AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 18,
1996
1933 Act File No. 033-63493
1940 Act File No. 811-07367
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 1 [X]
(Check appropriate box or boxes)
BERGER INSTITUTIONAL PRODUCTS TRUST
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(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
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Gerard M. Lavin, 210 University Boulevard, Suite 900, Denver, CO 80206
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon after the
effective date of this registration statement as is practicable.
Registrant has elected to register an indefinite number of its
shares of beneficial interest pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Amount of registration fee paid
previously : $500.00.
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
SHARES OF BENEFICIAL INTEREST
($.01 Par Value)
Cross-Reference Sheet Pursuant to Rule 481
<TABLE>
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Item No. and Caption in Form N-1A Number of Section
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A. Prospectus
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1. Cover Page Cover Page
2. Synopsis Section 1
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Sections 2, 3, 4 and 10
5. Management of the Fund Sections 5 and 6
5A. Management's Discussion of Fund Performance Not Applicable
6. Capital Stock and Other Securities Sections 9, 10 and 11
7. Purchase of Securities Being Offered Sections 7 and 8
8. Redemption or Repurchase Section 7
9. Pending Legal Proceedings Not Applicable
B. Statement of Additional Information
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Section 12
13. Investment Objectives and Policies Sections 1 and 2
14. Management of the Funds Section 3
15. Control Persons and Principal Holders of Securities Sections 3 and 12
16. Investment Advisory and Other Services Sections 3, 4, 5 and 12
17. Brokerage Allocation and Other Practices Sections 1 and 6
18. Capital Stock and Other Securities Section 12
19. Purchase, Redemption and Pricing of Securities
Being Offered Sections 7, 8 and 9
20. Tax Status Section 10
21. Underwriters Not Applicable
22. Calculations of Performance Data Section 11
23. Financial Statements Financial Statements
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PROSPECTUS
Berger Institutional Products Trust (the "Trust") is an
open-end management investment company. The Trust currently consists
of three diversified series or portfolios (individually referred to as
a "Fund"), known as the Berger IPT - 100 Fund, the Berger IPT - Growth
and Income Fund and the Berger IPT - Small Company Growth Fund. Each
Fund has its own investment objective and policies. The Funds are
recently organized and have no operating history, but their investment
advisor , Berger Associates, Inc. ("Berger Associates") has been
in the investment advisory business for over 20 years. Shares of the
Funds are not offered directly to the public, but are sold only in
connection with investment in and payments under variable annuity
contracts and variable life insurance contracts (collectively
"variable insurance contracts") issued by life insurance companies
("Participating Insurance Companies"), as well as to certain qualified
retirement plans.
BERGER IPT - 100 FUND
The investment objective of the Berger IPT - 100 Fund is
long-term capital appreciation. The Berger IPT - 100 Fund seeks to
achieve this objective by investing primarily in common
stocks of established companies which the Fund's advisor
believes offer favorable growth prospects. Current income is not an
investment objective of the Berger IPT - 100 Fund, and any income
produced will be a by-product of the effort to achieve the Fund's
objective.
BERGER IPT - GROWTH AND INCOME FUND
The primary investment objective of the Berger IPT - Growth
and Income Fund is capital appreciation. A secondary objective is to
provide a moderate level of current income. The Berger IPT - Growth
and Income Fund seeks to achieve these objectives by investing
primarily in common stocks and other securities, such as convertible
securities or preferred stocks, which the Fund's advisor
believes offer favorable growth prospects and are expected to
also provide current income.
BERGER IPT - SMALL COMPANY GROWTH FUND
The investment objective of the Berger IPT - Small Company
Growth Fund is capital appreciation. The Berger IPT - Small Company
Growth Fund seeks to achieve this objective by investing
primarily in equity securities (including common and preferred
stocks, convertible debt securities and other securities having equity
features) of small growth companies with market capitalization of less
than $1 billion at the time of initial purchase.
This Prospectus sets forth concise information about each of
the Funds that a prospective purchaser of a variable insurance
contract or plan participant should consider before purchasing a
variable contract, allocating contract values to one or more of the
Funds or selecting one of the Funds as an investment option under a
qualified plan. It should be read carefully in conjunction with any
separate account prospectus of the specific insurance product or
qualified plan documents that accompany this Prospectus and retained
for future reference. Additional information about the Funds has been
filed with the Securities and Exchange Commission. A copy of the
Statement of Additional Information, which is incorporated in its
entirety by this reference into the Prospectus, is available upon
request without charge by writing the Berger Funds, c/o Berger
Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-303-329-
0200 or 1-800-706-0539 or by writing or calling a Participating
Insurance Company.
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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 DOES NOT CONSTITUTE AN OFFER TO SELL
SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH STATE.
The date of this Prospectus and the Statement of Additional
Information referred to above is May 1, 1996 .
<PAGE>
Table of Contents
Section Page
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1. Fee Tables. . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Introduction. . . . . . . . . . . . . . . . . . . . . . . . 2
3. Investment Objectives and Policies and Risk Factors . . . . 2
4. Portfolio Turnover. . . . . . . . . . . . . . . . . . . . . 9
5. Management and Investment Advice. . . . . . . . . . . . . . 9
6. Expenses of the Funds . . . . . . . . . . . . . . . . . . . 11
7. How to Purchase and Redeem Shares in the Funds. . . . . . . 12
8. How the Net Asset Value Is Determined . . . . . . . . . . . 13
9. Income Dividends, Capital Gains Distributions and Tax
Treatment . . . . . . . . . . . . . . . . . . . . . . . . . 13
10. Additional Information. . . . . . . . . . . . . . . . . . . 14
11. Performance . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Shareholder Inquiries . . . . . . . . . . . . . . . . . . . 17
<PAGE>
1. FEE TABLES
SHAREHOLDER TRANSACTION EXPENSES (APPLICABLE TO ALL THREE FUNDS)
Maximum Sales Load Imposed on Purchases 0%
Maximum Sales Load Imposed on Reinvested Dividends 0%
Deferred Sales Load 0%
Redemption Fees 0%
Exchange Fee 0%
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Other Expenses/*/ Total Fund
Fee Operating
Expenses/*/
Berger IPT - 100 Fund .75% .22% .97%
Berger IPT - Growth and .75% .22% .97%
Income Fund
Berger IPT - Small Company .90% .22% 1.12%
Growth Fund
EXAMPLES
You would pay the following expenses on a $1,000 investment,
assuming 5% annual return, and assuming redemption at the end of each
time period:
1 Year/*/ 3 Years/*/
Berger IPT - 100 Fund $10 $31
Berger IPT - Growth and Income $10 $31
Fund
Berger IPT - Small Company $11 $35
Growth Fund
/*/ Based on estimated expenses for the Funds' first year of
operations.
THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES,
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AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH
MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT.
The purpose of the preceding tables is to assist the
investor in understanding the various costs and expenses that an
investor in any of the Funds will bear directly or indirectly. In the
fee table, "Other Expenses" and "Total Fund Operating Expenses" are
based on estimated amounts for the Funds' first year of operation.
The Funds' investment advisor has agreed to waive its
advisory fee to the extent that normal operating
expenses in any fiscal year, including the management fee but
excluding brokerage commissions, interest, taxes and extraordinary
expenses, of each of the Berger IPT - 100 Fund and the Berger
IPT - Growth and Income Fund exceed 1.00%, and the
normal operating expenses in any fiscal year of the
Berger IPT - Small Company Growth Fund exceed 1.15%, of the
respective Fund's average daily net assets. The Funds'
expenses are described in greater detail under "Management and
Investment Advice" and "Expenses of the Funds".
2. INTRODUCTION
The Berger IPT - 100 Fund, the Berger IPT - Growth and
Income Fund and the Berger IPT - Small Company Growth Fund are all
diversified portfolios or series of the Berger Institutional Products
Trust, a management investment company. The Funds sell and redeem
their shares at net asset value without any sales charges, commissions
or redemption fees. Sales charges for variable insurance contracts
are described in the accompanying separate account prospectuses
relating to those contracts ("Separate Account Prospectuses"). Each
variable insurance contract involves fees and expenses not described
in this Prospectus. Certain Funds may not be available in connection
with a particular contract and certain contracts may limit allocations
among the Funds. See the Separate Account Prospectuses for
information regarding contract fees and expenses and any restrictions
on purchases or allocations.
This Prospectus describes the securities offered by each of
the Funds. Because the Funds have the same investment advisor ,
officers and trustees and have similar investment restrictions and
investment privileges, the Funds believe you will find this combined
Prospectus useful and informative in understanding the important
features of the Funds and their similarities and differences.
3. INVESTMENT OBJECTIVES AND POLICIES AND RISK FACTORS
The Berger IPT - 100 Fund, the Berger IPT - Growth and
Income Fund and the Berger IPT - Small Company Growth Fund are each
separate Funds of the Berger Institutional Products Trust, each with
its own portfolio of securities selected to achieve its particular
investment objective. Since the shares of the Funds primarily
represent an investment in common stocks, the net asset value of each
Fund will reflect changes in the market value of the securities held
in that Fund's portfolio, and the value of a Fund share will therefore
go up and down.
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Although the Funds are newly-organized, they
have the same investment objectives and follow
substantially the same investment strategies and policies as those
of certain publicly-offered investment companies managed by Berger
Associates (the "Berger retail funds"). The Berger IPT - 100
Fund corresponds to the Berger 100 Fund [R] . The Berger
IPT - Growth and Income Fund corresponds to the Berger
Growth and Income Fund. The Berger IPT - Small Company Growth
Fund corresponds to the Berger Small Company Growth Fund [R].
As described below under "Management and Investment Advice," the same
persons who serve as portfolio managers of the Funds also serve as
portfolio managers of the corresponding Berger retail funds.
Although it is anticipated that each Fund and its
corresponding retail fund will hold similar securities selections,
their investment results are expected to differ. In particular,
differences in asset size and in cash flow resulting from purchases
and redemption of Fund shares may result in different security
selections, differences in the relative weightings of securities or
differences in the prices paid for particular portfolio holdings.
Expenses and expense limitations of each Fund and its corresponding
retail fund are expected to differ. The variable insurance contract
owner will also bear various insurance related costs at the insurance
company level and should refer to the accompanying Separate Account
Prospectus for a summary of contract fees and expenses.
BERGER IPT - 100 FUND. The investment objective of the
Berger IPT - 100 Fund is long-term capital appreciation. Current
income is not an investment objective of the Berger IPT - 100 Fund,
and any income produced will be a by-product of the effort to achieve
the Fund's objective.
In selecting its portfolio securities, the Berger IPT - 100
Fund places primary emphasis on established companies which it
believes to have favorable growth prospects , regardless of the
company's size . Common stocks usually constitute all or most of
the Fund's investment portfolio, but the Fund remains free to invest
in securities other than common stocks, and may do so when
deemed appropriate by the investment advisor to
achieve the objective of the Fund. The Fund may, from time to
time, take substantial positions in securities convertible into common
stocks, and it may also purchase government securities, preferred
stocks and other senior securities if its advisor believes
these are likely to be the best suited at that time to achieve the
Fund's objective. The Fund's policy of investing in securities
believed to have a potential for capital growth means that a Fund
share may be subject to greater fluctuations in value than if the Fund
invested in other securities.
BERGER IPT - GROWTH AND INCOME FUND. The primary investment
objective of the Berger IPT - Growth and Income Fund is capital
appreciation. A secondary objective is to provide a moderate level of
current income. However, neither capital appreciation nor a fixed or
moderate rate of current income can be assured, and in periods of low
interest rates and yields on securities, the income available for
distribution to the Fund shareholders will likely be substantially
reduced or eliminated.
In selecting its portfolio securities, the Berger IPT -
Growth and Income Fund places primary emphasis on securities which it
believes offer favorable growth prospects and are expected to
also provide current income. Common stocks of companies with mid-
sized to large market capitalizations usually constitute the
majority of the Fund's investment portfolio . Market
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capitalization is defined as total current market value of a company's
outstanding common stock. The Fund also invests in senior
securities such as convertible securities, preferred stocks,
government securities and corporate bonds, as seems appropriate from
time to time. Attention is given to the anticipated reliability of
income as well as to its indicated current level.
BERGER IPT - SMALL COMPANY GROWTH FUND. The investment
objective of the Berger IPT - Small Company Growth Fund is capital
appreciation. The Fund seeks to achieve its investment objective by
investing its assets principally in a diversified group of equity
securities of small growth companies with market capitalization of
less than $1 billion at the time of initial purchase. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Under normal circumstances, the Berger IPT
- - Small Company Growth Fund will invest at least 65% of its assets in
equity securities of such companies, consisting of common and
preferred stock and other securities having equity features such as
convertible bonds, warrants and rights (subject to certain
restrictions). The balance of the Fund may be invested in equity
securities of companies with market capitalization in excess of $1
billion, government securities, short-term investments or other
securities as described on the following pages. Because income is not
an objective of the Berger IPT - Small Company Growth Fund, any income
produced will be a by-product of the effort to achieve the Fund's
objective of capital appreciation.
In selecting its portfolio securities, the Berger IPT -
Small Company Growth Fund places primary emphasis on companies which
it believes have favorable growth prospects. The Fund seeks to
identify small growth companies that either occupy a dominant position
in an emerging industry or a growing market share in larger fragmented
industries. While these companies may present above average risk,
management believes they may have the potential to achieve long-term
earnings growth rates substantially in excess of the growth of
earnings of other companies.
Investments in small growth companies may involve greater
risks and volatility than more traditional equity investments due to
some of these companies potentially having limited product lines,
reduced market liquidity for the trading of their shares and less
depth in management than more established companies. For this reason,
the Berger IPT - Small Company Growth Fund is not intended as a
complete investment vehicle but rather as an investment for persons
who are in a financial position to assume above average risk and share
price volatility over time. Realizing the full potential of small
growth companies frequently takes time. As a result, the Berger IPT -
Small Company Growth Fund should be considered as a long-term
investment vehicle.
* * *
In general, investment decisions for the Funds are based on
an approach which seeks out successful companies because they are
believed to be more apt to become profitable investments. To evaluate
a prospective investment, the investment advisor analyzes
information from various sources, including industry economic trends,
earnings expectations and fundamental securities valuation factors to
identify companies which in management's opinion are more likely to
have predictable, above average earnings growth, regardless of the
company's geographic
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location. The advisor also takes into account a company's
management and its innovations in products and services in evaluating
its prospects for continued or future earnings growth.
The investment objective of the Berger IPT - 100 Fund, the
primary investment objective of the Berger IPT - Growth and Income
Fund and the investment objective of the Berger IPT - Small Company
Growth Fund are considered fundamental, meaning that they cannot be
changed without a shareholders' vote. The secondary investment
objective of the Berger IPT - Growth and Income Fund is not considered
fundamental, and therefore may be changed in the future by action of
the directors without shareholder vote. However, the Berger IPT -
Growth and Income Fund will not change its secondary investment
objective without giving its shareholders such notice as may be
required by law. If the Berger IPT - Growth and Income Fund changes
its secondary investment objective, shareholders should consider
whether the Fund remains an appropriate investment in light of their
then current financial position and needs. There can be no assurance
that any of the Funds' investment objectives will be realized.
Any of the Funds may increase their investment in government
securities and other short-term interest-bearing securities without
limit when the advisor believes market conditions warrant a
temporary defensive position, during which period it may be more
difficult for a Fund to achieve its investment objective. Following
is additional information about some of the other specific types of
securities in which the Funds may invest.
FOREIGN SECURITIES. Each Fund may invest in both domestic
and foreign securities. Investments in foreign securities involve
some risks that are different from the risks of investing in
securities of U.S. issuers, such as the risk of fluctuations in the
value of the currencies in which they are denominated, the risk of
adverse political and economic developments and, with respect to
certain countries, the possibility of expropriation, confiscatory
taxation or limitations on the removal of funds or other assets of the
Funds. Securities of some foreign companies, particularly those of
developing countries, are less liquid and more volatile than
securities of comparable domestic companies. A developing country
generally is considered to be in the initial stages of its
industrialization cycle. Investing in the securities of developing
countries may involve exposure to economic structures that are less
diverse and mature, and to political systems that can be expected to
have less stability than developed countries. There also may be less
publicly available information about foreign issuers than domestic
issuers, and foreign issuers generally are not subject to the uniform
accounting, auditing and financial reporting standards and practices
applicable to domestic issuers. Delays may be encountered in settling
certain foreign securities transactions and the Funds will incur costs
in converting foreign currencies into U.S. dollars. The Funds will
consider the political and economic conditions in a country, the
prospect for changes in the value of its currency and the liquidity of
an investment in that country's securities markets in selecting
investments in foreign securities.
CONVERTIBLE SECURITIES. Each Fund may purchase securities
which are convertible into common stock when management of the Funds
believes they offer the potential for a higher total return than
nonconvertible securities. While fixed income securities generally
have a priority claim on a corporation's assets over that of common
stock, some of the convertible securities which the Funds may hold are
high-yield/high-risk securities that are subject to special risks,
including the risk of default in interest or principal payments which
could result in a loss of income to the Funds or a decline in the
market value of the securities. Convertible securities
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often display a degree of market price volatility that is comparable
to common stocks. The credit risk associated with convertible
securities generally is reflected by their being rated below
investment grade by organizations such as Moody's Investors Service,
Inc. , and Standard & Poor's Corporation. The Funds have no
pre-established minimum quality standards for convertible securities
and may invest in convertible securities of any quality, including
lower rated or unrated securities. However, under normal
circumstances, none of the Funds will invest in any security in
default at the time of purchase or in any nonconvertible debt
securities rated below investment grade, and each Fund will invest
less than 20% of the market value of its assets at the time of
purchase in convertible securities rated below investment grade. For
a further discussion of debt security ratings, see Appendix A to the
Statement of Additional Information.
ZEROS/STRIPS. The Berger IPT - 100 Fund and the Berger IPT
- - Growth and Income Fund may each invest in zero coupon bonds or in
"strips". Zero coupon bonds do not make regular interest payments;
rather, they are sold at a discount from face value. Principal and
accreted discount (representing interest accrued but not paid) are
paid at maturity. "Strips" are debt securities that are stripped of
their interest coupon after the securities are issued, but
otherwise are comparable to zero coupon bonds. The market values of
"strips" and zero coupon bonds generally fluctuate in response to
changes in interest rates to a greater degree than do interest-paying
securities of comparable term and quality. None of the Funds will
invest in mortgage-backed or other asset-backed securities.
REPURCHASE AGREEMENTS. Each Fund is authorized to invest in
repurchase agreements. A repurchase agreement is a means of investing
cash for a short period. In a repurchase agreement, a seller
(typically a U.S. commercial bank or recognized U.S. securities
dealer) sells securities to the Fund and agrees to repurchase the
securities at the Fund's cost plus interest within a specified period
(normally one day). In these transactions, the securities purchased
by the Fund will have a total value equal to, or in excess of, the
value of the repurchase agreement, and will be held by the Fund's
custodian bank until repurchased. These transactions must be fully
collateralized at all times by debt securities
(generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance or a
certificate of deposit), but involve some credit risk to the Fund if
the other party defaults on its obligation and the Fund is delayed or
prevented from liquidating the collateral. Repurchase agreements
maturing in more than seven days will be considered illiquid for
purposes of the restriction on each Fund's investment in illiquid and
restricted securities.
LENDING PORTFOLIO SECURITIES. Each Fund may lend its
portfolio securities to qualified institutional investors such as
brokers, dealers or other financial organizations. This practice
permits a Fund to earn income, which, in turn, can be invested in
additional securities to pursue the Fund's investment objective.
Loans of securities by a Fund will be collateralized by cash, letters
of credit, or securities issued or guaranteed by the U.S. Government
or its agencies. The collateral will equal at least 100% of the
current market value of the loaned securities, marked-to-market on a
daily basis. A Fund bears a risk of loss in the event that the other
party to a securities lending transaction defaults on its obligations
and the Fund is delayed in or prevented from exercising its rights to
dispose of the collateral, including the risk of a possible decline in
the value of the collateral securities during the period in which the
Fund seeks to assert these rights, the risk of incurring expenses
associated with asserting these rights,
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and the risk of losing all or a part of the income from the
transaction. None of the Funds will lend any security if, as a result
of such loan, the aggregate value of securities then on loan would
exceed 33-1/3% of the market value of the Fund's total assets.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. Each Fund is
authorized to make limited investments in certain types of futures,
forwards and options, but only for the purpose of hedging, that is,
protecting against the risk of market movements that may adversely
affect the value of a Fund's securities or the price of securities
that a Fund is considering purchasing. Although a hedging transaction
may, for example, partially protect a Fund from a decline in the value
of a particular security or its portfolio generally, the cost of the
transaction will reduce the potential return on the security or the
portfolio. Following is a summary of the futures, forwards and
options in which the Funds may invest, provided that no more than 5%
of a Fund's net assets at the time of purchase may be invested
in initial margins for financial futures transactions and premiums for
options.
Financial futures and forwards are contracts on financial
instruments (such as securities, securities indices and foreign
currencies) that obligate the holder to take or make future delivery
of a specified quantity of the underlying financial instrument.
Futures are generally exchange traded and settled with cash, while
forwards are privately negotiated and contemplate actual delivery of
the underlying financial instrument (usually a foreign currency). An
option gives the holder the right, but not the obligation, to purchase
or sell something (such as a security) at a specified price at any
time until the expiration date. An option on a securities index is
similar, except that upon exercise, settlement is made in cash rather
than in specific securities. Each Fund may only write call options
(that is, issue options that obligate the Fund to deliver if the
option is exercised by the holder) that are "covered" and only up to
25% of a Fund's total assets. A call option is considered "covered"
if a Fund already owns the security on which the option is written or,
in the case of an option written on a securities index, if a Fund owns
a portfolio of securities believed likely to substantially replicate
movement of the index.
Investments in futures and forwards by a Fund involve the
potential for a loss that may exceed the amount of initial margin the
Fund would be permitted to invest in the contracts under its
investment limitations, or in the case of a call option written by a
Fund, may exceed the premium received for the option. However, each
Fund will be permitted to make such investments for hedging purposes
only, and only if the aggregate amount of its obligations under these
investments does not exceed the total market value of the assets the
Fund is attempting to hedge, such as a portion or all of its exposure
to equity securities or its holding in a specific foreign currency.
To ensure that each Fund will be able to meet its obligations under
its futures and forward contracts and its obligations under options
written by that Fund, each Fund will be required to place high-grade
liquid assets in a segregated account with its custodian bank or to
set aside portfolio securities to "cover" its position in these
investments. Assets segregated or set aside generally may not be
disposed of so long as the Fund maintains the positions requiring
segregation or cover, which could diminish the Fund's return due to
the opportunity losses of foregoing other potential investments with
such assets.
The principal risks of the Funds investing in futures
transactions, forward contracts and options are: (a) losses resulting
from market movements not anticipated by
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the Funds; (b) possible imperfect correlation between movements in the
prices of futures, forwards and options and movements in the prices of
the securities or currencies hedged or used to cover such positions;
(c) lack of assurance that a liquid secondary market will exist for
any particular futures, forwards or options at any particular time,
and possible exchange-imposed price fluctuation limits, either of
which may make it difficult or impossible to close a position when so
desired; (d) the need for additional information and skills beyond
those required for the management of a portfolio of traditional
securities; and (e) possible need to defer closing out certain futures
or options contracts in order to continue to qualify for beneficial
tax treatment afforded "regulated investment companies" under the
Internal Revenue Code of 1986, as amended. In addition, when a Fund
enters into an over-the-counter contract with a counterparty, the Fund
will assume counterparty credit risk, that is, the risk that the
counterparty will fail to perform its obligations, in which case the
Fund could be worse off than if the contract had not been entered
into. Additional detail concerning the Funds' investment in futures,
forwards and options and the risks of such investments can be found in
the Statement of Additional Information.
ILLIQUID SECURITIES. Each Fund is authorized to invest in
securities which are illiquid because they are subject to restrictions
on their resale ("restricted securities") or because, based upon their
nature or the market for such securities, they are not readily
marketable. However, none of the Funds may purchase any security, the
purchase of which would cause the Fund to invest more than 15% of its
net assets, measured at the time of purchase, in illiquid securities.
Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Certain
restricted securities, such as Rule 144A securities, may be treated as
liquid under this restriction if a determination is made that such
securities are readily marketable. Investments in illiquid securities
involve certain risks to the extent that a Fund may be unable to
dispose of such a security at the time desired or at a reasonable
price or, in some cases, may be unable to dispose of it at all. In
addition, in order to resell a restricted security, a Fund might have
to incur the potentially substantial expense and delay associated with
effecting registration.
INVESTMENT RESTRICTIONS
In addition to its investment objective, each Fund has
adopted a number of restrictions on its investments and other
activities that may not be changed without shareholder approval. For
example, neither the Berger IPT - 100 Fund nor the Berger IPT - Growth
and Income Fund may purchase securities of any issuer (except U.S.
Government securities) if, immediately after and as a result of such
purchase, the value of such Fund's holdings in the securities of that
issuer exceeds 5% of the value of its total assets or it owns more
than 10% of the outstanding voting securities or of any class of
securities of such issuer. The Berger IPT - Small Company Growth Fund
is similarly restricted with respect to 75% of its total assets.
Further, neither the Berger IPT - 100 Fund nor the Berger
IPT - Growth and Income Fund may borrow in excess of 5% of its assets
or pledge assets taken at market value to an extent greater than 10%
of its total assets taken at cost (and no borrowing may be undertaken
except from banks as a temporary measure for extraordinary or
emergency purposes), subject to certain exclusions, and neither may
make loans (except that each Fund may enter into repurchase agreements
in accordance with the Fund's investment policies). The
-8-<PAGE>
Berger IPT - Small Company Growth Fund may not borrow money, except
borrowing undertaken from banks for temporary or emergency purposes in
amounts not to exceed 25% of the market value of its assets (including
the amount borrowed) and may not make loans (except that the Fund may
enter into repurchase agreements and may lend portfolio securities in
accordance with the Fund's investment policies). None of the Funds
may invest in any one industry more than 25% of the value of its
assets at the time of investment, nor invest in commodities, except,
only for the purpose of hedging, in certain futures, forwards and
options as specified in greater detail above and in the Statement of
Additional Information.
Also, none of the Funds currently intends to make short
sales of securities, except short sales of securities which the Fund
owns or has the right to acquire at no additional cost (i.e., short
sales "against the box"), and does not intend to purchase or sell
securities on a when-issued or delayed delivery basis if as a result,
more than 5% of its assets are invested in such securities, although
these restrictions may be changed without shareholder approval. For
more detail about the Funds' investment restrictions, see the
Statement of Additional Information.
4. PORTFOLIO TURNOVER
In pursuit of each Fund's investment objective, management
continuously reviews its investments and makes portfolio changes
whenever changes in the market, industry trends or the outlook for the
growth of any portfolio security indicate to management that the
objective could be better achieved by investment in another security,
regardless of portfolio turnover. In addition, portfolio turnover
may increase as a result of large amounts of purchases and redemptions
of shares of a Fund due to economic, market or other factors that are
not within the control of management. The annual portfolio
turnover rates of the Funds may at times exceed 100%. An annual
turnover rate of 100% or more would be higher than that of most other
funds. Increased portfolio turnover would necessarily result in
correspondingly higher brokerage costs for the Funds and may result in
the acceleration of net taxable gains.
5. MANAGEMENT AND INVESTMENT ADVICE
The trustees of the Trust are responsible for major
decisions relating to each Fund's policies and objectives. They also
oversee the operation of each Fund by its officers and review the
investment performance of the Funds on a regular basis.
The investment advisor to each of the Funds is Berger
Associates, 210 University Boulevard, Suite 900, Denver, CO 80206.
Berger Associates furnishes continuous advice and recommendations to
each Fund regarding securities to be purchased and sold by the Fund.
Berger Associates, therefore, formulates a continuing program for
management of the assets of each Fund consistent with the investment
objectives and policies established by the trustees of the Trust.
Berger Associates also provides office space for each Fund and pays
the salaries, fees and expenses of all Fund officers and directors or
trustees of the Funds who are interested persons of Berger Associates.
Berger Associates serves as investment advisor to mutual funds,
pension and profit-sharing plans, and institutional and private
investors.
Rodney L. Linafelter, Vice President and Chief Investment
Officer of Berger Associates, is the President and portfolio manager
of the Berger IPT - 100 Fund and the Berger
-9-<PAGE>
IPT - Growth and Income Fund and as such is responsible for the
investments of both of these Funds, including the day-to-day
investment decisions for the Funds. Mr. Linafelter is also a
trustee of the Trust and a director or trustee of each of the Berger
retail funds. As Chief Investment Officer of Berger Associates, Mr.
Linafelter has management responsibilities with respect to all
investment activities of the Trust.
Mr. Linafelter joined Berger Associates in January 1990,
where he has served as a portfolio manager for the Berger 100 Fund and
the Berger Growth and Income Fund, as well as for retirement
plans and institutional and private investors. From April 1986 to
December 1989, Mr. Linafelter was employed as a Financial Consultant
(registered representative) with Merrill Lynch, Pierce, Fenner &
Smith, Inc., providing investment advice to institutions and
individuals.
William R. Keithler is the President and portfolio manager
of the Berger IPT - Small Company Growth Fund and is primarily
responsible for the investments of the Fund, including the day-
to-day investment decisions for the Fund. Mr. Keithler
also serves as President and portfolio manager for the Berger Small
Company Growth Fund and the Berger New Generation Fund.
Mr. Keithler joined Berger Associates as Vice President-
Investment Management in December 1993. Previously, he was employed
by INVESCO Trust Company, Denver, Colorado, as Senior Vice President
(January 1993 to December 1993), Vice President (January 1991 to
January 1993) and Portfolio Manager (January 1988 to January 1991).
During his seven years with INVESCO, Mr. Keithler was portfolio
manager of several mutual funds, most recently INVESCO Dynamics Fund
and INVESCO Emerging Growth Fund. From 1982 to 1986, Mr. Keithler
was Vice President and portfolio manager with First Trust St. Paul, in
St. Paul, Minnesota.
William M.B. Berger is a director (Chairman of the Board) of
Berger Associates, a trustee of the Trust and a director or trustee of
each of the Berger retail funds. Although he is no longer involved in
making investment decisions for the Berger Funds , he was
founder of Berger Associates and its President from 1973 until 1994,
and he was a principal shareholder and executive officer of
predecessor investment advisory firms which served as investment
advisors to mutual funds and other investors from 1960. From 1950 to
1960, he was an investment officer in the trust department of The
Colorado National Bank of Denver in charge of common stock
investments.
Gerard M. Lavin, President and a director of Berger
Associates, is also President and a trustee of the Trust. In those
capacities, Mr. Lavin serves as the chief executive officer for Berger
Associates and the Trust, but does not participate in making
investment decisions for any of the Funds. In addition to his
positions with Berger Associates and the Trust, Mr. Lavin also serves
as a Vice President of DST Systems, Inc. Formerly, Mr. Lavin was
President and Chief Executive Officer of Investors Fiduciary Trust
Company (February 1992 to March 1995) and Chief Operating Officer of
SUNAMERICA Asset Management Co. (January 1990 to February
1992).
-10-<PAGE>
Under their Investment Advisory Agreements, the Berger IPT -
100 Fund and the Berger IPT - Growth and Income Fund each have agreed
to compensate Berger Associates for its investment advisory services
to the Fund by the payment of a fee at the annual rate of .75 of 1%
(0.75%) of the average daily net assets of the Fund. Under the
Investment Advisory Agreement for the Berger IPT - Small Company
Growth Fund, Berger Associates is compensated for its investment
advisory services to that Fund by the payment of a fee at the annual
rate of .9 of 1% (0.90%) of the average daily net assets of the
Fund. The management fees are higher than those paid by most other
mutual funds.
From time to time, Berger Associates may compensate
Participating Insurance Companies or their affiliates whose customers
hold shares of the Funds for providing a variety of administrative
services (such as recordkeeping and accounting) and investor support
services (such as responding to inquiries and preparing mailings to
shareholders). This compensation, which may be paid as a per account
fee or as a percentage of the average daily net assets invested in the
Funds by the compensated Participating Insurance Company, depending on
the nature, extent and quality of the services provided, will be paid
from Berger Associates' own resources and not from the assets of the
Funds.
Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 80% of the outstanding shares of Berger Associates.
KCSI is a publicly traded holding company whose primary subsidiaries
are engaged in transportation services and financial asset management.
KCSI also owns approximately 41% of the outstanding shares of
DST Systems, Inc. ("DST"), a publicly traded information and
transaction processing company which also acts as the Funds' sub-
transfer agent.
6. EXPENSES OF THE FUNDS
Each of the Funds has appointed Investors Fiduciary Trust
Company ("IFTC") as its recordkeeping and pricing agent to calculate
the daily net asset value of such Fund and to perform certain
accounting and recordkeeping functions required by the Fund. In
addition, IFTC also serves as the Funds' custodian, transfer agent and
dividend disbursing agent. IFTC has engaged DST as sub-agent to
provide transfer agency and dividend disbursing services for the
Funds. As noted above, approximately 41% of the outstanding
shares of DST are owned by KCSI.
For custodian, recordkeeping and pricing services, each Fund
pays fees to IFTC based on a percentage of its assets, subject to
certain minimums. Each Fund also pays a monthly fee based primarily
on the number of accounts maintained on behalf of the Fund for
transfer agency and dividend disbursing services, which fees are paid
by the Funds to IFTC and in turn passed through to DST as sub-agent.
In addition, the Funds reimburse IFTC and DST for certain out-of-
pocket expenses.
The trustees of each of the Funds have authorized Berger
Associates to place portfolio transactions on an agency basis through
DST Securities, Inc., a wholly-owned broker-dealer subsidiary of DST
("DSTS"). When transactions for a Fund are effected through DSTS, the
portion of the commissions received by it is credited against, and
thereby reduces, certain
-11-<PAGE>
operating expenses that the Fund would otherwise be obligated to pay.
No portion of the commissions is retained by DSTS.
In addition, under a separate Administrative Services
Agreement with each Fund, Berger Associates performs certain
administrative and recordkeeping services not otherwise performed by
IFTC, including the preparation of financial statements and reports to
be filed with regulatory authorities. Each Fund pays Berger
Associates a fee at the annual rate of one one-hundredth of one
percent (0.01%) of its average daily net assets for such services.
The Funds also incur other expenses, including accounting,
administrative and legal expenses.
Berger Associates has agreed to waive its
advisory fee to the extent that normal operating
expenses in any fiscal year, including the management fee but
excluding brokerage commissions, interest, taxes and extraordinary
expenses, of each of the Berger IPT - 100 Fund and the Berger IPT
- - Growth and Income Fund exceed 1.00%, and the
normal operating expenses in any fiscal year of the
Berger IPT - Small Company Growth Fund exceed 1.15%, of the
respective Fund's average daily net assets.
7. HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS
Shares of the Funds are sold by the Funds on a continuous
basis to separate accounts of Participating Insurance Companies or to
qualified plans. Investors may not purchase or redeem shares of the
Funds directly, but only through variable insurance contracts offered
through the separate accounts of Participating Insurance Companies or
through qualified retirement plans. You should refer to the
applicable Separate Account Prospectus or your plan documents for
information on how to purchase or surrender a contract, make partial
withdrawals of contract values, allocate contract values to one or
more of the Funds, change existing allocation among investment
alternatives, including the Funds, or select specific Funds as
investment options for a qualified plan. No sales charge is imposed
upon the purchase or redemption of shares of the Funds. Sales charges
for the variable insurance contracts or qualified plans are described
in the relevant Separate Account Prospectuses or plan documents.
Fund shares are purchased or redeemed at the net asset value
per share next computed after receipt of a purchase or redemption
order by a Fund, its agent or its delegatee. Payment for redeemed
shares will generally will be made within three business days
following the date of the request for redemption. However, payment
may be postponed under unusual circumstances, such as when normal
trading is not taking place on the New York Stock Exchange, an
emergency as defined by the Securities and Exchange Commission exists,
or as permitted by the Securities and Exchange Commission.
8. HOW THE NET ASSET VALUE IS DETERMINED
The price of each Fund's shares is based on the net asset
value of that Fund, which is determined at the close of the regular
trading session of the New York Stock Exchange (normally 4:00 p.m.,
New York time) each day that the Exchange is open.
The per share net asset value of each Fund is determined by
dividing the total value of its securities and other assets, less
liabilities, by the total number of shares outstanding.
-12-<PAGE>
In determining net asset value, securities are valued at market value
or, if market quotations are not readily available, at their fair
value determined in good faith pursuant to consistently applied
procedures established by the trustees. Money market
instruments maturing within 60 days are valued at amortized cost,
which approximates market value.
Since none of the Funds imposes any front end sales load or
redemption fee, both the purchase price and the redemption price of a
Fund share are the same and will be equal to the next calculated net
asset value of a share of that Fund.
9. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
Each of the Funds intends to declare dividends representing
the Fund's net investment income annually, normally in December. It
is also the present policy of each Fund to distribute annually all of
its net realized capital gains.
All dividends or capital gains distributions paid by a Fund
will be automatically reinvested in shares of that Fund at the net
asset value on the ex-dividend date unless an election is made
on behalf of a separate account or qualified plan to receive
distributions in cash.
Each of the Funds intends to qualify to be treated as a
separate regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). If they so
qualify and meet certain minimum distribution requirements, the Funds
will not be liable for Federal income tax on the amount of their
earnings that are distributed. If a Fund distributes annually
less than 98% of its income and gain, it will be subject to a
nondeductible excise tax equal to 4% of the shortfall .
In addition, each Fund intends to qualify under the diversification
requirements of Code Section 817(h) relating to insurance company
separate accounts. By meeting these and other requirements, the
Participating Insurance Companies, rather than the owners of the
variable insurance contracts, should be subject to tax on
distributions received with respect to Fund shares. The tax treatment
of distributions made to a Participating Insurance Company will depend
on the Participating Insurance Company's tax status. Participating
Insurance Companies should consult their own tax advisors
concerning whether such distributions are subject to Federal
income tax if retained as part of contract reserves. For further
information concerning Federal income tax consequences for the
owners of variable insurance contracts and qualified plan
participants, consult the appropriate Separate Account Prospectus or
plan documents.
Dividends and interest received by the Funds on foreign
securities may give rise to withholding and other taxes imposed by
foreign countries. It is expected that foreign taxes paid by the
Funds will be treated as expenses of the Funds. Tax conventions
between certain countries and the United States may reduce or
eliminate such taxes.
10. ADDITIONAL INFORMATION
The Funds are each separate series or portfolios established
under the Trust, a Delaware business trust organized on October 17,
1995. The Trust is authorized to issue an
-13-<PAGE>
unlimited number of shares of beneficial interest in series or
portfolios. Currently, the series comprising the Berger IPT - 100
Fund, the Berger IPT - Growth and Income Fund and the Berger IPT -
Small Company Growth Fund are the only portfolios established under
the Trust, although others may be added in the future. Shares of each
Fund are fully paid and nonassessable when issued. Each share has a
par value of $.01. All shares issued by a Fund participate equally in
dividends and other distributions by the Fund, and in the residual
assets of the Fund in the event of its liquidation.
The separate accounts of the Participating Insurance
Companies and the trustees of the qualified plans invested in the
Funds, rather than individual contract owners or plan participants,
are the shareholders of the Funds. However, each Participating
Insurance Company or qualified plan will vote such shares as required
by law and interpretations thereof, as amended or changed from time to
time. Under current law, a Participating Insurance Company is
required to request voting instructions from its contract owners and
must vote Fund shares held by each of its separate accounts in
proportion to the voting instructions received. Additional
information about voting procedures is contained in the applicable
Separate Account Prospectuses.
Shareholders of each Fund generally vote separately on
matters relating to that Fund, although they will vote together with
the holders of all other series of the Trust in the election of
trustees of the Trust and on all matters relating to the Trust as a
whole. Each full share of each Fund has one vote. Shares of each
Fund have noncumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of trustees can
elect 100% of the trustees if they choose to do so and, in such event,
the holders of the remaining less than 50% of the shares voting for
the election of trustees will not be able to elect any person or
persons as trustees. None of the Funds is required to hold annual
shareholder meetings unless required by the Investment Company Act of
1940 or other applicable law or unless called by the trustees.
If shareholders owning at least 10% of the outstanding
shares of the Trust so request, a special shareholders' meeting
will be held for the purpose of considering the removal of a trustee
of the Trust. Special meetings will be held for other purposes if the
holders of at least 25% of the outstanding shares of the Trust so
request. Subject to certain limitations, the Funds will facilitate
appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a trustee.
Each Fund sells its shares only to certain qualified
retirement plans and to variable annuity and variable life insurance
separate accounts of insurance companies that are unaffiliated with
Berger Associates and that may be unaffiliated with one another. The
Funds currently do not foresee any disadvantages to policyowners
arising out of the fact that each Fund offers its shares to such
entities. Nevertheless, the trustees intend to monitor events in
order to identify any material irreconcilable conflicts that may arise
and to determine what action, if any, should be taken in response to
such conflicts. If a conflict occurs, the trustees may require one or
more insurance company separate accounts or plans to withdraw its
investments in one or more of the Funds and to substitute shares of
another Fund. As a result, a Fund may be forced to sell securities at
disadvantageous prices. In addition, the trustees may refuse to sell
shares of any Fund to any separate account or qualified plan or may
suspend or terminate the offering of
-14-<PAGE>
shares of any Fund if such action is required by law or regulatory
authority or is deemed by the Fund to be in the best interests of the
shareholders of the Fund.
The Funds' transfer agent and dividend disbursing agent is
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, MO 64105. IFTC has engaged DST Systems, Inc. ("DST"),
P.O. Box 419958, Kansas City, MO 64141, as sub-agent to provide
transfer agency and dividend disbursing services for the Funds.
Owners of variable insurance contracts and qualified plan
administrators will receive annual and semiannual reports including
the financial statements of the Funds in which contract values or
qualified plan assets are invested. Each report will show the
investments owned by each Fund and the market values thereof, as well
as other information about the Funds and their operations.
11. PERFORMANCE
From time to time in advertisements, the Funds may discuss
their performance ratings as published by recognized mutual fund
statistical services, such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., or Morningstar, Inc., or by
publications of general interest such as The Wall Street Journal,
Investor's Business Daily, Barron's, Financial World or
Kiplinger's Personal Finance Magazine. In addition, the Funds may
compare their performance to that of recognized broad-based securities
market indices, including the Standard & Poor's 500 Stock Index, the
Dow Jones Industrial Average, the Russell 2000 Stock Index , the
Standard & Poor's 600 Small Cap Index or the Nasdaq Composite
Index, or more narrowly-based indices which reflect the market sectors
in which that Fund invests.
The total return of each Fund is calculated for any
specified period of time by assuming the purchase of shares of the
Fund at the net asset value at the beginning of the period. Each
dividend or other distribution paid by the Fund is assumed to have
been reinvested at the net asset value on the reinvestment date. The
total number of shares then owned as a result of this process is
valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of
the investment from the ending value and dividing the remainder by the
initial value.
Each Fund's total return reflects the Fund's performance
over a stated period of time. An average annual total return reflects
the hypothetical annually compounded return that would have produced
the same total return if the Fund's performance had been constant over
the entire period. Total return figures are based on the overall
change in value of a hypothetical investment in each Fund. Because
average annual total returns for more than one year tend to smooth out
variations in a Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.
A Fund's total return includes the effect of deducting that
Fund's expenses, but does not include any charges and expenses
attributable to a particular variable insurance contract or qualified
plan. Because shares of the Funds can be purchased only through a
variable insurance contract or qualified plan, the Funds' total return
data should be reviewed along with the description of charges and
expenses contained in the applicable Separate Account Prospectus
-15-<PAGE>
or plan documents. Total return for a Fund must always be accompanied
by, and reviewed with, comparable total return data for an associated
separate account, or data that would permit evaluation of the
magnitude of charges and expenses attributable to the contract or plan
that are not reflected in the Fund's total return.
Any performance figures for the Funds are based upon
historical results and do not assure future performance. The
investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
Although the Trust is newly-organized and the Funds do not
yet have their own performance records, each Fund has the same
investment objective and follows substantially the same investment
strategies as a corresponding Berger retail fund. The Berger retail
funds have the same investment advisor as the corresponding
Funds offered under this Prospectus. As described under "Management
and Investment Advice," the same persons who serve as portfolio
managers of the Funds also serve as portfolio managers of the
corresponding Berger retail funds.
Set forth in the table below is total return information for
each of the Berger retail funds, calculated as described above.
Investors should not consider this performance data as an indication
of the future performance of the Funds offered under this Prospectus.
The performance figures below reflect the deduction of the historical
fees and expenses paid by the Berger retail funds, and not those to be
paid by these Funds. The figures also do not reflect the deduction of
charges or expenses attributable to variable annuity or variable life
insurance contracts. As discussed above, investors should refer to
the applicable Separate Account Prospectus for information pertaining
to such contract charges and expenses. Moreover, although it is
anticipated that each Fund and its corresponding retail fund will hold
similar securities selections, their investment results are expected
to differ. In particular, differences in asset size and in cash flow
resulting from purchases and redemption of Fund shares may result in
different security selections, differences in the relative weightings
of securities or differences in the prices paid for particular
portfolio holdings.
The following table shows, where applicable, the average
annualized total returns for the Berger retail funds for the one-,
five- and ten-year periods ended September 30, 1995, and, for the
period from inception (or immediately prior to Berger Associates
assuming the duties as the investment advisor ) through
September 30, 1995:
<TABLE>
<CAPTION>
SINCE
BERGER RETAIL FUND 1-YEAR 5-YEAR 10-YEAR INCEPTION<F1>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Berger 100 Fund 18.4% 25.8% 20.4%<F2> 15.3%<F2>
Berger Growth and Income Fund 14.1% 20.5% 13.3%<F2> 13.7%<F2>
Berger Small Company 31.9% NA NA 23.4%
Growth Fund
<FN>
<F1> Since Inception performance for the Berger 100 Fund and the Berger Growth and Income Fund is shown for
the period from September 30, 1974, immediately prior to Berger Associates assuming the duties as the investment
advisor for those
-16-<PAGE>
Funds, through September 30, 1995. Since Inception performance for the Berger Small Company Growth Fund is shown
for the period from December 30, 1993 (date operations commenced) through September 30, 1995.
<F2> Since the 12b-1 fees applicable to the Berger 100 Fund and the Berger Growth and Income Fund did not
take effect until June 19, 1990, the performance figures do not reflect the deduction of the 12b-1 fees for the full
length of the ten-year and longer periods shown.
</TABLE>
12. SHAREHOLDER INQUIRIES
Shareholders with questions should write to the Berger
Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217,
or call 1-303-329-0200 or 1-800-706-0539 , or contact a
Participating Insurance Company.
-17-
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust (the "Trust") is an
open-end management investment company. The Trust currently consists
of three diversified series or portfolios (individually referred to as
a "Fund"), known as the Berger IPT - 100 Fund, the Berger IPT - Growth
and Income Fund and the Berger IPT - Small Company Growth Fund. Each
Fund has its own investment objective and policies. The Funds are
recently organized and have no operating history, but their investment
advisor , Berger Associates, Inc. ("Berger Associates") has been
in the investment advisory business for over 20 years. Shares of the
Funds are not offered directly to the public, but are sold only in
connection with investment in and payments under variable annuity
contracts and variable life insurance contracts (collectively
"variable insurance contracts") issued by life insurance companies
("Participating Insurance Companies"), as well as to certain qualified
retirement plans.
BERGER IPT - 100 FUND
- ---------------------
The Berger IPT - 100 Fund's investment objective is long-
term capital appreciation. The Berger IPT - 100 Fund seeks to achieve
this objective by investing primarily in common stocks
of established companies which the Fund believes offer favorable
growth prospects. Current income is not an investment objective of
the Berger IPT - 100 Fund, and any income produced will be a by-
product of the efforts to achieve the Fund's objective.
BERGER IPT - GROWTH AND INCOME FUND
- -----------------------------------
The primary investment objective of the Berger IPT - Growth
and Income Fund is capital appreciation. A secondary objective is to
provide a moderate level of current income. The Fund seeks to achieve
these objectives by investing primarily in common stocks
and other securities, such as convertible securities or preferred
stocks, which the Fund believes offer favorable growth prospects and
are expected to also provide current income.
BERGER IPT - SMALL COMPANY GROWTH FUND
- --------------------------------------
The investment objective of the Berger IPT - Small Company
Growth Fund is capital appreciation. The Fund seeks to achieve this
objective by investing primarily in equity securities
(including common and preferred stocks, convertible debt securities
and other securities having equity features) of small growth companies
with market capitalization of less than $1 billion at the time of
initial purchase.
This Statement of Additional Information is not a
prospectus. It should be read in conjunction with the Prospectus
describing the Funds, dated May 1, 1996 , which may be obtained
by writing the Funds at P.O. Box 5005, Denver, Colorado 80217, calling
1-800-706-0539 , or by contacting a Participating Insurance
Company.
May 1, 1996 <PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
Cross-References to
Related Disclosures
Table of Contents in Prospectus
----------------- -------------------
Introduction Section 2
1. Portfolio Policies of the Funds Section 2, 3, 4
2. Investment Restrictions Section 3
3. Management of the Funds Section 5
4. Investment Advisor Section 5
5. Expenses of the Funds Section 6
6. Brokerage Policy Section 6
7. How to Purchase and Redeem Shares in Section 7
the Funds
8. Suspension of Redemption Rights Section 7
9. How the Net Asset Value is Section 8
Determined
10. Income Dividends, Capital Gains Section 9
Distributions and Tax Treatment
11. Performance Information Section 11
12. Additional Information Section 10
Financial Statements
-i-<PAGE>
INTRODUCTION
------------
The Berger IPT - 100 Fund, the Berger IPT - Growth and
Income Fund and the Berger IPT - Small Company Growth Fund are
diversified portfolios or series of the Berger Institutional Products
Trust, a management investment company. The Berger IPT - 100 Fund's
investment objective is long-term capital appreciation. The primary
investment objective of the Berger IPT - Growth and Income Fund is
capital appreciation, and its secondary objective is to provide a
moderate level of current income. The Berger IPT - Small Company
Growth Fund's investment objective is capital appreciation.
1. Portfolio Policies of the Funds
-------------------------------
The Prospectus discusses the investment objective of each of
the Funds and the policies to be employed to achieve that objective.
This section contains supplemental information concerning the types of
securities and other instruments in which the Funds may invest, the
investment policies and portfolio strategies that the Funds may
utilize and certain risks attendant to those investments, policies and
strategies.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds is
authorized to invest in securities which are illiquid because they are
subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities,
they are not readily marketable. However, none of the Funds will
purchase any such security, the purchase of which would cause the Fund
to invest more than 15% of its net assets, measured at the time of
purchase, in illiquid securities. Repurchase agreements maturing in
more than seven days will be considered as illiquid for purposes of
this restriction. Pursuant to authority delegated from the trustees,
the Funds' advisor will determine whether securities issued in
offerings made pursuant to SEC Rule 144A under the Securities Act of
1933 should be treated as illiquid investments considering, among
other things, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wanting to purchase
or sell the security and the number of other potential purchasers;
(3) dealer undertakings to make a market in the security; and (4) the
nature of the security and the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of the transfer). Investments in illiquid
securities involve certain risks to the extent that the Fund may be
unable to dispose of such a security at the time desired or at a
reasonable price or, in some cases, may be unable to dispose of it at
all. In addition, in order to resell a restricted security, a Fund
might have to incur the potentially substantial expense and delay
associated with effecting registration.
REPURCHASE AGREEMENTS. As discussed in the Prospectus, each
Fund may invest in repurchase agreements with various financial
organizations, including commercial banks, registered
-1-<PAGE>
broker-dealers and registered government securities dealers. A
repurchase agreement is an agreement under which a Fund acquires a
debt security (generally a security issued or
guaranteed by the U.S. government or an agency thereof, a banker's
acceptance or a certificate of deposit) from a commercial bank, broker
or dealer, subject to resale to the seller at an agreed upon price and
date (normally, the next business day). A repurchase agreement may be
considered a loan collateralized by securities. The resale price
reflects an agreed upon interest rate effective for the period the
instrument is held by a Fund and is unrelated to the interest rate on
the underlying instrument. In these transactions, the securities
acquired by a Fund (including accrued interest earned thereon) must
have a total value equal to or in excess of the value of the
repurchase agreement and are held by the Fund's custodian bank until
repurchased. In addition, the trustees will establish guidelines and
standards for review by the investment advisor of the
creditworthiness of any bank, broker or dealer party to a repurchase
agreement with a Fund. None of the Funds will enter into a repurchase
agreement maturing in more than seven days if as a result more than
15% of the Fund's total assets would be invested in such repurchase
agreements and other illiquid securities.
The use of repurchase agreements involves certain risks.
For example, if the other party to the agreement defaults on its
obligation to repurchase the underlying security at a time when the
value of the security has declined, a Fund may incur a loss upon
disposition of the security. If the other party to the agreement
becomes insolvent and subject to liquidation or reorganization under
the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by a Fund not within the
control of the Fund and therefore the realization by the Fund on such
collateral may automatically be stayed. Finally, it is possible that
a Fund may not be able to substantiate its interest in the underlying
security and may be deemed an unsecured creditor of the other party to
the agreement. While management of the Funds acknowledges these
risks, it is expected that they can be controlled through careful
monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERED SECURITIES. Each Fund may
purchase and sell securities on a when-issued or delayed delivery
basis. However, none of the Funds currently intends to purchase or
sell securities on a when-issued or delayed delivery basis, if as a
result more than 5% of its total assets taken at market value at the
time of purchase would be invested in such securities. When-issued or
delayed delivery transactions arise when securities (normally, equity
obligations of issuers eligible for investment by a Fund) are
purchased or sold by the Fund with payment and delivery taking place
in the future in order to secure what is considered to be an
advantageous price or yield. However, the yield on a comparable
security available when delivery takes place may vary from the yield
on the security at the time that the when-issued or delayed delivery
transaction was entered into. Any failure to consummate a when-issued
or delayed delivery transaction may result in a Fund missing the
opportunity of obtaining a price
-2-<PAGE>
or yield considered to be advantageous. When-issued and delayed
delivery transactions may generally be expected to settle within one
month from the date the transactions are entered into, but in no event
later than 90 days. However, no payment or delivery is made by a Fund
until it receives delivery or payment from the other party to the
transaction.
When a Fund purchases securities on a when-issued basis, it
will maintain in a segregated account with its custodian cash, U.S.
government securities or other high-grade debt obligations readily
convertible into cash having an aggregate value equal to the amount of
such purchase commitments, until payment is made. If necessary,
additional assets will be placed in the account daily so that the
value of the account will equal or exceed the amount of the Fund's
purchase commitments.
LENDING OF SECURITIES. As discussed in the Prospectus, each
Fund may lend its securities to qualified institutional investors who
need to borrow securities in order to complete certain transactions,
such as covering short sales, avoiding failures to deliver securities,
or completing arbitrage operations. By lending its securities, a Fund
will be attempting to generate income through the receipt of interest
on the loan which, in turn, can be invested in additional securities
to pursue the Fund's investment objective. Any gain or loss in the
market price of the securities loaned that might occur during the term
of the loan would be for the account of a Fund. A Fund may lend its
portfolio securities to qualified brokers, dealers, banks or other
financial institutions, so long as the terms, the structure and the
aggregate amount of such loans are not inconsistent with the
Investment Company Act of 1940, or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the
"Commission") thereunder, which currently require that (a) the
borrower pledge and maintain with the Fund collateral consisting of
cash, an irrevocable letter of credit or securities issued or
guaranteed by the United States government having a value at all times
not less than 100% of the value of the securities loaned, (b) the
borrower add to such collateral whenever the price of the securities
loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any
time and (d) the Fund receive reasonable interest on the loan, which
interest may include the Fund's investing cash collateral in interest
bearing short-term investments, and (e) the Fund receive all dividends
and distributions on the loaned securities and any increase in the
market value of the loaned securities.
A Fund bears a risk of loss in the event that the other
party to a securities lending transaction defaults on its obligations
and the Fund is delayed in or prevented from exercising its rights to
dispose of the collateral, including the risk of a possible decline in
the value of the collateral securities during the period in which the
Fund seeks to assert these rights, the risk of incurring expenses
associated with asserting these rights and
-3-<PAGE>
the risk of losing all or a part of the income from the transaction.
None of the Funds will lend its portfolio securities if, as a result,
the aggregate value of such loans would exceed 33-1/3% of the value of
the Fund's total assets. Loan arrangements made by a Fund will comply
with all other applicable regulatory requirements, including the rules
of the New York Stock Exchange, which rules presently require the
borrower, after notice, to redeliver the securities within the normal
settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or
institution, will be considered in making decisions with respect to
the lending of securities, subject to review by the Fund's trustees.
SHORT SALES. Each Fund currently only intends to engage in
short sales if, at the time of the short sale, the Fund owns or has
the right to acquire an equivalent kind and amount of the security
being sold short at no additional cost (i.e., short sales "against the
box").
In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those
securities until delivery occurs. To make delivery to the purchaser,
the executing broker borrows the securities being sold short on behalf
of the seller. While the short position is maintained, the seller
collateralizes its obligation to deliver the securities sold short in
an amount equal to the proceeds of the short sale plus an additional
margin amount established by the Board of Governors of the Federal
Reserve. If a Fund engages in a short sale, the collateral account
will be maintained by the Fund's custodian. While the short sale is
open, the Fund will maintain in a segregated custodial account an
amount of securities convertible into or exchangeable for such
equivalent securities at no additional cost. These securities would
constitute the Fund's long position.
A Fund may make a short sale, as described above, when it
wants to sell the security it owns at a current attractive price, but
also wishes to defer recognition of gain or loss for federal income
tax purposes and for purposes of satisfying certain tests applicable
to regulated investment companies under the Internal Revenue Code. In
such a case, any future losses in the Fund's long position should be
reduced by a gain in the short position. The extent to which such
gains or losses are reduced would depend upon the amount of the
security sold short relative to the amount the Fund owns. There will
be certain additional transaction costs associated with short sales,
but the Fund will endeavor to offset these costs with income from the
investment of the cash proceeds of short sales.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. As described in th
e Prospectus, each Fund is authorized to make limited investment in
certain types of futures, forwards and options, but only for the
purpose of hedging, that is, protecting against market risk due to
market movements that may adversely affect the value of a Fund's
-4-<PAGE>
securities or the price of securities that a Fund is considering
purchasing. The utilization of futures, forwards and options is also
subject to policies and procedures which may be established by the
trustees from time to time. A hedging transaction may partially
protect a Fund from a decline in the value of a particular security or
its portfolio generally, although the cost of the transaction will
reduce the potential return on the security or the portfolio.
Following is additional information concerning the futures, forwards
and options in which the Funds may invest, provided that no more than
5% of the Fund's net assets at the time of purchase may be
invested in initial margins for financial futures transactions and
premiums for options. In addition, a Fund may only write call options
that are covered and only up to 25% of the Fund's total assets. The
following information should be read in conjunction with the
information concerning the Funds' investment in futures, forwards and
options and the risks of such investments contained in the Prospectus.
Futures Contracts. Financial futures contracts are
-----------------
contracts on financial instruments (such as securities and foreign
currencies) and securities indices that obligate the long or short
holder, if the contract is held to its specified delivery date, to
take or make delivery of a specified quantity of the underlying
financial instrument, or the cash value of a securities index.
Although futures contracts by their terms call for the delivery or
acquisition of the underlying instruments or a cash payment based on
the value of the underlying instruments, in most cases the contractual
obligation is offset before the delivery date by buying (in the case
of an obligation to sell) or selling (in the case of an obligation to
buy) an identical futures contract. Such a transaction cancels the
original obligation to make or take delivery of the instruments.
Each Fund may enter into contracts for the purchase or sale
for future delivery of financial instruments, such as securities and
foreign currencies, or contracts based on financial indices including
indices of U.S. Government securities, foreign government securities
or equity securities. U.S. futures contracts are traded on exchanges
which have been designated "contract markets" by the Commodity Futures
Trading Commission ("CFTC") and must be executed through a futures
commission merchant (an "FCM"), or brokerage firm, which is a member
of the relevant contract market. Through their clearing corporations,
the exchanges guarantee performance of the contracts as between the
clearing members of the exchange.
Both the buyer and seller are required to deposit "initial
margin" for the benefit of the FCM when a futures contract is entered
into. Initial margin deposits are equal to a percentage of the
contract's value, as set by the exchange on which the contract is
traded, and may be maintained in cash or certain high-grade liquid
assets. If the value of either party's position declines, that party
will be required to make additional "variation margin" payments to the
other party to settle the change in value
-5-<PAGE>
on a daily basis. Initial and variation margin payments are similar
to good faith deposits or performance bonds or party-to-party payments
resulting from daily changes in the value of the contract, unlike
margin extended by a securities broker, and would be returned or
credited to the Funds upon termination of the futures contract,
assuming all contractual obligations have been satisfied. Unlike
margin extended by a securities broker, initial and variation margin
payments do not constitute purchasing securities on margin for
purposes of each Fund's investment limitations. The Funds will incur
brokerage fees when they buy or sell futures contracts.
In the event of the bankruptcy of the FCM that holds margin
on behalf of a Fund, the Fund may be entitled to return of margin owed
to the Fund only in proportion to the amount received by the FCM's
other customers. Each Fund will attempt to minimize the risk by
careful monitoring of the creditworthiness of the FCMs with which the
Fund does business and by depositing margin payments in a segregated
account with the Fund's custodian for the benefit of the FCM when
practical or otherwise required by law.
Each Fund intends to comply with guidelines of eligibility
for exclusion from the definition of the term "commodity pool
operator" with the CFTC and the National Futures Association, which
regulate trading in the futures markets. Accordingly, the Fund will
not enter into any futures contract or option on a futures contract
if, as a result, the aggregate initial margin and premiums required to
establish such positions would exceed 5% of the Fund's net assets.
Although each Fund would hold cash and liquid assets in a
segregated account with a value sufficient to cover the Fund's open
futures obligations, the segregated assets would be available to the
Fund immediately upon closing out the futures position, while
settlement of securities transactions could take several days.
However, because the Fund's cash that may otherwise be invested would
be held uninvested or invested in high-grade liquid assets so long as
the futures position remains open, the Fund's return could be
diminished due to the opportunity losses of foregoing other potential
investments.
The acquisition or sale of a futures contract may occur, for
example, when a Fund is considering purchasing or holds equity
securities and seeks to protect itself from fluctuations in prices
without buying or selling those securities. For example, if prices
were expected to decrease, the Fund might sell equity index futures
contracts, thereby hoping to offset a potential decline in the value
of equity securities in the portfolio by a corresponding increase in
the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much
as it otherwise would have. A Fund also could protect against
potential price declines by selling portfolio securities and investing
in money market instruments. However, the use of futures contracts as
an investment technique allows the
-6-<PAGE>
Funds to maintain a defensive position without having to sell
portfolio securities.
Similarly, when prices of equity securities are expected to
increase, futures contracts may be bought to attempt to hedge against
the possibility of having to buy equity securities at higher prices.
This technique is sometimes known as an anticipatory hedge. Since the
fluctuations in the value of futures contracts should be similar to
those of equity securities, a Fund could take advantage of the
potential rise in the value of equity securities without buying them
until the market has stabilized. At that time, the futures contracts
could be liquidated and the Fund could buy equity securities on the
cash market.
To the extent a Fund enters into futures contracts for this
purpose, the assets in the segregated asset account maintained to
cover the Fund's obligations with respect to the futures contracts
will consist of high-grade liquid assets from its portfolio in an
amount equal to the difference between the amount of the Fund's
obligation under the contract and the aggregate value of the initial
and variation margin payments made by the Fund with respect to the
futures contracts.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are
subject to distortions. First, all participants in the futures market
are subject to initial margin and variation margin requirements.
Rather than meeting additional variation margin requirements,
investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between
the cash and futures markets. Second, the liquidity of the futures ma
rket depends on participants entering into offsetting transactions
rather than making or taking delivery. To the extent participants
decide to make or take delivery, liquidity in the futures market could
be reduced and prices in the futures market distorted. Third, from
the point of view of speculators, the margin deposit requirements in
the futures market are less than margin requirements in the securities
market. Therefore, increased participation by speculators in the
futures market may cause temporary price distortions. Due to the
possibility of the foregoing distortions, a correct forecast of
general price trends by the Funds still may not result in a successful
use of futures.
Futures contracts entail risks. Although each Fund believes
that use of such contracts will benefit the Fund, if the Fund's
investment judgment is incorrect, the Fund's overall performance could
be worse than if the Fund had not entered into futures contracts. For
example, if the Fund has hedged against the effects of a possible
decrease in prices of securities held in the Fund's portfolio and
prices increase instead, the Fund will lose part or all of the benefit
of the increased value of these securities because of offsetting
losses in the Fund's futures positions. In addition, if the Fund has
insufficient cash, it may
-7-<PAGE>
have to sell securities from its portfolio to meet daily variation
margin requirements. Those sales may be, but will not necessarily be,
at increased prices which reflect the rising market and may occur at a
time when the sales are disadvantageous to the Fund. Although the
buyer of an option cannot lose more than the amount of the premium
plus related transaction costs, a buyer or seller of futures contracts
could lose amounts substantially in excess of any initial margin
deposits made, due to the potential for adverse price movements
resulting in additional variation margin being required by such
positions. However, each Fund intends to monitor its investments
closely and will attempt to close its positions when the risk of loss
to the Fund becomes unacceptably high.
The prices of futures contracts depend primarily on the
value of their underlying instruments. Because there are a limited
number of types of futures contracts, it is possible that the
standardized futures contracts available to a Fund will not match
exactly the Fund's current or potential investments. A Fund may buy
and sell futures contracts based on underlying instruments with
different characteristics from the securities in which it typically
invests -- for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities -- which
involves a risk that the futures position will not correlate precisely
with the performance of the Fund's investments.
Futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments closely
correlate with a Fund's investments. Futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instruments and the time
remaining until expiration of the contract. Those factors may affect
securities prices differently from futures prices. Imperfect
correlations between a Fund's investments and its futures positions
may also result from differing levels of demand in the futures markets
and the securities markets, from structural differences in how futures
and securities are traded, and from imposition of daily price
fluctuation limits for futures contracts. A Fund may buy or sell
futures contracts with a greater or lesser value than the securities
it wishes to hedge or is considering purchasing in order to attempt to
compensate for differences in historical volatility between the
futures contract and the securities, although this may not be
successful in all cases. If price changes in a Fund's futures
positions are poorly correlated with its other investments, its
futures positions may fail to produce desired gains or result in
losses that are not offset by the gains in the Fund's other
investments.
Because futures contracts are generally settled within a day
from the date they are closed out, compared with a longer settlement
period for most types of securities, the futures markets can provide
superior liquidity to the securities markets. Nevertheless, there is
no assurance a liquid secondary market will exist for any particular
futures contract at any particular time.
-8-<PAGE>
In addition, futures exchanges may establish daily price fluctuation
limits for futures contracts and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On
volatile trading days when the price fluctuation limit is reached, it
may be impossible for a Fund to enter into new positions or close out
existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, a Fund
may not be able to promptly liquidate unfavorable futures positions
and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value.
As a result, a Fund's access to other assets held to cover its futures
positions also could be impaired.
Options on Futures Contracts. Each Fund may buy and write
----------------------------
options on futures contracts for hedging purposes. An option on a
futures contract gives the Funds the right (but not the obligation) to
buy or sell a futures contract at a specified price on or before a
specified date. The purchase of a call option on a futures contract
is similar in some respects to the purchase of a call option on an
individual security. Depending on the pricing of the option compared
to either the price of the futures contract upon which it is based or
the price of the underlying instrument, ownership of the option may or
may not be less risky than ownership of the futures contract or the
underlying instrument. As with the purchase of futures contracts, a
Fund may buy a call option on a futures contract to hedge against a
market advance, and a Fund might buy a put option on a futures
contract to hedge against a market decline.
The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the security
or foreign currency which is deliverable under, or of the index
comprising, the futures contract. If the futures price at the
expiration of the call option is below the exercise price, a Fund will
retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in the Fund's
portfolio holdings. If a call option a Fund has written is exercised,
the Fund will incur a loss which will be reduced by the amount of the
premium it received. Depending on the degree of correlation between
change in the value of its portfolio securities and changes in the
value of the futures positions, a Fund's losses from existing options
on futures may to some extent be reduced or increased by changes in
the value of portfolio securities.
The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put options on
portfolio securities. For example, a Fund may buy a put option on a
futures contract to hedge the Fund's portfolio against the risk of
falling prices.
The amount of risk a Fund assumes when it buys an option on
a futures contract is the premium paid for the option plus
-9-<PAGE>
related transaction costs. In addition to the correlation risks
discussed above, the purchase of an option also entails the risk that
changes in the value of the underlying futures contract will not be
fully reflected in the value of the options bought.
Forward Foreign Currency Exchange Contracts. A forward
-------------------------------------------
contract is an agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified
time in the future and the other party is obligated to pay a specified
invoice amount for the assets at the time of delivery. The Funds curr
ently intend that the only forward contracts or commitments that they
might enter into for hedging purposes are forward foreign currency
exchange contracts, although the Funds may enter into additional forms
of forward contracts or commitments in the future if they become
available and advisable in light of the Funds' objectives and
investment policies. Forward contracts generally are negotiated in an
interbank market conducted directly between traders (usually large
commercial banks) and their customers. Unlike futures contracts,
which are standardized contracts, forward contracts can be
specifically drawn to meet the needs of the parties that enter into
them. The parties to a forward contract may agree to offset or
terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated exchange.
The following discussion summarizes the Funds' principal
uses of forward foreign currency exchange contracts ("forward currency
contracts"). A Fund may enter into forward currency contracts with
stated contract values of up to the value of the Fund's assets. A
forward currency contract is an obligation to buy or sell an amount of
a specified currency for an agreed price (which may be in U.S. dollars
or a foreign currency). A Fund will exchange foreign currencies for
U.S. dollars and for other foreign currencies in the normal course of
business and may buy and sell currencies through forward currency
contracts in order to fix a price for securities it has agreed to buy
or sell ("transaction hedge"). A Fund also may hedge some or all of
its investments denominated in foreign currency against a decline in
the value of that currency relative to the U.S. dollar by entering
into forward currency contracts to sell an amount of that currency
approximating the value of some or all of its portfolio securities
denominated in that currency ("position hedge") or by participating in
futures contracts (or options on such futures) with respect to the
currency. A Fund also may enter into a forward currency contract with
respect to a currency where the Fund is considering the purchase or
sale of investments denominated in that currency but has not yet
selected the specific investments ("anticipatory hedge"). In any of
these circumstances a Fund may, alternatively, enter into a forward
currency contract to purchase or sell one foreign currency for a
second currency that is expected to perform more favorably relative to
the U.S. dollar if the portfolio manager believes there is a
reasonable degree of correlation between movements in the two
currencies ("cross-hedge").
-10-<PAGE>
These types of hedging minimize the effect of currency
appreciation as well as depreciation, but do not eliminate
fluctuations in the underlying U.S. dollar equivalent value of the
proceeds of or rates of return on a Fund's foreign currency
denominated portfolio securities. The matching of the increase in
value of a forward contract and the decline in the U.S. dollar
equivalent value of the foreign currency denominated asset that is the
subject of the hedge generally will not be precise. Shifting a Fund's
currency exposure from one foreign currency to another limits that
Fund's opportunity to profit from increases in the value of the
original currency and involves a risk of increased losses to such Fund
if its portfolio manager's projection of future exchange rates is
inaccurate. Cross-hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which hedged
securities are denominated. Unforeseen changes in currency prices may
result in poorer overall performance for a Fund than if it had not
entered into such contracts. Also, with regard to a Fund's use of
cross-hedges, there can be no assurance that historical correlations
between the movement of certain foreign currencies relative to the
U.S. dollar will continue. Thus, at any time poor correlation may
exist between movements in the exchange rates of the foreign
currencies underlying a Fund's cross-hedges and the movements in the
exchange rates of the foreign currencies in which the Fund's assets
that are the subject of such cross-hedges are denominated.
The Funds will cover outstanding forward currency contracts
by maintaining liquid portfolio securities denominated in the currency
underlying the forward contract or the currency being hedged. To the
extent that a Fund is not able to cover its forward currency positions
with underlying portfolio securities, the Funds' custodian will
segregate cash or high-grade liquid assets having a value equal to the
aggregate amount of such Fund's commitments under forward contracts
entered into. If the value of the securities used to cover a position
or the value of segregated assets declines, the Fund must find
alternative cover or segregate additional cash or high-grade liquid
assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of a Fund's commitments
with respect to such contracts.
While forward contracts are not currently regulated by the
CFTC, the CFTC may in the future assert authority to regulate forward
contracts. In such event, the Funds' ability to utilize forward
contracts may be restricted. A Fund may not always be able to enter
into forward contracts at attractive prices and may be limited in its
ability to use these contracts to hedge Fund assets. In addition,
when a Fund enters into a privately negotiated forward contract with a
counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not
been entered into. Unlike many exchange-traded futures contracts and
options on futures, there are no daily price fluctuation limits with
respect to forward contracts
-11-<PAGE>
and other negotiated or over-the-counter instruments, and with respect
to those contracts, adverse market movements could therefore continue
to an unlimited extent over a period of time. However, each Fund
intends to monitor its investments closely and will attempt to
renegotiate or close its positions when the risk of loss to the Fund
becomes unacceptably high.
Options on Securities and Securities Indices. A Fund may
--------------------------------------------
buy or sell put or call options and write covered call options on
securities that are traded on United States or foreign securities
exchanges or over-the-counter. Buying an option involves the risk
that, during the option period, the price of the underlying security
will not increase (in the case of a call) to above the exercise price,
or will not decrease (in the case of a put) to below the exercise
price, in which case the option will expire without being exercised
and the holder would lose the amount of the premium. Writing a call
option involves the risk of an increase in the market value of the
underlying security, in which case the option could be exercised and
the underlying security would then be sold by a Fund to the option
holder at a lower price than its current market value and the Fund's
potential for capital appreciation on the security would be limited to
the exercise price. Moreover, when a Fund writes a call option on a
securities index, the Fund bears the risk of loss resulting from
imperfect correlation between movements in the price of the index and
the price of the securities set aside to cover such position.
Although they entitle the holder to buy equity securities, call
options to purchase equity securities do not entitle the holder to
dividends or voting rights with respect to the underlying securities,
nor do they represent any rights in the assets of the issuer of those
securities.
A call option written by a Fund is "covered" if the Fund
owns the underlying security covered by the call or has an absolute
and immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of
other securities held in its portfolio. A call option is also deemed
to be covered if a Fund holds a call on the same security and in the
same principal amount as the call written and the exercise price of
the call held (i) is equal to or less than the exercise price of the
call written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in cash and high-
grade liquid assets in a segregated account with its custodian.
The writer of a call option may have no control when the und
erlying securities must be sold. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This
amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security
during the option period.
-12-<PAGE>
The writer of an exchange-traded call option that wishes to
terminate its obligation may effect a "closing purchase transaction."
This is accomplished by buying an option of the same series as the
option previously written. The effect of the purchase is that the
writer's position will be cancelled by the clearing corporation. If a
Fund desires to sell a particular security from the Fund's portfolio
on which the Fund has written a call option, the Fund will effect a
closing transaction prior to or concurrent with the sale of the
security. However, a writer may not effect a closing purchase
transaction after being notified of the exercise of an option. An
investor who is the holder of an exchange-traded option may liquidate
its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option
previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
A Fund will realize a profit from a closing transaction if
the price of the purchase transaction is less than the premium
received from writing the option or the price received from a sale
transaction is more than the premium paid to buy the option; the Fund
will realize a loss from a closing transaction if the price of the
purchase transaction is more than the premium received from writing
the option or the price received from a sale transaction is less than
the premium paid to buy the option. Because increases in the market
price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists
a secondary market for an option of the same series. If a secondary
market does not exist, it might not be possible to effect closing
transactions in particular options with the result that a Fund would
have to exercise the options in order to realize any profit. If a
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or the Fund delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market may
include the following: (i) there may be insufficient trading interest
in certain options, (ii) restrictions may be imposed by a national
securities exchange on which the option is traded ("Exchange") on
opening or closing transactions or both, (iii) trading halts,
suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal
operations on an Exchange, (v) the facilities of an Exchange or of the
Options Clearing Corporation ("OCC") may not at all times be adequate
to handle current trading volume, or (vi) one or more Exchanges could,
for economic or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on
-13-<PAGE>
that Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been
issued by the OCC as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.
In addition, when a Fund enters into an over-the-counter
option contract with a counterparty, the Fund assumes counterparty
credit risk, that is, the risk that the counterparty will fail to
perform its obligations, in which case the Fund could be worse off
than if the contract had not been entered into.
An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery o
f a security at a specified price, an option on a securities index
gives the holder the right to receive, on exercise of the option, an
amount of cash if the closing level of the securities index on which
the option is based is greater than, in the case of a call, or less
than, in the case of a put, the exercise price of the option.
A Fund may buy call options on securities or securities
indices to hedge against an increase in the price of a security or
securities that the Fund may buy in the future. The premium paid for
the call option plus any transaction costs will reduce the benefit, if
any, realized by a Fund upon exercise of the option, and, unless the
price of the underlying security or index rises sufficiently, the
option may expire and become worthless to the Fund. A Fund may buy
put options to hedge against a decline in the value of a security or
its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by a Fund
upon exercise of the option, and, unless the price of the underlying
security or index declines sufficiently, the option may expire and
become worthless to the Fund.
An example of a hedging transaction using an index option
would be if a Fund were to purchase a put on a stock index, in order
to protect the Fund against a decline in the value of all securities
held by it to the extent that the stock index moves in a similar
pattern to the prices of the securities held. While the correlation
between stock indices and price movements of the stocks in which the
Funds will generally invest may be imperfect, the Funds expect,
nonetheless, that the use of put options that relate to such indices
will, in certain circumstances, protect against declines in values of
specific portfolio securities or a Fund's portfolio generally.
Although the purchase of a put option may partially protect a Fund
from a decline in the value of a particular security or its portfolio
generally, the cost of a put will reduce the potential return on the
security or the portfolio.
PORTFOLIO TURNOVER. In pursuit of each Fund's investment
objective, management continuously reviews its investments and makes
portfolio changes whenever changes in the market, industry trends or
the outlook for the growth of any portfolio security indicate to
management that the objective could be better achieved
-14-<PAGE>
by investment in another security, regardless of portfolio turnover.
In addition, portfolio turnover may increase as a result of large
amounts of purchases and redemptions of shares of a Fund due to
economic, market or other factors that are not within the control of
management. The annual portfolio turnover rates of the Funds may
at times exceed 100%. A 100% annual turnover rate results, for
example, if the equivalent of all of the securities in a Fund's
portfolio are replaced in a period of one year. An annual
turnover rate of 100% or more would be higher than that of most other
mutual funds.
Increased portfolio turnover would necessarily result in
correspondingly higher brokerage costs for the Funds. The existence
of a high portfolio turnover rate has no direct relationship to the
tax liability of a Fund, although sales of certain stocks will lead to
realization of gains, and, possibly, increased taxable distributions.
The Funds' brokerage policy is discussed further under Section 6
Brokerage Policy, and additional information concerning income taxes
is located under Section 10 Income Dividends, Capital Gains
Distributions and Tax Treatment.
2. Investment Restrictions
-----------------------
Each Fund has adopted certain fundamental restrictions on
its investments and other activities, and none of these restrictions
may be changed without the approval of (i) 67% or more of the voting
securities of the Fund present at a meeting of shareholders thereof if
the holders of more than 50% of the outstanding voting securities are
present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund.
BERGER IPT - 100 FUND AND BERGER IPT - GROWTH AND INCOME FUND
- -------------------------------------------------------------
The following fundamental restrictions apply to each of the
Berger IPT - 100 Fund and the Berger IPT - Growth and Income Fund. A
Fund may not:
1. Purchase the securities of any one issuer (except U.S.
Government securities) if immediately after and as a result of such
purchase (a) the value of the holdings of the Fund in the securities
of such issuer exceeds 5% of the value of the Fund's total assets or
(b) the Fund owns more than 10% of the outstanding voting securities
or of any class of securities of such issuer.
2. Purchase securities of any company with a record of
less than three years' continuous operation (including that of
predecessors) if such purchase would cause the Fund's investments in
all such companies taken at cost to exceed 5% of the value of the
Fund's total assets.
3. Invest in any one industry more than 25% of the value
of its total assets at the time of such investment.
-15-<PAGE>
4. Make loans, except that the Fund may enter into
repurchase agreements and may lend portfolio securities in accordance
with the Fund's investment policies. The Fund does not, for this
purpose, consider the purchase of all or a portion of an issue of
publicly distributed bonds, bank loan participation agreements, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original
issuance of the securities, to be the making of a loan.
5. Borrow in excess of 5% of the value of its total
assets, or pledge, mortgage, or hypothecate its assets taken at market
value to an extent greater than 10% of the Fund's total assets taken
at cost (and no borrowing may be undertaken except from banks as a
temporary measure for extraordinary or emergency purposes). This
limitation shall not prohibit or restrict short sales or deposits of
assets to margin or guarantee positions in futures, options or forward
contracts, or the segregation of assets in connection with any of such
transactions.
6. Purchase or retain the securities of any issuer if
those officers and trustees of the Fund or its investment
advisor owning individually more than 1/2 of 1% of the
securities of such issuer together own more than 5% of the securities
of such issuer.
7. Purchase the securities of any other investment
company, except by purchase in the open market involving no commission
or profit to a sponsor or dealer (other than the customary broker's
commission).
8. Act as a securities underwriter (except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933
in disposing of a security) or invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in
commodities or commodity contracts except, only for the purpose of
hedging, (i) financial futures transactions, including futures
contracts on securities, securities indices and foreign currencies,
and options on any such futures, (ii) forward foreign currency
exchange contracts and other forward commitments and (iii) securities
index put or call options.
9. Participate on a joint or joint and several basis in
any securities trading account.
10. Invest in companies for the purposes of exercising
control of management.
In applying the industry concentration investment
restriction (no. 3 above), the Funds use the industry groups used in
the Data Monitor Portfolio Monitoring System of William O'Neil & Co.
Incorporated. Further, in implementing that restriction, each Fund
intends not to invest in any one industry 25% or more of the value of
its total assets at the time of such investment.
-16-<PAGE>
The trustees have adopted additional non-fundamental
investment restrictions for each of the Berger IPT - 100 Fund and the
Berger IPT - Growth and Income Fund. These limitations may be changed
by the trustees without a shareholder vote. The non-fundamental
investment restrictions include the following:
1. Only for the purpose of hedging, the Fund may purchase
and sell financial futures, forward foreign currency exchange
contracts and put and call options, but no more than 5% of the Fund's
total net assets at the time of purchase may be invested
in initial margins for financial futures transactions and premiums for
options. The Fund may only write call options that are covered and
only up to 25% of the Fund's total assets.
2. The Fund may not purchase or sell securities on a when-
issued or delayed delivery basis, if as a result more than 5% of its
total assets taken at market value at the time of purchase would be
invested in such securities.
3. The Fund may not purchase or sell any interest in an
oil, gas or mineral development or exploration program, including
investments in oil, gas or other mineral leases, rights or royalty
contracts (except that the Fund may invest in the securities of
issuers engaged in the foregoing activities).
4. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not
readily marketable, if more than 15% of the net assets of the Fund,
taken at market value at the time of purchase would be invested in
such securities.
5. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions, and may
not make short sales of securities, except that the Fund may make
short sales if, at the time of the short sale, the Fund owns or has
the right to acquire an equivalent kind and amount of the security
being sold short at no additional cost (i.e., short sales "against the
box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making
margin payments and other deposits in connection therewith.
6. The Fund's investments in warrants valued at the lower
of cost or market, may not exceed 5% of the value of the Fund's net
assets. Included within that amount, but not to exceed 2% of the
value of the Fund's net assets, may be warrants that are not listed on
the New York Stock Exchange or American Stock Exchange.
BERGER IPT - SMALL COMPANY GROWTH FUND
- --------------------------------------
The following fundamental restrictions apply to the Berger
IPT - Small Company Growth Fund. The Fund may not:
-17-<PAGE>
1. With respect to 75% of the Fund's total assets,
purchase the securities of any one issuer (except U.S. government
securities) if immediately after and as a result of such purchase
(a) the value of the holdings of the Fund in the securities of such
issuer exceeds 5% of the value of the Fund's total assets or (b) the
Fund owns more than 10% of the outstanding voting securities of such
issuer.
2. Invest in any one industry (other than U.S. government
securities) more than 25% of the value of its total assets at the time
of such investment.
3. Borrow money, except from banks for temporary or
emergency purposes in amounts not to exceed 25% of the Fund's total as
sets (including the amount borrowed) taken at market value, nor
pledge, mortgage or hypothecate its assets, except to secure permitted
indebtedness and then only if such pledging, mortgaging or
hypothecating does not exceed 25% of the Fund's total assets taken at
market value. When borrowings exceed 5% of the Fund's total assets,
the Fund will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933
in disposing of a security), issue senior securities (except to the
extent permitted under the Investment Company Act of 1940), invest in
real estate (although it may purchase shares of a real estate
investment trust), or invest in commodities or commodity contracts
except financial futures transactions, futures contracts on securities
and securities indices and options on such futures, forward foreign
currency exchange contracts, forward commitments or securities index
put or call options.
5. Make loans, except that the Fund may enter into
repurchase agreements and may lend portfolio securities in accordance
with the Fund's investment policies. The Fund does not, for this
purpose, consider the purchase of all or a portion of an issue of
publicly distributed bonds, bank loan participation agreements, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original
issuance of the securities, to be the making of a loan.
In applying the industry concentration investment
restriction (no. 2 above), the Fund uses the industry groups used in
the Data Monitor Portfolio Monitoring System of William O'Neil & Co.
Incorporated. Further, in implementing that restriction, the Fund
intends not to invest in any one industry 25% or more of the value of
its total assets at the time of such investment.
The trustees have adopted additional non-fundamental
investment restrictions for the Fund. These limitations may be
changed by the trustees without a shareholder vote. The non-
fundamental investment restrictions include the following:
-18-<PAGE>
1. The Fund may not purchase securities of any company
which, including its predecessors and parents, has a record of less
than three years' continuous operation, if such purchase would cause
the Fund's investments in all such companies taken at cost to exceed
10% of the value of the Fund's total assets.
2. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions, and may
not make short sales of securities, except that the Fund may make
short sales if, at the time of the short sale, the Fund owns or has
the right to acquire an equivalent kind and amount of the security
being sold short at no additional cost (i.e., short sales "against the
box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making
margin payments and other deposits in connection therewith.
3. The Fund may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary
broker's commission).
4. The Fund may not invest in companies for the purposes
of exercising control of management.
5. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not
readily marketable, if more than 15% of the net assets of the Fund,
taken at market value at the time of purchase would be invested in
such securities.
6. Only for the purpose of hedging, the Fund may purchase
and sell financial futures, forward foreign currency exchange
contracts and put and call options, but no more than 5% of the Fund's
total net assets at the time of purchase may be invested in initial
margins for financial futures transactions and premiums for options.
The Fund may only write call options that are covered and only up to
25% of the Fund's total assets.
7. The Fund may not purchase or sell securities on a when-
issued or delayed delivery basis, if as a result more than 5% of its
total assets taken at market value at the time of purchase would be
invested in such securities.
8. The Fund may not purchase or sell any interest in an
oil, gas or mineral development or exploration program, including
investments in oil, gas or other mineral leases, rights or royalty
contracts (except that the Fund may invest in the securities of
issuers engaged in the foregoing activities).
9. The Fund's investments in warrants valued at the lower
of cost or market may not exceed 5% of the value of the Fund's net
assets. Included within that amount, but not to exceed 2% of the
value of the Fund's net assets, may be warrants that are
-19-<PAGE>
not listed on the New York Stock Exchange or American Stock Exchange.
3. Management of the Funds
-----------------------
The same trustees and most of the same executive officers
serve each of the Funds. They are listed below, together with
information which includes their principal occupations during the past
five years and other principal business affiliations.
/*/ GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO
80206, age 53. President and a Trustee of Berger Institutional
Products Trust since its inception in October 1995. President
and a director since April 1995 of Berger Associates. A Vice
President of DST Systems, Inc. (data processing) since July 1995.
Director of First of Michigan Capital Corp. (holding company) and
First of Michigan Corp. (broker-dealer) since March 1995.
Formerly President and Chief Executive Officer of Investors
Fiduciary Trust Company (banking) from February 1992 to March
1995 and Chief Operating Officer of SUNAMERICA Asset
Management Co. (money management) from January 1990 to
February 1992.
/*/ RODNEY L. LINAFELTER, 210 University Boulevard, Suite 900,
Denver, CO 80206, age 36. President and Portfolio Manager of
Berger IPT - 100 Fund and Berger IPT - Growth and Income Fund and
a Trustee of Berger Institutional Products Trust since its
inception in October 1995. President since November 1994
(formerly, Vice President from October 1990 to November 1994), a
Portfolio Manager since October 1990 and a Director since October
1994 of Berger 100 Fund and Berger Growth and Income Fund.
President and a Trustee of Berger Investment Portfolio Trust
since its inception in August 1993. Vice President (since
December 1990) and Chief Investment Officer (since October 1994),
Director (since January 1992) and, formerly, Portfolio Manager
(January 1990 to December 1990), with Berger Associates.
Formerly (April 1986 to December 1989), Financial Consultant
(registered representative) with Merrill Lynch, Pierce, Fenner &
Smith, Inc.
/*/ WILLIAM R. KEITHLER, 210 University Boulevard, Suite 900, Denver,
CO 80206, age 43. President and Portfolio Manager of the Berger
IPT - Small Company Growth Fund since its inception in
October 1995. President since November 1994 (formerly, Vice
President from December 1993 to November 1994) and Portfolio
Manager since its inception in December 1993 of the Berger
Small Company Growth Fund . President and Portfolio Manager of
the Berger New Generation Fund since its inception in December
1995. Since December 1993, Vice President-Investment
Management of Berger Associates. Formerly, Senior Vice President
(January 1993 to December 1993), Vice President (January 1991 to
January 1993) and
-20-<PAGE>
Portfolio Manager (January 1988 to January 1991) of INVESCO Trust
Company (investment management).
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110,
age 67. President, Baldwin Financial Counseling. Formerly
(1978-1990), Vice President and Denver Office Manager of Merrill
Lynch Capital Markets. Trustee of Berger Institutional Products
Trust and Berger Investment Portfolio Trust. Director of Berger
100 Fund and Berger Growth and Income Fund.
/*/ WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900,
Denver, CO 80206, age 70. Trustee of Berger Institutional
Products Trust since its inception in October 1995. Director
and, formerly, President (1974-1994) of Berger 100 Fund and
Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust since its inception in August 1993
(Chairman of the Trustees through November 1994). Chairman
(since 1994) and a Director (since 1973) and, formerly, President
(1973-1994) of Berger Associates. From 1960 to 1973, principal
shareholder and executive officer of predecessor investment
advisory firms which served as investment advisors to mutual
funds and other investors, and from 1950 to 1960, investment
officer in the trust department of The Colorado National Bank of
Denver in charge of common stock investments.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 70.
President, Climate Engineering, Inc. (building environmental
systems). Trustee of Berger Institutional Products Trust and
Berger Investment Portfolio Trust. Director of Berger 100 Fund
and Berger Growth and Income Fund.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age
50. President, Cattanach & Associates, Ltd. (investment
consulting firm). Formerly (1981-1988), Executive Vice
President, Captiva Corporation, Denver, Colorado (private
investment management firm). Ph.D. in Finance (Arizona State
University); Chartered Financial Analyst (CFA). Trustee of
Berger Institutional Products Trust and Berger Investment
Portfolio Trust. Director of Berger 100 Fund and Berger
Growth and Income Fund.
LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age
68. Associate, University College, University of Denver.
Formerly, President of the Colorado State Board of Land
Commissioners (1989-1995), and Vice President and Economist
(1983-1988) and Consulting Economist (1989) for First Interstate
Bank of Denver. Ph.D. in Economics (Harvard University).
Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and
Berger Growth and Income Fund.
-21-<PAGE>
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL
60602, age 50. Since 1991, Director, President and Chief
Executive Officer of Catalyst Institute (international public
policy research organization focused primarily on financial
markets and institutions) and Catalyst Consulting (international
financial institutions business consulting firm). Formerly
(1988-1991), Director, President and Chief Executive Officer of
Kessler Asher Group (brokerage, clearing and trading firm).
Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and
Berger Growth and Income Fund.
HARRY T. LEWIS, JR., 370 17th Street, Suite 5150, Denver, CO
80202, age 62. Self-employed as a private investor. Formerly
(1981-1988), Senior Vice President, Rocky Mountain Region, of
Dain Bosworth Incorporated and member of that firm's Management
Committee. Trustee of Berger Institutional Products Trust and
Berger Investment Portfolio Trust. Director of Berger 100 Fund
and Berger Growth and Income Fund.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman,
MT 59717 , age 58. Since 1994, Dean, and since 1989, a
member of the Finance faculty, of the College of Business,
Montana State University. Self-employed as a financial and
management consultant, and in real estate development. Formerly
(1976-1989), Chairman and Chief Executive Officer of Royal Gold,
Inc. (mining). Chairman of the Trustees of Berger Institutional
Products Trust and Berger Investment Portfolio Trust. Chairman
of the Board of Berger 100 Fund and Berger Growth and
Income Fund.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135,
age 67. President, Sinclaire Cattle Co., and private investor.
Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and
Berger Growth and Income Fund.
/*/ KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver,
CO 80206, age 40. Vice President, Secretary and Treasurer of
Berger Institutional Products Trust since its inception in
October 1995, of Berger 100 Fund and Berger Growth and
Income Fund since October 1991 and of Berger Investment
Portfolio Trust since its inception in August 1993. Also, Vice
President-Finance and Administration, Secretary and Treasurer of
Berger Associates since September 1991. Formerly, Financial
Consultant (registered representative) with Neidiger Tucker
Bruner, Inc. (broker-dealer) (October 1989 to September 1991) and
Financial Consultant with Merrill Lynch, Pierce, Fenner & Smith,
Inc. (October 1985 to October 1989).
____________________
-22-<PAGE>
/*/ Interested person (as defined in the Investment Company Act of
1940) of each Fund and of Berger Associates.
TRUSTEE COMPENSATION
The officers of the Funds receive no compensation from the Funds.
However, trustees of the Funds who are not interested persons of
Berger Associates are compensated for their services according to a
fee schedule, allocated among the Funds, which includes an annual fee
component and a per meeting fee component. Neither the officers of
the Funds nor the trustees receive any form of pension or
retirement benefit compensation from the Funds.
Set forth below is information regarding compensation paid or
accrued during the twelve-month period ended September 30, 1995, for
each trustee of the Trust, for their service as a director or trustee
of the Berger retail funds. Since the Berger Institutional Products
Trust (currently consisting of three Funds) has only been recently
organized, the trustees did not receive any compensation from the
Trust during the twelve months ended September 30, 1995. The Trust,
unlike the Berger retail funds, has a fiscal year ending on
December 31.
<TABLE>
<CAPTION>
NAME AND POSITION WITH AGGREGATE COMPENSATION FROM
BERGER FUNDS
Berger Berger
Institutional Retail
Products Funds<F2>
Trust<F1>
<S> <C> <C>
Dennis E. Baldwin<F3> $-0- $46,617
William M.B. Berger<F3><F4> -0- -0-
Louis R. Bindner<F3> -0- 39,687
Katherine A. Cattanach<F3> -0- 45,000
Lucy Black Creighton<F3> -0- 38,132
Paul R. Knapp<F3> -0- 50,976
Gerard M. Lavin<F4><F5> -0- -0-
Harry T. Lewis<F3> -0- 43,500
Rodney L. Linafelter<F3><F4><F6> -0- -0-
Michael Owen<F3> -0- 57,544
William Sinclaire<F3> -0- 38,247
<FN>
<F1> The trustees are not expected to receive any compensation from the Trust for the period from the Trust's
inception through the end of the Trust's first fiscal year on December 31, 1995. Berger Associates will pay
organizational costs of
-23-<PAGE>
the Trust, including trustee fees in connection with the Trust's organizational meetings.
<F2> The fees from the Berger retail funds are for their last fiscal year, which ended September 30, 1995.
<F3> Director of Berger 100 Fund and Berger Growth and Income Fund . Trustee of Berger Investment
Portfolio Trust and Berger Institutional Products Trust.
<F4> Interested person of Berger Associates.
<F5> President and a trustee of Berger Institutional Products Trust.
<F6> President of Berger 100 Fund, Berger Growth and Income Fund, Berger Investment Portfolio Trust, Berger
IPT - 100 Fund and Berger IPT - Growth and Income Fund.
</TABLE>
Trustees may elect to defer receipt of all or a portion of
their fees pursuant to a fee deferral plan adopted by the Berger
Institutional Products Trust. Under the plan, deferred fees are
credited to an account and adjusted thereafter to reflect the
investment experience of whichever of the Berger Funds (or approved
money market funds) is designated by the trustees for this purpose.
Pursuant to an SEC exemptive order, the Trust is permitted to purchase
shares of the designated funds in order to offset its obligation to
the trustees participating in the plan. Purchases made pursuant to
the plan are excepted from any otherwise applicable investment
restriction limiting the purchase of securities of any other
investment company. The Trust's obligation to make payments of
deferred fees under the plan is a general obligation of the Trust.
As of May 1, 1996 , the officers and trustees of the Trust
as a group did not own of record or beneficially any shares of any of
the Funds of the Berger Institutional Products Trust.
4. Investment Advisor
------------------
Berger Associates is the investment advisor to each Fund.
Gerard M. Lavin, President and a director of Berger Associates, is
also President and a trustee of the Trust. Rodney L. Linafelter, Vice
President and Chief Investment Officer and a director of Berger
Associates, is also a trustee of the Trust and President and portfolio
manager of the Berger IPT - 100 Fund and the Berger IPT - Growth and
Income Fund. Mr. Linafelter also serves as President, portfolio
manager and a director of both the Berger 100 Fund and the Berger
Growth and Income Fund, and President and a trustee of the
Berger Investment Portfolio Trust. William R. Keithler, Vice
President-Investment Management of Berger Associates, is President and
portfolio manager of the Berger IPT - Small Company Growth Fund.
Mr. Keithler also serves as President and portfolio manager of the
Berger Small Company Growth Fund, the retail fund that parallels the
Berger IPT - Small Company Growth Fund , and the Berger New
Generation Fund, another retail Berger Fund . Kevin R. Fay, Vice
President-Finance and Administration, Secretary and Treasurer of
Berger Associates, also serves as Vice President, Secretary and
Treasurer of all the Berger Funds.
-24-<PAGE>
Berger Associates serves as investment advisor to other
mutual funds, pension and profit-sharing plans, and other
institutional and private investors. At times, Berger Associates may
recommend purchases and sales of the same investment securities for
a Fund , the other Berger Funds and for one or
more other investment accounts. In such cases, it will be the
practice of Berger Associates to allocate the purchase and sale
transactions among the participating Berger Funds and the
accounts in such manner as it deems equitable. In making such
allocation, the main factors to be considered are the respective
investment objectives of the Berger Funds and the accounts, the
relative size of portfolio holdings of the same or comparable
securities, the current availability of cash for investment by each of
the Berger Funds and each account, the size of investment commitments
generally held by each Berger Fund and each account, and the opinions
of the persons responsible for recommending investments to the Berger
Funds and the accounts.
The officers of Berger Associates are Gerard M. Lavin, President;
Rodney L. Linafelter, Vice President and Chief Investment Officer;
William R. Keithler, Vice President-Investment Management; Craig D.
Cloyed, Vice President and Chief Marketing Officer; and Kevin R. Fay,
Vice President-Finance and Administration, Secretary and Treasurer.
The directors of Berger Associates are Mr. Lavin, Mr. Linafelter and
William M.B. Berger (all of whom also serve as trustees of the Trust)
and Landon H. Rowland, 114 West 11th Street, Kansas City, MO 64105.
Berger Associates permits its directors, officers and employees
to purchase and sell securities for their own accounts in accordance
with a Berger Associates policy regarding personal investing. The
policy requires all directors, officers and employees of Berger
Associates to conduct their personal securities transactions in a
manner which does not operate adversely to the interests of the Funds
or Berger Associates' other advisory clients. Directors and
officers of Berger Associates (including those who also serve as
directors or trustees of the Berger Funds), investment personnel and
other designated persons deemed to have access to current trading
information ("access persons") are required to pre-clear all
transactions in securities not otherwise exempt under the policy.
Requests for authority to trade will be denied pre-clearance when,
among other reasons, the proposed personal transaction would be
contrary to the provisions of the policy or would be deemed to
adversely affect any transaction then known to be under consideration
for or currently being effected on behalf of any client account,
including the Funds.
In addition to the pre-clearance requirements described above,
the policy subjects directors and officers of Berger Associates
(including those who also serve as directors or trustees of the Berger
Funds), investment personnel and other access persons to various
trading restrictions and reporting obligations. All reportable
transactions are reviewed for compliance with Berger Associates'
policy. Those persons also may be required under
-25-<PAGE>
certain circumstances to forfeit their profits made from personal
trading. The policy is administered by Berger Associates and the
provisions of the policy are subject to interpretation by and
exceptions authorized by its board of directors.
Each Fund's current Investment Advisory Agreement with Berger
Associates came into effect on or shortly before May 1, 1996 ,
and will continue in effect until the last day of April, 1997, and
thereafter from year to year if such continuation is specifically
approved at least annually by the trustees or by vote of a majority of
the outstanding shares of the Fund and in either case by vote of a
majority of the trustees who are not "interested persons" (as that
term is defined in the 1940 Act) of the Fund or Berger Associates.
Each Agreement is subject to termination by the Fund or Berger
Associates on 60 days' written notice, and terminates automatically in
the event of its assignment.
From time to time, Berger Associates may compensate Participating
Insurance Companies or their affiliates whose customers hold shares of
the Funds for providing a variety of administrative services (such as
recordkeeping and accounting) and investor support services (such as
responding to inquiries and preparing mailings to shareholders). This
compensation, which may be paid as a per account fee or as a
percentage of the average daily net assets invested in the Funds by
the compensated Participating Insurance Company, depending on the
nature, extent and quality of the services provided, will be paid from
Berger Associates' own resources and not from the assets of the Funds.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately
80% of the outstanding shares of Berger Associates. KCSI is a
publicly traded holding company whose primary subsidiaries are engaged
in transportation services and financial asset management. KCSI also
owns approximately 41% of the outstanding shares of DST
Systems, Inc. ("DST"), a publicly traded information and transaction
processing company which also acts as the Funds' sub-transfer agent.
5. Expenses of the Funds
---------------------
Under their Investment Advisory Agreements, the Berger IPT - 100
Fund and the Berger IPT - Growth and Income Fund have each agreed to
compensate Berger Associates for its investment advisory services to
the Fund by the payment of a fee at the annual rate of .75 of 1%
(0.75%) of the average daily net assets of the Fund. The fee is
accrued daily and payable monthly. This fee may be higher than that
paid by most other mutual funds.
Under the Investment Advisory Agreement for the Berger IPT -
Small Company Growth Fund, Berger Associates is compensated for its
investment advisory services to the Fund by the payment of a fee at
the annual rate of .9 of 1% (0.90%) of the average daily net
assets of the Berger IPT - Small Company Growth Fund. The fee
-26-<PAGE>
is accrued daily and payable monthly. This fee is higher than that
paid by most other mutual funds.
Each Fund pays all of its expenses not assumed by Berger
Associates, including, but not limited to, investment advisor
fees, custodian and transfer agent fees, legal and accounting
expenses, administrative and record keeping expenses, interest
charges, federal and state taxes, costs of share certificates,
expenses of shareholders' meetings, compensation of trustees who are
not interested persons of Berger Associates, expenses of printing and
distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with
the execution of its portfolio transactions, including brokerage
commissions on purchases and sales of portfolio securities, which are
considered a cost of securities of each Fund. Each Fund also pays all
expenses incurred in complying with all federal and state laws and the
laws of any foreign country applicable to the issue, offer or sale of
shares of the Fund, including, but not limited to, all costs involved
in preparing and printing prospectuses of the Fund.
Each of the Funds has appointed Investors Fiduciary Trust Company
("IFTC") as its recordkeeping and pricing agent. In addition, IFTC
also serves as the Funds' custodian, transfer agent and dividend
disbursing agent. IFTC has engaged DST as sub-agent to provide
transfer agency and dividend disbursing services for the Funds. As
noted in the previous section, approximately 41% of the
outstanding shares of DST are owned by KCSI. The addresses and
telephone numbers for DST set forth in the Prospectus and this
Statement of Additional Information should be used for correspondence
with the transfer agent.
As recordkeeping and pricing agent, IFTC calculates the daily net
asset value of each of the Funds and performs certain accounting and
recordkeeping functions required by the Funds. Each Fund pays
IFTC a monthly base fee of $500 , plus an asset-based fee at an
annual rate of $.10 per $1,000 of the Fund's
assets (minimum monthly asset fee of $750 per Fund), plus an
additional $.10 per $1,000 of the Fund's assets invested in foreign
securities . IFTC is also reimbursed for certain out-of-
pocket expenses.
IFTC, as custodian, and its subcustodians have custody and
provide for the safekeeping of the Funds' securities and cash, and
receive and remit the income thereon as directed by the management of
the Funds. The custodian and subcustodians do not perform any
managerial or policy-making functions for the Funds. For its services
as custodian, IFTC receives a fee, payable monthly, at an annual rate
ranging from $.05 to $.10 per $1,000 of assets under
custody invested in domestic securities , based on the assets of
all funds in the Berger Fund s complex, and $.50 to $4.50
per $1,000 of Fund assets under custody invested in
foreign securities . IFTC also receives certain transaction fees
and is reimbursed for out-of-pocket expenses.
-27-<PAGE>
As transfer agent and dividend disbursing agent, IFTC (through
DST, as sub-agent) maintains all shareholder accounts of record;
assists in mailing all reports, proxies and other information to the
Funds' shareholders; calculates the amount of, and delivers to the
Funds' shareholders, proceeds representing all dividends and
distributions; and performs other related services. For these
services, IFTC receives a base fee of $600 per month and an annual fee
of $15.05 per open Fund shareholder account, subject to
scheduled increases, plus certain transaction fees and fees for closed
accounts, and is reimbursed for out-of-pocket expenses, which fees in
turn are passed through to DST as sub-agent. All of IFTC's fees are
subject to reduction pursuant to an agreed formula for certain
earnings credits on the cash balances of the Funds maintained by IFTC
as custodian.
The trustees of each of the Funds have authorized Berger
Associates to place portfolio transactions on an agency basis through
DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer
subsidiary of DST . When transactions for a Fund are effected
through DSTS , the portion of the commissions received by it
is credited against, and thereby reduce s , certain operating
expenses that the Fund would otherwise be obligated to pay. No
portion of the commissions is retained by DSTS .
In addition, under a separate Administrative Services Agreement
with each Fund, Berger Associates performs certain administrative and
recordkeeping services not otherwise performed by IFTC, including the
preparation of financial statements and reports to be filed with
regulatory authorities. Each Fund pays Berger Associates a fee at the
annual rate of one-hundredth of one percent (0.01%) of its average
daily net assets for such services. These fees are in addition to the
fees paid under the Investment Advisory Agreement. The administrative
services fees may be changed by the trustees without shareholder
approval.
Berger Associates has agreed to waive its advisory fee to
the extent that normal operating expenses in any
fiscal year, including the management fee but excluding brokerage
commissions, interest, taxes and extraordinary expenses, of each
of the Berger IPT - 100 Fund and the Berger IPT - Growth and Income
Fund exceed 1.00%, and the normal operating expenses
in any fiscal year of the Berger IPT - Small Company Growth
Fund exceed 1.15%, of the respective Fund's average
daily net assets.
6. Brokerage Policy
----------------
Although each Fund retains full control over its own investment
policies, under the terms of its Investment Advisory Agreement, Berger
Associates is directed to place the portfolio transactions of the
Fund. Berger Associates is required to report on the placement of
brokerage business to the trustees of each Fund every quarter,
indicating the brokers with whom Fund portfolio business was placed
and the basis for such placement.
-28-<PAGE>
The Investment Advisory Agreement that each Fund has with Berger
Associates authorizes and directs Berger Associates to place portfolio
transactions for the Fund only with brokers and dealers who render
satisfactory service in the execution of orders at the most favorable
prices and at reasonable commission rates. However, each Agreement
specifically authorizes Berger Associates to place such transactions
with a broker with whom it has negotiated a commission that is in
excess of the commission another broker or dealer would have charged
for effecting that transaction if Berger Associates determines in good
faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker
viewed in terms of either that particular transaction or the
overall responsibilities of Berger Associates.
In accordance with this provision of the Agreement, Berger
Associates places portfolio brokerage business of each Fund with
brokers who provide useful research services to Berger Associates.
Such research services typically consist of studies made by investment
analysts or economists relating either to the past record of and
future outlook for companies and the industries in which they operate,
or to national and worldwide economic conditions, monetary conditions
and trends in investors' sentiment, and the relationship of these
factors to the securities market. In addition, such analysts may be
available for regular consultation so that Berger Associates may be
apprised of current developments in the above-mentioned factors.
The research services received from brokers are often helpful to
Berger Associates in performing its investment advisory responsi-
bilities to the Funds, but they are not essential, and the avail-
ability of such services from brokers does not reduce the respon-
sibility of Berger Associates' advisory personnel to analyze and
evaluate the securities in which the Funds invest. The research
services obtained as a result of the Funds' brokerage business also
will be useful to Berger Associates in making investment decisions for
its other advisory accounts, and, conversely, information obtained by
reason of placement of brokerage business of such other accounts may
be used by Berger Associates in rendering investment advice to the
Funds. Although such research services may be deemed to be of value
to Berger Associates, they are not expected to decrease the expenses
that Berger Associates would otherwise incur in performing its
investment advisory services for the Funds nor will the advisory fees
that are received by Berger Associates from the Funds be reduced as a
result of the availability of such research services from brokers.
The trustees of each of the Funds have authorized Berger
Associates to place portfolio transactions on an agency basis through
DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary
of DST . When transactions for a Fund are effected through
DSTS, the portion of the commissions received by DSTS is
credited against, and thereby reduce s , certain operating
expenses
-29-<PAGE>
that the Fund would otherwise be obligated to pay. No portion of the
commissions is retained by DSTS.
The trustees of each Fund have authorized Berger Associates to
consider sales by a broker-dealer of variable insurance
contracts that permit allocation of contract values to one or more of
the Funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds. In placing portfolio business
with such broker-dealers, Berger Associates will seek the best
execution of each transaction, and all such brokerage placement must
be consistent with the Rules of Fair Practice of the NASD.
Although investment decisions for each of the Funds are made
independently from those for other investment advisory clients of
Berger Associates, the same investment decision may be made for both a
Fund and one or more other advisory clients, including other mutual
funds advised by Berger Associates. If any of the Funds and other
clients of Berger Associates should purchase or sell the same class of
securities on the same day, the orders for such transactions may be
combined in order to seek the best combination of net price and
execution for each. In such event, the amount and net price of the
transactions would be allocated in a manner considered equitable to
the Fund and each such other client.
7. How To Purchase and Redeem Shares In the Funds
----------------------------------------------
Shares of the Funds are sold by the Funds on a continuous basis
to separate accounts of Participating Insurance Companies or to
qualified plans. Investors may not purchase or redeem shares of the
Funds directly, but only through variable insurance contracts offered
through the separate accounts of Participating Insurance Companies or
through qualified retirement plans. You should refer to the
applicable Separate Account Prospectus or your plan documents for
information on how to purchase or surrender a contract, make partial
withdrawals of contract values, allocate contract values to one or
more of the Funds, change existing allocation among investment
alternatives, including the Funds, or select specific Funds as
investment options for a qualified plan. No sales charge is imposed
upon the purchase or redemption of shares of the Funds. Sales charges
for the variable insurance contracts or qualified plans are described
in the relevant Separate Account Prospectuses or plan documents.
Fund shares are purchased or redeemed at the net asset value per
share next computed after receipt of a purchase or redemption order by
a Fund, its agent or its delegatee. Payment for redeemed shares
generally will be made within three business days following the date
of the request for redemption. However, payment may be postponed
under unusual circumstances, such as when normal trading is not taking
place on the New York Stock Exchange, an emergency as defined by the
Securities and Exchange Commission exists, or as permitted by the
Securities and Exchange Commission.
-30-<PAGE>
8. Suspension of Redemption Rights
-------------------------------
The right of redemption may be suspended for any period during
which the New York Stock Exchange is closed or the Securities and
Exchange Commission determines that trading on the Exchange is
restricted, or when there is an emergency as determined by the
Securities and Exchange Commission as a result of which it is not
reasonably practicable for a Fund to dispose of securities owned by it
or to determine the value of its net assets, or for such other period
as the Securities and Exchange Commission may by order permit for the
protection of shareholders of a Fund.
Each Fund intends to redeem its shares only for cash, although it
retains the right to redeem its shares in kind under unusual
circumstances, in order to protect the interests of the remaining
shareholders, by the delivery of securities selected from its assets
at its discretion. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage costs in converting the
assets to cash. The method of valuing securities used to make
redemption in kind will be the same as the method of valuing portfolio
securities described below.
9. How The Net Asset Value Is Determined
-------------------------------------
The net asset value of each Fund is determined once daily, at the
close of the regular trading session of the New York Stock Exchange
("NYSE") (normally 4:00 p.m., New York time, Monday through Friday)
each day that the NYSE is open. The NYSE is closed and the net asset
value of the Funds is not determined on weekends and on New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day each year. The per
share net asset value of each Fund is determined by dividing the total
value of its securities and other assets, less liabilities, by the
total number of shares outstanding.
In determining net asset value, securities listed or traded
primarily on national exchanges, The Nasdaq Stock Market and foreign
exchanges are valued at the last sale price on such markets, or, if
such a price is lacking for the trading period immediately preceding
the time of determination, such securities are valued at the mean of
their current bid and asked prices. Securities that are traded in the
over-the-counter market are valued at the mean between their current
bid and asked prices. Foreign securities and currencies are converted
to U.S. dollars using the exchange rate in effect shortly before the
close of the NYSE. The market value of individual securities held by
each Fund will be determined by using prices provided by pricing
services which provide market prices to other mutual funds or, as
needed, by obtaining market quotations from independent
broker/dealers. Short-term money market securities maturing within 60
days are valued on the amortized cost basis, which approximates market
value. Securities and assets for which quotations are not readily
available are valued at fair values determined in good faith
-31-<PAGE>
pursuant to consistently applied procedures established by the
trustees.
10. Income Dividends, Capital Gains
Distributions and Tax Treatment
-------------------------------
Each of the Funds intends to qualify to be treated as a separate
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If they so qualify and
meet certain minimum distribution requirements, the Funds will not be
liable for Federal income tax on the amount of their earnings that are
distributed. If a Fund distributes annually less than 98% of
its income and gain, it will be subject to a non-deductible 4% excise
tax. In addition, each Fund intends to qualify under the
diversification requirements of Code Section 817(h) relating to
insurance company separate accounts. By meeting these and other
requirements, the Participating Insurance Companies, rather than the
owners of the variable insurance contracts, should be subject to tax
on distributions received with respect to Fund shares. The tax
treatment of distributions made to a Participating Insurance Company
will depend on the Participating Insurance Company's tax status.
Participating Insurance Companies should consult their own tax
advisors concerning whether such distributions are subject to
federal income tax if retained as part of contract reserves. For
further information concerning federal income tax consequences for the
owners of variable insurance contracts and qualified plan
participants, consult the appropriate Separate Account Prospectus or
plan documents.
All dividends or capital gains distributions paid by a Fund will
be automatically reinvested in shares of that Fund at the net asset
value on the ex-dividend date , unless an election is made on
behalf of a separate account or qualified plan to receive
distributions in cash.
Dividends and interest received by the Funds on foreign
securities may give rise to withholding and other taxes imposed by
foreign countries. It is expected that foreign taxes paid by the
Funds will be treated as expenses of the Funds. Tax conventions
between certain countries and the United States may reduce or
eliminate such taxes.
11. Performance Information
-----------------------
The Prospectus contains a brief description of how total return
is calculated.
Quotations of average annual total return for the Funds will be
expressed in terms of the average annual compounded rate of return of
a hypothetical investment in the Fund over periods of 1, 5 and
10 years (or the life of the Fund, if shorter). These are the rates
of return that would equate the initial amount invested to the ending
redeemable value. These rates of return are
-32-<PAGE>
calculated pursuant to the following formula: P(1 + T)[to the Nth
power] = ERV (where P = a hypothetical initial payment of $1,000, T =
the average annual total return, n = the number of years and ERV = the
ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period). All total return figures reflect the
deduction of a proportional share of Fund expenses on an annual basis,
and assume that all dividends and distributions are reinvested when
paid.
In conjunction with performance reports, comparative data between
a Fund's performance for a given period and other types of investment
vehicles may be provided. A Fund's performance is based upon amounts
available for investment under variable insurance contracts of
Participating Insurance Companies or available for allocation to a
qualified plan account, rather than upon premiums paid or
contributions by contract owners or plan participants. Consequently
the Fund's total return data does not reflect the impact of sales
loads (whether front-load or deferred) or other contract or plan
charges deducted from premiums or from the assets of the separate
accounts or qualified plans that invest in the Fund. Such sales loads
and charges may be substantial and may vary widely among Participating
Insurance Companies and qualified plans. Accordingly, the total
return data for the Funds is most useful for comparison with
comparable data for other investment options under the same variable
insurance contract or qualified plan.
Comparisons of the Funds' total returns to those of other
investment vehicles are useful in evaluating the historical portfolio
management performance of the Funds' investment advisor .
However, such comparisons should not be mistaken for comparisons of
the returns from the purchase of a variable insurance contract of a
Participating Insurance Company, or investment in a qualified plan, to
the purchase of another investment vehicle. The Funds' total return
data should be reviewed along with comparable total return data for an
associated separate account or in conjunction with data (such as the
data contained in personalized, hypothetical illustrations of variable
life insurance contracts) that would permit evaluation of the
magnitude of charges and expenses attributable to the contract or plan
that are not reflected in the Fund's total return data.
12. Additional Information
----------------------
The Berger IPT - 100 Fund, the Berger IPT - Growth and Income
Fund and the Berger IPT - Small Company Growth Fund are separate
portfolios or series established under the Berger Institutional
Products Trust, a Delaware business trust organized under the Delaware
Business Trust Act on October 17, 1995. Under Delaware law,
shareholders of the Trust will enjoy the same limitations on personal
liability as extended to stockholders of a Delaware corporation.
Further, the Trust Instrument of the Trust provides that no
shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by,
-33-<PAGE>
contracted for or otherwise existing with respect to, the Trust or any
particular series (fund) of the Trust. However, the principles of law
governing the limitations of liability of beneficiaries of a business
trust have not been authoritatively established as to business trusts
organized under the laws of one jurisdiction but operating or owning
property in other jurisdictions. In states that have adopted
legislation containing provisions comparable to the Delaware Business
Trust Act, it is believed that the limitation of liability of
beneficial owners provided by Delaware law should be respected. In
those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the
shareholders of the Trust are not entitled to the limitations of
liability set forth in Delaware law or the Trust Instrument and,
accordingly, that they may be personally liable for the obligations of
the Trust.
In order to protect shareholders from such potential liability,
the Trust Instrument requires that every written obligation of the
Trust or any series thereof contain a statement to the effect that
such obligation may only be enforced against the assets of the Trust
or such series. The Trust Instrument also provides for
indemnification from the assets of the relevant series for all losses
and expenses incurred by any shareholder by reason of being or having
been a shareholder, and that the Trust shall, upon request, assume the
defense of any such claim made against such shareholder for any act or
obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.
As a result, the risk of a shareholder of any Fund incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations. The Trust believes that, in view of the above, the risk
of personal liability to shareholders of any of the Funds is remote.
The trustees intend to conduct the operations of the Trust and the
Funds so as to avoid, to the extent possible, liability of
shareholders for liabilities of the Trust or the Funds.
Shares of the Funds have no preemptive rights, and since each
Fund has only one class of securities there are no sinking funds or
arrearage provisions which may affect the rights of the Fund shares.
Fund shares have no conversion or subscription rights. Shares of the
Funds may be transferred by endorsement, or other customary methods,
but none of the Funds is bound to recognize any transfer until it is
recorded on its books.
The separate accounts of the Participating Insurance Companies
and the trustees of the qualified plans invested in the Funds, rather
than individual contract owners or plan participants, are the
shareholders of the Funds. However, each Participating Insurance
Company or qualified plan will vote such shares as required by law and
interpretations thereof, as amended or changed from time to time.
Under current law, a Participating Insurance Company is required to
request voting instructions from its
-34-<PAGE>
contract owners and must vote Fund shares held by each of its separate
accounts in proportion to the voting instructions received.
Additional information about voting procedures is contained in the
applicable Separate Account Prospectuses.
Shareholders of each Fund generally vote separately on matters
relating to that Fund, although they will vote together with the
holders of all other series of the Trust in the election of trustees
of the Trust and on all matters relating to the Trust as a whole.
Each full share of each Fund has one vote. Shares of each Fund have
noncumulative voting rights, which means that the holders of more than
50% of the shares voting for the election of trustees can elect 100%
of the trustees if they choose to do so and, in such event, the
holders of the remaining shares voting for the election of trustees
will not be able to elect any trustees. None of the Funds is required
to hold annual shareholder meetings unless required by the Investment
Company Act of 1940 or other applicable law or unless called by the
trustees.
As of May 1, 1996 , all of the outstanding shares of each
Fund were held by Berger Associates, a Delaware corporation, the
Funds' investment advisor , which provided the seed capital
necessary to establish the Funds.
Davis, Graham & Stubbs LLP , 370 Seventeenth Street, Denver,
Colorado, has passed on legal matters relating to this offering as
counsel for the Trust.
Price Waterhouse LLP, 950 Seventeenth Street , Denver,
Colorado, has been appointed to act as independent accountants
for the Trust and each of its Funds for the fiscal year ended
December 31, 1996 .
The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of
1933, as amended, with respect to the securities of the Berger IPT -
100 Fund, the Berger IPT - Growth and Income Fund and the Berger IPT -
Small Company Growth Fund, of which this Statement of Additional
Information is a part. If further information is desired with respect
to any of the Funds or such securities, reference is made to the
Registration Statements and the exhibits filed as a part thereof.
Financial Statements
- --------------------
The following financial statements are attached at the end of
this Statement of Additional Information:
Report of Independent Accountants, dated April 16, 1996
Statements of Assets and Liabilities of the Berger IPT - 100 Fund,
Berger IPT - Growth and Income Fund and Berger IPT - Small Company
Growth Fund, as of April 16, 1996
-35-<PAGE>
Notes to Statements of Assets and Liabilities, April 16, 1996
-36-<PAGE>
APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Funds may purchase securities which are convertible into
common stock when the Funds' management believes they offer the
potential for a higher total return than nonconvertible securities.
While fixed income securities generally have a priority claim on a
corporation's assets over that of common stock, some of the
convertible securities which the Funds may hold are high-yield/high-
risk securities that are subject to special risks, including the risk
of default in interest or principal payments which could result in a
loss of income to a Fund or a decline in the market value of the
securities. Convertible securities often display a degree of market
price volatility that is comparable to common stocks.
Specifically, corporate debt securities which are below
investment grade (securities rated Ba or lower by Moody's or BB or
lower by Standard & Poor's) and unrated securities which a Fund may
purchase and hold are subject to a higher risk of non-payment of
principal or interest, or both, than higher grade debt securities.
Generally speaking, the lower the quality of a debt security (which
may be reflected in its Moody's and/or Standard & Poor's ratings), the
higher the yield it will provide, but the greater the risk that
interest or principal payments will not be made when due. Thus, the
lower the grade of a security, the more speculative characteristics it
generally has. Information about the ratings of Moody's and Standard
& Poor's, and the investment risks associated with the various
ratings, is set forth below.
The market prices of these lower grade convertible securities are
generally less sensitive to interest rate changes than higher-rated
investments, but more sensitive to economic changes or individual
corporate developments. Periods of economic uncertainty and change
can be expected to result in volatility of prices of these securities.
Lower rated securities also may have less liquid markets than higher
rated securities, and their liquidity as well as their value may be
adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a
negative impact on the market for high-yield/high-risk bonds.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard &
Poor's are a generally accepted measurement of credit risk. However,
they are subject to certain limitations. Ratings are generally based
upon historical events and do not necessarily reflect the future. In
addition, there is a period of time between the issuance of a rating
and the update of the rating, during which time a published rating may
be inaccurate.
-37-<PAGE>
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." 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 rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate
and thereby not well safeguarded during good and bad times over the
future. Uncertainty of position characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.
Ca-Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
-38-<PAGE>
C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each
generic rating classification from Aa through B in its corporate bond
rating system. The modifier 1 indicates that the security 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
issue ranks in the lower end of its generic category.
KEY TO STANDARD & POOR'S CORPORATE RATINGS
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 higher rated categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions, or
changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal for debt in this category than in
higher rated categories.
BB, B, CCC, CC and C-Debt rated BB, B, CCC, CC and C is regarded,
on balance, as predominantly speculative with respect to capacity to
pay interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and C the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are out-weighed by the
large uncertainties or major risk exposures to adverse conditions.
C1-The rating C1 is reserved for income bonds on which no
interest is being paid.
D-Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be
modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
-39-<PAGE>
950 Seventeenth Street
Suite 2500
Denver, CO 80202
PRICE WATERHOUSE LLP [LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholder
of Berger Institutional Products Trust
In our opinion, the accompanying statements of assets and liabilities
present fairly, in all material respects, the financial position of
Berger IPT - 100 Fund, Berger IPT - Growth and Income Fund and Berger
IPT - Small Company Growth Fund (constituting the Berger Institutional
Products Trust, hereafter referred to as the "Fund"), at April 16,
1996, in conformity with generally accepted accounting principles.
This financial statement is the responsibility of the Fund's
management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of
this financial statement in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides
a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
PRICE WATERHOUSE LLP
Denver, Colorado
April 16, 1996<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
April 16, 1996 Berger IPT- Berger IPT-
Berger IPT- Growth and Small Company
100 Fund Income Fund Growth Fund
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash $250,000 $250,000 $250,000
- --------------------------------------------------------------------------------------------------------------------
Total Assets 250,000 250,000 250,000
- --------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 0 0 0
- --------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Shares Outstanding $250,000 $250,000 $250,000
====================================================================================================================
Capital Shares:
Authorized (Par Value $0.01) unlimited unlimited unlimited
====================================================================================================================
Shares Outstanding 25,000 25,000 25,000
====================================================================================================================
Net Asset Value, Offering and Redemption
Price Per Share $10.00 $10.00 $10.00
====================================================================================================================
</TABLE>
See notes to statements of assets and liabilities.
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
NOTES TO STATEMENTS OF ASSETS AND LIABILITIES
APRIL 16, 1996
NOTE 1 - ORGANIZATION AND REGISTRATION
Berger Institutional Products Trust (the "Trust"), a Delaware
business trust, was established on October 17, 1995 as a diversified
open-end management investment company. The Trust consists of three
separate portfolios: Berger IPT-100 Fund, Berger IPT-Growth and
Income Fund, and Berger IPT-Small Company Growth Fund. The Trust has
been inactive since inception except for matters relating to its
organization and registration as an investment company under the
Investment Company Act of 1940 and the Securities Act of 1933. The
Trust's shares are not offered directly to the public, but are sold
exclusively to insurance companies (the "Participating Insurance
Companies") as a pooled funding vehicle for variable annuity and
variable life insurance contracts issued by separate accounts of
Participating Insurance Companies and to qualified plans.
On April 15, 1996 Berger Associates, Inc. ("Berger"), the Trust's
investment advisor purchased 25,000 shares of each portfolio at a net
asset value of $10.00 per share.
All costs incurred in organizing the Trust were paid by Berger,
the investment advisor of the Trust.
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS
Berger serves as the Trust's investment advisor. As compensation
for its services to the Trust, Berger receives an investment advisory
fee which is accrued daily at the applicable rate and paid monthly.
The fee is based on an annual rate of each portfolio's average net
assets as follows: Berger IPT-100 Fund and Berger IPT-Growth and
Income Fund at .75 of 1% of average daily net assets; Berger IPT-Small
Company Growth Fund at .90 of 1% of average daily net assets.
In accordance with a recordkeeping and pricing agreement, the
Trust pays Investors Fiduciary Trust Company ("IFTC"), a monthly base
rate plus an additional annual fee which is computed using average net
assets. The fee is calculated daily and paid monthly.
IFTC has also been appointed as the custodian, transfer agent,
and dividend disbursing agent for the Trust..
The Trust has entered into an administrative services agreement
with Berger with respect to each portfolio. The administrative
services agreement provides for an annual fee of .01 of 1% of the
average daily net assets of the portfolio, computed daily and paid
monthly.
Certain officers and directors of Berger are also officers and
trustees of the Trust.
-40-<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits:
---------------------------------
(a) Financial Statements.
--------------------
In Part A of the Registration Statement (Prospectus):
None.
To be included in Part B of this amendment to the
Registration Statement (Statement of Additional
Information) :
1. Report of Independent Accountants, dated April 16,
1996
2. Statements of Assets and Liabilities of the Berger
IPT-100 Fund, Berger IPT-Growth and Income Fund and
Berger IPT-Small Company Growth Fund, as of April
16, 1996
3. Notes to Statements of Assets and Liabilities,
April 16, 1996
In Part C of the Registration Statement:
None.
(b) Exhibits.
--------
The Exhibit Index following the signature pages below is
incorporated herein by reference.
C-1<PAGE>
Item 25. Persons Controlled by or Under Common Control With
--------------------------------------------------
Registrant
----------
On the date that this Registration Statement is declared
effective, Berger Associates, Inc., a Delaware corporation,
will own all of the outstanding shares of the Registrant, having
provided all the initial seed capital to establish the Registrant.
Consequently, Berger Associates will be a control person of
the Registrant. Berger Associates will continue to be a
control person of the Registrant so long as it holds more than 25%
of the Registrant's outstanding shares, as the term "control" is
defined in the Investment Company Act of 1940. So long as the
Registrant is controlled by Berger Associates , it will be
under common control with the other companies controlled by
Berger Associates' corporate parent, Kansas City
Southern Industries, Inc. ("KCSI") . See "Management and
Investment Advice" in the Prospectus and "Investment
Advisor " in the Statement of Additional Information for
more information KCSI and its affiliates .
Item 26. Number of Holders of Securities
-------------------------------
The number of record holders of shares of beneficial
interest in the series of Registrant's shares outstanding as of
April 18, 1996
, was as follows:
SERIES OR FUND NUMBER OF HOLDERS
OF SHARES
Berger IPT - 100 Fund
1
Berger IPT - Growth and Income Fund 1
Berger IPT - Small Company Growth Fund 1
Item 27. Indemnification
---------------
Article IX, Section 2 of the Trust Instrument for Berger
Institutional Products Trust (the "Trust"), provides for
indemnification of certain persons acting on behalf of the Trust
to the fullest extent permitted by the law. In general, trustees,
officers, employees, managers and agents will be indemnified
against liability and against all expenses incurred by them in
connection with any claim, action, suit or proceeding (or
settlement thereof) in which they become involved by virtue of
their Trust office, unless their conduct is determined to
constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been
determined that they have not acted in good faith in the
reasonable belief that their actions were in or not opposed to the
best interests of the Trust. The Trust also may advance money for
these expenses, provided that the trustees, officers, employees,
managers or agents undertake to repay the Trust if their conduct
is later determined to preclude indemnification. The Trust has
the power to
C-2<PAGE>
purchase insurance on behalf of its trustees, officers, employees,
managers and agents, whether or not it would be permitted or
required to indemnify them for any such liability under the Trust
Instrument or applicable law, and the Trust has purchased and
maintains an insurance policy covering such persons against
certain liabilities incurred in their official capacities.
Item 28. Business and Other Connections of Investment Advisor
----------------------------------------------------
The business of Berger Associates, Inc., the investment
advisor of the Registrant, is described in the Prospectus
in Section 5 and in the Statement of Additional Information in
Section 4 which are included in this Registration
Statement.
William M.B. Berger, Rodney L. Linafelter, William R.
Keithler and Kevin R. Fay have no business, profession, vocation
or employment of a substantial nature other than their positions
with the investment advisor , and have had no prior
business, profession, vocation or employment of a substantial
nature within the preceding two years other than as shown in
Section 3 of the Statement of Additional Information.
Gerard M. Lavin, President and a director of Berger
Associates and President and a trustee of the Trust, also serves
as a Vice President of DST Systems, Inc., 1055 Broadway, 9th
Floor, Kansas City, MO 64105 (provider of information and
transaction processing and recordkeeping services for various
mutual funds), and as a director of First of Michigan Capital
Corp. (holding company) and First of Michigan Corp. (broker-
dealer), 100 Renaissance Center, Detroit, MI 48243. From February
1992 to March 1995, Mr. Lavin served as President and CEO of
Investors Fiduciary Trust Company.
Craig D. Cloyed, Vice President and Chief Marketing
Officer of Berger Associates, was formerly (September 1989 to
August 1995) Senior Vice President of INVESCO Funds Group (mutual
funds).
Landon H. Rowland, a director of Berger Associates, also
serves as President, Chief Executive Officer and a director of
Kansas City Southern Industries, Inc., 114 W. 11th Street, Kansas
City, MO 64105 (a publicly traded holding company whose primary
subsidiaries are engaged in transportation and financial asset
management, and which owns approximately 41 % of the
outstanding shares of DST Systems, Inc., a publicly traded
information and transaction processing company). Mr. Rowland also
serves as Chairman of the Board and a director of The Kansas City
Southern Railway Company, and until September 1995, served as
Chairman of the Board and a director of DST Systems, Inc.
Item 29. Principal Underwriters
----------------------
Not applicable.
C-3<PAGE>
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the rules
promulgated thereunder are maintained as follows:
(a) Shareholder records are maintained by the
Registrant's sub-transfer agent, DST Systems,
Inc., P.O. Box 419958, Kansas City, MO 64141;
(b) Accounting records relating to cash and other
money balances; asset, liability, reserve,
capital, income and expense accounts; portfolio
securities; purchases and sales; and brokerage
commissions are maintained by the Registrant's
Recordkeeping and Pricing Agent, Investors
Fiduciary Trust Company ("IFTC"), 127 West 10th
Street, Kansas City, Missouri 64105. Other
records of the Registrant relating to purchases
and sales; the Trust Instrument, minute books and
other trust records; brokerage orders; performance
information and other records are maintained at
the offices of the Registrant at 210 University
Boulevard, Suite 900, Denver, Colorado 80206.
Item 31. Management Services
-------------------
The Registrant has no management-related service
contract which is not discussed in Parts A and B of this form.
See Section 6 of the Prospectus and Section 5 of the Statement of
Additional Information for a discussion of the Recordkeeping and
Pricing Agent Agreement entered into between the Registrant and
IFTC and the Administrative Services Agreement entered into
between the Registrant and Berger Associates, Inc., investment
advisor to the Registrant.
Item 32. Undertakings
------------
(1) Registrant undertakes to comply with the following
policy with respect to calling meetings of shareholders for the
purpose of voting upon the removal of any trustee of the
Registrant and facilitating shareholder communications related to
such meetings:
1. The trustees will promptly call a meeting of
shareholders for the purpose of voting upon the removal of any
trustee of the Registrant when requested in writing to do so by
the record holders of at least 10% of the outstanding shares of
the Registrant.
2. Whenever ten or more shareholders of record who
have been shareholders of the Registrant for at least six months,
and who hold in the aggregate either shares having a net asset
value of at least $25,000 or at least 1% of the outstanding shares
C-4<PAGE>
of the Registrant, whichever is less, apply to the trustees in
writing stating that they wish to communicate with other
shareholders with a view to obtaining signatures to request such a
meeting, and deliver to the trustees a form of communication and
request which they wish to transmit, the trustees within 5
business days after receipt of such application either will (i)
give such applicants access to a list of the names and addresses
of all shareholders of record of the Registrant, or (ii) inform
such applicants of the approximate number of shareholders of
record and the approximate cost of mailing the proposed
communication and form of request.
3. If the trustees elect to follow the course
specified in clause (ii), above, the trustees, upon the written
request of such applicants accompanied by tender of the material
to be mailed and the reasonable expenses of the mailing, will,
with reasonable promptness, mail such material to all shareholders
of record, unless within 5 business days after such tender the
trustees shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together
with a copy of the material requested 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.
4. If the Commission enters an order either refusing
to sustain any of the trustees' objections or declaring that any
objections previously sustained by the Commission have been
resolved by the applicants, the trustees will cause the Registrant
to mail copies of such material to all shareholders of record with
reasonable promptness after the entry of such order and the
renewal of such tender.
(2) Registrant undertakes to file a Post-Effective
Amendment to this Registration Statement (using financial
statements which need not be certified) within four to six months
after the later of the effective date of this Registration
Statement or commencement of its operations.
(3) The Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy of Registrant's
latest annual report to shareholders, upon request and without
charge.
(4) Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the
provisions set forth above, or otherwise, the 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 liability
(other than the payment by the Registrant of expense incurred or
C-5<PAGE>
paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
C-6<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant has
duly caused this amendment to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Denver, and State of
Colorado, on the 18th day of April, 1996.
BERGER INSTITUTIONAL PRODUCTS TRUST
-----------------------------------
(Registrant)
By GERARD M. LAVIN
---------------------------------
Name: Gerard M. Lavin
----------------------------
Title: President
---------------------------
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Gerard M. Lavin
- -------------------------- President (Principal April 18, 1996
Gerard M. Lavin Executive Officer)
and Trustee
/s/ Rodney L. Linafelter*
- -------------------------- President of April 18, 1996
Rodney L. Linafelter Berger IPT - 100 Fund and
Berger IPT - Growth and
Income Fund and Trustee
Kevin R. Fay
- -------------------------- Vice President, April 18, 1996
Kevin R. Fay Secretary and
Treasurer (Principal
Financial and
Accounting Officer)
/s/ Dennis E. Baldwin*
- -------------------------- Trustee April 18, 1996
Dennis E. Baldwin
/s/ William M.B. Berger*
- -------------------------- Trustee April 18, 1996
William M.B. Berger
/s/ Louis R. Bindner*
- -------------------------- Trustee April 18, 1996
Louis R. Bindner
C-7<PAGE>
/s/ Katherine A. Cattanach*
- -------------------------- Trustee April 18, 1996
Katherine A. Cattanach
/s/ Lucy Black Creighton*
- -------------------------- Trustee April 18, 1996
Lucy Black Creighton
/s/ Paul R. Knapp*
- -------------------------- Trustee April 18, 1996
Paul R. Knapp
/s/ Harry T. Lewis, Jr.*
- -------------------------- Trustee April 18, 1996
Harry T. Lewis, Jr.
/s/ Michael Owen*
- -------------------------- Trustee April 18, 1996
Michael Owen
/s/ William Sinclaire*
- -------------------------- Trustee April 18, 1996
William Sinclaire
Gerard M. Lavin
- ---------------------------
*By: Gerard M. Lavin,
Attorney-in-fact
C-8<PAGE>
EXHIBIT INDEX
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
_____________ __________ _______________
* Exhibit 1 EX-99.B1 Trust Instrument
* Exhibit 2 EX-99.B2 Bylaws
Exhibit 3 Not Applicable
Exhibit 4 Not Applicable
* Exhibit 5.1 EX-99.B5.1 Form of Investment Advisory
Agreement for Berger IPT - 100
Fund
* Exhibit 5.2 EX-99.B5.2 Form of Investment Advisory
Agreement for Berger IPT -
Growth and Income Fund
* Exhibit 5.3 EX-99.B5.3 Form of Investment Advisory
Agreement for Berger IPT -
Small Company Growth Fund
Exhibit 6 Not Applicable
Exhibit 7 Not Applicable
* Exhibit 8 EX-99.B8 Form of Custody Agreement
* Exhibit 9.1.1 EX-99.B9.1.1 Form of Administrative
Services Agreement for Berger
IPT - 100 Fund
* Exhibit 9.1.2 EX-99.B9.1.2 Form of Administrative
Services Agreement for Berger
IPT - Growth and Income Fund
* Exhibit 9.1.3 EX-99.B9.1.3 Form of Administrative
Services Agreement for Berger
IPT - Small Company Growth
Fund
* Exhibit 9.2 EX-99.B9.2 Form of Recordkeeping and
Pricing Agent Agreement
* Exhibit 9.3 EX-99.B9.3 Form of Agency Agreement
* Exhibit 9.4 EX-99.B9.4 Form of Participation
Agreement between Berger
Institutional Products Trust,
Berger Associates, Inc. and
Great American Reserve
Insurance Company
* Exhibit 10 EX-99.B10 Opinion and consent of Davis,
Graham & Stubbs LLP
* Exhibit 11 EX-99.B11 Consent of Price Waterhouse
LLP
Exhibit 12 Not Applicable
* Exhibit 13 EX-99.B13 Investment Letter from Initial
Stockholder
Exhibit 14 Not Applicable
Exhibit 15 Not Applicable
* Exhibit 16 EX-99.B16 Schedule for Computation of
Performance Data
** Exhibit 17.1 EX-99.B27.IPT100 Financial Data Schedule for
Berger IPT - 100 Fund
** Exhibit 17.2 EX-99.B27.IPTG&I Financial Data Schedule for
Berger IPT - Growth and Income
Fund
** Exhibit 17.3 EX-99.B27.IPTSCG Financial Data Schedule for
Berger IPT - Small Company
Growth Fund
Exhibit 18 Not Applicable
_______________________
* Filed herewith.
** Not required to be filed until financial statements for Fund are
required.
BERGER INSTITUTIONAL PRODUCTS TRUST
(A Delaware Business Trust)
TRUST INSTRUMENT
Dated October 17, 1995
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE TRUSTEES. . . . . . . . . . . . . . . . . . . . 2
Section 1. Management of the Trust. . . . . . . . . . . . 2
Section 2. Initial Trustees and Number of Trustees. . . . 2
Section 3. Term of Office of Trustees . . . . . . . . . . 2
Section 4. Vacancies; Appointment of Trustees . . . . . . 3
Section 5. Temporary Vacancy or Absence . . . . . . . . . 3
Section 6. Chairman . . . . . . . . . . . . . . . . . . . 3
Section 7. Action by the Trustees . . . . . . . . . . . . 3
Section 8. Ownership of Trust Property. . . . . . . . . . 4
Section 9. Effect of Trustees Not Serving . . . . . . . . 4
Section 10. Trustees, Etc. as Shareholders . . . . . . . . 4
ARTICLE III POWERS OF THE TRUSTEES. . . . . . . . . . . . . . . 5
Section 1. Powers . . . . . . . . . . . . . . . . . . . . 5
Section 2. Certain Transactions . . . . . . . . . . . . . 8
ARTICLE IV SERIES; CLASSES; SHARES . . . . . . . . . . . . . . 8
Section 1. Establishment of Series or Classes . . . . . . 8
Section 2. Shares of Beneficial Interest. . . . . . . . . 9
Section 3. Investment in the Trust. . . . . . . . . . . . 9
Section 4. Assets and Liabilities of Series . . . . . . . 10
Section 5. Ownership and Transfer of Shares . . . . . . . 11
Section 6. Status of Shares: Limitation of Shareholder
Liability. . . . . . . . . . . . . . . . . . . 11
ARTICLE V DISTRIBUTIONS AND REDEMPTIONS . . . . . . . . . . . 12
Section 1. Distributions. . . . . . . . . . . . . . . . . 12
Section 2. Redemptions. . . . . . . . . . . . . . . . . . 12
Section 3. Determination of Net Asset Value . . . . . . . 12
Section 4. Suspension of Right of Redemption. . . . . . . 13
Section 5. Redemptions Necessary for Qualification as
Regulated Investment Company . . . . . . . . . 13
ARTICLE VI SHAREHOLDERS' VOTING POWERS AND MEETINGS. . . . . . 13
Section 1. Voting Powers. . . . . . . . . . . . . . . . . 13
Section 2. Meetings of Shareholders . . . . . . . . . . . 14
Section 3. Quorum; Required Vote. . . . . . . . . . . . . 14
ARTICLE VII CONTRACTS WITH SERVICE PROVIDERS. . . . . . . . . . 15
Section 1. Investment Adviser . . . . . . . . . . . . . . 15
Section 2. Principal Underwriter. . . . . . . . . . . . . 15
i<PAGE>
Page
----
Section 3. Transfer Agency, Shareholder Services and
Administration Agreements. . . . . . . . . . . 16
Section 4. Custodian. . . . . . . . . . . . . . . . . . . 16
Section 5. Parties to Contracts with Service Providers. . 16
ARTICLE VIII EXPENSES OF THE TRUST AND SERIES. . . . . . . . . . 16
ARTICLE IX LIMITATION OF LIABILITY AND INDEMNIFICATION . . . . 17
Section 1. Limitation of Liability. . . . . . . . . . . . 17
Section 2. Indemnification. . . . . . . . . . . . . . . . 18
Section 3. Indemnification of Shareholders. . . . . . . . 19
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 20
Section 1. Trust Not a Partnership. . . . . . . . . . . . 20
Section 2. Trustee Action; Expert Advice; No Bond or
Surety . . . . . . . . . . . . . . . . . . . . 20
Section 3. Record Dates . . . . . . . . . . . . . . . . . 20
Section 4. Termination of the Trust . . . . . . . . . . . 20
Section 5. Reorganization; Merger; Consolidation. . . . . 21
Section 6. Trust Instrument . . . . . . . . . . . . . . . 22
Section 7. Applicable Law . . . . . . . . . . . . . . . . 22
Section 8. Amendments . . . . . . . . . . . . . . . . . . 23
Section 9. Fiscal Year. . . . . . . . . . . . . . . . . . 23
Section 10. Severability . . . . . . . . . . . . . . . . . 23
Section 11. Use of the Name "Berger" . . . . . . . . . . . 24
ii<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
TRUST INSTRUMENT
----------------
This TRUST INSTRUMENT is made on October 17, 1995, by the
Trustees, to establish a business trust for the investment and
reinvestment of funds contributed to the Trust by investors. The
Trustees declare that all money and property contributed to the Trust
shall be held and managed in trust pursuant to this Trust Instrument.
The name of the Trust created by this Trust Instrument is Berger
Institutional Products Trust.
ARTICLE I
---------
DEFINITIONS
-----------
Unless otherwise provided or required by the context:
(a) "Bylaws" means the Bylaws of the Trust adopted by the
Trustees, which Bylaws are incorporated by reference herein in their
entirety, as amended from time to time;
(b) "Class" means any class of Shares of a Series
established pursuant to Article IV;
(c) "Commission," "Interested Person," and "Principal
Underwriter" have the meanings provided in the 1940 Act;
(d) "Covered Person" means a person so defined in
Article IX, Section 2;
(e) "Delaware Act" means the Delaware Business Trust Act,
12 Del.C. Section 3801 et seq., as amended from time to time;
-- ---
(f) "Majority Shareholder Vote" means "the vote of a
majority of the outstanding voting securities" as defined in the 1940
Act;
(g) "Net Asset Value" means the net asset value of each
Series of the Trust, determined as provided in Article V, Section 3;
(h) "Outstanding Shares" means Shares shown in the books of
the Trust or its transfer agent as then issued and outstanding, but
does not include Shares which have been repurchased or redeemed by the
Trust and which are held in the treasury of the Trust;
(i) "Series" means a series of Shares established pursuant
to Article IV;
(j) "Shareholder" means a record owner of Outstanding
Shares;
<PAGE>
(k) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of each Series or
Class is divided from time to time (including whole Shares and
fractions of Shares);
(l) "Trust" means Berger Institutional Products Trust
established hereby, and reference to the Trust, when applicable to one
or more Series, refers to that Series;
(m) "Trustees" means the persons who have signed this Trust
Instrument, so long as they shall continue in office in accordance
with the terms hereof, and all other persons who may from time to time
be duly qualified and serving as Trustees in accordance with
Article II, in all cases in their capacities as Trustees hereunder;
(n) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the
Trust or any Series or the Trustees on behalf of the Trust or any
Series;
(o) The "1940 Act" means the Investment Company Act of
1940, as amended from time to time.
ARTICLE II
----------
THE TRUSTEES
------------
Section 1. Management of the Trust. 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 or desirable to
carry out that responsibility. The Trustees may execute all
instruments and take all action they deem necessary or desirable to
promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust
shall be conclusive.
Section 2. Initial Trustees and Number of Trustees. The
--------- ---------------------------------------
initial Trustees shall be the persons signing this Trust Instrument.
The exact number of Trustees (other than the initial Trustees) shall
be fixed from time to time by a majority of the Trustees, provided,
that there shall be at least two (2) Trustees. Other than the initial
Trustees and Trustees appointed to fill vacancies pursuant to Section
4 of this Article, the Shareholders shall elect the Trustees by a
plurality vote on such dates as the Trustees may fix from time to
time.
Section 3. Term of Office of Trustees. Each Trustee shall
--------- --------------------------
hold office for life or until his successor is elected or the Trust
terminates; except that (a) any Trustee may resign by delivering to
the other Trustees or to any Trust officer a written resignation
effective upon such delivery or a later date specified therein;
(b) any Trustee who requests to be retired, or who has
-2-<PAGE>
become physically or mentally incapacitated or is otherwise unable to
serve, may be retired by a written instrument signed by a majority of
the other Trustees, specifying the effective date of retirement;
(c) any Trustee shall be retired or removed with or without cause at
any time upon the unanimous written request of the remaining Trustees;
and (d) any Trustee may be removed at any meeting of the Shareholders
by a vote of at least two-thirds of the Outstanding Shares.
Section 4. Vacancies; Appointment of Trustees. Whenever a
--------- ----------------------------------
vacancy shall exist, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their
sole discretion to fill that vacancy, consistent with the limitations
under the 1940 Act. Such appointment shall be made by a written
instrument signed by a majority of the Trustees or by a resolution of
the Trustees, duly adopted and recorded in the records of the Trust,
specifying the effective date of the appointment. The Trustees may
appoint a new Trustee as provided above in anticipation of a vacancy
expected to occur because of the retirement, resignation or removal of
a Trustee, or an increase in number of Trustees, provided that such
appointment shall become effective only at or after the expected
vacancy occurs. As soon as any such Trustee has accepted his or her
appointment in writing, the Trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further
act or conveyance, and he or she shall be deemed a Trustee hereunder.
Section 5. Temporary Vacancy or Absence. Whenever a
--------- ----------------------------
vacancy in the Trustees shall occur, until such vacancy is filled, or
while any Trustee is absent from his domicile (unless that Trustee has
made arrangements to be informed about, and to participate in, the
affairs of the Trust during such absence), or is physically or
mentally incapacitated, the remaining Trustees shall have all the
powers hereunder and their certificate as to such vacancy, absence or
incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not to exceed
six (6) months, unless otherwise extended for one or more additional
consecutive six (6) month periods, to any other Trustee or Trustees.
Section 6. Chairman. The Trustees shall appoint one of
--------- --------
their number to be Chairman of the 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.
Section 7. Action by the Trustees. The Trustees shall act
--------- ----------------------
by majority vote at a meeting duly called (including at a telephonic
meeting at which all participants can hear one another, unless the
1940 Act requires that a particular action be taken only at a meeting
of the Trustees in person) at which a quorum is present or by written
consent of a majority of Trustees (or such greater number as may be
required by applicable law) without a meeting. A majority of the
Trustees shall constitute a quorum at
-3-<PAGE>
any meeting. Meetings of the Trustees may be called orally or in
writing by the Chairman of the Trustees or by any two other Trustees.
Notice of the time, date and place of all Trustees meetings shall be
given to each Trustee by telephone, facsimile or other electronic
mechanism 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 signs a waiver
of notice either before, at or after the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may
delegate to any Trustee or Trustees authority to approve particular
matters or take particular actions on behalf of the Trust. Any
written consent or waiver may be provided and delivered to the Trust
by facsimile or other similar electronic mechanism.
Section 8. Ownership of Trust Property. The Trust Property
--------- ---------------------------
of the Trust and of each Series 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. All of the Trust
Property and legal title thereto shall at all times be considered as
vested in the Trust, provided that the Trustees may cause legal title
to any Trust Property to be held by or in the name of the Trustees
acting on behalf 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, as
provided in Article IV, a proportionate undivided beneficial interest
in the Trust or Series represented by Shares. The Trust or the
Trustees 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.
Section 9. Effect of Trustees Not Serving. The death,
--------- ------------------------------
resignation, retirement, removal, incapacity or inability or refusal
to serve of the Trustees, or any one of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to
the terms of this Trust Instrument.
Section 10. Trustees, Etc. as Shareholders. Subject to any
---------- ------------------------------
restrictions in the Bylaws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the
same extent as any other Shareholder, and the Trustees may issue and
sell Shares to and buy Shares from any such person or any firm or
company in which such person is interested, subject only to any
general limitations herein; provided, however, that no such person
shall be permitted to acquire or own Shares if their acquisition or
ownership would adversely affect the Trust's compliance with the
requirements of Section 817 of the Internal
-4-<PAGE>
Revenue Code or other legal or other provision applicable to the
Trust.
ARTICLE III
-----------
POWERS OF THE TRUSTEES
----------------------
Section 1. Powers. The Trustees in all instances shall act
--------- ------
as principals, free of the control of the Shareholders. The Trustees
shall have full power and authority to take or refrain from taking any
action and to execute any contracts and instruments that they may
consider necessary or desirable in the management of the Trust. The
Trustees shall not in any way be bound or limited by current or future
laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The
Trustees may exercise all of their powers without recourse to any
court or other authority. Subject to any applicable limitation herein
or in the Bylaws or resolutions of the Trust, the Trustees shall have
power and authority, without limitation:
(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 current or future law or custom
concerning investments by trustees, and to sell, exchange, lend,
pledge, mortgage, hypothecate, write options on and lease any or all
of the Trust Property; to invest in obligations, securities and assets
of any kind, and without regard to whether they may mature before or
after the possible termination of the Trust; and without limitation to
invest all or any part of its cash and other property in securities
issued by a registered investment company or series thereof, subject
to the provisions of the 1940 Act;
(b) To operate as and carry on the business of an
investment company, and exercise all the powers necessary and proper
to conduct such a business;
(c) 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 such right is not reserved to
the Shareholders;
(d) To elect and remove such officers and appoint and
terminate such agents, independent contractors and delegatees as they
deem appropriate;
(e) To employ as custodian of any assets of the Trust,
subject to any provisions herein or in the Bylaws, one or more banks,
trust companies or companies that are members of a national securities
exchange, or other entities permitted by the Commission to serve as
such;
-5-<PAGE>
(f) To retain one or more transfer agents and
Shareholder servicing agents, or both;
(g) To provide for the distribution of Shares, either
through a Principal Underwriter or distributor as provided herein, or
by the Trust itself, or both, or pursuant to a distribution plan of
any kind;
(h) To set record dates in the manner provided for
herein or in the Bylaws;
(i) To delegate such authority as they consider
desirable to any officers of the Trust and to any agent, subagent,
independent contractor, delegatee, manager, investment adviser,
custodian or underwriter;
(j) To sell or exchange any or all of the assets of
the Trust, subject to Article X, Section 4;
(k) To vote or give assent, or exercise any rights of
ownership, with respect to securities or other property; and to
execute and deliver powers of attorney delegating such power to other
persons;
(l) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(m) To hold any security or other property (i) in a
form not indicating any trust, whether in bearer, book entry,
unregistered or other negotiable form, or (ii) either in the Trust's
or Trustees' own name or in the name of a custodian or a nominee or
nominees, subject to safeguards according to the usual practice of
business trusts or investment companies;
(n) To establish separate and distinct Series with
separately defined investment objectives and policies and distinct
investment purposes, and with separate Shares representing beneficial
interests in such Series, and to establish separate Classes, all in
accordance with the provisions of Article IV;
(o) To the full extent permitted by Section 3804 of
the Delaware Act, to allocate assets, liabilities and expenses of the
Trust to a particular Series and assets, liabilities and expenses to a
particular Class or to apportion the same between or among two or more
Series or Classes, provided that any liabilities or expenses incurred
by a particular Series or Class shall be payable solely out of the
assets belonging to that Series or Class as provided for in
Article IV, Section 4;
(p) To consent to or participate in any plan for the
liquidation, reorganization, consolidation or merger of any
corporation or concern whose securities are held by the Trust; to
consent to any contract, lease, mortgage, purchase or sale of
-6-<PAGE>
property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held by the Trust;
(q) 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;
(r) To make distributions of income and of capital
gains to Shareholders in the manner provided for in this Trust
Instrument or in the Bylaws;
(s) To borrow money and in connection therewith to
issue notes or other evidences of indebtedness and to pledge or grant
security interests in Trust Property as security therefor;
(t) To establish committees for such purposes, with
such membership, and with such responsibilities as the Trustees may
consider proper;
(u) To issue, sell, repurchase, redeem, cancel,
retire, acquire, hold, resell, reissue, dispose of and otherwise deal
in Shares; to establish terms and conditions regarding the issuance,
sale, repurchase, exchange, redemption, cancellation, retirement,
acquisition, holding, resale, reissuance, disposition of or dealing in
Shares; and, subject to Articles IV and V, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the Trust or of the particular Series
with respect to which such Shares are issued;
(v) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(w) To endorse or guarantee the payment of any notes
or other obligations of any person or to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
(x) To adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;
(y) To join with other security holders in acting
through a committee, depository, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer any security
to, any such committee, depository or trustee, and to delegate to them
such power and authority with relation to any security (whether or not
so deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depository or trustee as the Trustees
shall deem proper; and
-7-<PAGE>
(z) To carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary or desirable to accomplish any purpose or to further any of
the foregoing powers, and to take every other action incidental to the
foregoing business or purposes, objects or powers.
The clauses above shall be construed as objects and powers,
and the enumeration of specific powers shall not limit in any way the
general powers of the Trustees. Any action by one or more of 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. 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. In
construing this Trust Instrument, the presumption shall be in favor of
a grant of power to the Trustees.
Section 2. Certain Transactions. Except as 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, administrator, distributor
or transfer agent for the Trust or with any Interested Person of such
person. The Trust may employ any such person or entity in which such
person is an Interested Person, as broker, legal counsel, registrar,
investment adviser, administrator, distributor, transfer agent,
dividend disbursing agent, custodian or in any other capacity upon
customary terms.
ARTICLE IV
----------
SERIES; CLASSES; SHARES
-----------------------
Section 1. Establishment of Series or Classes. The Trust
--------- ----------------------------------
shall consist of one or more Series. The Trustees hereby establish
the Series listed in Schedule A attached hereto and made a part
hereof. Each additional Series shall be established by the adoption
of a resolution of the Trustees. The Trustees may divide the Shares
of any Series into Classes. In such case each Class of a Series shall
represent interests in the assets of that Series. The Trustees by
resolution may designate the relative rights and preferences of the
Shares of each Series or Class. The Trust shall maintain separate and
distinct records for each Series and hold and account for the assets
thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares and need not issue
Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series or Class shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon
redemption of his
-8-<PAGE>
Shares, such Shareholder shall be paid solely out of the funds and
property of such Series. The Trustees may change the name of any
Series or Class. At any time that there are no Shares outstanding of
any particular Series (or Class) previously established and
designated, the Trustees may by a majority vote abolish that Series
(or Class) and rescind the establishment and designation thereof.
Section 2. Shares of Beneficial Interest. The beneficial
--------- -----------------------------
interest in the Trust shall be divided into Shares of one or more
separate and distinct Series or Classes established by the Trustees.
The number of Shares of each Series and Class is unlimited and each
Share shall have a par value, or be without par value, as determined
by resolution of the Trustees. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive
or other right to subscribe to any additional Shares or other
securities issued by the Trust or any Series. The Trustees shall have
full power and authority, in their sole discretion and without
obtaining Shareholder approval: to issue original or additional
Shares at such times and for the amount and type of consideration and
on such terms and conditions as they deem appropriate; to issue
fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges
as the Trustees may determine (but without a vote of a majority of the
Outstanding Shares of the Series or Class, as the case may be, voting
as a class, the Trustees may not change Outstanding Shares in a manner
materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser
number; to classify or reclassify any unissued Shares of any Series or
Classes into one or more Series or Classes of Shares; to abolish any
one or more Series or Classes of Shares; to issue Shares to acquire
other assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses; and to take such other
action with respect to the Shares as the Trustees may deem desirable.
Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other
distributions declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall
--------- -----------------------
accept investments in any Series 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 that Series is authorized to invest,
valued as provided in Article V, Section 3. Investments in a Series
shall be credited to each Shareholder's account in the form of full or
fractional Shares at the Net Asset Value per Share next determined
after the investment is received or accepted as may be determined by
the Trustees; provided, however, that the Trustees may, in their sole
discretion, (a) impose a sales charge upon investments in any Series
or Class or (b) determine the Net Asset Value per Share of the initial
capital contribution. The Trustees
-9-<PAGE>
shall have the right to refuse to accept investments in any Series at
any time without any cause or reason therefor whatsoever.
Section 4. 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 every other Series and are referred to
as "assets belonging to" that Series. The assets belonging to a
particular Series shall belong only to that Series for all purposes,
and to no other Series, subject only to the rights of creditors of
that particular Series. Any assets, income, earnings, profits and
proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series shall be allocated
by the Trustees between and among one or more Series as the Trustees
deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such
assets, earnings, income, profits or funds, or payments and proceeds
thereof shall be referred to as assets belonging to that Series. The
assets belonging to a 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 Shareholders of that Series. The assets belonging to a Series
shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that
liabilities and expenses allocated solely to a particular Class shall
be borne by that Class. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be allocated and
charged by the Trustees between or among any one or more of the Series
or Classes or, if appropriate, between or among any one or more of the
Series or Classes and any other investment company advised by the same
investment adviser, in each case in such manner as the Trustees deem
fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all
purposes.
Without limiting the foregoing, but subject to the right of
the Trustees to allocate general liabilities, expenses, costs, charges
or reserves as herein provided, the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with
respect to a particular Series shall be enforceable against the assets
of such Series only, and not against the assets of the Trust generally
or of any other Series. Notice of this contractual limitation on
liabilities among Series may, in the Trustees discretion, be set forth
in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the Delaware Act, and upon
the giving of such
-10-<PAGE>
notice in the certificate of trust, the statutory provisions of
Section 3804 of the Delaware Act relating to limitations on
liabilities among Series (and the statutory effect under Section 3804
of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit
to, contracting with or having any claim against any Series may look
only to the assets of that Series to satisfy or enforce any debt,
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. No Shareholder or
former Shareholder of any particular Series shall have any claim or
right to institute suit against or in the right of the Trust or any
Series with respect to any matter that does not directly affect that
particular Series.
Section 5. Ownership and Transfer of Shares. The Trust
--------- --------------------------------
shall maintain a register containing the names and addresses of the
Shareholders of each Series and Class thereof, the number of Shares of
each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity
of Shareholders of record and the number of Shares held by them from
time to time. The Trustees may authorize the issuance of certificates
representing Shares and adopt rules governing their use. The Trustees
may make rules governing the transfer of Shares, whether or not
represented by certificates.
Section 6. Status of Shares: Limitation of Shareholder
--------- --------------------------------------------
Liability. Shares shall be deemed to be personal property giving
- ---------
Shareholders only the rights provided in this Trust Instrument. Every
Shareholder, by virtue of having acquired a Share, shall be held
expressly to have assented to and agreed to be bound by the terms of
this Trust Instrument. No Shareholder shall be personally liable for
the debts, liabilities, obligations and expenses incurred by,
contracted for, or otherwise existing with respect to, the Trust or
any Series. The death of a Shareholder during the existence of the
Trust shall not operate to terminate the Trust, nor entitle the
representative of any deceased Shareholder to an accounting or to take
any action in court or elsewhere against the Trust or the Trustees,
but entitles such representative only to the rights of said deceased
Shareholder under the Trust. Neither the Trust nor the Trustees shall
have any power to bind any Shareholder personally or to demand payment
from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal
liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written
obligation of the Trust or any Series shall contain a statement to the
effect that such obligation may only be enforced against the assets of
the Trust or such Series; however, the omission of such statement
shall not operate to bind or create personal liability for any
Shareholder or Trustee.
-11-<PAGE>
ARTICLE V
---------
DISTRIBUTIONS AND REDEMPTIONS
-----------------------------
Section 1. Distributions. The Trustees may declare and pay
--------- -------------
dividends and other distributions from the assets belonging to each
Series. The amount and payment of dividends or distributions and
their form, whether they are in cash, Shares or other Trust Property,
shall be determined by the Trustees. Dividends and other
distributions may be paid pursuant to a standing resolution adopted
once or more often as the Trustees determine. All dividends and other
distributions on Shares of a particular Series shall be distributed
pro rata to the Shareholders of that Series in proportion to the
number of Shares of that Series they held on the record date
established for such payment, except that such dividends and
distributions shall appropriately reflect expenses allocated to a
particular Class of such Series. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout
plans or similar plans as the Trustees deem appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall
--------- -----------
have the right at such times as may be permitted by the Trustees to
require the Series to redeem all or any part of his Shares at a
redemption price per Share equal to the Net Asset Value per Share. In
the absence of such resolution, the redemption price per Share shall
be the Net Asset Value next determined after receipt by the Series of
a request for redemption in proper form less such charges as are
determined by the Trustees and described in any required disclosure
document. The Trustees may specify conditions, prices and places of
redemption, and may specify binding requirements for the proper form
or forms of requests for redemption. Payment of the redemption price
may be wholly or partly in securities or other assets at the value of
such securities or assets used in such determination of Net Asset
Value, or may be in cash. Following redemption, Shares may be
reissued from time to time. The Trustees may require Shareholders to
redeem Shares for any reason under terms set by the Trustees,
including the failure of a Shareholder to supply a personal
identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares
issued to him. To the extent permitted by law, the Trustees may
retain the proceeds of any redemption of Shares required by them for
payment of amounts due and owing by a Shareholder to the Trust or any
Series or Class. Notwithstanding the foregoing, the Trustees may
postpone payment of the redemption price and may suspend the right of
the Shareholders to require any Series or Class to redeem Shares
during any period of time when and to the extent permissible under the
1940 Act.
Section 3. Determination of Net Asset Value. The Trustees
--------- --------------------------------
shall cause the Net Asset Value of Shares of each Series or Class to
be determined from time to time in a manner consistent with applicable
laws and regulations. The Trustees may delegate
-12-<PAGE>
the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such purpose. The Net Asset Value of
Shares shall be determined separately for each Series or Class at such
times as may be prescribed by the Trustees or, in the absence of
action by the Trustees, as of the close of the regular trading session
on the New York Stock Exchange on each day for all or part of which
such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as
--------- ---------------------------------
referred to in Section 2 of this Article, the Trustees postpone
payment of the redemption price and suspend the right of Shareholders
to redeem their Shares, such suspension shall take effect at the time
the Trustees shall specify, but not later than the close of business
on the business day next following the declaration of suspension.
Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of
redemption is suspended, a Shareholder may either withdraw his request
for redemption or receive payment based on the Net Asset Value per
Share next determined after the suspension terminates.
Section 5. Redemptions Necessary for Qualification as
--------- ------------------------------------------
Regulated Investment Company. If the Trustees shall determine 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 they deem equitable to (a) 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 (b) refuse to transfer or issue Shares to any person whose
acquisition of Shares in question would, in the Trustees judgment,
result in such disqualification. Any such redemption shall be
effected at the redemption price and in the manner provided in this
Article. Shareholders shall upon demand disclose to the Trustees in
writing such information concerning direct and indirect ownership of
Shares as the Trustees deem necessary to comply with the requirements
of any taxing authority.
ARTICLE VI
----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 1. Voting Powers. The Shareholders shall have
--------- -------------
power to vote only with respect to (a) the election of Trustees as
provided in Section 2 of this Article; (b) the removal of Trustees as
provided in Article II, Section 3(d); (c) any investment advisory or
management contract as provided in Article VII, Section 1; (d) any
termination of the Trust as provided in
-13-<PAGE>
Article X, Section 4; (e) the amendment of this Trust Instrument to
the extent and as provided in Article X, Section 8; and (f) such
additional matters relating to the Trust as may be required by law,
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 by individual Series or Class, except (a) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series or Class, and (b) when the Trustees have
determined that the matter affects the interests of more than one
Series or Class, then the Shareholders of all such affected Series or
Classes shall be entitled to vote thereon. 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. The Bylaws may provide that
proxies may be given by any electronic or telecommunications device or
in any other manner, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of the
Trust or of any Series or Class, or if there is a proxy contest or
proxy solicitation or proposal in opposition to any proposal by the
officers or Trustees, Shares may be voted only in person or by written
proxy. Until Shares of a Series are issued, as to that Series the
Trustees may exercise all rights of Shareholders and may take any
action required or permitted to be taken by Shareholders by law, this
Trust Instrument or the Bylaws.
Section 2. Meetings of Shareholders. Special meetings of
--------- ------------------------
the Shareholders of any Series or Class may be called by the Trustees
and shall be called by the Trustees upon the written request of
Shareholders owning at least twenty-five percent (25%) of the
Outstanding Shares of such Series or Class entitled to vote.
Shareholders shall be entitled to at least fifteen days notice of any
meeting, given as determined by the Trustees.
Section 3. Quorum; Required Vote. One-third of the
--------- ---------------------
Outstanding Shares of each Series or Class, or one-third of the
Outstanding Shares of the Trust, entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders meeting with respect to such Series or Class, or with
respect to the entire Trust, respectively. Except when a larger vote
is required by law, this Trust Instrument or the Bylaws, at any
meeting at which a quorum is present, a majority of the Shares voted
in person or by proxy shall decide any matters to be voted upon with
respect to the entire Trust and a plurality of such Shares shall elect
a Trustee; provided, that if this Trust Instrument or applicable law
permits or requires that Shares be voted on any matter by individual
Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a Majority Shareholder Vote of that
Series or Class) voted in
-14-<PAGE>
person or by proxy on the matter shall decide that matter insofar as
that Series or Class is concerned.
Shareholders may act as to the Trust or any Series or Class
by the written consent of a majority (or such greater amount as may be
required by applicable law) of the Outstanding Shares of the Trust or
of such Series or Class, as the case may be. If the consents of all
Shareholders entitled to vote have not been solicited in writing and
if the unanimous written consent of all such Shareholders shall not
have been received, the Secretary shall give prompt notice of the
action approved by the Shareholders without a meeting.
Notwithstanding any other provision herein or in the Bylaws,
any meeting of Shareholders, whether or not a quorum is present, may
be adjourned from time to time by the vote of the majority of the
Shares represented at that meeting, either in person or by proxy. Any
adjourned session of a meeting of Shareholders may be held within a
reasonable time without further notice.
ARTICLE VII
-----------
CONTRACTS WITH SERVICE PROVIDERS
--------------------------------
Section 1. Investment Adviser. Subject to a Majority
--------- ------------------
Shareholder Vote, the Trustees may enter into one or more investment
advisory contracts on behalf of the Trust or any Series, providing for
investment advisory services, statistical and research facilities and
services, and other facilities and services to be furnished to the
Trust or Series on terms and conditions acceptable to the Trustees.
Any such contract may provide for the investment adviser to effect
purchases, sales or exchanges of portfolio securities or other Trust
Property on behalf of the Trustees or may authorize any officer or
agent of the Trust to effect such purchases, sales or exchanges
pursuant to recommendations of the investment adviser. The Trustees
may authorize the investment adviser to employ one or more
sub-advisers. Any reference in this Trust Instrument to the
investment adviser shall be deemed to include such sub-advisers,
unless the context otherwise requires.
Section 2. Principal Underwriter. The Trustees may enter
--------- ---------------------
into contracts with another party on behalf of the Trust or any Series
or Class, providing for the distribution and sale of Shares by such
other party, either directly or as sales agent, on terms and
conditions acceptable to the Trustees. The Trustees may adopt a plan
or plans of distribution with respect to Shares of any Series or Class
and enter into any related agreements, whereby the Series or Class
finances directly or indirectly any activity that is primarily
intended to result in sales of its Shares, subject to the requirements
of Section 12 of the 1940 Act, Rule 12b-1 thereunder, and other
applicable rules and regulations.
-15-<PAGE>
Section 3. Transfer Agency, Shareholder Services and
--------- -----------------------------------------
Administration Agreements. The Trustees, on behalf of the Trust or
- -------------------------
any Series or Class, may enter into transfer agency agreements,
Shareholder service agreements and administration and management
agreements with any party or parties on terms and conditions
acceptable to the Trustees.
Section 4. Custodian. The Trustees shall at all times
--------- ---------
place and maintain the securities and similar investments of the Trust
and of each Series in custody meeting the requirements of Section
17(f) of the 1940 Act and the rules thereunder. The Trustees, on
behalf of the Trust or any Series, may enter into an agreement with a
custodian on terms and conditions acceptable to the Trustees,
providing for the custodian, among other things, to (a) hold the
securities owned by the Trust or any Series and deliver the same upon
written order or oral order confirmed in writing, (b) receive and
receipt for any moneys due to the Trust or any Series and deposit the
same in its own banking department or elsewhere, (c) disburse such
funds upon orders or vouchers, and (d) employ one or more sub-
custodians.
Section 5. Parties to Contracts with Service Providers.
--------- -------------------------------------------
The Trustees may enter into any contract referred to in this Article
with any entity, although one or more of the Trustees or officers of
the Trust may be an officer, director, trustee, partner, shareholder
or member of such entity, and no such contract shall be invalidated or
rendered void or voidable because of such relationship. No person
having such a relationship shall be disqualified from voting on or
executing a contract in his capacity as Trustee and/or Shareholder, or
be liable merely by reason of such relationship for any loss or
expense to the Trust with respect to such a contract or accountable
for any profit realized directly or indirectly therefrom.
Any contract referred to in Sections 1 and 2 of this Article
shall be consistent with and subject to the applicable requirements of
Section 15 of the 1940 Act and the rules and orders thereunder with
respect to its continuance in effect, its termination and the method
of authorization and approval of such contract or renewal. No
amendment to a contract referred to in Section 1 of this Article shall
be effective unless assented to in a manner consistent with the
requirements of Section 15 of the 1940 Act, and the rules and orders
thereunder.
ARTICLE VIII
------------
EXPENSES OF THE TRUST AND SERIES
--------------------------------
Subject to Article IV, Section 4, the Trust or a particular
Series shall pay, or shall reimburse the Trustees from the Trust
estate or the assets belonging to the particular Series, for their
expenses and disbursements, including, but not limited to, interest
charges, taxes, brokerage fees and commissions; expenses of pricing
Trust portfolio securities; expenses of issue,
-16-<PAGE>
repurchase and redemption of Shares; certain insurance premiums;
applicable fees, interest charges and expenses of third parties,
including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees
of pricing, interest, dividend, credit and other reporting services;
costs of membership in trade associations; telecommunications
expenses; funds transmission expenses; auditing, legal and compliance
expenses; costs of forming the Trust and its Series and maintaining
its existence; costs of preparing and printing the prospectuses of the
Trust and each Series, statements of additional information and
Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of
maintaining books and accounts; costs of reproduction, stationery and
supplies; fees and expenses of the Trustees; compensation of the
Trust's officers and employees and costs of other personnel performing
services for the Trust or any Series; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign
securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the
Trust or a Series (or a Trustee or officer of the Trust acting as
such) is a party, and for all losses and liabilities by them incurred
in administering the Trust. 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,
for the reimbursement to them of such expenses, disbursements, losses
and liabilities. This Article shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE IX
----------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
Section 1. Limitation of Liability. All persons
--------- -----------------------
contracting with or having any claim against the Trust or a particular
Series shall look only to the assets of the Trust or such Series for
payment under such contract or claim; and neither the Trustees nor any
of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. Every written instrument
or obligation on behalf of the Trust or any Series shall contain a
statement to the foregoing effect, but the absence of such statement
shall not operate to make any Trustee or officer of the Trust liable
thereunder. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees, officers, employees and managers
of the Trust shall not be responsible or liable for any act or
omission or for neglect or wrongdoing of them or any officer, agent,
employee, manager, investment adviser, delegatee or independent
contractor of the Trust, but nothing contained in this Trust
Instrument or in the Delaware Act shall protect any Trustee, officer,
employee or manager of the Trust against liability to the Trust or to
-17-<PAGE>
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 his office.
Section 2. Indemnification.
--------- ---------------
(a) Subject to the exceptions and limitations
contained in subsection (b) below:
(i) every person who is, or has been, a Trustee,
officer, employee, manager or agent of the Trust (including persons
who serve at the Trust's request as directors, trustees, officers or
agents of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise) ("Covered Person") shall be
indemnified by the Trust or the appropriate Series to the fullest
extent permitted by law against liability and against all expenses
reasonably incurred or paid by such person in connection with any
claim, action, suit or proceeding in which such person becomes
involved as a party or otherwise by virtue of being or having been a
Covered Person and against amounts paid or incurred by such person in
the settlement thereof, whether or not such person is a Covered Person
at the time such expenses are incurred;
(ii) as used herein, 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, attorney's 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 or not opposed to the best
interests of the Trust; or
(ii) In the event of a settlement, unless there
has been a determination that such Covered Person 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).
-18-<PAGE>
(c) To the maximum extent permitted by applicable law,
expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in subsection (a) of this Section may be paid by the Trust
or applicable 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 such person to the Trust
or applicable Series if it is ultimately determined that such person
is not entitled to indemnification under this Section; provided,
however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured
against losses arising out of any such advance payments or
(iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a
review of readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that such Covered Person will
not be disqualified from indemnification under this Section.
(d) The rights of indemnification herein provided
shall be severable, shall not be exclusive of or affect any other
rights to which any Covered Person may now or hereafter be entitled,
and shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.
(e) By action of the Trustees, and notwithstanding any
interest of the Trustees in the action, the Trust shall have power to
purchase and maintain insurance, in such amounts as the Trustees deem
appropriate, on behalf of any Covered Person, whether or not such
person is indemnified against such liability or expense under the
provisions of this Article IX and whether or not the Trust would have
the power or would be required to indemnify such person against such
liability under the provisions of this Article IX or of the Delaware
Act or by any other applicable law, subject only to any limitations
imposed by the 1940 Act.
(f) Any repeal or modification of this Article IX by
the Shareholders of the Trust, or adoption or modification of any
other provision of the Trust Instrument or Bylaws inconsistent with
this Article, shall be prospective only, to the extent that such
repeal or modification would, if applied retrospectively, adversely
affect any limitation on the liability of any Covered Person or
indemnification available to any Covered Person with respect to any
act or omission which occurred prior to such repeal, modification or
adoption.
Section 3. Indemnification of Shareholders. If any
--------- -------------------------------
Shareholder or former Shareholder of any Series shall be held
personally liable solely by reason of being or having been a
Shareholder and not because of acts or omissions or for some other
reason, the Shareholder or former Shareholder (or such person's heirs,
executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled
-19-<PAGE>
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 such Shareholder, assume the defense of any
such claim made against such Shareholder for any act or obligation of
the Series and satisfy any judgment thereon from the assets of the
Series.
ARTICLE X
---------
MISCELLANEOUS
-------------
Section 1. Trust Not a Partnership. This Trust Instrument
--------- -----------------------
creates a trust and not a partnership. No Trustee shall have any
power to bind personally either the Trust's officers or any
Shareholder.
Section 2. Trustee Action; Expert Advice; No Bond or
--------- -----------------------------------------
Surety. The exercise by the Trustees of their powers and discretion
- ------
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 IX, 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 IX, shall not be liable 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 3. Record Dates. The Trustees may fix in advance
--------- ------------
a date up to ninety (90) days before the date of any Shareholders
meeting, 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 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 such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in
respect of any such change, conversion or exchange of Shares. Any
Shareholder who was a Shareholder at the date and time so fixed shall
be entitled to vote at such meeting or any adjournment thereof.
Section 4. Termination of the Trust.
--------- ------------------------
(a) This Trust shall have perpetual existence.
Subject to a Majority Shareholder Vote of the Trust or of each Series
to be affected, the Trustees may:
(i) Sell and convey all or substantially all of
the assets of the Trust or any affected Series to another Series or to
another entity which is an open end investment company as
-20-<PAGE>
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 or
interests in such Series, entity or series thereof; or
(ii) At any time sell and convert into money all
or substantially all of the assets of the Trust or any affected
Series.
Upon making reasonable provision for the payment of all
known liabilities of the Trust or any affected Series in either (i) or
(ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably among
the Shareholders of the Trust or any affected Series; however, the
payment to any particular Class of such Series may be reduced by any
fees, expenses or charges allocated to that Class or Series.
(b) The Trustees may take any of the actions specified
in subsection (A)(i) and (ii) above without obtaining a Majority
Shareholder Vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is
not in the best interests of the Trust, such Series, or their
respective Shareholders as a result of factors or events adversely
affecting the ability of the Trust or such Series to conduct its
business and operations in an economically viable manner. Such
factors and events may include the inability of the Trust or a Series
to maintain its assets at an appropriate size, changes in laws or
regulations governing the Trust or the Series or affecting assets of
the type in which the Trust or Series invests, or economic
developments or trends having a significant adverse impact on the
business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the
remaining proceeds or assets pursuant to subsection (a), the Trust or
affected Series shall terminate and the Trustees and the Trust shall
be discharged of any and all further liabilities and duties hereunder
with respect thereto and the right, title and interest of all parties
therein shall be canceled 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 5. Reorganization; Merger; Consolidation.
--------- -------------------------------------
(a) Notwithstanding anything else herein, to change
the Trust's form of organization the Trustees may, without Shareholder
approval, (i) cause the Trust to merge or consolidate with or into one
or more entities, if the surviving or resulting entity is the Trust or
another open-end management investment company under the 1940 Act, or
a series thereof, that will succeed
-21-<PAGE>
to or assume the Trust's registration under the 1940 Act, (ii) cause
the Shares to be exchanged under or pursuant to any state or federal
statute to the extent permitted by law, or (iii) cause the Trust to
incorporate under the laws of Delaware. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of
Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Any merger or consolidation of the Trust other
than those described in Section 5(a) hereof may be approved by the
affirmative vote of both a majority of the Trustees voting at a duly
constituted meeting of Trustees at which a quorum is present and the
holders of one-half (1/2) of the Outstanding Shares of the Trust
entitled to vote thereon.
(c) Pursuant to and in accordance with the provisions
of Section 3815(f) of the Delaware Act, an agreement of merger or
consolidation approved in accordance with this Section 5 may effect
any amendment to the governing instrument of the Trust 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 6. Trust Instrument. The original or a copy of
--------- ----------------
this Trust Instrument and of each amendment hereto or Trust Instrument
supplemental 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 a Trustee or an officer of the Trust as to the
authenticity of the Trust Instrument or any such amendments or
supplements and as to any matters in connection with the Trust. The
masculine gender herein shall include the feminine and neuter genders.
Headings herein are for convenience only and shall not affect the
construction of this Trust Instrument. This Trust Instrument may be
executed in any number of counterparts, each of which shall be deemed
an original.
Section 7. Applicable Law. This Trust Instrument and the
--------- --------------
Trust created hereunder are governed by and construed and administered
according to the Delaware Act and the applicable laws of the State of
Delaware; provided, however, that there shall not be applicable to the
Trust, the Trustees 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,
-22-<PAGE>
storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees, which are inconsistent
with the limitations on liabilities or authority and powers of the
Trustees set forth or referenced in this Trust Instrument. The Trust
shall be of the type commonly called a Delaware 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 8. Amendments. The Trustees may, without any
--------- ----------
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; provided, that Shareholders
shall have the right to vote on any amendment (a) which would affect
the voting rights of Shareholders granted in Article VI, Section I,
(b) to this Section 8, (c) required to be approved by Shareholders by
law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their
discretion. Any amendment submitted to Shareholders which the
Trustees determine would affect the Shareholders of any Series shall
be authorized by vote of the Shareholders of such Series and no vote
shall be required of Shareholders of a Series not affected.
Notwithstanding anything else herein, any amendment to
Article IX which would have the effect of reducing the indemnification
and other rights provided thereby to Trustees, officers, employees and
agents of the Trust or to Shareholders or former Shareholders, and any
repeal or amendment of this sentence, shall each require the
affirmative vote of the holders of two-thirds (2/3) of the Outstanding
Shares of the Trust entitled to vote thereon.
Section 9. Fiscal Year. The fiscal year of the Trust shall
--------- -----------
end on the date set in the manner specified in the Bylaws. The
Trustees may change the fiscal year of the Trust without Shareholder
approval.
Section 10. Severability. The provisions of this Trust
---------- ------------
Instrument are severable. If the Trustees determine, with the advice
of counsel, that any provision hereof conflicts 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
-23-<PAGE>
improper any action taken or omitted prior to such determination. If
any provision hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to
such provision only in such jurisdiction and shall not affect any
other provision of this Trust Instrument.
Section 11. Use of the Name "Berger". Berger Associates,
---------- ------------------------
Inc. ("Berger") has consented to and granted a non-exclusive license
for the use by the Trust and by each Series thereof to the identifying
word "Berger" in the name of the Trust and of each Series. Such
consent is conditioned upon the Trust's employment of Berger as
investment adviser to the Trust and to each Series. As between Berger
and the Trust, Berger shall control the use of such name insofar as
such name contains the identifying word "Berger." Berger may from
time to time use the identifying word "Berger" in other connections
and for other purposes, including without limitation in the names of
other investment companies, corporations or businesses that it may
manage, advise, sponsor or own or in which it may have a financial
interest. Berger may require the Trust or any Series to cease using
the identifying word "Berger" in the name of the Trust or any Series
if the Trust or Series ceases to employ Berger or affiliate thereof as
investment adviser.
[remainder of this page intentionally left blank]
-24-<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the
initial Trustees, have executed this Trust Instrument as of the date
first above written.
________________________________________
Michael Owen, as
Trustee and not individually
________________________________________
Dennis E. Baldwin, as
Trustee and not individually
________________________________________
William M.B. Berger, as
Trustee and not individually
________________________________________
Louis R. Bindner, as
Trustee and not individually
________________________________________
Katherine A. Cattanach, as
Trustee and not individually
________________________________________
Lucy Black Creighton, as
Trustee and not individually
________________________________________
Paul R. Knapp, as
Trustee and not individually
________________________________________
Gerard M. Lavin, as
Trustee and not individually
-25-
<PAGE>
________________________________________
Harry T. Lewis, Jr., as
Trustee and not individually
________________________________________
Rodney L. Linafelter, as
Trustee and not individually
________________________________________
William Sinclaire, as
Trustee and not individually
-26-<PAGE>
SCHEDULE A
SERIES OF THE TRUST
-------------------
Berger IPT - 100 Fund
Berger IPT - Growth and Income Fund
Berger IPT - Small Company Growth Fund
-27-
BERGER INSTITUTIONAL PRODUCTS TRUST
(A Delaware Business Trust)
BYLAWS
October 17, 1995
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I NAME OF TRUST, PRINCIPAL OFFICE AND SEAL. . . . . . 1
Section 1. Principal Office . . . . . . . . . . . . . . . 1
Section 2. Delaware Office. . . . . . . . . . . . . . . . 1
Section 3. Seal . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II MEETINGS OF TRUSTEES. . . . . . . . . . . . . . . . 1
Section 1. Meetings . . . . . . . . . . . . . . . . . . . 1
Section 2. Action Without a Meeting . . . . . . . . . . . 2
Section 3. Compensation of Trustees . . . . . . . . . . . 2
ARTICLE III COMMITTEES. . . . . . . . . . . . . . . . . . . . . 2
Section 1. Organization . . . . . . . . . . . . . . . . . 2
Section 2. Executive Committee. . . . . . . . . . . . . . 2
Section 3. Nominating Committee . . . . . . . . . . . . . 2
Section 4. Audit Committee. . . . . . . . . . . . . . . . 2
Section 5. Other Committees . . . . . . . . . . . . . . . 3
Section 6. Proceedings and Quorum . . . . . . . . . . . . 3
Section 7. Compensation of Committee Members. . . . . . . 3
ARTICLE IV OFFICERS. . . . . . . . . . . . . . . . . . . . . . 3
Section 1. General. . . . . . . . . . . . . . . . . . . . 3
Section 2. Election, Tenure and Qualifications of
Officers . . . . . . . . . . . . . . . . . . . 3
Section 3. Vacancies and Newly Created Offices. . . . . . 3
Section 4. Removal and Resignation. . . . . . . . . . . . 4
Section 5. Chairman . . . . . . . . . . . . . . . . . . . 4
Section 6. President. . . . . . . . . . . . . . . . . . . 4
Section 7. Vice President . . . . . . . . . . . . . . . . 4
Section 8. Treasurer and Assistant Treasurers . . . . . . 5
Section 9. Secretary and Assistant Secretaries. . . . . . 5
Section 10. Subordinate Officers . . . . . . . . . . . . . 5
Section 11. Compensation of Officers . . . . . . . . . . . 6
Section 12. Surety Bond. . . . . . . . . . . . . . . . . . 6
ARTICLE V MEETINGS OF SHAREHOLDERS. . . . . . . . . . . . . . 6
Section 1. Annual Meetings. . . . . . . . . . . . . . . . 6
Section 2. Special Meetings . . . . . . . . . . . . . . . 6
Section 3. Notice of Meetings . . . . . . . . . . . . . . 6
Section 4. Validity of Proxies. . . . . . . . . . . . . . 7
Section 5. Place of Meeting . . . . . . . . . . . . . . . 8
Section 6. Action Without a Meeting . . . . . . . . . . . 8
(i)<PAGE>
Page
----
ARTICLE VI SHARES OF BENEFICIAL INTEREST . . . . . . . . . . . 8
Section 1. Share Certificates . . . . . . . . . . . . . . 8
Section 2. Transfer of Shares . . . . . . . . . . . . . . 9
Section 3. Lost, Stolen or Destroyed Certificates . . . . 9
ARTICLE VII CUSTODY OF SECURITIES . . . . . . . . . . . . . . . . 9
Section 1. Employment of a Custodian. . . . . . . . . . . . 9
Section 2. Termination of Custodian Agreement . . . . . . 10
Section 3. Other Arrangements . . . . . . . . . . . . . . 10
ARTICLE VIII FISCAL YEAR AND ACCOUNTANT. . . . . . . . . . . . . 10
Section 1. Fiscal Year. . . . . . . . . . . . . . . . . . 10
Section 2. Accountant . . . . . . . . . . . . . . . . . . 10
ARTICLE IX AMENDMENTS. . . . . . . . . . . . . . . . . . . . . 10
Section 1. General. . . . . . . . . . . . . . . . . . . . 10
ARTICLE X NET ASSET VALUE . . . . . . . . . . . . . . . . . . 10
Section 1. Determination of Net Asset Value . . . . . . . 10
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 11
Section 1. Inspection of Books. . . . . . . . . . . . . . 11
Section 2. Severability . . . . . . . . . . . . . . . . . 11
Section 3. Headings . . . . . . . . . . . . . . . . . . . 11
(ii)<PAGE>
BYLAWS
OF
BERGER INSTITUTIONAL PRODUCTS TRUST
(A Delaware Business Trust)
These Bylaws of Berger Institutional Products Trust (the
"Trust"), a Delaware business trust, are subject to the Trust
Instrument of the Trust dated October 17, 1995, as from time to time
amended, supplemented or restated (the "Trust Instrument").
Capitalized terms used herein have the same meaning as in the Trust
Instrument.
ARTICLE I
---------
NAME OF TRUST, PRINCIPAL OFFICE AND SEAL
----------------------------------------
Section 1. Principal Office. The principal office of the
--------- ----------------
Trust shall be located in Denver, Colorado, or such other location as
the Trustees may from time to time determine. The Trust may establish
and maintain other offices and places of business as the Trustees may
from time to time determine.
Section 2. Delaware Office. The Trustees shall establish a
--------- ---------------
registered office in the State of Delaware and shall appoint as the
Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a corporation authorized to transact business in the
State of Delaware and in any case the business office of such
registered agent for service of process shall be identical with the
registered Delaware office of the Trust.
Section 3. Seal. The Trustees may adopt a seal which shall
--------- ----
be in such form and have such inscription as the Trustees may from
time to time determine. Any Trustee or officer of the Trust shall
have authority to affix the seal to any document, provided that the
failure to affix the seal shall not affect the validity or
effectiveness of any document.
ARTICLE II
----------
MEETINGS OF TRUSTEES
--------------------
Section 1. Meetings. Meetings of the Trustees may be held
--------- --------
at such places and such times as the Trustees may from time to time
determine. Such meetings may be called orally or in writing by the
Chairman of the Trustees or by any two other Trustees. Each
<PAGE>
Trustee shall be given notice of any meeting as provided in
Article II, Section 7, of the Trust Instrument.
Section 2. Action Without a Meeting. Actions may be taken
--------- ------------------------
by the Trustees without a meeting or by a telephone meeting, as
provided in Article II, Section 7, of the Trust Instrument.
Section 3. Compensation of Trustees. Each Trustee may
--------- ------------------------
receive such compensation from the Trust for his or her services and
reimbursement for his or her expenses as may be fixed from time to
time by the Trustees.
ARTICLE III
-----------
COMMITTEES
----------
Section 1. Organization. The Trustees may designate one or
--------- ------------
more committees of the Trustees. The Chairmen of such committees
shall be elected by the Trustees. The number composing such
committees and the powers conferred upon the same shall be determined
by the vote of a majority of the Trustees. All members of such
committees shall hold office at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time in their sole
discretion. Any committee to which the Trustees delegate any of their
powers shall maintain records of its meetings and shall report its
actions to the Trustees. The Trustees shall have the power to rescind
any action of any committee, but no such rescission shall have
retroactive effect. The Trustees shall have the power at any time to
fill vacancies in the committees. The Trustees may delegate to these
committees any of its powers, except the power to declare a dividend
or distribution on Shares, authorize the issuance of Shares, recommend
to Shareholders any action requiring Shareholders' approval, amend
these Bylaws, approve any merger or Share exchange, approve or
terminate any contract with an Investment Adviser, Transfer Agent,
Custodian or Principal Underwriter, or to take any other action
required by applicable law to be taken by the Trustees or to be
approved by Shareholders.
Section 2. Executive Committee. The Trustees may elect
--------- -------------------
from their own number an Executive Committee which shall have any or
all the powers of the Trustees when the Trustees are not in session.
Section 3. Nominating Committee. The Trustees may elect
--------- --------------------
from their own number a Nominating Committee which shall have the
power to select and nominate Trustees who are not Interested Persons,
and shall have such other powers and perform such other duties as may
be assigned to it from time to time by the Trustees.
Section 4. Audit Committee. The Trustees may elect from
--------- ---------------
their own number an Audit Committee which shall have the power to
review and evaluate the audit function, including recommending
-2-<PAGE>
independent certified public accountants, and shall have such other
powers and perform such other duties as may be assigned to it from
time to time by the Trustees.
Section 5. Other Committees. The Trustees may appoint
--------- ----------------
other committees whose members need not be Trustees. Each such
committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Trustees, but shall not
exercise any power which may lawfully be exercised only by the
Trustees or a committee thereof.
Section 6. Proceedings and Quorum. In the absence of an
--------- ----------------------
appropriate resolution of the Trustees, each committee may adopt such
rules and regulations governing its proceedings, quorum and manner of
acting as it shall deem proper and desirable. In the event any member
of any committee is absent from any meeting, the members present at
the meeting, whether or not they constitute a quorum, may appoint a
member of the Trustees to act in the place of such absent member.
Section 7. Compensation of Committee Members. Each
--------- ---------------------------------
committee member may receive such compensation from the Trust for his
or her services and reimbursement for his or her expenses as may be
fixed from time to time by the Trustees.
ARTICLE IV
----------
OFFICERS
--------
Section 1. General. The officers of the Trust shall be a
--------- -------
President, a Treasurer, a Secretary, and may include a Chairman of the
Trustees, one or more Vice Presidents, Assistant Treasurers or
Assistant Secretaries, and such other officers as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or
other officer to be a Shareholder of the Trust.
Section 2. Election, Tenure and Qualifications of Officers.
--------- -----------------------------------------------
The officers of the Trust, except those appointed as provided in
Section 10 of this Article, shall be elected by the Trustees. Each
officer elected by the Trustees shall hold office until his or her
successor shall have been elected and qualified or until his or her
earlier resignation. Any person may hold one or more offices of the
Trust except that no one person may serve concurrently as both
President and Secretary. A person who holds more than one office in
the Trust may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed,
acknowledged or verified by more than one officer. Except for the
Chairman and the President, no officer need be a Trustee.
Section 3. Vacancies and Newly Created Offices. Whenever
--------- -----------------------------------
a vacancy shall occur in any office, regardless of the reason for such
vacancy, or if any new office shall be created,
-3-<PAGE>
such vacancies or newly created offices may be filled by the Trustees
or, in the case of any office created pursuant to Section 10 of this
Article, by any officer upon whom such power shall have been conferred
by the Trustees.
Section 4. Removal and Resignation. Any officer may be
--------- -----------------------
removed from office by the Trustees. In addition, any officer or
agent appointed in accordance with the provisions of Section 10 of
this Article may be removed, with or without cause, by any officer
upon whom such power of removal shall have been conferred by the
Trustees. Any officer may resign from office at any time by
delivering a written resignation to the Trustees, the President, the
Secretary, or any Assistant Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.
Section 5. Chairman. The Chairman of the Trustees, if such
--------- --------
an officer is elected by the Trustees, shall preside at all meetings
of the Trustees and at all meetings of the Shareholders, and shall
exercise and perform such other powers and duties as may be from time
to time assigned to the Chairman by the Trustees or prescribed by
these Bylaws.
Section 6. President. The President shall be the chief
--------- ---------
executive officer of the Trust. The President must be a Trustee.
Subject to the direction of the Trustees, the President shall have
general charge of the business affairs, policies and property of the
Trust and general supervision over its officers, employees and agents.
In the absence of the Chairman of the Trustees or if no Chairman of
the Trustees has been elected, the President shall preside at all
Shareholders' meetings and at all meetings of the Trustees and shall
in general exercise the powers and perform the duties of the Chairman
of the Trustees. 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 or Class thereof. The President also shall
have the power to employ attorneys, accountants and other advisers and
agents for the Trust. The President shall exercise such other powers
and perform such other duties as the Trustees may from time to time
assign to the President.
Section 7. Vice President. The Trustees may from time to
--------- --------------
time elect one or more Vice Presidents who shall have such powers and
perform such duties as may from time to time be assigned to them by
the Trustees or the President. 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 first appointed 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.
-4-<PAGE>
Section 8. Treasurer and Assistant Treasurers. The
--------- ----------------------------------
Treasurer shall be the principal financial and accounting officer of
the Trust and shall have general charge of the finances and books of
the Trust. The Treasurer shall deliver all funds and securities of
the Trust to such company as the Trustees shall retain as custodian in
accordance with the Trust Instrument, these Bylaws, and applicable
law. The Treasurer shall make annual reports regarding the business
and financial condition of the Trust as soon as possible after the
close of the Trust's fiscal year. The Treasurer also shall furnish
such other reports concerning the business and financial condition of
the Trust as the Trustees may from time to time require. The
Treasurer shall perform all acts incidental to the office of
Treasurer, subject to the supervision of the Trustees, and shall
perform such additional duties as the Trustees may from time to time
designate.
Any Assistant Treasurer may perform such duties of the
Treasurer as the Trustees or the Treasurer may assign, and, in the
absence of the Treasurer, may perform all the duties of the Treasurer.
Section 9. Secretary and Assistant Secretaries. The
--------- -----------------------------------
Secretary shall record all votes and proceedings of the meetings of
Trustees and Shareholders in books to be kept for that purpose. The
Secretary shall be responsible for giving and serving of all notices
of the Trust. The Secretary shall have custody of any seal of the
Trust. The Secretary shall be responsible for the records of the
Trust, including the Share register and such other books and papers as
the Trustees may direct and such books, reports, certificates and
other documents required by law. All of such records and documents
shall at all reasonable times be kept open by the Secretary for
inspection by any Trustee for any proper Trust purpose. The Secretary
shall perform all acts incidental to the office of Secretary, subject
to the supervision of the Trustees, and shall perform such additional
duties as the Trustees may from time to time designate.
Any Assistant Secretary may perform such duties of the
Secretary as the Trustees or the Secretary may assign, and, in the
absence of the Secretary, may perform all the duties of the Secretary.
Section 10. Subordinate Officers. The Trustees may appoint
---------- --------------------
from time to time such other officers and 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 may delegate from time to time to one or
more officers or committees of Trustees the power to appoint any such
subordinate officers or agents and to prescribe their respective
rights, terms of office, authorities and duties. Any officer or agent
appointed in accordance with the provisions of this Section 10 may be
removed, either with or without cause, by any officer upon whom such
power of removal shall have been conferred by the Trustees.
-5-<PAGE>
Section 11. Compensation of Officers. Each officer may
---------- ------------------------
receive such compensation from the Trust for services and
reimbursement for expenses as may be fixed from time to time by the
Trustees.
Section 12. Surety Bond. 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
and the rules and regulations of the Securities and Exchange
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 or her 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 or her
hands.
ARTICLE V
---------
MEETINGS OF SHAREHOLDERS
------------------------
Section 1. Annual Meetings. There shall be no annual
--------- ---------------
Shareholders' meetings except as required by law or as hereinafter
provided.
Section 2. Special Meetings. Special meetings of
--------- ----------------
Shareholders of the Trust or of any Series or Class shall be called by
the President, Vice President or Secretary whenever ordered by the
Trustees, and shall be held at such time and place as may be stated in
the notice of the meeting.
Special meetings of the Shareholders of the Trust or of any
Series or Class shall be called by the Secretary upon the written
request of Shareholders owning at least twenty-five percent (25%) of
the Outstanding Shares entitled to vote at such meeting, provided that
(1) such request shall state the purposes of such meeting and the
matters proposed to be acted on, and (2) the Shareholders requesting
such meeting shall have paid to the Trust the reasonably estimated
cost of preparing and mailing the notice thereof, which the Secretary
shall determine and specify to such Shareholders.
If the Secretary fails for more than thirty days to call a
special meeting, the Trustees or the Shareholders requesting such a
meeting may, in the name of the Secretary, call the meeting by giving
the required notice. If the meeting is a meeting of Shareholders of
any Series or Class, but not a meeting of all Shareholders of the
Trust, then only a special meeting of Shareholders of such Series or
Class need be called and, in such case, only Shareholders of such
Series or Class shall be entitled to notice of and to vote at such
meeting.
Section 3. Notice of Meetings. Except as provided in
--------- ------------------
Section 2 of this Article, the Secretary shall cause written notice
-6-<PAGE>
of the place, date and time, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called. Notice shall
be given as determined by the Trustees at least fifteen days before
the date of the meeting. The written notice of any meeting may be
delivered or mailed, postage prepaid, to each Shareholder entitled to
vote at such meeting. If mailed, notice shall be deemed to be given
when deposited in the United States mail directed to the Shareholder
at his or her address as it appears on the records of the Trust.
Notice of any Shareholders' meeting need not be given to any
Shareholder if a written waiver of notice, executed before, at or
after such meeting, is filed with the record of such meeting, or to
any Shareholder who is present at such meeting in person or by proxy
unless the Shareholder is present solely for the purpose of objecting
to the call of the meeting. 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 at which the adjournment is taken
and the adjourned meeting is held within a reasonable time after the
date set for the original meeting. At the adjourned meeting the Trust
may transact any business which might have been transacted at the
original meeting. If after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be
given to Shareholders of record entitled to vote at such meeting. Any
irregularities in the notice of any meeting or the nonreceipt of any
such notice by any of the Shareholders shall not invalidate any action
otherwise properly taken at any such meeting.
Section 4. Validity of Proxies. Subject to the provisions
--------- -------------------
of the Trust Instrument, Shareholders entitled to vote may vote either
in person or by proxy, provided that either (1) a written instrument
authorizing such proxy to act has been signed and dated by the
Shareholder or by his or her duly authorized attorney, or (2) the
Trustees adopt by resolution an electronic, telephonic, computerized
or other alternative to execution of a written instrument authorizing
the proxy to act, but if a proposal by anyone other than the officers
or Trustees is submitted to a vote of the Shareholders of the Trust or
of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy.
Unless the proxy provides otherwise, it shall not be valid if executed
more than eleven months before the date of the meeting. All proxies
shall be delivered to the Secretary 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 Shareholder to vote at any adjournment of a
Shareholders meeting. At every meeting of Shareholders, unless the
voting is conducted by inspectors, all questions concerning the
qualifications of voters, the validity of proxies, and the acceptance
or rejection of votes, shall be decided by the chairman of the
meeting. Subject to the provisions of the
-7-<PAGE>
Trust Instrument or these Bylaws, all matters concerning 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 5. Place of Meeting. All special meetings of
--------- ----------------
Shareholders shall be held at the principal place of business of the
Trust or at such other place as the Trustees may from time to time
designate.
Section 6. Action Without a Meeting. Any action to be
--------- ------------------------
taken by Shareholders may be taken without a meeting if a majority (or
such other amount as may be required by law) of the Outstanding Shares
entitled to vote on the matter consent to the action in writing and
such written consents are filed with the records of the Shareholders'
meetings. Such written consent shall be treated for all purposes as a
vote at a meeting of the Shareholders held at the principal place of
business of the Trust. If the unanimous written consent of all
Shareholders entitled to vote shall not have been received, the
Secretary shall give prompt notice of the action approved by the
Shareholders without a meeting.
ARTICLE VI
----------
SHARES OF BENEFICIAL INTEREST
-----------------------------
Section 1. Share Certificates. No certificates certifying
--------- ------------------
the ownership of Shares shall be issued except as the Trustees may
otherwise authorize from time to time. The Trustees may issue
certificates to a Shareholder of any Series or Class for any purpose
and the issuance of a certificate to one or more Shareholders shall
not require the issuance of certificates to all Shareholders. If the
Trustees authorize the issuance of Share certificates, then such
certificates shall be in the form prescribed 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 of the Trust. Such signatures may be facsimiles if the
certificate is signed by a transfer agent or Shareholder servicing
agent or by a registrar, other than a Trustee, officer or employee of
the Trust. If any officer who has signed any such certificate or
whose facsimile signature has been placed thereon shall have ceased to
be such an officer before the certificate is issued, then such
certificate may be issued by the Trust with the same effect as if he
or she were such an officer at the date of issue. 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.
-8-<PAGE>
In lieu of issuing certificates of Shares, the Trustees or
the transfer agent or Shareholder servicing agent may either issue
receipts or may keep accounts upon the books of the Trust for record
holders of such Shares. In either case, the record holders shall be
deemed, for all purposes, to be holders of certificates for such
Shares as if they accepted such certificates and shall be held to have
expressly consented to the terms thereof.
Section 2. Transfer of Shares. The Shares of the Trust
--------- ------------------
shall be transferable only by a transfer recorded on the books of the
Trust by the Shareholder of record in person or by his or her duly
authorized attorney or legal representative. The Shares of the Trust
may be freely transferred, and the Trustees may, from time to time,
adopt rules and regulations regarding the method of transfer of such
Shares. The Trust shall be entitled to treat the holder of record of
any Share or Shares as the absolute owner for all purposes, and shall
not be bound to recognize any legal, equitable or other claim or
interest in such Share or Shares on the part of any other person
except as otherwise expressly provided by law.
Shares of any portfolio of the Trust that are repurchased or
redeemed by the Trust will be held in the treasury. Shares which are
held in the treasury may be reissued and sold by the Trust.
Section 3. Lost, Stolen or Destroyed Certificates. If any
--------- --------------------------------------
Share certificate should become lost, stolen or destroyed, a duplicate
Share certificate may be issued in place thereof, upon such terms and
conditions as the Trustees may prescribe, including, but not limited
to, requiring the owner of the lost, stolen or destroyed certificate
to give the Trust a bond or other indemnity, in such form and in such
amount as the Trustees may direct and with such surety or sureties as
may be satisfactory to the Trustees sufficient to indemnify the Trust
against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
ARTICLE VII
-----------
CUSTODY OF SECURITIES
---------------------
Section 1. Employment of a Custodian. The Trust shall at
--------- -------------------------
all times place and maintain all funds, securities and similar
investments of the Trust and of each Series in the custody of a
Custodian, including any sub-custodian for the Custodian (the
"Custodian"). The Custodian shall be one or more banks or trust
companies of good standing having an aggregate capital surplus, and
undivided profits of not less than two million dollars ($2,000,000),
or such other financial institutions or other entities as shall be
permitted by rule or order of the Securities
-9-<PAGE>
and Exchange Commission. The Custodian shall be appointed from time
to time by the Trustees, who shall determine its remuneration.
Section 2. Termination of Custodian Agreement. Upon
--------- ----------------------------------
termination of the Custodian Agreement or inability of the Custodian
to continue to serve, the Trustees shall promptly appoint a successor
Custodian, but in the event that no successor Custodian can be found
who has the required qualifications and is willing to serve, the
Trustees shall promptly call a special meeting of the Shareholders to
determine whether the Trust shall function without a Custodian or
shall be liquidated. If so directed by resolution of the Trustees or
by vote of a majority of Outstanding Shares of the Trust, the
Custodian shall deliver and pay over all property of the Trust or any
Series held by it as specified in such vote.
Section 3. Other Arrangements. The Trust may make such
--------- ------------------
other arrangements for the custody of its assets (including deposit
arrangements) as may be required by any applicable law, rule or
regulation.
ARTICLE VIII
------------
FISCAL YEAR AND ACCOUNTANT
--------------------------
Section 1. Fiscal Year. The fiscal year of the Trust shall
--------- -----------
be as determined by the Trustees.
Section 2. Accountant. The Trust shall employ independent
--------- ----------
certified public accountants as its accountant ("Accountant") to
examine the accounts of the Trust and to sign and certify financial
statements filed by the Trust. The Accountant's certificates and
reports shall be addressed both to the Trustees and to the
Shareholders.
ARTICLE IX
----------
AMENDMENTS
----------
Section 1. General. All Bylaws of the Trust shall be
--------- -------
subject to amendment, alteration or repeal, and new Bylaws may be made
by the affirmative vote of a majority of either: (1) the Outstanding
Shares of the Trust entitled to vote at any meeting; or (2) the
Trustees at any meeting.
ARTICLE X
---------
NET ASSET VALUE
---------------
Section 1. Determination of Net Asset Value. The term "Net
--------- --------------------------------
Asset Value" of any Series shall mean that amount by which the assets
belonging to that Series exceed its liabilities, all as
-10-<PAGE>
determined by or under the direction of the Trustees. Such value per
Share 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 appraising portfolio securities
insofar as permitted under the Investment Company Act of 1940 and the
rules, regulations and interpretations thereof promulgated or issued
by the Securities and Exchange Commission or insofar as permitted by
any order of the Securities and Exchange Commission applicable to the
Series. The Trustees may delegate any of their powers and duties
under this Section 1 with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the Net Asset Value
per Share last determined to be determined again in a similar manner
and may fix the time when such redetermined values shall become
effective.
ARTICLE XI
----------
MISCELLANEOUS
-------------
Section 1. 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 the accounts and books of the
Trust or any Series or Class shall be open to the inspection of
Shareholders. 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.
Section 2. Severability. The provisions of these Bylaws
--------- ------------
are severable. If the Trustees determine, with the advice of counsel,
that any provision hereof conflicts with the Investment Company Act of
1940, 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 these Bylaws; provided, however, that such determination shall not
affect any of the remaining provisions of these Bylaws or render
invalid or improper any action taken or omitted prior to such
determination. If any provision hereof shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision only in such jurisdiction and
shall not affect any other provision of these Bylaws.
Section 3. 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.
-11-
INVESTMENT ADVISORY AGREEMENT
BERGER IPT - 100 FUND
(A SERIES OF BERGER INSTITUTIONAL PRODUCTS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made
this _____ day of ______________, 1996, between BERGER ASSOCIATES,
INC., a Delaware corporation ("Berger Associates"), and BERGER
INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust (the "Trust")
with respect to the series of the Trust known as the Berger IPT - 100
Fund (the "Fund").
W I T N E S S E T H:
-------------------
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has registered its shares for public
offering under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust is authorized to create separate series
of shares, each with its own separate investment portfolio, one of
such series created by the Trust being the Fund; and
WHEREAS, the Trust and Berger Associates deem it mutually
advantageous that Berger Associates should assist the Trustees and
officers of the Trust in the management of the securities portfolio of
the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Management Functions. In addition to the expenses
--------------------
which Berger Associates may incur in the performance of its investment
advisory functions under this Agreement, and the expenses which it may
expressly undertake to incur and pay under other agreements with the
Trust or otherwise, Berger Associates shall incur and pay the
following expenses relating to the Fund's operations without
reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees (the "Trustees"),
except for such Trustees who are not interested persons
of Berger Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the
Fund, other than expenses incurred in complying with
federal and state laws and the law of any foreign
country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund
including without limitation registration fees and
costs, the costs of preparing the registration
statement relating to the Fund and amendments thereto,
and the costs and expenses
<PAGE>
of preparing, printing, and mailing prospectuses (and
statements of additional information) to persons other
than shareholders of the Fund.
2. Investment Advisory Functions. In its capacity as
-----------------------------
investment adviser to the Fund, Berger Associates shall have the
following responsibilities:
(a) To furnish continuous advice and recommendations to the
Fund as to the acquisition, holding or disposition of
any or all of the securities or other assets which the
Fund may own or contemplate acquiring from time to
time, giving due consideration to the investment
policies and restrictions and the other statements
concerning the Fund in the Trust's Trust Instrument,
Bylaws and registration statements under the 1940 Act
and the 1933 Act, to any orders issued to the Trust by
the Securities and Exchange Commission, and to the
provisions of the Internal Revenue Code, as amended
from time to time, applicable to the Fund as a
regulated investment company or required to maintain
compliance with any diversification provisions
applicable to insurance company separate accounts or
qualified plans investing in the Trust;
(b) To cause its officers to attend meetings and furnish
oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the
condition of the investment portfolio of the Fund, the
investment recommendations of Berger Associates, and
the investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale of securities as
directed by the appropriate officers of the Trust.
3. Obligations of Trust. The Trust shall have the
--------------------
following obligations under this Agreement:
(a) To keep Berger Associates continuously and fully
informed as to the composition of the investment
portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Berger Associates with a certified copy of
any financial statement or report prepared for the Fund
by certified or independent public accountants and with
copies of any financial statements or reports made to
the Fund's shareholders or to any governmental body or
securities exchange;
(c) To furnish Berger Associates with any further materials
or information which Berger Associates may reasonably
request to enable it to perform its function under this
Agreement; and
-2-<PAGE>
(d) To compensate Berger Associates for its services and
reimburse Berger Associates for its expenses incurred
hereunder in accordance with the provisions of
paragraph 4 hereof.
4. Compensation. The Trust shall pay to Berger Associates
------------
for its services under this Agreement a monthly fee, payable on the
last day of each month during which or part of which this Agreement is
in effect, of 1/12 of 0.75% of the average daily closing net asset
value of the Fund for such month. For the month during which this
Agreement becomes effective and the month during which it terminates,
however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month
during which this Agreement is effective.
5. Expenses Paid by the Trust. The Trust assumes and
--------------------------
shall pay all expenses incidental to its operations and business not
specifically assumed or agreed to be paid by Berger Associates
pursuant to Section 1 hereof, including, but not limited to,
investment adviser fees; any compensation, fees or reimbursements
which the Trust pays to its Trustees who are not interested persons of
Berger Associates; compensation of the Fund's custodian, transfer
agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping
and bookkeeping expenses; brokerage commissions and all other expenses
in connection with execution of portfolio transactions (including any
appropriate commissions paid to Berger Associates or its affiliates
for effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the
purchasers thereof; expenses of local representation in Delaware;
expenses of shareholders' meetings and of preparing, printing and
distributing proxy statements, notices, and reports to shareholders;
expenses of preparing and filing reports and tax returns with federal
and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration
or qualification of shares of the Fund for sale in any jurisdiction,
the costs of portfolio pricing services and systems for compliance
with blue sky laws, and all costs involved in preparing, printing and
mailing prospectuses and statements of additional information of the
Fund; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association
or other investment company organization. To the extent that Berger
Associates shall perform any of the above described administrative and
clerical functions, including transfer agency, registry, dividend
disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports
and returns, the Trust shall pay to Berger Associates compensation
for, or reimburse Berger Associates for its expenses incurred in
connection with, such services as Berger Associates and the Trust
shall agree from time to time, any other provision of this Agreement
notwithstanding.
6. Treatment of Investment Advice. The Trust shall treat
------------------------------
the investment advice and recommendations of Berger Associates as
being advisory only, and shall retain full control over its own
investment policies. However, the Trustees may delegate to the
appropriate officers of the Trust, or to a committee of the Trustees,
the power to authorize purchases, sales
-3-<PAGE>
or other actions affecting the portfolio of the Fund in the interim
between meetings of the Trustees.
7. Brokerage Commissions. For purposes of this Agreement,
---------------------
brokerage commissions paid by the Fund upon the purchase or sale of
its portfolio securities shall be considered a cost of securities of
the Fund and shall be paid by the Fund. Berger Associates is
authorized and directed to place Fund portfolio transactions only with
brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission
rates, provided, however, that Berger Associates may pay a broker or
dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if Berger Associates
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities of Berger
Associates. Berger Associates is also authorized to consider sales of
Fund shares as a factor in selecting broker-dealers to execute Fund
portfolio transactions. In placing portfolio business with such
broker-dealers, Berger Associates shall seek the best execution of
each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the
Investment Company Act of 1940 and the Securities Exchange Act of
1934, as amended, and in the event that Berger Associates or an
affiliate is registered as a broker-dealer, Berger Associates may
select a broker with which it or the Fund is affiliated. Berger
Associates or such affiliated broker-dealer may effect or execute Fund
portfolio transactions, whether on a securities exchange or in the
over-the-counter market, and receive separate compensation from the
Fund therefor. Notwithstanding the foregoing, the Trust shall retain
the right to direct the placement of all portfolio transactions, and
the Trustees of the Trust may establish policies or guidelines to be
followed by Berger Associates in placing portfolio transactions for
the Trust pursuant to the foregoing provisions. Berger Associates
shall report on the placement of portfolio transactions in the prior
fiscal quarter at each quarterly meeting of such Trustees.
8. Termination. This Agreement may be terminated at any
-----------
time, without penalty, by the Trustees of the Trust, or by the
shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities, provided in either case that sixty (60)
days' advance written notice of termination be given to Berger
Associates at its principal place of business. This Agreement may be
terminated by Berger Associates at any time, without penalty, by
giving sixty (60) days' advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees
that, consistent with the terms of the Trust's Trust Instrument, the
Trust shall cease to use the name "Berger" in connection with the Fund
as soon as reasonably practicable following any termination of this
Agreement if Berger Associates does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate
----------
automatically in the event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until
----
the last day of April, 1997, unless sooner terminated in accordance
with its terms, and shall continue in effect from
-4-<PAGE>
year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of
the Trustees of the Trust who are not parties hereto or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual
approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not
more than sixty (60) days prior to the last day of April of each
applicable year, notwithstanding the fact that more than three hundred
sixty-five (365) days may have elapsed since the date on which such
approval was last given.
11. Amendments. This Agreement may be amended by the
----------
parties only if such amendment is specifically approved (i) by a
majority of the Trustees, including a majority of the Trustees who are
not interested persons of Berger Associates and, if required by
applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Allocation of Expenses. The Trustees shall determine
----------------------
the basis for making an appropriate allocation of the Trust's expenses
(other than those directly attributable to the Fund) between the Fund
and any other series of the Trust and between the Fund and other
investment companies managed by Berger Associates.
13. Limitation on Personal Liability. NOTICE IS HEREBY
--------------------------------
GIVEN that the Trust is a business trust organized under the Delaware
Business Trust Act pursuant to a Certificate of Trust filed in the
office of the Secretary of State of the State of Delaware. All
parties to this Agreement acknowledge and agree that the Trust is a
series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with
respect to such series only, and not against the assets of the Trust
generally or against the assets held with respect to any other series
and further that no trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the
foregoing.
14. Limitation of Liability of Berger Associates. Berger
--------------------------------------------
Associates shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law.
As used in this Section 14, "Berger Associates" shall include any
affiliate of Berger Associates performing services for the Trust
contemplated hereunder and directors, officers and employees of Berger
Associates and such affiliates.
15. Activities of Berger Associates. The services of
-------------------------------
Berger Associates to the Trust hereunder are not to be deemed to be
exclusive, and Berger Associates and its affiliates are free to render
services to other parties. It is understood that Trustees, officers
and shareholders of the Trust are or may become interested in Berger
Associates as directors, officers and shareholders of Berger
Associates, that directors, officers, employees and shareholders of
Berger Associates are or may become similarly interested in the Trust,
and that Berger Associates may become interested in the Trust as a
shareholder or otherwise.
-5-<PAGE>
16. Certain Definitions. The terms "vote of a majority of
-------------------
the outstanding voting securities", "assignment" and "interested
persons" when used herein, shall have the respective meanings
specified in the 1940 Act, as now in effect or hereafter amended, and
the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Investment Advisory Agreement as
of the date and year first above written.
BERGER ASSOCIATES, INC.
By______________________________________
Title:
BERGER INSTITUTIONAL PRODUCTS TRUST
By______________________________________
Title:
-6-<PAGE>
[BERGER ASSOCIATES, INC. LETTERHEAD APPEARS HERE]
______________, 1996
Berger Institutional Products Trust
210 University Blvd., Suite 900
Denver, Colorado 80206
Gentlemen:
As you know, Section 4 of our Investment Advisory Agreement,
dated ___________, 1996, provides for compensation to Berger
Associates, Inc. ("Berger Associates") with respect to the series of
the Trust known as the Berger IPT - 100 Fund (the "Fund"). This
letter is to inform you that Berger Associates will voluntarily waive
a portion of its investment advisory fee under the conditions set
forth in this letter agreement and hereby agrees to amend our
Investment Advisory Agreement by the addition of the following
provision:
In the event the normal operating expenses of the
Fund, including amounts payable to Berger
Associates pursuant to Section 4 hereof, for any
fiscal year ending on a date on which this
Agreement is in effect exceed 1.00% of the Fund's
average net assets, Berger Associates shall reduce
its advisory fee due from the Fund by the extent
of such excess; provided, however, to the extent
permitted by law, there shall be excluded from
such expenses the amount of any interest, taxes,
brokerage commissions and extraordinary expenses
(including but not limited to legal claims and
liabilities and litigation costs and any
indemnification related thereto) paid or payable
by the Fund. Whenever the expenses of the Fund
exceed a pro rata portion of the applicable annual
expense limitation, the estimated amount of
reimbursement under such limitation shall be
<PAGE>
Berger Institutional Products Trust
____________, 1996
Page 2
applicable as an offset against the monthly
payment of the fee due to Berger Associates.
This waiver shall terminate automatically upon the
termination of the Investment Advisory Agreement. In addition, this
waiver may be terminated by Berger Associates at any time provided
that Berger Associates provides at least 90 days' prior written notice
of the date of termination. Any such notice of termination shall
state the date this waiver shall terminate and copies of any such
notice shall be mailed to each Trustee of the Trust concurrently with
its delivery to the Trust.
This waiver is applicable only to that series of the Trust
known as the Berger IPT - 100 Fund, and shall not be applicable to any
other series of the Trust, whether now existing or hereafter created.
Very truly yours,
BERGER ASSOCIATES, INC.
By:_____________________________________
Title:_______________________________
INVESTMENT ADVISORY AGREEMENT
BERGER IPT - GROWTH AND INCOME FUND
(A SERIES OF BERGER INSTITUTIONAL PRODUCTS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made
this _____ day of ______________, 1996, between BERGER ASSOCIATES,
INC., a Delaware corporation ("Berger Associates"), and BERGER
INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust (the "Trust")
with respect to the series of the Trust known as the Berger IPT -
Growth and Income Fund (the "Fund").
W I T N E S S E T H:
-------------------
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has registered its shares for public
offering under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust is authorized to create separate series
of shares, each with its own separate investment portfolio, one of
such series created by the Trust being the Fund; and
WHEREAS, the Trust and Berger Associates deem it mutually
advantageous that Berger Associates should assist the Trustees and
officers of the Trust in the management of the securities portfolio of
the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Management Functions. In addition to the expenses
--------------------
which Berger Associates may incur in the performance of its investment
advisory functions under this Agreement, and the expenses which it may
expressly undertake to incur and pay under other agreements with the
Trust or otherwise, Berger Associates shall incur and pay the
following expenses relating to the Fund's operations without
reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees (the "Trustees"),
except for such Trustees who are not interested persons
of Berger Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the
Fund, other than expenses incurred in complying with
federal and state laws and the law of any foreign
country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund
including without limitation registration fees and
costs, the costs of preparing the registration
statement relating to the Fund and amendments thereto,
and the costs and expenses
<PAGE>
of preparing, printing, and mailing prospectuses (and
statements of additional information) to persons other
than shareholders of the Fund.
2. Investment Advisory Functions. In its capacity as
-----------------------------
investment adviser to the Fund, Berger Associates shall have the
following responsibilities:
(a) To furnish continuous advice and recommendations to the
Fund as to the acquisition, holding or disposition of
any or all of the securities or other assets which the
Fund may own or contemplate acquiring from time to
time, giving due consideration to the investment
policies and restrictions and the other statements
concerning the Fund in the Trust's Trust Instrument,
Bylaws and registration statements under the 1940 Act
and the 1933 Act, to any orders issued to the Trust by
the Securities and Exchange Commission, and to the
provisions of the Internal Revenue Code, as amended
from time to time, applicable to the Fund as a
regulated investment company or required to maintain
compliance with any diversification provisions
applicable to insurance company separate accounts or
qualified plans investing in the Trust;
(b) To cause its officers to attend meetings and furnish
oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the
condition of the investment portfolio of the Fund, the
investment recommendations of Berger Associates, and
the investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale of securities as
directed by the appropriate officers of the Trust.
3. Obligations of Trust. The Trust shall have the
--------------------
following obligations under this Agreement:
(a) To keep Berger Associates continuously and fully
informed as to the composition of the investment
portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Berger Associates with a certified copy of
any financial statement or report prepared for the Fund
by certified or independent public accountants and with
copies of any financial statements or reports made to
the Fund's shareholders or to any governmental body or
securities exchange;
(c) To furnish Berger Associates with any further materials
or information which Berger Associates may reasonably
request to enable it to perform its function under this
Agreement; and
-2-<PAGE>
(d) To compensate Berger Associates for its services and
reimburse Berger Associates for its expenses incurred
hereunder in accordance with the provisions of
paragraph 4 hereof.
4. Compensation. The Trust shall pay to Berger Associates
------------
for its services under this Agreement a monthly fee, payable on the
last day of each month during which or part of which this Agreement is
in effect, of 1/12 of 0.75% of the average daily closing net asset
value of the Fund for such month. For the month during which this
Agreement becomes effective and the month during which it terminates,
however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month
during which this Agreement is effective.
5. Expenses Paid by the Trust. The Trust assumes and
--------------------------
shall pay all expenses incidental to its operations and business not
specifically assumed or agreed to be paid by Berger Associates
pursuant to Section 1 hereof, including, but not limited to,
investment adviser fees; any compensation, fees or reimbursements
which the Trust pays to its Trustees who are not interested persons of
Berger Associates; compensation of the Fund's custodian, transfer
agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping
and bookkeeping expenses; brokerage commissions and all other expenses
in connection with execution of portfolio transactions (including any
appropriate commissions paid to Berger Associates or its affiliates
for effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the
purchasers thereof; expenses of local representation in Delaware;
expenses of shareholders' meetings and of preparing, printing and
distributing proxy statements, notices, and reports to shareholders;
expenses of preparing and filing reports and tax returns with federal
and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration
or qualification of shares of the Fund for sale in any jurisdiction,
the costs of portfolio pricing services and systems for compliance
with blue sky laws, and all costs involved in preparing, printing and
mailing prospectuses and statements of additional information of the
Fund; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association
or other investment company organization. To the extent that Berger
Associates shall perform any of the above described administrative and
clerical functions, including transfer agency, registry, dividend
disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports
and returns, the Trust shall pay to Berger Associates compensation
for, or reimburse Berger Associates for its expenses incurred in
connection with, such services as Berger Associates and the Trust
shall agree from time to time, any other provision of this Agreement
notwithstanding.
6. Treatment of Investment Advice. The Trust shall treat
------------------------------
the investment advice and recommendations of Berger Associates as
being advisory only, and shall retain full control over its own
investment policies. However, the Trustees may delegate to the
appropriate officers of the Trust, or to a committee of the Trustees,
the power to authorize purchases, sales
-3-<PAGE>
or other actions affecting the portfolio of the Fund in the interim
between meetings of the Trustees.
7. Brokerage Commissions. For purposes of this Agreement,
---------------------
brokerage commissions paid by the Fund upon the purchase or sale of
its portfolio securities shall be considered a cost of securities of
the Fund and shall be paid by the Fund. Berger Associates is
authorized and directed to place Fund portfolio transactions only with
brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission
rates, provided, however, that Berger Associates may pay a broker or
dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if Berger Associates
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities of Berger
Associates. Berger Associates is also authorized to consider sales of
Fund shares as a factor in selecting broker-dealers to execute Fund
portfolio transactions. In placing portfolio business with such
broker-dealers, Berger Associates shall seek the best execution of
each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the
Investment Company Act of 1940 and the Securities Exchange Act of
1934, as amended, and in the event that Berger Associates or an
affiliate is registered as a broker-dealer, Berger Associates may
select a broker with which it or the Fund is affiliated. Berger
Associates or such affiliated broker-dealer may effect or execute Fund
portfolio transactions, whether on a securities exchange or in the
over-the-counter market, and receive separate compensation from the
Fund therefor. Notwithstanding the foregoing, the Trust shall retain
the right to direct the placement of all portfolio transactions, and
the Trustees of the Trust may establish policies or guidelines to be
followed by Berger Associates in placing portfolio transactions for
the Trust pursuant to the foregoing provisions. Berger Associates
shall report on the placement of portfolio transactions in the prior
fiscal quarter at each quarterly meeting of such Trustees.
8. Termination. This Agreement may be terminated at any
-----------
time, without penalty, by the Trustees of the Trust, or by the
shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities, provided in either case that sixty (60)
days' advance written notice of termination be given to Berger
Associates at its principal place of business. This Agreement may be
terminated by Berger Associates at any time, without penalty, by
giving sixty (60) days' advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees
that, consistent with the terms of the Trust's Trust Instrument, the
Trust shall cease to use the name "Berger" in connection with the Fund
as soon as reasonably practicable following any termination of this
Agreement if Berger Associates does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate
----------
automatically in the event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until
----
the last day of April, 1997, unless sooner terminated in accordance
with its terms, and shall continue in effect from
-4-<PAGE>
year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of
the Trustees of the Trust who are not parties hereto or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual
approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not
more than sixty (60) days prior to the last day of April of each
applicable year, notwithstanding the fact that more than three hundred
sixty-five (365) days may have elapsed since the date on which such
approval was last given.
11. Amendments. This Agreement may be amended by the
----------
parties only if such amendment is specifically approved (i) by a
majority of the Trustees, including a majority of the Trustees who are
not interested persons of Berger Associates and, if required by
applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Allocation of Expenses. The Trustees shall determine
----------------------
the basis for making an appropriate allocation of the Trust's expenses
(other than those directly attributable to the Fund) between the Fund
and any other series of the Trust and between the Fund and other
investment companies managed by Berger Associates.
13. Limitation on Personal Liability. NOTICE IS HEREBY
--------------------------------
GIVEN that the Trust is a business trust organized under the Delaware
Business Trust Act pursuant to a Certificate of Trust filed in the
office of the Secretary of State of the State of Delaware. All
parties to this Agreement acknowledge and agree that the Trust is a
series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with
respect to such series only, and not against the assets of the Trust
generally or against the assets held with respect to any other series
and further that no trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the
foregoing.
14. Limitation of Liability of Berger Associates. Berger
--------------------------------------------
Associates shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law.
As used in this Section 14, "Berger Associates" shall include any
affiliate of Berger Associates performing services for the Trust
contemplated hereunder and directors, officers and employees of Berger
Associates and such affiliates.
15. Activities of Berger Associates. The services of
-------------------------------
Berger Associates to the Trust hereunder are not to be deemed to be
exclusive, and Berger Associates and its affiliates are free to render
services to other parties. It is understood that Trustees, officers
and shareholders of the Trust are or may become interested in Berger
Associates as directors, officers and shareholders of Berger
Associates, that directors, officers, employees and shareholders of
Berger Associates are or may become similarly interested in the Trust,
and that Berger Associates may become interested in the Trust as a
shareholder or otherwise.
-5-<PAGE>
16. Certain Definitions. The terms "vote of a majority of
-------------------
the outstanding voting securities", "assignment" and "interested
persons" when used herein, shall have the respective meanings
specified in the 1940 Act, as now in effect or hereafter amended, and
the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Investment Advisory Agreement as
of the date and year first above written.
BERGER ASSOCIATES, INC.
By______________________________________
Title:
BERGER INSTITUTIONAL PRODUCTS TRUST
By______________________________________
Title:
-6-<PAGE>
[BERGER ASSOCIATES, INC. LETTERHEAD APPEARS HERE]
______________, 1996
Berger Institutional Products Trust
210 University Blvd., Suite 900
Denver, Colorado 80206
Gentlemen:
As you know, Section 4 of our Investment Advisory Agreement,
dated ___________, 1996, provides for compensation to Berger
Associates, Inc. ("Berger Associates") with respect to the series of
the Trust known as the Berger IPT - Growth and Income Fund (the
"Fund"). This letter is to inform you that Berger Associates will
voluntarily waive a portion of its investment advisory fee under the
conditions set forth in this letter agreement and hereby agrees to
amend our Investment Advisory Agreement by the addition of the
following provision:
In the event the normal operating expenses of the
Fund, including amounts payable to Berger
Associates pursuant to Section 4 hereof, for any
fiscal year ending on a date on which this
Agreement is in effect exceed 1.00% of the Fund's
average net assets, Berger Associates shall reduce
its advisory fee due from the Fund by the extent
of such excess; provided, however, to the extent
permitted by law, there shall be excluded from
such expenses the amount of any interest, taxes,
brokerage commissions and extraordinary expenses
(including but not limited to legal claims and
liabilities and litigation costs and any
indemnification related thereto) paid or payable
by the Fund. Whenever the expenses of the Fund
exceed a pro rata portion of the applicable annual
expense limitation, the estimated amount of
reimbursement under such limitation shall be
<PAGE>
Berger Institutional Products Trust
____________, 1996
Page 2
applicable as an offset against the monthly
payment of the fee due to Berger Associates.
This waiver shall terminate automatically upon the
termination of the Investment Advisory Agreement. In addition, this
waiver may be terminated by Berger Associates at any time provided
that Berger Associates provides at least 90 days' prior written notice
of the date of termination. Any such notice of termination shall
state the date this waiver shall terminate and copies of any such
notice shall be mailed to each Trustee of the Trust concurrently with
its delivery to the Trust.
This waiver is applicable only to that series of the Trust
known as the Berger IPT - Growth and Income Fund, and shall not be
applicable to any other series of the Trust, whether now existing or
hereafter created.
Very truly yours,
BERGER ASSOCIATES, INC.
By:_____________________________________
Title:_______________________________
INVESTMENT ADVISORY AGREEMENT
BERGER IPT - SMALL COMPANY GROWTH FUND
(A SERIES OF BERGER INSTITUTIONAL PRODUCTS TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made
this _____ day of ______________, 1996, between BERGER ASSOCIATES,
INC., a Delaware corporation ("Berger Associates"), and BERGER
INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust (the "Trust")
with respect to the series of the Trust known as the Berger IPT -
Small Company Growth Fund (the "Fund").
W I T N E S S E T H:
-------------------
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has registered its shares for public
offering under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust is authorized to create separate series
of shares, each with its own separate investment portfolio, one of
such series created by the Trust being the Fund; and
WHEREAS, the Trust and Berger Associates deem it mutually
advantageous that Berger Associates should assist the Trustees and
officers of the Trust in the management of the securities portfolio of
the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Management Functions. In addition to the expenses
--------------------
which Berger Associates may incur in the performance of its investment
advisory functions under this Agreement, and the expenses which it may
expressly undertake to incur and pay under other agreements with the
Trust or otherwise, Berger Associates shall incur and pay the
following expenses relating to the Fund's operations without
reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees (the "Trustees"),
except for such Trustees who are not interested persons
of Berger Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the
Fund, other than expenses incurred in complying with
federal and state laws and the law of any foreign
country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund
including without limitation registration fees and
costs, the costs of preparing the registration
statement relating to the Fund and amendments thereto,
and the costs and expenses
<PAGE>
of preparing, printing, and mailing prospectuses (and
statements of additional information) to persons other
than shareholders of the Fund.
2. Investment Advisory Functions. In its capacity as
-----------------------------
investment adviser to the Fund, Berger Associates shall have the
following responsibilities:
(a) To furnish continuous advice and recommendations to the
Fund as to the acquisition, holding or disposition of
any or all of the securities or other assets which the
Fund may own or contemplate acquiring from time to
time, giving due consideration to the investment
policies and restrictions and the other statements
concerning the Fund in the Trust's Trust Instrument,
Bylaws and registration statements under the 1940 Act
and the 1933 Act, to any orders issued to the Trust by
the Securities and Exchange Commission, and to the
provisions of the Internal Revenue Code, as amended
from time to time, applicable to the Fund as a
regulated investment company or required to maintain
compliance with any diversification provisions
applicable to insurance company separate accounts or
qualified plans investing in the Trust;
(b) To cause its officers to attend meetings and furnish
oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the
condition of the investment portfolio of the Fund, the
investment recommendations of Berger Associates, and
the investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale of securities as
directed by the appropriate officers of the Trust.
3. Obligations of Trust. The Trust shall have the
--------------------
following obligations under this Agreement:
(a) To keep Berger Associates continuously and fully
informed as to the composition of the investment
portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Berger Associates with a certified copy of
any financial statement or report prepared for the Fund
by certified or independent public accountants and with
copies of any financial statements or reports made to
the Fund's shareholders or to any governmental body or
securities exchange;
(c) To furnish Berger Associates with any further materials
or information which Berger Associates may reasonably
request to enable it to perform its function under this
Agreement; and
-2-<PAGE>
(d) To compensate Berger Associates for its services and
reimburse Berger Associates for its expenses incurred
hereunder in accordance with the provisions of
paragraph 4 hereof.
4. Compensation. The Trust shall pay to Berger Associates
------------
for its services under this Agreement a monthly fee, payable on the
last day of each month during which or part of which this Agreement is
in effect, of 1/12 of 0.90% of the average daily closing net asset
value of the Fund for such month. For the month during which this
Agreement becomes effective and the month during which it terminates,
however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month
during which this Agreement is effective.
5. Expenses Paid by the Trust. The Trust assumes and
--------------------------
shall pay all expenses incidental to its operations and business not
specifically assumed or agreed to be paid by Berger Associates
pursuant to Section 1 hereof, including, but not limited to,
investment adviser fees; any compensation, fees or reimbursements
which the Trust pays to its Trustees who are not interested persons of
Berger Associates; compensation of the Fund's custodian, transfer
agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping
and bookkeeping expenses; brokerage commissions and all other expenses
in connection with execution of portfolio transactions (including any
appropriate commissions paid to Berger Associates or its affiliates
for effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the
purchasers thereof; expenses of local representation in Delaware;
expenses of shareholders' meetings and of preparing, printing and
distributing proxy statements, notices, and reports to shareholders;
expenses of preparing and filing reports and tax returns with federal
and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration
or qualification of shares of the Fund for sale in any jurisdiction,
the costs of portfolio pricing services and systems for compliance
with blue sky laws, and all costs involved in preparing, printing and
mailing prospectuses and statements of additional information of the
Fund; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association
or other investment company organization. To the extent that Berger
Associates shall perform any of the above described administrative and
clerical functions, including transfer agency, registry, dividend
disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports
and returns, the Trust shall pay to Berger Associates compensation
for, or reimburse Berger Associates for its expenses incurred in
connection with, such services as Berger Associates and the Trust
shall agree from time to time, any other provision of this Agreement
notwithstanding.
6. Treatment of Investment Advice. The Trust shall treat
------------------------------
the investment advice and recommendations of Berger Associates as
being advisory only, and shall retain full control over its own
investment policies. However, the Trustees may delegate to the
appropriate officers of the Trust, or to a committee of the Trustees,
the power to authorize purchases, sales
-3-<PAGE>
or other actions affecting the portfolio of the Fund in the interim
between meetings of the Trustees.
7. Brokerage Commissions. For purposes of this Agreement,
---------------------
brokerage commissions paid by the Fund upon the purchase or sale of
its portfolio securities shall be considered a cost of securities of
the Fund and shall be paid by the Fund. Berger Associates is
authorized and directed to place Fund portfolio transactions only with
brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission
rates, provided, however, that Berger Associates may pay a broker or
dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if Berger Associates
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities of Berger
Associates. Berger Associates is also authorized to consider sales of
Fund shares as a factor in selecting broker-dealers to execute Fund
portfolio transactions. In placing portfolio business with such
broker-dealers, Berger Associates shall seek the best execution of
each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the
Investment Company Act of 1940 and the Securities Exchange Act of
1934, as amended, and in the event that Berger Associates or an
affiliate is registered as a broker-dealer, Berger Associates may
select a broker with which it or the Fund is affiliated. Berger
Associates or such affiliated broker-dealer may effect or execute Fund
portfolio transactions, whether on a securities exchange or in the
over-the-counter market, and receive separate compensation from the
Fund therefor. Notwithstanding the foregoing, the Trust shall retain
the right to direct the placement of all portfolio transactions, and
the Trustees of the Trust may establish policies or guidelines to be
followed by Berger Associates in placing portfolio transactions for
the Trust pursuant to the foregoing provisions. Berger Associates
shall report on the placement of portfolio transactions in the prior
fiscal quarter at each quarterly meeting of such Trustees.
8. Termination. This Agreement may be terminated at any
-----------
time, without penalty, by the Trustees of the Trust, or by the
shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities, provided in either case that sixty (60)
days' advance written notice of termination be given to Berger
Associates at its principal place of business. This Agreement may be
terminated by Berger Associates at any time, without penalty, by
giving sixty (60) days' advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees
that, consistent with the terms of the Trust's Trust Instrument, the
Trust shall cease to use the name "Berger" in connection with the Fund
as soon as reasonably practicable following any termination of this
Agreement if Berger Associates does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate
----------
automatically in the event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until
----
the last day of April, 1997, unless sooner terminated in accordance
with its terms, and shall continue in effect from
-4-<PAGE>
year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of
the Trustees of the Trust who are not parties hereto or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual
approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not
more than sixty (60) days prior to the last day of April of each
applicable year, notwithstanding the fact that more than three hundred
sixty-five (365) days may have elapsed since the date on which such
approval was last given.
11. Amendments. This Agreement may be amended by the
----------
parties only if such amendment is specifically approved (i) by a
majority of the Trustees, including a majority of the Trustees who are
not interested persons of Berger Associates and, if required by
applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Allocation of Expenses. The Trustees shall determine
----------------------
the basis for making an appropriate allocation of the Trust's expenses
(other than those directly attributable to the Fund) between the Fund
and any other series of the Trust and between the Fund and other
investment companies managed by Berger Associates.
13. Limitation on Personal Liability. NOTICE IS HEREBY
--------------------------------
GIVEN that the Trust is a business trust organized under the Delaware
Business Trust Act pursuant to a Certificate of Trust filed in the
office of the Secretary of State of the State of Delaware. All
parties to this Agreement acknowledge and agree that the Trust is a
series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with
respect to such series only, and not against the assets of the Trust
generally or against the assets held with respect to any other series
and further that no trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the
foregoing.
14. Limitation of Liability of Berger Associates. Berger
--------------------------------------------
Associates shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law.
As used in this Section 14, "Berger Associates" shall include any
affiliate of Berger Associates performing services for the Trust
contemplated hereunder and directors, officers and employees of Berger
Associates and such affiliates.
15. Activities of Berger Associates. The services of
-------------------------------
Berger Associates to the Trust hereunder are not to be deemed to be
exclusive, and Berger Associates and its affiliates are free to render
services to other parties. It is understood that Trustees, officers
and shareholders of the Trust are or may become interested in Berger
Associates as directors, officers and shareholders of Berger
Associates, that directors, officers, employees and shareholders of
Berger Associates are or may become similarly interested in the Trust,
and that Berger Associates may become interested in the Trust as a
shareholder or otherwise.
-5-<PAGE>
16. Certain Definitions. The terms "vote of a majority of
-------------------
the outstanding voting securities", "assignment" and "interested
persons" when used herein, shall have the respective meanings
specified in the 1940 Act, as now in effect or hereafter amended, and
the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Investment Advisory Agreement as
of the date and year first above written.
BERGER ASSOCIATES, INC.
By______________________________________
Title:
BERGER INSTITUTIONAL PRODUCTS TRUST
By______________________________________
Title:
-6-<PAGE>
[BERGER ASSOCIATES, INC. LETTERHEAD APPEARS HERE]
______________, 1996
Berger Institutional Products Trust
210 University Blvd., Suite 900
Denver, Colorado 80206
Gentlemen:
As you know, Section 4 of our Investment Advisory Agreement,
dated ___________, 1996, provides for compensation to Berger
Associates, Inc. ("Berger Associates") with respect to the series of
the Trust known as the Berger IPT - Small Company Growth Fund (the
"Fund"). This letter is to inform you that Berger Associates will
voluntarily waive a portion of its investment advisory fee under the
conditions set forth in this letter agreement and hereby agrees to
amend our Investment Advisory Agreement by the addition of the
following provision:
In the event the normal operating expenses of the
Fund, including amounts payable to Berger
Associates pursuant to Section 4 hereof, for any
fiscal year ending on a date on which this
Agreement is in effect exceed 1.15% of the Fund's
average net assets, Berger Associates shall reduce
its advisory fee due from the Fund by the extent
of such excess; provided, however, to the extent
permitted by law, there shall be excluded from
such expenses the amount of any interest, taxes,
brokerage commissions and extraordinary expenses
(including but not limited to legal claims and
liabilities and litigation costs and any
indemnification related thereto) paid or payable
by the Fund. Whenever the expenses of the Fund
exceed a pro rata portion of the applicable annual
expense limitation, the
<PAGE>
Berger Institutional Products Trust
____________, 1996
Page 2
estimated amount of reimbursement under such
limitation shall be applicable as an offset
against the monthly payment of the fee due to
Berger Associates.
This waiver shall terminate automatically upon the
termination of the Investment Advisory Agreement. In addition, this
waiver may be terminated by Berger Associates at any time provided
that Berger Associates provides at least 90 days' prior written notice
of the date of termination. Any such notice of termination shall
state the date this waiver shall terminate and copies of any such
notice shall be mailed to each Trustee of the Trust concurrently with
its delivery to the Trust.
This waiver is applicable only to that series of the Trust
known as the Berger IPT - Small Company Growth Fund, and shall not be
applicable to any other series of the Trust, whether now existing or
hereafter created.
Very truly yours,
BERGER ASSOCIATES, INC.
By:_____________________________________
Title:_______________________________
CUSTODY AGREEMENT
-----------------
THIS AGREEMENT made effective as of the _____ day of
____________, 1995, by and between INVESTORS FIDUCIARY TRUST COMPANY,
a trust company chartered under the laws of the state of Missouri,
having its trust office located at 127 West 10th Street, Kansas City,
Missouri 64105 ("Custodian"), and BERGER INSTITUTIONAL PRODUCTS
TRUST, a Delaware business trust, referred to as the "Fund,"
consisting of separate portfolios represented by separate series of
shares of beneficial interest (referred to herein, together with any
such portfolios hereafter constituted, where appropriate, individually
as a "Portfolio," or collectively as the "Portfolios,") having its
principal office and place of business at 210 University Boulevard,
Suite 900, Denver, Colorado 80206.
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust
Company as Custodian of the securities and monies of Fund's investment
portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept
such appointment;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound,
mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints
------------------------
Custodian as custodian of the Fund which is to include
appointment as custodian of the securities and monies at any time
owned by the Fund.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will
-------------------------------
deliver to Custodian prior to the effective date of this
Agreement, copies of the following documents and all amendments
or supplements thereto, properly certified or authenticated:
A. Resolutions of the Trustees of Fund appointing Custodian as
custodian hereunder and approving the form of this
Agreement; and
<PAGE>
B. Resolutions of the Trustees of Fund designating certain
persons to give instructions on behalf of Fund to Custodian
and authorizing Custodian to rely upon written instructions
over their signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
----------------------------------------
A. Delivery of Assets
------------------
Fund will deliver or cause to be delivered to Custodian on
the effective date of this Agreement, or as soon thereafter
as practicable, and from time to time thereafter, all
portfolio securities acquired by it and monies then owned by
it except as permitted by the Investment Company Act of 1940
or from time to time coming into its possession during the
time this Agreement shall continue in effect. Custodian
shall have no responsibility or liability whatsoever for or
on account of securities or monies not so delivered. All
securities so delivered to Custodian (other than bearer
securities) shall be registered in the name of the
applicable Portfolio or its nominee, or of a nominee of
Custodian, or shall be properly endorsed and in form for
transfer satisfactory to Custodian.
B. Delivery of Accounts and Records
--------------------------------
Fund shall turn over to Custodian all of each Portfolio's
relevant accounts and records previously maintained by it.
Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records
turned over to it by Fund, and Fund shall indemnify and hold
Custodian harmless of and from any and all expenses, damages
and losses whatsoever arising out of or in connection with
any error, omission, inaccuracy or other deficiency of such
accounts and records or in the failure of Fund to provide
any portion of such or to provide any information needed by
the Custodian knowledgeably to perform its function
hereunder.
C. Delivery of Assets to Third Parties
-----------------------------------
Custodian will receive delivery of and keep safely the
assets of each Portfolio delivered to it from time to time
segregated in a separate account. Custodian will not
deliver, assign, pledge or hypothecate any such assets to
any person except as permitted by the provisions of this
Agreement or any agreement executed by it according to the
terms of section 3.S. of this Agreement. Upon delivery of
any
2<PAGE>
such assets to a subcustodian pursuant to Section 3.S. of
this agreement, Custodian will create and maintain records
identifying those assets which have been delivered to the
subcustodian as belonging to each such Portfolio. The
Custodian is responsible for the securities and monies of
Fund only until they have been transmitted to and received
by other persons as permitted under the terms of this
Agreement, except for securities and monies transmitted to
subcustodians appointed under Section 3.S of this Agreement
for which Custodian remains responsible to the extent
provided in Section 3.S of this Agreement. Custodian may
participate directly or indirectly through a subcustodian in
the Depository Trust Company, Treasury/Federal Reserve Book
Entry System or Participant Trust Company (PTC) or other
depository approved by the Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)) (each a "Depository"
and collectively the "Depositories").
D. Registration of Securities
--------------------------
Custodian will hold stocks and other registerable portfolio
securities of Fund registered in the name of the applicable
Portfolio or in the name of any nominee of Custodian for
whose fidelity and liability Custodian will be fully
responsible, or in street certificate form, so-called, with
or without any indication of fiduciary capacity.
Unless otherwise instructed, Custodian will register all
such portfolio securities in the name of its authorized
nominee. All securities, and the ownership thereof by Fund,
which are held by Custodian hereunder, however, shall at all
times be identifiable on the records of the Custodian. The
Fund agrees to hold Custodian and its nominee harmless for
any liability arising solely from Custodian or its nominee
acting as a recordholder of securities held in custody.
E. Exchange of Securities
----------------------
Upon receipt of instructions as defined herein in Section
4.A, Custodian will exchange, or cause to be exchanged,
portfolio securities held by it for the account of Fund for
other securities or cash issued or paid in connection with
any reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or
otherwise, and will deposit any such securities in
3<PAGE>
accordance with the terms of any reorganization or
protective plan. Without instructions, Custodian is
authorized to exchange securities held by it in temporary
form for securities in definitive form, to effect an
exchange of shares when the par value of the stock is
changed, and, upon receiving payment therefor, to surrender
bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that
Custodian shall receive instructions prior to surrendering
any convertible security.
F. Purchases of Investments of the Fund
------------------------------------
Fund will, on each business day on which a purchase of
securities shall be made by it, deliver to Custodian
instructions which shall specify with respect to each such
purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased,
and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage
commission, taxes and other expenses payable in
connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or
dealer through whom the purchase was made.
In accordance with such instructions, Custodian will pay for
out of monies held for the account of the Portfolio, but
only insofar as monies are available therein for such
purpose, and receive the portfolio securities so purchased
by or for the account of the Portfolio except that Custodian
may in its sole discretion advance funds for the account of
the Portfolio which may result in an overdraft because the
monies held by the Custodian for the account of the
Portfolio of the Fund are insufficient to pay the total
amount payable upon such purchase. Except as otherwise
instructed by Fund, such payment shall be made by the
Custodian only upon receipt of securities: (a) by the
Custodian; (b) by a clearing corporation of
4<PAGE>
a national exchange of which the Custodian is a member; or
(c) by a Depository. Notwithstanding the foregoing, (i) in
the case of a repurchase agreement, the Custodian may
release funds to a Depository prior to the receipt of advice
from the Depository that the securities underlying such
repurchase agreement have been transferred by book-entry
into the account maintained with such Depository by the
Custodian, on behalf of its customers, provided that the
Custodian's instructions to the Depository require that the
Depository make payment of such funds only upon transfer by
book-entry of the securities underlying the repurchase
agreement in such account; (ii) in the case of time
deposits, call account deposits, currency deposits and other
deposits, foreign exchange transactions, futures contracts
or options, the Custodian may make payment therefor before
receipt of an advice or confirmation evidencing said deposit
or entry into such transaction; and (iii) in the case of the
purchase of securities, the settlement of which occurs
outside of the United States of America, the Custodian may
make, or cause a subcustodian appointed pursuant to Section
3.S.2. of this Agreement to make, payment therefor in
accordance with generally accepted local custom and market
practice.
G. Sales and Deliveries of Investments of the Fund - Other than
------------------------------------------------------------
Options and Futures
-------------------
Fund will, on each business day on which a sale of
investment securities of Fund has been made, deliver to
Custodian instructions specifying with respect to each such
sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the
securities;
3. The number of shares or principal amount sold, and
accrued interest, if any;
4. The date on which the securities sold were purchased or
other information identifying the securities sold and
to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission,
taxes or other expenses payable in connection with such
sale;
5<PAGE>
8. The total amount to be received by Fund upon such sale;
and
9. The name and address of the broker or dealer through
whom or person to whom the sale was made.
In accordance with such instructions, Custodian will deliver
or cause to be delivered the securities thus designated as
sold for the account of the Portfolio to the broker or other
person specified in the instructions relating to such sale.
Except as otherwise instructed by Fund, such delivery shall
be made upon receipt of: (a) payment therefor in such form
as is satisfactory to the Custodian; (b) credit to the
account of the Custodian with a clearing corporation of a
national securities exchange of which the Custodian is a
member; or (c) credit to the account of the Custodian, on
behalf of its customers, with a Depository. Notwithstanding
the foregoing: (i) in the case of securities held in
physical form, such securities shall be delivered in
accordance with "street delivery custom" to a broker or its
clearing agent; or (ii) in the case of the sale of
securities, the settlement of which occurs outside of the
United States of America, the Custodian may make, or cause a
subcustodian appointed pursuant to Section 3.S.2. of this
Agreement to make, such delivery upon payment therefor in
accordance with generally accepted local custom and market
practice.
H. Purchases or Sales of Security Options, Options on Indices
----------------------------------------------------------
and Security Index Futures Contracts
------------------------------------
Fund will, on each business day on which a purchase or sale
of the following options and/or futures shall be made by it,
deliver to Custodian instructions which shall specify with
respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
6<PAGE>
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through
whom the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer
through whom the sale or purchase was made, or
other applicable settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract
and, when available, the closing level, thereof;
b. The index level on the date the contract is
entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to instructions, and if not already in
the possession of Custodian, Fund shall deliver a
substantially complete and executed custodial
7<PAGE>
safekeeping account and procedural agreement which
shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission
merchant through whom the sale or purchase was
made, or other applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
----------------------------
If specifically allowed for in the prospectus of Fund:
1. Upon receipt of instructions, Custodian will release or
cause to be released securities held in custody to the
pledgee designated in such instructions by way of
pledge or hypothecation to secure any loan incurred by
Fund; provided, however, that the securities shall be
released only upon payment to Custodian of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made, further securities may be released or caused to
be released for that purpose upon receipt of
instructions. Upon receipt of instructions, Custodian
will pay, but only from funds available for such
purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated
in such instructions; provided,
8<PAGE>
however, that the securities will be released only upon
deposit with Custodian of full cash collateral as
specified in such instructions, and that Fund will
retain the right to any dividends, interest or
distribution on such loaned securities. Upon receipt
of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
J. Routine Matters
---------------
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of Fund except as may be
otherwise provided in this Agreement or directed from time
to time by the Trustees of Fund.
K. Deposit Account
---------------
Custodian will open and maintain a special purpose deposit
account in the name of Custodian ("Account"), subject only
to draft or order by Custodian upon receipt of instructions.
All monies received by Custodian from or for the account of
a Portfolio shall be deposited in the Account of such
Portfolio. Barring events not in the control of the
Custodian such as strikes, lockouts or labor disputes,
riots, war or equipment or transmission failure or damage,
fire, flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond
its control, at 9:00 a.m., Kansas City time, on the second
business day after deposit of any check into a Portfolio's
Account, Custodian agrees to make Fed Funds available to
such Portfolio in the amount of the check. Deposits made by
Federal Reserve wire will be available to the Fund
immediately and ACH wires will be available to the Fund on
the next business day. Income earned on the portfolio
securities will be credited to the Account of the applicable
Portfolio based on the schedule attached as Exhibit A. The
Custodian will be entitled to reverse any credited amounts
where credits have been made and monies are not finally
collected, provided that the Custodian has made reasonable
efforts to collect such uncollected income. If monies are
collected after such reversal, the Custodian will credit the
applicable Portfolio in that amount. Custodian may open and
maintain Accounts in its own banking department, in
9<PAGE>
State Street Bank and Trust Company, and in such other banks
or trust companies as may be designated by it and as
properly authorized by resolution of the Trustees of the
Fund, such Accounts, however, to be in the name of custodian
and subject only to its draft or order.
L. Income and other Payments to the Portfolio
------------------------------------------
Custodian will:
1. Collect, claim and receive and deposit for the account
of the Portfolio all income and other payments which
become due and payable on or after the effective date
of this Agreement with respect to the securities
deposited under this Agreement, and credit the account
of the applicable Portfolio in accordance with the
schedule attached hereto as Exhibit A. If, for any
reason, a Portfolio is credited with income that is not
subsequently collected, Custodian may reverse that
credited amount provided that the Custodian has made
reasonable efforts to collect such uncollected income;
2. Execute ownership and other certificates and affidavits
for all federal, state and local tax purposes in
connection with the collection of bond and note
coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income
and other payments, including but not limited to
the presentation for payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be
called, redeemed, retired or otherwise become
payable and regarding which the Custodian has
actual knowledge, or notice of which is
contained in publications of the type to
which it normally subscribes for such
purpose; and
b. the endorsement for collection, in the name of
Fund, of all checks, drafts or other negotiable
instruments.
10<PAGE>
Custodian, however, will not be required to institute suit
or take other extraordinary action to enforce collection
except upon receipt of instructions and upon being
indemnified to its satisfaction against the costs and
expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and
other similar items and will deal with the same pursuant to
instructions. Unless prior instructions have been received
to the contrary, Custodian will, without further
instructions, sell any rights held for the account of a
Portfolio on the last trade date prior to the date of
expiration of such rights.
M. Payment of Dividends and other Distributions
--------------------------------------------
On the declaration of any dividend or other distribution on
the shares of the Fund ("Fund Shares") by the Trustees of
Fund, Fund shall deliver to Custodian instructions with
respect thereto, including a copy of the Resolution of said
Trustees certified by the Secretary or an Assistant
Secretary of Fund wherein there shall be set forth the
record date as of which shareholders entitled to receive
such dividend or other distribution shall be determined, the
date of payment of such dividend or distribution, and the
amount payable per share on such dividend or distribution.
Except if the ex-dividend date and the reinvestment date of
any dividend are the same, in which case funds shall remain
in the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other
distribution, Custodian will pay out of the monies held for
the account of the applicable Portfolio, insofar as the same
shall be available for such purposes, and credit to the
account of the Dividend Disbursing Agent for Fund, such
amount as may be necessary to pay the amount per share
payable in cash on Fund Shares issued and outstanding on the
record date established by such Resolution.
N. Shares of Fund Purchased by Fund
--------------------------------
Whenever any Fund Shares are repurchased or redeemed by
Fund, Fund or its agent shall advise Custodian of the
aggregate dollar amount to be paid for such shares and shall
confirm such advice in writing. Upon receipt of such
advice, Custodian shall charge such aggregate dollar amount
to the Account of the applicable Portfolio and either
deposit the same in the account maintained for the
11<PAGE>
purpose of paying for the repurchase or redemption of Fund
Shares or deliver the same in accordance with such advice.
Custodian shall not have any duty or responsibility to
determine that Fund Shares have been removed from the proper
shareholder account or accounts or that the proper number of
such shares have been cancelled and removed from the
shareholder records.
O. Shares of Fund Purchased from Fund
----------------------------------
Whenever Fund Shares are purchased from Fund, Fund will
deposit or cause to be deposited with Custodian the amount
received for such shares.
Custodian shall not have any duty or responsibility in its
capacity as Custodian of the Fund to determine that Fund
Shares purchased from Fund have been added to the proper
shareholder account or accounts or that the proper number of
such shares have been added to the shareholder records.
P. Proxies and Notices
-------------------
Custodian will promptly deliver or mail or have delivered or
mailed to Fund all proxies properly signed, all notices of
meetings, all proxy statements and other notices, requests
or announcements affecting or relating to securities held by
Custodian for Fund and will, upon receipt of instructions,
execute and deliver or cause its nominee to execute and
deliver or mail or have delivered or mailed such proxies or
other authorizations as may be required. Except as provided
by this Agreement or pursuant to instructions hereafter
received by Custodian, neither it nor its nominee will
exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver
with respect thereto, or take any other similar action.
Q. Disbursements
-------------
Custodian will pay or cause to be paid insofar as funds are
available for the purpose, bills, statements and other
obligations of Fund (including but not limited to
obligations in connection with the conversion, exchange or
surrender of securities owned by Fund, interest charges,
dividend disbursements, taxes, management fees, custodian
fees, legal fees, auditors' fees, transfer agents' fees,
12<PAGE>
brokerage commissions, compensation to personnel, and other
operating expenses of Fund) pursuant to instructions of Fund
setting forth the name of the person to whom payment is to
be made, the amount of the payment, and the purpose of the
payment.
R. Daily Statement of Accounts
---------------------------
Custodian will, within a reasonable time, render to Fund as
of the close of business on each day, a detailed statement
of the amounts received or paid and of securities received
or delivered for the account of the Portfolio during said
day. Custodian will, from time to time, upon request by
Fund, render a detailed statement of the securities and
monies held for the Portfolios under this Agreement, and
Custodian will maintain such books and records as are
necessary to enable it to do so and will permit such persons
as are authorized by Fund, including Fund's independent
public accountants, access to such records or confirmation
of the contents of such records; and if demanded, will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written
instructions of Fund or as demanded by federal or state
regulatory agencies, Custodian will instruct any
subcustodian to give such persons as are authorized by the
Fund, including Fund's independent public accountants,
access to such records or confirmation of the contents of
such records; and if demanded, to permit federal and state
regulatory agencies to examine the books, records and
securities held by subcustodian which relate to Fund.
S. Appointment of Subcustodian
---------------------------
1. Notwithstanding any other provisions of this Agreement,
all or any of the monies or securities of Fund may be
held in Custodian's own custody or in the custody of
one or more other banks or trust companies selected by
Custodian. Any such subcustodian selected by the
Custodian must have the qualifications required for
custodian under the Investment Company Act of 1940, as
amended. Custodian shall be responsible to the Fund
for any loss, damage or expense suffered or incurred by
the Fund resulting from the actions or omissions of any
subcustodians selected and appointed by Custodian
(except subcustodians appointed at the request of Fund
and
13<PAGE>
as provided in Subsection 2 below) to the same extent
Custodian would be responsible to the Fund under
Section 5. of this Agreement if it committed the act or
omission itself. Upon request of the Fund, Custodian
shall be willing to contract with other subcustodians
reasonably acceptable to the Custodian for purposes of
(i) effecting third-party repurchase transactions with
banks, brokers, dealers, or other entities through the
use of a common custodian or subcustodian, or (ii)
providing depository and clearing agency services with
respect to certain variable rate demand note
securities, or (iii) for other reasonable purposes
specified by Fund; provided, however, that the
Custodian shall be responsible to the Fund for any
loss, damage or expense suffered or incurred by the
Fund resulting from the actions or omissions of any
such subcustodian only to the same extent such
subcustodian is responsible to the Custodian. The Fund
shall be entitled to review the Custodian's contracts
with any such subcustodians appointed at the request of
Fund.
2. Notwithstanding any other provisions of this Agreement,
Fund's foreign securities (as defined in Rule 17f-
5(c)(1) under the Investment Company Act of 1940) and
Fund's cash or cash equivalents, in amounts reasonably
necessary to effect Fund's foreign securities
transactions, may be held in the custody of one or more
banks or trust companies acting as subcustodians,
according to Section 3.S.1; and thereafter, pursuant to
a written contract or contracts as approved by Fund's
governing Board, may be transferred to an account
maintained by such subcustodian with an eligible
foreign custodian, as defined in Rule 17f-5(c)(2),
provided that any such arrangement involving a foreign
custodian shall be in accordance with the provisions of
Rule 17f-5 under the Investment Company Act of 1940 as
that Rule may be amended from time to time. The Fund
shall be provided the contract with the domestic
subcustodian who shall contract with the eligible
foreign subcustodians. The Custodian shall be
responsible for the monies and securities of Fund held
by eligible foreign
14<PAGE>
subcustodians to the extent the domestic subcustodian
with which the Custodian contracts is responsible to
Custodian.
T. Accounts and Records Property of Fund
-------------------------------------
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the
property of Fund, and will be made available to Fund for
inspection or reproduction within a reasonable period of
time, upon demand. Custodian will assist Fund's independent
auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or
Custodian, in any requested review of Fund's accounts and
records but shall be reimbursed for all expenses and
employee time invested in any such review outside of routine
and normal periodic reviews.
U. Adoption of Procedures
----------------------
Custodian and Fund may from time to time adopt procedures as
they agree upon, and Custodian may conclusively assume that
no procedure approved by Fund, or directed by Fund,
conflicts with or violates any requirements of its
prospectus, Trust Instrument, Bylaws, or any rule or
regulation of any regulatory body or governmental agency.
Fund will be responsible to notify Custodian of any changes
in statutes, regulations, rules or policies not specifically
governing custodians or banks which might necessitate
changes in Custodian's responsibilities or procedures.
V. Advances
--------
In the event Custodian or any subcustodian shall, in its
sole discretion, advance cash or securities for any purpose
(including but not limited to securities settlements,
purchase or sale of foreign exchange or foreign exchange
contracts and assumed settlement) for the benefit of any
Portfolio, the advance shall be payable by the Fund on
demand. Any such cash advance shall be subject to an
overdraft charge at the rate set forth in the then-current
fee schedule from the date advanced until the date repaid.
As security for each such advance, Fund hereby grants
Custodian and such subcustodian a lien on and security
interest in all property at any time held for the account of
the applicable Portfolio, including without limitation all
assets acquired with the amount advanced. Should the Fund
15<PAGE>
fail to promptly repay the advance, the Custodian and such
subcustodian shall be entitled to utilize available cash and
to dispose of such Portfolio's assets pursuant to applicable
law to the extent necessary to obtain reimbursement of the
amount advanced and any related overdraft charges.
W. Exercise of Rights; Tender Offers
---------------------------------
Upon receipt of instructions, the Custodian shall: (a)
deliver warrants, puts, calls, rights or similar securities
to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if
any, are to be delivered to the Custodian; and (b) deposit
securities upon invitations for tenders thereof, provided
that the consideration for such securities is to be paid or
delivered to the Custodian or the tendered securities are to
be returned to the Custodian.
4. INSTRUCTIONS.
------------
A. The term "instructions", as used herein, means written or
oral instructions to Custodian from a designated
representative of Fund. Certified copies of resolutions of
the Trustees of Fund naming one or more designated
representatives to give instructions in the name and on
behalf of Fund, may be received and accepted from time to
time by Custodian as conclusive evidence of the authority of
any designated representative to act for Fund and may be
considered to be in full force and effect (and Custodian
will be fully protected in acting in reliance thereon) until
receipt by Custodian of notice to the contrary. Unless the
resolution delegating authority to any person to give
instructions specifically requires that the approval of
anyone else will first have been obtained, Custodian will be
under no obligation to inquire into the right of the person
giving such instructions to do so. Notwithstanding any of
the foregoing provisions of this Section 4, no
authorizations or instructions received by Custodian from
Fund will be deemed to authorize or permit any trustee,
officer, employee, or agent of Fund to withdraw any of the
securities or similar investments of Fund upon the mere
receipt of such authorization or instructions from such
trustee, officer, employee or agent.
16<PAGE>
Notwithstanding any other provision of this Agreement,
Custodian, upon receipt (and acknowledgment if required at
the discretion of Custodian) of the instructions of a
designated representative of Fund will undertake to deliver
for Fund's account monies, (provided such monies are on hand
or available) in connection with Fund's transactions and to
wire transfer such monies to such broker, dealer,
subcustodian, bank or other agent specified in such
instructions by a designated representative of Fund.
B. No later than the next business day immediately following
each oral instruction, Fund will send Custodian written
confirmation of such oral instruction. At Custodian's sole
discretion, Custodian may record on tape, or otherwise, any
oral instruction whether given in person or via telephone,
each such recording identifying the parties, the date and
the time of the beginning and ending of such oral
instruction.
C. If Custodian shall provide Fund direct access to any
computerized recordkeeping and reporting system used
hereunder or if Custodian and Fund shall agree to utilize
any electronic system of communication, Fund shall be fully
responsible for any and all consequences of the use or
misuse of the terminal device, passwords, access
instructions and other means of access to such system(s)
which are utilized by, assigned to or otherwise made
available to the Fund. Fund agrees to implement and enforce
appropriate security policies and procedures to prevent
unauthorized or improper access to or use of such system(s).
Custodian shall be fully protected in acting hereunder upon
any instructions, communications, data or other information
received by Custodian by such means as fully and to the same
effect as if delivered to Custodian by written instrument
signed by the requisite authorized representative(s) of
Fund. Fund shall indemnify and hold Custodian harmless from
and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability which may be
suffered or incurred by Custodian as a result of the use or
misuse, whether authorized or unauthorized, of any such
system(s) by Fund or by any person who acquires access to
such system(s) through the terminal device, passwords,
access instructions or other means of access to such
system(s) which are utilized by,
17<PAGE>
assigned to or otherwise made available to the Fund, except
to the extent attributable to any negligence or willful
misconduct by Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
------------------------------------
A. Notwithstanding any other provisions of this Agreement,
Custodian will hold harmless and indemnify Fund from and
against any loss or liability, including attorney's fees,
arising out of Custodian's breach of this Agreement or its
negligence, willful misconduct or bad faith. Custodian
shall not be liable for consequential, special, or punitive
damages. Custodian may request and obtain the advice and
opinion of counsel for Fund, or of its own counsel with
respect to questions or matters of law, and it shall be
without liability to Fund for any action taken or omitted by
it in good faith, in conformity with such advice or opinion.
If Custodian reasonably believes that it could not prudently
act according to the instructions of the Fund or the Fund's
counsel, it may in its discretion, with notice to the Fund,
not act according to such instructions.
B. Fund shall hold harmless and indemnify Custodian from and
against any loss or liability, including attorney's fees,
arising out of Fund's breach of this Agreement or its
negligence, willful misconduct or bad faith.
C. Custodian may rely upon the advice of Fund and upon
statements of Fund's public accountants and other persons
believed by it in good faith, to be expert in matters upon
which they are consulted, and Custodian shall not be liable
for any actions taken, in good faith, upon such statements.
D. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the
payment of money by it, or which in Custodian's opinion
might make it or its nominee liable for payment of monies or
in any other way, Custodian, upon notice to Fund given prior
to such actions, shall be and be kept indemnified by Fund in
an amount and form satisfactory to Custodian against any
liability on account of such action.
E. Custodian shall be entitled to receive, and Fund agrees to
pay to Custodian, on demand, reimbursement for such cash
disbursements, costs and expenses as may be agreed upon from
time to time by Custodian and Fund.
18<PAGE>
F. Custodian shall be protected in acting as custodian
hereunder upon any instructions, advice, notice, request,
consent, certificate or other instrument or paper reasonably
appearing to it to be genuine and to have been properly
executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from Fund
hereunder, a certificate signed by the Fund's President, or
other officer specifically authorized for such purpose.
G. Without limiting the generality of the foregoing, Custodian
shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any securities purchased
by or for Fund, the legality of the purchase thereof or
evidence of ownership required by Fund to be received
by Custodian, or the propriety of the decision to
purchase or amount paid therefor;
2. The legality of the sale of any securities by or for
Fund, or the propriety of the amount for which the same
are sold;
3. The legality of the issue or sale of any shares of
beneficial interest of Fund, or the sufficiency of the
amount to be received therefor;
4. The legality of the repurchase or redemption of any
Fund Shares, or the propriety of the amount to be paid
therefor; or
5. The legality of the declaration of any dividend by
Fund, or the legality of the issue of any Fund Shares
in payment of any stock dividend.
H. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft,
wire transfer, clearinghouse funds, uncollected funds, or
instrument for the payment of money received by it on behalf
of Fund, until Custodian actually receives such money,
provided only that it shall advise Fund promptly if it fails
to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund
toward the end that such money shall be received.
I. Except as otherwise provided in this Agreement, Custodian
shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any
19<PAGE>
broker, bank, trust company, or any other person with whom
Custodian may deal in the absence of negligence, or bad
faith on the part of Custodian.
J. Custodian shall be responsible to the Fund for any loss,
damage or expense suffered or incurred by the Fund resulting
from the actions or omissions of any Depository only to the
same extent such Depository is responsible to Custodian.
K. Notwithstanding anything herein to the contrary, Custodian
may, and with respect to any foreign subcustodian appointed
under Section 3.S.2. must, provide Fund for its approval,
agreements with banks or trust companies which will act as
subcustodians for Fund pursuant to Section 3.S. of this
Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is
------------
stated in the Fee Schedule attached hereto as Exhibit B which may
be changed from time to time as agreed to in writing by Custodian
and Fund. Custodian may charge such compensation against monies
held by it for the account of Fund. Custodian will also be
entitled, notwithstanding the provisions of Sections 5.C. or 5.D.
hereof, to charge against any monies held by it for the account
of Fund the amount of any loss, damage, liability, advance, or
expense for which it shall be entitled to reimbursement from the
Fund under the provisions of this Agreement including fees or
expenses due to Custodian for other services provided to the Fund
by the Custodian.
7. TERMINATION. Either party to this Agreement may terminate the
-----------
same by notice in writing, delivered or mailed, postage prepaid,
to the other party hereto and received not less than sixty (60)
days prior to the date upon which such termination will take
effect. Upon termination of this Agreement, Fund will pay to
Custodian such compensation for its reimbursable disbursements,
costs and expenses paid or incurred to such date and Fund will
use its best efforts to obtain a successor custodian. Unless the
holders of a majority of the outstanding shares of the Fund vote
to have the securities, funds and other properties held under
this Agreement delivered and paid over to some other person, firm
or corporation specified in the vote, having not less the Two
Million Dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report, and
meeting such other qualifications for custodian as set forth in
the governing documents of Fund, the Trustees of Fund will,
forthwith upon giving or receiving notice of termination of this
Agreement, appoint as successor custodian a bank
20<PAGE>
or trust company having such qualifications. Custodian will,
upon termination of this Agreement, deliver to the successor
custodian so specified or appointed, at Custodian's office, all
securities then held by Custodian hereunder, duly endorsed and in
form for transfer, all funds and other properties of Fund
deposited with or held by Custodian hereunder, or will co-operate
in effecting changes in book-entries at the Depository Trust
Company or in the Treasury/Federal Reserve Book-Entry System or
other depository pursuant to 31 CFR Sec. 306.118. In the event
no such vote has been adopted by the stockholders of Fund and no
written order designating a successor custodian has been
delivered to Custodian on or before the date when such
termination becomes effective, then Custodian will deliver the
securities, funds and properties of Fund to a bank or trust
company at the selection of Custodian and meeting the
qualifications for custodian, if any, set forth in the governing
documents of Fund and having not less than Two Million Dollars
($2,000,000) aggregate capital, surplus and undivided profits, as
shown by its last published report. Upon either such delivery to
a successor custodian, Custodian will have no further obligations
or liabilities under this Agreement. Thereafter such bank or
trust company will be the successor custodian under this
Agreement and will be entitled to reasonable compensation for its
services. In the event that no such successor custodian can be
found, Fund will submit to its shareholders, before permitting
delivery of the cash and securities owned by Fund to anyone other
than a successor custodian, the question of whether Fund will be
liquidated or function without a custodian. Notwithstanding the
foregoing requirement as to delivery upon termination of this
Agreement, Custodian may make any other delivery of the
securities, funds and property of Fund which is permitted by the
Investment Company Act of 1940, Fund's Trust Instrument and
Bylaws then in effect or apply to a court of competent
jurisdiction for the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings
-------
received by Fund at 210 University Boulevard, Suite 900, Denver,
Colorado 80206 or at such other address as Fund may have
designated to Custodian in writing, will be deemed to have been
properly given to Fund hereunder; and notices, requests,
instructions and other writings received by Custodian at its
offices at 127 West 10th Street, Kansas City, Missouri 64105, or
to
21<PAGE>
such other address as it may have designated to Fund in writing,
will be deemed to have been properly given to Custodian
hereunder.
9. LIMITATION OF LIABILITY. Notice is hereby given that the Fund is
-----------------------
a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the
Secretary of State of the State of Delaware. All parties to this
Agreement acknowledge and agree that the Fund is a series Fund
and all debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular
series shall be enforceable against the assets held with respect
to such series only, and not against the assets of the Fund
general or against the assets held with respect to any other
series and further that no trustee, officer or holder of shares
of beneficial interest of the Fund shall be personally liable for
any of the foregoing.
10. MISCELLANEOUS.
-------------
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified,
in any manner except by a written agreement properly
authorized and executed by both parties hereto.
D. The captions in this Agreement are included for convenience
of reference only, and in no way define or delimit any of
the provisions hereof or otherwise affect their construction
or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but
all of which together will constitute one and the same
instrument.
F. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
22<PAGE>
G. Custodian will not release the identity of Fund to an issuer
which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of
direct communications between such issuer and Fund unless
the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without
prior written consent of the other party.
I. If any provision of the Agreement, either in its present
form or as amended from time to time, limits, qualifies, or
conflicts with the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, such statutes,
rules and regulations shall be deemed to control and
supersede such provision without nullifying or terminating
the remainder of the provisions of this Agreement.
23<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:_____________________________________
Title:__________________________________
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:__________________________________
<PAGE>
EXHIBIT A
- ---------
INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE
<TABLE>
<CAPTION>
TRANSACTION DTC PHYSICAL FED
----------- -------------------------- ------------------------------- --------------------------
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Int. Paydate C Paydate C N/A
Floating Rate Int. (No N/A As Rate Received C N/A
Rate)
Mtg. Backed P&I Paydate C Paydate + 1 Bus. C Paydate F
Day
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
</TABLE>
Legend
- ------
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement") is
entered into effective as of the _______ day of __________________,
1996, by and between Berger Associates, Inc. ("Berger Associates"),
and Berger Institutional Products Trust (the "Trust"), with respect to
the Berger IPT - 100 Fund, a series of the Trust (the "Fund").
RECITALS
A. The Trust is a Delaware business trust and an open-end,
management investment company registered under the Investment Company
Act of 1940.
B. The Fund is a series of the Trust for which Berger
Associates acts as investment adviser.
C. The parties desire that in addition to its duties as
investment adviser, Berger Associates provide certain administrative
and record keeping services to the Trust with respect to the Fund, on
the terms and conditions set forth herein.
AGREEMENT
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Berger Associates shall perform all administrative and
record keeping services (excluding transfer agent, dividend disbursing
agent and related shareholder services) for the Fund not otherwise
provided for and described in the Recordkeeping and Pricing Agent
Agreement between the Trust and Investors Fiduciary Trust Company,
dated December 20, 1995, including the preparation of financial
statements and reports to be filed with the Securities and Exchange
Commission and state regulatory authorities, and the maintenance and
preservation of all such statements and reports, and any supporting
documentation as may be required by the Investment Company Act of 1940
and other applicable federal and state laws and regulations.
2. The Trust shall pay to Berger Associates a monthly fee
for performing such services, payable on the last day of each month
during all or part of which this Agreement is in effect, of one-
twelfth (1/12) of one one-hundredth of one percent (.01%) of the
average daily closing net assets of the Fund for such month.
3. In performing the services described in Section 1,
Berger Associates shall at all times comply with the applicable
provisions of the Investment Company Act of 1940 and any other federal
or state securities laws.
<PAGE>
4. This Agreement shall continue until terminated at the
end of any month by either party upon at least 60 days' notice in
writing to the other party. This Agreement may not be assigned by
either party without the written consent of the other party.
5. NOTICE IS HEREBY GIVEN that the Trust is a business
trust organized under the Delaware Business Trust Act pursuant to a
Certificate of Trust filed in the office of the Secretary of State of
the State of Delaware. All parties to this Agreement acknowledge and
agree that the Trust is a series trust and all debts, liabilities,
obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable
against the assets held with respect to such series only, and not
against the assets of the Trust generally or against the assets held
with respect to any other series and further that no trustee, officer
or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
6. This Agreement may be amended by the parties, provided
that all such amendments shall be subject to the approval of the
Trustees of the Trust.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement effective as of the date first set forth above.
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:
BERGER ASSOCIATES, INC.
By:_____________________________________
Title:
2
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement") is
entered into effective as of the _______ day of __________________,
1996, by and between Berger Associates, Inc. ("Berger Associates"),
and Berger Institutional Products Trust (the "Trust"), with respect to
the Berger IPT - Growth and Income Fund, a series of the Trust (the
"Fund").
RECITALS
A. The Trust is a Delaware business trust and an open-end,
management investment company registered under the Investment Company
Act of 1940.
B. The Fund is a series of the Trust for which Berger
Associates acts as investment adviser.
C. The parties desire that in addition to its duties as
investment adviser, Berger Associates provide certain administrative
and record keeping services to the Trust with respect to the Fund, on
the terms and conditions set forth herein.
AGREEMENT
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Berger Associates shall perform all administrative and
record keeping services (excluding transfer agent, dividend disbursing
agent and related shareholder services) for the Fund not otherwise
provided for and described in the Recordkeeping and Pricing Agent
Agreement between the Trust and Investors Fiduciary Trust Company,
dated December 20, 1995, including the preparation of financial
statements and reports to be filed with the Securities and Exchange
Commission and state regulatory authorities, and the maintenance and
preservation of all such statements and reports, and any supporting
documentation as may be required by the Investment Company Act of 1940
and other applicable federal and state laws and regulations.
2. The Trust shall pay to Berger Associates a monthly fee
for performing such services, payable on the last day of each month
during all or part of which this Agreement is in effect, of one-
twelfth (1/12) of one one-hundredth of one percent (.01%) of the
average daily closing net assets of the Fund for such month.
3. In performing the services described in Section 1,
Berger Associates shall at all times comply with the applicable
provisions of the Investment Company Act of 1940 and any other federal
or state securities laws.
<PAGE>
4. This Agreement shall continue until terminated at the
end of any month by either party upon at least 60 days' notice in
writing to the other party. This Agreement may not be assigned by
either party without the written consent of the other party.
5. NOTICE IS HEREBY GIVEN that the Trust is a business
trust organized under the Delaware Business Trust Act pursuant to a
Certificate of Trust filed in the office of the Secretary of State of
the State of Delaware. All parties to this Agreement acknowledge and
agree that the Trust is a series trust and all debts, liabilities,
obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable
against the assets held with respect to such series only, and not
against the assets of the Trust generally or against the assets held
with respect to any other series and further that no trustee, officer
or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
6. This Agreement may be amended by the parties, provided
that all such amendments shall be subject to the approval of the
Trustees of the Trust.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement effective as of the date first set forth above.
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:
BERGER ASSOCIATES, INC.
By:____________________________________
Title:
2
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement") is
entered into effective as of the _______ day of __________________,
1996, by and between Berger Associates, Inc. ("Berger Associates"),
and Berger Institutional Products Trust (the "Trust"), with respect to
the Berger IPT - Small Company Growth Fund, a series of the Trust (the
"Fund").
RECITALS
A. The Trust is a Delaware business trust and an open-end,
management investment company registered under the Investment Company
Act of 1940.
B. The Fund is a series of the Trust for which Berger
Associates acts as investment adviser.
C. The parties desire that in addition to its duties as
investment adviser, Berger Associates provide certain administrative
and record keeping services to the Trust with respect to the Fund, on
the terms and conditions set forth herein.
AGREEMENT
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Berger Associates shall perform all administrative and
record keeping services (excluding transfer agent, dividend disbursing
agent and related shareholder services) for the Fund not otherwise
provided for and described in the Recordkeeping and Pricing Agent
Agreement between the Trust and Investors Fiduciary Trust Company,
dated December 20, 1995, including the preparation of financial
statements and reports to be filed with the Securities and Exchange
Commission and state regulatory authorities, and the maintenance and
preservation of all such statements and reports, and any supporting
documentation as may be required by the Investment Company Act of 1940
and other applicable federal and state laws and regulations.
2. The Trust shall pay to Berger Associates a monthly fee
for performing such services, payable on the last day of each month
during all or part of which this Agreement is in effect, of one-
twelfth (1/12) of one one-hundredth of one percent (.01%) of the
average daily closing net assets of the Fund for such month.
3. In performing the services described in Section 1,
Berger Associates shall at all times comply with the applicable
provisions of the Investment Company Act of 1940 and any other federal
or state securities laws.
<PAGE>
4. This Agreement shall continue until terminated at the
end of any month by either party upon at least 60 days' notice in
writing to the other party. This Agreement may not be assigned by
either party without the written consent of the other party.
5. NOTICE IS HEREBY GIVEN that the Trust is a business
trust organized under the Delaware Business Trust Act pursuant to a
Certificate of Trust filed in the office of the Secretary of State of
the State of Delaware. All parties to this Agreement acknowledge and
agree that the Trust is a series trust and all debts, liabilities,
obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable
against the assets held with respect to such series only, and not
against the assets of the Trust generally or against the assets held
with respect to any other series and further that no trustee, officer
or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing.
6. This Agreement may be amended by the parties, provided
that all such amendments shall be subject to the approval of the
Trustees of the Trust.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement effective as of the date first set forth above.
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:
BERGER ASSOCIATES, INC.
By:_____________________________________
Title:
2
RECORDKEEPING AND PRICING AGENT AGREEMENT
THIS AGREEMENT made to be effective as of this ___ day of
__________, 1995, by and between BERGER INSTITUTIONAL PRODUCTS TRUST,
a Delaware business trust, referred to as the "Fund," consisting of
separate portfolios represented by separate series of shares of
beneficial interest, (referred to herein, together with any such
portfolios hereafter constituted, where appropriate, individually as a
"Portfolio," and collectively as the "Portfolios"), having its place
of business at 210 University Boulevard, Suite 900, Denver, Colorado
80206 ("Fund"), and INVESTORS FIDUCIARY TRUST COMPANY, a state
chartered trust company organized and existing under the laws of the
State of Missouri, having its principal place of business at 127 West
10th Street, Kansas City, Missouri, 64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Recordkeeping and
Pricing Agent and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. Appointment of Recordkeeping and Pricing Agent
----------------------------------------------
Fund hereby constitutes and appoints IFTC as Recordkeeping and
Pricing Agent to calculate the daily net asset value of each
Portfolio and to perform certain accounting and recordkeeping
functions required of Fund as a registered investment company
under the Investment Company Act of 1940, as amended (the "Act");
to provide certain information necessary for Fund to file
financial and other reports; to prepare, maintain and preserve
certain required books, accounts and records as the basis for
such reports; to perform certain daily functions in connection
with such accounts and records; and, upon request, to act as
liaison with the Fund's independent auditors.
2. Delivery of Corporate Documents
-------------------------------
Fund shall deliver to IFTC prior to the effective date of this
Agreement copies of a resolution of the Trustees of Fund
certified by the Secretary or Assistant Secretary of the Fund,
appointing IFTC as Recordkeeping and Pricing Agent for Fund and
approving the
<PAGE>
form of this Agreement. Fund shall also deliver a resolution of
the Trustees of the Fund designating certain persons to give
instructions on behalf of the Fund to IFTC, and authorizing IFTC
to rely upon written instructions over his/her/their signatures.
3. Representations and Warranties of Fund
--------------------------------------
A. Fund represents and warrants that it is a business trust
duly organized as an investment company and existing and in
good standing under the laws of the State of Delaware;
B. Fund represents and warrants that it has the power and
authority under applicable laws, its Trust Instrument and
bylaws, and has taken all action necessary to enter into and
perform this Agreement, including appropriate authorization
from the Fund's Trustees;
C. Fund represents and warrants that it has determined that the
automated data processing system on which IFTC shall
prepare, maintain and preserve the books and records of the
Fund (the "Portfolio System") is suitable for its needs;
D. Fund acknowledges that IFTC, as Licensee, and DST Systems,
Inc., as Licensor ("Licensor"), have proprietary rights in
and to the Portfolio System and that the Portfolio System
and the programs, documentation, books, records, lists,
pricing schedules, designs, plans and other information
relating to the Portfolio System or the business of IFTC
("IFTC Confidential Information") are confidential and
constitute trade secrets of IFTC;
E. During the term of this Agreement and for a period of five
years after termination of this Agreement, Fund shall
preserve the confidentiality of the IFTC Confidential
Information and prevent its disclosure to persons other than
its own employees and agents who reasonably have a need to
know or have access to the IFTC Confidential Information
pursuant to this Agreement, and shall take appropriate
action to protect the rights of IFTC and Licensor as to the
IFTC Confidential Information, including, but not limited to
notification to all employees and agents of the Fund of the
necessity to maintain the confidentiality of IFTC
Confidential Information, provided, that IFTC shall be
solely responsible for protecting any trademarks, patents,
copyrights and licenses against
-2-<PAGE>
unauthorized use and infringement by parties other than the
Fund, its employees and agents.
4. Representation and Warranties of IFTC
-------------------------------------
A. IFTC is a trust company duly organized and existing and in
good standing under the laws of the State of Missouri.
B. IFTC has the power and authority under applicable laws, its
charter and bylaws, and has taken all action necessary, to
enter into this Agreement and perform the services
contemplated herein, and this Agreement constitutes a legal,
valid and binding obligation of IFTC, enforceable in
accordance with its terms.
C. IFTC has obtained and shall maintain throughout the term of
this Agreement all necessary proprietary rights and
approvals, licenses and permits which are required for IFTC
to perform its duties and obligations hereunder and to use
the Portfolio System.
D. IFTC presently has, and shall maintain throughout the term
of this Agreement, facilities, equipment, computer hardware
and software, and personnel necessary to perform its duties
and obligations under this Agreement, and shall maintain or
otherwise have readily available, reasonable back-up
facilities and equipment to ensure that there is no material
interruption in the services contemplated by this Agreement,
except as provided in Section 7 hereof.
5. Duties and Responsibilities of IFTC
-----------------------------------
A. Delivery of Records.
-------------------
Fund shall turn over to IFTC all of Fund's accounts and
records previously maintained relating to the services to be
provided by IFTC hereunder. IFTC shall be entitled to rely
conclusively on the completeness and correctness of the
accounts and records turned over to it by Fund or its
previous service provider and Fund shall indemnify and hold
IFTC harmless of and from any and all costs, expenses,
damages, losses and liabilities whatsoever, including
attorney's fees (collectively, "Damages"), arising out of or
in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of
Fund or its previous service provider to provide any portion
of such
-3-<PAGE>
account and records or to provide any information needed by
IFTC to perform its function hereunder.
B. Accounting and Portfolio Duties.
-------------------------------
IFTC shall perform the duties specified on Schedule A
attached hereto.
C. Accounts and Records
--------------------
1. IFTC, with the direction of the Fund, its accountants
and/or its advisors, shall prepare, maintain and
preserve all books, records, ledgers, journals,
accounts and other documents, containing such
information as may be required from time to time under
the Act relating to the activities performed by IFTC
pursuant to Schedule A (the "Records"); preserve the
Records in an readily accessible location for at least
the periods required under the Act, at all times during
the term of this Agreement and, as may be reasonably
necessary, following the termination of this Agreement,
make the Records available for examination by the
Securities and Exchange Commission, the Fund, the
Fund's accountants and such other persons as the Fund
may deem appropriate; and maintain facilities and
equipment necessary for producing readable projections
or hard copies of Records. Notwithstanding the terms
of this Section C.1. as heretofore provided, IFTC shall
not be responsible for maintaining or furnishing such
Records after termination of the Agreement to the
extent that such Records have been forwarded to the
Fund or its agent. Hard copies of Records will be
furnished to the Fund without additional cost unless
such requests for Records are unusual, repetitive,
require special handling, or otherwise reasonably
warrant the Fund's reimbursement for the costs
associated therewith. The Fund shall pay for the costs
of maintaining microfiche records.
2. It shall be the responsibility of Fund to furnish IFTC
with the declaration, record and payment dates and
amounts of any dividends or other distributions, other
special actions, and the value or price of the
securities in Fund's portfolio to the extent such
information is not available from generally accepted
securities industry services or publications. IFTC
shall
-4-<PAGE>
incur no liability and Fund shall indemnify and hold
IFTC harmless from any liability in connection with the
Fund's furnishing of such information.
3. The accounts, books and records prepared, maintained
and preserved by IFTC pursuant to this Agreement shall
be the property of the Fund and shall be made available
to the Fund for inspection or reproduction promptly
upon demand.
4. IFTC shall assist Fund's independent accountants, and
upon instruction from Fund or upon proper demand, shall
assist any court or regulatory body, in any requested
review of Fund's accounts and records prepared and
maintained by IFTC. Fund shall reimburse IFTC for all
reasonable expenses and employee time associated with
any such review which is not part of routine or normal
periodic reviews, unless such expenses are incurred as
a result of a breach of this Agreement by IFTC or
IFTC's negligence or willful misconduct. For purposes
of this Agreement, routine or normal periodic reviews
include the annual audit of the Fund and routine
interim audits or reviews by the Fund's independent
accountants and the routine reviews by the Securities
and Exchange Commission (SEC).
5. IFTC shall provide Fund with information for tax
returns, questionnaires, and periodic reports to
shareholders and such other reports and information as
Fund may request in conjunction with IFTC's stated
duties hereunder. IFTC shall provide such information
as soon as reasonably practicable following the Fund's
request or as may be otherwise agreed to by the
parties.
6. IFTC and Fund may from time to time adopt procedures as
they may agree upon, and IFTC may conclusively assume
that any procedure approved by Fund, or directed by
Fund in the manner prescribed by Section 6.B., does not
conflict with or violate any requirements of Fund's
prospectus, Trust Instrument, bylaws, or any law, rule
or regulation applicable to Fund. Fund shall be
responsible to notify IFTC of any changes in its
prospectus, Trust Instrument, bylaws, or policies
applicable
-5-<PAGE>
to the Fund which may necessitate changes in IFTC's
responsibilities or procedures. The Fund may
conclusively assume that any procedure adopted by IFTC
does not conflict with or violate any requirements of
IFTC's chater, bylaws, or any law, rule or regulation
applicable to IFTC. IFTC shall be responsible to
notify the Fund of any changes in its charter, bylaws,
or policies which may affect the Fund's
responsibilities or procedures.
7. IFTC will calculate Portfolio's daily closing net asset
value, in accordance with the Fund's prospectus. IFTC
will prepare and maintain a daily valuation of
securities held in the Portfolios for which market
quotations are available by the use of outside services
normally used and contracted for this purpose; all
other securities will be valued in accordance with
Fund's instructions.
6. Limitation of Liability of IFTC
-------------------------------
A. IFTC shall not be liable for any loss or damage resulting
from its action or omission to act or otherwise, except for
any loss or damage arising from any breach of this Agreement
or any negligent act or omission or willful misconduct of
IFTC and IFTC shall indemnify and hold harmless Fund from
and against any Damages arising from such breach, negligence
or willful misconduct. Without limiting the generality of
the foregoing, IFTC will use best efforts to resolve to the
satisfaction of the Fund the effect on shareowners of any
IFTC error which causes an incorrect calculation of the net
asset value of the Portfolios and which effect is considered
material, as such term is generally used by accountants in
the mutual fund industry. IFTC shall not be liable for
consequential, special, or punitive damages. IFTC may
request and obtain the advice and opinion of counsel for
Fund or its own counsel at the reasonable expense of Fund
with respect to questions or matters of law relating to its
performance of this Agreement, and it shall be without
liability to Fund for any action taken or omitted by it in
good faith, in conformity with such advice or opinion.
B. IFTC may rely, and be protected in acting in reliance upon
any instruction, advice, notice, consent, resolution,
opinion, certificate or other written instrument
-6-<PAGE>
appearing to be genuine and properly executed by an
authorized representative of the Fund or any oral
instruction from an authorized representative of the Fund
("Instruction"), except trade instructions and adjustments
to the Fund's trial balance sheet, general ledger or balance
sheet, which must be in writing executed by two authorized
representatives of the Fund, unless IFTC has actual
knowledge that any such Instruction is incorrect or
unauthorized.
C. IFTC shall be entitled to receive and Fund agrees to pay to
IFTC, on demand, reimbursement for such cash disbursements,
costs and expenses as may be agreed upon in writing from
time to time by IFTC and Fund.
D. During the term of this Agreement and for a period of five
years after termination of this Agreement, IFTC shall not
use and shall preserve the confidentiality of all accounting
and financial information, investment portfolio records
including, but not limited to, transactional information,
share subscription and redemption records, and other records
made available to or created by IFTC under the terms of this
Agreement ("Fund Confidential Information"), other than for
purposes of complying with its duties and responsibilities
under this Agreement or as specifically authorized by Fund
in writing. IFTC shall prevent disclosure of Fund
Confidential Information to persons other than its own
agents and employees who reasonably have a need to know or
have access to Fund Confidential Information pursuant to
this Agreement, and shall take appropriate action to protect
the rights of Fund in such Fund Confidential Information
including, but not limited to, notification to all its
employees and agents of the necessity to maintain the
confidentiality of Fund Confidential Information, provided,
that Fund shall be solely responsible for protecting any
trademarks, patents, copyrights and licenses against
unauthorized use and infringement by parties other than
IFTC, its employees and agents.
7. Force Majeure
-------------
IFTC shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond
its reasonable control, including without limitation any
interruption, loss or malfunction of any utility, transportation,
computer (hardware or
-7-<PAGE>
software) or communication service; or inability to obtain labor,
material, equipment or transportation; nor shall any such failure
or delay give Fund any additional right to terminate this
Agreement.
8. Additional Funds
----------------
IFTC shall act as Recordkeeping and Pricing Agent for additional
Portfolios upon 30 days notice to IFTC provided that IFTC
consents in writing in advance to such arrangement. Rates or
charges for serving as Recordkeeping and Pricing Agent for any
such additional Portfolios shall be as agreed to by IFTC and Fund
in writing.
9. Compensation
------------
Fund shall pay to IFTC such compensation at such time as may from
time to time be agreed upon in writing by IFTC and Fund. The
initial compensation schedule is attached hereto as Schedule B.
10. Termination
-----------
Either party to this Agreement may terminate same by notice in
writing received by the other party not less than sixty (60) days
prior to the date upon which such termination shall take effect.
Upon termination of this Agreement, Fund shall pay to IFTC such
compensation for its reimbursable disbursements, costs and
expenses paid or incurred to such date and Fund shall use its
best efforts to obtain a successor agent. IFTC shall, upon
termination of this Agreement, deliver to the successor so
specified or appointed, or to Fund, at IFTC's office, all books,
records, ledgers, accounts, journals and other documents and
information then held by IFTC hereunder, all money, instruments
and other funds and other properties of Fund deposited with or
held by IFTC hereunder. In the event no written order
designating a successor (which may be Fund) shall have been
delivered to IFTC on or before the date when such termination
shall become effective, then IFTC shall deliver such records,
funds and properties of Fund to a bank or trust company at the
selection of IFTC having not less than $2,000,000 aggregate
capital, surplus and undivided profits as shown by its most
recent published report, and meeting the requirements of the Act,
or if a satisfactory successor cannot be obtained, IFTC may
deliver the assets to the Fund, at IFTC's offices or as otherwise
agreed to between the parties. Thereafter the Fund or such bank
or trust company shall be the successor under this Agreement and
shall be entitled to reasonable compensation for its services.
-8-<PAGE>
Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, IFTC may make any other delivery
of the records, funds and property of Fund which shall be
permitted by the Act and Fund's Trust Instrument or bylaws then
in effect.
11. Notices
-------
Notices, requests, instructions and other writings received by
Fund at 210 University Boulevard, Suite 900, Denver, Colorado
80206, or at such address as Fund may have designated to IFTC in
writing, shall be deemed to have been properly given to Fund
hereunder; and notices, requests, instructions and other writings
received by IFTC at its offices at 127 West 10th Street, Kansas
City, Missouri 64105, or to such other address as it may have
designated to Fund in writing, shall be deemed to have been
properly given to IFTC hereunder.
12. Limitation of Liability.
-----------------------
Notice is hereby given that the Fund is a business trust
organized under the Delaware Business Trust Act pursuant to a
Certificate of Trust filed in the office of the Secretary of
State of the State of Delaware. All parties to this Agreement
acknowledge and agree that the Fund is a series Fund and all
debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series
shall be enforceable against the assets held with respect to such
series only, and not against the assets of the Fund general or
against the assets held with respect to any other series; and
further that no trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for
any of the foregoing.
13. Miscellaneous
-------------
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by both parties hereto.
-9-<PAGE>
D. The captions in the Agreement are included for convenience
of reference only, and in no way define or delimit any of
the provisions hereof or otherwise affect their construction
or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
F. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
G. This Agreement may not be assigned by either party without
prior written consent of the other party.
-10-<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective and duly authorized corporate or trust
officers.
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:__________________________________
INVESTORS FIDUCIARY TRUST COMPANY
By:_____________________________________
Title:__________________________________
-11-<PAGE>
Schedule - A
ACCOUNTING AND PORTFOLIO DUTIES
In its capacity as the Recordkeeping and Pricing Agent for the
Fund, IFTC shall perform the following responsibilities:*
A. On a Daily Basis.
----------------
1. Prepare available cash forecasts and communicate balances to
the Fund.
2. Review investment portfolio for cash and stock dividends and
stock splits.
3. Prepare compliance reports including data necessary to
monitor compliance with limitations prescribed by the
Investment Company Act of 1940 with respect to the types and
amounts of securities held in the Portfolio.
4. Review failed security transaction report; investigate
failed transactions and report status to Fund.
5. Prepare overdraft report with explanation of overdraft.
6. Post Fund share receivables and payables to the Fund's
general ledger; send general ledger reflecting all the day's
activities to Fund preferably by 3:30 p.m. Mountain time but
in no event later than 8 a.m. Mountain time the next day.
7. Reconcile ending share balance from transfer agent reports
to general ledger; report differences to Fund and resolve
with the transfer agent.
8. Enter security transactions reported by the Fund.
9. Post bank activity to general ledger; account for all items
on bank statements, and prepare and complete daily bank
reconciliations, including documentation of reconciling
items.
10. Post manual journal entries to the general ledger.
11. Review current daily security transactions for dividends,
splits and other corporate activity.
12. Prepare Net Asset Value rollforward.
13. Review individual components of the change in each
Portfolio's Net Asset Value for accuracy and reasonableness.
14. Enter manual prices.
-12-<PAGE>
15. Review pricing stratification report for unusual price
movements in individual securities; investigate and trace
items to the particular pricing sources; and consult with
Fund. Review pricing report for detection of stock splits
and dividends, cash dividends and corporate action. Review
NAV for incorrect CUSIP numbers or ticker symbols or
incorrectly posted purchases and sales of securities.
Review income and expense accruals and posting of gains and
losses for proper recording. Send Fund complete pricing
sheet for the Fund's Portfolios preferably by 3:30 p.m.
Mountain time but in no event later that 8:00 a.m. Mountain
time the next day.
16. Review for ex-dividend items indicated by pricing sources.
17. Communicate required pricing information to Fund,
quotation/publication services and to transfer agents.
Communicate NAV to newspapers and quotation services in time
for publication and to the transfer agent in time to run the
shareowner accounts by the beginning of the next day.
Communicate the NAV and corresponding worksheet to the Fund
preferably by 3:30 p.m. Mountain time but in no event later
that 8:00 a.m. Mountain time the next day.
18. Attend to routine matters in connection with the calculation
of the net asset value and aggregate asset value of each
Portfolio.
B. On a Periodic Basis.
-------------------
1. Provide information prepared by IFTC during the performance
of its duties hereunder for Fund's semiannual reports within
15 calendar days after March 31st and September 30th or the
end of the reporting period of the Fund, as applicable.
2. As agreed upon, deliver information to Fund on days when the
NYSE is not open.
*Information shall be provided by IFTC's normal means as acceptable to
the Fund. Costs for communicating routine information shall be borne
by IFTC; costs other than routine information, including microfiche,
shall be borne by the Fund.
-13-
AGENCY AGREEMENT
THIS AGREEMENT made as of the _____ day of ____________, 1995, by
and between BERGER INSTITUTIONAL PRODUCTS TRUST, a Delaware business
trust, referred to as the "Fund," consisting of separate portfolios
represented by separate series of shares of beneficial interest
(referred to herein, together with any such portfolios hereafter
constituted, where appropriate, individually as a "Portfolio," or
collectively as the "Portfolios,") having its principal place of
business at 210 University Boulevard, Suite 900, Denver, Colorado
80206, and INVESTORS FIDUCIARY TRUST COMPANY, a state chartered trust
company organized and existing under the laws of the State of
Missouri, having its principal place of business at 127 West 10th
Street, Kansas City, Missouri 64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Transfer Agent and
Dividend Disbursing Agent, and IFTC desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
--------------------------------------
In connection with the appointment of IFTC as Transfer Agent and
Dividend Disbursing Agent for Fund, there will be filed with IFTC
the following documents:
A. A certified copy of the resolutions of the Trustees of the
Fund appointing IFTC as Transfer Agent and Dividend
Disbursing Agent, approving the form of this Agreement, and
designating certain persons to sign beneficial interest
certificates, if any, and give written instructions and
requests on behalf of Fund;
B. A certified copy of the Trust Instrument of Fund and all
amendments thereto;
C. A certified copy of the Bylaws of Fund;
D. Copies of Registration Statements and amendments thereto,
filed with the Securities and Exchange Commission.
E. Specimens of all forms of outstanding shares of beneficial
interest, in the forms approved by the Trustees of Fund,
with a certificate of the Secretary of Fund, as to such
approval;
<PAGE>
F. Specimens of the signatures of the officers of the Fund
authorized to sign beneficial interest certificates and
individuals authorized to sign written instructions and
requests;
G. An opinion of counsel for Fund with respect to:
(1) Fund's organization and existence under the laws of its
state of organization,
(2) The status of all shares of beneficial interest of Fund
covered by the appointment under the Securities Act of
1933, as amended, and any other applicable federal or
state statute, and
(3) That all issued shares are, and all unissued shares
will be, when issued, validly issued, fully paid and
nonassessable.
2. Certain Representations and Warranties of IFTC.
----------------------------------------------
IFTC represents and warrants to Fund that:
A. It is a trust company duly organized and existing and in
good standing under the laws of Missouri.
B. It is duly qualified to carry on its business in the State
of Missouri.
C. It is empowered under applicable laws and by its Trust
Instrument and bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required
under the Securities Exchange Act of 1934.
E. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
3. Certain Representations and Warranties of Fund.
----------------------------------------------
Fund represents and warrants to IFTC that:
A. It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
B. It is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as
amended.
-2-<PAGE>
C. A registration statement under the Securities Act of 1933
has been filed and will be effective with respect to all
shares of Fund being offered for sale.
D. All requisite steps have been or will be taken to register
Fund's shares for sale in all applicable states.
E. Fund is empowered under applicable laws and by its Trust
Instrument and bylaws to enter into and perform this
Agreement.
4. Scope of Appointment.
--------------------
A. Subject to the conditions set forth in this Agreement, Fund
hereby employs and appoints IFTC as Transfer Agent and
Dividend Disbursing Agent.
B. IFTC hereby accepts such employment and appointment and
agrees that it will act as Fund's Transfer Agent and
Dividend Disbursing Agent. IFTC agrees that it will also
act as agent in connection with each Portfolio's periodic
withdrawal payment accounts and other open accounts or
similar plans for shareholders, if any.
C. IFTC agrees to provide the necessary facilities, equipment
and personnel to perform its duties and obligations
hereunder in accordance with industry practice.
D. Fund agrees to use its best efforts to deliver to IFTC in
Kansas City, Missouri, as soon as they are available, all of
its shareholder account records.
E. Subject to the provisions of Sections 19. and 20. hereof,
IFTC agrees that it will perform all of the usual and
ordinary services of Transfer Agent and Dividend Disbursing
Agent and as Agent for the various shareholder accounts,
including, without limitation, the following: issuing,
transferring and cancelling beneficial interest
certificates, if any, maintaining all shareholder accounts,
preparing shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing shareholder
reports and prospectuses, withholding taxes on nonresident
alien and foreign corporation accounts, for pension and
deferred income, backup withholding or other instances
agreed upon by the parties, preparing and mailing checks for
disbursement of redemptions, income dividends and capital
gains distributions, preparing and filing U.S. Treasury
Department Form 1099 for all shareholders, preparing and
mailing confirmation forms to shareholders and dealers with
respect to all purchases and redemptions of Fund shares and
other
-3-<PAGE>
transactions in shareholder accounts for which confirmations
are required, recording reinvestments of dividends and
distributions in Fund shares, and cooperating with broker-
dealers and financial intermediaries who represent
shareholders of the Fund.
5. Limit of Authority.
------------------
Unless otherwise expressly limited by the resolution of
appointment or by subsequent action by the Fund, the appointment
of IFTC as Transfer Agent will be construed to cover the full
amount of authorized shares of beneficial interest of the class
or classes for which IFTC is appointed as the same will, from
time to time, be constituted, and any subsequent increases in
such authorized amount.
In case of such increase Fund will file with IFTC:
A. If the appointment of IFTC was theretofore expressly
limited, a certified copy of a resolution of the Trustees of
Fund increasing the authority of IFTC;
B. A certified copy of the amendment to the Trust Instrument of
Fund authorizing the increase of shares of beneficial
interest;
C. A certified copy of the order or consent of each
governmental or regulatory authority required by law to
consent to the issuance of the increased shares of
beneficial interest, and an opinion of counsel that the
order or consent of no other governmental or regulatory
authority is required;
D. Opinion of counsel for Fund stating:
(1) The status of the additional shares of beneficial
interest of Fund under the Securities Act of 1933, as
amended, and any other applicable federal or state
statute; and
(2) That the additional shares are, or when issued will be,
validly issued, fully paid and nonassessable.
6. Compensation and Expenses.
-------------------------
A. In consideration for its services hereunder as Transfer
Agent and Dividend Disbursing Agent, Fund will pay to IFTC
from time to time a reasonable compensation for all services
rendered as Agent, and also, all its reasonable out-of-
pocket expenses, charges, counsel fees, and other
disbursements
-4-<PAGE>
(Compensation and Expenses) incurred in connection with the
agency. Such compensation is set forth in a separate
schedule, a copy of which is attached hereto and
incorporated herein by reference. IFTC shall make
reasonable efforts to bill the Fund as soon as practicable
after the end of each calendar month for the Compensation
and Expenses due for that month and said billing shall be
detailed in accordance with the such schedule. If the Fund
has not paid such Compensation and Expenses to IFTC within a
reasonable time, IFTC may charge against any monies held
under this Agreement, the amount of any Compensation and/or
Expenses for which it shall be entitled to reimbursement
under this Agreement.
B. Fund agrees to promptly reimburse IFTC for all reasonable
out-of-pocket expenses or advances incurred by IFTC in
connection with the performance of services under this
Agreement, for postage (and first class mail insurance in
connection with mailing share certificates), envelopes,
check forms, continuous forms, forms for reports and
statements, stationery, and other similar items, telephone
and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used each year to record
the previous year's transactions in shareholder accounts and
computer tapes used for permanent storage of records and
cost of insertion of materials in mailing envelopes by
outside firms. IFTC will provide to Fund no less often than
monthly a detailed accounting of all such expenses on behalf
of the Fund.
7. Operation of IFTC System.
------------------------
A. In connection with the performance of its services under
this Agreement, IFTC is responsible for such items as:
(1) The accuracy of entries in IFTC's records reflecting
orders and instructions received by IFTC from dealers,
shareholders, Fund or its principal underwriter;
(2) The availability and the accuracy of shareholder lists,
shareholder account verifications, confirmations and
other shareholder account information to be produced
from its records or data;
-5-<PAGE>
(3) The accurate and timely issuance of dividend and
distribution checks in accordance with instructions
received from Fund;
(4) The accuracy of redemption transactions and payments in
accordance with redemption instructions received from
dealers, shareholders or Fund;
(5) The deposit daily in Fund's appropriate special bank
account of all checks and payments received from
dealers or shareholders for investment in shares;
(6) The requiring of proper forms of instructions,
signatures and signature guarantees and any necessary
documents supporting the legality of transfers,
redemptions and other shareholder account transactions,
all in conformance with IFTC's and the Fund's present
procedures with such changes as may be required or
approved by Fund; and
(7) The maintenance of a current duplicate set of Fund's
essential records at a secure distant location, in a
form available and usable forthwith in the event of any
breakdown or disaster disrupting its main operation.
8. Indemnification.
---------------
A. IFTC will not be responsible for, and Fund will hold
harmless and indemnify IFTC from and against any loss by or
liability to the Fund or a third party, including reasonable
attorney's fees, in connection with any claim or suit
asserting any such liability arising out of or attributable
to actions taken or omitted by IFTC pursuant to this
Agreement, unless IFTC has acted negligently or in bad
faith. The matters covered by this indemnification include
but are not limited to those of Section 14. hereof. Fund
will be responsible for, and will have the right to conduct
or control the defense of any litigation asserting
liability, including reasonable attorney's fees, against
which IFTC is indemnified hereunder. IFTC will not be under
any obligation to prosecute or defend any action or suit in
respect of the agency relationship hereunder, which, in its
opinion, may involve it in expense or liability, unless Fund
will, as often as requested, furnish IFTC with reasonable,
satisfactory security and indemnity against such expense or
liability.
-6-<PAGE>
B. IFTC will hold harmless and indemnify Fund from and against
any loss or liability arising out of IFTC's negligence or
bad faith in performing its duties under this Agreement,
including reasonable attorney's fees.
9. Certain Covenants of IFTC and Fund.
----------------------------------
A. All requisite steps will be taken by Fund from time to time
when and as necessary to register the Fund's shares for sale
in all states in which Fund's shares shall at the time be
offered for sale and require registration. If at any time
Fund will receive notice of any stop order or other
proceeding in any such state affecting such registration or
the sale of Fund's shares, or of any stop order or other
proceeding under the federal securities laws affecting the
sale of Fund's shares, Fund will give prompt notice thereof
to IFTC.
B. IFTC hereby agrees to perform such transfer agency functions
as are set forth in Section 4.E. above and establish and
maintain facilities and procedures reasonably acceptable to
Fund for safekeeping of shares of beneficial interest
certificates, check forms, and facsimile signature
imprinting devices, if any; and for the preparation or use,
and for keeping account of, such certificates, forms and
devices, and to carry such insurance as it considers
adequate and reasonably available and not to substantially
reduce such level of insurance without prior notice to the
Fund.
C. To the extent required by Section 31 of the Investment
Company Act of 1940 as amended and Rules thereunder, IFTC
agrees that all records maintained by IFTC relating to the
services to be performed by IFTC under this Agreement are
the property of Fund and will be preserved and will be
surrendered promptly to Fund on request.
D. IFTC agrees to furnish Fund semiannual reports of its
financial condition, consisting of a balance sheet, earnings
statement and any other financial information reasonably
requested by Fund. The annual financial statements will be
certified by IFTC's certified public accountants.
E. IFTC represents and agrees that it will use its best efforts
to keep current on the trends of the investment company
industry relating to shareholder services and will use its
best efforts to continue to modernize and improve.
-7-<PAGE>
F. IFTC will permit Fund and its authorized representatives to
make periodic inspections of its operations as such would
involve the Fund at reasonable times during business hours.
10. Recapitalization or Readjustment.
--------------------------------
In case of any recapitalization, readjustment or other change in
the capital structure of Fund requiring a change in the form of
beneficial interest certificates, IFTC will issue or register
certificates in the new form in exchange for, or in transfer of,
the outstanding certificates in the old form, upon receiving:
A. Written instructions from an officer of Fund;
B. Certified copy of the amendment to the Trust Instrument or
other document effecting the change;
C. Certified copy of the order or consent of each governmental
or regulatory authority, required by law to the issuance of
the beneficial interest certificate in the new form, and an
opinion of counsel that the order or consent of no other
government or regulatory authority is required;
D. Specimens of the new certificates in the form approved by
the Trustees of Fund, with a certificate of the Secretary of
Fund as to such approval;
E. Opinion of counsel for Fund stating:
(1) The status of the shares of beneficial interest of Fund
in the new form under the Securities Act of 1933, as
amended and any other applicable federal or state
statute; and
(2) That the issued shares in the new form are, and all
unissued shares will be, when issued, validly issued,
fully paid and nonassessable.
11. Beneficial Interest Certificates.
--------------------------------
Fund will furnish IFTC with a sufficient supply of blank
beneficial interest certificates and from time to time will renew
such supply upon the request of IFTC. Such certificates will be
signed manually or by facsimile signatures of the officers of
Fund authorized by law and by bylaws to sign such certificates,
and if required, will bear the corporate seal or facsimile
thereof.
-8-<PAGE>
12. Death, Resignation or Removal of Signing Officer.
------------------------------------------------
Fund will file promptly with IFTC written notice of any change in
the officers authorized to sign certificates, written
instructions or requests, together with two signature cards
bearing the specimen signature of each newly authorized officer.
In case any officer of Fund who will have signed manually or
whose facsimile signature will have been affixed to blank
certificates will die, resign, or be removed prior to the
issuance of such certificates, IFTC may issue or register such
certificates as the certificates of Fund notwithstanding such
death, resignation, or removal, until specifically directed to
the contrary by Fund in writing. In the absence of such
direction, Fund will file promptly with IFTC such approval,
adoption, or ratification as may be required by law.
13. Future Amendments of Trust Instrument and Bylaws.
------------------------------------------------
Fund will promptly file with IFTC copies of all material
amendments to its Trust Instrument or bylaws made after the date
of this Agreement.
14. Instructions, Opinion of Counsel and Signatures.
-----------------------------------------------
At any time IFTC may apply to any person authorized by the Fund
to give instructions to IFTC, and may with the approval of a Fund
officer consult with legal counsel for Fund or its own legal
counsel at the expense of Fund, with respect to any matter
arising in connection with the agency and it will not be liable
for any action taken or omitted by it in good faith in reliance
upon such instructions or upon the opinion of such counsel. IFTC
will be protected in acting upon any paper or document reasonably
believed by it to be genuine and to have been signed by the
proper person or persons and will not be held to have notice of
any change of authority of any person, until receipt of written
notice thereof from Fund. It will also be protected in
recognizing beneficial interest certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the
officers of Fund, and the proper countersignature of any former
Transfer Agent or Registrar, or of a co-Transfer Agent or co-
Registrar.
15. Papers Subject to Approval of Counsel.
-------------------------------------
The acceptance by IFTC, of its appointment as Transfer Agent and
Dividend Disbursing Agent and all documents filed in connection
with such appointment and thereafter in connection with the
agencies, will be subject to the approval of legal counsel for
IFTC (which approval will be not unreasonably withheld).
-9-<PAGE>
16. Certification of Documents.
--------------------------
The required copy of the Trust Instrument of Fund and copies of
all amendments thereto will be certified by the Secretary of
State (or other appropriate official) of the State of
Certification, and if such Trust Instrument and amendments is
required by law to be also filed with a county, city or other
officer of official body, a certificate of such filing will
appear on the certified copy submitted to IFTC. A copy of the
order or consent of each governmental or regulatory authority
required by law to the issuance of the beneficial interest
certificate will be certified by the Secretary or Clerk of such
governmental or regulatory authority, under proper seal of such
authority. The copy of the Bylaws and copies of all amendments
thereto, and copies of resolutions of the Trustees of Fund, will
be certified by the Secretary or an Assistant Secretary of Fund
under the Fund's seal.
17. Records.
-------
IFTC will maintain customary records in connection with its
agency, and particularly will maintain those records required to
be maintained pursuant to subparagraph (2) (iv) of paragraph (b)
of Rule 31a-1 for the period and in the manner prescribed by Rule
31a-2 under the Investment Company Act of 1940, if any.
18. Disposition of Books, Records and Cancelled Certificates.
--------------------------------------------------------
IFTC will send periodically to Fund, or to where designated by
the Secretary or an Assistant Secretary of Fund, all books,
documents, and all records no longer deemed needed for current
purposes and beneficial interest certificates which have been
cancelled in transfer or in exchange, upon the understanding that
such books, documents, records, and beneficial interest
certificates will not be destroyed by Fund without the consent of
IFTC (which consent will not be unreasonably withheld), but will
be safely stored for possible future reference.
19. Provisions Relating to IFTC as Transfer Agent.
---------------------------------------------
A. IFTC will make original issues of beneficial interest
certificates upon written request of an officer of Fund and
upon being furnished with a certified copy of a resolution
of the Trustees authorizing such original issue, an opinion
of counsel as outlined in paragraphs 1.D. and G. of this
Agreement, any documents required by paragraphs 5. or 10. of
this Agreement, and necessary funds for the payment of any
original issue tax.
-10-<PAGE>
B. Before making any original issue of certificates Fund will
furnish IFTC with sufficient funds to pay all required taxes
on the original issue of the shares of beneficial interest,
if any. Fund will furnish IFTC such evidence as may be
required by IFTC to show the actual value of such shares.
If no taxes are payable IFTC will be furnished with an
opinion of outside counsel to that effect.
C. Shares of beneficial interest will be transferred and new
certificates issued in transfer, or shares of beneficial
interest accepted for redemption and funds remitted
therefor, upon surrender of the old certificates in form
deemed by IFTC properly endorsed for transfer or redemption
accompanied by such documents as IFTC may deem necessary to
evidence that authority of the person making the transfer or
redemption, and bearing satisfactory evidence of the payment
of any applicable transfer taxes. IFTC reserves the right
to refuse to transfer or redeem shares until it is satisfied
that the endorsement or signature on the certificate or any
other document is valid and genuine, and for that purpose it
may require a guaranty of signature by a financial
institution as permitted by the Fund's prospectus or as
otherwise required by applicable law. IFTC also reserves
the right to refuse to transfer or redeem shares until it is
satisfied that the requested transfer or redemption is
legally authorized, and it will incur no liability for the
refusal in good faith to make transfers or redemptions
which, in its judgment, are improper or unauthorized. IFTC
may, in effecting transfers or redemptions, rely upon
Simplification Acts or other statutes which protect it and
Fund in not requiring complete fiduciary documentation. In
cases in which IFTC is not directed or otherwise required to
maintain the consolidated records of shareholder's accounts,
IFTC will not be liable for any loss which may arise by
reason of not having such records, provided that such loss
could not have been prevented by the exercise of ordinary
diligence.
D. When mail is used for delivery of beneficial interest
certificates IFTC will forward certificates in
"nonnegotiable" form by first class or registered mail and
certificates in "negotiable" form by registered mail, all
such mail deliveries to be covered while in transit to the
addressee by insurance arranged for by IFTC.
-11-<PAGE>
E. IFTC will issue and mail subscription warrants, certificates
representing dividends, exchanges or split ups, or act as
Conversion Agent upon receiving written instructions from
any officer of Fund and such other documents as IFTC deems
necessary.
F. IFTC will issue, transfer, and split up certificates and
will issue certificates of beneficial interest representing
full shares upon surrender of scrip certificates aggregating
one full share or more when presented to IFTC for that
purpose upon receiving written instructions from an officer
of Fund and such other documents as IFTC may deem necessary.
G. IFTC may issue new certificates in place of certificates
represented to have been lost, destroyed, stolen or
otherwise wrongfully taken upon receiving instructions from
Fund and indemnity satisfactory to IFTC and Fund, and may
issue new certificates in exchange for, and upon surrender
of, mutilated certificates. Such instructions from Fund
will be in such form as will be approved by the Trustees of
Fund and will be in accordance with the provisions of law
and the bylaws of Fund governing such matter.
H. IFTC will supply a shareholder's list to Fund for its annual
meeting upon receiving a request from an officer of Fund.
It will also supply lists at such other times as may be
requested by an officer of Fund.
I. Upon receipt of written instructions of an officer of Fund,
IFTC will address and mail notices to shareholders.
J. In case of any request or demand for the inspection of the
shareholder records of Fund or any other books in the
possession of IFTC, IFTC will endeavor to notify Fund and to
secure instructions as to permitting or refusing such
inspection. IFTC reserves the right, however, to exhibit
the shareholder records or other books to any person in case
it is advised by its counsel that it may be held responsible
for the failure to exhibit the shareholder records or other
books to such person.
K. In the event that any check or other order for the payment
of money is returned unpaid for any reason, IFTC will: (i)
within three days give written notice of such return to the
Fund or its designee; (ii) place a stop transfer order
against all
-12-<PAGE>
Fund shares issued in certificate form as a result of such
check or order or cancel the purchase of Fund shares issued
in book-entry form as a result of such check or order, (iii)
take such other steps as IFTC may, in its discretion, deem
appropriate or as the Fund or its designee may instruct.
L. Upon receipt of all necessary information and documentation
relating to a redemption, IFTC will issue to the Fund's
custodian an advice setting forth the number of shares of
the Fund received by IFTC for redemption. IFTC shall, upon
notification that the custodian has transferred funds for
the redemption of shares to a redemption account at IFTC or
at another bank, pay such moneys to the shareholder, his
authorized agent or legal representative.
M. IFTC is authorized to review and process transfers of shares
of the Fund and exchanges between the Fund and other mutual
funds for which IFTC acts as transfer agent as permitted in
the prospectus for the Fund, on the records of the Fund
maintained by IFTC. If shares to be transferred are
represented by outstanding certificates, IFTC shall, upon
surrender to it of the certificates in proper form for
transfer, and upon cancellation thereof, countersign and
issue new certificates for a like number of shares (if so
requested by the registered holder thereof) and deliver the
same. If the shares to be transferred are not represented
by outstanding certificates, IFTC shall upon an order
thereof by or on behalf of the registered holder thereof in
proper form, credit the same to the transferee on its books.
If shares are to be exchanged for shares of another mutual
fund, IFTC will process such shares exchanged in the same
manner as a redemption and sale of shares, except that it
may in its discretion waive requirements for information and
documentation.
N. Unless otherwise instructed by the Fund, IFTC shall maintain
records showing for each investor's account the following:
(i) names, addresses, tax identifying numbers and assigned
account numbers; (ii) numbers of shares held; (iii)
historical information regarding the account of each
shareholder, including dividends paid and date and price of
all transactions on a shareholder's account; (iv) any stop
or restraining order placed against a shareholder's account
or on lost and/or replaced certificates; (v) information
with respect to withholdings in the
-13-<PAGE>
case of a foreign account; (vi) any capital gain or dividend
reinvestment order, account application, dividend address
and correspondence relating to the current maintenance of a
shareholder's account; (vii) certificate numbers and
denominations for any shareholders holding certificates; and
(viii) any information required in order to permit the Fund
to confirm that IFTC has properly performed the calculations
contemplated or required by this Agreement.
O. IFTC will maintain records necessary to reflect the
crediting of dividends which are reinvested in shares of the
Fund.
P. IFTC will investigate all shareholder inquiries related to
shareholder accounts and respond promptly to correspondence
from shareholders.
Q. If requested and as directed by the Fund, IFTC will address
and mail all communications to shareholders or their
nominees, including proxy material and periodic reports to
shareholders.
R. In connection with special and annual meetings of
shareholders, IFTC will prepare shareholder lists, mail and
certify as to the mailing of proxy materials, process and
tabulate returned proxy cards, report on proxies voted and
received by IFTC prior to meetings as stated in the proxy
statement, and certify to the Secretary of the Fund shares
to be voted at meetings.
S. In addition to the duties expressly provided for herein,
IFTC shall perform such other duties and functions as are
set forth in the Compensation and Expenses schedule hereto
from time to time.
20. Provisions Relating to Dividend Disbursing Agency.
-------------------------------------------------
A. IFTC will maintain one or more deposit accounts as Agent for
the Fund, into which the funds for payment of dividends,
distributions, redemptions or other disbursements provided
for hereunder will be deposited, and against which checks
for the foregoing purposes will be drawn (Accounts). Such
Accounts may be maintained in IFTC's own banking department,
in State Street Bank and Trust Company, and in such other
banks or trust companies as may be designated by IFTC and as
properly authorized by resolution of the Trustees of the
Fund, such Accounts, however, to be in the name of IFTC as
agent of the Fund and subject only to its draft or order.
-14-<PAGE>
B. Upon the receipt of proper instructions, as described below,
which may be continuing instructions when deemed appropriate
by the parties, IFTC shall pay out monies of the Fund in
such Accounts in the following cases only:
1. For the redemption of Fund shares according to the
Fund's then current prospectus;
2. For the payment of any dividends declared by the Fund
or other distributions to shareholders of the Fund; and
3. For any other proper purpose, but only upon receipt of
proper instructions 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 purpose, and naming the person or persons to
whom such payment is to be made.
IFTC shall disburse funds from such Accounts as directed
upon receipt of instructions from the Fund. All
instructions shall be given only by persons designated in
writing to IFTC by the Fund to be authorized to give
instructions to IFTC under this Agreement. Instructions may
be in writing executed by an authorized representative of
the Fund or, if IFTC reasonably believes such instructions
to be by an authorized representative of the Fund, via
telecommunications.
C. The Fund will promptly notify IFTC of the declaration of any
dividend or distribution. The Fund shall furnish to IFTC a
written document specifying the date of the declaration of
such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment
shall be determined, the amount payable per share to
shareholders of record as of that date, and the total amount
payable to IFTC on the payment date.
D. IFTC will, on or before the payable date of any dividend or
distribution, notify the Fund's custodian and the Fund of
the estimated amount of cash required to pay said dividend
or distribution. On or before the mailing date of such
dividend or distribution, Fund shall instruct the custodian
to place in a dividend disbursing account at IFTC or another
bank, funds equal to the cash amount to be paid out. IFTC
will calculate, prepare and mail checks to, or (where
appropriate) credit
-15-<PAGE>
such dividend or distribution to the account of, Fund
shareholders, and maintain and safeguard all required
underlying records.
E. As directed by the Fund, IFTC shall prepare and mail to each
Fund shareholder such information with respect to each
dividend or distribution as is required by applicable
federal income tax laws and regulations and by the
Investment Company Act of 1940.
F. As directed by the Fund, IFTC shall file such appropriate
information returns concerning the payment of dividends and
capital gain distributions with the proper federal
authorities as are required by federal law to be filed by
the Fund and shall withhold such sums as are required to be
withheld by federal law.
G. IFTC will, at the expense of the Fund, provide a special
form of check containing the imprint of any device or other
matter desired by Fund. Such form of checks must, however,
be compatible with the equipment employed by IFTC and its
agents.
H. If the Fund desires to include additional printed matter,
financial statements, etc. with the dividend checks, the
same will be furnished to IFTC within a reasonable time
prior to the date of mailing of the dividend checks, at the
expense of the Fund.
I. If the Fund desires that its distributions be mailed in any
special form of envelopes, a sufficient supply of the same
will be furnished to IFTC, but the size and form of said
envelopes will be subject to the approval of IFTC. If
stamped envelopes are used, they must be furnished by Fund
or, if postage stamps are to be affixed to the envelopes,
the stamps or the cash necessary for such stamps must be
furnished by the Fund prior to mailing.
J. IFTC is authorized and directed to stop payment of checks
theretofore issued hereunder, but not presented for payment,
when the payees thereof allege either that they have not
received the checks or that such checks have been mislaid,
lost, stolen, destroyed or through no fault of theirs, are
otherwise beyond their control, and cannot be produced by
them for presentation and collections, and, to issue and
deliver duplicate checks in replacement thereof upon receipt
of properly executed affidavits.
-16-<PAGE>
21. Assumption of Duties By the Fund.
--------------------------------
The Fund may assume certain duties and responsibilities of IFTC
or those usual and ordinary services of Transfer Agent and
Dividend Disbursement Agent as those terms are referred to in
Section 4.E. of this Agreement including but not limited to
accepting shareholder instructions and transmitting orders based
on such instructions to IFTC, preparing and mailing
confirmations, obtaining certified TIN numbers, and disbursing
monies of the Fund. To the extent the Fund or its agent or
affiliate assumes such duties and responsibilities, IFTC shall be
relieved from all responsibility and liability therefor.
22. Termination of Agreement.
------------------------
A. This Agreement may be terminated by either party upon
receipt of sixty (60) days written notice from the other
party.
B. Fund, in addition to any other rights and remedies, shall
have the right to terminate this Agreement forthwith upon
the occurrence at any time of any of the following events:
(1) Any interruption or cessation of operations by IFTC or
its assigns which materially interferes with the
business operation of Fund;
(2) The bankruptcy of IFTC or its assigns or the
appointment of a receiver for IFTC or its assigns;
(3) Any merger, consolidation or sale of substantially all
the assets of IFTC or its assigns;
(4) The acquisition of a controlling interest in IFTC or
its assigns, by any broker, dealer, investment adviser
or investment company except as may presently exist; or
(5) Failure by IFTC or its assigns to perform its duties in
accordance with the Agreement, which failure materially
adversely affects the business operations of Fund and
which failure continues for thirty (30) days after
receipt of written notice from Fund.
C. In the event of termination, Fund will promptly pay IFTC all
amounts due to IFTC hereunder.
D. In the event of termination, IFTC will use its best efforts
to transfer the books and records of the Fund to the
designated successor transfer agent and to provide
-17-<PAGE>
other information relating to its service provided hereunder
for reasonable compensation therefor.
23. Assignment.
----------
A. Neither this Agreement nor any rights or obligations
hereunder may be assigned by IFTC without the written
consent of Fund; provided, however, no assignment will
relieve IFTC of any of its obligations hereunder. IFTC may,
however, employ agents to assist it in performing its duties
hereunder.
B. This Agreement will inure to the benefit of and be binding
upon the parties and their respective successors and
assigns.
24. Confidentiality.
---------------
A. IFTC agrees that, except as provided in the last sentence of
Section 19.J hereof, or as otherwise required by law, IFTC
will keep confidential all records of and information in its
possession relating to Fund or its shareholders or
shareholder accounts and will not disclose the same to any
person except at the request or with the consent of Fund.
B. Fund agrees to keep confidential all financial statements
and other financial records (other than statements and
records relating solely to Fund's business dealings with
IFTC) and all manuals, systems and other technical
information and data, not publicly disclosed, relating to
IFTC's operations and programs furnished to it by IFTC
pursuant to this Agreement and will not disclose the same to
any person except at the request or with the consent of
IFTC.
C. The Fund acknowledges that IFTC and DST Systems, Inc. (DST)
have proprietary rights in and to the computerized data
processing recordkeeping system used by IFTC to perform
services hereunder including, but not limited to the
maintenance of shareholder accounts and records, processing
of related information and generation of output (the MFS
System), including, without limitation any changes or
modifications of the MFS System and any other IFTC or DST
programs, data bases, supporting documentation, or
procedures ("collectively IFTC Protected Information") which
the Fund's access to the MFS System or computer hardware or
software may permit the Fund or its employees or agents to
become aware of or to access and that the IFTC Protected
-18-<PAGE>
Information constitutes confidential material and trade
secrets of IFTC. The Fund agrees to maintain the
confidentiality of the IFTC Protected Information. The Fund
acknowledges that any unauthorized use, misuse, disclosure
or taking of IFTC Protected Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and
unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be
subject to civil liabilities and criminal penalties under
applicable state law. The Fund will advise all of its
employees and agents who have access to any IFTC Protected
Information or to any computer equipment capable of
accessing IFTC or DST hardware or software of the foregoing.
IFTC and DST are intended to be, and shall be, third party
beneficiaries of the Fund's obligations and undertakings
contained in this Section.
25. Survival of Representations and Warranties.
------------------------------------------
All representations and warranties by either party herein
contained will survive the execution and delivery of this
Agreement.
26. Limitation of Liability.
-----------------------
Notice is hereby given that the Fund is a business trust
organized under the Delaware Business Trust Act pursuant to a
Certificate of Trust filed in the office of the Secretary of
State of the State of Delaware. All parties to this Agreement
acknowledge and agree that the Fund is a series Fund and all
debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series
shall be enforceable against the assets held with respect to such
series only, and not against the assets of the Fund generally or
against the assets held with respect to any other series and
further that no trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for
any of the foregoing.
27. Miscellaneous.
-------------
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
-19-<PAGE>
B. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified,
in any manner except by a written agreement properly
authorized and executed by both parties hereto.
D. The captions in this Agreement are included for convenience
of reference only, and in no way define or delimit any of
the provisions hereof or otherwise affect their construction
or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
F. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
-20-<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:_____________________________________
Title:__________________________________
BERGER INSTITUTIONAL PRODUCTS TRUST
By:_____________________________________
Title:__________________________________
-21-<PAGE>
EXHIBIT B
INSURANCE COVERAGE
Minimum Insurance Coverages:
DESCRIPTION OF POLICY:
BROKERS BLANKET BOND, STANDARD FORM 14
Covering losses caused by dishonesty of employees, physical
loss of securities on or outside of premises while in
possession of authorized person, loss caused by forgery or
alteration of checks or similar instruments.
Minimum Coverage: $75,000,000
ERRORS AND OMISSIONS INSURANCE
Indemnifies against loss in providing shareholder accounting
services by reason of neglect, error or omission.
Minimum Coverage: $10,000,000
MAIL INSURANCE (APPLIES TO ALL FULL SERVICE OPERATIONS)
Provides indemnity for security lost in the mails.
Minimum Coverage:
$10,000,000 per envelope nonnegotiable securities mailed to
domestic locations via registered mail.
$1,000,000 per envelope nonnegotiable securities mailed to
domestic locations via first-class or certified mail.
$1,000,000 per envelope nonnegotiable securities mailed to
foreign locations via registered mail.
$1,000,000 per envelope negotiable securities mailed to all
locations via registered mail.
-22-
PARTICIPATION AGREEMENT
Among
BERGER INSTITUTIONAL PRODUCTS TRUST
BERGER ASSOCIATES, INC.
and
GREAT AMERICAN RESERVE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 15th day of April,
1996 by and among GREATER AMERICAN RESERVE INSURANCE COMPANY,
(hereinafter the "Insurance Company"), a Texas corporation, on its own
behalf and on behalf of each segregated asset account of the Insurance
Company set forth on Schedule A hereto as may be amended from time to
time (each such account hereinafter referred to as the "Account"),
BERGER INSTITUTIONAL PRODUCTS TRUST, a Delaware business trust (the
"Trust") and BERGER ASSOCIATES, INC., a Delaware corporation ("Berger
Associates").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle
for variable annuity and life insurance contracts to be offered by
separate accounts of insurance companies which have entered into
participation agreements substantially identical to this Agreement
("Participating Insurance Companies") and for qualified retirement and
pension plans ("Qualified Plans"); and
WHEREAS, the beneficial interest in the Trust is divided into
several series of shares, each designated a "Fund" and representing
the interest in a particular managed portfolio of securities and other
assets; and
WHEREAS, a notice (Investment Company Act Release No. 21858,
March 26, 1996) has been issued of the Trust's application for an
order of the Securities and Exchange Commission (the "Commission")
(File No. 812-9852), granting Participating Insurance Companies and
their separate accounts exemptions from the provisions of Sections
9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as amended, (the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Trust to
be sold to and held by Qualified Plans and by variable annuity and
variable life insurance separate accounts of life insurance companies
that may or may not be affiliated with one another, and an order (the
"Mixed and Shared Funding Exemptive Order") granting that application
is expected to be issued in April, 1996; and
<PAGE>
WHEREAS, the Trust is registered as an open-end management
investment company under the 1940 Act and the offering of its shares
is registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, Berger Associates is duly registered as an investment
adviser under the Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Insurance Company has registered under the 1933 Act,
or will register under the 1933 Act, certain variable annuity or
variable life insurance contracts identified by the form number(s)
listed on Schedule B to this Agreement, as amended from time to time
hereafter by mutual written agreement of all the parties hereto (the
"Contracts"); and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the board of
directors of the Insurance Company on the date shown for that Account
on Schedule A hereto, to set aside and invest assets attributable to
the Contracts; and
WHEREAS, the Insurance Company has registered or will register
each Account as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurance Company intends to purchase shares in the
Funds at net asset value on behalf of each Account to fund the
Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the
Insurance Company, the Trust and Berger Associates agree as follows:
ARTICLE I. SALE OF TRUST SHARES
1.1. The Trust agrees to sell to the Insurance Company those
shares of the Trust which each Account orders, executing such orders
on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the order for the shares of the Trust.
For purposes of this Section 1.1, the Insurance Company shall be the
designee of the Trust for receipt of such orders from the Accounts and
receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such order by 7:00 a.m.,
Mountain Time, on the next following Business Day. In this Agreement,
"Business Day" shall mean any day on which the New York Stock Exchange
is open for trading and on which the Trust calculates its net asset
value pursuant to the rules of the Commission.
1.2. The Trust agrees to make its shares available for purchase
at the applicable net asset value per share by the Insurance Company
and its Accounts on those days on which the Trust calculates its
Funds' net asset values pursuant to rules of the
2<PAGE>
Commission and the Trust shall use reasonable efforts to calculate
its Funds' net asset values on each day on which the New York Stock
Exchange is open for trading. Notwithstanding the foregoing, the
trustees of the Trust may refuse to sell shares of any Fund to any
person, or suspend or terminate the offering of shares of any Fund if
such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the trustees of the
Trust acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best
interests of the shareholders of that Fund.
1.3. The Trust agrees that shares of the Trust will be sold only
to Accounts of Participating Insurance Companies and to Qualified
Plans. No shares of any Fund will be sold to the general public.
1.4. The Trust will not sell its shares to any insurance company
or separate account unless an agreement containing provisions
substantially the same as Sections 2.4, 3.4, 3.5, and Sections 7.1 -
7.7 of this Agreement is in effect to govern such sales.
1.5. The Trust agrees to redeem, on the Insurance Company's
request, any full or fractional shares of the Trust held by the
Account, executing such requests on a daily basis at the net asset
value next computed after receipt by the Trust or its designee of the
request for redemption. However, if one or more Funds has determined
to settle redemption transactions for all of its shareholders on a
delayed basis (more than one business day, but in no event more than
three Business Days, after the date on which the redemption order is
received, unless otherwise permitted by an order of the Commission
under Section 22(e) of the 1940 Act), the Trust shall be permitted to
delay sending redemption proceeds to the Insurance Company by the
same number of days that the Trust is delaying sending redemption
proceeds to the other shareholders of the Fund. For purposes of this
Section 1.5, the Insurance Company shall be the designee of the Trust
for receipt of requests for redemption from each Account and receipt
by that designee shall constitute receipt by the Trust; provided that
the Trust receives notice of the request for redemption by 7:00 a.m.,
Mountain Time, on the next following Business Day.
1.6. The Insurance Company agrees to purchase and redeem the
shares of each Fund offered by the then-current prospectus of the
Trust in accordance with the provisions of that prospectus. The
Insurance Company agrees that all net amounts available under the
Contracts shall be invested in the Trust, or in the Insurance
Company's general account, provided that such amounts may also be
invested in an investment company other than the Trust if (a) the
other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment
objectives and policies of any Fund of the Trust in which the Account
may invest; or (b) the other investment company was available as a
funding vehicle for the Contracts prior to the
3<PAGE>
date of this Agreement and the Insurance Company so informs the Trust
and Berger Associates prior to their signing this Agreement; or (c)
the Trust and Berger Associates consent in advance in writing to the
use of the other investment company.
1.7. The Insurance Company shall pay for Trust shares by 1:00
p.m., Mountain Time, on the next Business Day after an order to
purchase Trust shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by
wire. For the purpose of Sections 2.9 and 2.10, upon receipt by the
Trust of the federal funds so wired, such funds shall cease to be the
responsibility of the Insurance Company and shall become the
responsibility of the Trust. Payment of net redemption proceeds
(aggregate redemptions of a Fund's shares by an Account minus
aggregate purchases of that Fund's shares by that Account) of less
than $1 million for a given Business Day will be made by wiring
federal funds to the Insurance Company on the next Business Day after
receipt of the redemption request. Payment of net redemption proceeds
of $1 million or more will be by wiring federal funds within three
Business Days after receipt of the redemption request.
1.8. Issuance and transfer of the Trust's shares will be by book
entry only. Stock certificates will not be issued to the Insurance
Company or any Account. Shares ordered from the Trust will be
recorded in an appropriate title for each Account or the appropriate
subaccount of each Account.
1.9. The Trust shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Insurance Company
of any income, dividends or capital gain distributions payable on the
Funds' shares. The Insurance Company hereby elects to receive all
income dividends and capital gain distributions payable on a Fund's
shares in additional shares of that Fund. The Insurance Company
reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Trust
shall notify the Insurance Company of the number of shares issued as
payment of dividends and distributions.
1.10. The Trust shall make the net asset value per share for
each Fund available to the Insurance Company on a daily basis as soon
as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make those per-share net
asset values available by 5:00 p.m., Mountain Time.
ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1. The Insurance Company represents, warrants and agrees that
the offerings of the Contracts are, or will be, registered under the
1933 Act; that the Contracts will be issued and sold in compliance in
all material respects with all applicable federal and state laws and
that the sale of the Contracts shall comply in all material respects
with applicable state insurance suitability requirements. The
Insurance Company further represents that it is an insurance company
duly organized and in good standing under
4<PAGE>
applicable law and that it has legally and validly established the
Account prior to any issuance or sale thereof as a segregated asset
account under the Texas Insurance Code and has registered, or warrants
and agrees that prior to any issuance or sale of the Contracts it
will register, the Account as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2. The Trust warrants and agrees that Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sale in compliance with the laws of
the State of Delaware and all applicable federal securities laws and
that the Trust is and shall remain registered under the 1940 Act. The
Trust warrants and agrees that it shall amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time
to time as required in order to effect the continuous offering of its
shares. The Trust shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the
extent deemed advisable by the Trust or Berger Associates.
2.3. The Trust represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and warrants and agrees
that it will make all reasonable efforts to maintain its qualification
(under Subchapter M or any successor or similar provision) and that it
will notify the Insurance Company immediately upon having a reasonable
basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
2.4. The Insurance Company represents that the Contracts are
currently treated as annuity or life insurance contracts under
applicable provisions of the Code and warrants and agrees that it will
make every effort to maintain such treatment and that it will notify
the Trust and Berger Associates immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or
that they might not be so treated in the future.
2.5. The Trust may elect to make payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act. To
the extent that it decides to finance distribution expenses pursuant
to Rule 12b-1, the Trust undertakes to have a board of trustees, a
majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6. The Trust makes no representation warranties as to whether
any aspect of its operations (including, but not limited to, fees and
expenses and investment policies) complies or will comply with the
insurance laws or regulations of the various states.
2.7. The Trust represents that it is lawfully organized and
validly existing under the laws of the State of Delaware and
5<PAGE>
represents, warrants and agrees that it does and will comply in all
material respects with the 1940 Act.
2.8. Berger Associates represents that it is and warrants that
it shall remain duly registered as an investment adviser under all
applicable federal and state securities laws and agrees that it shall
perform its obligations for the Trust in compliance in all material
respects with the laws of the State of Colorado and any applicable
state and federal securities laws.
2.9. The Trust and Berger Associates represent and warrant that
all of their officers, employees, investment advisers, investment sub-
advisers, and other individuals or entities described in Rule 17g-1
under the 1940 Act dealing with the money and/or securities of the
Trust are, and shall continue to be at all times, covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust in an
amount not less than the minimum coverage required currently by Rule
17g-1 under the 1940 Act or related provisions as may be promulgated
from time to time. That fidelity bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.10. The Insurance Company represents and warrants that all of
its officers, employees, investment advisers, and other individuals or
entities described in Rule 17g-1 under the 1940 Act are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust, in an amount not less
than the minimum coverage required currently for entities subject to
the requirements of Rule 17g-1 of the 1940 Act or related provisions
or may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
ARTICLE III. DISCLOSURE DOCUMENTS AND VOTING
3.1. Berger Associates shall provide the Insurance Company (at
the Insurance Company's expense) with as many copies of the Trust's
current prospectus as the Insurance Company may reasonably request.
If requested by the Insurance Company in lieu thereof, the Trust shall
provide such documentation (including a final copy of the new
prospectus as set in type at the Trust's expense) and other assistance
as is reasonably necessary in order for the Insurance Company once
each year (or more frequently if the prospectus for the Trust is
amended) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one document (at the Insurance
Company's expense).
3.2. The Trust's prospectus shall state that the Statement of
Additional Information for the Trust (the "SAI") is available from the
Trust, and Berger Associates (or the Trust), at its expense, shall
print and provide the SAI free of charge to the Insurance Company and
to any owner of a Contract or prospective owner who requests the SAI.
6<PAGE>
3.3. The Trust, at its expense, shall provide the Insurance
Company with copies of its proxy material, reports to shareholders and
other communications to shareholders in such quantity as the Insurance
Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law, the Insurance Company
shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions have been
received in the same proportion as Trust shares of that
Fund for which instructions have been received;
so long as and to the extent that the Commission continues to
interpret the 1940 Act to require pass-through voting privileges for
variable contract owners. The Insurance Company reserves the right
to vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their
separate accounts participating in the Trust calculates voting
privileges in a manner consistent with the standards set forth on
Schedule C attached hereto and incorporated herein by this reference,
which standards will also be provided to the other Participating
Insurance Companies. The Insurance Company shall fulfill its
obligation under, and abide by the terms and conditions of, the Mixed
and Shared Funding Exemptive Order.
3.5. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will
either provide for annual meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or, as the Trust currently intends, comply with Section 16(c) of the
1940 Act (although the Trust is not one of the trusts described in
Section 16(c) of that Act) as well as with Sections 16(a) and, if and
when applicable, 16(b). Further, the Trust will act in accordance
with the Commission's interpretation of the requirements of Section
16(a) with respect to periodic elections of trustees and with whatever
rules the Commission may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Insurance Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales
literature or other promotional material in which the Trust, a sub-
adviser of one of the Funds, or Berger Associates is named, at least
fifteen calendar days prior to its use. No such material
7<PAGE>
shall be used if the Trust or its designee objects to such use within
ten calendar days after receipt of such material.
4.2. The Insurance Company shall not give any information or
make any representations or statements on behalf of the Trust or
concerning the Trust in connection with the sale of the Contracts
other than the information or representations contained in the Trust's
registration statement, prospectus or SAI, as that registration
statement, prospectus or SAI may be amended or supplemented from time
to time, or in reports or proxy statements for the Trust, or in sales
literature or other promotional material approved by the Trust or its
designee or by Berger Associates, except with the permission of the
Trust or Berger Associates.
4.3. The Trust, Berger Associates, or its designee shall
furnish, or shall cause to be furnished, to the Insurance Company or
its designee, each piece of sales literature or other promotional
material in which the Insurance Company or the Account is named at
least fifteen calendar days prior to its use. No such material shall
be used if the Insurance Company or its designee objects to such use
within ten calendar days after receipt of that material.
4.4. The Trust and Berger Associates shall not give any
information or make any representations on behalf of the Insurance
Company or concerning the Insurance Company, any Account, or the
Contracts other than the information or representations contained in a
registration statement, prospectus or statement of additional
information for the Contracts, as that registration statement,
prospectus or statement of additional information may be amended or
supplemented from time to time, or in published reports for any
Account which are in the public domain or approved by the Insurance
Company for distribution to Contract owners, or in sales literature or
other promotional material approved by the Insurance Company or its
designee, except with the permission of the Insurance Company.
4.5. The Trust will provide to the Insurance Company at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, proxy statement, piece of
sales literature or other promotional material, application for
exemption, request for no-action letter, and any amendment to any of
the above, that relate to the Trust or its shares, contemporaneously
with the filing of the document with the Commission, the National
Association of Securities Dealers, Inc. ("NASD"), or other regulatory
authorities.
4.6. The Insurance Company will provide to the Trust at least
one complete copy of each registration statement, prospectus,
statement of additional information, report, solicitation for voting
instructions, piece of sales literature and other promotional
material, application for exemption, request for no-action letter, and
any amendment to any of the above, that relates to the Contracts or
the Account, contemporaneously with the filing of the document with
the Commission, the NASD, or other regulatory authorities.
8<PAGE>
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited
to, advertisements, newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public media, sales literature
(i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, shareholder
newsletters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made
generally available to some or all agents or employees, and
registration statements, prospectuses, statements of additional
information, shareholder reports, and proxy materials.
4.8. At the request of any party to this Agreement, each other
party will make available to the other party's independent auditors
and/or representative of the appropriate regulatory agencies, all
records, data and access to operating procedures that may be
reasonably requested.
ARTICLE V. FEES AND EXPENSES
5.1. The Trust and Berger Associates shall pay no fee or other
compensation to the Insurance Company under this agreement, except as
set forth in Section 5.4 and except that if the Trust or any Fund
adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, Berger Associates or the Trust may make
payments to the Insurance Company in amounts consistent with that 12b-
1 plan, subject to review by the trustees of the Trust.
5.2. All expenses incident to performance by the Trust under
this Agreement shall be paid by the Trust. The Trust shall see to it
that any offering of its shares is registered and that all of its
shares are authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust or
Berger Associates, in accordance with applicable state laws prior to
their sale. The Trust shall bear the cost of registration and
qualification of the Trust's shares, preparation and filing of the
Trust's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing
the proxy materials and reports to shareholders, the preparation of
all statements and notices required by any federal or state law, and
all taxes on the issuance or transfer of the Trust's shares.
5.3. The Insurance Company shall bear the expenses of printing
and distributing to Contract owners the Contract prospectuses and of
distributing to Contract owners the Trust's prospectus, proxy
materials and reports.
5.4. The Insurance Company bears the responsibility and
correlative expense for administrative and support services for
Contract owners. Berger Associates recognizes the Insurance
9<PAGE>
Company as the sole shareholder of shares of the Trust issued under
this Agreement. From time to time, Berger Associates may pay amounts
from its past profits to the Insurance Company for providing certain
administrative services for the Trust or for providing other services
that relate to the Trust. In consideration of the savings resulting
from such arrangement, and to compensate the Insurance Company for its
costs, Berger Associates agrees to pay to the Insurance Company an
amount equal to 25 basis points (0.25%) per annum of the average
aggregate amount invested by the Insurance Company in the Trust under
this Agreement. The parties agree that such payments are for adminis-
trative services and investor support services, and do not constitute
payment for investment advisory, distribution or other services.
Payment of such amounts by Berger Associates shall not increase the
fees paid by the Trust or its shareholders.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5 relating to the diversification
requirements for variable annuity, endowment, modified endowment or
life insurance contracts and any amendments or other modifications to
that Section or Regulation at all times necessary to satisfy those
requirements.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The trustees of the Trust will monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the variable Contract owners of all separate accounts
investing in the Trust and the participants of all Qualified Plans
investing in the Trust. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretive letter, or
any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any
Fund are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract
owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of variable contract owners. The
trustees of the Trust shall promptly inform the Insurance Company if
they determine that an irreconcilable material conflict exists and the
implications thereof. The trustees of the Trust shall have sole
authority to determine whether an irreconcilable material conflict
exists and their determination shall be binding upon the Insurance
Company.
7.2. The Insurance Company and Berger Associates each will
report promptly any potential or existing conflicts of which it is
aware to the trustees of the Trust. The Insurance Company and Berger
Associates each will assist the trustees of the Trust in
10<PAGE>
carrying out their responsibilities under the Mixed and Shared Funding
Exemptive Order, by providing the trustees of the Trust with all
information reasonably necessary for them to consider any issues
raised. This includes, but is not limited to, an obligation by the
Insurance Company to inform the trustees of the Trust whenever
Contract owner voting instructions are to be disregarded. These
responsibilities shall be carried out by the Insurance Company with a
view only to the interests of the Contract owners and by Berger
Associates with a view only to the interests of Contract holders and
Qualified Plan participants.
7.3. If it is determined by a majority of the trustees of the
Trust, or a majority of the trustees who are not interested persons of
the Trust, any of its Funds, or Berger Associates (the "Independent
Trustees"), that a material irreconcilable conflict exists, the
Insurance Company and/or other Participating Insurance Companies or
Qualified Plans that have executed participation agreements shall, at
their expense and to the extent reasonably practicable (as determined
by a majority of the Independent Trustees), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict,
up to and including: (1) withdrawing the assets allocable to some or
all of the separate accounts from the Trust or any Fund and
reinvesting those assets in a different investment medium, including
(but not limited to) another Fund of the Trust, or submitting the
question whether such segregation should be implemented to a vote of
all affected variable contract owners and, as appropriate, segregating
the assets of any appropriate group (e.g., annuity contract owners,
life insurance contract owners, or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected variable contract owners the
option of making such a change; and (2) establishing a new registered
management investment company or managed separate account and
obtaining any necessary approvals or orders of the Commission in
connection therewith.
7.4. If a material irreconcilable conflict arises because of a
decision by the Insurance Company to disregard Contract owner voting
instructions and that decision represents a minority position or would
preclude a majority vote, the Insurance Company may be required, at
the Trust's election, to withdraw the affected Account's investment in
the Trust and terminate this Agreement with respect to that Account;
provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Independent
Trustees. Any such withdrawal and termination must take place within
six (6) months after the Trust gives written notice that this
provision is being implemented, and, until the end of that six month
period, the Trust shall continue to accept and implement orders by the
Insurance Company for the purchase (and redemption) of shares of the
Trust.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
11<PAGE>
Insurance Company conflicts with the majority of other state
regulators, then the Insurance Company will withdraw the affected
Account's investment in the Trust and terminate this Agreement with
respect to that Account within six months after the trustees of the
Trust inform the Insurance Company in writing that they have deter-
mined that the state insurance regulator's decision has created an
irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a
majority of the Independent Trustees. Until the end of the foregoing
six month period, the Trust shall continue to accept and implement
orders by the Insurance Company for the purchase (and redemption) of
shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the Independent Trustees shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Trust be required to establish a
new funding medium for the Contracts. The Insurance Company shall not
be required by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority
of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the trustees of the Trust
determine that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Insurance Company will
withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the trustees of the Trust inform
the Insurance Company in writing of the foregoing determination,
provided, however, that the withdrawal and termination shall be
limited to the extent required by the material irreconcilable
conflict, as determined by a majority of the Independent Trustees.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the Act or the rules promulgated thereunder with respect
to mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Mixed and Shared Funding Exemptive Order, then
(a) the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with
Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent those rules are applicable; and (b) Sections 3.4, 3.5, 7.1,
7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only
to the extent that terms and conditions substantially identical to
those Sections are contained in the Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE INSURANCE COMPANY
8.1(a). The Insurance Company agrees to indemnify and hold
harmless the Trust and each trustee, officer, employee or agent of
12<PAGE>
the Trust, and each person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Insurance Company) or litigation
(including legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to
the sale, acquisition, or redemption of the Trust's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus for the Contracts
or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in
conformity with information furnished in writing to the
Insurance Company by or on behalf of the Trust for use in
the registration statement or prospectus for the Contracts
or in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Contracts or shares of the Trust;
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature of the Trust not supplied by the Insurance
Company, or persons under its control) or wrongful conduct
of the Insurance Company or persons under its control, with
respect to the sale or distribution of the Contracts or
Trust Shares;
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Trust or
any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon information furnished in
writing to the Trust by or on behalf of the Insurance
Company;
13<PAGE>
(iv) arise as a result of any failure by the Insurance
Company to provide the services and furnish the materials
under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation, warranty or agreement made by the Insurance
Company in this Agreement or arise out of or result from any
other material breach of this Agreement by the Insurance
Company,
as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
8.1(b). The Insurance Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified
Party that may arise from that Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of that
Indemnified Party's duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
the Trust, whichever is applicable.
8.1(c). The Insurance Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless that Indemnified Party shall have notified
the Insurance Company in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon that Indemnified Party (or
after the Indemnified Party shall have received notice of such service
on any designated agent). Notwithstanding the foregoing, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve the Insurance Company of its obligations hereunder except to
the extent that the Insurance Company has been prejudiced by such
failure to give notice. In addition, any failure by the Indemnified
Party to notify the Insurance Company of any such claim shall not
relieve the Insurance Company from any liability which it may have to
the Indemnified Party against whom the action is brought otherwise
than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Insurance
Company shall be entitled to participate, at its own expense, in the
defense of the action. The Insurance Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party
named in the action; provided, however, that if the Indemnified Party
-------- -------
shall have reasonably concluded that there may be defenses available
to it which are different from or additional to those available to the
Insurance Company, the Insurance Company shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Insurance Company be liable for the
fees and expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Insurance
Company to the
14<PAGE>
Indemnified Party of the Insurance Company's election to assume the
defense thereof, and in the absence of such a reasonable conclusion
that there may be different or additional defenses available to the
Indemnified Party, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Insurance
Company will not be liable to that party under this Agreement for any
legal or other expenses subsequently incurred by the party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Insurance Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Trust's
shares or the Contracts or the operation of the Trust.
8.2. INDEMNIFICATION BY BERGER ASSOCIATES
8.2(a). Berger Associates agrees to indemnify and hold harmless
the Insurance Company and each of its directors, officers, employees
or agents, and each person, if any, who controls the Insurance Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any
and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of Berger Associates) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related
to the sale, acquisition or redemption of the Trust's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus or sales literature
of the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if the statement or omission or alleged statement or
omission was made in reliance upon and in conformity with
information furnished in writing to Berger Associates or the
Trust by or on behalf of the Insurance Company for use in
the registration statement or prospectus for the Trust or in
sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Trust shares;
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Contracts not supplied by Berger
15<PAGE>
Associates or persons under its control) or wrongful conduct
of the Trust, Berger Associates or persons under their
control, with respect to the sale or distribution of the
Contracts or shares of the Trust;
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished in writing to the Insurance Company by
or on behalf of the Trust;
(iv) arise as a result of any failure by the Trust to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with
the diversification requirements specified in Article VI of
this Agreement); or
(v) arise out of or result from any material breach of any
representation, warranty or agreement made by Berger
Associates in this Agreement or arise out of or result from
any other material breach of this Agreement by Berger
Associates;
as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
8.2(b) Berger Associates shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified
Party that may arise from the Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified
Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the
Insurance Company or the Account, whichever is applicable.
8.2(c) Berger Associates shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless the Indemnified Party shall have notified
Berger Associates in writing within a reasonable time after the
summons or other first legal process giving information of the nature
of the claim shall have been served upon the Indemnified Party (or
after the Indemnified Party shall have received notice of such service
on any designated agent). Notwithstanding the foregoing, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve Berger Associates of its obligations hereunder except to the
extent that Berger Associates has been prejudiced by such failure to
give notice. In addition,
16<PAGE>
any failure by the Indemnified Party to notify Berger Associates of
any such claim shall not relieve Berger Associates from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties,
Berger Associates will be entitled to participate, at its own expense,
in the defense thereof. Berger Associates also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party
named in the action; provided,
--------
however, that if the Indemnified Party shall have reasonably concluded
- -------
that there may be defenses available to it which are different from or
additional to those available to Berger Associates, Berger Associates
shall not have the right to assume said defense, but shall pay the
costs and expenses thereof (except that in no event shall Berger
Associates be liable for the fees and expenses of more than one
counsel for Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances). After
notice from Berger Associates to the Indemnified Party of Berger
Associates's election to assume the defense thereof, and in the
absence of such a reasonable conclusion that there may be different or
additional defenses available to the Indemnified Party, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and Berger Associates will not be liable to
that party under this Agreement for any legal or other expenses
subsequently incurred by that party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.2(d) The Insurance Company agrees to notify Berger Associates
promptly of the commencement of any litigation or proceedings against
it or any of its officers or directors in connection with the issuance
or sale of the Contracts or the operation of the Account.
8.3 INDEMNIFICATION BY THE TRUST
8.3(a). The Trust agrees to indemnify and hold harmless the
Insurance Company, and each of its directors, officers, employees and
agents, and each person, if any, who controls the Insurance Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any
and all losses, claims, damages, liabilities (including legal and
other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as those
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of any trustee(s) of the Trust, are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide
the services and furnish the materials under the terms of
this Agreement (including a failure to comply
17<PAGE>
with the diversification requirements specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation, warranty or agreement made by the Trust in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Trust;
as limited by, and in accordance with the provisions of, Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party that may
arise from the Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of the Indemnified Party's duties
or by reason of the Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Insurance
Company, the Trust, Berger Associates or the Account, whichever is
applicable.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless the Indemnified Party shall have notified the Trust in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon the Indemnified Party (or after the Indemnified Party
shall have received notice of such service on any designated agent).
Notwithstanding the foregoing, the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Trust of its
obligations hereunder except to the extent that the Trust has been
prejudiced by such failure to give notice. In addition, any failure
by the Indemnified Party to notify the Trust of any such claim shall
not relieve the Trust from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action
is brought against the Indemnified Parties, the Trust will be entitled
to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action; provided, however, that
-------- -------
if the Indemnified Party shall have reasonably concluded that there
may be defenses available to it which are different from or additional
to those available to the Trust, the Trust shall not have the right to
assume said defense, but shall pay the costs and expenses thereof
(except that in no event shall the Trust be liable for the fees and
expenses of more than one counsel for Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances). After notice from the Trust to the
Indemnified Party of the Trust's election to assume the defense
thereof, and in the absence of such a reasonable conclusion that there
may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and
18<PAGE>
expenses of any additional counsel retained by it, and the Trust will
not be liable to that party under this Agreement for any legal or
other expenses subsequently incurred by that party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.3(d). The Insurance Company and Berger Associates agree
promptly to notify the Trust of the commencement of any litigation or
proceedings against it or any of its respective officers or directors
in connection with this Agreement, the issuance or sale of the
Contracts, the operation of the Account, or the sale or acquisition of
shares of the Trust.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and provisions hereof
interpreted under and in accordance with the laws of the State of
Delaware.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934, and 1940 Acts, and the rules and regulations and rulings
thereunder, including any exemptions from those statutes, rules and
regulations the Commission may grant (including, but not limited to,
the Mixed and Shared Funding Exemptive Order) and the terms hereof
shall be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall terminate:
(a) at the option of any party upon one year advance
written notice to the other parties; provided, however, such
notice shall not be given earlier than one year following
the date of this Agreement; or
(b) at the option of the Insurance Company to the extent
that shares of Funds are not reasonably available to meet
the requirements of the Contracts as determined by the
Insurance Company, provided, however, that such a termina-
tion shall apply only to the Fund(s) not reasonably
available. Prompt written notice of the election to
terminate for such cause shall be furnished by the Insurance
Company to the Trust and Berger; or
(c) at the option of the Trust or Berger Associates, in the
event that formal administrative proceedings are instituted
against the Insurance Company by the NASD, the Commission,
an insurance commissioner or any other regulatory body
regarding the Insurance Company's duties under this
Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Trust's
shares, provided, however, that the Trust determines in its
sole judgment exercised in good faith,
19<PAGE>
that any such administrative proceedings will have a
material adverse effect upon the ability of the Insurance
Company to perform its obligations under this Agreement; or
(d) at the option of the Insurance Company in the event
that formal administrative proceedings are instituted
against the Trust or Berger Associates by the NASD, the
Commission, or any state securities or insurance department
or any other regulatory body, provided, however, that the
Insurance Company determines in its sole judgement exercised
in good faith, that any such administrative proceedings will
have a material adverse effect upon the ability of the Trust
or Berger Associates to perform its obligations under this
Agreement; or
(e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in that Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Fund shares in accordance with
the terms of the Contracts for which those Fund shares had
been selected to serve as the underlying investment media.
The Insurance Company will give at least 30 days' prior
written notice to the Trust of the date of any proposed vote
to replace the Trust's shares; or
(f) at the option of the Insurance Company, in the event
any of the Trust's shares are not registered, issued or sold
in accordance with applicable state and/or federal law or
exemptions therefrom, or such law precludes the use of those
shares as the underlying investment media of the Contracts
issued or to be issued by the Insurance Company; or
(g) at the option of the Insurance Company, if the Trust
ceases to qualify as a regulated investment company under
Subchapter M of the Code or under any successor or similar
provision, or if the Insurance Company reasonably believes
that the Trust may fail to so qualify; or
(h) at the option of the Insurance Company, if the Trust
fails to meet the diversification requirements specified in
Article VI hereof; or
(i) at the option of either the Trust or Berger Associates,
if (1) the Trust or Berger Associates, respectively, shall
determine, in their sole judgment reasonably exercised in
good faith, that the Insurance Company has suffered a
material adverse change in its business or financial
condition or is the subject of material adverse publicity
and that material adverse change or material adverse
publicity will have a material adverse impact upon the
business and operations of either the Trust or
20<PAGE>
Berger Associates, (2) the Trust or Berger Associates shall
notify the Insurance Company in writing of that
determination and its intent to terminate this Agreement,
and (3) after considering the actions taken by the Insurance
Company and any other changes in circumstances since the
giving of such a notice, the determination of the Trust or
Berger Associates shall continue to apply on the sixtieth
(60th) day following the giving of that notice, which
sixtieth day shall be the effective date of termination; or
(j) at the option of the Insurance Company, if (1) the
Insurance Company shall determine, in its sole judgment
reasonably exercised in good faith, that either the Trust or
Berger Associates has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and that material adverse change
or material adverse publicity will have a material adverse
impact upon the business and operations of the Insurance
Company, (2) the Insurance Company shall notify the Trust
and Berger Associates in writing of the determination and
its intent to terminate the Agreement, and (3) after
considering the actions taken by the Trust and/or Berger
Associates and any other changes in circumstances since the
giving of such a notice, the determination shall continue to
apply on the sixtieth (60th) day following the giving of the
notice, which sixtieth day shall be the effective date of
termination; or
(k) at the option of either the Trust or Berger Associates,
if the Insurance Company gives the Trust and Berger
Associates the written notice specified in Section 1.6(b)
hereof and at the time that notice was given there was no
notice of termination outstanding under any other provision
of this Agreement; provided, however, any termination under
this Section 10.1(k) shall be effective forty-five (45) days
after the notice specified in Section 1.6(b) was given.
10.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 10.1(a) may be
exercised for any reason or for no reason.
10.3. No termination of this Agreement shall be effective unless
and until the party terminating this Agreement gives prior written
notice to all other parties to this Agreement of its intent to
terminate, which notice shall set forth the basis for the termination.
Furthermore,
(a) In the event that any termination is based upon the
provisions of Article VII, or the provision of Section
10.1(a), 10.1(i), 10.1(j), or 10.1(k) of this Agreement, the
prior written notice shall be given in advance of the
21<PAGE>
effective date of termination as required by those
provisions; and
(b) in the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this Agreement,
the prior written notice shall be given at least ninety (90)
days before the effective date of termination.
10.4. Notwithstanding any termination of this Agreement, subject
to Section 1.2 of this Agreement and for so long as the Trust
continues to exist, the Trust and Berger Associates shall at the
option of the Insurance Company, continue to make available additional
shares of the Trust pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of
termination of this Agreement ("Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Trust, redeem investments
in the Trust and/or invest in the Trust upon the making of additional
purchase payments under the Existing Contracts. The parties agree
that this Section 10.4 shall not apply to any terminations under
Article VII and the effect of Article VII terminations shall be
governed by Article VII of this Agreement.
10.5. The Insurance Company shall not redeem Trust shares
attributable to the Contracts (as opposed to Trust shares attributable
to the Insurance Company's assets held in the Account) except (i) as
necessary to implement Contract-owner-initiated transactions, or (ii)
as required by state and/or federal laws or regulations or judicial or
other legal precedent of general application (a "Legally Required
Redemption"). Upon request, the Insurance Company will promptly
furnish to the Trust and Berger Associates the opinion of counsel for
the Insurance Company (which counsel shall be reasonably satisfactory
to the Trust and Berger Associates) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, the Insurance Company shall not prevent new Contract
owners from allocating payments to a Fund that formerly was available
under the Contracts without first giving the Trust or Berger
Associates 90 days notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of that other party
set forth below or at such other address as the other party may from
time to time specify in writing.
If to the Trust:
210 University Boulevard, Suite 900
Denver, Colorado 80206
Attention: Kevin R. Fay, Vice President
22<PAGE>
If to the Insurance Company:
11815 N. Pennsylvania Street
Carmel, Indiana 46032
Attention: L. Gregory Gloeckner, Chief Marketing Officer
If to Berger Associates:
210 University Boulevard, Suite 900
Denver, Colorado 80206
Attention: Kevin R. Fay, Vice President
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement, shall
not disclose, disseminate or utilize such names and addresses and
other confidential information without the express written consent of
the affected party unless and until that information may come into the
public domain.
12.2. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of
the provisions hereof or otherwise affect their construction or
effect.
12.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one
and the same instrument.
12.4. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without
limitation the Commission, the NASD and state insurance regulators)
and shall permit those authorities reasonable access to its books and
records in connection with any lawful investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
12.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties
hereto are entitled to under state and federal laws.
12.7. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns;
provided, that no party may assign this Agreement without the prior
written consent of the others.
23<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly
authorized representative as of the date specified below.
Insurance Company:
GREAT AMERICAN RESERVE INSURANCE COMPANY
By its authorized officer,
By:__________________________________________
Title:_______________________________________
Date:________________________________________
Trust:
BERGER INSTITUTIONAL PRODUCTS TRUST
By its authorized officer,
By:__________________________________________
Title:_______________________________________
Date:________________________________________
Berger Associates:
BERGER ASSOCIATES, INC.
By its authorized officer,
By:__________________________________________
Title:_______________________________________
Date:________________________________________
24<PAGE>
SCHEDULE A
ACCOUNTS
Name of Account Date of Resolution of Insurance
Company's Board which Established
the Account
Great American Reserve
Variable Annuity Account E November 12, 1993
25<PAGE>
SCHEDULE B
CONTRACTS
1. Contract Form 22-4047/22-4048
26<PAGE>
SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsi-
bilities for the handling of proxies relating to the Trust by Berger
Associates, the Trust and the Insurance Company. The defined terms
herein shall have the meanings assigned in the Participation Agreement
except that the term "Insurance Company" shall also include the
department or third party assigned by the Insurance Company to perform
the steps delineated below.
1. The number of proxy proposals is given to the Insurance Company
by Berger Associates as early as possible before the date set by
the Trust for the shareholder meeting to facilitate the
establishment of tabulation procedures. At this time Berger
Associates will inform the Insurance Company of the Record,
Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Insurance Company will
perform a "tape run", or other activity, which will generate the
names, addresses and number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record
Date. Allowance should be made for account adjustments made
after this date that could affect the status of the Customers'
accounts of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Insurance Company
will use its best efforts to call in the number of
Customers to Berger Associates, as soon as possible, but
no later than one week after the Record Date.
3. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Insurance Company by the Trust. The
Insurance Company, at its expense, shall produce and personalize
the Voting Instruction cards. Berger Associates must approve the
Card before it is printed. Allow approximately 2-4 business days
for printing information on the Cards. Information commonly
found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed
by the Trust).
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the proposals.)
4. During this time, Berger Associates will develop, produce, and
the Trust will pay for the Notice of Proxy and the Proxy
Statement (one document). Printed and folded notices and
27<PAGE>
statements will be sent to Insurance Company for insertion into
envelopes (envelopes and return envelopes are provided and paid
for by the Insurance Company). Contents of envelope sent to
customers by Insurance Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Insurance Company)
addressed to the Insurance Company or its tabulation
agent
d. "Urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Trust.)
e. Cover letter - optional, supplied by Insurance Company
and reviewed and approved in advance by Berger
Associates.
5. The above contents should be received by the Insurance Company
approximately 3-5 business days before mail date. Individual in
charge at Insurance Company reviews and approves the contents of
the mailing package to ensure correctness and completeness. Copy
of this approval sent to Berger Associates.
6. Package mailed by the Insurance Company.
* The Trust must allow at least a 15-day solicitation time to
----
the Insurance Company as the shareowner. (A 5-week period
is recommended.) Solicitation time is calculated as
calendar days from (but not including) the meeting, counting
---
backwards.
7. Collection and tabulation of Cards begins. Tabulation usually
takes place in another department or another vendor depending on
process used. An often used procedure is to sort cards on
arrival by proposal into vote categories of all yes, no, or mixed
replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's
internal procedure.
8. If Cards are mutilated, or for any reason are illegible or are
not signed properly, they are sent back to the Customer with an
explanatory letter, a new Card and return envelope. The
mutilated or illegible Card is disregarded and considered to be
not received for purposes of vote tabulation. Such mutilated or
--- --------
illegible Cards are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards
are usually remedied individually.
9. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into
28<PAGE>
categories depending upon their vote; an estimate of how the vote
is progressing may then be calculated. If the initial estimates
and the actual vote do not coincide, then an internal audit of
that vote should occur. This may entail a recount.
10. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Trust
receives the tabulations stated in terms of a percentage and the
number of shares.) Berger Associates must review and approve
------
tabulation format.
11. Final tabulation in shares is verbally given by the Insurance
Company to Berger Associates on the morning of the meeting not
later than 10:00 a.m. Denver time. Berger Associates may request
an earlier deadline if required to calculate the vote in time for
the meeting.
12. A Certificate of Mailing and Authorization to Vote Shares will be
required from the Insurance Company as well as an original copy
of the final vote. Berger Associates will provide a standard
form for each Certification.
13. The Insurance Company will be required to box and archive the
Cards received from the Customers. In the event that any vote is
challenged or if otherwise necessary for legal, regulatory, or
accounting purposes, Berger Associates will be permitted
reasonable access to such Cards.
14. All approvals and "signing-off" may be done orally, but must
always be followed up in writing.
29
DAVIS, GRAHAM & STUBBS LLP
A Limited Liability Partnership
Attorneys at Law
Suite 4700
370 Seventeenth Street
Denver, Colorado 80202
Telephone 303-892-9400
Facsimile 303-893-1379
April 18, 1996
Berger Institutional Products Trust
210 University Blvd., Suite 900
Denver, Colorado 80206
Ladies and Gentlemen:
We have acted as counsel to Berger Institutional Products Trust,
a Delaware business trust (the "Trust"), and are providing this
opinion in connection with the registration by the Trust of shares of
beneficial interest, $.01 par value (the "Shares"), described in the
Registration Statement on Form N1-A of the Trust (1933 Act File No.
033-63493; 1940 Act File No. 811-07367), as initially filed with the
Securities and Exchange Commission on October 18, 1995, and as amended
on or prior to the date hereof (the "Registration Statement").
In such connection, we have examined the Trust's Trust Instrument
and Bylaws, the proceedings of its Trustees relating to the
authorization, issuance and proposed sale of the Shares, and
considered such other records and documents and such factual and legal
matters as we deemed appropriate for purposes of this opinion.
Based on the foregoing, it is our opinion that the Shares have
been duly authorized and, when sold as contemplated in the
Registration Statement, will be validly issued, fully paid and non-
assessable Shares of the Trust.
We hereby consent to all references to this firm in the
Registration Statement and to the filing of this opinion as an exhibit
to the Registration Statement. This consent does not constitute a
consent under Section 7 of the Securities Act of 1933, and in
consenting to the references to our firm in the Registration
Statement, we have not certified any part of the Registration
Statement and do not otherwise come within the categories of persons
whose consent is required under Section 7 or the rules and regulations
of the Securities and Exchange Commission thereunder.
Very truly yours,
DAVIS, GRAHAM & STUBBS LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional
Information constituting part of this Pre-Effective Amendment No. 1 to
the registration statement on Form N-1A (the "Registration Statement")
of our report dated April 16, 1996, relating to the statements of
assets and liabilities of Berger Institutional Products Trust 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 "Additional Information" in such
Statement of Additional Information.
Price Waterhouse LLP
PRICE WATERHOUSE LLP
Denver, Colorado
April 16, 1996
SUBSCRIPTION AGREEMENT FOR SHARES
OF THE BERGER IPT FUNDS
(SERIES OF BERGER INSTITUTIONAL PRODUCTS TRUST)
The undersigned hereby subscribes for the purchase of shares of
beneficial interest of the Berger IPT - 100 Fund, Berger IPT - Growth
and Income Fund and the Berger IPT - Small Company Growth Fund, each a
series of Berger Institutional Products Trust, par value $.01 per
share, at the subscription price of $10.00 per share (the "Shares"),
as follows:
Berger IPT - 100 Fund 25,000 shares
Berger IPT - Growth and Income Fund 25,000 shares
Berger IPT - Small Company Growth Fund 25,000 shares
Submitted herewith is consideration for the Shares to Berger
Institutional Products Trust, or its transfer agent, in the aggregate
amount of $750,000.
The undersigned hereby represents to the Trust that the Shares
are being acquired by the undersigned solely for investment, for the
sole account of the undersigned, and not with a view to distribution
within the meaning of the Securities Act of 1933 (the "Act") and the
rules and regulations thereunder. The undersigned further hereby
represents to the Trust, as an inducement for the Shares to be issued
to the undersigned, that the present and anticipated financial
position of the undersigned permits it to purchase the Shares and to
hold them for investment purposes and that the undersigned has no
present intention to redeem or resell such Shares. The undersigned is
thoroughly familiar with the proposed business of the Trust and has
made all investigations which it deems necessary or desirable in
connection with this purchase. The undersigned is headquartered in
the State of Colorado. The undersigned has been advised that the
availability of the exemption from registration under the Securities
Act of 1933 relied upon by the Trust in issuing these Shares is
dependent in part upon the truth of the foregoing representations.
Prior to making a commitment to purchase the Shares, the Trust
has informed the undersigned: (i) that the Shares are not registered
under the Act and may not be resold unless they are subsequently so
registered or unless an exemption from such registration is available;
(ii) that Rule 144 under the Act is presently not applicable to a
resale of the Shares; (iii) that any certificate representing the
Shares may bear a legend in customary form drawing attention to the
restrictions on its transferability.
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement effective as of the 15th day of April, 1996.
BERGER ASSOCIATES, INC.
By: Kevin R. Fay
Title: Vice President, Secretary and
Treasurer
EXHIBIT 16
The total return of a Fund is calculated for any specified period of
time by assuming the purchase of shares of the Fund at the net asset
value at the beginning of the period. Each dividend of other
distribution paid by the Fund is assumed to have been reinvested at
the net asset value on the reinvestment date. The total number of
shares then owned as a result of this process is valued at the net
asset value at the end of the period. The percentage increase is
determined by subtracting the initial value of the investment from the
ending value and dividing the remainder by the initial value.
Formula for calculating Total Return:
P (1 + T) = ERV
P = $1,000 initial payment
T = average annual total return
ERV = ending redeemable value
The Average Annual Total Return for a Fund will be expressed in terms
of average annual compounded rates of return for periods in excess of
one year. The Average Annual Total Return formula as prescribed by
Item 22 of Form N-1A is as follows:
P (1 + T)[to the Nth power] = ERV
P = $1,000 initial payment
T = average annual total return
N = number of years
ERV = ending redeemable value
This is the formula by which the performance figures for the Berger
retail funds, which appear in the Funds' prospectus, were also
calculated. For example, the 5-year average annual total return for
the Berger 100 Fund for the period ended September 30, 1995, was
25.81%, calculated as follows:
$1,000 (1 + T)[to the 5th power] = $3,152
(1 + T)[to the 5th power] = 3.152
1 + T = the fifth root of 3.152 = 1.2581
T = .2581 = 25.81%