027,798, and $31,531 on total transactions of $6,291,313. During the fiscal year ended June 30, 1997, the Adviser did not allocate brokerage for the Fund based on research provided by brokers. PERFORMANCE INFORMATION Any total rate of return quotation for the Fund will be for a period of three or more months and will assume the reinvestment of all dividends and capital gains distributions which were made by the Fund during such period. Any period total rate of return quotation of the Fund will be calculated by dividing the net change in value of a hypothetical shareholder account established by an initial payment of $1,000 at the beginning of the period by 1,000. The net change in the value of a shareholder account is determined by subtracting $1,000 from the product obtained by multiplying the net asset value per share at the end of the period by the sum obtained by adding (A) the number of shares purchased at the beginning of the period plus (B) the number of shares purchased during the period with reinvested dividends and distributions. Any average annual compounded total rate of return quotation of the Fund will be calculated by dividing the redeemable value at the end of the period (i.e., the product referred to in the preceding sentence) by $1,000. A root equal to the period, measured in years, in question is then determined and 1 is subtracted from such root to determine the average annual compounded total rate of return. The foregoing computation may also be expressed by the following formula: P(1+T)n = ERV P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the stated periods at the end of the stated periods. An average annual compounded rate of return refers to the rate of return which, if applied to an initial investment at the beginning of a stated period and compounded over the period, would result in the redeemable value of the investment at the end of the stated period. The calculation assumes reinvestment of all dividends and distributions and reflects the effect of all recurring fees. The Fund's average annual compounded rate of return for the one year ended June 30, 1997 was 5.02% and for the period from December 2, 1992 (commencement of operations) through June 30, 1997 was 19.41%. The results below show the value of an assumed initial investment in the Fund of $10,000 made on December 2, 1992 through June 30, 1997, assuming reinvestment of all dividends and distributions. Value of $10,000 Cumulative June 30, Investment % Change 1993 $ 11,562 15.62% 1994 $ 12,126 21.26% 1995 $ 15,494 54.94% 1996 $ 21,442 114.42% 1997 $ 22,519 125.19% The foregoing performance results are based on historical earnings and should not be considered as representative of the performance of the Fund in the future. Such performance results also reflect reimbursements made by the Adviser during the period from December 2, 1992 to June 30, 1994 to keep the Fund's total fund operating expenses at or below 2.0%. An investment in the Fund will fluctuate in value and at redemption its value may be more or less than the initial investment. CUSTODIAN Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202, acts as custodian for the Fund. As such, Firstar Trust Company holds all securities and cash of the Fund, delivers and receives payment for securities sold, receives and pays for securities purchased, collects income from investments and performs other duties, all as directed by officers of the Fund. Firstar Trust Company does not exercise any supervisory function over the management of the Fund, the purchase and sale of securities or the payment of distributions to shareholders. Firstar Trust Company also acts as the Fund's transfer agent and dividend disbursing agent. TAXES As set forth in the Prospectus under the caption "Dividends, Distributions and Taxes, the Fund will endeavor to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended. Dividends from the Fund's net investment income and distributions from the Fund's net realized short-term capital gains are taxable to shareholders as ordinary income, whether received in cash or in additional Fund shares. The 70% dividends-received deduction for corporations will apply to dividends from the Fund's net investment income, subject to proportionate reductions if the aggregate dividends received by the Fund from domestic corporations in any year are less than 100% of the Fund's gross income. Any dividend or capital gains distribution paid shortly after a purchase of Fund shares will have the effect of reducing the per share net asset value of such shares by the amount of the dividend or distribution. Furthermore, if the net asset value of the Fund shares immediately after a dividend or distribution is less than the cost of such shares to the shareholder, the dividend or distribution will be taxable to the shareholder even though it results in a return of capital to him. The Fund may be required to withhold Federal income tax at a rate of 31% ("backup withholding") from dividend payments and redemption proceeds if a shareholder fails to furnish the Fund with his social security or other tax identification number and certify under penalty of perjury that such number is correct and that he is not subject to backup withholding due to the underreporting of income. The certification form is included as part of the share purchase application and should be completed when the account is opened. This section is not intended to be a full discussion of present or proposed federal income tax laws and the effects of such laws on an investor. Investors are urged to consult their own tax advisers for a complete review of the tax ramifications of an investment in the Fund. SHAREHOLDER MEETINGS It is contemplated that the Fund will not hold an annual meeting of shareholders in any year in which the election of trustees is not required to be acted on by shareholders under the Investment Company Act of 1940. The Fund's Trust Instrument and Bylaws also contain procedures for the removal of trustees by the Fund's shareholders. At any meeting of shareholders, duly called and at which a quorum is present, the shareholders may, by the affirmative vote of the holders of at least two-thirds (2/3) of the outstanding shares, remove any trustee or trustees. Upon the written request of the holders of shares entitled to not less than ten percent (10%) of all the votes entitled to be cast at such meeting, the Secretary of the Fund shall promptly call a special meeting of shareholders for the purpose of voting upon the question of removal of any trustee. Whenever ten or more shareholders of record who have been such for at least six months preceding the date of application, and who hold in the aggregate either shares having a net asset value of at least $25,000 or at least one percent (1%) of the total outstanding shares, whichever is less, shall apply to the Fund's Secretary in writing, stating that they wish to communicate with other shareholders with a view to obtaining signatures to a request for a meeting as described above and accompanied by a form of communication and request which they wish to transmit, the Secretary shall within five business days after such application either: (1) afford to such applicants access to a list of the names and addresses of all shareholders as recorded on the books of the Fund; or (2) inform such applicants as to the approximate number of shareholders of record and the approximate cost of mailing to them the proposed communication and form of request. If the Secretary elects to follow the course specified in clause (2) of the last sentence of the preceding paragraph, the Secretary, upon the written request of such applicants, accompanied by a tender of the material to be mailed and of the reasonable expenses of mailing, shall, with reasonable promptness, mail such material to all shareholders of record at their addresses as recorded on the books unless within five business days after such tender the Secretary shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement signed by at least a majority of the trustees to the effect that in their opinion either such material contains untrue statements of fact or omits to state facts necessary to make the statements contained therein not misleading, or would be in violation of applicable law, and specifying the basis of such opinion. After opportunity for hearing upon the objections specified in the written statement so filed, the Securities and Exchange Commission may, and if demanded by the trustees or by such applicants shall, enter an order either sustaining one or more of such objections or refusing to sustain any of them. If the Securities and Exchange Commission shall enter an order refusing to sustain any of such objections, or if, after the entry of an order sustaining one or more of such objections, the Securities and Exchange Commission shall find, after notice and opportunity for hearing, that all objections so sustained have been met, and shall enter an order so declaring, the Secretary shall mail copies of such material to all shareholders with reasonable promptness after the entry of such order and the renewal of such tender. INDEPENDENT ACCOUNTANTS Price Waterhouse LLP, 3100 Multifoods Tower, 33 South Sixth Street, Minneapolis, Minnesota 55402, currently serves as the independent accountants for the Fund. FINANCIAL STATEMENTS The following financial statements are incorporated by reference to the Annual Report, dated June 30, 1997, of The Henlopen Fund (File No. 811-7168), as filed with the Securities and Exchange Commission on August 6, 1997: Statement of Net Assets Statement of Operations Statements of Changes in Net Assets Financial Highlights Notes to Financial Statements Report of Independent Accounts DESCRIPTION OF SECURITIES RATINGS As set forth in the Prospectus under the caption "Investment Objective and Policies," the Fund may invest up to 30% of its total assets in publicly distributed debt securities assigned one of the three highest ratings of either Standard & Poor's Corporation ("Standard & Poor's") or Moody's Investors Service, Inc. ("Moody's"). A brief description of the ratings symbols and their meanings follows. Standard & Poor's Debt Ratings. A Standard & Poor's corporate debt rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation. This assessment may take into consideration obligors such as guarantors, insurers or lessees. The debt rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment as to market price or suitability for a particular investor. The ratings are based on current information furnished by the issuer or obtained by Standard & Poor's from other sources it considers reliable. Standard & Poor's does not perform any audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended or withdrawn as a result of changes in, or unavailability of, such information, or for other circumstances. The ratings are based, in varying degrees, on the following considerations: I. Likelihood of default - capacity and willingness of the obligor as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation; II. Nature of and provisions of the obligation; III. Protection afforded by, and relative position of the obligation in the event of bankruptcy, reorganization or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights; AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A - Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in the higher rated categories. Moody's Bond Ratings. Aaa - Bonds which are rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large, or by an exceptionally stable, margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa - Bonds which are Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude, or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Moody's applies numerical modifiers 1, 2 and 3 in each of the foregoing generic rating classifications. The modifier 1 indicates that the company ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the company ranks in the lower end of its generic rating category. PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits (a.) Financial Statements (Financial Highlights included in Part A and all incorporated by reference to the Annual Report, dated June 30, 1997 (File No. 811-7168), of The Henlopen Fund (as filed with the Securities and Exchange Commission on August 6, 1997)) (b.) Exhibits (1.1) Registrant's Certificate of Trust (1.2) Registrant's Trust Instrument (2) Registrant's Bylaws, as amended (3) None (4) None (5) Investment Advisory Agreement (6) None (7) None (8) Custodian Agreement with Firstar Trust Company (9.1) Administration Agreement with Fiduciary Management, Inc. (9.2) Transfer Agent Agreement with Firstar Trust Company (10) Opinion of Foley & Lardner, counsel for Registrant (11) Consent of Independent Accountants (12) None (13) Subscription Agreement (14.1) Individual Retirement Custodial Account (14.2) Simplified Employee Pension Plan (14.3) Defined Contribution Retirement Plan (15) None (16) Computation of Performance Quotations (Exhibit 16 to Post-Effective Amendment No. 5. to Registrant's Registration Statement on Form N-1A is incorporated by reference pursuant to Rule 411 under the Securities Act of 1933). (17) Financial Data Schedule (18) None Item 25. Persons Controlled by or under Common Control with Registrant Registrant is controlled by Wilmington Trust Company, as custodian FBO J. Eric May Trust, which owned or controlled 25.52% of the Fund's voting securities as of September 30, 1997. Registrant does not control any person. Item 26. Number of Holders of Securities Number of Record Holders Title of Class as of September 30, 1997 Shares of Beneficial Interest, no par value 312 Item 27. Indemnification Pursuant to Chapter 38 of Title 12 of the Delaware Code, the Registrant's Trust Instrument, dated September 16, 1992, contains the following article, which is in full force and effect and has not been modified or canceled: ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION Section 10.1. Limitation of Liability. A Trustee, when acting in such capacity, shall not be personally liable to any person other than the Trust or a beneficial owner for any act, omission or obligation of the Trust or any Trustee. A Trustee shall not be liable for any act or omission or any conduct whatsoever in his capacity as Trustee, provided that nothing contained herein or in the Delaware Act shall protect any Trustee against any liability to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. Section 10.2. Indemnification. (a) Subject to the exceptions and limitations contained in Section 10.2(b) below: (i) every Person who is, or has been, a Trustee or officer of the Trust (hereinafter referred to as a "Covered Person") shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof; (ii) the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened while in office or thereafter, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. (b) No indemnification shall be provided hereunder to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry); provided, however, that any Shareholder may, by appropriate legal proceedings, challenge any such determination by the Trustees or by independent counsel. (c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel, other than Covered Persons, and other persons may be entitled by contract or otherwise under law. (d) Expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in paragraph (a) of this Section 10.2 may be paid by the Trust or Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him to the Trust or Series if it is ultimately determined that he is not entitled to indemnification under this Section 10.2; provided, however, that either (a) such Covered Person shall have provided appropriate security for such undertaking, (b) the Trust is insured against losses arising out of any such advance payments or (c) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a trial- type inquiry or full investigation), that there is reason to believe that such Covered Person will be found entitled to indemnification under this Section 10.2. Section 10.3. Shareholders. In case any Shareholder or former Shareholder of any Series shall be held to be personally liable solely by reason of his being or having been a Shareholder of such Series and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by the Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series. Insofar as indemnification for and with respect to liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person or Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 28. Business and Other Connections of Investment Adviser Incorporated by reference to pages 3 through 5 of the Statement of Additional Information pursuant to Rule 411 under the Securities Act of 1933. Item 29. Principal Underwriters Registrant has no principal underwriters. Item 30. Location of Accounts and Records The accounts, books and other documents required to be maintained by Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder are in the physical possession of Registrant, Registrant's Custodian and Registrant's Administrator as follows: the documents required to be maintained by paragraphs (5) and (11) of Rule 31a-1(b) will be maintained by the Registrant; the documents required to be maintained by paragraphs (3) and (7) of Rule 31a-1(b) will be maintained by Registrant's Custodian; and all other records will be maintained by Registrant's Administrator. Item 31. Management Services All management-related service contracts entered into by Registrant are discussed in Parts A and B of this Registration Statement. Item 32. Undertakings Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Amended Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amended Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington and State of Delaware on the 20th day of October, 1997. THE HENLOPEN FUND (Registrant) By:/s/ Michael L. Hershey Michael L. Hershey, President and Treasurer Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed below by the following persons in the capacities and on the date indicated. Name Title Date /s/ Michael L. Hershey Principal Executive, October 20, 1997 Michael L. Hershey Financial and Accounting officer and Trustee /s/ Robert J. Fahey, Jr. Trustee October 20, 1997 Robert J. Fahey, Jr. /s/ Stephen L. Hershey, M.D. Trustee October 20, 1997 Stephen L. Hershey, M.D. /s/ P. Coleman Townsend, Jr. Trustee October 20, 1997 P. Coleman Townsend, Jr. EXHIBIT INDEX Exhibit No. Exhibit Page No. (1.1) Registrant's Certificate of Trust (1.2) Registrant's Trust Instrument (2) Registrant's Bylaws, as amended (3) None (4) None (5) Investment Advisory Agreement (6) None (7) None (8) Custodian Agreement with Firstar Trust Company (9.1) Administration Agreement with Fiduciary Management, Inc. (9.2) Transfer Agent Agreement with Firstar Trust Company (10) Opinion of Foley & Lardner, counsel for Registrant (11) Consent of Independent Accountants (12) None (13) Subscription Agreement (14.1) Individual Retirement Custodial Account (14.2) Simplified Employee Pension Plan (14.3) Defined Contribution Retirement Plan (15) None (16) Computation of Performance Quotations* (17) Financial Data Schedule (18) None _________________ * Incorporated by reference. EX-99.B.1.1 2 EXHIBIT 1.1 CERTIFICATE OF TRUST OF THE HENLOPEN FUND THIS CERTIFICATE OF TRUST is being duly executed and filed on behalf of the business trust formed hereby by the undersigned, all of the trustees of the Trust, to form a business trust pursuant to the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.). ARTICLE I The name of the business trust formed hereby is "The Henlopen Fund" (the "Trust"). ARTICLE II The Trust is, or will become prior to the issuance of beneficial interests, a registered investment company under the Investment Company Act of 1940, as amended (15 U.S.C. Section Section 80a-1 et seq.). ARTICLE III The address of the registered office of the Trust in the State of Delaware is Suite 100, 400 West Ninth Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Michael L. Hershey. ARTICLE IV The Trust Instrument relating to the Trust provides for the issuance of one or more series of shares of beneficial interest in the Trust. Separate and distinct records shall be maintained by the Trust for each series and the assets associated solely with any such series shall be held and accounted for separately from the assets of the Trust associated solely with any other series. As provided in the Trust Instrument, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the Trust generally. ARTICLE V This Certificate of Trust shall become effective upon filing in the office of the Secretary of State of Delaware IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust as of this 16th day of September, 1992. THE HENLOPEN FUND (the "Trust") /s/ Michael L. Hershey Michael L. Hershey, as Trustee /s/ Robert J. Fahey, Jr. Robert J. Fahey, Jr., as Trustee /s/ Stephen L. Hershey Stephen L. Hershey, M.D., as Trustee /s/ P. Coleman Townsend, Jr. P. Coleman Townsend, Jr., as Trustee EX-99.B.1.2 3 EXHIBIT 1.2 THE HENLOPEN FUND TRUST INSTRUMENT DATED SEPTEMBER 16, 1992 TABLE OF CONTENTS Page ARTICLE I -- NAME, DEFINITIONS AND CERTIFICATE OF TRUST 1 Section 1.1. Name 1 Section 1.2. Definitions 1 Section 1.3. Certificate of Trust 3 ARTICLE II -- BENEFICIAL INTEREST 3 Section 2.1. Shares of Beneficial Interest 3 Section 2.2. Issuance of Shares 4 Section 2.3. Register of Shares and Share Certificates 4 Section 2.4. Transfer of Shares 5 Section 2.5. Treasury Shares 5 Section 2.6. Establishment of Series 5 Section 2.7. Investment in the Trust 7 Section 2.8. Assets and Liabilities of Series 7 Section 2.9. No Preemptive Rights 9 Section 2.10. Personal Liability of Shareholders 9 Section 2.11. Assent to Trust Instrument 9 ARTICLE III -- THE TRUSTEES 9 Section 3.1. Management of the Trust 9 Section 3.2. Initial Trustees 10 Section 3.3. Term of Office of Trustees 11 Section 3.4. Vacancies and Appointment of Trustees 11 Section 3.5. Temporary Absence of Trustee 12 Section 3.6. Number of Trustees 12 Section 3.7. Effect of Death, Resignation, etc. of a Trustee 12 Section 3.8. Ownership of Assets of the Trust 12 ARTICLE IV -- POWERS OF THE TRUSTEES 13 Section 4.1. Powers 13 Section 4.2. Issuance and Repurchase of Shares 17 Section 4.3. Trustees and Officers as Shareholders 17 Section 4.4. Action by the Trustees 18 Section 4.5. Chairman of the Trustees 19 Section 4.6. Principal Transactions 19 ARTICLE V -- EXPENSES OF THE TRUST 19 Section 5.1. Trustee Reimbursement 19 ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT 20 Section 6.1. Investment Adviser 20 Section 6.2. Principal Underwriter 21 Section 6.3. Transfer Agent 21 Section 6.4. Parties to Contract 22 Section 6.5. Provisions and Amendments 22 ARTICLE VII -- SHAREHOLDERS' VOTING POWERS AND MEETINGS 23 Section 7.1. Voting Powers 23 Section 7.2. Meetings 24 Section 7.3. Quorum and Required Vote 24 ARTICLE VIII -- CUSTODIAN 25 Section 8.1. Appointment and Duties 25 Section 8.2. Central Certificate System 26 ARTICLE IX -- DISTRIBUTIONS AND REDEMPTIONS 27 Section 9.1. Distributions 27 Section 9.2. Redemptions 28 Section 9.3. Determination of Net Asset Value and Valuation of Portfolio Assets 28 Section 9.4. Suspension of the Right of Redemption 30 Section 9.5. Redemption of Shares in Order to Qualify as Regulated Investment Company 30 Section 9.6. Redemption of De Minimis Accounts 31 ARTICLE X -- LIMITATION OF LIABILITY AND INDEMNIFICATION 31 Section 10.1. Limitation of Liability 31 Section 10.2. Indemnification 31 Section 10.3. Shareholders 34 ARTICLE XI -- MISCELLANEOUS 34 Section 11.1. Trust Not a Partnership 34 Section 11.2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety 35 Section 11.3. Establishment of Record Dates 35 Section 11.4. Termination of Trust 36 Section 11.5. Reorganization 37 Section 11.6. Filing of Copies, References, Headings 38 Section 11.7. Applicable Law 38 Section 11.8. Amendments 40 Section 11.9. Fiscal Year 40 Section 11.10. Use of the Word "Henlopen" 40 Section 11.11. Provisions in Conflict with Law 41 THE HENLOPEN FUND DATED SEPTEMBER 16, 1992 TRUST INSTRUMENT, dated as of September 16, 1992, by and among Michael L. Hershey, Robert J. Fahey, Jr., Stephen L. Hershey, M.D., and P. Coleman Townsend, Jr., as trustees, and each person who becomes a Shareholder (as hereinafter defined) in accordance with the terms hereof. WHEREAS, the parties hereto desire to create a business trust pursuant to the Delaware Act (as hereinafter defined) for the investment and reinvestment of funds contributed thereto. NOW, THEREFORE, the parties hereto declare that all money and property contributed to the trust hereunder shall be held and managed in trust under this Trust Instrument for the benefit of the Shareholders as herein set forth below. ARTICLE I NAME, DEFINITIONS AND CERTIFICATE OF TRUST Section 1.1. Name. The name of the business trust created hereby is "The Henlopen Fund". Section 1.2. Definitions. Wherever used herein, unless otherwise required by the context or specifically provided: (a) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e) hereof, as from time to time amended. (b) The term "Commission" has the meaning given it in the 1940 Act. The terms "Affiliated Person", "Assignment", "Interested Person" and "Principal Underwriter" shall have the meanings given them in the 1940 Act, as modified by or interpreted by any applicable order or orders of the Commission or any rules or regulations adopted or interpretive releases of the Commission thereunder. "Majority Shareholder Vote" shall have the same meaning as the term "vote of a majority of the outstanding voting securities" is given in the 1940 Act, as modified by or interpreted by any applicable order or orders of the Commission or any rules or regulations adopted or interpretive releases of the Commission thereunder. (c) The "Delaware Act" refers to the Delaware Business Trust Act, 12 Del. C. Section 3801 et seq., as such Act may be amended from time to time. (d) "Net Asset Value" means the net asset value of each Series of the Trust determined in the manner provided in Article IX, Section 9.3 hereof. (e) "Outstanding Shares" means those Shares shown from time to time in the books of the Trust or its Transfer Agent as then issued and outstanding, but shall not include Shares which have been redeemed or repurchased by the Trust and which are at the time held in the treasury of the Trust. (f) "Person" means a natural person, partnership, limited partnership, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity. (g) "Series" means a series of Shares of the Trust established in accordance with the provisions of Article II, Section 2.6 hereof. (h) "Shareholder" means a record owner of Outstanding Shares of the Trust. (i) "Shares" means the equal proportionate transferable units of beneficial interest into which the beneficial interest of each Series of the Trust or class thereof shall be divided and may include fractions of Shares as well as whole Shares. (j) The "Trust" refers to The Henlopen Fund business trust created hereby, and reference to the Trust, when applicable to one or more Series of the Trust, shall refer to any such Series. (k) The "Trustees" means the Persons who have signed this Trust Instrument as trustees, so long as they shall continue to serve as trustees of the Trust in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed as Trustees in accordance with the provisions of Section 3.4 hereof, and reference herein to a Trustee or to the Trustees shall refer to such Persons in their capacity as Trustees hereunder. (l) "Trust Property" means any and all property, real or personal, tangible or intangible, which is owned or held by or for the account of one or more of the Trust or any Series, or the Trustees on behalf of the Trust or any Series. (m) The "1940 Act" refers to the Investment Company Act of 1940, as amended from time to time. Section 1.3. Certificate of Trust. Immediately upon the execution of this Trust Instrument, the Trustees shall file a Certificate of Trust with respect to the Trust in the office of the Secretary of State of the State of Delaware pursuant to the Delaware Act. ARTICLE II BENEFICIAL INTEREST Section 2.1. Shares of Beneficial Interest. The beneficial interest in the Trust shall be divided into such transferable Shares of one or more separate and distinct Series or classes of a Series as the Trustees shall from time to time create and establish. The number of Shares of each Series, and class thereof, authorized hereunder is unlimited. Each Share shall have no par value. All Shares issued hereunder, including without limitation, Shares issued in connection with a dividend in Shares or a split or reverse split of Shares, shall be fully paid and nonassessable. Section 2.2. Issuance of Shares. The Trustees in their discretion may, from time to time, without vote of the Shareholders, issue Shares, in addition to the then issued and outstanding Shares and Shares held in the treasury, to such party or parties and for such amount and type of consideration, subject to applicable law, including cash or securities, at such time or times and on such terms as the Trustees may deem appropriate, and may in such manner acquire other assets (including the acquisition of assets subject to, and in connection with, the assumption of liabilities) and businesses. In connection with any issuance of Shares, the Trustees may issue fractional Shares and Shares held in the treasury. The Trustees may from time to time divide or combine the Shares into a greater or lesser number without thereby changing the proportionate beneficial interests in the Trust. Contributions to the Trust may be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share or integral multiples thereof. Section 2.3. Register of Shares and Share Certificates. A register shall be kept at the principal office of the Trust or an office of the Trust's transfer agent which shall contain the names and addresses of the Shareholders of each Series, the number of Shares of that Series (or any class or classes thereof) held by them respectively and a record of all transfers thereof. As to Shares for which no certificate has been issued, such register shall be conclusive as to who are the holders of the Shares and who shall be entitled to receive dividends or other distributions or otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall be entitled to receive payment of any dividend or other distribution, nor to have notice given to him as herein or in the Bylaws provided, until he has given his address to the transfer agent or such other officer or agent of the Trustees as shall keep the said register for entry thereon. The Trustees, in their discretion, may authorize the issuance of share certificates and promulgate appropriate rules and regulations as to their use. Such certificates may be issuable for any purpose limited in the Trustees discretion. In the event that one or more certificates are issued, whether in the name of a shareholder or a nominee, such certificate or certificates shall constitute evidence of ownership of Shares for all purposes, including transfer, assignment or sale of such Shares, subject to such limitations as the Trustees may, in their discretion, prescribe. Section 2.4. Transfer of Shares. Except as otherwise provided by the Trustees, Shares shall be transferable on the records of the Trust only by the recent holder thereof or by his agent thereunto duly authorized in writing, upon delivery to the Trustees or the Trust's transfer agent of a duly executed instrument of transfer, together with a Share certificate, if one is outstanding, and such evidence of the genuineness of each such execution and authorization and of such other matters as may be required by the Trustees. Upon such delivery the transfer shall be recorded on the register of the Trust. Until such record is made, the Shareholder of record shall be deemed to be the holder of such Shares for all purposes hereunder and neither the Trustees nor the Trust, nor any transfer agent or registrar nor any officer, employee or agent of the Trust shall be affected by any notice of the proposed transfer. Section 2.5. Treasury Shares. Shares held in the treasury shall, until reissued pursuant to Section 2.2 hereof, not confer any voting rights on the Trustees, nor shall such Shares be entitled to any dividends or other distributions declared with respect to the Shares. Section 2.6. Establishment of Series. The Shares issued hereunder shall consist of one or more Series and separate and distinct records shall be maintained by the Trust for each Series and the assets associated solely with any such Series shall be held and accounted for separately from the assets of the Trust associated solely with any other Series. The Trustees shall have full power and authority, in their sole discretion, and without obtaining any prior authorization or vote of the Shareholders of any Series of the Trust, to establish and designate and to change in any manner any such Series of Shares or any classes of initial or additional Series and to fix such preferences, voting powers, rights and privileges of such Series or classes thereof as the Trustees may from time to time determine, to divide or combine the Shares or any Series or classes thereof into a greater or lesser number, to classify or reclassify any issued Shares or any Series or classes thereof into one or more Series or classes of Shares, and to take such other action with respect to the Shares as the Trustees may deem desirable. The establishment and designation of any Series shall be effective upon the adoption of a resolution by a majority of the Trustees setting forth such establishment and designation and the relative rights and preferences of the Shares of such Series. A Series may issue any number of Shares but need not issue any shares. At any time that there are no Shares outstanding of any particular Series previously established and designated, the Trustees may by a majority vote abolish that Series and the establishment and designation thereof. All references to Shares in this Trust Instrument shall be deemed to be Shares of any or all Series, or classes thereof, as the context may require. All provisions herein relating to the Trust shall apply equally to each Series of the Trust, and each class thereof, except as the context otherwise requires. Each Share of a Series of the Trust shall represent an equal beneficial interest in the net assets of such Series. Each holder of outstanding Shares of a Series shall be entitled to receive his pro rata share of distributions of income and capital gains, if any, made with respect to such Series. Upon redemption of his Shares, such Shareholder shall be paid solely out of the funds and property of such Series of the Trust. Section 2.7. Investment in the Trust. The Trustees shall accept investments in any Series of the Trust from such Persons and on such terms as they may from time to time authorize. At the Trustees' discretion, such investments, subject to applicable law, may be in the form of cash or securities in which the affected Series is authorized to invest, valued as provided in Article IX, Section 9.3 hereof. Investments in a Series shall be credited to each Shareholder's account in the form of full Shares at the Net Asset Value per Share next determined after the investment is received; provided, however, that the Trustees may, in their sole discretion, (a) fix the Net Asset Value per Share of the initial capital contribution, (b) impose a sales charge upon investments in the Trust in such manner and at such time determined by the Trustees or (c) issue fractional Shares. Section 2.8. Assets and Liabilities of Series. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held and accounted for separately from the other assets of the Trust and of every other Series and may be referred to herein as "assets belonging to" that Series. The assets belonging to a particular Series shall belong to that Series for all purposes, and to no other Series, subject only to the rights of creditors of that Series. In addition, any assets, income, earnings, profits or funds, or payments and proceeds with respect thereto, which are not readily identifiable as belonging to any particular Series shall be allocated by the Trustees between and among one or more of the Series in such manner as the Trustees, in their sole discretion, deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes, and such assets, income, earnings, profits or funds, or payments and proceeds with respect thereto shall be assets belonging to that Series. The assets belonging to a particular Series shall be so recorded upon the books of the Trust, and shall be held by the Trustees in trust for the benefit of the holders of Shares of that Series. The assets belonging to each particular Series shall be charged with the liabilities of that Series and all expenses, costs, charges and reserves attributable to that Series. Any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series shall be allocated and charged by the Trustees between or among any one or more of the Series in such manner as the Trustees in their sole discretion deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes. Without limitation of the foregoing provisions of this Section 2.8, but subject to the right of the Trustees in their discretion to allocate general liabilities, expenses, costs, charges or reserves as herein provided, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable against the assets of such Series only, and not against the assets of the Trust generally. Notice of this contractual limitation on inter-Series liabilities may, in the Trustee's sole discretion, be set forth in the Certificate of Trust of the Trust (whether originally or by amendment) as filed or to be filed in the Office of the Secretary of State of the State of Delaware pursuant to the Delaware Act, and upon the giving of such notice in the Certificate of Trust, the statutory provisions of Section 3804 of the Delaware Act relating to limitations on inter-Series liabilities (and the statutory effect under Section 3804 of setting forth such notice in the Certificate of Trust) shall become applicable to the Trust and each Series. Any Person extending credit to, contracting with or having any claim against any Series may look only to the assets of that Series to satisfy or enforce any debt, liability, obligation or expense incurred, contracted for or otherwise existing with respect to that Series. No Shareholder or former Shareholder of any Series shall have a claim on or any right to any assets allocated or belonging to any other Series. Section 2.9. No Preemptive Rights. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issues by the Trust or the Trustees, whether of the same or other Series. Section 2.10. Personal Liability of Shareholders. Each Shareholder of the Trust shall not be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or any Series thereof. The Trustees shall have no power to bind any Shareholder personally or, except as provided by applicable law, to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by way of subscription for any Shares or otherwise. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust or to any Series thereof shall include a recitation limiting the obligation represented thereby to the Trust or to one or more Series thereof and its or their assets (but the omission of such a recitation shall not operate to bind any Shareholder or Trustee of the Trust). Section 2.11. Assent to Trust Instrument. Every Shareholder, by virtue of having purchased a Share, shall be held to have expressly assented to, and agreed to be bound by, the terms hereof. ARTICLE III THE TRUSTEES Section 3.1. Management of the Trust. The Trustees shall have exclusive and absolute control over the Trust Property and over the business of the Trust to the same extent as if the Trustees were the sole owners of the Trust Property and business in their own right, but with such powers of delegation as may be permitted by this Trust Instrument. The Trustees shall have power to conduct the business of the Trust and carry on its operations in any and all of its branches and maintain offices both within and without the State of Delaware, in any and all states of the United States of America, in the District of Columbia, in any and all commonwealths, territories, dependencies, colonies, or possessions of the United States of America, and in any foreign jurisdiction and to do all such other things and execute all such instruments as they deem necessary, proper or desirable in order to promote the interests of the Trust although such things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing the provisions of this Trust Instrument, the presumption shall be in favor of a grant of power to the Trustees. The enumeration of any specific power in this Trust Instrument shall not be construed as limiting the aforesaid power. The powers of the Trustees may be exercised without order of or resort to any court. Except for the Trustees named herein or appointed to fill vacancies pursuant to Section 3.4 of this Article III, the Trustees shall be elected by the Shareholders owning of record a plurality of the Shares voting at a meeting of Shareholders. Such a meeting shall be held on a date fixed by the Trustees. In the event that less than a majority of the Trustees holding office have been elected by Shareholders, the Trustees then in office will call a Shareholders' meeting for the election of Trustees. Section 3.2. Initial Trustees. The initial Trustees shall be the persons named herein. On a date fixed by the Trustees, the Shareholders shall elect at least three (3) but not more than twelve (12) Trustees, as specified by the Trustees pursuant to Section 3.6 of this Article III. Section 3.3. Term of Office of Trustees. The Trustees shall hold office during the lifetime of this Trust, and until its termination as herein provided; except (a) that any Trustee may resign his trust by written instrument signed by him and delivered to the other Trustees, which shall take effect upon such delivery or upon such later date as is specified therein; (b) that any Trustee may be removed at any time by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal, specifying the date when such removal shall become effective; (c) that any Trustee who requests in writing to be retired or who has died, become physically or mentally incapacitated by reason of disease or otherwise, or is otherwise unable to serve, may be retired by written instrument signed by a majority of the other Trustees, specifying the date of his retirement; and (d) that a Trustee may be removed at any meeting of the Shareholders of the Trust by a vote of Shareholders owning at least two-thirds of the outstanding Shares. Section 3.4. Vacancies and Appointment of Trustees. In case of the declination to serve, death, resignation, retirement, removal, physical or mental incapacity by reason of disease or otherwise, or a Trustee is otherwise unable to serve, or an increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled, the other Trustees shall have all the powers hereunder and the certificate of the other Trustees of such vacancy shall be conclusive. In the case of an existing vacancy, the remaining Trustees shall fill such vacancy by appointing such other person as they in their discretion shall see fit consistent with the limitations under the 1940 Act. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees in office or by resolution of the Trustees, duly adopted, which shall be recorded in the minutes of a meeting of the Trustees, whereupon the appointment shall take effect. An appointment of a Trustee may be made by the Trustees then in office in anticipation of a vacancy to occur by reason of retirement, resignation or increase in number of Trustees effective at a later date, provided that said appointment shall become effective only at or after the effective date of said retirement, resignation or increase in number of Trustees. As soon as any Trustee appointed pursuant to this Section 3.4 shall have accepted this trust, the trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. The power to appoint a Trustee pursuant to this Section 3.4 is subject to the provisions of Section 16(a) of the 1940 Act. Section 3.5. Temporary Absence of Trustee. Any Trustee may, by power of attorney, delegate his power for a period not exceeding six months at any one time to any other Trustee or Trustees, provided that in no case shall less than two Trustees personally exercise the other powers hereunder except as herein otherwise expressly provided. Section 3.6. Number of Trustees. The number of Trustees shall initially be four (4), and thereafter shall be such number as shall be fixed from time to time by a majority of the Trustees; provided, however, that the number of Trustees shall in no event be less than three (3) nor more than twelve (12). Section 3.7. Effect of Death, Resignation, etc. of a Trustee. The declination to serve, death, resignation, retirement, removal, incapacity, or inability of the Trustees, or any one of them, shall not operate to terminate the Trust or to revoke any existing agency created pursuant to the terms of this Trust Instrument. Section 3.8. Ownership of Assets of the Trust. The assets of the Trust and of each Series thereof shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. Legal title in all of the assets of the Trust and the right to conduct any business shall at all times be considered as vested in the Trustees on behalf of the Trust, except that the Trustees may cause legal title to any Trust Property to be held by, or in the name of the Trust, or in the name of any person as nominee. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or of any Series or any right of partition or possession thereof, but each Shareholder shall have, except as otherwise provided for herein, a proportionate undivided beneficial interest in the Trust or Series. The Shares shall be personal property giving only the rights specifically set forth in this Trust Instrument or the Delaware Act. ARTICLE IV POWERS OF THE TRUSTEES Section 4.1. Powers. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to trust investments, but shall have full authority and power to make any and all investments which they, in their sole discretion, shall deem proper to accomplish the purpose of this Trust without recourse to any court or other authority. Subject to any applicable limitation in this Trust Instrument or the Bylaws of the Trust, the Trustees shall have power and authority: (a) To invest and reinvest cash and other property, and to hold cash or other property uninvested, without in any event being bound or limited by any present or future law or custom in regard to investments by trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or all of the assets of the Trust; (b) To operate as and carry on the business of an investment company, and exercise all the powers necessary and appropriate to the conduct of such operations; (c) To borrow money and in this connection issue notes or other evidence of indebtedness; to secure borrowings by mortgaging, pledging or otherwise subjecting as security the Trust Property; to endorse, guarantee, or undertake the performance of an obligation or engagement of any other Person and to lend Trust Property; (d) To provide for the distribution of interests of the Trust either through a principal underwriter in the manner hereinafter provided for or by the Trust itself, or both, or otherwise pursuant to a plan of distribution of any kind; (e) To adopt Bylaws not inconsistent with this Trust Instrument providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders; such Bylaws shall be deemed incorporated and included in this Trust Instrument; (f) To elect and remove such officers and appoint and terminate such agents as they consider appropriate; (g) To employ one or more banks, trust companies or companies that are members of a national securities exchange or such other entities as the Commission may permit as custodians of any assets of the Trust subject to any conditions set forth in this Trust Instrument or in the Bylaws; (h) To retain one or more transfer agents and shareholder servicing agents, or both; (i) To set record dates in the manner provided herein or in the Bylaws; (j) To delegate such authority as they consider desirable to any officers of the Trust and to any investment adviser, manager, custodian, underwriter or other agent or independent contractor; (k) To sell or exchange any or all of the assets of the Trust, subject to the provisions of Article XI, Section 11.4(b) hereof; (l) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper; (m) To exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities; (n) To hold any security or property in a form not indicating any trust, whether in bearer, book entry, unregistered or other negotiable form; or either in the name of the Trust or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of Delaware business trusts or investment companies; (o) To establish separate and distinct Series with separately defined investment objectives and policies and distinct investment purposes in accordance with the provisions of Article II hereof and to establish classes of such Series having relative rights, powers and duties as they may provide consistent with applicable law; (p) Subject to the provisions of Section 3804 of the Delaware Act, to allocate assets, liabilities and expenses of the Trust to a particular Series or to apportion the same between or among two or more Series, provided that any liabilities or expenses incurred by a particular Series shall be payable solely out of the assets belonging to that Series as provided for in Article II hereof; (q) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust; (r) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes; (s) To make distributions of income and of capital gains to Shareholders in the manner hereinafter provided; (t) To establish, from time to time, a minimum investment for Shareholders in the Trust or in one or more Series or class, and to require the redemption of the Shares of any Shareholders whose investment is less than such minimum upon giving notice to such Shareholder; (u) To establish one or more committees, to delegate any of the powers of the Trustees to said committees and to adopt a committee charter providing for such responsibilities, membership (including Trustees, officers or other agents of the Trust therein) and any other characteristics of said committees as the Trustees may deem proper. Notwithstanding the provisions of this Article IV, and in addition to such provisions or any other provision of this Trust Instrument or of the Bylaws, the Trustees may by resolution appoint a committee consisting of less than the whole number of Trustees then in office, which committee may be empowered to act for and bind the Trustees and the Trust, as if the acts of such committee were the acts of all the Trustees then in office, with respect to the institution, prosecution, dismissal, settlement, review or investigation of any action, suit or proceeding which shall be pending or threatened to be brought before any court, administrative agency or other adjudicatory body; (v) To interpret the investment policies, practices or limitations of any Series; (w) To establish a registered office and have a registered agent in the state of Delaware; and (x) In general to carry on any other business in connection with or incidental to any of the foregoing powers, to do everything necessary, suitable or proper for the accomplishment of any purpose or the attainment of any object or the furtherance of any power hereinbefore set forth, either alone or in association with others, and to do every other act or thing incidental or appurtenant to or growing out of or connected with the aforesaid business or purposes, objects or powers. The foregoing clauses shall be construed both as objects and powers, and the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the general powers of the Trustees. Any action by one or more the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust or the applicable Series, and not an action in an individual capacity. The Trustees shall not be limited to investing in obligations maturing before the possible termination of the Trust. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. Section 4.2. Issuance and Repurchase of Shares. The Trustees shall have the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to the provisions set forth in Articles II and IX, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property of the Trust, or the particular Series of the Trust, with respect to which such Shares are issued. Section 4.3. Trustees and Officers as Shareholders. Any Trustee, officer or other agent of the Trust may acquire, own and dispose of Shares to the same extent as if he were not a Trustee, officer or agent; and the Trustees may issue and sell or cause to be issued and sold Shares to and buy such Shares from any such person or any firm or company in which he is interested, subject only to the general limitations herein contained as to the sale and purchase of such Shares; and all subject to any restrictions which may be contained in the Bylaws. Section 4.4. Action by the Trustees. The Trustees shall act by majority vote at a meeting only called or by unanimous written consent without a meeting or by telephone meeting provided a quorum of Trustees participate in any such telephone meeting, unless the 1940 Act requires that a particular action be taken only at a meeting at which the Trustees are present in person. At any meeting of the Trustees, a majority of the Trustees shall constitute a quorum. Meetings of the Trustees may be called orally or in writing by the Chairman of the Board of Trustees or by any two other Trustees. Notice of the time, date and place of all meetings of the Trustees shall be given by the party calling the meeting to each Trustee by telephone, telefax, or telegram sent to his home or business address at least twenty-four hours in advance of the meeting or by written notice mailed to his home or business address at least seventy- two hours in advance of the meeting. Notice need not be given to any Trustee who attends the meeting without objecting to the lack of notice or who executes a written waiver of notice with respect to the meeting. Any meeting conducted by telephone shall be deemed to take place at the principal office of the Trust, as determined by the Bylaws or the Trustees. Subject to the requirements of the 1940 Act, the Trustees by majority vote may delegate to any one or more of their number their authority to approve particular matters or take particular actions on behalf of the Trust. Written consents or waivers of the Trustees may be executed in one or more counterparts. Execution of a written consent or waiver and delivery thereof to the Trust may be accomplished by telefax. Section 4.5. Chairman of the Trustees. The Trustees shall appoint one of their number to be Chairman of the Board of Trustees. The Chairman shall preside at all meetings of the Trustees, shall be responsible for the execution of policies established by the Trustees and the administration of the Trust, and may be (but is not required to be) the chief executive, financial and/or accounting officer of the Trust. Section 4.6. Principal Transactions. Except to the extent prohibited by applicable law, the Trustees may, on behalf of the Trust, buy any securities from or sell any securities to, or lend any assets of the Trust to, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any investment adviser, distributor or transfer agent for the Trust or with any Interested Person of such person; and the Trust may employ any such person, or firm or company in which such person is an Interested Person, as broker, legal counsel, registrar, investment adviser, distributor, transfer agent, dividend disbursing agent, custodian or in any other capacity upon customary terms. ARTICLE V EXPENSES OF THE TRUST Section 5.1. Trustee Reimbursement. Subject to the provisions of Article II, Section 2.8 hereof, the Trustees shall be reimbursed from the Trust estate or the assets belonging to the appropriate Series for their expenses and disbursements, including, without limitation, fees and expenses of Trustees who are not Interested Persons of the Trust, interest expense, taxes, fees and commissions of every kind, expenses of pricing Trust portfolio securities, expenses of issue, repurchase and redemption of shares, including expenses attributable to a program of periodic repurchases or redemptions, expenses of registering and qualifying the Trust and its Shares under Federal and State laws and regulations or under the laws of any foreign jurisdiction, charges of third parties, including investment advisers, managers, custodians, transfer agents, portfolio accounting and/or pricing agents, and registrars, expenses of preparing and setting up in type prospectuses and statements of additional information and other related Trust documents, expenses of printing and distributing prospectuses sent to existing Shareholders, auditing and legal expenses, reports to Shareholders, expenses of meetings of Shareholders and proxy solicitations therefor, insurance expenses, association membership dues and for such non-recurring items as may arise, including litigation to which the Trust (or a Trustee acting as such) is a party, and for all losses and liabilities by them incurred in administering the Trust, and for the payment of such expenses, disbursements, losses and liabilities the Trustees shall have a lien on the assets belonging to the appropriate Series, or in the case of an expense allocable to more than one Series, on the assets of each such Series, prior to any rights or interests of the Shareholders thereto. This section shall not preclude the Trust from directly paying any of the aforementioned fees and expenses. ARTICLE VI INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT Section 6.1. Investment Adviser. The Trustees may in their discretion, from time to time, enter into an investment advisory or management contract or contracts with respect to the Trust or any Series whereby the other party or parties to such contract or contracts shall undertake to furnish the Trustees with such management, investment advisory, statistical and research facilities and services and such other facilities and services, if any, and all upon such terms and conditions, as the Trustees may in their discretion determine; provided, however, that the initial approval and entering into of such contract or contracts shall be subject to a Majority Shareholder Vote. Notwithstanding any other provision of this Trust Instrument, the Trustees may authorize any investment adviser (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales or exchanges of portfolio securities, other investment instruments of the Trust, or other Trust Property on behalf of the Trustees, or may authorize any officer, agent, or Trustee to effect such purchases, sales or exchanges pursuant to recommendations of the investment advisor (and all without further action by the Trustees). Any such purchases, sales and exchanges shall be deemed to have been authorized by all of the Trustees. The Trustees may authorize, subject to applicable requirements of the 1940 Act, including those relating to Shareholder approval, the investment advisor to employ, from time to time, one or more sub-advisors to perform such of the acts and services of the investment advisor, and upon such terms and conditions, as may be agreed upon between the investment advisor and sub-advisor. Any reference in this Trust Instrument to the investment advisor shall be deemed to include such sub-advisors, unless the context otherwise requires. Section 6.2. Principal Underwriter. The Trustees may in their discretion from time to time enter into an exclusive or non-exclusive underwriting contract or contracts providing for the sale of Shares, whereby the Trust may either agree to sell Shares to the other party to the contract or appoint such other party its sales agent for such Shares. In either case, the contract shall be on such terms and conditions, if any, as may be prescribed in the Bylaws, and such further terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Article VI, or of the Bylaws; and such contract may also provide for the repurchase or sale of Shares by such other party as principal or as agent of the Trust. Section 6.3. Transfer Agent. The Trustees may in their discretion from time to time enter into one or more transfer agency and Shareholder service contracts whereby the other party or parties shall undertake to furnish the Trustees with transfer agency and Shareholder services. The contract or contracts shall be on such terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Trust Instrument or of the Bylaws. Section 6.4. Parties to Contract. Any contract of the character described in Sections 6.1, 6.2, and 6.3 of this Article VI or any contract of the character described in Article VIII hereof may be entered into with any corporation, firm, partnership, trust or association, although one or more of the Trustees or officers of the Trust may be an officer, director, trustee, shareholder, or member of such other party to the contract, and no such contract shall be invalidated or rendered void or voidable by reason of the existence of any relationship, nor shall any person holding such relationship be disqualified from voting on or executing the same in his capacity as Shareholder and/or Trustee, nor shall any person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for any profit realized directly or indirectly therefrom, provided that the contract when entered into was not inconsistent with the provisions of this Article VI or Article VIII hereof or of the Bylaws. The same person (including a firm, corporation, partnership, trust, or association) may be the other party to contracts entered into pursuant to Sections 6.1, 6.2, and 6.3 of this Article VI or pursuant to Article VIII hereof, and any individual may be financially interested or otherwise affiliated with persons who are parties to any or all of the contracts mentioned in this Section 6.4. Section 6.5. Provisions and Amendments. Any contract entered into pursuant to Sections 6.1 or 6.2 of this Article VI shall be consistent with and subject to the requirements of Section 15 of the 1940 Act or other applicable Act of Congress hereafter enacted with respect to its continuance in effect, its termination, and the method of authorization and approval of such contract or renewal thereof, and no amendment to any contract, entered into pursuant to Section 6.1 of this Article VI shall be effective unless assented to in a manner consistent with the requirements of said Section 15, as modified by an applicable rule, regulation or order of the Commission. ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS Section 7.1. Voting Powers. The Shareholders shall have power to vote only (i) for the election of Trustees as provided in Article III, Sections 3.1 and 3.2 hereof, (ii) for the removal of Trustees as provided in Article III, Section 3.3(d) hereof, (iii) with respect to any investment advisory or management contract as provided in Article VI, Sections 6.1 and 6.5 hereof, and (iv) with respect to such additional matters relating to the Trust as may be required by law, by this Trust Instrument, or the Bylaws or any registration of the Trust with the Commission or any State, or as the Trustees may consider desirable. On any matter submitted to a vote of the Shareholders, all Shares shall be voted separately by individual Series, except (i) when required by the 1940 Act, Shares shall be voted in the aggregate and not by individual Series, and (ii) when the Trustees have determined that the matter affects the interests of more than one Series, then the Shareholders of all such Series shall be entitled to vote thereon. The Trustees may also determine that a matter affects only the interests of one or more classes of a Series, in which case any such matter shall be voted on by such class or classes. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote, and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy or in any manner provided for in the Bylaws. A proxy may be given in writing. The Bylaws may provide that proxies may also, or may instead, be given by any electronic or telecommunications device or in any other manner. Notwithstanding anything else herein or in the Bylaws, in the event a proposal by anyone other than the officers or Trustees of the Trust is submitted to a vote of the Shareholders of one or more Series or of the Trust, or in the event of any proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or Trustees of the Trust, Shares may be voted only in person or by written proxy. Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any action required or permitted by law, this Trust Instrument or any of the Bylaws of the Trust to be taken by Shareholders. Section 7.2. Meetings. The first Shareholders' meeting shall be held in order to elect Trustees as specified in Section 3.2 of Article III hereof at the principal office of the Trust or such other place as the Trustees may designate. Meetings may be held within or without the State of Delaware. Special meetings of the Shareholders of any Series may be called by the Trustees and shall be called by the Trustees upon the written request of Shareholders owning at least one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more Shareholders meeting the qualifications set forth in Section 16(c) of the 1940 Act, as the same may be amended from time to time, seek the opportunity of furnishing materials to the other Shareholders with a view to obtaining signatures on such a request for a meeting, the Trustees shall comply with the provisions of said Section 16(c) with respect to providing such Shareholders access to the list of the Shareholders of record of the Trust or the mailing of such materials to such Shareholders of record, subject to any rights provided to the Trust or any Trustees provided by said Section 16(c). Notice shall be sent, by First Class Mail or such other means determined by the Trustees, at least 15 days prior to any such meeting. Section 7.3. Quorum and Required Vote. One-third of Shares entitled to vote in person or by proxy shall be a quorum for the transaction of business at a Shareholders' meeting, except that where any provision of law or of this Trust Instrument permits or requires that holders of any Series shall vote as a Series (or that holders of a class shall vote as a class), then one-third of the aggregate number of Shares of that Series (or that class) entitled to vote shall be necessary to constitute a quorum for the transaction of business by that Series (or that class). Any lesser number shall be sufficient for adjournments. Any adjourned session or sessions may be held, within a reasonable time after the date set for the original meeting, without the necessity of further notice. Except when a larger vote is required by law or by any provision of this Trust Instrument or the Bylaws, a majority of the Shares voted in person or by proxy shall decide any questions and a plurality shall elect a Trustee, provided that where any provision of law or of this Trust Instrument permits or requires that the holders of any Series shall vote as a Series (or that the holders of any class shall vote as a class), then a majority of the Shares present in person or by proxy of that Series or, if required by law, a Majority Shareholder Vote of that Series (or class), voted on the matter in person or by proxy shall decide that matter insofar as that Series (or class) is concerned. Shareholders may act by unanimous written consent. Actions taken by Series (or class) may be consented to unanimously in writing by Shareholders of that Series. ARTICLE VIII CUSTODIAN Section 8.1. Appointment and Duties. The Trustees shall at all times employ a bank, a company that is a member of a national securities exchange, or a trust company, each having capital, surplus and undivided profits of at least two million dollars ($2,000,000) as custodian with authority as its agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the Bylaws of the Trust: (1) to hold the securities owned by the Trust and deliver the same upon written order or oral order confirmed in writing; (2) to receive and receipt for any moneys due to the Trust and deposit the same in its own banking department or elsewhere as the Trustees may direct; and (3) to disburse such funds upon orders or vouchers; and the trust may also employ such custodian as its agent; (4) to keep the books and accounts of the Trust or of any Series or class and furnish clerical and accounting services; and (5) to compute, if authorized to do so by the Trustees, the Net Asset Value of any Series, or class thereof, in accordance with the provisions hereof; all upon such basis of compensation as may be agreed upon between the Trustees and the custodian. The Trustees may also authorize the custodian to employ one or more sub-custodians from time to time to perform such of the acts and services of the custodian, and upon such terms and conditions, as may be agreed upon between the custodian and such sub-custodian and approved by the Trustees, provided that in every case such sub-custodian shall be a bank, a company that is a member of a national securities exchange, or a trust company organized under the laws of the United States or one of the states thereof and having capital, surplus and undivided profits of at least two million dollars ($2,000,000) or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act. Section 8.2. Central Certificate System. Subject to such rules, regulations and orders as the Commission may adopt, the Trustees may direct the custodian to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission under the Securities Exchange Act of 1934, as amended, or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust or its custodians, subcustodians or other agents. ARTICLE IX DISTRIBUTIONS AND REDEMPTIONS Section 9.1. Distributions. (a) The Trustees may from time to time declare and pay dividends or other distributions with respect to any Series. The amount of such dividends or distributions and the payment of them and whether they are in cash or any other Trust Property shall be wholly in the discretion of the Trustees. (b) Dividends and other distributions may be paid or made to the Shareholders of record at the time of declaring a dividend or other distribution or among the Shareholders of record at such other date or time or dates or times as the Trustees shall determine, which dividends or distributions, at the election of the Trustees, may be paid pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine. The Trustees may adopt and offer to Shareholders such dividend reinvestment plans, cash dividend payout plans or related plans as the Trustees shall deem appropriate. (c) Anything in this Trust Instrument to the contrary notwithstanding, the Trustees may at any time declare and distribute a stock dividend pro rata among the Shareholders of a particular Series, or class thereof, as of the record date of that Series fixed as provided in Section 9.1(b) hereof. Section 9.2. Redemptions. In case any holder of record of Shares of a particular Series desires to dispose of his Shares or any portion thereof, he may deposit at the office of the transfer agent or other authorized agent of that Series a written request or such other form of request as the Trustees may from time to time authorize, requesting that the Series purchase the Shares in accordance with this Section 9.2; and the Shareholder so requesting shall be entitled to require the Series to purchase, and the Series or the principal underwriter of the Series shall purchase his said Shares, but only at the Net Asset Value thereof (as described in Section 9.3 of this Article IX). The Series shall make payment for any such Shares to be redeemed, as aforesaid, in cash or property from the assets of that Series and payment for such Shares shall be made by the Series or the principal underwriter of the Series to the Shareholder of record within seven (7) days after the date upon which the request is effective. Upon redemption, shares shall become Treasury shares and may be re-issued from time to time. Section 9.3. Determination of Net Asset Value and Valuation of Portfolio Assets. The term "Net Asset Value" of any Series shall mean that amount by which the assets of that Series exceed its liabilities, all as determined by or under the direction of the Trustees. Such value shall be determined separately for each Series and shall be determined on such days and at such times as the Trustees may determine. Such determination shall be made with respect to securities for which market quotations are readily available, at the market value of such securities; and with respect to other securities and assets, at the fair value as determined in good faith by the Trustees; provided, however, that the Trustees, without Shareholder approval, may alter the method of valuing portfolio securities insofar as permitted under the 1940 Act and the rules, regulations and interpretations thereof promulgated or issued by the Commission or insofar as permitted by any Order of the Commission applicable to the Series. The Trustees may delegate any of their powers and duties under this Section 9.3 with respect to valuation of assets and liabilities. The resulting amount, which shall represent the total Net Asset Value of the particular Series, shall be divided by the total number of shares of that Series outstanding at the time and the quotient so obtained shall be the Net Asset Value per Share of that Series. At any time the Trustees may cause the Net Asset Value per Share last determined to be determined again in similar manner and may fix the time when such redetermined value shall become effective. If, for any reason, the net income of any Series, determined at any time, is a negative amount, the Trustees shall have the power with respect to that Series (i) to offset each Shareholder's pro rata share of such negative amount from the accrued dividend account of such Shareholder, or (ii) to reduce the number of Outstanding Shares of such Series by reducing the number of Shares in the account of each Shareholder by a pro rata portion of that number of full and fractional Shares which represents the amount of such excess negative net income, or (iii) to cause to be recorded on the books of such Series an asset account in the amount of such negative net income (provided that the same shall thereupon become the property of such Series with respect to such Series and shall not be paid to any Shareholder), which account may be reduced by the amount, of dividends declared thereafter upon the Outstanding Shares of such Series on the day such negative net income is experienced, until such asset account is reduced to zero; (iv) to combine the methods described in clauses (i) and (ii) and (iii) of this sentence; or (v) to take any other action they deem appropriate, in order to cause (or in order to assist in causing) the Net Asset Value per Share of such Series to remain at a constant amount per Outstanding Share immediately after each such determination and declaration. The Trustees shall also have the power not to declare a dividend out of net income for the purpose of causing the Net Asset Value per Share to be increased. The Trustees shall not be required to adopt, but may at any time adopt, discontinue or amend the practice of maintaining the Net Asset Value per Share of the Series at a constant amount. Section 9.4. Suspension of the Right of Redemption. The Trustees may declare a suspension of the right of redemption or postpone the date of payment as permitted under the 1940 Act. Such suspension shall take effect at such time as the Trustees shall specify but not later than the close of business on the business day next following the declaration of suspension, and thereafter there shall be no right of redemption or payment until the Trustees shall declare the suspension at an end. In the case of a suspension of the right of redemption, a Shareholder may either withdraw his request for redemption or receive payment based on the Net Asset Value per Share next determined after the termination of the suspension. In the event that any Series is divided into classes, the provisions of this Section 9.3, to the extent applicable as determined in the discretion of the Trustees and consistent with applicable law, may be equally applied to each such class. Section 9.5. Redemption of Shares in Order to Qualify as Regulated Investment Company. If the Trustees shall, at any time and in good faith, be of the opinion that direct or indirect ownership of Shares of any Series has or may become concentrated in any Person to an extent which would disqualify any Series as a regulated investment company under the Internal Revenue Code, then the Trustees shall have the power (but not the obligation) by lot or other means deemed equitable by them (i) to call for redemption by any such person of a number, or principal amount, of Shares sufficient to maintain or bring the direct or indirect ownership of Shares into conformity with the requirements for such qualification and (ii) to refuse to transfer or issue Shares to any person whose acquisition of the Shares in question would result in such disqualification. The redemption shall be effected at the redemption price and in the manner provided in this Article IX. The holders of Shares shall upon demand disclose to the Trustees in writing such information with respect to direct and indirect ownership of Shares as the Trustees deem necessary to comply with the provisions of the Internal Revenue Code, or to comply with the requirements of any other taxing authority. Section 9.6. Redemption of De Minimis Accounts. If, at any time when a request for transfer or redemption of Shares of any Series is received by the Trust or its agent, the value (computed as set forth in Section 9.3 hereof) of the Shares of such Series in a Shareholder's account is less than Dollars ($ ), after giving effect to such transfer or redemption, the Trust may cause the remaining Shares of such Series in such Shareholder's account to be redeemed in accordance with such procedures as the Trustees shall adopt. ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION Section 10.1. Limitation of Liability. A Trustee, when acting in such capacity, shall not be personally liable to any person other than the Trust or a beneficial owner for any act, omission or obligation of the Trust or any Trustee. A Trustee shall not be liable for any act or omission or any conduct whatsoever in his capacity as Trustee, provided that nothing contained herein or in the Delaware Act shall protect any Trustee against any liability to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. Section 10.2. Indemnification. (a) Subject to the exceptions and limitations contained in Section 10.2(b) below: (i) every Person who is, or has been, a Trustee or officer of the Trust (hereinafter referred to as a "Covered Person") shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof; (ii) the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened while in office or thereafter, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. (b) No indemnification shall be provided hereunder to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry); provided, however, that any Shareholder may, by appropriate legal proceedings, challenge any such determination by the Trustees or by independent counsel. (c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel, other than Covered Persons, and other persons may be entitled by contract or otherwise under law. (d) Expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in paragraph (a) of this Section 10.2 may be paid by the Trust or Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him to the Trust or Series if it is ultimately determined that he is not entitled to indemnification under this Section 10.2; provided, however, that either (a) such Covered Person shall have provided appropriate security for such undertaking, (b) the Trust is insured against losses arising out of any such advance payments or (c) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a trial-type inquiry or full investigation), that there is reason to believe that such Covered Person will be found entitled to indemnification under this Section 10.2. Section 10.3. Shareholders. In case any Shareholder or former Shareholder of any Series shall be held to be personally liable solely by reason of his being or having been a Shareholder of such Series and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by the Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series. ARTICLE XI MISCELLANEOUS Section 11.1. Trust Not a Partnership. It is hereby expressly declared that a trust and not a partnership is created hereby. No Trustee hereunder shall have any power to bind personally either the Trust's officers or any Shareholder. All persons extending credit to, contracting with or having any claim against the Trust or the Trustees shall look only to the assets of the appropriate Series or (if the Trustees shall have yet to have established any separate Series) of the Trust for payment under such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor. Nothing in this Trust Instrument shall protect a Trustee against any liability to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. Section 11.2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety. The exercise by the Trustees of their powers and discretions hereunder in good faith and with reasonable care under the circumstances then prevailing shall be binding upon everyone interested. Subject to the provisions of Article X hereof and to Section 11.1 of this Article XI, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Trust Instrument, and subject to the provisions of Article X hereof and Section 11.1 of this Article XI, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is obtained. Section 11.3. Establishment of Record Dates. The Trustees may close the Share transfer books of the Trust for a period not exceeding sixty (60) days preceding the date of any meeting of Shareholders, or the date for the payment of any dividends or other distributions, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect; or in lieu of closing the stock transfer books as aforesaid, the Trustees may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of Shareholders, or the date for payment of any dividend or other distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect, as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend or other distribution, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of Shares, and in such case such Shareholders and only such Shareholders as shall be Shareholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of such dividend or other distribution, or to receive such allotment or rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any Shares on the books of the Trust after any such record date fixed as aforesaid. Section 11.4. Termination of Trust. (a) This Trust shall continue without limitation of time but subject to the provisions of sub-section (b) of this Section 11.4. (b) The Trustees may, subject to a Majority Shareholder Vote of each Series affected by the matter or, if applicable, to a Majority Shareholder Vote of the Trust, and subject to a vote of a majority of the Trustees: (i) sell and convey all or substantially all of the assets of any affected Series to another Series of the Trust for adequate consideration, which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the affected Series, and which may include Shares of the acquiring Series; (ii) sell and convey all or substantially all of the assets of the Trust or any affected Series to another trust, partnership, association or corporation, or to a separate series of shares thereof, organized under the laws of any state which trust, partnership, association or corporation is an open-end management company as defined in the 1940 Act, or is a series thereof, for adequate consideration which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust or any affected Series, and which may include shares of beneficial interest, stock or other ownership interests of such trust, partnership, association or corporation or of a series thereof; or (iii) at any time sell and convert into money all of the assets of the Trust or any affected Series. Upon making reasonable provision, in the determination of the Trustees, for the payment of all such liabilities in (i), (ii) or (iii), by such assumption or otherwise, the Trustees shall distribute the remaining proceeds or assets (as the case may be) of each Series (or class) ratably among the holders of Shares of that Series then outstanding. (c) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in sub-section (b), the Trust or any affected Series shall terminate and the Trustees and the Trust shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties with respect to the Trust or Series shall be cancelled and discharged. Upon termination of the Trust, following completion of winding up of its business, the Trustees shall cause a certificate of cancellation of the Trust's certificate of trust to be filed in accordance with the Delaware Act, which certificate of cancellation may be signed by any one Trustee. Section 11.5. Reorganization. Notwithstanding anything else herein, the Trustees, in order to change the form of organization of the Trust, may, without prior Shareholder approval, (i) cause the Trust to merge or consolidate with or into one or more trusts, partnerships, associations or corporations so long as the surviving or resulting entity is an open-end management investment company under the 1940 Act, or is a series thereof, that will succeed to or assume the Trust's registration under that Act and which is formed, organized or existing under the laws of a state, commonwealth possession or colony of the Unites States or (ii) cause the Trust to incorporate under the laws of Delaware. Any agreement of merger or consolidation or certificate of merge may be signed by a majority of Trustees and facsimile signatures conveyed by electronic or telecommunication means shall be valid. Pursuant to and in accordance with the provisions of Section 3815(f) of the Delaware Act, and notwithstanding anything to the contrary contained in this Trust Instrument, an agreement of merger or consolidation approved by the Trustees in accordance with this Section 11.5 may effect any amendment to the Trust Instrument or effect the adoption of a new trust instrument of the Trust if it is the surviving or resulting trust in the merger or consolidation. Section 11.6. Filing of Copies, References, Headings. The original or a copy of this Trust Instrument and of each amendment hereof or Trust Instrument supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by an officer or Trustee of the Trust as to whether or not any such amendments or supplements have been made and as to any matters in connection with the Trust hereunder, and with the same effect as if it were the original, may rely on a copy certified by an officer or Trustee of the Trust to be a copy of this Trust Instrument or of any such amendment or supplemental Trust Instrument. In this Trust Instrument or in any such amendment or supplemental Trust Instrument, references to this Trust Instrument, and all expressions like "herein," "hereof" and "hereunder," shall be deemed to refer to this Trust Instrument as amended or affected by any such supplemental Trust Instrument. All expressions like "his", "he", and "him", shall be deemed to include the feminine and neuter, as well as masculine, genders. Headings are placed herein for convenience of reference only and in case of any conflict, the text of this Trust Instrument, rather than the headings, shall control. This Trust Instrument may be executed in any number of counterparts each of which shall be deemed an original. Section 11.7. Applicable Law. This Trust Instrument has been executed and delivered in, and the Trust created hereby will be administered from, the State of Delaware, and the Trust and this Trust Instrument, and the rights, obligations and remedies of the Trustees and Shareholders hereunder, are to be governed by and construed and administered according to the Delaware Act and the other laws of said State; provided, however, that there shall not be applicable to the Trust, the Trustees, the Shareholders or this Trust Instrument (a) the provisions of Section 3540 of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) pertaining to trusts which relate to or regulate (i) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (ii) affirmative requirements to post bonds for trustees, officers, agents or employees of a trust, (iii) the necessity for obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (iv) fees or other sums payable to trustees, officers, agents or employees of a trust, (v) the allocation of receipts and expenditures to income or principal, (vi) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust assets, or (vii) the establishment of fiduciary or other standards or responsibilities or limitations on the indemnification, acts or powers of trustees or other Persons, which are inconsistent with the limitations or liabilities or authorities and powers of the Trustees or officers of the Trust set forth or referenced in this Trust Instrument. The Trust shall be of the type commonly called a "business trust," and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust under Delaware law. The Trust specifically reserves the right to exercise any of the powers or privileges afforded to trusts or actions that may be engaged in by trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power or privilege or take such actions. Section 11.8. Amendments. Except as specifically provided herein, the Trustees may, without shareholder vote, amend or otherwise supplement this Trust Instrument by making an amendment, a Trust Instrument supplemental hereto or an amended and restated trust instrument. Shareholders shall have the right to vote (i) on any amendment which would affect their right to vote granted in Section 7.1 of Article VII hereof, (ii) on any amendment to this Section 11.8, (iii) on any amendment as may be required by law or by the Trust's registration statement filed with the Commission and (iv) on any amendment submitted to them by the Trustees. Any amendment required or permitted to be submitted to Shareholders which, as the trustees determine, shall affect the Shareholders of one or more Series shall be authorized by vote of the Shareholders of each Series affected and no vote of shareholders of a Series not affected shall be required. Notwithstanding anything else herein, any amendment to Article 10 hereof shall not limit the rights to indemnification or insurance provided therein with respect to action or omission of Covered Persons prior to such amendment. Section 11.9. Fiscal Year. The fiscal year of the Trust shall end on a specified date as set forth in the Bylaws, provided, however, that the Trustees may, without Shareholder approval, change the fiscal year of the Trust. Section 11.10. Use of the Word "Henlopen". Landis Associates, Inc. ("Landis") has consented to, and granted a non-exclusive license for, the use by any Series or by the Trust of the identifying word "Henlopen" in the name of the Trust or any Series thereof. Such consent is subject to revocation by Landis in its discretion, if Landis or any subsidiary or affiliate thereof is not employed as the investment advisor of each Series of the Trust. As between the Trust and Landis, Landis controls the use of the name of the Trust insofar as such name contains the identifying word "Henlopen". Landis may, from time to time, use the identifying word "Henlopen" in other connections and for other purposes, including, without limitation, in the names of other investment companies, corporations or businesses which it may manage, advise, sponsor or own or in which it may have a financial interest, whether or not any such business or entity shall have any interest adverse to the Trust or any Series thereof. Landis may require the Trust or any Series thereof to cease using the identifying word "Henlopen" in the name of the Trust or any Series thereof if the Trust or any Series thereof ceases to employ Landis or a subsidiary or affiliate thereof as investment adviser. Section 11.11. Provisions in Conflict with Law. The provisions of this Trust Instrument are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Trust Instrument; provided, however, that such determination shall not affect any of the remaining provisions of this Trust Instrument or render invalid or improper any action taken or omitted prior to such determination. If any provision of this Trust Instrument shall be held invalid or enforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provisions in any other jurisdiction or any other provision of this Trust Instrument in any jurisdiction. IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of the Trust, have executed this instrument this 16th day of September, 1992. /s/ Michael L. Hershey Michael L. Hershey, as Trustee /s/ Robert J. Fahey, Jr. Robert J. Fahey, Jr, as Trustee /s/ Stephen L. Hershey, M.D. Stephen L. Hershey, M.D., as Trustee /s/ P. Coleman Townsend, Jr. P. Coleman Townsend, Jr., as Trustee EX-99.B.2 4 Exhibit 2 BYLAWS of THE HENLOPEN FUND These Bylaws of The Henlopen Fund, a Delaware business trust (the "Trust"), are subject to the Trust Instrument of the Trust, dated September 16, 1992, as from time to time amended, supplemented or restated (the "Trust Instrument"). Capitalized terms used herein which are defined in the Trust Instrument are used as therein defined. ARTICLE I PRINCIPAL OFFICE The principal office of the Trust shall be located in Wilmington, Delaware, or such other location as the Trustees may, from time to time, determine. The Trust may establish and maintain such other offices and places of business as the Trustees may, from time to time, determine. ARTICLE II OFFICERS AND THEIR ELECTION Section 1. Officers. The officers of the Trust shall be a President, a Treasurer, a Secretary, and such other officers as the Trustees may from time to time elect. The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents. It shall not be necessary for any Trustee or other officer to be a holder of Shares in the Trust. Section 2. Election of Officers. The Treasurer and Secretary shall be chosen by the Trustees. The President shall be chosen by the Trustees from among their number. Two or more offices may be held by a single person, except the offices of President and Secretary. Subject to the provisions of Article III, Section 13 hereof, the President, the Treasurer and the Secretary shall each hold office until their successors are chosen and qualified and all other officers shall hold office at the pleasure of the Trustees. Section 3. Resignations. Any officer of the Trust may resign, notwithstanding Section 2 hereof, by filing a written resignation with the President, the Trustees or the Secretary, which resignation shall take effect upon being so filed or at such time as may be therein specified. ARTICLE III POWERS AND DUTIES OF OFFICERS AND TRUSTEES Section 1. Management of The Trust; General. The business and affairs of the Trust shall be managed by, or under the direction of, the Trustees, and they shall have all powers necessary and desirable to carry out their responsibilities, so far as such powers are not inconsistent with the laws of the State of Delaware, the Trust Instrument or with these Bylaws. Section 2. Executive And Other Committees. The Trustees may elect from their own number an executive committee, which shall have any or all the powers of the Trustees while the Trustees are not in session. The Trustees may also elect from their own number other committees from time to time. The number composing such committees and the powers conferred upon the same are to be determined by vote of a majority of the Trustees. All members of such committees shall hold such offices at the pleasure of the Trustees. The Trustees may abolish any such committee at any time. Any committee to which the Trustees delegate any of their powers or duties shall keep records of its meetings and shall report its actions to the Trustees. The Trustees shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect. Section 3. Compensation. Each Trustee and each committee member may receive such compensation for his services and reimbursement for his expenses as may be fixed from time to time by resolution of the Trustees. Section 4. Chairman Of the Trustees. The Trustees shall appoint from among their number a Chairman, who shall serve as such at the pleasure of the Trustees. When present, he shall preside at all meetings of the Shareholders and the Trustees, and he may, subject to the approval of the Trustees, appoint another Trustee to preside at such meetings in his absence. He shall perform such other duties as the Trustees may from time to time designate. Section 5. President. The President shall be the chief executive officer of the Trust and, subject to the direction of the Trustees, shall have general administration of the business and policies of the Trust. Except as the Trustees may otherwise order, the President shall have the power to grant, issue, execute or sign such powers of attorney, proxies, agreements or other documents as may be deemed advisable or necessary in the furtherance of the interests of the Trust or any Series thereof. He shall also have the power to employ attorneys, accountants and other advisers and agents and counsel for the Trust. The President shall perform such duties additional to all of the foregoing as the Trustees may from time to time designate. Section 6. Treasurer. The Treasurer shall be the principal financial and accounting officer of the Trust. He shall deliver all funds and securities of the Trust which may come into his hands to such company as the Trustees shall employ as Custodian in accordance with the Trust Instrument and applicable provisions of law. He shall make annual reports regarding the business and condition of the Trust, which reports shall be preserved in Trust records, and he shall furnish such other reports regarding the business and condition of the Trust as the Trustees may from time to time require. The Treasurer shall perform such additional duties as the Trustees may from time to time designate. Section 7. Secretary. The Secretary shall record in books kept for the purpose all votes and proceedings of the Trustees and the Shareholders at their respective meetings. He shall have the custody of the seal of the Trust. The Secretary shall perform such additional duties as the Trustees may from time to time designate. Section 8. Vice President. Any Vice President of the Trust shall perform such duties as the Trustees or the President may from time to time designate. At the request or in the absence or disability of the President, the Vice President (or, if there are two or more Vice Presidents, then the senior of the Vice Presidents present and able to act) may perform all the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Section 9. Assistant Treasurer. Any Assistant Treasurer of the Trust shall perform such duties as the Trustees or the Treasurer may from time to time designate, and, in the absence of the Treasurer, the senior Assistant Treasurer, present and able to act, may perform all the duties of the Treasurer. Section 10. Assistant Secretary. Any Assistant Secretary of the Trust shall perform such duties as the Trustees or the Secretary may from time to time designate, and, in the absence of the Secretary, the senior Assistant Secretary, present and able to act, may perform all the duties of the Secretary. Section 11. Subordinate Officers. The Trustees from time to time may appoint such other officers or agents as they may deem advisable each of whom shall have such title, hold office for such period, have such authority and perform such duties as the Trustees may determine. The Trustees from time to time may delegate to one or more officers or committees of Trustees the power to appoint any such subordinate officers or agents and to prescribe their respective terms of office, authorities and duties. Section 12. Surety Bonds. The Trustees may require any officer or agent of the Trust to execute a bond (including, without limitation, any bond required by the Investment Company Act of 1940, as amended ("the 1940 Act"), and the rules and regulations of the Securities and Exchange Commission ("Commission")) to the Trust in such sum and with such surety or sureties as the Trustees may determine, conditioned upon the faithful performance of his duties to the Trust including responsibility for negligence and for the accounting of any of the Trust's property, funds or securities that may come into his hands. Section 13. Removal. Any officer may be removed from office whenever in the judgment of the Trustees the best interest of the Trust will be served thereby, by the vote of a majority of the Trustees given at any regular meeting or any special meeting of the Trustees. In addition, any officer or agent appointed in accordance with the provisions of Section 10 hereof may be removed, either with or without cause, by any officer upon whom such power of removal shall have been conferred by the Trustees. Section 14. Remuneration. The salaries or other compensation, if any, of the officers of the Trust shall be fixed from time to time by resolution of the Trustees. ARTICLE IV SHAREHOLDERS' MEETINGS Section 1. Special Meetings. A special meeting of the shareholders shall be called by the Secretary whenever (i) ordered by the Trustees or (ii) requested in writing by the holder or holders of at least ten percent (10%) of the Outstanding Shares entitled to vote (provided that such holder or holders prepay the costs to the Trust of preparing and mailing the notice of the meeting). If the Secretary, when so ordered or requested, refuses or neglects for more than thirty (30) days to call such special meeting, the Trustees or the Shareholders so requesting, may, in the name of the Secretary, call the meeting by giving notice thereof in the manner required when notice is given by the Secretary. If the meeting is a meeting of the Shareholders of one or more Series or classes of Shares, but not a meeting of all Shareholders of the Trust, then only special meetings of the Shareholders of such one or more Series or Classes shall be called and only the shareholders of such one or more Series or Classes shall be entitled to notice of and to vote at such meeting. Section 2. Notices. Except as above provided, notices of any meeting of the Shareholders shall be given by the Secretary by delivering or mailing, postage prepaid, to each Shareholder entitled to vote at said meeting, written or printed notification of such meeting at least fifteen (15) days before the meeting, to such address as may be registered with the Trust by the Shareholder. Notice of any Shareholder meeting need not be given to any Shareholder if a written waiver of notice, executed before or after such meeting, is filed with the record of such meeting, or to any Shareholder who shall attend such meeting in person or by proxy. Notice of adjournment of a Shareholders' meeting to another time or place need not be given, if such time and place are announced at the meeting or reasonable notice is given to persons present at the meeting and the adjourned meeting is held within a reasonable time after the date set for the original meeting. Section 3. Voting; Proxies. Subject to the provisions of the Trust Instrument, Shareholders entitled to vote may vote either in person or by proxy, provided that either (i) an instrument authorizing such proxy to act is executed by the Shareholder in writing and dated not more than eleven (11) months before the meeting, unless the instrument specifically provides for a longer period, or (ii) the Trustees adopt by resolution an electronic, telephonic, computerized or other alternative to execution of a written instrument authorizing the proxy to act, which authorization is received not more than eleven (11) months before the meeting. Proxies shall be delivered to the Secretary of the Trust or other person responsible for recording the proceedings before being voted. A proxy with respect to Shares held in the name of two or more persons shall be valid if executed by one of them, unless at or prior to exercise of such proxy the Trust receives a specific written notice to the contrary from any one of them. Unless otherwise specifically limited by their terms, proxies shall entitle the holder thereof to vote at any adjournment of a meeting. A proxy purporting to be exercised by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden or proving invalidity shall rest on the challenger. At all meetings of the Shareholders, unless the voting is conducted by inspectors, all questions relating to the qualifications of voters, the validity of proxies, and the acceptance or rejection of votes shall be decided by the Chairman of the meeting. Except as otherwise provided herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may be amended or supplemented from time to time, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Shareholders were shareholders of a Delaware corporation. Section 4. Place Of Meeting. All special meetings of the Shareholders shall be held at the principal place of business of the Trust or at such other place in the United States as the Trustees may designate. Section 5. Action Without a Meeting. Any action to be taken by Shareholders may be taken without a meeting if all Shareholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of meetings of Shareholders of the Trust. Such consent shall be treated for all purposes as a vote at a meeting of the Trustees held at the principal place of business of the Trust. ARTICLE V TRUSTEES' MEETINGS Section 1. Special Meetings. Special meetings of the Trustees may be called orally or in writing by the Chairman of the Trustees or any two other Trustees. Section 2. Regular Meetings. Regular meetings of the Trustees may be held at such places and at such times as the Trustees may from time to time determine; each Trustee present at such determination shall be deemed a party calling the meeting and no call or notice will be required to such Trustee, provided that any Trustee who is absent when such determination is made shall be given notice of the determination by the Chairman or any two other Trustees, as provided for in Section 4.04 of the Trust Instrument. Section 3. Quorum. A majority of the Trustees shall constitute a quorum for the transaction of business and an action of a majority of the quorum shall constitute action of the Trustees. Section 4. Notice. Except as otherwise provided, notice of any special meeting of the Trustees shall be given by the party calling the meeting to each Trustee, as provided for in Section 4.04 of the Trust Instrument. A written notice may be mailed, postage prepaid, addressed to him at his address as registered on the books of the Trust or, if not so registered, at his last known address. Section 5. Place Of Meeting. All special meetings of the Trustees shall be held at the principal place of business of the Trust or such other place as the Trustees may designate. Any meeting may adjourn to any place. Section 6. Special Action. When all the Trustees shall be present at any meeting, however called or wherever held, or shall assent to the holding of the meeting without notice, or shall sign a written assent thereto filed with the record of such meeting, the acts of such meeting shall be valid as if such meeting had been regularly held. Section 7. Action By Consent. Except as set forth below, any action by the Trustees may be taken without a meeting if a written consent thereto is signed by all the Trustees and filed with the records of the Trustees' meeting. Such consent shall be treated, for all purposes, as a vote at a meeting of the Trustees held at the principal place of business of the Trustees. Notwithstanding the preceding two sentences, no action may be taken by the Trustees pursuant to a written consent with respect to the approval of the Trust's investment advisory agreement or any action required by the Investment Company Act of 1940 or other applicable law to be taken at a meeting of the Trustees to be held in person. Section 8. Participation in Meetings By Conference Telephone. Except as set forth below, the Trustees may participate in a meeting of Trustees by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. Any meeting conducted by telephone shall be deemed to take place at and from the principal office of the Trust. Notwithstanding the preceding two sentences, no action may be taken by the Trustees pursuant to a telephonic conference call with respect to the approval of the Trust's investment advisory agreement or any action required by the Investment Company Act of 1940 or other applicable law to be taken at a meeting of the Trustees to be held in person. ARTICLE VI SHARES OF BENEFICIAL INTEREST Section 1. Beneficial Interest. The beneficial interest in the Trust shall at all times be divided into such transferable Shares of one or more separate and distinct Series, or classes thereof, as the Trustees shall from time to time create and establish. The number of Shares is unlimited, and each Share of each Series or class thereof shall be without par value and shall represent an equal proportionate interest with each other Share in the Series, none having priority or preference over another, except to the extent that such priorities or preferences are established with respect to one or more classes of shares consistent with applicable law and any rule or order of the Commission. Section 2. Transfer of Shares. The Shares of the Trust shall be transferable, so as to affect the rights of the Trust, only by transfer recorded on the books of the Trust, in person or by attorney. Section 3. Equitable Interest Not Recognized. The Trust shall be entitled to treat the holder of record of any Share or Shares of beneficial interest as the holder in fact thereof, and shall not be bound to recognize any equitable or other claim or interest in such Share or Shares on the part of any other person except as may be otherwise expressly provided by law. Section 4. Share Certificate. No certificates certifying the ownership of Shares shall be issued except as the Trustees may otherwise authorize. The Trustees may issue certificates to a Shareholder of any Series or class thereof for any purpose and the issuance of a certificate to one or more Shareholders shall not require the issuance of certificates generally. In the event that the Trustees authorize the issuance of Share certificates, such certificate shall be in the form proscribed from time to time by the Trustees and shall be signed by the President or a Vice President and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary. Such signatures may be facsimiles if the certificate is signed by a transfer or shareholder services agent or by a registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he or she were such officer at the time of its issue. In lieu of issuing certificates for Shares, the Trustees or the transfer or shareholder services agent may either issue receipts therefor or may keep accounts upon the books of the Trust for the record holders of such Shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of certificates for such Shares as if they had accepted such certificates and shall be held to have expressly assented and agreed to the terms hereof. Section 5. Loss of Certificate. In the case of the alleged loss or destruction or the mutilation of a Share certificate, a duplicate certificate may be issued in place thereof, upon such terms as the Trustees may prescribe. Section 6. Discontinuance of Issuance Of Certificates. The Trustees may at any time discontinue the issuance of Share certificates and may, by written notice to each Shareholder, require the surrender of Share certificates to the Trust for cancellation. Such surrender and cancellation shall not affect the ownership of Shares in the Trust. ARTICLE VII OWNERSHIP OF ASSETS OF THE TRUST The Trustees, acting for and on behalf of the Trust, shall be deemed to hold legal and beneficial ownership of any income earned on securities held by the Trust issued by any business entity formed, organized or existing under the laws of any jurisdiction other than a state, commonwealth, possession or colony of the United States or the laws of the United States. ARTICLE VIII INSPECTION OF BOOKS The Trustees shall from time to time determine whether and to what extent, and at what times and places, and under what conditions and regulations the accounts and books of the Trust or any of them shall be open to the inspection of the Shareholders; and no Shareholder shall have any right to inspect any account or book or document of the Trust except as conferred by law or otherwise by the Trustees or by resolution of the Shareholders. ARTICLE IX INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES The Trust may purchase and maintain insurance on behalf of any Covered Person or employee of the Trust, including any Covered Person or employee of the Trust who is or was serving at the request of the Trust as a Trustee, officer or employee of a corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Trustees would have the power to indemnify him against such liability. The Trust may not acquire or obtain a contract for insurance that protects or purports to protect any Trustee or officer of the Trust against any liability to the Trust or its Shareholders to which he would otherwise be subject by reason or willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. ARTICLE X SEAL The seal of the Trust shall be circular in form bearing the inscription: "THE HENLOPEN FUND -- 1992 THE STATE OF DELAWARE" The form of the seal shall be subject to alteration by the Trustees and the seal may be used by causing it or a facsimile to be impressed or affixed or printed or otherwise reproduced. Any officer or Trustee of the Trust shall have authority to affix the seal of the Trust to any document, instrument or other paper executed and delivered by or on behalf of the Trust; however, unless otherwise required by the Trustees, the seal shall not be necessary to be placed on and its absence shall not impair the validity of any document, instrument, or other paper executed by or on behalf of the Trust. ARTICLE XI FISCAL YEAR The fiscal year of the Trust shall end on such date as the Trustees shall from time to time determine. ARTICLE XII AMENDMENTS These Bylaws may be amended at any meeting of the Trustees of the Trust by a majority vote. ARTICLE XIII REPORTS TO SHAREHOLDERS The Trustees shall at least semi-annually submit to the Shareholders a written financial report of the Trust including financial statements which shall be certified at least annually by independent public accountants. XIV HEADINGS Headings are placed in these Bylaws for convenience of reference only and in case of any conflict, the text of these Bylaws rather than the headings shall control. EX-99.B.5 5 INVESTMENT ADVISORY AGREEMENT Agreement made this ____ day of_____________, 1992 between The Henlopen Fund, a Delaware business trust (the "Trust"), and Landis Associates, Inc., a Delaware corporation (the "Adviser"). W I T N E S S E T H: WHEREAS, the Trust is in the process of registering with the Securities and Exchange Commission as an open-end management investment company under the Investment Company Act of 1940 (the "Act"); WHEREAS, upon so registering with the Securities and Exchange Commission, the Trust will be a registered investment company satisfying the conditions of Section 10(d) of the Act; and WHEREAS, the Trust desires to retain the Adviser, which is an investment adviser registered under the Investment Advisers Act of 1940 and which is engaged principally in the business of rendering investment supervisory services within the meaning of Section 202(a)(13) of the Investment Advisers Act of 1940, as its investment adviser. NOW, THEREFORE, the Trust and the Adviser do mutually promise and agree as follows: 1. Employment. The Trust hereby employs the Adviser to manage the investment and reinvestment of the assets of the Trust for the period and on the terms set forth in this Agreement. The Adviser hereby accepts such employment for the compensation herein provided and agrees during such period to render the services and to assume the obligations herein set forth. 2. Authority of the Adviser. The Adviser shall supervise and manage the investment portfolio of the Trust, and, subject to such policies as the trustees of the Trust may determine, direct the purchase and sale of investment securities in the day to day management of the Trust. The Adviser shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. However, one or more shareholders, officers, directors or employees of the Adviser may serve as directors and/or officers of the Trust, but without compensation or reimbursement of expenses for such services from the Trust. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Certificate of Trust or Trust Instrument, dated September 16, 1992, or any applicable statute or regulation, or to relieve or deprive the trustees of the Trust of their responsibility for, and control of, the affairs of the Trust. 3. Expenses. The Adviser, at its own expense and without reimbursement from the Trust, shall furnish office space, and all necessary office facilities, equipment and executive personnel for managing the investments of the Trust. The Adviser shall pay the salaries and fees of all officers and trustees of the Trust (except the fees paid to those trustees who are not interested persons of the Adviser, as defined in the Act, and who are not officers or employees of the Trust). The Adviser shall also bear all sales and promotional expenses of the Trust, except for expenses incurred in complying with laws regulating the issue or sale of securities. Fees paid for attendance at meetings of the Trust's trustees to trustees of the Trust who are not interested persons of the Adviser, as defined in the Act, as amended, shall be borne by the Trust. The Trust shall bear all other expenses initially incurred by it, provided that the total expenses borne by the Trust, including the Adviser's fee but excluding all federal, state and local taxes, interest, brokerage commissions and extraordinary items, shall not in any year exceed that percentage of the average net asset value of the Trust for such year, as determined by valuations made as of the close of each business day, which is the most restrictive percentage provided by the state laws of the various states in which the Trust's shares are qualified for sale. The expenses of the Trust's operations borne by the Trust include by way of illustration and not limitation, the costs of preparing and printing its registration statements required under the Securities Act of 1933 and the Act (and amendments thereto), the expense of registering its shares with the Securities and Exchange Commission and in the various states, the printing and distribution cost of prospectuses mailed to existing shareholders, the cost of share certificates trustee and officer liability insurance, reports to shareholders, reports to government authorities and proxy statements, interest charges, taxes, legal expenses, salaries of administrative and clerical personnel, association membership dues, auditing and accounting services, insurance premiums, brokerage and other expenses connected with the execution of portfolio securities transactions, fees and expenses of the custodian of the Trust's assets, expenses of calculating the net asset value and repurchasing and redeeming shares, charges and expenses of dividend disbursing agents, registrars and stock transfer agents and the cost of keeping all necessary shareholder records and accounts. The Trust shall monitor its expense ratio on a monthly basis. If the accrued amount of the expenses of the Trust exceeds the expense limitation established herein, the Trust shall create an account receivable from the Adviser for the amount of such excess. In such a situation the monthly payment of the Adviser's fee will be reduced by the amount of such excess, subject to adjustment month by month during the balance of the Trust's fiscal year if accrued expenses thereafter fall below the expense limitation. 4. Compensation of the Adviser. For the services and facilities to be rendered and the charges and expenses to be assumed by the Adviser hereunder, the Trust shall pay to the Adviser an advisory fee, paid monthly, based on the average net asset value of the Trust, as determined by valuations made as of the close of each business day of the month. The advisory fee shall be 1/12 of 1% (1% per annum) of such net asset value. For any month in which this Agreement is not in effect for the entire month, such fee shall be reduced proportionately on the basis of the number of calendar days during which it is in effect and the fee computed upon the average net asset value of the business days during which it is so in effect. 5. Ownership of Shares of the Trust. Except in connection with the initial capitalization of the Trust, the Adviser shall not take, and shall not permit any of its shareholders, officers, directors or employees to take, a long or short position in the shares of the Trust, except for the purchase of shares of the Trust for investment purposes at the same price as that available to the public at the time of purchase. 6. Exclusivity. The services of the Adviser to the Trust hereunder are not to be deemed exclusive and the Adviser shall be free to furnish similar services to others as long as the services hereunder are not impaired thereby. Although the Adviser has permitted and is permitting the Trust to use the name "Henlopen", it is understood and agreed that the Adviser reserves the right to use and to permit other persons, firms or corporations, including investment companies, to use such name, and that the Trust will not use such name if the Adviser ceases to be the Trust's sole investment adviser. During the period that this Agreement is in effect, the Adviser shall be the Trust's sole investment adviser. 7. Liability. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Adviser, the Adviser shall not be subject to liability to the Trust or to any shareholder of the Trust for any act or omission in the course of, or connected with, rendering services hereunder, or for any losses that may be sustained in the purchase, holding or sale of any security. 8. Brokerage Commissions. The Adviser may cause the Trust to pay a broker-dealer which provides brokerage and research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), to the Adviser a commission for effecting a securities transaction in excess of the amount another broker-dealer would have charged for effecting such transaction, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of brokerage and research services provided by the executing broker-dealer viewed in terms of either that particular transaction or his overall responsibilities with respect to the accounts as to which he exercises investment discretion (as defined in Section 3(a)(35) of the Exchange Act). 9. Amendments. This Agreement may be amended by the mutual consent of the parties; provided, however, that in no event may it be amended without the approval of the trustees of the Trust in the manner required by the Act, and by the vote of the majority of the outstanding voting securities of the Trust, as defined in the Act. 10. Termination. This Agreement may be terminated at any time, without the payment of any penalty, by the trustees of the Trust or by a vote of the majority of the outstanding voting securities of the Trust, as defined in the Act, upon giving sixty (60) days' written notice to the Adviser. This Agreement may be terminated by the Adviser at any time upon the giving of sixty (60) days' written notice to the Trust. This Agreement shall terminate automatically in the event of its assignment (as defined in Section 2(a)(4) of the Act). Subject to prior termination as hereinbefore provided, this Agreement shall continue in effect for two (2) years from the date hereof and indefinitely thereafter, but only so long as the continuance after such two (2) year period is specifically approved annually by (i) the trustees of the Trust or by the vote of the majority of the outstanding voting securities of the Trust, as defined in the Act, and (ii) the trustees of the Trust in the manner required by the Act, provided that any such approval may be made effective not more than sixty (60) days thereafter. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day first above written. LANDIS ASSOCIATES, INC. (the "Adviser") By: _______________________ By: ________________________ Abigail Rickert Hershey Michael L. Hershey Secretary President THE HENLOPEN FUND (the "Trust") By: _______________________ By: ________________________________ Jane M. Teasley Michael L. Hershey Secretary President EX-99.B.8 6 EXHIBIT 8 CUSTODIAN AGREEMENT THIS AGREEMENT made on October 27, 1992, between THE HENLOPEN FUND, a Delaware Business Trust (hereinafter called the "Fund"), and FIRST WISCONSIN TRUST COMPANY, a corporation organized under the laws of the State of Wisconsin (hereinafter called "Custodian"). W I T N E S S E T H : WHEREAS, the Fund desires that its securities and cash shall be hereafter held and administered by Custodian pursuant to the terms of this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein made, the Fund and Custodian agree as follows: 1. Definitions The word "securities" as used herein includes stocks, shares, bonds, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets. The words "officers' certificate" shall mean a request or direction or certification in writing signed in the name of the Fund by any two of the President, a Vice President, the Secretary and the Treasurer of the Fund, or any other persons duly authorized to sign by the Board of Trustees. The word "Board" shall mean Board of Trustees of The Henlopen Fund. 2. Names, Titles and Signatures of the Fund's Officers An officer of the Fund will certify to Custodian the names and signatures of those persons authorized to sign the officers' certificates described in Section 1 hereof, and the names of the members of the Board of Trustees, together with any changes which may occur from time to time. 3. Receipt and Disbursement of Money A. Custodian shall open and maintain a separate account or accounts in the name of the Fund, subject only to draft or order by Custodian acting pursuant to the terms of this Agreement. Custodian shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Fund. Custodian shall make payments of cash to, or for the account of, the Fund from such cash only: (a) for the purchase of securities for the portfolio of the Fund upon the delivery of such securities to Custodian, registered in the name of the Fund or of the nominee of Custodian referred to in Section 7 or in proper form for transfer; (b) for the purchase or redemption of shares of the common stock of the Fund upon delivery thereof to Custodian, or upon proper instructions from The Henlopen Fund; (c) for the payment of interest, dividends, taxes, investment adviser's fees or operating expenses (including, without limitation thereto, fees for legal, accounting, auditing and custodian services and expenses for printing and postage); (d) for payments in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Fund held by or to be delivered to Custodian; or (e) for other proper corporate purposes certified by resolution of the Board of Trustees of the Fund. Before making any such payment, Custodian shall receive (and may rely upon) an officers' certificate requesting such payment and stating that it is for a purpose permitted under the terms of items (a), (b), (c) or (d) of this Subsection A, and also, in respect of item (e), upon receipt of an officers' certificate specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such payment is to be made, provided, however, that an officers' certificate need not precede the disbursement of cash for the purpose of purchasing a money market instrument, or any other security with same or next-day settlement, if the President, a Vice President, the Secretary or the Treasurer of the Fund issues appropriate oral or facsimile instructions to Custodian and an appropriate officers' certificate is received by Custodian within two business days thereafter. B. Custodian is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received by Custodian for the account of the Fund. C. Custodian shall, upon receipt of proper instructions, make federal funds available to the Fund as of specified times agreed upon from time to time by the Fund and the Custodian in the amount of checks received in payment for shares of the Fund which are deposited into the Fund's account. 4. Segregated Accounts Upon receipt of proper instructions, the Custodian shall establish and maintain a segregated account(s) for and on behalf of the portfolio, into which account(s) may be transferred cash and/or securities. 5. Transfer, Exchange, Redelivery, etc. of Securities Custodian shall have sole power to release or deliver any securities of the Fund held by it pursuant to this Agreement. Custodian agrees to transfer, exchange or deliver securities held by it hereunder only: (a) for sales of such securities for the account of the Fund upon receipt by Custodian of payment therefore; (b) when such securities are called, redeemed or retired or otherwise become payable; (c) for examination by any broker selling any such securities in accordance with "street delivery" custom; (d) in exchange for, or upon conversion into, other securities alone or other securities and cash whether pursuant to any plan of merger, consolidation, reorganization, recapitalization or readjustment, or otherwise; (e) upon conversion of such securities pursuant to their terms into other securities; (f) upon exercise of subscription, purchase or other similar rights represented by such securities; (g) for the purpose of exchanging interim receipts or temporary securities for definitive securities; (h) for the purpose of redeeming in kind shares of common stock of the Fund upon delivery thereof to Custodian; or (i) for other proper corporate purposes. As to any deliveries made by Custodian pursuant to items (a), (b), (d), (e), (f) and (g), securities or cash receivable in exchange therefore shall be deliverable to Custodian. Before making any such transfer, exchange or delivery, Custodian shall receive (and may rely upon) an officers' certificate requesting such transfer, exchange or delivery, and stating that it is for a purpose permitted under the terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this Section 5 and also, in respect of item (i), upon receipt of an officers' certificate specifying the securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such securities shall be made, provided, however, that an officers' certificate need not precede any such transfer, exchange or delivery of a money market instrument, or any other security with same or next-day settlement, if the President, a Vice President, the Secretary or the Treasurer of the Fund issues appropriate oral or facsimile instructions to Custodian and an appropriate officers' certificate is received by Custodian within two business days thereafter. 6. Custodian's Acts Without Instructions Unless and until Custodian receives an officers' certificate to the contrary, Custodian shall: (a) present for payment all coupons and other income items held by it for the account of the Fund, which call for payment upon presentation and hold the cash received by it upon such payment for the account of the Fund; (b) collect interest and cash dividends received, with notice to the Fund, for the account of the Fund; (c) hold for the account of the Fund hereunder all stock dividends, rights and similar securities issued with respect to any securities held by it hereunder; and (d) execute, as agent on behalf of the Fund, all necessary ownership certificates required by the Internal Revenue Code or the Income Tax Regulations of the United States Treasury Department or under the laws of any state now or hereafter in effect, inserting the Fund's name on such certificates as the owner of the securities covered thereby, to the extent it may lawfully do so. 7. Registration of Securities Except as otherwise directed by an officers' certificate, Custodian shall register all securities, except such as are in bearer form, in the name of a registered nominee of Custodian as defined in the Internal Revenue Code and any Regulations of the Treasury Department issued hereunder or in any provision of any subsequent federal tax law exempting such transaction from liability for stock transfer taxes, and shall execute and deliver all such certificates in connection therewith as may be required by such laws or regulations or under the laws of any state. Custodian shall use its best efforts to the end that the specific securities held by it hereunder shall be at all times identifiable in its records. The Fund shall from time to time furnish to Custodian appropriate instruments to enable Custodian to hold or deliver in proper form for transfer, or to register in the name of its registered nominee, any securities which it may hold for the account of the Fund and which may from time to time be registered in the name of the Fund. 8. Voting and Other Action Neither Custodian nor any nominee of Custodian shall vote any of the securities held hereunder by or for the account of the Fund, except in accordance with the instructions contained in an officers' certificate. Custodian shall deliver, or cause to be executed and delivered, to the Corporation all notices, proxies and proxy soliciting materials with relation to such securities, such proxies to be executed by the registered holder of such securities (if registered otherwise than in the name of the Fund), but without indicating the manner in which such proxies are to be voted. 9. Transfer Tax and Other Disbursements The Fund shall pay or reimburse Custodian from time to time for any transfer taxes payable upon transfers of securities made hereunder, and for all other necessary and proper disbursements and expenses made or incurred by Custodian in the performance of this Agreement. Custodian shall execute and deliver such certificates in connection with securities delivered to it or by it under this Agreement as may be required under the provisions of the Internal Revenue Code and any Regulations of the Treasury Department issued thereunder, or under the laws of any state, to exempt form taxation any exemptable transfers and/or deliveries of any such securities. 10. Concerning Custodian Custodian shall be paid as compensation for its services pursuant to this Agreement such compensation as may from time to time be agreed upon in writing between the two parties. Until modified in writing, such compensation shall be as set forth in Exhibit A attached hereto. Custodian shall not be liable for any action taken in good faith upon any certificate herein described or certified copy of any resolution of the Board, and may rely on the genuineness of any such document which it may in good faith believe to have been validly executed. The Fund agrees to indemnify and hold harmless Custodian and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (including counsel fees) incurred or assessed against it or by its nominee in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct. Custodian is authorized to charge any account of the Fund for such items. In the event of any advance of cash for any purpose made by Custodian resulting from orders or instructions of the Fund, or in the event that Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the Fund shall be security therefore. 11. Subcustodians Custodian is hereby authorized to engage another bank or trust company as a Subcustodian for all or any part of the Fund's assets, so long as any such bank or trust company is a bank or trust company organized under the laws of any state of the United States, having an aggregate capital, surplus and undivided profit, as shown by its last published report, of not less than Two Million Dollars ($2,000,000) and provided further that, if the Custodian utilizes the services of a Subcustodian, the Custodian shall remain fully liable and responsible for any losses caused to the Fund by the Subcustodian as fully as if the Custodian was directly responsible for any such losses under the terms of the Custodian Agreement. Notwithstanding anything contained herein, if the Fund requires the Custodian to engage specific Subcustodians for the safekeeping and/or clearing of assets, the Fund agrees to indemnify and hold harmless Custodian from all claims, expenses and liabilities incurred or assessed against it in connection with the use of such Subcustodian in regard to the Fund's assets, except as may arise from its own negligent action, negligent failure to act or willful misconduct. 12. Reports by Custodian Custodian shall furnish the Fund periodically as agreed upon with a statement summarizing all transactions and entries for the account of Fund. Custodian shall furnish to the Fund, at the end of every month, a list of the portfolio securities showing the aggregate cost of each issue. The books and records of Custodian pertaining to its actions under this Agreement shall be open to inspection and audit at reasonable times by officers of, and of auditors employed by, the Fund. 13. Termination or Assignment This Agreement may be terminated by the Fund, or by Custodian, on ninety (90) days notice, given in writing and sent by registered mail to Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at 400 West Ninth Street, Suite 100, Wilmington, Delaware 19801, as the case may be. Upon termination of this Agreement, pending appointment of a successor to Custodian or a vote of the shareholders of the Fund to dissolve or to function without a custodian of its cash, securities and other property, Custodian shall not deliver cash, securities or other property of the Fund to the Fund, but may deliver them to a bank or trust company of its own selection, having an aggregate capital, surplus and undivided profits, as shown by its last published report of not less than Two Million Dollars ($2,000,000) as a Custodian for the Fund to be held under terms similar to those of this Agreement, provided, however, that Custodian shall not be required to make any such delivery or payment until full payment shall have been made by the Fund of all liabilities constituting a charge on or against the properties then held by Custodian or on or against Custodian, and until full payment shall have been made to Custodian of all its fees, compensation, costs and expenses, subject to the provisions of Section 10 of this Agreement. This Agreement may not be assigned by Custodian without the consent of the Fund, authorized or approved by a resolution of its Board of Trustees. 14. Deposits of Securities in Securities Depositories No provision of this Agreement shall be deemed to prevent the use by Custodian of a central securities clearing agency or securities depository, provided, however, that Custodian and the central securities clearing agency or securities depository meet all applicable federal and state laws and regulations, and the Board of Trustees of the Fund approves by resolution the use of such central securities clearing agency or securities depository. 15. Records To the extent that Custodian in any capacity prepares or maintains any records required to be maintained and preserved by the Fund pursuant to the provisions of the Investment Company Act of 1940, as amended, or the rules and regulations promulgated thereunder, Custodian agrees to make any such records available to the Fund upon request and to preserve such records for the periods prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and their respective corporate seals to be affixed hereto as of the date first above-written by their respective officers thereunto duly authorized. Executed in several counterparts, each of which is an original. Attest: FIRST WISCONSIN TRUST COMPANY _____________________ By ____________________________ ASSISTANT SECRETARY VICE PRESIDENT Attest: THE HENLOPEN FUND _________________________ By ____________________________ EX-99.B.9.1 7 EXHIBIT 9.1 ADMINISTRATIVE AGREEMENT AGREEMENT made this 29th day of October, 1992, between THE HENLOPEN FUND (the "Fund"), and FIDUCIARY MANAGEMENT, INC., a Wisconsin corporation (the "Administrator"). W I T N E S S E T H : WHEREAS, the Fund is in the process of registering with the Securities and Exchange Commission as an open-end management investment company under the Investment Company Act of 1940 (the "Act"); WHEREAS, upon so registering with the Securities and Exchange Commission, the Fund will be a registered investment company; and WHEREAS, the Fund desires to retain the Administrator to perform the following management-related services for the Fund and the Administrator desires to perform such services for the Fund. NOW, THEREFORE, the Fund and the Administrator do mutually promise and agree as follows: 1. Employment. The Fund hereby employs the Administrator to be its Administrator for the period and on the terms set forth in this Agreement. The Administrator hereby accepts such employment for the compensation herein provided and agrees during such period to render the services and to assume the obligations herein set forth. 2. Authority and Duties of the Administrator. The Administrator shall perform the following management-related services for the Fund: (a) Prepare and maintain the books, accounts and other documents specified in Rule 31a-1, under the Act in accordance with the requirements of Rule 31a-1 and Rule 31a-2 under the Act; (b) Determine the Fund's net asset value in accordance with the provisions of the Fund's Articles of Incorporation and its Registration Statement; (c) Respond to stockholder inquiries forwarded to it by the Fund; (d) Prepare the financial statements contained in reports to stockholders of the Fund; (e) Prepare reports to and filings with the Securities and Exchange Commission (other than the Fund's Registration Statement on Form N-1A); (f) Furnish statistical and research data, clerical, accounting and bookkeeping services and stationery and office supplies; and (g) Keep and maintain the Fund's financial accounts and records, and generally assist in all aspects of the Fund's operations to the extent agreed to by the Administrator and the Fund. The Administrator shall not act, and shall not be required to act, as an investment adviser to the Fund and shall not have any authority to supervise the investment or reinvestment of the cash, securities or other property comprising the Fund's assets or to determine what securities or other property may be purchased or sold by the Fund. The Administrator shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund. 3. Expenses. The Administrator, at its own expense and without reimbursement from the Fund, shall furnish office space, and all necessary office facilities, equipment and executive personnel for performing the services required to be performed by it under the Agreement. The Administrator shall not be required to pay any expenses of the Fund. The expenses of the Fund's operations borne by the Fund include by way of illustration and not limitation, directors fees paid to those directors who are not interested persons of the Fund, as defined in the Act, the professional costs of preparing and cost of printing its registration statements required under the Securities Act of 1933 and the Act (and amendments thereto), the expense of registering its shares with the Securities and Exchange Commission and in the various states, the printing and distribution cost of prospectuses mailed to existing shareholders, the cost of stock certificates, director and officer liability insurance, the printing and distribution costs of reports to stockholders, reports to government authorities and proxy statements, interest charges, taxes, legal expenses, association membership dues, auditing services, insurance premiums, brokerage and other expenses connected with the execution of portfolio securities transactions, fees and expenses of the custodian of the Fund's assets, printing and mailing expenses and charges and expenses of dividend disbursing agents, registrars and stock transfer agents. 4. Compensation of the Administrator. For the services to be rendered by the Administrator hereunder, the Fund shall pay to the Administrator an administration fee, paid monthly, based on the average net assets of the Fund, as determined by valuations made as of the close of each business day of the month. The administration fee shall be 1/12 of 0.2% of such net assets up to and including $30,000,000 and 1/12 of .1% of the next $30,000,000 of daily net assets and 1/12 of 0.05% of the daily net assets in excess of $60,000,000, provided, however, that the minimum fee payable by the Fund shall be $20,000 annually. For any month in which this Agreement is not in effect for the entire month, such fee shall be reduced proportionately on the basis of the number of calendar days during which it is in effect and the fee computed upon the net assets of the business days during which it is so in effect. 5. Exclusivity. The services of the Administrator to the Fund hereunder are not to be deemed exclusive and the Administrator shall be free to furnish similar services to others as long as the services hereunder are not impaired thereby. During the period that this Agreement is in effect, the Administrator shall be the Fund's sole administrator. 6. Liability. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Administrator, the Administrator shall not be subject to liability to the Fund or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering services hereunder, or for any losses that may be sustained in the purchase, holding or sale of any security. 7. Amendments and Termination. This Agreement may be amended by the mutual consent of the parties. This Agreement may be terminated at any time, without the payment of any penalty, by the board of directors of the Fund upon the giving of ninety (90) days' written notice to the Administrator. This Agreement may be terminated by the Administrator at any time upon the giving of ninety (90) days' written notice to the Fund. Upon termination of the Agreement the Administrator shall deliver to the Fund all books, accounts and other documents then maintained by it pursuant to Section 2 hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day first above written. FIDUCIARY MANAGEMENT, INC. (the "Administrator") By: /s/ Maria Blanco By: /s/ Donald S. Wilson Secretary President THE HENLOPEN FUND (the "Fund") By: /s/ Jane M. Teasley By: /s/ Michael L. Hershey Secretary President EX-99.B.9.2 8 Exhibit 9.2 TRANSFER AGENT AGREEMENT THIS AGREEMENT is made and entered into on this 27th day of October, 1992, by and between THE HENLOPEN FUND (hereinafter referred to as the "Fund") and FIRST WISCONSIN TRUST COMPANY, a corporation organized under the laws of the State of Wisconsin (hereinafter referred to as the "Agent"). W I T N E S S E T H : WHEREAS, the Fund is an open-ended management investment company which is registered under the Investment Company Act of 1940; and WHEREAS, the Agent is a trust company and, among other things, is in the business of administering transfer and dividend disbursing agent functions for the benefit of its customers; NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as follows: 1. Terms of Appointment; Duties of the Agent Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints the Agent to act as transfer agent and dividend disbursing agent. The Agent shall perform all of the customary services of a transfer agent and dividend disbursing agent, and as relevant, agent in connection with accumulation, open account or similar plans (including without limitation any periodic investment plan or periodic withdrawal program), including but not limited to: A. Receive orders for the purchase of shares; B. Process purchase orders and issue the appropriate number of certificated or uncertificated shares with such uncertificated shares being held in the appropriate shareholder account; C. Process redemption requests received in good order; D. Pay monies in accordance with the instructions of redeeming shareholders; E. Process transfers of shares in accordance with the shareowner's instructions; F. Process exchanges between funds within the same family of funds; G. Issue and/or cancel certificates as instructed; replace lost, stolen or destroyed certificates upon receipt of satisfactory indemnification or surety bond; H. Prepare and transmit payments for dividends and distributions declared by the Fund; I. Make changes to shareholder records, including, but not limited to, address changes in plans (i.e., systematic withdrawal, automatic investment, dividend reinvestment, etc.); J. Record the issuance of shares of the Fund and maintain, pursuant to Section Rule 17ad-10(e), a record of the total number of shares of the Fund which are authorized, issued and outstanding; K. Prepare shareholder meeting lists and, if applicable, mail, receive and tabulate proxies; L. Mail shareholder reports and prospectuses to current shareholders; M. Prepare and file U.S. Treasury Department forms 1099 and other appropriate information returns required with respect to dividends and distributions for all shareholders; N. Provide shareholder account information upon request and prepare and mail confirmations and statements of account to shareholders for all purchases, redemptions and other confirmable transactions as agreed upon with the Fund; and O. Provide a Blue Sky System which will enable the Fund to monitor the total number of shares sold in each state. In addition, the Fund shall identify to the Agent in writing those transactions and assets to be treated as exempt from the Blue Sky reporting to the Fund for each state. The responsibility of the Agent for the Fund's Blue Sky state registration status is solely limited to the initial compliance by the Fund and the reporting of such transactions to the Fund. 2. Compensation The Fund agrees to pay the Agent for performance of the duties listed in this Agreement; the fees and out-of-pocket expenses include, but are not limited to the following: printing, postage, forms, stationery, record retention, mailing, insertion, programming, labels, shareholder lists and proxy expenses. These fees and reimbursable expenses may be changed from time to time subject to mutual written agreement between the Fund and the Agent. The Fund agrees to pay all fees and reimbursable expenses within ten (10) business days following the mailing of the billing notice. 3. Representations of Agent The Agent represents and warrants to the Fund that: A. It is a trust company duly organized, existing and in good standing under the laws of Wisconsin; B. It is duly qualified to carry on its business in the state of Wisconsin; C. It is empowered under applicable laws and by its charter and bylaws to enter into and perform this Agreement; D. All requisite corporate proceedings have been taken to authorize it to enter and perform this Agreement; and E. It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. 4. Representations of the Fund The Fund represents and warrants to the Agent that: A. The Fund is an open-ended diversified investment company under the Investment Company Act of 1940; B. The Fund is a business trust organized, existing, and in good standing under the laws of Delaware; C. The Fund is empowered under applicable laws and by its Declaration of Trust and bylaws to enter into and perform this Agreement; D. All necessary proceedings required by the Declaration of Trust have been taken to authorize it to enter into and perform this Agreement; E. The Fund will comply with all applicable requirements of the Securities and Exchange Acts of 1933 and 1934, as amended, the Investment Company Act of 1940, as amended, and any laws, rules and regulations of governmental authorities having jurisdiction; and F. A registration statement under the Securities Act of 1933 is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all shares of the Fund being offered for sale. 5. Covenants of Fund and Agent The Fund shall furnish the Agent a certified copy of the resolution of the Board of Trustees of the Fund authorizing the appointment of the Agent and the execution of this Agreement. The Fund shall provide to the Agent a copy of the Declaration of Trust, bylaws of the Fund, and all amendments. The Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the rules thereunder, the Agent agrees that all such records prepared or maintained by the Agent relating to the services to be performed by the Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such section and rules and will be surrendered to the Fund on and in accordance with its request. 6. Indemnification; Remedies Upon Breach The Agent agrees to use reasonable care and act in good faith in performing its duties hereunder. Notwithstanding the foregoing, the Agent shall not be liable or responsible for delays or errors occurring by reason of circumstances beyond its control, including acts of civil or military authority, national or state emergencies, fire, mechanical or equipment failure, flood or catastrophe, acts of God, insurrection or war. In the event of a mechanical breakdown beyond its control, the Agent shall take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond the Agent's control. The Agent will make every reasonable effort to restore any lost or damaged data, and the correcting of any errors resulting from such a breakdown will be at the Agent's expense. The Agent agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of The Henlopen Fund shall be entitled to inspect the Agent's premises and operating capabilities at any time during regular business hours of the Agent, upon reasonable notice to the Agent. The Fund will indemnify and hold the Agent harmless against any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from the Agent's bad faith or negligence, and arising out of or in connection with the Agent's duties on behalf of the Fund hereunder. Further, the Fund will indemnify and hold the Agent harmless against any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit as a result of the negligence of the Fund or the principal underwriter (unless contributed to by the Agent's own negligence or bad faith); or as a result of the Agent acting upon telephone instructions relating to the exchange or redemption of shares received by the Agent and reasonably believed by the Agent to have originated from the record owner of the subject shares; or as a result of the Agent acting upon any instructions executed or orally communicated by a duly authorized officer or employee of the Fund, according to such lists of authorized officers and employees furnished to the Agent and as amended from time to time in writing by a resolution of the Board of Trustees of the Fund; or as a result of acting in reliance upon any genuine instrument or stock certificate signed, countersigned or executed by any person or persons authorized to sign, countersign or execute the same. In order for this section to apply, it is understood that if in any case the Fund may be asked to indemnify or hold harmless the Agent, the Fund shall be advised of all pertinent facts concerning the situation in question, and it is further understood that the Agent will use reasonable care to notify the Fund promptly concerning any situation which presents or appears likely to present a claim for indemnification against the Fund. The Fund shall have the option to defend the Agent against any claim which may be the subject of this indemnification and, in the event that the Fund so elects, the Agent will so notify the Fund, and thereupon the Fund shall take over complete defense of the claim and the Agent shall sustain no further legal or other expenses in such situation for which the Agent shall seek indemnification under this section. The Agent will in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify the Agent, except with the Fund's prior written consent. 7. Confidentiality The Agent agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its shareholders and shall not be disclosed to any other party, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Agent may be exposed to civil or criminal contempt proceedings for failure to comply after being requested to divulge such information by duly constituted authorities. 8. Wisconsin Law to Apply This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the state of Wisconsin. 9. Amendment, Assignment, Termination and Notice A. This Agreement may be amended by the mutual written consent of the parties. B. After the first full year, this Agreement may be terminated upon ninety (90) day's written notice given by one party to the other. C. This Agreement and any right or obligation hereunder may not be assigned by either party without the signed, written consent of the other party. D. Any notice required to be given by the parties to each other under the terms of this Agreement shall be in writing, addressed and delivered, or mailed to the principal place of business of the other party. E. In the event that the Fund gives to the Agent its written intention to terminate and appoint a successor transfer agent, the Agent agrees to cooperate in the transfer of its duties and responsibilities to the successor, including any and all relevant books, records and other data established or maintained by the Agent under this Agreement. F. Should the Fund exercise its right to terminatie, all out-of- pocket expenses associated with the movement of records and material will be paid by the Fund. THE HENLOPEN FUND FIRST WISCONSIN TRUST COMPANY By: __________________________ By: _________________________________ Attest: ________________________ Attest: ____________________________ EX-99.B.10 9 EXHIBIT 10 November 5, 1992 The Henlopen Fund 400 West Ninth Street Wilmington, Delaware 19801 Gentlemen: We have acted as counsel for you in connection with the preparation of a Registration Statement on Form N-1A relating to the sale by you of an indefinite amount of shares of beneficial interest, no par value, of The Henlopen Fund (such shares of beneficial interest being hereinafter referred to as the "Shares") in the manner set forth in the Registration Statement to which reference is made. In this connection we have examined: (a) the Registration Statement on Form N-1A; (b) your Certificate of Trust, Trust Instrument and Bylaws; (c) proceedings relative to the authorization for issuance of the Shares; and (d) such other proceedings, documents and records as we have deemed necessary to enable us to render this opinion. Based upon the foregoing, we are of the opinion that the Shares when sold as contemplated in the Registration Statement will be legally issued, fully paid and nonassessable. We hereby consent to the use of this opinion as an exhibit to the Form N-1A Registration Statement. In giving this consent, we do not admit that we are experts within the meaning of Section 11 of the Securities Act of 1933, as amended, or within the category of persons whose consent is required by Section 7 of said Act. Very truly yours, FOLEY & LARDNER EX-99.B.11 10 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in the Statement of Additional Information constituting part of this Post-Effective Amendment No. 6 to the registration statement on Form N-1A (the "Registration Statement") of our report dated July 24, 1997, relating to the financial statements and financial highlights of The Henlopen Fund, which appears in such Statement of Additional Information, and to the incorporation by reference of our report into the Prospectus which constitutes part of this Registration Statement. We also consent to the reference to us under the heading "Independent Accountants" in such Statement of Additional Information. PRICE WATERHOUSE LLP Minneapolis, Minnesota October 31, 1997 EX-99.B.13 11 Exhibit 13 SUBSCRIPTION AGREEMENT The Henlopen Fund 400 West Ninth Street Wilmington, Delaware 19801 Gentlemen: The undersigned hereby subscribes to 10,000 shares of beneficial interest, no par value, of The Henlopen Fund, in consideration for which the undersigned agrees to transfer to you upon demand cash in the amount of $100,000. It is understood that upon receipt by you of payment therefor, said shares shall be issued and shall be deemed to be fully paid and nonassessable. The undersigned agrees that the shares are being purchased for investment with no present intention of reselling or redeeming said shares. Dated and effective as of this ____ day of November, 1992. By: _________________________________ Michael L. Hershey ACCEPTANCE The foregoing subscription is hereby accepted. Dated and effective as of this ____ day of November, 1992. THE HENLOPEN FUND By: _________________________________ President Attest: ___________________________ Secretary EX-99.B.14.1 12 THE HENLOPEN FUND INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT The following constitutes an agreement establishing an Individual Retirement Account (under Section 408(a) of the Internal Revenue Code) between the Depositor and the Custodian. ARTICLE I The Custodian may accept additional cash contributions on behalf of the Depositor for a tax year of the Depositor. The total cash contributions are limited to $2,000 for the tax year unless the contribution is a rollover contribution described in Section 402(c) (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in Section 408(k). Rollover contributions before January 1, 1993, include rollovers described in Section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in Section 408(k). ARTICLE II The Depositor's interest in the balance in the custodial account is nonforfeitable. ARTICLE III 1. No part of the custodial funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of Section 408(a)(5)). 2. No part of the custodial funds may be invested in collectibles (within the meaning of Section 408(m)) except as otherwise permitted by Section 408(m)(3) which provides an exception for certain gold and silver coins and coins issued under the laws of any state. ARTICLE IV 1. Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor's interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8, including the incidental death benefit provisions of Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are herein incorporated by reference. 2. Unless otherwise elected by the time distributions are required to begin to the Depositor under Paragraph 3, or to the surviving spouse under Paragraph 4, other than in the case of a life annuity, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. 3. The Depositor's entire interest in the custodial account must be, or begin to be, distributed by the Depositor's required beginning date, April 1 following the calendar year end in which the Depositor reaches age 70 1/2. By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in: (a) A single sum payment. (b) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the life of the Depositor. (c) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the joint and last survivor lives of the Depositor and his or her designated beneficiary. (d) Equal or substantially equal annual payments over a specified period that may not be longer than the Depositor's life expectancy. (e) Equal or substantially equal annual payments over a specified period that may not be longer than the joint life and last survivor expectancy of the Depositor and his or her designated beneficiary. 4. If the Depositor dies before his or her entire interest is distributed to him or her, the entire remaining interest will be distributed as follows: (a) If the Depositor dies on or after distribution of his or her interest has begun, distribution must continue to be made in accordance with Paragraph 3. (b) If the Depositor dies before distribution of his or her interest has begun, the entire remaining interest will, at the election of the Depositor or, if the Depositor has not so elected, at the election of the beneficiary or beneficiaries, either (i) Be distributed by the December 31 of the year containing the fifth anniversary of the Depositor's death, or (ii) Be distributed in equal or substantially equal payments over the life or life expectancy of the designated beneficiary or beneficiaries starting by December 31 of the year following the year of the Depositor's death. If, however, the beneficiary is the Depositor's surviving spouse, then this distribution is not required to begin before December 31 of the year in which the Depositor would have turned age 70 1/2. (c) Except where distribution in the form of an annuity meeting the requirements of Section 408(b)(3) and its related regulations has irrevocably commenced, distributions are treated as having begun on the Depositor's required beginning date, even though payments may actually have been made before that date. (d) If the Depositor dies before his or her entire interest has been distributed and if the beneficiary is other than the surviving spouse, no additional cash contributions or rollover contributions may be accepted in the account. 5. In the case of a distribution over life expectancy in equal or substantially equal annual payments, to determine the minimum annual payment for each year, divide the Depositor's entire interest in the custodial account as of the close of business on December 31 of the preceding year by the life expectancy of the Depositor (or the joint life and last survivor expectancy of the Depositor and the Depositor's designated beneficiary, or the life expectancy of the designated beneficiary, whichever applies). In the case of distributions under Paragraph 3, determine the initial life expectancy (or joint life and last survivor expectancy) using the attained ages of the Depositor and designed beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2. In the case of a distribution in accordance with Paragraph 4(b)(ii), determine life expectancy using the attained age of the designated beneficiary as of the beneficiary's birthday in the year distributions are required to commence. 6. The owner of two or more individual retirement accounts may use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements described above. This method permits an individual to satisfy these requirements by taking from one individual retirement account the amount required to satisfy the requirement for another. ARTICLE V 1. The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under Section 408(i) and Regulations Section 1.408-5 and 1.408-6. 2. The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor prescribed by the Internal Revenue Service. ARTICLE VI Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles that are not consistent with Section 408(a) and related regulations will be invalid. ARTICLE VII This agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the persons whose signatures appear below. ARTICLE VIII 1. Investment of Account Assets. (a) All contributions to the custodial account shall be invested in shares of The Henlopen Fund or, if available, any other regulated investment company or companies for which Landis Associates, Inc. serves as investment advisor or designates as being eligible for investment ("Investment Company"). Shares of stock of an Investment Company shall be referred to as "Investment Company Shares." To the extent that two or more funds are available for investment, contributions shall be invested in accordance with the Depositor's investment election. (b) Each contribution to the custodial account shall identify the Depositor's account number and be accompanied by a signed statement directing the investment of that contribution. The Custodian may return to the Depositor, without liability for interest thereon, any contribution which is not accompanied by adequate account identification or an appropriate signed statement directing investment of that contribution. (c) Contributions shall be invested in whole and fractional Investment Company Shares at the price and in the manner such shares are offered to the public. All distributions received on Investment Company Shares, including both dividends and capital gains distributions, held in the custodial account shall be reinvested in like shares. If any distribution of Investment Company Shares may be received in additional like shares or in cash or other property, the Custodian shall elect to receive such distribution in additional like Investment Company Shares. (d) All Investment Company Shares acquired by the Custodian shall be registered in the name of the Custodian or its nominee. The Depositor shall be the beneficial owner of all Investment Company Shares held in the custodial account and the Custodian shall not vote any such shares, except upon written direction of the Depositor, timely received, in a form acceptable to the Custodian. The Custodian agrees to forward to the Depositor each prospectus, report, notice, proxy and related proxy soliciting materials applicable to Investment Company Shares held in the custodial account received by the Custodian. (e) The Depositor may, at any time, by written notice to the Custodian, in a form acceptable to the Custodian, redeem any number of shares held in the custodial account and reinvest the proceeds in the shares of any other Investment Company upon the terms and within the limitations imposed by the then current prospectus of such other Investment Company in which the Depositor elects to invest. By giving such instructions, the Depositor will be deemed to have acknowledged receipt of such prospectus. Such redemptions and reinvestments shall be done at the price and in the manner such shares are then being redeemed or offered by the respective Investment Company. 2. Amendment and Termination. (a) Landis Associates, Inc. may amend the Custodial Account (including retroactive amendments) by delivering to the Custodian and to the Depositor written notice of such amendment setting forth the substance and effective date of the amendment. The Custodian and the Depositor shall be deemed to have consented to any such amendment not objected to in writing by the Custodian or Depositor, as applicable, within thirty (30) days of receipt of the notice, provided that no amendment shall cause or permit any part of the assets of the custodial account to be diverted to purposes other than for the exclusive benefit of the Depositor or his or her beneficiaries. (b) The Depositor may terminate the custodial account at any time by delivering to the Custodian a written notice of such termination. (c) The custodial account shall automatically terminate upon distribution to the Depositor or his or her beneficiaries of its entire balance. 3. Taxes and Custodial Fees. Any income taxes or other taxes levied or assessed upon or in respect of the assets or income of the custodial account and any transfer taxes incurred shall be paid from the custodial account. All administrative expenses incurred by the Custodian in the performance of its duties, including fees for legal services rendered to the Custodian in connection with the custodial account, and the Custodian's compensation shall be paid from the custodial account, unless otherwise paid by the Depositor or his or her beneficiaries. Sufficient shares shall be liquidated from the custodial account to pay such fees and expenses. The Custodian's fees are set forth in a schedule provided to the Depositor. Extraordinary charges resulting from unusual administrative responsibilities not contemplated by the schedule will be subject to such additional charges as will reasonably compensate the Custodian. Fees for refund of excess contributions, transferring to a successor trustee or custodian, or redemption/reinvestment of Investment Company Shares will be deducted from the refund or redemption proceeds and the remaining balance will be remitted to the Depositor, or reinvested or transferred in accordance with the Depositor's instructions. 4. Reports and Notices. (a) The Custodian shall keep adequate records of transactions it is required to perform hereunder. After the close of each calendar year, the Custodian shall provide to the Depositor or his or her legal representative a written report or reports reflecting the transactions effected by it during such year and the assets and liabilities of the Custodial Account at the close of the year. (b) All communications or notices shall be deemed to be given upon receipt by the Custodian at Post Office Box 701, Milwaukee, Wisconsin 53201-0701 or the Depositor at his most recent address shown in the Custodian's records. The Depositor agrees to advise the Custodian promptly, in writing, of any change of address. 5. Designation of Beneficiary. The Depositor may designate a beneficiary or beneficiaries to receive benefits from the custodial account in the event of the Depositor's death. In the event the Depositor has not designated a beneficiary, or if all beneficiaries shall predecease the Depositor, the following persons shall take in the order named: (a) The spouse of the Depositor; (b) If the spouse shall predecease the Depositor or if the Depositor does not have a spouse, then to the Depositor's estate. The Depositor may also change or revoke any previously made designation of beneficiary. Any designation or change or revocation of a designation shall be made by written notice in a form acceptable to and filed with the Custodian, prior to the complete distribution of the balance in the custodial account. The last such designation on file at the time of the Depositor's death shall govern. If a beneficiary dies after the Depositor, but prior to receiving his or her entire interest in the custodial account, the remaining interest in the custodial account shall be paid to the beneficiary's estate. 6. Multiple Individual Retirement Accounts. In the event the Depositor maintains more than one individual retirement account (as defined in Section 408(a)) and elects to satisfy his or her minimum distribution requirements described in Article IV above by making a distribution for another individual retirement account in accordance with Paragraph 6 thereof, the Depositor shall be deemed to have elected to calculate the amount of his or her minimum distribution under this custodial account in the same manner as under the individual retirement account from which the distribution is made. 7. Inalienability of Benefits. Neither the benefits provided under this custodial account nor the assets held therein shall be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind and any attempt to cause such benefits or assets to be so subjected shall not be recognized except to the extent as may be required by law. 8. Rollover Contributions and Transfers. The Custodian shall have the right to receive rollover contributions and to receive direct transfers from other custodians or trustees. All contributions must be made in cash or check. 9. Conflict in Provisions. To the extent that any provisions of this Article VIII shall conflict with the provisions of Articles IV, V and/or VII, the provisions of this Article VIII shall govern. 10. Applicable State Law. This custodial account shall be construed, administered and enforced according to the laws of the State of Wisconsin. 11. Resignation or Removal of Custodian. The Custodian may resign at any time upon thirty (30) days notice in writing to the Investment Company. Upon such resignation, the Investment Company shall notify the Depositor, and shall appoint a successor custodian under this Agreement. The Depositor or the Investment Company at any time may remove the Custodian upon 30 days written notice to that effect in a form acceptable to and filed with the Custodian. Such notice must include designation of a successor custodian. The successor custodian shall satisfy the requirements of section 408(h) of the Code. Upon receipt by the Custodian of written acceptance of such appointment by the successor custodian, the Custodian shall transfer and pay over to such successor the assets of and records relating to the Custodial Account. The Custodian is authorized, however, to reserve such sum of money as it may deem advisable for payment of all its fees, compensation, costs and expenses, or for payment of any other liability constituting a charge on or against the assets of the Custodial Account or on or against the Custodian, and where necessary may liquidate shares in the Custodial Account for such payments. Any balance of such reserve remaining after the payment of all such items shall be paid over to the successor Custodian. The Custodian shall not be liable for the acts or omissions of any predecessor or successor custodian or trustee. 12. Limitation on Custodian Responsibility. The Custodian will not under any circumstances be responsible for the timing, purpose or propriety of any contribution or of any distribution made hereunder, nor shall the Custodian incur any liability or responsibility for any tax imposed on account of any such contribution or distribution. Further, the Custodian shall not incur any liability or responsibility in taking or omitting to take any action based on any notice, election, or instruction or any written instrument believed by the Custodian to be genuine and to have been properly executed. The Custodian shall be under no duty of inquiry with respect to any such notice, election, instruction, or written instrument, but in its discretion may request any tax waivers, proof of signatures or other evidence which it reasonably deems necessary for its protection. The Depositor and the successors of the Depositor including any executor or administrator of the Depositor shall, to the extent permitted by law, indemnify the Custodian and its successors and assigns against any and all claims, actions or liabilities of the Custodian to the Depositor or the successors or beneficiaries of the Depositor whatsoever (including without limitation all reasonable expenses incurred in defending against or settlement of such claims, actions or liabilities) which may arise in connection with this Agreement or the Custodial Account, except those due to the Custodian's own bad faith, gross negligence or willful misconduct. The Custodial shall not be under any duty to take any action not specified in this Agreement, unless the Depositor shall furnish it with instructions in proper form and such instructions shall have been specifically agreed to by the Custodian, or to defend or engage in any suit with respect hereto unless it shall have first agreed in writing to do so and shall have been fully indemnified to its satisfaction. EX-99.B.14.2 13 THE HENLOPEN FUND SIMPLIFIED EMPLOYEE PENSION Instructions Section references are to the Internal Revenue Code unless otherwise noted. Purpose of Form Form 5305-SEP (Model SEP) is used by an employer to make an agreement to provide benefits to all eligible employees under a SEP described in section 408(k). Do not file this form with the IRS. See Pub. 560, Retirement Plans for the Self-Employed, and Pub. 590, Individual Retirement Arrangements (IRAs). Instructions to the Employer Simplified Employee Pension.-A SEP is a written arrangement (a plan) that provides you with a simplified way to make contributions toward your employees' retirement income. Under a SEP, you can contribute to an employee's individual retirement account or annuity (IRA). You make contributions directly to an IRA set up by or for each employee with a bank, insurance company, or other qualified financial institution. When using Form 5305-SEP to establish a SEP, the IRA must be a Model IRA established on an IRS form or a master or prototype IRA for which the IRS has issued a favorable opinion letter. Making the agreement on Form 5305- SEP does not establish an employer IRA described in section 408(c). When Not To Use Form 5305-SEP.-Do not use this form if you: 1. Currently maintain any other qualified retirement plan. This does not prevent you from maintaining another SEP. 2. Previously maintained a defined benefit plan that is now terminated. 3. Have any eligible employees for whom IRAs have not been established. 4. Use the services of leased employees (described in section 414(n)). 5. Are a member of an affiliated service group (described in section 414(m)), a controlled group of corporations (described in section 414(b)), or trades or businesses under common control (described in sections 414(c) and 414(o)), unless all eligible employees of all the members of such groups,trades, or businesses, participate in the SEP. 6. Will not pay the cost of the SEP contributions. Do not use Form 5305-SEP for a SEP that provides for elective employee contributions even if the contributions are made under a salary reduction agreement. Use Form 5305A-SEP, or a nonmodel SEP if you permit elective deferrals to a SEP. Note: SEPs permitting elective deferrals cannot be established after 1996. Eligible Employees.-All eligible employees must be allowed to participate in the SEP. An eligible employee is any employee who: (1) is at least 21 years old, and (2) has performed "service" for you in at least 3 of the immediately preceding 5 years. Note: You can establish less restrictive eligibility requirements, but not more restrictive ones. Service is any work performed for you for any period of time, however short. If you are a member of an affiliated service group, a controlled group of corporations,or trades or businesses under common control, service includes any work performed for any period of time for any other member of such group,trades, or businesses. Excludable Employees.-The following employees do not have to be covered by the SEP: (1) employees covered by a collective bargaining agreement whose retirement benefits were bargained for in good faith by you and their union, (2) nonresident alien employees who did not earn U.S.source income from you, and (3) employees who received less than $400* in compensation during the year. ____________________ * This amount reflects the cost-of-living increase effective January 1, 1997. The amount is adjusted annually. The IRS announces the increase, if any, in a news release and in the Internal Revenue Bulletin. Contribution Limits.-The SEP rules permit you to make an annual contribution of up to 15% of the employee's compensation or $300,000*, whichever is less. Compensation, for this purpose, does not include employer contributions to the SEP or the employee's compensation in excess of $160,000*. If you also maintain a Model Elective SEP or any other SEP that permits employees to make elective deferrals, contributions to the two SEPs together may not exceed the smaller of $300,000* or 15% of compensation for any employee. Contributions cannot discriminate in favor of highly compensated employees. You are not required to make contributions every year. But you must contribute to the SEP-IRAs of all of the eligible employees who actually performed services during the year of the contribution. This includes eligible employees who die or quit working before the contribution is made. You may also not integrate your SEP contributions with, or offset them by, contributions made under the Federal Insurance Contributions Act (FICA). If this SEP is intended to meet the top-heavy minimum contribution rules of section 416, but it does not cover all your employees who participate in your elective SEP, then you must make minimum contributions to IRAs established on behalf of those employees. Deducting Contributions.--You may deduct contributions to a SEP subject to the limits of section 404(h). This SEP is maintained on a calendar year basis and contributions to the SEP are deductible for your tax year with or within which the calendar year ends. Contributions made for a particular tax year must be made by the due date of your income tax return (including extensions) for that tax year. Completing the Agreement.--This agreement is considered adopted when: - IRAs have been established for all your eligible employees; - You have completed all blanks on the agreement form without modification; and - You have given all your eligible employees the following information: 1. A copy of Form 5305-SEP. 2. A statement that IRAs other than the IRAs into which employer SEP contributions will be made may provide different rates of return and different terms concerning, among other things, transfers and withdrawals of funds from the IRAs. 3. A statement that, in addition to the information provided to an employee at the time the employee becomes eligible to participate, the administrator of the SEP must furnish each participant within 30 days of the effective date of any amendment to the SEP, a copy of the amendment and a written explanation of its effects. 4. A statement that the administrator will give written notification to each participant of any employer contributions made under the SEP to that participant's IRA by the later of January 31 of the year following the year for which a contribution is made or 30 days after the contribution is made. Employers who have established a SEP using Form 5305-SEP and have furnished each eligible employee with a copy of the completed Form 5305- SEP and provided the other documents and disclosures described in Instructions to the Employer and Information for the Employee, are not required to file the annual information returns, Forms 5500, 5500-C/R, or 5500-EZ for the SEP. However, under Title I of ERISA, this relief from the annual reporting requirements may not be available to an employer who selects, recommends, or influences its employees to choose IRAs into which contributions will be made under the SEP, if those IRAs are subject to provisions that impose any limits on a participant's ability to withdraw funds (other than restrictions imposed by the Code that apply to all IRAs). For additional information on Title I requirements, see the Department of Labor regulation at 29 CFR 2520.104-48. Information for the Employee The information below explains what a SEP is, how contributions are made, and how to treat your employer's contributions for tax purposes. For more information, see Pub. 590. Simplified Employee Pension.--A SEP is a written arrangement (a plan) that allows an employer to make contributions toward your retirement. Contributions are made to an individual retirement account/annuity (IRA). Contributions must be made to either a Model IRA executed on an IRS form or a master or prototype IRA for which the IRS has issued a favorable opinion letter. An employer is not required to make SEP contributions. If a contribution is made, it must be allocated to all the eligible employees according to the SEP agreement. The Model SEP (Form 5305-SEP) specifies that the contribution for each eligible employee will be the same percentage of compensation (excluding compensation higher than $160,000*) for all employees. Your employer will provide you with a copy of the agreement containing participation rules and a description of how employer contributions may be made to your IRA. Your employer must also provide you with a copy of the completed Form 5305-SEP and a yearly statement showing any contributions to your IRA. All amounts contributed to your IRA by your employer belong to you even after you stop working for that employer. Contribution Limits.--Your employer will determine the amount to be contributed to your IRA each year. However, the amount for any year is limited to the smaller of $30,000* or 15% of your compensation (currently limited to $160,000) for that year. Compensation does not include any amount that is contributed by your employer to your IRA under the SEP. Your employer is not required to make contributions every year or to maintain a particular level of contributions. Tax Treatment of Contributions.--Employer contributions to your SEP-IRA are excluded from your income unless there are contributions in excess of the applicable limit. Employer contributions within these limits will not be included on your Form W-2. Employee Contributions.--You may contribute the smaller of $2,000 or 100% of your compensation to an IRA. However, the amount you can deduct may be reduced or eliminated because, as a participant in a SEP, you are covered by an employer retirement plan. SEP Participation.--If your employer does not require you to participate in a SEP as a condition of employment, and you elect not to participate, all other employees of your employer may be prohibited from participating. If one or more eligible employees do not participate and the employer tries to establish a SEP for the remaining employees, it could cause adverse tax consequences for the participating employees. An employer may not adopt this IRS Model SEP if the employer maintains another qualified retirement plan or has ever maintained a qualified defined benefit plan. This does not prevent your employer from adopting this IRS Model SEP and also maintaining an IRS Model Elective SEP or other SEP. However, if you work for several employers, you may be covered by a SEP of one employer and a different SEP or pension or profit- sharing plan of another employer. SEP-IRA Amounts--Rollover or Transfer to Another IRA.--You can withdraw or receive funds from your SEP-IRA if within 60 days of receipt, you place those funds in another IRA or SEP-IRA. This is called a "rollover" and can be done without penalty only once in any 1-year period. However, there are no restrictions on the number of times you may make "transfers" if you arrange to have these funds transferred between the trustees or the custodians so that you never have possession of the funds. Withdrawals.--You may withdraw your employer's contribution at any time, but any amount withdrawn is includible in your income unless rolled over. Also, if withdrawals occur before you reach age 59-1/2, you may be subject to a tax on early withdrawal. Excess SEP Contributions.--Contributions exceeding the yearly limitations may be withdrawn without penalty by the due date (plus extensions) for filing your tax return (normally April 15), but is includible in your gross income. Excess contributions left in your SEP-IRA account after that time may have adverse tax consequences. Withdrawals of those contributions may be taxed as premature withdrawals. Financial Institution Requirements.--The financial institution where your IRA is maintained must provide you with a disclosure statement that contains the following information in plain, nontechnical language: 1. The law that relates to your IRA. 2. The tax consequences of various options concerning your IRA. 3. Participation eligibility rules, and rules on the deductibility of retirement savings. 4. Situations and procedures for revoking your IRA, including the name, address, and telephone number of the person designated to receive notice of revocation. (This information must be clearly displayed at the beginning of the disclosure statement.) 5. A discussion of the penalties that may be assessed because of prohibited activities concerning your IRA. 6. Financial disclosure that provides the following information: a. Projects value growth rates of your IRA under various contribution and retirement schedules, or describes the method of determining annual earnings and charges that may be assessed. b. Describes whether, and for when, the growth projections are guaranteed, or a statement of the earnings rate and the terms on which the projections are based. c. States the sales commission for each year expressed as a percentage of $1,000. In addition, the financial institution must provide you with a financial statement each year. You may want to keep these statements to evaluate your IRA's investment performance. THE HENLOPEN FUND SIMPLIFIED EMPLOYEE PENSION-INDIVIDUAL RETIREMENT ACCOUNTS CONTRIBUTION AGREEMENT (Under Section 408(k) of the Internal Revenue Code) ____________________________ makes the following agreement under (Name of employer) Section 408(k) of the Internal Revenue Code and the instructions to this form. Article I--Eligibility Requirements (Check appropriate boxes--see Instructions.) The employer agrees to provide for discretionary contributions in each calendar year to the individual retirement account or individual retirement annuity (IRA) of all employees who are at least ______ years old (not to exceed 21 years old) and have performed services for the employer in at least ______ years (not to exceed 3 years) of the immediately preceding 5 years. This simplified employee pension (SEP) [_] includes [_] does not include employees covered under a collective bargaining agreement, [_] includes [_] does not include certain nonresident aliens, and [_] includes [_] does not include employees whose total compensation during the year is less than $400*. _____________________ * This amount reflects the cost-of-living increase effective January 1, 1997. The amount is adjusted annually. The IRS announces the increase, if any, in a news release and in the Internal Revenue Bulletin. Article II--SEP Requirements (See Instructions.) The employer agrees that contributions made on behalf of each eligible employee will be: A. Based only on the first $160,000* of compensation. B. Made in an amount that is the same percentage of compensation for every employee. C. Limited annually to the smaller of $30,000* or 15% of compensation. D. Paid to the employee's IRA trustee, custodian, or insurance company (for an annuity contract). ____________________________ __________________________ Employer's Signature and date Name and title EX-99.B.14.3 14 THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN Profit Sharing Plan AA - Plan No. 01-001 Pension Plan AA - Plan No. 01-002 THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN Profit Sharing Plan AA - Plan No. 01-001 Pension Plan AA - Plan No. 01-002 THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN Table of Contents ARTICLE I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE III. PARTICIPATION . . . . . . . . . . . . . . . . . . . . 10 Section 3.1. Participation at Effective Date . . . . . . . . . . . 10 Section 3.2. Participation after Effective Date . . . . . . . . . . 10 Section 3.3. Reentry . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3.4. Participation by an Owner-Employee of More Than One Trade or Business . . . . . . . . . . . . . . . . . . 10 ARTICLE IV. CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 12 Section 4.1. Employer Profit Sharing Contributions . . . . . . . . 12 Section 4.2. Employer Pension Contributions . . . . . . . . . . . . 14 Section 4.3. Participant Voluntary Contributions . . . . . . . . . 14 Section 4.4. Time for Making Contributions . . . . . . . . . . . . 15 Section 4.5. Leased Employees . . . . . . . . . . . . . . . . . . . 15 Section 4.6. Rollovers and Transfers . . . . . . . . . . . . . . . 15 ARTICLE V. CASH OR DEFERRED ARRANGEMENT (CODE SECTION 401(k)) . . . . . . . . . . . . . . . . 16 Section 5.1. Cash or Deferred Arrangement (Code Section 401(k)) . . 16 Section 5.2. Elective Deferrals . . . . . . . . . . . . . . . . . . 16 Section 5.3. Matching Contributions . . . . . . . . . . . . . . . . 21 Section 5.4. Qualified Matching Contributions and Qualified Non-Elective Contributions . . . . . . . . . . . . . . 24 Section 5.5. Special Distribution Rules . . . . . . . . . . . . . . 25 Section 5.6. Definitions . . . . . . . . . . . . . . . . . . . . . 26 ARTICLE VI. SECTION 415 LIMITATIONS . . . . . . . . . . . . . . . 31 Section 6.1. Employers Maintaining Only this Plan . . . . . . . . . 31 Section 6.2. Employers Maintaining Other Master or Prototype Defined Contribution Plans . . . . . . . . . . . . . . 32 Section 6.3. Employers Maintaining Other Defined Contribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Section 6.4. Employers Maintaining Defined Benefit Plans . . . . . 33 Section 6.5. Definitions . . . . . . . . . . . . . . . . . . . . . 33 ARTICLE VII. PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . 37 Section 7.1. Separate Accounts . . . . . . . . . . . . . . . . . . 37 Section 7.2. Vesting . . . . . . . . . . . . . . . . . . . . . . . 37 Section 7.3. Computation of Vesting Service . . . . . . . . . . . . 37 Section 7.4. Allocation of Forfeitures . . . . . . . . . . . . . . 38 ARTICLE VIII. PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . 39 Section 8.1. Benefits Payable Under the Plan . . . . . . . . . . . 39 Section 8.2. Manner of Distributions . . . . . . . . . . . . . . . 40 Section 8.3. Commencement of Payments . . . . . . . . . . . . . . . 44 Section 8.4. Payment of Small Amounts . . . . . . . . . . . . . . . 48 Section 8.5. Persons Under Legal or Other Disability . . . . . . . 49 Section 8.6. Withdrawals from Profit Sharing Plan . . . . . . . . . 49 Section 8.7. Transfer of Benefits to Eligible Retirement Plan . . . 50 ARTICLE IX. ESTABLISHMENT OF CUSTODIAL ACCOUNT; INVESTMENTS . . . 51 Section 9.1. Custodial Account . . . . . . . . . . . . . . . . . . 51 Section 9.2. Receipt of Contributions . . . . . . . . . . . . . . . 51 Section 9.3. Investment of Account Assets . . . . . . . . . . . . . 51 Section 9.4. Exclusive Benefit . . . . . . . . . . . . . . . . . . 52 Section 9.5. Expenses . . . . . . . . . . . . . . . . . . . . . . . 52 Section 9.6. Voting . . . . . . . . . . . . . . . . . . . . . . . . 52 Section 9.7. Reports of the Custodian and Administrator . . . . . . 52 Section 9.8. Limitation of Custodian's Duties and Liability . . . . 53 ARTICLE X. AMENDMENT AND TERMINATION . . . . . . . . . . . . . . 55 Section 10.1. Amendment . . . . . . . . . . . . . . . . . . . . . . 55 Section 10.2. Termination . . . . . . . . . . . . . . . . . . . . . 56 ARTICLE XI. FIDUCIARY RESPONSIBILITIES . . . . . . . . . . . . . . 57 Section 11.1. Administrator . . . . . . . . . . . . . . . . . . . . 57 Section 11.2. Powers of Administrator . . . . . . . . . . . . . . . 57 Section 11.3. Records and Reports . . . . . . . . . . . . . . . . . 57 Section 11.4. Other Administrative Provisions . . . . . . . . . . . 57 Section 11.5. Claims Procedure . . . . . . . . . . . . . . . . . . . 58 Section 11.6. Claims Review Procedure . . . . . . . . . . . . . 58 ARTICLE XII. AMENDMENT AND CONTINUATION OF ORIGINAL PLAN . . . . . 59 ARTICLE XIII. TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . 61 Section 13.1. Effect of Top-Heavy Status . . . . . . . . . . . . . . 61 Section 13.2. Additional Definitions . . . . . . . . . . . . . . . . 61 Section 13.3. Minimum Allocations . . . . . . . . . . . . . . . . . 63 Section 13.4. Benefit Limit Change . . . . . . . . . . . . . . . . . 64 ARTICLE XIV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 65 Section 14.1. Rights of Employees and Participants . . . . . . . . . 65 Section 14.2. Merger With Other Plans . . . . . . . . . . . . . . . 65 Section 14.3. Non-Alienation of Benefits . . . . . . . . . . . . . . 65 Section 14.4. Failure to Qualify . . . . . . . . . . . . . . . . . . 65 Section 14.5. Mistake of Fact; Disallowance of Deduction . . . . . . 66 Section 14.6. Participation under Prototype Plan . . . . . . . . . . 66 Section 14.7. Gender . . . . . . . . . . . . . . . . . . . . . . . . 66 Section 14.8. Headings . . . . . . . . . . . . . . . . . . . . . . . 66 Section 14.9. Governing Law . . . . . . . . . . . . . . . . . . . . 66 THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN ARTICLE I. INTRODUCTION This Plan, which is made available by Landis Associates, Inc., has been adopted by the Employer named in the Adoption Agreement(s) as a qualified money purchase pension and/or profit sharing plan for its eligible employees which is intended to qualify under Code Section 401(a). The Employer's Plan shall consist of the following provisions, together with the Adoption Agreement(s). ARTICLE II. DEFINITIONS Section 2.1. "Account" means the account or accounts maintained by the Custodian for a Participant, as described in Article VII. Section 2.2. "Administrator" means the plan administrator and fiduciary of the Plan with authority and responsibility to control and manage the operation and administration of the Plan in accordance with its terms and to comply with the reporting, disclosure and other requirements of ERISA. Unless a different Administrator is appointed by the Employer, the Administrator shall be the Employer. Section 2.3. "Beneficiary" means the person or persons designated by a Participant or otherwise entitled to receive benefits in the event of the Participant's death as provided herein. Such designation shall be made in writing and in such form as may be required by the Administrator, and shall be filed with the Administrator. Any designation may include contingent or successive Beneficiaries. Where such designation has been properly made, distribution of benefits shall be made directly to such Beneficiary or Beneficiaries. The Beneficiary or Beneficiaries designated by a Participant may be changed or withdrawn at any time from time to time, by the Participant, but only by filing with the Administrator a new designation, and revoking all prior designations. The most recent valid designation on file with the Administrator at the time of the Participant's death shall be the Beneficiary. Notwithstanding the foregoing, in the event the Participant is married at the time of his death, the Beneficiary shall be the Participant's surviving spouse unless such spouse consented in writing to the designation of an alternative Beneficiary after notice of the spouse's rights and such consent was witnessed by a Plan representative appointed by the Administrator or a notary public as provided in Section 8.2(a) hereof. In the event no valid designation of Beneficiary is on file with the Administrator at the date of death or no designated Beneficiary survives him, the Participant's spouse shall be deemed the Beneficiary; in the further event the Participant is unmarried or his spouse does not survive him, the Participant's estate shall be deemed to be his Beneficiary. Section 2.4. "Break in Service" means a Plan Year in which a Participant fails to complete at least five hundred one (501) Hours of Service. Breaks in Service and Years of Service will be measured on the same vesting computation period. Section 2.5. "Code" means the Internal Revenue Code of 1986, as interpreted by applicable regulations and rulings issued pursuant thereto, all as amended and in effect from time to time. Reference to a Code Section shall include that Section, and any comparable section or sections of any future legislation that amends, supplements or supersedes that Section. Section 2.6. "Compensation" is defined as wages within the meaning of Section 3401(a) of the Code and all other payments of compensation to the Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code, determined without regard to any rules under Section 3401(a) that limit the remuneration included in wages based on the nature or locations of the employment or the services performed. For any Self-Employed Individual covered under the Plan, Compensation shall mean such individual's Earned Income. For Plan Years beginning after December 31, 1988, the maximum amount of Compensation taken into account under the Plan for a Participant in any Plan Year shall not exceed two hundred thousand dollars ($200,000) or such greater amount as permitted by the Secretary of the Treasury, except that the dollar increase in effect on January 1 of any calendar year is effective for years beginning in such calendar year and the first adjustment to the $200,000 limitation is effective on January 1, 1990. If the Plan determines Compensation on a period of time that contains fewer than 12 calendar months, then the annual compensation limit is an amount equal to the annual compensation limit for the calendar year in which the compensation period begins multiplied by the ratio obtained by dividing the number of full months in the period by 12. For purposes of this limitation, the family aggregation rules of Code Section 414(q)(6) shall apply, except that the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age nineteen (19) before the close of such year. If, as a result of the application of such rules the adjusted two hundred thousand dollars ($200,000) limitation is exceeded, then (except for purposes of determining the portion of Compensation up to the integration level if the Plan provides for permitted disparity), the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section prior to the application of this limitation. If Compensation for any prior Plan Year is taken into account in determining an Employee's contributions or benefits for the current year, the Compensation for such prior year is subject to the applicable annual compensation limit in effect for that prior year. For this purpose, for years beginning before January 1, 1990, the applicable annual compensation limit is $200,000. In addition to other applicable limitations set forth in the plan, and notwithstanding any other provision of the plan to the contrary, for plan years beginning on or after January 1, 1994, the annual Compensation of each employee taken into account under the plan shall not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost of living in accordance with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. For plan years beginning on or after January 1, 1994, any reference in this plan to the limitation under section 401(a)(17) of the Code shall mean the OBRA '93 annual compensation limit set forth in this provision. If Compensation for any prior determination period is taken into account in determining an employee's benefits accruing in the current plan year, the compensation for that prior determination period is subject to OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the first plan year beginning on or after January 1, 1994, the OBRA '93 annual compensation limit is $150,000 Section 2.7. "Custodial Account" means the account established by the Custodian, in accordance with Article IX, in the name of the Employer or for each Participant as elected in the Adoption Agreement. Section 2.8. "Custodian" means Firstar Trust Company, or any successor thereto. Section 2.9. "Disability" means a mental or physical condition of injury or sickness, as determined by the Administrator based upon the report of a medical examiner satisfactory to the Employer, which prevents a Participant from carrying out the duties of his position and which is likely to be permanent. Any such determination by the Administrator shall be made in a uniform and nondiscriminatory manner. Section 2.10. "Earned Income" means net earnings from self-employment in the trade or business with respect to which the Plan is established for which the personal services of the individual are a material income-producing factor. Net earnings shall be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings shall be reduced by contributions by the Employer to a qualified plan to the extent deductible under Code Section 404. Net earnings shall be determined with regard to the deduction allowed to the Employer under Code Section 164(f) for taxable years beginning after December 31, 1989. Section 2.11. "Effective Date" means the date as of which this Plan is initially effective as indicated in item 3 of the Adoption Agreement. Section 2.12. "Elective Deferrals" means any Employer contributions made to the Plan at the election of a participating Employee, in lieu of payment of an equal amount to the participating Employee in cash as Compensation pursuant to Section 5.2 hereof, and shall include contributions made pursuant to a salary reduction agreement or other deferral method. With respect to any taxable year, a participating Employee's Elective Deferrals are the sum of all employer contributions made on behalf of such Employee pursuant to an election to defer under any qualified CODA as described in Code Section 401(k), any simplified employee pension cash or deferred arrangement as described in Code Section 402(h)(1)(B), any eligible deferred compensation plan under Code Section 457, any plan as described under Code Section 501(c)(18), and any employer contributions made on the behalf of a participating Employee for the purchase of an annuity contract under Code Section 403(b) pursuant to a salary reduction agreement. Section 2.13. "Employee" means an individual employed by the Employer (including any eligible Self-Employed Individual) or any Related Employer adopting this Plan except as excluded pursuant to item 4 of the Adoption Agreement. The term Employee shall also include any individual who is a Leased Employee, unless excluded pursuant to item 4 of the Adoption Agreement. Section 2.14. "Employer" means any entity adopting the Plan. Section 2.15. "Employer Pension Contributions" means the contributions made by the Employer pursuant to Section 4.2 hereof if elected in item 6 of the Adoption Agreement (Pension Plan). Section 2.16. "Employer Profit Sharing Contributions" means the contributions made by the Employer pursuant to Section 4.1 hereof if elected in item 6 of the Adoption Agreement (Profit Sharing Plan). Section 2.17. "ERISA" means the Employee Retirement Income Security Act of 1974, as interpreted and applied under regulations and rulings issued pursuant thereto, all as amended and in effect from time to time. Section 2.18. "Hour of Service" means: (a) Each hour for which an Employee is paid, or entitled to payment for the performance of duties for the Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed; and (b) Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than five hundred one (501) Hours of service shall be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). Hours of Service under this paragraph shall be calculated and credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations which are incorporated herein by this reference; and (c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under subsection (a) or subsection (b), as the case may be, and under this subsection (c). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made. (d) Solely for purposes of determining whether a Break in Service, as defined in Section 2.4, for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, eight (8) hours of service per normal workday of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence: (i) by reason of the pregnancy of the individual; (ii) by reason of a birth of a child of the individual; (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual; or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this Section 2.18 shall be credited (i) in the computation period in which the absence begins if the crediting is necessary to prevent a Break in Service in that period, or (ii) in all other cases the following computation period. (e) Hours of Service shall be determined on the basis of actual hours for which an Employee is paid or entitled to payment unless a different method of determining Hours of Service is selected in item 4(A) of the Adoption Agreement. (f) In the event the Employer maintains the plan of a predecessor employer, service for such predecessor employer shall be treated as service for the Employer. Hours of Service will be credited for employment with members of an affiliated service group under Code Section 414(m), a controlled group of corporations under Code Section 414(b), or a group of trades or businesses under common control under Code Section 414(c) of which the Employer is a member and any other entity required to be aggregated with the Employer pursuant to Code Section 414(o) and the Regulations thereunder. Hours of Service will also be credited for any Leased Employee for purposes of this Plan under Code Sections 414(n) or (o) and the Regulations thereunder, unless excluded under item 4 of the Adoption Agreement. Section 2.19. "Investment Advisor" means Landis Associates, Inc.. Section 2.20. "Investment Company" means The Henlopen Fund, Inc. and any other regulated investment company(ies) designated by the Investment Advisor. Section 2.21. "Investment Company Shares" means the shares of each Investment Company. Section 2.22. "Leased Employee" means any individual who is considered a leased employee within the meaning of Code Sections 414(n) or (o). For purposes of this Section, a Leased Employee means any person who, pursuant to an agreement between the Employer and any other person (which may include the Leased Employee), has performed services for the Employer (or for the Employer and any Related Employer) in a capacity other than as a common law employee on a substantially full-time basis for a period of at least one year, and such services are of a type historically performed by employees in the business field of the Employer. Notwithstanding the foregoing, no individual shall be considered to be a Leased Employee if (a) such individual is covered by a money purchase pension plan providing: (i) a non-integrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Code Section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement which are excludable from the individual's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b), (ii) immediate participation, and (iii) full and immediate vesting and (b) Leased Employees do not constitute more than twenty percent (20%) of the Employer's nonhighly compensated work force. Contributions or benefits provided to a Leased Employee by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer. Section 2.23. "Matching Contribution" means an Employer contribution made to the Plan or any other defined contribution plan on behalf of a participating Employee on account of a participating Employee's Elective Deferrals pursuant to Section 5.3 hereof or on account of any employee contributions or elective deferrals made to any other plan. Section 2.24. "Net Profits" means the current or accumulated earnings of the Employer before federal and state taxes and contributions to this or any other qualified plan. Section 2.25. "Normal Retirement Age" means age 65 or such other age as selected in item 11 of the Adoption Agreement (Profit Sharing Plan) and item 9 of the Adoption Agreement (Pension Plan). If the Employer enforces a mandatory retirement age, the Normal Retirement Age shall be the lesser of such mandatory retirement age or the age specified in the Adoption Agreement. Section 2.26. "Original Plan" means any defined contribution plan which meets the requirements of Code Section 401 and referred to in Article XII of the Plan. Section 2.27. "Owner-Employee" means an individual who is a sole proprietor, or who is a partner owning more than ten percent (10%) of either the capital or profits interest of the partnership. Section 2.28. "Participant" means each Employee (including any eligible Self-Employed Individual) who has completed the requirements for eligibility specified in Section 3.1 hereof. Each such Employee shall become a Participant as of the earlier of: (i) the first day of the Plan Year or (ii) the first day of the seventh month of the Plan Year beginning after he completes such requirements. Section 2.29. "Participant Voluntary Contributions" means contributions by a Participant under the Plan pursuant to Section 4.3, if elected in item 9 of the Adoption Agreement (Profit Sharing Plan) and item 8 of the Adoption Agreement (Pension Plan). Section 2.30. "Pension Plan" means the feature of the Plan pursuant to which the Employer makes Employer Pension Contributions. Such feature applies only to the extent elected in item 6 of the Adoption Agreement (Pension Plan). Section 2.31. "Plan" means this prototype profit sharing plan and/or money purchase pension plan, together with the appropriate Adoption Agreement(s), as set forth herein and as may be amended from time to time. As used herein, the term Plan shall mean either or both the money purchase pension plan and the profit-sharing plan depending on whether the Employer has adopted one or both plans. Section 2.32. "Plan Year" means the twelve (12) consecutive month period designated in item 2 of the Adoption Agreement. The first Plan Year shall commence on the Effective Date. Section 2.33. "Profit Sharing Plan" means the features of the Plan pursuant to which all contributions, other than Employer Pension Contributions, are made to the Plan, including any contributions pursuant to the cash or deferred arrangement (Section 401(k)) described in Article V hereof. Such features apply only to the extent elected in items 6 and/or 8 of the Adoption Agreement (Profit Sharing Plan). Section 2.34. "Related Employer" means an organization which, together with the Employer, constitutes (i) a controlled group of corporations as defined in Code Section 414(b); (ii) trades or businesses under common control as defined in Code Section 414(c); (iii) an affiliated service group as defined in Code Section 414(m); or (iv) a group of employers required to be aggregated under Code Section 414(o). Section 2.35. "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the trade or business for which.the Plan was established or who would have had Earned Income but for the fact that the trade or business had no Net Profits for the taxable year. Section 2.36. "Valuation Date" means the last day of each Plan Year and such other times as shall be determined by the Administrator. Section 2.37. "Year of Employment" means the twelve (12) consecutive month period, beginning on the date the Employee first performs an Hour of Service or any anniversary thereof, in which the Employee completes at least one thousand (1,000) Hours of Service or such lesser number of Hours of Service as selected in item 4 of the Adoption Agreement. Section 2.38. "Year of Service" means a Plan Year in which the Employee completes at least one thousand (1,000) Hours of Service or such lesser number of Hours of Service as selected in item 7 of the Adoption Agreement. ARTICLE III. PARTICIPATION Section 3.1. Participation at Effective Date. Each Employee shall become a Participant on the Effective Date, if on the Effective Date such Employee has completed the number of Years of Employment and has attained age 21 or such lesser age as elected in item 4 of the Adoption Agreement. Section 3.2. Participation after Effective Date. Each Employee who did not become a Participant as of the Effective Date, including future Employees, shall be entitled to become a Participant in accordance with Section 2.28 after such Employee has completed the number of Years of Employment and has attained age 21 or such lesser age as elected in item 4 of the Adoption Agreement. Section 3.3. Reentry. A former Participant shall become a Participant immediately upon his return to employment with the Employer or his return to an eligible class of Employees, whichever is applicable. In the event an Employee who is not a member of the eligible class of Employees becomes a member of the eligible class, such Employee will become a Participant in accordance with Section 3.2 above; provided that if the Employee has previously satisfied the eligibility requirements of Section 3.2, the Employee shall become a Participant immediately upon becoming a member of the eligible class of Employees. Section 3.4. Participation by an Owner-Employee of More Than One Trade or Business. (a) If this Plan provides contributions or benefits for one or more Owner-Employees who control both the business with respect to which this Plan is established, and one or more other trades or businesses, this Plan and the plan established with respect to such other trades or businesses must, when looked at as a single plan, satisfy Code Sections 401(a) and (d) with respect to the employees of this and all such other trades or businesses. (b) If this Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the employees of each such other trade or business must be included in a plan which satisfies Code Section 401(a) and (d) and which provides contributions and benefits not less favorable than provided for such Owner-Employees under this Plan. (c) If an individual is covered as an Owner-Employee under the plans of two or more trades or businesses which he does not control, and such individual controls a trade or business, then the contributions or benefits of the employees under the plan of the trade or business which he or she does control must be as favorable as those provided for him or her under the most favorable plan of the trade or business which he or she does not control. (d) For purposes of the preceding subparagraphs, an Owner-Employee, or two or more Owner-Employees, shall be considered to control a trade or business if such Owner-Employee, or such two or more Owner-Employees together, own the entire interest in an unincorporated trade or business, or, in the case of a partnership, own more than fifty percent (50%) of either the capital interest or the profits interest in such partnership. For purposes of the preceding sentence, an Owner-Employee, or two or more Owner-Employees, shall be treated as owning any interest in a partnership which is owned, directly or indirectly, by a partnership which such Owner-Employee, or such two or more Owner-Employees, are considered to control within the meaning of the preceding sentence. (e) Employees and Owner-Employees of trades or businesses which are under common control (within the meaning of Code Section 414(c)) and Employees and Owner-Employees of the members of an affiliated service group (within the meaning of Code Section 414(m)) or of a group of aggregated employers (under Code Section 414(o)) will be treated as employed by a single Employer for purposes of employee benefit requirements of Code Section 414(m)(4). ARTICLE IV. CONTRIBUTIONS Section 4.1. Employer Profit Sharing Contributions. (a) If elected in item 6 of the Adoption Agreement (Profit Sharing Plan), the Employer shall make an Employer Profit Sharing Contribution for each Plan Year ending on or after the Effective Date in the amount determined under such Adoption Agreement. (b) The total amount of such Employer Profit Sharing Contribution for a Plan Year shall be allocated to the Account of each eligible Participant as follows: (i) Unless otherwise elected in item 6(C) of the Adoption Agreement, the total amount of such Employer Profit Sharing Contribution shall be allocated based on the ratio that such eligible Participant's Compensation and/or Earned Income for the Plan Year bears to the total Compensation and Earned Income of all eligible Participants for the Plan Year. (ii) If the Integration Formula is selected in item 6(C) of the Adoption Agreement, the total amount of such Employer Profit Sharing Contribution shall be allocated based on the ratio that such eligible Participant's Compensation and/or Earned Income for the Plan Year in excess of the integration level for the Plan Year bears to the total Compensation and Earned Income for all eligible Participants in excess of the integration level for the Plan Year; provided, however, that contributions allocated to a Participant with respect to Compensation and/or Earned Income in excess of the integration level shall not represent a greater percentage of such excess Compensation and/or Earned Income than the lesser of (A) 200% of the base contribution percentage, or (B) the base contribution percentage plus the greater of (I) 5.7%, or (II) the rate of tax under Code Section 3111(a) which is attributable to old-age insurance in effect at the beginning of the Plan Year. Any Employer Profit Sharing Contribution remaining after the allocation in this subsection (ii) shall be allocated in accordance with subsection (i) above. The "integration level" shall be the taxable wage base or such lesser level of Compensation and/or Earned Income selected in item 6(C) of the Adoption Agreement. The "base contribution percentage" shall mean the percentage of Compensation and/or Earned Income which is contributed under the Plan with respect to each Participant's Compensation and/or Earned Income not in excess of the integration level. If the integration level exceeds the greater of ten thousand dollars ($10,000) or one-fifth (1/5) of the taxable wage base but is not more than eighty percent (80%) of the taxable wage base, the percentage referred to in (I) above shall be reduced to 4.3% and a proportionate reduction shall be made to the rate described in (II) above. If the integration level is more than eighty percent (80%) but less than one hundred percent (100%) of the taxable wage base, the percentage referred to in (I) above shall be reduced to 5.4% and a proportionate reduction shall be made to the rate described in (II) above. The "taxable wage base" shall be the maximum amount of earnings which may be considered wages for a year under Code Section 3121(a)(1) in effect as of the beginning of the applicable Plan Year. Notwithstanding the above, for any Plan Year in which the Plan is top-heavy (as defined in Section 13.1 hereof) the Employer Profit Sharing Contribution shall be allocated (A) first, to each eligible Participant based on the ratio that such Participant's Compensation and/or Earned Income for the Plan Year bears to the total Compensation and Earned Income of all eligible Participants for the Plan Year, but not more than three percent (3%) of such Participant's Compensation and/or Earned Income, (B) second, to each eligible Participant based on the ratio that such Participant's Compensation and/or Earned Income in excess of the integration level for the Plan Year bears to the total Compensation and Earned Income of all eligible Participants in excess of the integration level for the Plan Year, but not more than three percent (3%) of such Participant's excess Compensation and/or Earned Income, and (C) any remaining Employer Profit Sharing Contribution shall be allocated pursuant to the provisions of this subsection (ii) above. (c) A Participant will be considered eligible for an allocation of the Employer Profit Sharing Contribution if the Participant (i) is employed by the Employer on the last day of the Plan Year or (ii) has completed at least Five Hundred one (501) Hours of Service during the Plan Year. (d) If elected in item 6(B) of the Adoption Agreement, Employer Profit Sharing Contributions for a Plan Year shall not exceed the Net Profits of the Employer for such Plan Year. Section 4.2. Employer Pension Contributions. (a) If elected in item 6 of the Adoption Agreement (Pension Plan), the Employer shall make an Employer Pension Contribution for each eligible Participant for each Plan Year ending on or after the Effective Date in an amount determined under such Adoption Agreement. (b) The total amount of such Employer Pension Contribution for a Plan Year shall be allocated to the Account of each eligible Participant as follows: (i) Unless otherwise elected in item 6(B) of the Adoption Agreement, each eligible Participant shall be allocated an amount equal to the percentage of such eligible Participant's Compensation and/or Earned Income as specified in the Adoption Agreement. (ii) If the Integration Formula is selected in item 6(B) of the Adoption Agreement, the total amount of such Employer Pension Contribution shall be allocated in accordance with the method described in Section 4.1(b)(ii) above. Notwithstanding the foregoing, if the Integration Formula is selected under the Profit Sharing Plan, the Employer Pension Contribution shall be allocated in accordance with subsection (b)(i) above. (c) A Participant will be considered eligible for an Employer Pension Contribution if the Participant (i) is employed by the Employer on the last day of the Plan Year or (ii) has completed at least Five Hundred one (501) Hours of Service during the Plan Year. Section 4.3. Participant Voluntary Contributions. (a) If elected in item 9 of the Adoption Agreement (Profit Sharing Plan) or item 8 of the Adoption Agreement (Pension Plan), a Participant may voluntarily contribute to the Plan an amount up to ten percent (10%) of his aggregate Compensation for all years since becoming a Participant under this Plan and all other qualified plans of the Employer. Any Participant Voluntary Contributions shall be limited in accordance with the provisions of Section 5.3, even if the Employer does not elect the Cash or Deferred Arrangement (Section 401(k)) under item 8 of the Adoption Agreement (Profit Sharing Plan). If the Profit Sharing Plan is elected, all Participant Voluntary Contributions shall be deemed made to such plan. Participant Voluntary Contributions shall be limited to Participants who are not highly compensated employees (within the meaning of Code Section 414(q)) if elected in the Adoption Agreement. (b) A Participant shall be entitled to withdraw from his appropriate Account at any time upon thirty (30) days' notice from the Administrator to the Custodian (which notice shall specify the amount of the withdrawal), a sum not in excess of the capital amount contributed by him as Participant Voluntary Contributions under the provisions of this Section 4.3, or the value of such Account, whichever is less, provided that no ordinary income or capital gains attributable to such contributions shall be subject to withdrawal. Notwithstanding anything to the contrary herein, (i) all withdrawals are subject to the provisions of Article VIII, and (ii) no forfeiture shall occur solely as a result of a Participant's withdrawal of all or any portion of his Participant Voluntary Contributions. (c) No deductible voluntary employee contributions may be made for taxable years beginning after December 31, 1986. Such contributions made prior to that date will be maintained in a separate Account which will be nonforfeitable at all times. The Account will share in the gains or losses in the same manner as described in Section 9.3 of the Plan. Subject to Section 8.2, a Participant may withdraw any part of the deductible voluntary contribution Account by making a written application to the Administrator. Section 4.4. Time for Making Contributions. Employer Pension Contributions and Employer Profit Sharing Contributions must be made no later than the due date, including extensions thereof, for filing the Employer's Federal income tax return for the year coincident with or within which the Plan Year ends (or such later time as authorized by Treasury Regulations). Participant Voluntary Contributions for any Plan Year shall be made no later than thirty (30) days after the end of such Plan Year. The Employer may establish a payroll deduction system or other procedure to assist the making of Participant Voluntary Contributions and shall transfer such contributions to the Custodian as soon as practicable after collected. Section 4.5. Leased Employees. Contributions or benefits provided to a Leased Employee by the leasing organization (within the meaning of Code Section 414(n)) which are attributable to services performed for the Employer shall be treated as provided by the Employer for purposes of this Plan. Section 4.6. Rollovers and Transfers. In the discretion of the Administrator according to such uniform and nondiscriminatory rules established by the Administrator, and in accordance with Sections 402 and 408 of the Code, a Participant may make a rollover to the Plan or the Plan may accept a direct transfer (including voluntary after-tax contributions) from another plan qualified under Section 401(a) of the Code or from an individual retirement account. If the Employer has adopted the Profit Sharing Plan, any rollover or transfer shall be made to such Plan. ARTICLE V. CASH OR DEFERRED ARRANGEMENT (CODE SECTION 401(k)) Section 5.1. Cash or Deferred Arrangement (Code Section 401(k)). The provisions of this Article shall be effective as of the first day of the Plan Year in which this cash or deferred arrangement is elected in item 8 of the Adoption Agreement (Profit Sharing Plan). Under no circumstances shall the provisions of this Article apply prior to the time specified in the preceding sentence. Section 5.2. Elective Deferrals. (a) Election. (i) An Employee who has satisfied the minimum age and service requirements set forth in item 8(A) of the Adoption Agreement (Profit Sharing Plan) may elect to have Elective Deferrals made to the Plan pursuant to a salary reduction agreement to the extent permitted in item 8(A) of the Adoption Agreement (Profit Sharing Plan). Such an election shall be effective as of the time specified in item 8(A) of the Adoption Agreement (Profit Sharing Plan) and may not be made effective retroactively. (ii) An eligible Employee may also base Elective Deferrals, to the extent provided in item 8(A) of the Adoption Agreement (Profit Sharing Plan), on cash bonuses that, at the Employee's election, may be contributed to the Plan or received by the Employee. Such an election shall be effective as of the time specified in item 8(A) of the Adoption Agreement (Profit Sharing Plan) and may not be made effective retroactively. (b) Change in Rate. The rate at which Elective Deferrals are made shall remain in effect until modified in accordance with item 8(A) of the Adoption Agreement (Profit Sharing Plan). Notwithstanding the foregoing, Elective Deferrals may be suspended entirely by an Employee at any time by written notice to the Administrator. Any such suspension shall be effective as soon as administratively practicable following the Administrator's receipt of such notice. (c) Vesting. A Participant shall at all times have a fully vested and nonforfeitable interest in his Elective Deferrals. (d) Excess Elective Deferrals. (i) No Participating Employee shall be permitted to have Elective Deferrals made under this Plan or any other qualified plan maintained by the Employer during any taxable year pursuant to Code Sections 401(k), 408(k) or 403(b) in excess of the dollar limitation contained in Code Section 402(g) in effect at the beginning of such taxable year. (ii) A Participating Employee may assign to the Plan any Excess Elective Deferrals made during a taxable year of such Employee by notifying the Administrator on or before the date specified below of the Excess Elective Deferrals to be assigned to the Plan. Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus any income and minus any loss allocable thereto, may be distributed no later than April 15 to any Participating Employee to whose Accounts Excess Elective Deferrals were assigned for the preceding year and who claims Excess Elective Deferrals for such taxable year. A Participating Employee's claim for Excess Elective Deferrals shall be made in writing and shall be submitted to the Administrator not later than the March 1 immediately preceding the relevant April 15. Such claim shall specify the amount of the Participating Employee's Excess Elective Deferrals for the preceding taxable year and shall be accompanied by the Participating Employee's written statement that if such amounts are not distributed, such Excess Elective Deferrals, when added to amounts deferred under other plans or arrangements described in Code Sections 401(k), 408(k) or 403(b), exceed the limit imposed on the Participating Employee by Code Section 402(g) for the year of the deferral. (iii) Excess Elective Deferrals shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Elective Deferrals is the sum of: (A) income or loss allocable to the participating Employee's Elective Deferrals Account for the taxable year for which the Excess Elective Deferrals occurred multiplied by a fraction, the numerator of which is such Participating Employee's Excess Elective Deferrals for such taxable year and the denominator of which is such Participating Employee's Elective Deferrals Account balance as of the end of the taxable year without regard to any income or loss occurring during such taxable year; and (B) income or loss allocable to the Participating Employee's Elective Deferrals Account for the period between the end of such taxable year and the date of distribution under (A) above; or, at the option of the Employer, ten percent (10%) of the amount determined under (A) above multiplied by the number of whole calendar months between the end of such taxable year and the date of distribution, counting the month of distribution if distribution occurs after the fifteenth (15th) of such month. The amount of Excess Elective Deferrals that may be distributed with respect to a Participating Employee shall be reduced by any Excess Contributions previously distributed or recharacterized with respect to such Participating Employee for the Plan Year beginning with or within such taxable year. In no event may the amount distributed exceed the Participating Employee's total Elective Deferrals for such taxable year. (e) Actual Deferral Percentage. (i) The Actual Deferral Percentage for Participating Employees who are Highly Compensated Employees for each Plan Year and the Actual Deferral Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (A) The Actual Deferral Percentage for Participating Employees who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Deferral Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year multiplied by 1.25; or (B) The Actual Deferral Percentage for Participating Employees who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Deferral Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year multiplied by 2.0, provided that the Actual Deferral Percentage for Participating Employees who are Highly Compensated Employees does not exceed the Actual Deferral Percentage for Participating Employees who are not Highly Compensated Employees by more than two (2) percentage points. (ii) The Actual Deferral Percentage for any Participating Employee who is a Highly Compensated Employee for the Plan Year and who is eligible to have Elective Deferrals (and Qualified Non-Elective Contributions or Qualified Matching Contributions, or both) allocated to his Accounts under two or more arrangements described in Code Section 401(k), that are maintained by the Employer, shall be determined as if such Elective Deferrals (and, if applicable, such Qualified Non-Elective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, contributions for such employee shall be aggregated for purposes of this subsection (e). Contributions which are required to be aggregated are any contributions made under all cash or deferred arrangements ending with or within the same calendar year. (iii) In the event that the Plan satisfies the requirements of Code Sections 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Code Sections only if aggregated with this Plan, then this subsection shall be applied by determining the Actual Deferral Percentage of Participating Employees as if all such plans were a single plan. For Plan Years beginning after December 31, 1989, plans may be aggregated in order to satisfy Code Section 401(k) only if they have the same Plan Year. (iv) For purposes of determining the Actual Deferral Percentage of a Participating Employee who is a five (5) percent owner or one of the ten (10) most highly-paid Highly Compensated Employees, the Elective Deferrals (and Qualified Non-Elective Contributions and Qualified Matching Contributions, or both) and Compensation of such Participating Employee shall include the Elective Deferrals (and, if applicable, Qualified Non-Elective Contributions and Qualified Matching Contributions, or both) and Compensation for the Plan Year of Family Members. Family Members, with respect to such Highly Compensated Employees, shall be disregarded as separate employees in determining the Actual Deferral Percentage both for Participating Employees who are not Highly Compensated Employees and for Participating Employees who are Highly Compensated Employees. (v) For purposes of determining the Actual Deferral Percentage test, Elective Deferrals, Qualified Non-Elective Contributions and Qualified Matching Contributions must be made before the last day of the twelve-month period immediately following the Plan Year to which such contributions relate. (vi) The Employer shall maintain records sufficient to demonstrate satisfaction of the Actual Deferral Percentage test and the amount of Qualified Non-Elective Contributions or Qualified Matching Contributions, or both, used in such test. (vii) The determination and treatment of the Actual Deferral Percentage amounts of any Participating Employee shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. (f) Distribution of Excess Contributions. (i) Notwithstanding any other provision of this Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Participating Employees to whose Accounts such Excess Contributions were allocated for the preceding Plan Year. If such excess amounts are distributed more than two and one-half (2-1/2) months after the last day of the Plan Year in which such excess amounts arose, a ten percent (10%) excise tax will be imposed on the Employer with respect to such amounts. Such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Contributions attributable to each of such Employees. Excess Contributions shall be allocated to Participating Employees who are subject to the family member aggregation rules of Code Section 414(q)(6) in the manner prescribed by the regulations. Excess Contributions (including any amounts recharacterized) shall be treated as Annual Additions for purposes of Article VI of the Plan. (ii) Excess Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Contributions is the sum of: (A) income or loss allocable to the Participating Employee's Elective Deferrals Account (and, if applicable, the Qualified Non-Elective Contributions Account or the Qualified Matching Contributions Account, or both) for the Plan Year for which the Excess Contributions occurred multiplied by a fraction, the numerator of which is such Participating Employee's Excess Contributions for such Plan Year and the denominator of which is such Participating Employee's Account balance(s) attributable to Elective Deferrals (and Qualified Non-Elective Contributions or Qualified Matching Contributions, or both) as of the end of the Plan Year without regard to any income or loss occurring during such Plan Year; and (B) income or loss allocable to the Participant's Elective Deferrals Account (and, if applicable, the Qualified Non-Elective Contribution Account or the Qualified Matching Contribution Account, or both) for the period between the end of such Plan Year and the date of distribution multiplied by the fraction determined under (A) above; or, at the option of the Employer, ten percent (10%) of the amount determined under (A) above multiplied by the number of whole calendar months between the end of such Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the fifteenth (15th) of such month. (iii) Excess Contributions shall be distributed from the Participating Employee's Elective Deferrals Account and Qualified Matching Contributions Account (if applicable) in proportion to the Participating Employee's Elective Deferrals and Qualified Matching Contributions (to the extent used in the Actual Deferral Percentage test) for the Plan Year. Excess Contributions shall be distributed from the Participating Employee's Qualified Non-Elective Contributions Account only to the extent that such Excess Contributions exceed the balance in the Participating Employee's Elective Deferrals Account and Matching Contributions Account. (g) Recharacterization. (i) A Participating Employee may treat his Excess Contributions as an amount distributed to the Participating Employee and then contributed by the Participating Employee to the Plan. Recharacterized amounts will remain nonforfeitable and subject to the same distribution requirements as Elective Deferrals. Amounts may not be recharacterized by a Highly Compensated Employee to the extent that such amount in combination with other Participant Voluntary Contributions would exceed any stated limit under the Plan on Participant Voluntary Contributions. Recharacterizing Excess Contributions shall be limited to Participants who are not Highly Compensated Employees if elected in the Adoption Agreement. (ii) Recharacterization must occur no later than two and one-half (2-1/2) months after the end of the Plan Year in which such Excess Contributions arose and is deemed to occur no earlier than the date the last Highly Compensated Employee is informed in writing of the amount recharacterized and the consequences thereof. Recharacterized amounts will be taxable to the Participating Employee for such Participating Employee's taxable year in which the Participating Employee would have received them in cash. Section 5.3. Matching Contributions. (a) The Employer shall make Employer Matching Contributions to the Plan to the extent elected in item 8(B) of the Adoption Agreement (Profit Sharing Plan). (b) A Participant shall have a vested interest in his Matching Contributions Account as determined under the vesting schedule elected in item 8(B) of the Adoption Agreement (Profit Sharing Plan). Forfeitures derived from Matching Contributions which become available because of the vesting provisions above, shall be applied to reduce the Employer Matching Contributions that would otherwise be due for the Plan Year, or subsequent Plan Years. (c) Actual Contribution Percentage. (i) The Actual Contribution Percentage for Participating Employees who are Highly Compensated Employees for each Plan Year and the Actual Contribution Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (A) The Actual Contribution Percentage for Participating Employees who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Contribution Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year multiplied by 1.25; or (B) The Actual Contribution Percentage for Participating Employees who are Highly Compensated Employees for the Plan Year shall not exceed the Actual Contribution Percentage for Participating Employees who are not Highly Compensated Employees for the same Plan Year multiplied by two (2), provided that the Actual Contribution Percentage for Participating Employees who are Highly Compensated Employees does not exceed the Actual Contribution Percentage for Participating Employees who are not Highly Compensated Employees by more than two (2) percentage points. (ii) If one or more Highly Compensated Employees participate in both a cash or deferred arrangement and a plan subject to the Actual Contribution Percentage test maintained by the Employer and the sum of the Actual Deferral Percentage and the Actual Contribution Percentage of those Highly Compensated Employees subject to either or both tests exceeds the Aggregate Limit, then the Actual Contribution Percentage of those Highly Compensated Employees who also participate in a cash or deferred arrangement will be reduced (beginning with such Highly Compensated Employee whose Actual Contribution Percentage is the highest) so that the limit is not exceeded. The amount by which each Highly Compensated Employee's Contribution Percentage Amount is reduced shall be treated as an Excess Aggregate Contribution. The Actual Deferral Percentage and the Actual Contribution Percentage of the Highly Compensated Employees are determined after any corrections required to meet the Actual Deferral Percentage and the Actual Contribution Percentage tests. Multiple use does not occur if both the Actual Deferral Percentage and the Actual Contribution Percentage of the Highly Compensated Employees does not exceed 1.25 multiplied by the Actual Deferral Percentage and the Actual Contribution Percentage of the Participating Employees who are not Highly Compensated Employees. (iii) For purposes of this subsection, the Contribution Percentage for any Participating Employee who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to his account under two or more plans described in Code Section 401(a), or arrangements described in Code Section 401(k) that are maintained by the Employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. (iv) In the event that this Plan satisfies the requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Code Sections only if aggregated with this Plan, then this subsection shall be applied by determining the Contribution Percentage of employees as if all such plans were a single plan. For plan years beginning after December 31, 1989, plans may be aggregated in order to satisfy Code Section 401(m) only if they have the same plan year. (v) For purposes of determining the Contribution Percentage of a Participating Employee who is a five percent owner or one of the ten (10) most highly-paid Highly Compensated Employees, the Contribution Percentage Amounts and Compensation of such Participating Employee shall include the Contribution Percentage Amounts and Compensation for the Plan Year of Family Members. Family Members, with respect to Highly Compensated Employees, shall be disregarded as separate employees in determining the Contribution Percentage both for Participating Employees who are not Highly Compensated Employees and for Participating Employees who are Highly Compensated Employees. (vi) For purposes of determining the Contribution Percentage test, Employee Contributions are considered to have been made in the Plan Year in which contributed to the trust. Matching Contributions and Qualified Non-Elective Contributions shall be considered made for a Plan Year if made no later than the end of the twelve-month period beginning on the day after the close of the Plan Year. (vii) The Employer shall maintain records sufficient to demonstrate satisfaction of the Actual Contribution Percentage test and the amount of Qualified Non-Elective Contributions or Qualified Matching Contributions, or both, used in such test. (viii) The determination and treatment of the Contribution Percentage of any Participating Employee shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. (d) Distribution of Excess Aggregate Contributions. (i) Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than the last day of each Plan Year to Participating Employees to whose Accounts such Excess Aggregate Contributions were allocated for the preceding Plan Year. Excess Aggregate Contributions shall be allocated to Participating Employees who are subject to the family member aggregation rules of Code Section 414(q)(6) in the manner prescribed by the regulations. If such Excess Aggregate Contributions are distributed more than two and one-half (2-1/2) months after the last day of the Plan Year in which such excess amounts arose, a ten percent (10%) excise tax will be imposed on the Employer with respect to those amounts. Excess Aggregate Contributions shall be treated as Annual Additions for purposes of Article VI of the Plan. (ii) Excess Aggregate Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Aggregate Contributions is the sum of: (A) income or loss allocable to the Participating Employee's Participant Voluntary Contributions Account, Matching Contributions Account, Qualified Matching Contribution Account (if any, and if all amounts therein are not used in the Actual Deferral Percentage test) and, if applicable, Qualified Non-Elective Contributions Account and Elective Deferrals Account for the Plan Year for which the Excess Aggregate Contributions occurred multiplied by a fraction, the numerator of which is such Participating Employee's Excess Aggregate Contributions for such Plan Year and the denominator of which is the Participating Employee's Account balance(s) attributable to Contribution Percentage Amounts as of the end of the Plan Year without regard to any income or loss occurring during such Plan Year; and (B) income or loss allocable to the Participating Employee's Participant Voluntary Contribution Account, Matching Contributions Account, Qualified Matching Contribution Account (if any, and if all amounts therein are not used in the Actual Deferral Percentage test) and, if applicable, Qualified Non-Elective Contributions Account and Elective Deferrals Account for the period between the end of such Plan Year and the date of distribution multiplied by the fraction determined under (A) above; or, at the election of the Employer, ten percent (10%) of the amount determined under (A) above multiplied by the number of whole calendar months between the end of such Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the fifteenth (15th) of such month. (iii) Forfeitures of Excess Aggregate Contributions shall be applied to reduce Employer contributions for subsequent Plan Years. (iv) Excess Aggregate Contributions shall be forfeited, if forfeitable, or distributed on a pro rata basis from the Participating Employee's Participant Voluntary Contributions Account, Matching Contributions Account and Qualified Matching Contribution Account (and, if applicable, the Participating Employee's Qualified Non-Elective Contributions Account or Elective Deferrals Account, or both). Section 5.4. Qualified Matching Contributions and Qualified Non-Elective Contributions. (a) Qualified Matching Contributions. The Employer may elect to make Qualified Matching Contributions under the Plan in item 8(C) of the Adoption Agreement. Qualified Matching Contributions may be made in lieu of distributing Excess Contributions as provided in Section 5.2(f) hereof. Qualified Matching Contributions may be either (i) additional amounts contributed to the Plan by the Employer and allocated to the Accounts of Participating Employees who are not Highly Compensated Employees based on such Employees' Elective Deferrals or (ii) Matching Contributions otherwise made to the Plan pursuant to Section 5.3(a) hereof which the Employer designates as Qualified Matching Contributions. The amount of Qualified Matching Contributions (if any) shall be determined by the Employer for each year. All Qualifying Matching Contributions shall be used to satisfy the Actual Deferral Percentage test pursuant to regulations under the Code. (b) The Employer may elect to make Qualified NonElective Contributions under the Plan in item 8(C) of the Adoption Agreement. Qualified Non-Elective Contributions may be made in lieu of distributing Excess Contributions as provided in Section 5.2(f) or Excess Aggregate Contributions as provided in Section 5.3(d) hereof. Qualified Non-Elective Contributions may be either (i) additional amounts contributed to the Plan by the Employer and allocated to the Accounts of Participating Employees who are not Highly Compensated Employees based on such Employees' Compensation or (ii) Profit Sharing Contributions otherwise made to the Plan pursuant to Section 4.1(a) hereof which the Employer designates as Qualified Non-Elective Contributions. The amount of Qualified Non-Elective Contributions (if any) shall be determined by the Employer for each year. All Qualified Non-Elective Contributions shall be used to satisfy either the Actual Deferral Percentage test or the Average Contribution Percentage test, or both, pursuant to regulations under the Code. (c) Separate accounts for Qualified Non-Elective Contributions and Qualified Matching Contributions will be maintained for each Participant consistent with Section 7.1 hereof. Each account will be credited with the applicable contributions and earnings thereon. (d) For purposes of the special distribution rules in Section 5.5, Qualified Matching Contributions and Qualified Non-Elective Contributions shall be treated as Elective Deferrals. (e) Qualified Matching Contributions and Qualified Non-Elective Contributions shall be appropriately designated when contributed. Section 5.5. Special Distribution Rules. Except as provided below, Elective Deferrals, Qualified Non-Elective Contributions and Qualified Matching Contributions, and income allocable to each, are not distributable to a Participant or a Beneficiary, in accordance with such Participant's or Beneficiary's election, earlier than upon separation from service, death, or disability. (a) Financial Hardship. (i) If elected by the Employer in item 8(D) of the Adoption Agreement (Profit Sharing Plan), a Participant may elect to withdraw all or any portion of his Elective Deferrals (excluding net earnings credited thereto after December 31, 1988) on account of financial hardship. For purposes of this Section 5.5, a financial hardship shall mean an immediate and heavy financial need of the Participant which cannot be satisfied from other resources reasonably available to such Participant. Hardship withdrawals are subject to the spousal consent requirements of Code Sections 401(a)(11) and 417. (ii) A withdrawal is made on account of an immediate and heavy financial need of a Participant only if it is made on account of: (A) unreimbursed medical expenses described in Code Section 213(d) of the Participant or the Participant's spouse or dependents (as defined in Code Section 152); (B) the purchase (excluding mortgage payments) of a principal residence for the Participant; (C) payment of tuition for the next term of post-secondary education for the Participant or the Participant's spouse, children or dependents; or (D) the need to prevent the Participant's eviction from, or foreclosure on the mortgage of, the Participant's principal residence or such other events as may be approved by the Commissioner of Internal Revenue in rulings, notices or other published documents. (iii) A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Participant only if: (A) the Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans under all plans maintained by the Employer; (B) all plans maintained by the Employer provide that the Participant's Elective Deferrals and any other elective contributions or employee contributions under this Plan and any other plan maintained by the Employer (both qualified and nonqualified) will be automatically suspended for twelve (12) months after the receipt of the hardship distribution; (C) the distribution is not in excess of the amount of an immediate and heavy financial need; and (D) all plans maintained by the Employer provide that the Participant may not make Elective Deferrals for the Participant's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code Section 402(g) for such taxable year less the amount of such Participant's Elective Deferrals for the taxable year of the hardship distribution. (iv) A request for a hardship distribution shall be made in writing and in such form as may be prescribed by the Administrator. Processing of applications and distributions of amounts under this Section, on account of a bona fide financial hardship, shall be made as soon as administratively feasible. (b) Elective Deferrals at Age 59-1/2. Upon attaining age fifty-nine and one-half (59-1/2), a Participant may elect to withdraw all or any portion of his Elective Deferrals Account and/or Employer Matching Contributions Account, as of the last day of any month, even if he is still employed. Section 5.6. Definitions. For purposes of this Article, the following words and phrases shall have the following meanings: (a) "Actual Deferral Percentage" means, for a specified group of Participating Employees for a Plan Year, the average of the ratios (calculated separately for each Participating Employee in such group) of (i) the amount of Employer contributions actually paid over to the trust on behalf of such Participating Employee for the Plan Year to (ii) the Participating Employee's Compensation for such Plan Year (whether or not the Employee was a Participating Employee for the entire Plan Year). Employer contributions on behalf of any Participating Employee shall include: (i) any Elective Deferrals made pursuant to the Participating Employee's deferral election, including Excess Elective Deferrals of Highly Compensated Employees, but excluding Elective Deferrals that are taken into account in the Contribution Percentage test (provided the Actual Deferral Percentage test is satisfied both with and without exclusion of these Elective Deferrals); and (ii) at the election of the Employer, Qualified Non-Elective Contributions and Qualified Matching Contributions. For purposes of computing Actual Deferral Percentages, an Employee who would be a Participating Employee but for the failure to make Elective Deferrals shall be treated as a Participating Employee on whose behalf no Elective Deferrals are made. (b) "Aggregate Limit" means the sum of (i) one hundred twenty-five percent (125%) of the greater of the Actual Deferral Percentage of the Participating Employees who are not Highly Compensated Employees for the Plan Year or the Actual Contribution Percentage of Participating Employees who are not Highly Compensated Employees under the Plan subject to Code Section 401(m) for the Plan Year beginning with or within the Plan Year of the cash or deferred arrangement and (ii) the lesser of two hundred percent (200%) or two (2) plus the lesser of such Actual Deferral Percentage or Actual Contribution Percentage. "Lesser" is substituted for "greater" in (i) above and "greater" is substituted for "lesser" after "two plus the" in (ii) above if it would result in a larger Aggregate Limit. (c) "Average Contribution Percentage" means the average of the Contribution Percentages of the Employees in a group who are eligible to make Participant Voluntary Contributions, or Elective Deferrals (if the Employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive Matching Contributions (including forfeitures) or Qualified Matching Contributions. (d) "Contribution Percentage" means the ratio (expressed as a percentage) of the Participating Employee's Contribution Percentage Amounts to the Participating Employee's Compensation for the Plan Year (whether or not the Employee was a Participating Employee for the entire Plan Year). (e) "Contribution Percentage Amounts" means the sum of the Participant Voluntary Contributions, Matching Contributions, and Qualified Matching Contributions (to the extent not taken into account for purposes of the Actual Deferral Percentage test) made under the Plan on behalf of the Participating Employee for the Plan Year. Such Contribution Percentage Amounts shall include forfeitures of Excess Aggregate Contributions or Matching Contributions allocated to the Participating Employee's Accounts which shall be taken into account in the year in which such forfeiture is allocated. The Employer may elect to include Qualified Non-Elective Contributions in the Contribution Percentage Amounts. The Employer also may elect to use all or part of the Elective Deferrals for the Plan Year in the Contribution Percentage Amounts so long as the Actual Deferral Percentage test is satisfied both including and excluding the Elective Deferrals that are included in the Contribution Percentage Amounts. (f) "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of: (i) the aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over (ii) the maximum Contribution Percentage Amounts permitted by the Actual Contribution Percentage test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages). Such determination shall be made after first determining Excess Elective Deferrals pursuant to Section 5.2(d) hereof and then determining Excess Contributions pursuant to Section 5.2(f) hereof. (g) "Excess Contributions" means, with respect to any Plan Year, the excess of: (i) the aggregate amount of Employer contributions actually taken into account in computing the Actual Deferral Percentage of Highly Compensated Employees for such Plan Year, over (ii) the maximum amount of such contributions permitted by the Actual Deferral Percentage test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of the Actual Deferral Percentages, beginning with the highest of such percentages). (h) "Excess Elective Deferrals" means those Elective Deferrals that are includible in a Participating Employee's gross income for a taxable year under Code Section 402(g) because they exceed the limitation specified in Section 5.2(d)(i) hereof. Excess Elective Deferrals shall be treated as Annual Additions under the Plan. (i) "Family Member" means the spouse, lineal ascendants and descendants of the employee or former employee and the spouses of such lineal ascendants and descendants, all within the meaning of Code Section 414(q)(6). (j) "Highly Compensated Employee" means both highly compensated active employees and highly compensated former employees. (i) A highly compensated active employee includes any Employee who performs service for the Employer during the determination year and who, during the look-back year: (i) received compensation from the Employer in excess of $75,000 (as adjusted pursuant to Code Section 415(d)); (ii) received compensation from the Employer in excess of $50,000 (as adjusted pursuant to Code Section 415(d)) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer and received compensation during such year that is greater than 50 percent of the dollar limitation in effect under Code Section 415(b)(1)(A). The term Highly Compensated Employee also includes: (i) employees who are both described in the preceding sentence if the term "determination year" is substituted for the term "look-back year" and the employee is one of the 100 employees who received the most compensation from the Employer during the determination year; and (ii) employees who are 5 percent owners at any time during the look-back year or determination year. If no officer has satisfied the compensation requirement of (iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. For this purpose, the determination year shall be the Plan Year. The look-back year shall be the twelve-month period immediately preceding the determination year. (ii) A highly compensated former employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for the Employer during the determination year, and was a highly compensated active employee for either the separation year or any determination year ending on or after the employee's fifty-fifth (55th) birthday. (iii) If an employee is, during a determination year or look-back year, a Family Member of either a five percent owner who is an active or former employee or a Highly Compensated Employee who is one of the ten (10) most highly compensated employees ranked on the basis of Compensation paid by the Employer during such year, then the Family Member and the five percent owner or top-ten Highly Compensated Employee shall be aggregated. In such case, the Family Member and five percent owner or top-ten Highly Compensated Employee shall be treated as a single employee receiving Compensation and Plan contributions or benefits equal to the sum of such Compensation and contributions or benefits of the Family Member and five percent owner or top-ten Highly Compensated Employee. (iv) The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of employees in the top-paid group, the top 100 employees, the number of employees treated as officers and the Compensation that is considered, will be made in accordance with Code Section 414(q). (k) "Participating Employee" means an Employee who is eligible to make Elective Deferrals or Participant Voluntary Contributions (if the Employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive Matching Contributions (including forfeitures) or Qualified Matching Contributions. If an Employee contribution is required as a condition of participation in the Plan, any Employee who would be a Participant in the Plan if such Employee made such a contribution shall be treated as a Participating Employee on behalf of whom no Employee contributions are made. (l) "Qualified Matching Contributions" means Matching Contributions which are one hundred percent (100%) vested and nonforfeitable at all times and which are distributable only in accordance with the distribution provisions applicable to Elective Deferrals. (m) "Qualified Non-Elective Contributions" means contributions (other than Matching Contributions or Qualified Matching Contributions) made by the Employer and allocated to Participating Employees' Accounts that the Participating Employees may not elect to receive in cash until distributed from the Plan, are one hundred percent (100%) vested and nonforfeitable when made, and are distributable only in accordance with the distribution provisions applicable to Elective Deferrals. ARTICLE VI. SECTION 415 LIMITATIONS Section 6.1. Employers Maintaining Only this Plan. (a) If the Participant does not participate in, and has never participated in another qualified plan, a welfare benefit fund (as defined in Code Section 419(e)) or an individual medical account (as defined in Code Section 415(1)(2)) maintained by the Employer, the amount of Annual Additions which may be credited to a Participant's Account under this Plan for a Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer's contribution that would otherwise be contributed or allocated to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (b) Prior to the determination of the Participant's actual compensation for a Limitation Year, the Maximum Permissible Amount may be determined on the basis of the Participant's estimated annual compensation for such Limitation Year. Such estimated annual compensation shall be determined on a reasonable basis and shall be uniformly determined for all Participants similarly situated. Any Employer contributions based on estimated annual compensation shall be reduced by any Excess Amounts carried over from prior years. (c) As soon as it is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (d) If, pursuant to Section 6.1(c) and notwithstanding the provisions of Section 6.1(a) hereof which require a reduction of contributions so as not to exceed the limitations of this Article VI, there is an Excess Amount with respect to a Participant for a Limitation Year, such Excess Amount shall be disposed of as follows: (i) Any Participant Voluntary Contributions, to the extent that the return would reduce the Excess Amount, shall be returned to the Participant. (ii) In the event that the Participant is covered by this Plan at the end of the Limitation Year, remaining Excess Amounts after the application of clause (i) shall be applied to reduce future Employer contributions (including any allocation of forfeitures) for such Participant under this Plan in the next Limitation Year (and each succeeding year, as necessary). (iii) In the event that the Participant is not covered by this Plan at the end of the Limitation Year, remaining Excess Amounts after the application of clause (i) shall not be distributed to the Participant, but shall be held unallocated in a suspense account and shall be applied to reduce future Employer contributions (including any allocation of forfeitures) for all remaining Participants in the next Limitation Year (and each succeeding year, as necessary). (iv) If a suspense account is in existence at any time during the Limitation Year pursuant to this Section, it will not participate in the allocation of any investment gains and losses, and all amounts in the suspense account must be allocated and reallocated to Participants' Accounts before any Employer or Employee contributions may be made to the Plan for such Limitation Year. Excess amounts may not be distributed to Participants or former Participants. Section 6.2. Employers Maintaining Other Master or Prototype Defined Contribution Plans. (a) If, in addition to this Plan, the Participant is covered under another qualified defined contribution plan which qualifies as a Master or Prototype Plan or a welfare benefit fund (as defined in Code Section 419(e)) or an individual medical account (as defined in Code Section 415(1)(2)) maintained by the Employer during any Limitation Year, the amount of Annual Additions which may be allocated under this Plan on the Participant's behalf for such Limitation Year, shall not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's account under such other plans, welfare benefit funds or individual medical accounts for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's Account under this Plan for the Limitation Year. (b) Prior to the determination of the Participant's actual Compensation for the Limitation Year, the amounts referred to in subsection (a) above may be determined on the Participant's estimated annual compensation for such Limitation Year. Such estimated annual compensation shall be determined on a reasonable basis and shall be uniformly determined for all Participants similarly situated. Any Employer contribution based on estimated annual compensation shall be reduced by any Excess Amounts carried over from prior years. (c) As soon as it is administratively feasible after the end of the Limitation Year, the amounts referred to in subsection (a) above shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (d) If a Participant's Annual Additions under this Plan and all such other plans result in an Excess Amount for a Limitation Year, such Excess Amount shall be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. (e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of: (i) the total Excess Amount allocated as of such date (including any amount which would have been allocated but for the limitations of Code Section 415), times (ii) the ratio of (A) the amount allocated to the Participant as of such date under this Plan, divided by (B) the total amount allocated as of such date under all qualified master or prototype defined contribution plans (determined without regard to the limitations of Code Section 415). (f) Any Excess Amounts attributed to this Plan shall be disposed of as provided in Section 6.1(d). Section 6.3. Employers Maintaining Other Defined Contribution Plans. If the Participant is covered under another plan which is a qualified defined contribution plan which is not a Master or Prototype Plan maintained by the Employer, Annual Additions allocated under this Plan on behalf of any Participant shall be limited in accordance with the provisions of Section 6.2, as though the other plan were a Master or Prototype Plan, unless the Employer provides other limitations in the Adoption Agreement. Section 6.4. Employers Maintaining Defined Benefit Plans. If the Participant is covered or was covered at any time under a qualified defined benefit plan maintained by the Employer, the projected annual benefit thereunder and the Annual Additions credited to any such Participant's Account under this Plan and any other qualified defined contribution plan in any Limitation Year will be limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction with respect to such Participant will not exceed 1.0 in any Limitation Year. The Annual Additions which may be credited to the Participant's Account under this Plan for any Limitation Year will be limited in accordance with the Adoption Agreement. Section 6.5. Definitions. For purposes of this Article VI, the following terms shall be defined as follows: (a) Annual Additions -- The sum of the following amounts allocated to a Participant's Account for a Limitation Year: (i) all Employer contributions; (ii) all Participant contributions (other than a qualified rollover contribution as described in Code Section 402(a)(5)); (iii) all forfeitures; (iv) all amounts allocated, after March 31, 1984, to an individual medical account (as defined in Code Section 415(1)(2)) which is part of a defined benefit or annuity plan maintained by the Employer are treated as Annual Additions to a defined contribution plan; and (v) amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a "key employee" (as defined in Code Section 419A(d)(3)) under a welfare benefit fund (as defined in Code Section 419(e)) maintained by the Employer, are treated as Annual Additions to a defined contribution plan. For the purposes of this Article VI, amounts reapplied under Sections 6.1(d) and 6.2(f) of the Plan to reduce Employer contributions shall also be included as Annual Additions. (b) Compensation -- A Participant's wages as defined in Code Section 3121(a), for purposes of calculating social security taxes, but determined without regard to the wage base limitation in Code Section 3121(a)(1), the limitations on the exclusions from wages in Code Section 3121(a)(5)(C) and (D) for elective contributions and payments by reason of salary reduction agreements, the special rules in Code Section 3121(v), any rules that limit covered employment based on the type or location of an employee's employer, and any rules that limit the remuneration included in wages based on familial relationship or based on the nature or location of the employment or the services performed (such as the exceptions to the definition of employment in Code Section 3121(b)(1) through (20)). For any Self-Employed Individual Compensation means Earned Income. For Limitation Years beginning after December 31, 1991, for purposes of applying the limitations of this Article, Compensation for a Limitation Year is the Compensation actually paid or includible in gross income during such Limitation Year. Notwithstanding the preceding sentence, Compensation for a participant in a defined contribution plan who is permanently and totally disabled (as defined in Code Section 22(e)(3)) is the Compensation such participant would have received for the Limitation Year if the participant had been paid at the rate of Compensation paid immediately before becoming permanently and totally disabled. Such imputed Compensation for a disabled participant may be taken into account only if the participant is not a highly compensated employee (as defined in Code Section 414(q)) and contributions made on behalf of such participant are nonforfeitable when made. (c) Defined Benefit Fraction -- A fraction, the numerator of which is the sum of a Participant's Projected Annual Benefits under all the qualified defined benefit plans whether or not terminated) maintained by the Employer determined at the end of the Limitation Year, and the denominator of which is the lesser of (i) one hundred and twenty-five percent (125%) of the dollar limitation for such Limitation Year under Code Sections 415(b) and (d) (or such higher amount determined by the Commissioner of Internal Revenue applicable to the calendar year with which or within which the Limitation Year ends) or (ii) one hundred and forty percent (140%) of the Participant's average Compensation (or Earned Income) for the three highest consecutive calendar years of service during which the Participant was in the Plan including any adjustments under Code Section 415(b). Notwithstanding the above, if the Participant was a Participant as of the first limitation year beginning after December 31, 1986 in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than the product of 1.25 times the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last Limitation Year beginning after January 1, 1987, disregarding any changes in the terms and conditions of the Plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code Section 415 for all Limitation Years beginning before January 1, 1987. (d) Employer -- The Employer that adopts this Plan and in the case of a group of employers which constitutes (i) a controlled group of corporations (as defined in Code Section 414(b) as modified by Code Section 415(h)); (ii) trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) as modified by Code Section 415(h)); (iii) an affiliated service group (as defined in Code Section 414(m)); or (iv) a group of entities required to be aggregated (pursuant to Code Section 414(o)) all such employers shall be considered a single employer for purposes of applying the limitations of this Article VI. (e) Excess Amount -- The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (f) Limitation Year -- A calendar year or any other twelve (12) consecutive month period adopted by the Employer in item 12 of the Adoption Agreement (Profit Sharing Plan) or item 10 of the Adoption Agreement (Pension Plan). All qualified plans maintained by the Employer shall use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year shall begin on the date within the Limitation Year in which the amendment is made. (g) Master or Prototype Plan -- A plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service. (h) Maximum Permissible Amount -- For a Limitation Year, the Maximum Permissible Amount with respect to any Participant shall be the lesser of (i) the Defined Contribution Dollar Limitation or (ii) twenty-five percent (25%) of the Participant's Compensation for the Limitation Year. The Compensation limitation described in (ii) shall not apply to any contribution for medical benefits (within the meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition under Code Sections 415(1)(1) or 419A(d)(2). If a short Limitation Year is created because of an amendment changing the Limitation Year to a different twelve (12) consecutive month period, the Maximum Permissible Amount shall not exceed the defined contribution dollar limitation in Code Section 415(c)(1)(A) multiplied by a fraction, the numerator of which is the number of months in the short Limitation Year and the denominator of which is twelve (12). (i) Projected Annual Benefit -- A Participant's annual retirement benefit (adjusted to the actuarial equivalent of a straight life annuity if expressed in a form other than a straight life or qualified joint and survivor annuity) under the Plan, assuming that the Participant will continue employment until the later of current age or Normal Retirement Age, and that the Participant's Compensation for the Limitation Year and all other relevant factors used to determine benefits under the Plan will remain constant for all future Limitation Years. (j) Defined Contribution Fraction -- A fraction, the numerator of which is the sum of the Annual Additions credited to the Participant's account under this and all other qualified defined contribution plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years (including the Annual Additions attributable to the Participant's non-deductible employee contributions to all qualified defined benefit plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years and the Annual Additions attributable to all welfare benefit funds (as defined in Code Section 419(e)) and individual medical accounts (as defined in Code Section 415(1)(2) maintained by the Employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior Limitation Years of service with the Employer (regardless of whether a defined contribution plan was maintained by the Employer). The maximum aggregate amount in any Limitation Year is the lesser of (i) one hundred and twenty-five percent (125%) of the dollar limitation determined under Code Sections 415(b) and (d) in effect under Code Section 415(c)(1)(A) or (ii) thirty-five percent (35%) of the Participant's Compensation for such Limitation Year. If the Employee was a participant as of the end of the first day of the first Limitation Year beginning after December 31, 1986, in one or more defined contribution plans maintained by the Employer which were in existence on May 5, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal to the product of: (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the Plan made after May 5, 1986, but using the Code Section 415 limitation applicable to the first Limitation Year beginning on or after January 1, 1987. The annual addition for any Limitation Year beginning before January 1, 1987, shall not be computed to treat all Employee contributions as Annual Additions. (k) Defined Contribution Dollar Limitation -- For a Limitation Year, thirty thousand dollars ($30,000) or, if greater, one-fourth of the defined benefit dollar limitation set forth in Code Section 415(b)(1) as in effect for such Limitation Year. (l) Highest Average Compensation -- The average Compensation for the three consecutive Years of Service with the Employer which produces the highest average. ARTICLE VII. PARTICIPANTS' ACCOUNTS Section 7.1. Separate Accounts. Separate Accounts will be maintained for each Participant for each of the following types of contributions, and the income, expenses, gains and losses attributable thereto: (a) Employer Profit Sharing Contributions pursuant to Section 4.1 hereof; (b) Employer Pension Contributions pursuant to Section 4.2 hereof; (c) Participant Voluntary Contributions pursuant to Section 4.3 hereof; (d) Elective Deferrals pursuant to Section 5.2 hereof; (e) Matching Contributions pursuant to Section 5.3 hereof; (f) Rollover Contributions pursuant to Section 4.6 hereof. The Custodian shall establish such other separate Accounts as may be necessary under the Plan. These Accounts shall be for accounting purposes only and the Custodian shall not be required to establish separate Custodial Accounts for these contributions. Section 7.2. Vesting. (a) A Participant shall at all times have a fully vested and nonforfeitable interest in all his Accounts except his Employer Profit Sharing Contributions Account and/or his Employer Pension Contributions Account. (b) A Participant shall have a vested interest in his Employer Profit Sharing Contributions Account and/or his Employer Pension Contributions Account as determined under the vesting schedule elected in item 7 of the Adoption Agreement. Section 7.3. Computation of Vesting Service. All of a Participant's Years of Service with the Employer shall be counted to determine the nonforfeitable percentage of his Employer Profit Sharing Contributions Account and/or his Employer Pension Contributions Account except those Years of Service excluded under item 7 of the Adoption Agreement. A former Participant who had a nonforfeitable right to all or a portion of his Account balance derived from Employer contributions at the time of his termination shall receive credit for Years of Service prior to his Break in Service upon completing a Year of Service after his return to the employ of the Employer. A former Participant who did not have a nonforfeitable right to any portion of his Account balance derived from Employer contributions at the time of termination from service will be considered a new employee for vesting purposes, if the number of consecutive one year Breaks in Service equals or exceeds the greater of (i) five (5) years or (ii) the aggregate number of Years of Service before such Breaks in Service. If such a former Participant's Years of Service before termination from service may not be disregarded pursuant to the preceding sentence, such former Participant's prior Years of Service shall not be cancelled hereunder. Section 7.4. Allocation of Forfeitures. (a) As of the end of the Plan Year, forfeitures derived from Employer Profit Sharing Contributions Accounts which become available for reallocation during such Plan Year because of the operation of the vesting provisions of Section 7.2(b), shall be allocated to the Employer Profit Sharing Contribution Accounts of the Participants who are eligible to share in an Employer Profit Sharing Contributions for the Plan Year. Such amounts shall be allocated according to the ratio that each such Participant's Compensation or Earned Income for the Plan Year bears to the total Compensation and Earned Income of all such Participants for the Plan Year. Forfeitures under this subsection (a) will be allocated only for the benefit of Participants of the Employer adopting this Plan. (b) Forfeitures derived from Employer Pension Contributions which become available for reallocation during a Plan Year shall be applied to reduce the Employer Pension Contributions that would otherwise be due for such Plan Year under Section 4.2. Forfeitures under this subsection (b) will only be used to reduce the Employer Pension Contributions of the Employer adopting this Plan. (c) If a benefit is forfeited because a Participant or Beneficiary cannot be found, such benefit will be reinstated if a claim is made by the Participant or Beneficiary. (d) No forfeiture will occur solely as a result of a Participant's withdrawal of any Employee contributions. ARTICLE VIII. PAYMENT OF BENEFITS Section 8.1. Benefits Payable Under the Plan. (a) Normal Retirement. A Participant's interest in all Employer contributions allocated to his Accounts shall be fully vested and nonforfeitable on and after his Normal Retirement Age. Such Participant may retire at any time on or after that date and shall be entitled to receive, in accordance with the provisions of Sections 8.2 and 8.3 hereof, the total amount credited to his Accounts. Any Participant who is employed beyond his Normal Retirement Age shall continue to share in Employer contributions until his actual retirement. (b) Death Benefits. Upon the death of a Participant while employed by the Employer, the total amount credited to such Participant's Accounts (plus such Participant's share of the Employer contributions for the year of his death), shall be payable to such Participant's Beneficiary in accordance with Sections 8.2 and 8.3 hereof. Upon the death of a Participant following his termination of employment with the Employer, the vested portion of his Accounts which has not been distributed shall be payable to such Participant's Beneficiary in accordance with Sections 8.2 and 8.3 hereof. (c) Other Termination of Employment. A Participant who terminates employment with the Employer on account of Disability shall be entitled to receive, in accordance with Sections 8.2 and 8.3 hereof, the total amount credited to his Account. A Participant whose employment with the Employer is terminated prior to his Normal Retirement Date for any reason other than death or Disability shall be entitled to receive, in accordance with the provisions of Sections 8.2 and 8.3 hereof, the portions of his Accounts that have vested pursuant to Section 7.2 hereof. (d) Forfeitures. Any amounts in a Participant's Accounts which are not payable under subsection (c) above when his employment with the Employer is terminated shall remain in such Accounts and shall continue to share in profits or losses on investments under Section 9.3 hereof until such former Participant incurs five (5) consecutive Breaks in Service, whereupon they shall be forfeited and administered in accordance with Section 7.4 hereof. In the event a former Participant is reemployed by the Employer before incurring five (5) consecutive Breaks in Service his Accounts shall continue to vest in accordance with the vesting schedule specified in the applicable Adoption Agreement. Notwithstanding the foregoing, if a terminated Participant receives a distribution on account of termination of his participation in the Plan of his entire vested interest in the Pension Plan or the Profit Sharing Plan, such Participant's nonvested interest in the relevant plan shall be treated as a forfeiture and administered in accordance with Section 7.4 hereof. If the Participant elects to have distributed less than the entire vested portion of his Account balance derived from Employer contributions, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested portion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to Employer contributions and the denominator of which is the total value of the vested Employer derived Account balance. For purposes of this Section, if the value of an employee's vested account balance is zero, the Employee shall be deemed to have received a distribution of such vested account balance. A Participant's vested account balance shall not include accumulated deductible employee contributions within the meaning of Code Section 72(o)(5)(B) for plan years beginning prior to January 1, 1989. If a Participant receives or is deemed to receive a distribution pursuant to this subsection (d) and such Participant subsequently resumes employment covered under the Plan, the forfeited amounts shall be restored from current forfeitures, or if those are insufficient by a special Employer contribution, provided that the Participant repays to the Plan the full amount of the distribution attributable to Employer contributions prior to the earlier of (i) five (5) years after the Participant is reemployed, or (ii) the time the Participant incurs five (5) consecutive Breaks in Service. In the event a former Participant is reemployed after incurring five (5) consecutive Breaks in Service, separate Accounts will be maintained for Employer contributions allocated before and after the Break in Service, and Years of Service earned after his return to employment shall be disregarded in determining the Participant's vested percentage in his prebreak Employer contributions. Section 8.2. Manner of Distributions. (a) Distributions From Pension Plan. Distributions from the Pension Plan shall be made as follows: (i) A Participant's vested interest in the Plan shall be paid by purchasing an annuity contract from a licensed insurance company, unless the Participant elects to receive his interest in one of the alternate forms of benefit described in subsection (c) below. If a Participant is not married at his annuity starting date, the annuity contract shall provide a monthly benefit for his life. If a Participant is married at his annuity starting date, the annuity shall be in the form of a qualified joint and survivor annuity. A "qualified joint and survivor annuity" is an immediate annuity for the life of the Participant with a survivor annuity for the life of the spouse which is equal to fifty percent (50%) of the amount of the annuity which is payable during the joint lives of the Participant and the spouse and which is the amount of benefit which can be purchased with the Participant's vested Account balance. The Participant may elect to have such annuity distributed upon attainment of the earliest retirement age under the Plan. Any annuity contract purchased hereunder and distributed in accordance with this Section 8.2 shall be nontransferable and shall comply with the terms of this Plan. For purposes of this Section, the earliest retirement age shall be the Participant's age on the earliest date on which the Participant could elect to receive retirement benefits. (ii) Unless an optional form of benefit is selected in accordance with subsection (c) below, if a Participant has a spouse and dies prior to his annuity starting date (the date annuity payments commence), the Participant's vested Account balance in the Plan shall be applied toward the purchase of a life only annuity contract from a licensed insurance company providing a benefit for the life of the surviving spouse. The surviving spouse may elect to have such annuity distributed within a reasonable period after the Participant's death. (iii) For any distribution subject to the annuity requirements in subsection (i) above, a Participant or Beneficiary may elect in writing, within the ninety (90) day period ending on the annuity starting date (the date annuity or any other form of benefit payments commence), to receive his vested interest in the Plan in one of the alternate forms of benefit set forth in subsection (c) below in lieu of the form of benefit otherwise payable hereunder. Any waiver of the joint and survivor annuity by a married Participant shall not be effective unless: (A) the Participant's spouse consents in writing to the election; (B) the election designates a specific Beneficiary, including any class of beneficiaries or any contingent beneficiaries, which may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent); (C) the spouse's consent acknowledges the effect of the election; and (D) the spouse's consent is witnessed by a Plan representative or notary public. Additionally, a Participant's waiver of the joint and survivor annuity shall not be effective unless the election designates a form of benefit payment which may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent). If it is established to the satisfaction of a Plan representative that there is no spouse or that the spouse cannot be located, a waiver will be deemed a qualified election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the Participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior election may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant and the spouse have received notice as provided in subsection (v) below. (iv) A Participant may elect in writing to waive the surviving spouse benefit otherwise payable under subsection (ii) above. The benefit may be waived at any time during the period which begins on the first day of the Plan Year in which the Participant attains age 35 and ends on the date of the Participant's death. A Participant and the spouse may waive the pre-retirement survivor death benefit prior to age 35, provided that such early waiver becomes invalid in the Plan Year the Participant attains age 35 and a new waiver must be made pursuant to this subsection (iv). If the Participant separates from service prior to the first day of the Plan Year in which he attains age 35, the surviving spouse benefit may be waived, with respect to the Participant's account balance as of the date of separation, at any time during the period which begins on the date of such separation and ends on the date of the Participant's death. Notwithstanding the foregoing, any election by a Participant to waive the surviving spouse benefit payable under subsection (ii) above shall not be effective unless: (A) the Participant's spouse consents in writing to the election; (B) the spouse's consent acknowledges the effect of the election; and (C) the spouse's consent is witnessed by a Plan representative or notary public. If it is established to the satisfaction of a Plan representative that there is no spouse or that the spouse cannot be located, a waiver will be deemed a qualified election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A revocation of a prior election may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant and the spouse have received notice as provided in subsection (v) below. (v) The Administrator shall provide the Participant and the Spouse, as applicable, with a written explanation of: (A) the terms and conditions of the annuity described in subsections (i) or (ii), as applicable; (B) the Participant's or Spouse's, as applicable, right to waive the payment of benefits in the form of an annuity; (C) the rights of the Participant's spouse; and (D) the right to make, and the effect of, the revocation of a previous election to waive the payment of benefits in the form of an annuity described in subsections (i) or (ii) hereof. In the case of the annuity described in subsection (i), such explanation shall be provided no less than thirty (30) days and no more than ninety (90) days prior to the annuity starting date. In the case of the annuity described in subsection (ii), such explanation shall be provided within the applicable period for such Participant. The applicable period for a Participant is whichever of the following periods ends last: (A) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; (B) a reasonable period ending after the individual becomes a Participant; (C) a reasonable period ending after this Article first applies to the Participant. Notwithstanding the foregoing, notice must be provided within a reasonable period ending after separation from service in the case of a Participant who separates from service before attaining age 35. For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (B) and (C) is the end of the two-year period beginning one year prior to the date the applicable event occurs, and ending one year after that date. In the case of a Participant who separates from service before the Plan Year in which age 35 is attained, notice shall be provided within the two-year period beginning one year prior to separation and ending one year after separation. If such a Participant thereafter returns to employment with the Employer, the applicable period for such Participant shall be redetermined. A written explanation comparable to the notices described above shall be provided to a Participant who is waiving the surviving spouse benefit prior to attaining age 35. (vi) The Administrator shall be responsible for the purchase of any annuity contracts required to be purchased in accordance with the terms of this Plan. (b) Distributions from Profit Sharing Plan. Distributions from the Profit Sharing Plan shall be made in the form elected by the Participant (or Beneficiary) as described in subsection (c) below. Notwithstanding the foregoing, if the Profit Sharing Plan is a direct or indirect transferee of a defined benefit plan, a money purchase pension plan (including a target benefit plan), or a stock bonus or profit sharing plan or is an amendment of an original Plan which is (or was) subject to the survivor annuity requirements of Code Sections 401(a)(11) or 417 then distributions shall be made in accordance with the provisions of subsection (a) above. This amendment is effective on the first day of the first plan year beginning on or after December 12, 1994, or, if later, 90 days after December 12, 1994. Notwithstanding any provision of this plan to the contrary, to the extent that any optional form of benefit under this plan permits a distribution prior to the employee's retirement, death, disability, or severance from employment, and prior to plan termination, the optional form of benefit is not available with respect to benefits attributable to assets (including the post-transfer earnings thereon) and liabilities that are transferred, within the meaning of section 414(l) of the Internal Revenue Code, to this plan from a money purchase pension plan qualified under section 401(a) of the Internal Revenue Code (other than any portion of those assets and liabilities attributable to voluntary employee contributions). (c) Optional Forms of Distribution. All distributions required under this subsection shall be determined and made in accordance with the Income Tax Regulations under Code Section 401(a)(9), including the minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of such Regulations. (i) Amounts payable to a Participant shall be distributed in one of the following forms as elected by the Participant, with spousal consent, as applicable: (A) a lump sum; or (B) installments over a period certain not to exceed the life expectancy of the Participant or the joint life expectancy of the Participant and his Beneficiary. Such election shall be made in writing and in such form as shall be acceptable to the Administrator. If the Participant fails to elect any of the methods of distribution described above within the time specified for such election, the Administrator shall distribute the Participant's Account in the form of a single sum cash payment by the April 1 following the calendar year in which the Participant attains age seventy and one-half (70-1/2). (ii) If a Participant's benefit is to be distributed in installment payments under (B) above, the amount distributed for each calendar year, beginning with distributions for the first distribution calendar year, must at least equal the quotient obtained by dividing the Participant's benefit by the applicable life expectancy. The life expectancy (or joint and last survivor expectancy) is calculated using the attained age of the Participant (or Beneficiary) as of the Participant's (or Beneficiary's) birthday in the applicable calendar year reduced by one for each calendar year which has elapsed since the date life expectancy was first calculated. If life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy as so recalculated. The applicable calendar year shall be the first distribution calendar year, and, if life expectancy is being recalculated, such succeeding calendar year. Unless otherwise elected by the Participant (or the Participant's spouse) by the time distributions are required to begin, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The life expectancy of a nonspouse Beneficiary may not be recalculated. Life expectancy and joint life expectancy are computed by use of the expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Notwithstanding anything herein to the contrary, for calendar years beginning before January 1, 1989, if the Participant's spouse is not the designated Beneficiary, the method of distribution selected must assure that at least fifty percent (50%) of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after December 31, 1988, the amount to be distributed each year shall not be less than the quotient obtained by dividing the Participant's benefit by the lesser of (A) the applicable life expectancy or (B) if the Participant's spouse is not the designated Beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations. Distributions after the death of the Participant shall be distributed using the applicable return multiple specified in Section 1.72-9 of the Income Tax Regulations as the relevant divisor without regard to Section 1.401(a)(9)-2 of the Income Tax Regulations. (iii) The minimum distribution required for the Participant's first distribution calendar year must be made on or before the Participant's required beginning date as described in Section 8.3(c) hereof. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which such required beginning date occurs, must be made on or before December 31 of that distribution calendar year. (d) In any case where the Participant or Beneficiary has determined payment to be on an installment basis, such Participant or Beneficiary may by written request directed to the Administrator, at any time following commencement of such installment payments, accelerate all or any portion of the unpaid balance. (e) For purposes of this Section a "spouse" shall include the spouse or surviving spouse of a Participant, provided that a former spouse shall be treated as the spouse or surviving spouse and a current spouse will not be treated as a spouse or surviving spouse to the extent provided under a qualified domestic relations order as described in Code Section 414(p). (f) The payment of benefits in either a lump sum or in installments under this Section 8.2 may be made in cash or in Investment Company Shares. Section 8.3. Commencement of Payments. (a) Subject to the provisions of this Section 8.3, payment of benefits, under whichever method is selected, shall be made or commence as soon as administratively practicable after the Valuation Date immediately following the Participant's retirement, death or other termination of employment. (b) If the Participant's vested Account balance in the Pension Plan or the Profit Sharing Plan exceeds (or at the time of any prior distribution exceeded) three thousand five hundred dollars ($3,500), no distribution of that interest shall be made prior to the time the Participant's Account becomes immediately distributable without the written consent of the Participant and, in the case of the Pension Plan, the Participant's spouse (or where either the Participant or the spouse has died, the survivor). The consent of the Participant and the Participant's spouse shall be obtained in writing within the ninety (90) day period ending on the annuity starting date. The annuity starting date is the first day of the first period for which an amount is paid as an annuity or any other form. The Administrator shall notify the Participant and the Participant's spouse of the right to defer any distribution until the Participant's Account balance is no longer immediately distributable. Such notification shall include a general description of the material features, and an explanation of the relative values of the optional forms of benefit available under the Plan in a manner that would satisfy the notice requirements of Code Section 417(a)(3), and shall be provided no less than thirty (30) days and no more than ninety (90) days prior to the annuity starting date; provided that if a distribution is one to which Sections 401(a)(11) and 417 of the Internal Revenue Code do not apply, such distribution may commence less than 30 days after the notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that: (1) the Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) the Participant, after receiving the notice, affirmatively elects a distribution. Notwithstanding the foregoing, only the Participant need consent to the commencement of a distribution in the form of a qualified joint and survivor annuity while the Account balance is immediately distributable. (Furthermore, if payment in the form of a qualified joint and survivor annuity is not required with respect to the Participant pursuant to Section 8.2(b) of the Plan, only the Participant need consent to the distribution of an Account balance that is immediately distributable.) Neither the consent of the Participant nor the Participant's spouse shall be required to the extent that a distribution is required to satisfy Code Sections 401(a)(9) or 415. In addition, upon termination of this Plan if the Plan does not offer an annuity option (purchased from a commercial insurance company), the Participant's Account balance may, without the Participant's consent, be distributed to the Participant or transferred to another defined contribution plan (other than an employee stock ownership plan as defined in Code Section 4975(e)(7)) within the same controlled group. An Account balance is immediately distributable if any part of the Account balance could be distributed to the Participant (or surviving spouse) before the Participant attains (or would have attained if not deceased) the later of his Normal Retirement Age or age sixty-two (62). For purposes of determining the applicability of the foregoing consent requirements to distributions made before the first day of the first Plan Year beginning after December 31, 1988, a Participant's vested Account balance shall not include amounts attributable to accumulated deductible employee contributions within the meaning of Code Section 72(o)(5)(B). (c) Unless the Participant (or the Participant's Beneficiary, if the Participant is dead) elects to defer commencement under (b) above, distribution of benefits shall begin no later than the sixtieth (60th) day after the close of the Plan Year in which occurs the latest of (i) the Participant's attainment of age 65 (or normal retirement age, if earlier); (ii) the tenth (10th) anniversary of the year in which the Participant commenced participation in the Plan; or (iii) the date the Participant terminates service with the Employer. Notwithstanding the foregoing, the failure of a Participant and the spouse to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 8.1 of the Plan, shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy this Section. (d) Notwithstanding anything herein to the contrary, payment of benefits to a Participant shall commence by the Participant's required beginning date, even if the Participant is still employed. A Participant's required beginning date is the April 1 of the calendar year following the calendar year in which the Participant attains age seventy and one-half (70-1/2); provided that the required beginning date of a Participant who attains age 70-1/2 before January 1, 1988, shall be determined in accordance with (i) or (ii) below: (i) The required beginning date of a Participant who is not a 5-percent owner is the first day of April of the calendar year following the calendar year in which the later of retirement or attainment of age seventy and one-half (70-1/2) occurs. (ii) The required beginning date of a Participant who is a 5-percent owner during any year beginning after December 31, 1979, is the first day of April following the later of the calendar year in which the Participant attains age seventy and one-half (70-1/2), or the earlier of the calendar year with or within which ends the Plan Year in which the Participant becomes a 5-percent owner, or the calendar year in which the Participant retires. The required beginning date of a Participant who is not a 5-percent owner who attains age seventy and one-half (70-1/2) during 1988 and who has not retired as of January 1, 1989, is April 1, 1990. A Participant is treated as a 5-percent owner for purposes of this subsection (d) if such Participant is a 5-percent owner as defined in Code Section 416(i) (determined in accordance with Code Section 416, but without regard to whether the Plan is top-heavy) at any time during the Plan Year ending with or within the calendar year in which such owner attains age sixty-six and one-half (66-1/2) or any subsequent Plan Year. Once distributions have begun to a 5-percent owner under this subsection (d), they must continue to be distributed, even if the Participant ceases to be a 5-percent owner in a subsequent year. Distributions may be delayed pursuant to an election made prior to January 1, 1984, under Section 242 of the Tax Equity and Fiscal Responsibility Act of 1982; provided that the method of distribution selected must be in accordance with the requirements of Code Section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984. If such an election is revoked, any subsequent distribution must satisfy the requirements of Code Section 401(a)(9). If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code Section 401(a)(9), but for such Section 242(b)(2) election. For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the Income Tax Regulations. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life). (e)(i) If a Participant dies after benefit payments have begun, the Participant's remaining interest in the Plan shall be distributed to his designated Beneficiary at least as rapidly as under the method of distribution being used prior to the Participant's death. (ii) If the Participant dies before benefit payments have commenced, distribution of the Participant's entire interest in the Plan shall be completed by the December 31 of the calendar year containing the fifth (5th) anniversary of the Participant's death, except to the extent that an election is made to receive distributions in accordance with the following: (A) if any portion of the Participant's interest is payable to a designated Beneficiary, distributions may be made over the life or over a period certain not greater than the life expectancy of the designated Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; (B) if the designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with (A) above shall not be earlier than the later of December 31 of the calendar year immediately following the calendar year in which the Participant died and December 31 of the calendar year in which the Participant would have attained age seventy and one-half (70-1/2). If the Participant has not made an election pursuant to this subsection (ii) by the time of his death, the designated Beneficiary must elect the method of distribution no later than the earlier of December 31 of the calendar year in which distributions would be required to begin under this subsection (e) or December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the Participant has no designated Beneficiary, or if the designated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest in the Plan must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. For purposes of this subsection (ii), if the surviving spouse dies after the Participant, but before payments to such spouse begin, the provisions of this subsection (ii), with the exception of paragraph (B) above, shall be applied as if the surviving spouse were the Participant. Any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. For the purposes of this subsection (e), distribution of a Participant's interest is considered to begin on the Participant's required beginning date (or the date distribution is required to begin to the surviving spouse). If a distribution in the form of an annuity irrevocably commences to the Participant before the required beginning date, the date the distribution is considered to begin is the date distribution actually commences. (iii) A Participant's interest in the Plan is his Account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (the valuation calendar year) increased by the amount of any contributions or forfeitures allocated to the Account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. If any portion of the minimum distribution for the first distribution calendar year is made in the second distribution calendar year on or before the required beginning date, the amount of the minimum distribution made in the second distribution calendar year shall be treated as if it had been made in the immediately preceding distribution calendar year. The distribution calendar year is a calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to subsection (ii) above. For purposes of this subsection (e), the designated Beneficiary is the individual who is designated as the Beneficiary under the Plan in accordance with Code Section 401(a)(9) and the proposed regulations thereunder. Section 8.4. Payment of Small Amounts. Notwithstanding anything herein to the contrary, if the present value of the Participant's vested interest in the Pension Plan does not exceed (nor at the time of any prior distribution exceeded) three thousand five hundred dollars ($3,500) as of the date the Participant's employment with the Employer terminates, the Administrator shall distribute the present value of such interest to the Participant in a lump sum as soon as administratively practicable after the end of the Plan Year in which termination occurs. Likewise, if the total present value of the Participant's vested interest in the Profit Sharing Plan and Cash or Deferred Arrangement does not exceed (nor at any time of any prior distribution exceeded) three thousand five hundred dollars ($3,500) as of the date the Participant's employment with the Employer terminates, the Administrator shall distribute the present value of this interest to the Participant in a lump sum as soon as administratively practicable after the end of the Plan Year in which termination occurs. A Participant whose entire vested interest in the Pension Plan and/or the Profit Sharing Plan has been distributed or who has no vested interest in the Pension Plan and/or the Profit Sharing Plan shall be deemed cashed out from the Pension Plan and/or the Profit Sharing Plan, as applicable. Section 8.5. Persons Under Legal or Other Disability. In the event a Participant or Beneficiary is declared incompetent and a guardian or other person legally charged with the care of his person or of his property is appointed, any benefits to which such Participant or Beneficiary is entitled shall be paid to such guardian or other person legally charged with the care of his person or of his property. Section 8.6. Withdrawals from Profit Sharing Plan. (a) If elected in item 10 of the Adoption Agreement (Profit Sharing Plan), a Participant shall be permitted to withdraw the specified percentage of his vested Employer Profit Sharing Account while he is still employed after attainment of age fifty-nine and one-half (59-1/2) or prior to attainment of such age on account of a financial hardship; provided, that such Participant has been an active Participant in the Plan for at least five (5) years. A Participant may not make another withdrawal on account of financial hardship under this Section 8.6 until he has been an active Participant for at least an additional five (5) years from the date of his last hardship withdrawal. For purposes of this Section 8.6, a financial hardship shall mean a financial need or emergency which requires the distribution of a Participant's Plan account in order to meet such need or emergency. The determination of the existence of a financial hardship and the amount required to be distributed to meet the hardship shall be made by the Administrator in accordance with such uniform and nondiscriminatory rules as may be established by the Administrator. A request for a withdrawal shall be made in writing in a form prescribed by the Administrator and shall be made in accordance with procedures and limitations established by the Administrator. Notwithstanding the above, no withdrawal under this Section 8.6 shall be permitted if the Integration Formula is selected in item 6 of the Adoption Agreement (Profit Sharing Plan). (b) If a distribution is made pursuant to this Section 8.6 at a time when the Participant has a nonforfeitable right to less than one hundred percent (100%) of his Account balance derived from Employer contributions and the Participant may increase the nonforfeitable percentage in the Account: (i) A separate Account will be established for the Participant's interest in the Plan as of the time of the distribution; and (ii) At any relevant time the Participant's nonforfeitable portion of the separate Account will be equal to an amount ("X") determined by the formula: X = P(AB + (R x D)) - (R x D) For purposes of applying the formula above: P is the nonforfeitable percentage at the relevant time, AB is the Account balance at the relevant time, D is the amount of the distribution, and R is the ratio of the Account balance at the relevant time to the Account balance after distribution. Section 8.7. Transfer of Benefits to Eligible Retirement Plan. (a) This Section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Article VIII, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (b) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (c) An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (d) A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (e) A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. ARTICLE IX. ESTABLISHMENT OF CUSTODIAL ACCOUNT; INVESTMENTS Section 9.1. Custodial Account. (a) Unless the Employer elects otherwise in the Adoption Agreement, the Custodian shall open and maintain separate Custodial Accounts for each individual that the Employer shall from time to time certify to the Custodian as a Participant in the Plan. Such Custodial Accounts shall reflect the various Participant Accounts described at Section 7.1 hereof. (b) If the Employer so elects in the Adoption Agreement the Custodian shall open and maintain a single Custodial Account in the name of the Employer. If only a single Custodial Account is established, the Employer shall be responsible for maintaining the records for the individual Participant accounts. (c) In the event that separate balances are not maintained for the portion of a Participant's Account balance derived from Employer contributions and Participant Voluntary Contributions, the Account balance derived from Participant Voluntary Contributions shall be the Participant's total account balance multiplied by a fraction, the numerator of which is the total amount of Participant Voluntary Contributions (less any withdrawals) and the denominator of which is the sum of the numerator and the total Employer contributions (including Elective Deferrals) made on behalf of such Participant. Section 9.2. Receipt of Contributions. The Custodian shall accept such contributions of money on behalf of Participants as it may receive from time to time from the Employer. The Custodian may, in its sole discretion, also accept money or Investment Company Shares held under a preceding plan of the Employer qualified under Code Section 401(a) or which qualify as rollover contributions or transfers under Section 4.6 of the Plan. All such contributions shall be accompanied by written instructions, in a form acceptable to the Custodian, from the Employer specifying the Participant Accounts to which they are to be credited. Section 9.3. Investment of Account Assets. (a) Upon written instructions given by the Employer on a uniform and nondiscriminatory basis as between Participants, the Custodian shall invest and reinvest contributions credited to a Participant Account(s) in Investment Company Shares. All Participant Accounts shall share in the profits or losses of the investments on a pro rata basis (i.e., in the ratio that the Participant's Account balance bears to all Account balances, other than Accounts which are self-directed under subsection (b) below), subject to adjustment by the Administrator on a fair and equitable basis for contributions, distributions and/or withdrawals during the year. The amount of each contribution credited to a Participant Account to be applied to the purchase of Investment Company Shares shall be invested by the Custodian at the applicable offering price. These purchases shall be credited to such Account with notation as to cost. The Custodian shall have no discretionary investment responsibility and in no event be liable to any person for following investment instructions given by the Employer or the Participant in the manner provided herein. (b) Each Participant, through his separate Participant Account(s), shall be the beneficial owner of all investments held in such Account(s). The Employer however shall direct the Custodian (in a nondiscriminatory manner) regarding the selection of specific Investment Company Shares to be purchased for the Accounts of the Participants. The Employer may permit (in a nondiscriminatory manner) the individual Participants to select and direct the purchase of specific Investment Company Shares for their own Account(s). In such a situation, the Employer shall transmit all such directions to the Custodian. Notwithstanding the foregoing, unless otherwise elected in the Adoption Agreement the individual Participant may direct the investment of his Account(s) and select the specific Investment Company Shares for purchase for his individual Account(s) by directly communicating with the Custodian. (c) All income, dividends and capital gain distributions received on the Investment Company Shares held in each Participant Account shall be reinvested in such shares which shall be credited to such Account. If any distribution on Investment Company Shares may be received at the election of the Participant in additional shares or in cash or other property, the Custodian shall elect to receive it in additional shares. All investments acquired by the Custodian shall be registered in the name of the Custodian or its registered nominee. Section 9.4. Exclusive Benefit. The Custodial Account or Accounts established hereby shall not be used or diverted to purposes other than the exclusive benefit of Participants or their Beneficiaries. Section 9.5. Expenses. All expenses and charges in respect of the Plan and the Custodial Account, including, without limitation, the Custodian's fees and commissions and taxes of any kind upon or with respect to the Plan, shall be paid by the Employer; provided, however, that the Custodian shall be authorized to pay such charges and expenses from the Plan if the Employer shall fail to make payment within thirty (30) days after it has been billed therefor by the Custodian or such charges have otherwise become due. Section 9.6. Voting. The Custodian shall deliver, or cause to be executed and delivered, to the Employer all notices, prospectuses, financial statements, proxies and proxy soliciting materials received by the Custodian relating to investments held in Participants' Accounts. The Custodian shall vote all proxies only in accordance with instructions received from the Employer. Section 9.7. Reports of the Custodian and Administrator. (a) The Custodian shall keep accurate and detailed records of all receipts, investments, disbursements and other transactions required to be performed hereunder. Not later than sixty (60) days after the close of each calendar year (or after the Custodian's resignation or removal), the Custodian shall file with the Employer a written report reflecting the receipts, disbursements and other transactions effected by it during such year (or period ending with such resignation or removal) and the assets of this Plan at its close. Such report shall be open to inspection by any Participant for a period of thirty (30) days immediately following the date on which it is filed with the Employer. Upon the expiration of such thirty (30) day period, the Custodian shall be forever released and discharged from all liability and accountability to anyone with respect to its acts, transactions, duties, obligations or responsibilities as shown in or reflected by such report, except with respect to any such acts or transactions as to which the Employer shall have filed written objections with the Custodian within such thirty (30) day period. (b) Annual reports provided to the Employer by the Custodian shall be, in the Custodian's discretion, on a calendar year basis unless otherwise required by law. The Employer shall compute the valuation of all Plan assets at least annually at the fair market value as of the last day of each calendar year. (c) The Custodian shall keep such records, make such identifications and file such returns and other information concerning the Plan as may be required of the Custodian under the Code or forms adopted thereunder. (d) The Administrator shall be solely responsible for the filing of any reports or information required under the Code or forms adopted thereunder. Section 9.8. Limitation of Custodian's Duties and Liability. (a) The Custodian's duties are limited to those set forth in this Plan, and the Custodian shall have no other responsibility in the administration of the Plan or for compliance by the Employer with any provision thereof. The Custodian shall not be responsible for the collection of contributions provided for under the Plan; the purpose or propriety of any distribution; or any action or nonaction taken by the Employer or pursuant to the Employer's request. The Custodian shall have no responsibility to determine if instructions received by it from the Employer, or the Employer's designated agent, comply with the provisions of the Plan. The Custodian shall not have any obligation either to give advice to any Participant on the taxability of any contributions or payments made in connection with the Plan or to determine the amount of excess contribution and net income attributable thereto. The Custodian may employ suitable agents and counsel and pay their reasonable expenses and compensation, and such agents or counsel may or may not be agent or counsel for the Employer, and may be the Investment Advisor or an Investment Company. (b) The Employer shall at all times fully indemnify and hold harmless the Custodian, its agents, counsel, successors and assigns, from any liability arising from distributions made or actions taken, and from any and all other liability whatsoever which may arise in connection with this Plan, except liability arising from the negligence or willful misconduct of the Custodian. The Custodian shall be under no duty to take any action other than as herein specified with respect to this Plan unless the Employer shall furnish the Custodian with instructions in a form acceptable to the Custodian; or to defend or engage in any suit with respect to this Plan unless the Custodian shall have first agreed in writing to do so and shall have been fully indemnified to the satisfaction of the Custodian. The Custodian (and its agents) may conclusively rely upon and shall be protected in acting upon any written order from the Employer or any other notice, request, consent, certificate or other instrument or paper believed by it to be genuine and to have been properly executed, and, so long as it acts in good faith, in taking or omitting to take any other action. No amendment to the Plan shall place any greater burden on the Custodian without its written consent. The Custodian shall not be liable for interest on any cash balances maintained in the Plan. (c) The Employer shall have the sole authority to enforce the terms of the Plan on behalf of any and all persons having or claiming any interest therein by virtue of the Plan. (d) The Custodian, its agents, counsel, successors and assigns, shall not be liable to the Employer, or to any Participants or Beneficiary for any depreciation or loss of assets, or for the failure of this Plan to produce any or larger net earnings. The Custodian further shall not be liable for any act or failure to act of itself, its agents, employees, or attorneys, so long as it exercises good faith, is not guilty of negligence or willful misconduct, and has selected such agents, employees, and attorneys with reasonable diligence. The Custodian shall have no responsibility for the determination or verification of the offering or redemption prices or net asset values of Investment Company Shares, and shall be entitled to rely for such prices and net asset values upon statements issued by or on behalf of the Investment Company issuing the Investment Company Shares. The Custodian shall have no duty to inquire into the investment practices of such Investment Company; such Investment Company shall have the exclusive right to control the investment of its funds in accordance with its stated policies, and the investments shall not be restricted to securities of the character now or hereafter authorized for trustees by law or rules of court. The Custodian shall not be liable or responsible for any omissions, mistakes, acts or failures to act of such Investment Company, or its successors, assigns or agents. Notwithstanding the foregoing, nothing in this Plan shall relieve the Custodian of any responsibility or liability under ERISA. ARTICLE X. AMENDMENT AND TERMINATION Section 10.1. Amendment. (a) The Employer reserves the right at any time and from time to time to amend or terminate the Plan. No part of the Plan shall by reason of any amendment or termination be used for or diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries, and further that no amendment or termination may retroactively change or deprive any Participant or Beneficiary of rights already accrued under the Plan except insofar as such amendment is necessary to preserve the qualification and tax exemption of the Plan pursuant to Code Section 401. No amendment shall increase the duties of the Custodian or otherwise adversely affect the Custodian unless the Custodian expressly agrees thereto. However, if the Employer amends any provision of this Plan (including a waiver of the minimum funding requirements under Code Section 412(d)) other than by changing any election made in the Adoption Agreement, adopting an amendment stated in the Adoption Agreement which allows the Plan to satisfy Code Section 415, to avoid duplication of minimum benefits under Code Section 416 or to add certain model amendments published by the Internal Revenue Service which specifically provide that their adoption will not cause the Plan to be treated as an individually designed plan, such Employer shall no longer participate under this prototype plan and the Employer's Plan shall be deemed to be an individually designed plan. The Employer hereby irrevocably delegates (retaining, however, the right and power to change any election made in the Adoption Agreement) to the Investment Advisor the right and power to amend the Plan at any time, and from time to time, and the Employer by adopting the Plan shall be deemed to have consented thereto. The Investment Advisor shall notify the Employer of any amendment to the Plan. For purposes of any Investment Advisor amendments, the mass submitter shall be recognized as the agent of the Investment Advisor. If the Investment Advisor does not adopt the amendments made by the mass submitter, it will no longer be identical to or a minor modifier of the mass submitter plan. (b) No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's accrued benefit except to the extent permitted by Code Sections 412(c)(8) and 411(d)(6). For purposes of this subsection, a Plan amendment which has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the vesting schedule of a Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's right to his Employer-derived accrued benefit will not be less than his percentage computed under the Plan without regard to such amendment. (c) Notwithstanding subsection (a) above, an Employer may amend the Plan by adding overriding plan language to the Adoption Agreement where such language is necessary to satisfy Code Sections 415 or 416 because of the required aggregation of multiple plans under such Code Sections. Section 10.2. Termination. Upon complete discontinuance of the Employer's Profit Sharing Contributions (if the Employer has adopted a Profit Sharing Plan by completing the appropriate Adoption Agreement) or termination or partial termination of the Plan, each affected Participant's Account shall become nonforfeitable. Upon termination or partial termination of the Plan, the Employer shall instruct the Custodian whether currently to distribute to each Participant the entire amount of the Participant's Account, in such one or more of the methods described in Article VIII, or whether to continue the Plan and to make distributions therefrom as if the Plan had continued; provided that, in the event the Plan is continued, the Plan must continue to satisfy the requirements of Code Section 401(a). The Employer shall in all events exercise such discretion in a nondiscriminatory manner. The Plan shall continue in effect until the Custodian shall have completed the distribution of all of the Plan asset and the accounts of the Custodian have been settled. ARTICLE XI. FIDUCIARY RESPONSIBILITIES Section 11.1. Administrator. The Administrator shall have the power to allocate fiduciary responsibilities and to designate other persons to carry out such fiduciary responsibilities; provided such allocation is in writing and filed with the Plan records. The Administrator may employ one or more persons to render advice to the Administrator with regard to its responsibilities under the Plan, and consult with counsel, who may be counsel to the Employer. Section 11.2. Powers of Administrator. The Administrator shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out its terms. The Administrator shall have discretionary authority to determine eligibility for benefits and to interpret and construe the terms of the Plan, and any such determination, interpretation or construction shall be final and binding on all parties unless arbitrary and capricious. Any such discretionary authority shall be carried out in a uniform and nondiscriminatory manner. Section 11.3. Records and Reports. The Administrator, or those to whom it has delegated fiduciary duties, shall keep a record of all proceedings and actions, and shall maintain all such books of account, records and other data as shall be necessary for the proper administration of the Plan. The Administrator, or those to whom it has delegated fiduciary duties, shall have responsibility for compliance with the provisions of ERISA relating to such office, including filing with the Secretary of Labor and Internal Revenue Service of all reports required by the Code and/or ERISA and furnishing Participants and Beneficiaries with descriptions of the Plan and reports required by ERISA. Section 11.4. Other Administrative Provisions. (a) No bond or other security shall be required of the Administrator, and/or any officer or Employee of the Employer to whom fiduciary responsibilities are allocated, except as may be required by ERISA. (b) The Administrator or the Employer may shorten, extend or waive the time (but not beyond sixty days) required by the Plan for filing any notice or other form with the Administrator or the Employer, or taking any other action under the Plan, except a response to an appeal under Section 11.6, from a decision of the Administrator. (c) The Administrator or the Employer may direct that such reasonable expenses as may be incurred in the administration of the Plan shall be paid out of the funds of the Plan, unless the Employer shall pay them. (d) The Administrator, the Custodian, and any other persons performing fiduciary duties under the Plan shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims, and no such person shall be liable, to the maximum extent permitted by ERISA, for any act of commission or omission in accordance with the foregoing standard. Section 11.5. Claims Procedure. Any claim relating to benefits under the Plan shall be filed with the Administrator on a form prescribed by the Administrator. If a claim is denied in whole or in part, the Administrator shall give the claimant written notice of such denial within ninety (90) days after the filing of such claim, which notice shall specifically set forth: (a) The reasons for the denial; (b) The pertinent Plan provisions on which the denial was based; (c) Any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is needed; and (d) An explanation of the Plan's procedure for review of the denial of the claim. In the event that the claim is not granted and notice of denial of a claim is not furnished by the ninetieth (90th) day after such claim was filed, the claim shall be deemed to have been denied on that day for the purpose of permitting the claimant to request review of the claim. Section 11.6. Claims Review Procedure. (a) Any person whose claim filed pursuant to Section 11.5 has been denied in whole or in part by the Administrator may request review of the claim by the Employer, by filing a written request with the Administrator. The claimant shall file such request (including a statement of his position) with the Employer no later than sixty (60) days after the mailing or delivery of the written notice of denial provided for in Section 11.5, or, if such notice is not provided, within sixty (60) days after such be in writing and shall specifically set forth: (i) The reasons for the decision; and (ii) The pertinent Plan provisions on which the decision is based. Any such decision of the Employer shall bind the claimant and the Employer, and the Administrator shall take appropriate action to carry out such decision. (b) Any person whose claim has been denied in whole or in part must exhaust the administrative review procedures provided in subsection (a) above prior to initiating any claim for judicial review. ARTICLE XII. AMENDMENT AND CONTINUATION OF ORIGINAL PLAN Notwithstanding any of the foregoing provisions of the Plan to the contrary, an employer that has previously established an Original Plan may, in accordance with the provisions of the Original Plan, amend and continue the Original Plan in the form of this Plan and become an Employer hereunder, subject to the following: (a) subject to the conditions and limitations of the Plan, each person who is a Participant under the Original Plan immediately prior to the effective date of the amendment and continuation thereof in the form of this Plan will continue as a Participant in this Plan; (b) no election may be made in the Adoption Agreement if such election would reduce the benefits of a Participant under the Original Plan to less than the benefits to which he would have been entitled if he had resigned from the employ of the Employer on the date of the Amendment and continuation of the Original Plan in the form of this Plan; (c) the amounts, if any, of a Participant's or former Participant's Accounts immediately prior to the effective date of the amendment and continuation of the Original Plan in the form of this Plan shall be reduced to cash, deposited with the Custodian and constitute the opening balances in such Participant's Account under this Plan; (d) amounts being paid to individuals in accordance with the provisions of the Original Plan shall continue to be paid under this Plan, but in the form that they were being paid under the Original Plan; (e) any Beneficiary designation in effect under the Original Plan immediately before its amendment and continuation in the form of this Plan which effectively meets the requirements contained in Section 2.3 hereof shall be deemed to be a valid Beneficiary designation pursuant to Section 2.3 of this Plan, unless and until the Participant or former Participant revokes such Beneficiary designation or makes a new Beneficiary designation under this Plan. If the Beneficiary designation form does not meet the requirements of Section 2.3 hereunder, the Participant's spouse shall be deemed to be his Beneficiary. If the Participant is unmarried, or his spouse does not survive him, his estate shall be deemed his Beneficiary. (f) if the Original Plan's vesting schedule (or this Plan's vesting schedule) or the Plan is amended or changed in any way that directly or indirectly affects the computation of a Participant's nonforfeitable interest in his Account derived from Employer contributions, each such Participant with at least three (3) Years of Service with the Employer may elect, within a reasonable period after the adoption of the amendment or change, to have his nonforfeitable percentage computed under the Plan without regard for the amendment or change. For any Participant who does not have at least one (1) Hour of Service in any Plan Year beginning after December 31, 1988, the preceding sentence shall be applied by substituting "five (5) Years of Service" for "three (3) Years of Service" where such language appears therein. Any such election must be made during the period commencing on the date of the amendment or change and ending on the latest of: (i) sixty (60) days after that date; (ii) sixty (60) days after the effective date of the amendment or change; or (iii) sixty (60) days after such Participant is issued written notice of the amendment or change by the Plan Administrator or Employer. ARTICLE XIII. TOP-HEAVY PROVISIONS Section 13.1. Effect of Top-Heavy Status. The Plan shall be a "Top-Heavy Plan" for any Plan Year commencing after December 31, 1983, if any of the following conditions exist: (a) If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%) and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group. (b) If this Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans exceeds sixty percent (60%). (c) If this Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds sixty percent (60%). If the Plan is a Top-Heavy Plan in any Plan Year beginning after December 31, 1983, the provisions of Sections 13.3 through 13.6 shall supersede any conflicting provisions of the Plan or the Adoption Agreement. Section 13.2. Additional Definitions. Solely for purposes of this Article, the following terms shall have the meanings set forth below: (a) "Key Employee" means any Employee or former Employee (and the Beneficiaries of such Employee) who at any time during the Determination Period was an officer of the Employer if such individual's annual compensation exceeds 50 percent of the dollar limitation under Code Section 415(b)(1) (A), an owner (or considered an owner under Code Section 318) of one of the ten largest interests in the Employer if such individual's compensation exceeds 100 percent (100%) of the dollar limitation under Code Section 415(c)(1)(A), a five percent (5%) owner of the Employer, or one percent (1%) owner of the Employer who has an annual compensation of more than $150,000. Annual compensation means compensation as defined in Code Section 415(c)(3), of the Code, but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludible from the Employee's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b). The determination period is the plan year containing the Determination Date and the four (4) preceding Plan Years. The determination of who is a Key Employee will be made in accordance with Code Section 416(i)(1) and the Regulations thereunder. (b) "Determination Date" means the last day of the preceding Plan Year. For the first Plan Year of the Plan Determination Date shall mean the last day of that year. (c) "Top-Heavy Ratio" means: (i) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has not maintained any defined benefit plan which during the five (5) year period ending on the Determination Date(s) has or has had accrued benefits, the Top-Heavy Ratio for this plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the determination date(s) (including any part of any account balance distributed in the five (5) year period ending on the Determination Date(s)), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the five (5) year period ending on the Determination Date(s)), both computed in accordance with Code Section 416 and the Regulations thereunder. Both the numerator and denominator of the Top-Heavy Ratio are increased to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Code Section 416 and the Regulations thereunder. (ii) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer maintains or has maintained one or more defined benefit plans which during the five (5) year period ending on the Determination Date(s) has or has had any accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with (i) above, and the present value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all participants, determined in accordance with (i) above, and the present value of accrued benefits under the defined benefit plan or plans for all participants as of the Determination Date(s), all determined in accordance with Code Section 416 and the Regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top-Heavy Ratio are increased for any distribution of an accrued benefit made in the five (5) year period ending on the Determination Date. (iii) For purposes of (i) and (ii) above the value of account balances and the present value of accrued Valuation Date that falls within or ends with the twelve (12) month period ending on the Determination Date, except as provided in Code Section 416 and the Regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (A) who is not a Key Employee but who was a Key Employee in a prior year, or (B) who has not been credited with at least one (1) hour of service with any employer maintaining the plan at any time during the five (5) year period ending on the Determination Date will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code Section 416 and the Regulations thereunder. Deductible employee contributions will not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans the value of account balances and accrued benefits will be calculated with reference to the determination dates that fall within the same calendar year. (iv) The accrued benefit of a participant other than a Key Employee shall be determined under (i) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the employer, or (ii) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code Section 411(b)(1)(C). (d) "Permissive Aggregation Group" means the Required Aggregation Group of plans plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code Sections 401(a)(4) and 410. (e) "Required Aggregation Group" means (i) each qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the five (5) year period ending on the Determination Date (regardless of whether the plan has terminated), and (ii) any other qualified plan of the Employer which enables a plan described in (i) to meet the requirements of Code Sections 401(a)(4) or 410. (f) "Valuation Date" means (i) in the case of a defined contribution plan, the Determination Date, and (ii) in the case of a defined benefit plan, the date as of which funding calculations are generally made within the twelve (12) month period ending on the Determination Date. (g) "Employer" means the employer or employers whose employees are covered by this Plan and any other employer which must be aggregated with any such employer under Code Sections 414(b), (c), (m) and (o). (h) "Present Value" means the value based on an interest rate of five percent (5%) and mortality assumptions based on the 1971 GAM Mortality Table or such other interest rate or mortality assumptions as may be specified in the Adoption Agreement. Section 13.3. Minimum Allocations. (a) For any year in which the Plan is a Top-Heavy Plan, each Participant who is not a Key Employee and who is not separated from service at the end of the Plan Year shall receive allocations of Employer contributions and forfeitures under this Plan at least equal to three percent (3%) of Compensation (as defined in Section 2.6) for such year or, if less, the largest percentage of the first two hundred thousand dollars ($200,000) of compensation allocated on behalf of the Key Employee for the Plan Year where the Employer has no defined benefit plan which designates this Plan to satisfy Code Section 401. This minimum allocation shall be determined without regard for any Social Security contribution and shall be provided even though under other provisions the Participant would not otherwise be entitled to receive an allocation or would have received a lesser allocation because of (i) the Participant's failure to complete One Thousand (1,000) Hours of Service (or any equivalent provided in the Plan), or (ii) the Participant's failure to make mandatory Employee contributions to the Plan, or (iii) Compensation less than a stated amount. (b) The provision in (a) above shall not apply to any Participant to the extent the Participant is covered under any other plan or plans of the employer and the employer has provided in the Adoption Agreement that the minimum allocation or benefit requirement applicable to top-heavy plans will be met in the other plan or plans. (c) The minimum allocation required (to the extent required to be nonforfeitable under Section 416(b)) may not be forfeited under Code Sections 411(a)(3)(B) or 411(a)(3)(D). (d) For purposes of subsection (a) above, neither Elective Deferrals nor Employer Matching Contributions shall be taken into account for the purposes of satisfying the minimum top-heavy benefits requirement. Section 13.4. Benefit Limit Change. If the Employer maintains both the Plan and a defined benefit plan which cover one or more of the same Key Employees and the plans are Top-Heavy in a Plan Year, then Section 6.5(c) and (j) hereof shall be amended to substitute "one hundred percent (100%)" for the number "one hundred and twenty-five percent (125%)" where the latter appears therein. ARTICLE XIV. MISCELLANEOUS Section 14.1. Rights of Employees and Participants. No Employee or Participant shall have any right or claim to any benefit under the Plan except in accordance with the provisions of the Plan, and then only to the extent that there are funds available therefor in the hands of the Custodian. The establishment of the Plan shall not be construed as creating any contract of employment between the Employer and any Employee or otherwise conferring upon any Employee or other person any legal right to continuation of employment, nor as limiting or qualifying the right of the Employer to discharge any Employee without regard to the effect that such discharge might have upon his rights under the Plan. Section 14.2. Merger With Other Plans. The Plan shall not be merged or consolidated with, nor transfer its assets or liabilities to, any other plan unless each Participant, Beneficiary and other person entitled to benefits, would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he would have been entitled to receive if the Plan had terminated immediately prior to the merger, consolidation or transfer. Section 14.3. Non-Alienation of Benefits. The right to receive a benefit under the Plan shall not be subject in any manner to anticipation, alienation, or assignment, nor shall such right be liable for or subject to debts, contracts, liabilities or torts, either voluntarily or involuntarily. Any attempt by the Participant, Beneficiary or other person to anticipate, alienate or assign his interest in or right to a benefit or any claim against him seeking to subject such interest or right to legal or equitable process shall be null and void for all purposes hereunder to the extent permitted by ERISA and the Code. Notwithstanding the foregoing or any other provision of the Plan, the Administrator shall recognize and give effect to a qualified domestic relations order with respect to child support, alimony payments or marital property rights if such order is determined by the Administrator to meet the applicable requirements of Code Section 414(p). If any such order so directs, distribution of benefits to the alternate payee may be made at any time, even if the Participant is not then entitled to a distribution. The Administrator shall establish reasonable procedures relating to notice to the Participant and determinations respecting the qualified status of any domestic relations order. Section 14.4. Failure to Qualify. Notwithstanding anything in this Plan to the contrary, all contributions under the Plan made prior to the receipt by the Employer of a determination by the Internal Revenue Service to the effect that the Plan is qualified under Code Section 401 shall be made on the express condition that such a determination will be received, and in the event that the Internal Revenue Service determines upon initial application for a determination that the Plan is not so qualified or tax exempt, all contributions made by the Employer or Participants prior to the date of determination must be returned within one (1) year from the date of such determination, but only if the application for qualification is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan is adopted or such later date as the Secretary of the Treasury may prescribe. Section 14.5. Mistake of Fact; Disallowance of Deduction. Notwithstanding anything in this Plan to the contrary, any contributions made by the Employer which are conditioned on the deductibility of such amount under Code Section 404, to the extent of the amount disallowed, or which are made because of a mistake of fact must be returned to the Employer within one year after such disallowance or such mistaken contribution. Section 14.6. Participation under Prototype Plan. If the Plan as adopted by the Employer either fails to attain or maintain qualification under the Code, such Plan will no longer participate in this prototype plan and will be considered an individually designed plan. Section 14.7. Gender. Where the context admits, words used in the singular include the plural, words used in the plural include the singular, and the masculine gender shall include the feminine and neuter genders. Section 14.8. Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of the Plan, the text shall control. Section 14.9. Governing Law. Except to the extent governed by ERISA and any other applicable federal law, the Plan shall be construed, administered and enforced according to the laws of the state in which the Employer has its principal place of business. THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN ADOPTION AGREEMENT [STANDARDIZED] (PENSION PLAN) The undersigned Employer hereby adopts and establishes The Henlopen Fund Prototype Defined Contribution Retirement Plan. This Plan is subject to the terms set forth below in this Adoption Agreement. 1. EMPLOYER INFORMATION Name: Address: Telephone Number: (___) Employer Identification Number: Type of Entity: [_] Corporation [_] Partnership [_] Sole Proprietorship [_] Other (please describe) Employer's Taxable Year is [_] calendar year or [_] fiscal year beginning ______________________. 2. PLAN INFORMATION Plan Administrator (if other than the Employer): Name: Address: Telephone Number: (___) Plan Year is the [_] calendar year, [_] Employer's fiscal year, or [_] year beginning ___________________. 3. EFFECTIVE DATE Execution of this Adoption Agreement (check one): [_] Establishes a new plan. [_] Is an amendment to an Original Plan. This amendment is effective _____________, 19__. [_] Is an amendment to an Original Plan under which no further contributions will be made or participation permitted (a "frozen plan"). This amendment is effective __________, 19__. (You need not complete items 4, 5 or 6 and check item 7(A)(1)). The Effective Date of the Plan is ____________, 19__. (If this is an amended plan enter the date the Original Plan first started.) 4. ELIGIBILITY REQUIREMENTS (A) Please check one: [_] An Employee need not complete any waiting period. [_] In order to become a Participant, an employee must satisfy the following Age and Service Requirements: (1) An Employee must complete ____ (enter 1 or 2 years) Year(s) of Employment. If more than 1 year is selected, you must also check item 7(A)(1). A Year of Employment shall mean the 12 consecutive month period beginning on the date an Employee first performs an Hour of Service or an anniversary thereof during which the Employee has completed ________ (insert 1,000 or less) Hours of Service. Hours of Service shall be determined on the basis of the method elected below. Only one method may be elected. The method elected shall be applied to all Employees covered under the Plan. [_] On the basis of actual hours for which an Employee is paid or entitled to payment. [_] On the basis of days worked: An Employee shall be credited with 10 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the day. [_] On the basis of weeks worked: An Employee shall be credited with 45 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the week. [_] On the basis of months worked: An Employee shall be credited with 190 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the month. (2) An Employee must attain age ____ (not greater than age 21). (B) Union Employees shall be: [_] Included as eligible employees. [_] Excluded from participation in the Plan. Note: Union Employees must be covered by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits were the subject of good faith bargaining. The term "employee representatives" does not include any organization more than one-half of whose members are officers, executives or owners of the Employer. 5. COMPENSATION (A) A Participant's "Compensation" shall include (check one): [_] All taxable earnings for the Plan Year. [_] Only amounts earned after completion of the eligibility requirements selected in 4 above. (B) For any self-employed individual, Compensation means Earned Income. 6. EMPLOYER PENSION CONTRIBUTIONS (A) The Employer Pension Contribution for each Plan Year shall be ____% (not more than 25%) of the aggregate Compensation and Earned Income of eligible Participants. This contribution will be reduced by the amount of any forfeitures allocated to the accounts of Participants for such Plan Year. (B) Allocation Formulas The Employer Pension Contributions shall be allocated pursuant to the following formula (check one): (1) [_] Compensation Formula Employer Pension Contributions shall be allocated based on each eligible Participant's total Compensation for the Plan Year. Note: If the Integration Formula is elected under the Profit Sharing Plan, the Compensation Formula must be elected under this Plan. (2) [_] Integration Formula Employer Pension Contributions (and forfeitures) shall be allocated based on each eligible Participant's Compensation in excess of the Integration Level and total Compensation for the Plan Year, subject to the limitations set forth in Section 4.2(b) of the Plan. [_] The Integration Level shall be the taxable wage base for FICA tax purposes. [_] The Integration Level shall be $_________ (not to exceed the FICA taxable wage base). Note: If the Plan is top-heavy all eligible Participants must first be allocated 3% of their total Compensation and any remaining contribution may be allocated pursuant to the Integration Formula. 7. VESTING (A) A Participant shall have a nonforfeitable and fully vested interest in his Employer Pension Contribution Account under the following vesting schedule (check one): (1) [_] A Participant shall at all times have a nonforfeitable and fully vested interest. (2) [_] A Participant shall be fully vested after _____ (not more than 3) Years of Service. (3) [_] A Participant shall become vested in accordance with the following schedule: Vested Years of Service Percentage Less than 2 0% 2 20% 3 40% 4 60% 5 80% 6 or more 100% (B) A "Year of Service" shall mean any Plan year in which an Employee completes at least ____ (insert 1,000 or less) Hours of Service. Years of Service shall include all Years of Service with the Employer except as noted below (check one, both or none): (1) [_] All Years of Service prior to the effective date of this Plan (or a predecessor plan) shall be excluded. (2) [_] All Years of Service before the Plan Year in which the Participant attained age 18 shall be excluded. 8. PARTICIPANT AFTER-TAX CONTRIBUTIONS Participant Voluntary Contributions (check one): [_] Participant Voluntary Contributions are permitted. [_] Participant Voluntary Contributions are permitted only for non-highly compensated employees. [_] Participant Voluntary Contributions are not permitted. 9. NORMAL RETIREMENT AGE The Normal Retirement Age Shall be age ___ [insert an age not to exceed 65]. 10. LIMITATION ON ALLOCATIONS "Limitation Year", if other than a calendar year, shall mean the 12 consecutive month period ending on the last day of ________________________. Follow these instructions only if the Employer maintains (or has ever maintained) another qualified plan (other than the Profit Sharing Plan) which is either (i) a qualified defined contribution plan other than a Master or Prototype Plan or (ii) a qualified defined benefit plan in which any Participant in this Plan is (or was) a participant or could become a participant, or if the Employer maintains a welfare benefit fund or an individual medical account. To comply with Internal Revenue Code requirements, please attach appropriate provisions that limit the amount of Annual Additions allocated to any Participant's Account. If you do not attach the appropriate provisions, Sections 6.3. and 6.4 of the Plan will automatically apply. 11. TOP-HEAVY PROVISIONS The interest rate and mortality assumptions for determining Top-Heavy status shall be the assumptions designated under Section 13.2(h) of the Plan, unless different assumptions are selected below. The interest rate and mortality assumptions for determining present values to compute the Top-Heavy ratio shall be: Interest Rate: _____% Mortality Table: _____________________________ 12. ESTABLISHMENT OF ACCOUNTS (A) Unless elected below, the Custodian shall establish individual Custodial Accounts for each Participant. [_] The Custodian shall establish a single Custodial Account in the name of the Employer and the Employer shall keep all records for the individual Participants. (B) Unless elected below, a Participant shall be permitted to direct the investment of his Account balance. [_] Participant self-direction of the investment of his Account balance is not permitted. 13. CUSTODIAN The undersigned as Employer hereby appoints Firstar Trust Company as Custodian. 14. FEES The Custodian shall receive fees for its services in respect to each Participant's Account in accordance with the attached fee schedule. The fee schedule may be changed by the Custodian with advance notice from time to time. If not separately included, any acceptance fee listed in the attached schedule will be deducted from the initial contribution received from the Employer. Any acceptance or other Custodian fees included will be deducted equally from each Owner-Employee's contribution or Account. Annual maintenance fees for each Participant's Account and any fees directly related to activity in that Participant's Account shall be deducted annually and activity fees will be deducted at the time incurred. Sufficient Investment Company Shares will be redeemed to cover this fee. Extraordinary services resulting from unusual administrative responsibilities not contemplated by this schedule will be subject to such additional charges as will reasonably compensate the Custodian for the services performed. 15. FUNDING WAIVER In the event the Employer obtains a funding waiver under Code Section 412 from the Internal Revenue Service, the Employer shall amend the Plan by adding language which will override the affected provisions of the Plan and this Adoption Agreement (attach appropriate overriding language to this Adoption Agreement to comply with the Code). Note: An Employer that amends the Plan because of a waiver of the minimum funding requirements under Code Section 412 will no longer participate in this prototype Plan and will be considered to have adopted an individually designed plan. 16. REPRESENTATION OF EMPLOYER The Employer represents that it has consulted its legal and tax advisors with respect to the Plan. The Employer acknowledges that it may not continue participation under the Plan if it fails to attain or maintain tax qualification of the Plan or if it amends the Plan other than by a change in the Adoption Agreement. The Employer agrees that whenever a Participant contribution is made, the Employer will determine that the Participant has received the appropriate current Investment Company prospectus. The Employer represents that the Participant has received such prospectus by depositing contributions with the Custodian. The Employer acknowledges that if it has ever maintained or later adopts any plan (including after December 31, 1985, a welfare benefit fund, as defined in Code Section 419(e), which provides post-retirement medical benefits allocated to separate accounts for key employees, as defined in Code Section 419A(d)(3) or an individual medical account, as defined in Code Section 415(l)(2)) in addition to this Plan (or the Profit Sharing Plan), it may not rely on an opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Code Section 401. If the Employer adopts or maintains multiple plans and wishes reliance that the Plan is qualified, application for an individual determination letter should be made to the appropriate District Office of the Internal Revenue Service. 17. ADDITIONAL INFORMATION This Plan is sponsored by: Landis Associates, Inc. Suite 100 400 W. Ninth Street Wilmington, DE 19801 (302) 654-3131 Further information regarding this Plan may be obtained by contacting the Plan Sponsor at the address or telephone number listed above. The Plan Sponsor will inform the undersigned Employer of any amendments made to this Plan or of the discontinuance or abandonment of this Plan. Failure to properly fill out this Adoption Agreement may result in disqualification of this Plan. This Adoption Agreement can only be used with Plan document No. 01. Signature of Employer: Name of person signing above (please print): Date: CUSTODIAN ACCEPTANCE The undersigned hereby accepts appointment as Custodian under the Plan. FIRSTAR TRUST COMPANY By: _________________________ Date: _______________________ THE HENLOPEN FUND PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN ADOPTION AGREEMENT [STANDARDIZED] (PROFIT-SHARING PLAN) The undersigned Employer hereby adopts and establishes The Henlopen Fund Prototype Defined Contribution Retirement Plan. This Plan is subject to the terms set forth below in this Adoption Agreement. 1. EMPLOYER INFORMATION Name: Address: Telephone Number: (___) Employer Identification Number: Type of Entity: [_] Corporation [_] Partnership [_] Sole Proprietorship [_] Other (please describe) Employer's Taxable Year is [_] calendar year or [_] fiscal year beginning _____________________. 2. PLAN INFORMATION Plan Administrator (if other than the Employer): Name: Address: Telephone Number: (___) Plan Year is the [_] calendar year, [_] Employer's fiscal year, or [_] year beginning __________________. 3. EFFECTIVE DATE Execution of this Adoption Agreement (elect one): [_] Establishes a new plan. [_] Is an amendment to an Original Plan. This amendment is effective ____________, 19__. [_] Is an amendment to an Original Plan under which no further contributions will be made or participation permitted (a "frozen plan"). This amendment is effective ______________, 19__. (You need not complete items 4, 5 or 6 and check item 7(A)(l).) The Effective Date of the Plan is ____________, 19__. (If this is an amended plan enter the date the Original Plan first started.) 4. ELIGIBILITY REQUIREMENTS (A) Please check one: [_] An Employee need not complete any waiting period. [_] In order to become a Participant, an Employee must satisfy the following Age and Service Requirements (please fill in the blanks): (1) An Employee must complete ____ (enter 1 or 2 years) Year(s) of Employment. If more than 1 year is selected, you must also check item 7(A)(1). A Year of Employment shall mean the 12 consecutive month period beginning on the date an Employee first performs an Hour of Service or an anniversary thereof during which the Employee has completed _________ (insert 1,000 or less) Hours of Service. Hours of Service shall be determined on the basis of the method elected below. Only one method may be elected. The method elected shall be applied to all Employees covered under the Plan. [_] On the basis of actual hours for which an Employee is paid or entitled to payment. [_] On the basis of days worked: An Employee shall be credited with 10 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the day. [_] On the basis of weeks worked: An Employee shall be credited with 45 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the week. [_] On the basis of months worked: Employee shall be credited with 190 Hours of Service if the Employee would be credited with at least 1 Hour of Service during the month. (2) An Employee must attain age _____ (not greater than age 21). (B) Union Employees shall be: [_] Included as eligible employees. [_] Excluded from participation in the Plan. Note: Union Employees must be covered by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits were the subject of good faith bargaining. The term "employee representatives" does not include any organization more than one-half of whose members are officers, executives or owners of the Employer. 5. COMPENSATION (A) A Participant's "Compensation" shall include (check one): [_] All taxable earnings for the Plan Year. [_] Only amounts earned after completion of the eligibility requirements selected in item 4 above. (B) For any self-employed individual, Compensation means Earned Income. 6. EMPLOYER PROFIT SHARING CONTRIBUTIONS (A) The Employer Profit Sharing Contributions for each Plan Year shall be (check one): [_] A discretionary amount determined by the Employer, but not more than 15% of the aggregate Compensation and Earned Income of Participants eligible to share in such contribution for the Plan Year. [_] An amount equal to ____% (not more than 15%) of the aggregate Compensation and Earned Income of Participants eligible to share in such contribution for the Plan Year. (B) Employer Profit Sharing Contributions: [_] Shall be made out of Net Profits. [_] May be made without regard to Net Profits. (C) Allocation Formulas The Employer Profit Sharing Contributions (and) forfeitures) shall be allocated to the accounts of eligible Participants pursuant to the following formula (elect one): (1) [_] Compensation Formula Employer Profit Sharing Contributions (and forfeitures) shall be allocated based on each eligible Participant's total Compensation for the Plan Year. NOTE: If the Integration Formula is selected under the Pension Plan, the Compensation Formula must be selected under this Plan. (2) [_] Integration Formula Employer Profit Sharing Contributions (and forfeitures) shall be allocated based on each eligible Participant's Compensation in excess of the Intregration Level and total Compensation for the Plan Year, subject to the limitation set forth in Section 4.1(b) of the Plan. [_] The Integration Level shall be the taxable wage base for FICA tax purposes. [_] The Integration Level shall be $_________ (not to exceed the FICA taxable wage base). NOTE: If the Plan is top-heavy all eligible Participants must first be al1ocated 3% of their total Compensation and any remaining contributions may be allocated pursuant to the Intregration Formula. 7. VESTING (A) A Participant shall have a nonforfeitable and fully vested interest in his Employer Profit Sharing Contribution Account under the following vesting schedule (check one): (1) [_] A Participant shall at all times have a nonforfeitable and fully vested interest. (2) [_] A Participant shall be fully vested after _____ (not more than 3) Years of Service. (3) [_] A Participant shall become vested in accordance with the following schedule: Vested Years of Service Percentage Less than 2 0% 2 20% 3 40% 4 60% 5 80% 6 or more 100% (B) A "Year of Service" shall mean any Plan Year in which an Employee completes at least ____ (insert 1,000 or less) Hours of Service. Years of Service shall include all Years of Service with the Employer except as noted below (check one, both or none). (1) [_] All Years of Service prior to the effective date of this Plan (or a predecessor plan) shall be excluded. (2) [_] All Years of Service before the Plan Year in which the Participant attained age 18 shall be excluded. 8. CASH OR DEFERRED ARRANGEMENT (Section 401(k)) Please check one: [_] This Plan will include a cash or deferred arrangement (complete the remainder of this Section). The Effective Date of this Cash or Deferred Arrangement (Section 401(k)) is ________________, l9__. [_] This Plan will not include a cash or deferred arrangement (do not complete the remainder of this Section). (A) Elective Deferrals. (1) An Employee shall be eligible to make Elective Deferrals under Article V of the Plan upon satisfying the following eligibility requirements: [_] An Employee must complete _____ (not greater than 1 year) Years of Employment. [_] An Employee must attain age ____ (not greater than 21). [_] Union Employees are excluded from making Elective Deferrals. [_] All Employees are eligible to make Elective Deferrals. (2) An Employee may elect to make Elective Deferrals to the Plan equal to a percentage of regular salary or wages for a pay period as specified in a salary reduction agreement. The maximum percentage of Elective Deferrals shall be _____%. [_] Elective Deferrals may be based on cash bonuses paid to the Employee. The maximum percentage of such Elective Deferrals shall be _____%. (3) An Employee may change the rate of his Elective Deferrals: [_] On the first day of each Plan Year. [_] And on the following additional dates: ______________________ (4) [_] Recharacterization of excess contributions will be available only for non-highly compensated employees. (B) Matching Contributions (1) [_] The percentage of Elective Deferrral contributions which are matched is: [_] ____%. [_] of the first _____% of Elective Deferrals. [_] A percentage determined by the Employer, but will not be more than 100%. (2) Matching Contributions are made: [_] Each pay period in which Elective Deferrals are made. [_] At the end of the Plan Year for Employees meeting the requirements for annual contributions. (3) Matching Contributions will vest under the following schedule (elect one): [_] Employee shall at all times have a nonforfeitable and fully vested interest in any Matching Contributions. [_] An Employee shall be fully vested in any Matching Contributions after ____ (not more than 3) Years of Service. [_] An Employee shall become vested in any Matching Contributions in accordance with the following schedule: Nonforfeitable Years of Service Percentage Less than 2 0% 2 20% 3 40% 4 60% 5 80% 6 or more 100% (C) Special Contributions [_] The Employer may make Qualified Matching Contributions subject to Section 5.4 of the Plan. [_] The Employer may make Qualified Non-Elective Contributions, subject to Section 5.4 of the Plan. Note: These special contributions are used to satisfy the nondiscrimination tests which apply to elective deferral and matching contributions. (D) Hardship Withdrawals [_] Withdrawals on account of financial hardship are allowed in accordance with Section 5.5(a) of the Plan. [_] Withdrawals on account of financial hardship are not allowed. 9. PARTICIPANT AFTER-TAX CONTRIBUTIONS Participant Voluntary Contributions (check one): [_] Participant Voluntary Contributions are permitted. [_] Participant Voluntary Contributions are permitted only for non-highly compensated employees. [_] Participant Voluntary Contributions are not permitted. 10. WITHDRAWAL OF EMPLOYER PROFIT SHARING CONTRIBUTIONS [_] A Participant who has participated in the Plan for at least 5 years may withdraw up to _____% of his vested Employer Profit Sharing Contribution Account after attaining age 59-1/2 or on account of a financial hardship in accordance with Section 8.6 of the Plan. Note: Withdrawals are not permitted if the Integration Formula is selected in item 6(C)(2). [_] Withdrawals are not permitted. 11. NORMAL RETIREMENT AGE The Normal Retirement Age shall be age ___ [insert an age not to exceed 65]. 12. LIMITATION ON ALLOCATIONS "Limitation Year", if other than a calendar year, shall mean the 12 consecutive month period ending on the last day of _______________________. Follow these instructions only if the Employer maintains (or has ever maintained) another qualified plan (other than the Pension Plan) which is either (i) a qualified defined contribution plan other than a Master or Prototype Plan or (ii) a qualified defined benefit plan in which any Participant in this Plan is (or was) a participant or could become a participant, or if the Employer maintains a welfare benefit fund or an individual medical account. To comply with Internal Revenue Code requirements, please attach appropriate provisions that limit the amount of Annual Additions allocated to any Participant's Account. If you do not attach the appropriate provisions, Sections 6.3. and 6.4 of the Plan will automatically apply. 13. TOP-HEAVY PROVISIONS The interest rate and mortality assumptions for determining Top-Heavy status shall be the assumptions designated under Section 13.2(h) of the Plan, unless different assumptions are selected below. The interest rate and mortality assumptions for determining present values to compute the Top-Heavy ratio shall be: Interest Rate: _____% Mortality Table: _____________________________ 14. ESTABLISHMENT OF ACCOUNTS (A) Unless elected below, the Custodian shall establish individual Custodial Accounts for each Participant. [_] The Custodian shall establish a single Custodial Account in the name of the Employer and the Employer shall keep all records for the individual Participants. (B) Unless elected below, a Participant shall be permitted to direct the investment of his Account balance. [_] Participant self-direction of the investment of his Account balance is not permitted. 15. CUSTODIAN The undersigned as Employer hereby appoints Firstar Trust Company as Custodian. 16. FEES The Custodian shall receive fees for its services in respect to each Participant's Account in accordance with the attached fee schedule. The fee schedule may be changed by the Custodian with advance notice. If not separately included, any acceptance fee listed in the attached schedule will be deducted from the initial contribution received from the Employer. Any acceptance or other Custodian fees included will be deducted equally from each Owner-Employee's contribution or Account. Annual maintenance fees for each Participant's Account and any fees directly related to activity in that Participant's Account shall be deducted annually and activity fees will be deducted at the time incurred. Sufficient Investment Company Shares will be redeemed to cover this fee. Extraordinary services resulting from unusual administrative responsibilities not contemplated by this schedule will be subject to such additional charges as will reasonably compensate the Custodian for the services performed. 17. REPRESENTATION OF EMPLOYER The Employer represents that it has consulted its legal and tax advisors with respect to the Plan. The Employer acknowledges that it may not continue participation under the Plan if it fails to attain or maintain tax qualification of the Plan or if it amends the Plan other than by a change in the Adoption Agreement. The Employer agrees that whenever a Participant Contribution is made, the Employer will determine that the Participant has received the appropriate current Investment Company prospectus. The Employer represents that the Participant has received suchprospectus by depositing contributions with the Custodian. The Employer acknowledges that if it has ever maintained or later adopts any plan (including after December 3l, l985, a welfare benefit fund, as defined in Code Section 4l9(e), which provides post-retirement medical benefits allocated to separate accounts for key employees, as defined in Code Section 4l9A(d)(3) or an individual medical account, as defined in Code Section 4l5(l)(2)) in addition to this Plan (or the Pension Plan), it may not rely on an opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Code Section 40l. If the Employer adopts or maintains multiple plans and wishes reliance that the Plan is qualified, application for an individual determination letter should be made to the appropriate District Office of the Internal Revenue Service. 18. ADDITIONAL INFORMATION This Plan is sponsored by: Landis Associates, Inc. Suite 100 400 W. Ninth Street Wilmington, DE 19801 (302) 654-3131 Further information regarding this Plan may be obtained by contacting the Plan Sponsor at the address or telephone number listed above. The Plan Sponsor will inform the undersigned Employer of any amendments made to this Plan or of the discontinuance or abandonment of this Plan. Failure to properly fill out this Adoption Agreement may result in disqualification of this Plan. This Adoption Agreement can only be used with Plan document No. 01. Signature of Employer: Name of person signing above (please print): Date: CUSTODIAN ACCEPTANCE The undersigned hereby accepts appointment as Custodian under the Plan. FIRSTAR TRUST COMPANY By: Date: EX-27 15
6 1,000 12-MOS JUN-30-1997 JUL-01-1997 JUN-30-1997 27,268 29,300 20 5 0 29,325 298 0 48 346 0 25,202 1,831 1,544 0 0 1,745 0 2,032 28,979 68 169 0 450 (213) 2,692 (895) 1,584 0 0 3,623 0 382 351 256 2,007 0 2,882 0 0 287 0 450 28,693 17.47 (0.08) 0.58 0 2.14 0 15.83 1.57 0 0
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