Filed with the Securities and Exchange Commission on May 23, 1996.
File No. 33-
File No. 811-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _____ ___
Post-Effective Amendment No. _____ ___
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. _____ ___
WT Liquid Assets Trust
----------------------
(Exact Name of Registrant as Specified in Charter)
Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (302) 651-8280
Martin L. Klopping
Rodney Square Management Corporation
Rodney Square North, 1100 North Market Street
Wilmington, DE 19890-0001
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this Registration Statement.
Pursuant to the provisions of Rule 24f-2 under the Investment Company
Act of 1940, an indefinite number of shares of beneficial interest is being
registered by this Registration Statement.
Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until 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 such date as the Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
CROSS-REFERENCE SHEET
WT LIQUID ASSETS TRUST
INSTITUTIONAL CLASS
Items Required By Form N-1A
PART A - PROSPECTUS
Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------
1. Cover Page Cover Page
2. Synopsis Expense Table
Questions and Answers about the Fund
3. Condensed Financial Performance Information
Information
4. General Description of Questions and Answers about the Fund
Registrant Investment Objective and Policies
Description of the Trust
Appendix
5. Management of the Fund Questions and Answers about the Fund
Management of the Fund
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Questions and Answers about the Fund
Other Securities Dividends and Taxes
Description of the Trust
7. Purchase of Securities Questions and Answers about the Fund
Being Offered How Net Asset Value is Determined
Purchase of Shares
Management of the Fund
8. Redemption or Questions and Answers about the Fund
Repurchase Shareholder Accounts
Redemption of Shares
9. Pending Legal Not Applicable
Proceedings
<PAGE>
CROSS-REFERENCE SHEET
WT LIQUID ASSETS TRUST
RETAIL CLASS
Items Required By Form N-1A
PART A - PROSPECTUS
Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------
1. Cover Page Cover Page
2. Synopsis Expense Table
Questions and Answers about the Fund
3. Condensed Financial Performance Information
Information
4. General Description of Questions and Answers about the Fund
Registrant Investment Objective and Policies
Description of the Trust
Appendix
5. Management of the Fund Questions and Answers about the Fund
Management of the Fund
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Questions and Answers about the Fund
Other Securities Dividends and Taxes
Description of the Trust
7. Purchase of Securities Questions and Answers about the Fund
Being Offered How Net Asset Value is Determined
Purchase of Shares
Management of the Fund
8. Redemption or Questions and Answers about the Fund
Repurchase Shareholder Accounts
Redemption of Shares
9. Pending Legal Not Applicable
Proceedings
<PAGE>
WT LIQUID ASSETS TRUST
Items Required By Form N-1A (continued)
PART B - STATEMENT OF ADDITIONAL INFORMATION
Caption in Statement of
Item No. Item Caption Additional Information
- -------- ------------ -----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Description of the Trust
History
13. Investment Objectives and Investment Policies
Policies Investment Limitations
14. Management of the Registrant Trustees and Officers
15. Control Persons and Trustees and Officers
Principal Holders
16. Investment Advisory and Rodney Square Management Corporation
Other Services Investment Advisory Services
Administration, Transfer Agency and
Accounting Agreements
Distribution Arrangements
Shareholder Servicing Arrangements
Other Information
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Redemptions
Securities Description of the Trust
19. Purchase, Redemption and Redemptions
Pricing of Securities Net Asset Value and Dividends
Being Offered
20. Tax Status Taxes
21. Underwriters Distribution Arrangements
Other Information
22. Calculation of Performance Performance Information
23. Financial Statements Financial Statements
<PAGE>
WT LIQUID ASSETS TRUST
WT MONEY MARKET FUND
INSTITUTIONAL CLASS
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The WT Money Market Fund (the "Fund") is a diversified series of the WT
Liquid Assets Trust (the "Trust"), an open-end, management investment company.
The Fund seeks a high level of current income consistent with the preservation
of capital and liquidity by investing in money market instruments pursuant to
its investment practices. The Fund currently offers two classes of shares.
The shares offered by this Prospectus are the Institutional Class shares (the
"Institutional Class"). The Institutional Class shares are designed as an
investment vehicle for high net worth institutional investors, corporations
and individual investors.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00.
PROSPECTUS
JULY ____, 1996
This Prospectus sets forth concise information about the Fund and the
Institutional Class that you should know before investing. Please read and
retain this document for future reference. A Statement of Additional
Information (dated July ___, 1996) containing additional information about the
Fund and both of its classes of shares has been filed with the Securities and
Exchange Commission and, as amended or supplemented from time to time, is
incorporated by reference herein. A copy of the Statement of Additional
Information may be obtained, without charge, from certain institutions, such
as banks or securities dealers, that have entered into servicing agreements
("Service Organizations") with Rodney Square Distributors, Inc. ("RSD") or by
calling the number below, or by writing to RSD at the address noted on the
back cover of this Prospectus. RSD is a wholly owned subsidiary of Wilmington
Trust Company, a bank chartered in the State of Delaware.
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FOR FURTHER INFORMATION OR ASSISTANCE IN OPENING AN ACCOUNT, PLEASE CALL:
* NATIONWIDE......................................(800) XXX-XXXX
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SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
WILMINGTON TRUST COMPANY, NOR ARE THE SHARES INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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.
<PAGE>
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EXPENSE TABLE
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Institutional Class
Shares
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SHAREHOLDER TRANSACTION COSTS:* None
ANNUAL FUND OPERATING EXPENSES:**
(as a percentage of average net assets)
Advisory Fee................................... 0.15%
Other Expenses
Administration Fee........................ 0.05%
Other Operating Expenses (estimated after
reimbursements)......................... 0.15%
Total Other Expenses............ 0.20%
----
Total Fund Operating Expenses.................. 0.35%
====
Example***
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period:
One year $ 4
Three years 11
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* Service Organizations may charge their clients a fee for providing
administrative or other services in connection with investments in
Institutional Class shares.
** See "Management of the Fund" for additional information. As the Fund has
no operating history, "Other Operating Expenses" are based on estimated
amounts after reimbursements for the Fund's first fiscal period of
operations. Without reimbursements "Other Operating Expenses" and "Total
Fund Operating Expenses" are estimated to be ___% and ___%, respectively,
of the Fund's average daily net assets. The Fund's actual expenses will
depend upon, among other things, the level of average net assets and the
extent to which the Fund incurs variable expenses and whether Rodney
Square Management Corporation, the Fund's manager, waives a portion of
its manageemnt fee or reimburses a portion of the Fund's expenses.
*** The assumption in the Example of a 5% annual return is required by the
Securities and Exchange Commission and is applicable to all mutual funds;
the assumed 5% annual return is not a prediction of, and does not
represent, the Institutional Class' projected or actual performance.
The purpose of the preceding table is solely to aid shareholders and
prospective investors in understanding the various expenses that investors in
the Institutional Class will bear directly or indirectly.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
OR PERFORMANCE. ACTUAL EXPENSES INCURRED AND RETURNS MAY BE GREATER OR LESSER
THAN THOSE SHOWN.
<PAGE>
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QUESTIONS AND ANSWERS ABOUT THE FUND
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The information provided in this section is qualified in its entirety by
reference to more detailed information elsewhere in this Prospectus.
WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
The Fund seeks a high level of current income consistent with the
preservation of capital and liquidity by investing in money market
instruments pursuant to its investment practices. There can be no
assurance that the Fund will achieve its objective. (See "Investment
Objective and Policies.")
All assets of the Fund are invested in fixed-income obligations
maturing in 397 days or less, and the dollar-weighted average maturity of
the Fund's portfolio will not exceed 90 days. The Fund also has a
fundamental policy requiring it to use its best efforts to maintain a
constant net asset value of $1.00 per share, although under certain
circumstances this may not be possible. (See "How Net Asset Value Is
Determined.")
HOW CAN YOU BENEFIT BY INVESTING IN THE FUND RATHER THAN BY INVESTING DIRECTLY
IN MONEY MARKET INSTRUMENTS?
Investing in the Fund offers several key benefits.
FIRST: By pooling the monies of its many investors, the Fund
enables each investor to benefit from the greater liquidity and higher
yields offered by large denomination ($1,000,000 or more) money market
instruments.
SECOND: The Fund offers a way to keep money invested in a
professionally managed portfolio of high quality money market instruments
while at the same time maintaining full liquidity on a day-to-day basis.
There is no minimum period for investment, and no fees will be charged
upon redemption.
THIRD: Investors in the Fund need not become involved with the
detailed bookkeeping and operating procedures normally associated with
direct investment in money market instruments.
HOW ARE THE FUND'S PORTFOLIO SECURITIES VALUED?
In valuing the portfolio securities, the Fund uses the amortized
cost method of valuation. (See "Investment Objective and Policies" and
"How Net Asset Value Is Determined.")
WHO IS THE ADVISER?
Rodney Square Management Corporation ("RSMC"), a wholly owned
subsidiary of Wilmington Trust Company ("WTC"), serves as the Fund's
Adviser. (See "Management of the Fund.")
WHO IS THE ADMINISTRATOR, TRANSFER AGENT AND ACCOUNTING AGENT?
RSMC serves as the Administrator of the Fund and also provides
transfer agency and accounting services for the Fund. (See "Management of
the Fund.")
<PAGE>
WHO IS THE DISTRIBUTOR?
Rodney Square Distributors, Inc. ("RSD"), another wholly owned
subsidiary of WTC, serves as the Distributor. (See "Management of the
Fund.")
HOW DO YOU PURCHASE INSTITUTIONAL CLASS SHARES?
Shares may be purchased only as described below. There is no sales
load and shares of the Institutional Class are not subject distribution
fees under a 12b-1 Distribution Plan. The minimum initial investment in
the Institutional Class is $1,000,000, but additional investments may be
made in any amount.
Shares of the Institutional Class are offered on a continuous basis
by RSD. Shares may be purchased directly from RSD by clients of certain
institutions that have entered into servicing agreements ("Service
Organizations") with RSD through their accounts with those Service
Organizations. Shares may only be purchased by wire. (See "Purchase of
Shares.")
Receipt of federal funds or monies immediately convertible to
federal funds is necessary before investments may be credited to your
account in the Institutional Class. The Fund and RSD reserve the right to
reject new account applications and to close, by redemption, an account
without a certified Social Security or other taxpayer identification
number.
Please call your Service Organization or the number listed below for
further information about the Institutional Class or for assistance in
opening an account.
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* NATIONWIDE...............................(800) XXX-XXXX
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HOW DO YOU REDEEM YOUR INSTITUTIONAL CLASS SHARES?
If you purchased your Institutional Class shares through an account
a Service Organization, you may redeem all or any part of your
Institutional Class shares in accordance with the instructions pertaining
to that account. Other shareholders may redeem their Institutional Class
shares vai wire by telephone. (See "Redemption of Shares.") There is no
fee charged upon redemption.
HOW ARE DIVIDENDS PAID?
Substantially all of the net investment income allocable to the Fund
is declared as a dividend each day that the net asset value is
determined, and dividends are paid no later than seven days after the end
of the month in which they are declared. Shareholders may elect to
receive dividends in cash by checking the appropriate boxes on the
Application & New Account Registration form at the end of this Prospectus
("Application"). (See "Dividends and Taxes.")
<PAGE>
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INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Fund is to seek a high level of current
income consistent with the preservation of capital and liquidity by investing
in money market instruments pursuant to its investment practices.
The Fund's permitted investments are as follows:
(i) U.S. dollar-denominated obligations of major banks, including
certificates of deposit, time deposits or bankers' acceptances of U.S. banks
and their branches located outside of the United States, of U.S. branches of
foreign banks, of foreign branches of foreign banks, of U.S. agencies of
foreign banks and of wholly owned banking subsidiaries of foreign banks
located in the United States, provided that the bank has capital, surplus and
undivided profits (as of the date of its most recently published annual
financial statements) in excess of $100,000,000 at the date of investment;
(ii) commercial paper and corporate obligations rated at least A-1 or AA by
Standard & Poor's Ratings Services ("S&P ") or P-1 or Aa by Moody's Investors
Service, Inc. ("Moody's") at the time of investment, or if unrated, determined
to be of comparable quality by RSMC under the direction of, and subject to the
review of, The Trust's Board of Trustees; (iii) U.S. Government obligations;
(iv) high quality municipal securities; and (v) repurchase agreements
involving U.S. Government obligations. (See the Appendix to this Prospectus.)
Obligations of agencies and instrumentalities of the U.S. Government are not
direct obligations of the U.S. Treasury and include obligations backed by the
"full faith and credit" of the United States and obligations supported
primarily or solely by the creditworthiness of the issuer. Notwithstanding
the requirements set forth in (i) above, RSMC requires that a bank have assets
in excess of $5 billion at the time of investment.
The Fund may enter into repurchase agreements involving U.S. Government
obligations, even though the underlying security matures in more than 397
days. While it does not presently appear possible to eliminate all risks from
these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delay and costs to the Fund in
the event of a default of the seller), it is the policy of the Fund to limit
repurchase transactions to those banks and primary dealers in U.S. Government
obligations whose creditworthiness has been reviewed and found satisfactory by
RSMC.
The Fund's investments in the obligations of foreign banks and other
foreign issuers and their branches, agencies or subsidiaries may be
obligations of the parent, of the issuing branch, agency or subsidiary, or
both. Obligations of such issuers are subject to the same risks that pertain
to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, obligations of foreign entities may be subject to certain
additional risks, including adverse political and economic developments in a
foreign country, the extent and quality of government regulation of financial
markets and institutions, interest limitations, currency controls, foreign
withholding taxes, and expropriation or nationalization of foreign issuers and
their assets. There may be less publicly available information about foreign
issuers than about domestic issuers, and foreign issuers may not be subject to
the same accounting, auditing and financial recordkeeping standards and
requirements as are domestic issuers. RSMC carefully considers these factors
when making investments, and foreign issuers will be required to meet the same
tests of financial strength as the domestic issuers approved for the Fund.
<PAGE>
The Fund may invest in municipal bonds, including "general obligation"
and "revenue" bonds, with less than 397 days remaining until maturity,
floating and variable rate obligations, participation interests and short-term
municipal notes. Frequently, the municipal obligations acquired by the Fund
are secured by letters of credit or other credit support arrangements provided
by domestic or foreign banks or insurance companies. Although the interest
on municipal securities may be exempt from federal income tax, dividends
paid by the Fund to its shareholders attributable to such interest will
not be tax-exempt.
The Fund may borrow money from a bank for temporary or emergency purposes
(not for leveraging or investment) but not in excess of one-third of the
current value of its net assets. The Fund will not purchase securities for
investment while any bank borrowing equaling 5% of the Fund's total assets is
outstanding. The Fund may also invest up to 10% of its net assets in
repurchase agreements not entitling the holder to payment of principal within
seven days and other securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily available
market. There is no limit on the Fund's investment in restricted securities
that are liquid. The Fund may also purchase stand-by commitments and money
market instruments on a "when-issued" basis.
The investment objective, policies and limitations set forth above are
supplemented by the information contained in the Fund's Statement of
Additional Information. Except as noted, the Fund's policies and limitations
are non fundamental and may be changed by WT Liquid Assets Trust's Board of
Trustees without shareholder approval.
The Fund has a fundamental policy requiring it to use its best efforts to
maintain a constant net asset value of $1.00 per share, although under certain
circumstances this may not be possible. There can be no assurance that the
Fund will achieve its investment objective.
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PURCHASE OF SHARES
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HOW TO PURCHASE SHARES. Institutional Class shares are offered on a
continuous basis by RSD. Shares may be purchased directly from RSD or by
clients of Service Organizations through their Service Organization accounts.
The minimum initial investment is $1,000,000, but subsequent investments may
be made in any amount. Service Organizations may impose additional minimum
customer account and other requirements in addition to this minimum initial
investment requirement. The Fund and RSD each reserves the right to reject
any purchase order and may suspend the offering of Institutional Class shares
for a period of time.
BY WIRE: You must purchase shares by wiring federal funds. To advise the
Fund of the wire, and if making an initial purchase, to obtain an account
number, you must telephone RSMC at (800) XXX-XXXX. Once you have an account
number, instruct your bank to wire federal funds to RSMC, c/o Wilmington Trust
Company, Wilmington, DE-ABA #0311-0009-2, attention: WT Liquid Assets Trust,
WT Money Market Fund, Institutional Class, DDA# XXXX-XXX-X, further credit-
your account number and your name. After your initial purchase, you must
promptly forward a completed Application to WT Liquid Assets Trust, WT Money
Market Fund, Institutional Class, c/o Rodney Square Management Corporation,
1100 N. Market Street, Wilmington, DE 19801. If you are making a subsequent
purchase, the wire should also indicate your Fund account number.
<PAGE>
ADDITIONAL PURCHASE INFORMATION. Institutional Class shares of the Fund
are offered at their net asset value next determined after a purchase order is
received by RSMC and accepted by RSD. Purchase orders received by RSMC and
accepted by RSD before 12 noon, Eastern time, on any Business Day of a Fund
will be priced at the net asset value per share that is determined at 12 noon.
(See "How Net Asset Value Is Determined.") Purchase orders received by RSMC
and accepted by RSD after 12 noon, Eastern time, will be priced as of 12 noon
on the following Business Day of a Fund. A "Business Day of a Fund " is any
day on which the New York Stock Exchange (the "Exchange"), RSMC and the
Philadelphia branch office of the Federal Reserve are open for business. The
following are not Business Days of a Fund: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
Investments in the Institutional Class shares are accepted on the
Business Day of the Fund that (i) federal funds are deposited for your account
on or before 12 noon, Eastern time, or (ii) monies immediately convertible to
federal funds are deposited for your account on or before 12 noon, Eastern
time. All investments are credited to your account in the form of the
Institutional Class shares immediately upon acceptance and become entitled to
dividends declared as of the day of investment.
It is the responsibility of the Service Organization involved to transmit
orders for the purchase of shares by its customers to RSMC and to deliver
required funds on a timely basis, in accordance with the procedures stated
above.
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SHAREHOLDER ACCOUNTS
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RSMC, as Transfer Agent, maintains for each shareholder an account
expressed in terms of full and fractional shares of the Institutional Class
rounded to the nearest 1/1000th of a share. Investors purchasing through a
Service Organization may or may not be the shareholder of record.
In the interest of economy and convenience, the Institutional Class does
not issue share certificates. Each shareholder is sent a statement at least
quarterly showing all purchases in or redemptions from the shareholder's
account. The statement also sets forth the balance of shares held in the
account by Class.
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REDEMPTION OF SHARES
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Shareholders must redeem their shares by wire, as described below. If you
purchased your shares through an account at a Service Organization, you may
redeem all or part of your shares in accordance with the instructions
pertaining to that account. Corporations, other organizations, trusts,
fiduciaries and other institutional investors may be required to furnish
certain additional documentation to authorize redemptions. Redemption requests
should be accompanied by the Fund name, the class and your account number.
<PAGE>
BY WIRE BY TELEPHONE: Shareholders must redeem their shares by wire.
Shareholders must telephone RSMC to redeem shares in this manner. The
Application (included at the end of this Prospectus) describes the redemption
procedures in more detail and requires certain information that will be used
to identify the shareholder when a redemption request is made. In order to
redeem shares, you must indicate your name, the Fund's name, the Class name,
the account number, the number of shares you wish to redeem and certain other
information necessary to identify you as the shareholder. The Fund will employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine and will not be liable for any losses due to unauthorized or
fraudulent telephone transactions. During times of drastic economic or market
changes, the telephone redemption privilege may be difficult to implement. In
the event that you are unable to reach RSMC by telephone, you may make a
redemption request by mail.
ADDITIONAL REDEMPTION INFORMATION. You may redeem all or any part of the
value of your account on any Business Day of a Fund. Redemptions are effected
at the net asset value next calculated after RSMC has received your redemption
request. (See "How Net Asset Value Is Determined.") The Fund imposes no fee
when shares are redeemed although a Service Organization may impose such a
fee. It is the responsibility of the Service Organization to transmit
redemption orders and credit their customers' accounts with redemption
proceeds on a timely basis.
Amounts redeemed by wire are normally wired on the date of receipt and
acceptance of redemption instructions (if received by RSMC before 12 noon,
Eastern time) or the next Business Day of a Fund (if received after 12 noon,
Eastern time, or on a non Business Day of a Fund), but in no event later than
7 days following such receipt and acceptance. Redemption proceeds may be
wired to your predesignated bank account in any commercial bank in the United
States if the amount is $1,000 or more. The receiving bank may charge a fee
for this service. You may change the account which you have designated to
receive amounts redeemed at any time. Any request to change the account
designated to receive redemption proceeds should be accompanied by a guarantee
of the shareholder's signature by an eligible institution. A signature and a
signature guarantee are required for each person in whose name the account is
registered. Further documentation will be required to change the designated
account when shares are held by a corporation, other organization, trust,
fiduciary or other institutional investor.
For more information on redemption services, contact RSMC or, if your
shares are held in an account with a Service Organization, contact the Service
Organization.
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HOW NET ASSET VALUE IS DETERMINED
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RSMC determines the net asset value per share of the Fund as of 12 noon,
Eastern time, on each Business Day of the Fund. That net asset value is
calculated by adding the value of all securities and other assets in the
Fund's portfolio, deducting its actual and accrued liabilities and dividing by
the number of the Fund's shares outstanding. Net asset value is determined
separately for each class of the Fund's shares. It is a fundamental policy of
the Fund to use its best efforts to maintain a per share net asset value of
$1.00 for each class. The Fund values its portfolio securities utilizing the
amortized cost method of valuation, that is, the market value of an instrument
<PAGE>
is approximated by amortizing the difference between the acquisition cost and
value at maturity of the instrument on a straight-line basis over its
remaining life. All cash, receivables and current payables are carried at
their face value. Other assets, if any, are valued at fair value as determined
in good faith by or under the direction of WT Liquid Assets Trust's Board of
Trustees.
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DIVIDENDS AND TAXES
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DIVIDENDS. Substantially all of the Fund's net investment income
(consisting of accrued interest and earned discount, less amortization of
premium and accrued expenses) is declared as a dividend daily and paid
monthly. The Fund expects to distribute net realized gains, if any, once each
year, although it may distribute them more frequently if necessary in order to
maintain a net asset value of $1.00 per share.
Dividends and other distributions on both classes of Fund shares are
calculated at the same time and in the same manner. Dividends on
Institutional class shares are expected to be higher than those on the other
class of Fund shares because of the higher expenses resulting from the
distribution and shareholder servicing fees borne by the Retail Class shares.
The net investment income of the Institutional Class is determined by
RSMC on each day that the net asset value is calculated. Each dividend is
payable to shareholders of record at the time of its declaration (including,
for this purpose, holders of shares purchased, but excluding holders of shares
redeemed, on that day). Dividends declared on the Institutional Class shares
are accrued throughout the month and are paid to the holders thereof no later
than seven days after the end of the month in which the dividends are
declared. The dividend payment program is administered by RSMC, as the Fund's
Dividend Disbursing Agent.
Dividends paid on the Institutional Class shares are automatically
reinvested in additional Institutional Class shares unless a shareholder has
elected to receive dividends in cash by selecting the cash distribution option
on the Application.
TAXES. The Fund intends to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so
that it will be relieved of federal income tax on that part of its investment
company taxable income (generally, net investment income plus any realized net
short-term capital gain) that is distributed to its shareholders. Dividends
paid on the Institutional Class shares generally are taxable to the holders
thereof as ordinary income, notwithstanding that such dividends are paid in
additional shares of the Institutional Class. The Fund notifies its
shareholders following the end of each calendar year of the amount of
dividends paid that year.
The Fund is required to withhold 31% of all taxable dividends paid to any
individuals and certain other noncorporate shareholders who do not provide the
Fund with a correct taxpayer identification number or who otherwise are
subject to backup withholding. In connection with this withholding
requirement, each investor must certify on the Application at the end of this
Prospectus that the Social Security or other taxpayer identification number
provided thereon is correct and that the investor is not otherwise subject to
backup withholding.
<PAGE>
The foregoing is only a summary of some of the important federal income
tax considerations generally affecting the Fund and its shareholders; a
further discussion appears in the Statement of Additional Information. In
addition to these considerations, which are applicable to any investment in
the Institutional Class, there may be other federal, state or local tax
considerations applicable to a particular investor. Prospective investors are
therefore urged to consult their tax advisers with respect to the effects of
an investment on their own tax situations.
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PERFORMANCE INFORMATION
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From time to time, quotations of the "yield," "effective yield," "average
annual total return," "cumulative total return" and "total return" of the
Institutional Class may be included in advertisements, sales literature or
shareholder reports. These figures are based on historical performance, show
the performance of a hypothetical investment and are not intended to indicate
future performance. The yield refers to the net investment income generated by
the Fund over a specified seven-day period. This income is then annualized.
That is, the amount of income generated by the Fund during that week is
assumed to be generated during each week over a 52-week period and is shown as
a percentage of the investment. The effective yield is expressed similarly,
but, when annualized, the income earned by an investment in the Fund is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. The
average annual total return is the average annual compound rate. One-year,
five-year and ten-year periods will be shown, unless the Institutional Class
has been in existence for a shorter period. Cumulative total return is the
cumulative rate of return on a hypothetical initial investment for a specified
period. Both the average annual total return and the cumulative total return
quotations assume that all dividends during the period were reinvested. Total
return is the rate of return on an investment for a specified period of time
calculated in the manner of cumulative total return. Performance figures for
the Institutional Class will vary based upon, among other things, changes in
market conditions, the level of interest rates and the level of the
Institutional Class' expenses. The Institutional Class performance will also
vary from that of the Fund's other classes. Past performance is no guarantee
of future performance.
- ------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
- ------------------------------------------------------------------------------
The Trust's Board of Trustees supervises the management, activities and
affairs of the Fund and has approved contracts with various financial
organizations to provide, among other services, day-to-day management required
by the Fund and its shareholders.
FUND ADVISER, ADMINISTRATOR, TRANSFER AGENT AND DIVIDEND PAYING AGENT.
RSMC, the Fund's Adviser, Administrator, Transfer Agent and Dividend Paying
Agent, is a wholly owned subsidiary of WTC, which in turn is wholly owned by
Wilmington Trust Corporation. RSMC currently acts as adviser, administrator,
transfer agent and dividend paying agent for the Rodney Square Fund, the
Rodney Square Tax-Exempt Fund and the Rodney Square Multi-Manager Fund and as
Administrator, Transfer Agent and Dividend Paying Agent to the Rodney Square
Strategic Fixed-Income Fund portfolios. RSMC also provides asset management
<PAGE>
services to collective investment funds maintained by WTC. In the past, RSMC
has provided asset management services to individuals, personal trusts,
municipalities, corporations and other organizations. At March 31, 1996, the
aggregate assets of the investment companies managed by RSMC totaled
approximately $1.6 billion. RSMC also serves as Sub-Investment Adviser to
three portfolios of the Emerald Funds, which portfolio assets totaled
approximately $450 million at March 31, 1996.
As Adviser, RSMC, subject to the supervision of the Board of Trustees,
directs the investments of the Fund in accordance with the Fund's investment
objective, policies and limitations. For the services provided as adviser,
RSMC receives a monthly fee from the Fund at an annual rate of 0.15% of the
Fund's average daily net assets.
As Administrator, RSMC supplies office facilities, non-investment related
statistical and research data, stationary and office supplies, executive and
administrative services, internal auditing and regulatory compliance services.
RSMC assists in the preparation of reports to shareholders, prepares proxy
statements, updates prospectuses and makes filings with the SEC and state
securities authorities. RSMC also performs certain budgeting, financial
reporting and compliance monitoring activities. For the services provided as
administrator, RSMC receives a monthly administration fee from the Fund at an
annual rate of 0.05% of the Fund's average daily net assets, subject to
$50,000 annual minimum.
CUSTODIAN. WTC serves as custodian of the Fund. For its custody
services, the Fund pays WTC an annual fee based upon the average net assets of
the Fund as follows: 0.02% on the first $100 million and 0.015% for over $100
million, plus, $15 per purchase, sale or maturity of a portfolio security.
The custodian fee is subject to a minimum charge of $500 per month, exclusive
of any transaction charges.
ACCOUNTING SERVICES AGENT. RSMC determines the net asset value per share
of each class of the Fund and provides accounting services to the Fund
pursuant to an Accounting Services Agreement. For providing these services
RSMC receives an annual fee of $45,000 plus an amount equal to 0.02% of the
average daily net assets of the Fund in excess of $100 million, plus out-of-
pocket expenses such as pricing of portfolio securities.
DISTRIBUTOR. Pursuant to a Distribution Agreement, RSD serves as the
Fund's Distributor efforts and provides assistance and expertise in developing
marketing plans and materials, enters into dealer agreements with securities
dealers to sell shares of the Fund and, directly or through its affiliates,
provides shareholder support services.
BANKING LAWS. Applicable banking laws prohibit deposit-taking
institutions and certain of their affiliates from underwriting or distributing
securities. WTC believes, and counsel to WTC has advised the Fund, that WTC
and its affiliates may perform the services contemplated by their respective
agreements with the Trust without violation of applicable banking laws or
regulations. If WTC or its affiliates were prohibited from performing these
services, it is expected that the Board of Trustees would consider entering
into agreements with other entities. If a bank were prohibited from acting as
a Service Organization, its shareholder clients would be expected to be
permitted to remain Fund shareholders and alternative means for servicing such
shareholders would be sought. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.
<PAGE>
FUND EXPENSES. In addition to the fees set forth above, the Fund incurs
various other expenses in its operations such as professional fees, expenses
of board and shareholder meetings, fees and expenses related to the
registration of its shares, taxes and governmental fees, fees and expenses of
the independent trustees, costs of obtaining fidelity bond and other insurance
coverage, expenses of printing and distributing shareholder materials,
organizational expenses and extraordinary expenses, including costs or losses
in any litigation.
- ------------------------------------------------------------------------------
DESCRIPTION OF THE TRUST
- ------------------------------------------------------------------------------
GENERAL. The Trust is registered with the SEC as an open-end, management
investment company and was organized as a Delaware business trust under
Delaware law by Certificate of Trust on May 17, 1996. The Board of Trustees
is authorized to issue an unlimited number of shares of beneficial interest in
separate series, par value $0.001 per share, and to create classes of shares
within each series. Currently the Fund is the only series of the Trust.
Shares entitle holders to one vote per share and fractional votes for
fractional shares held. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable. Separate votes are
taken by each class of the Fund if a matter affects only that class.
The Trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by the shareholders, at which time the Trustees then
in office will call a shareholders' meeting for the election of Trustees.
Under the 1940 Act, shareholders of record owning no less than two-thirds of
the outstanding shares of a fund may remove a Trustee by vote cast in person
or by proxy at a meeting called for that purpose. The Trustees are required
to call a meeting of shareholders for the purpose of voting upon the question
of removal of any Trustee when requested in writing to do so by the
shareholders of record owning not less than 10% of the Fund's outstanding
shares.
As of the date of this Prospectus, RSMC owns all of the outstanding
shares of beneficial interest in the Fund and, until such time as the Fund
issues shares to the public will be deemed to control the Trust and the Fund
under the 1940 Act.
OTHER CLASSES OF SHARES. In addition to the Institutional Class, the
Fund currently offers one other class of shares, the Retail Class. Shares of
the Retail Class are offered to investors through certain Service
Organizations, subject to a $1,000 minimum initial investment.
Each class of the Fund has a different expense ratio, which will affect
each class' performance and result in the amount of dividends and other
distributions to differ among the classes. For more information on any class
of shares of the Fund, please contact RSD or your Service Organization or call
(800) XXX-XXXX.
<PAGE>
- ------------------------------------------------------------------------------
APPENDIX
- ------------------------------------------------------------------------------
The following paragraphs provide a brief description of the securities in
which the Fund may invest. The Fund is not limited by this discussion,
however, and may purchase other types of securities if they meet the Fund's
quality standards.
MONEY MARKET INSTRUMENTS are liquid, short-term, high-grade debt
securities. These instruments include U.S. Government obligations, commercial
paper, certificates of deposit, bankers' acceptances, time deposits, municipal
securities and corporate obligations.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation of
a bank to pay a draft which has been drawn on it by a customer. These
instruments reflect the obligation of both the bank and the drawer to pay the
face amount of the instrument upon maturity.
CERTIFICATES OF DEPOSIT are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to one year) at a stated or variable interest rate.
Variable rate certificates of deposit provide that the interest rate will
fluctuate on designated dates based on changes in a designated base rate (such
as the composite rate for certificates of deposit established by the Federal
Reserve Bank of New York).
CERTIFICATES OF PARTICIPATION give the investor an undivided interest in
the municipal obligation in the proportion that the investor's interest bears
to the total principal amount of the municipal obligation and provides a
demand repurchase feature.
COMMERCIAL PAPER consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by corporations in order to finance their
current operations.
CORPORATE OBLIGATIONS are bonds or notes issued by corporations and other
business organizations in order to finance their long-term credit needs. The
Fund's investments in these obligations will be limited to those obligations
that may be considered to have remaining maturities of 397 days or less
pursuant to Rule 2a-7 under the 1940 Act.
MUNICIPAL SECURITIES (including bonds and short-term notes) are debt
obligations of varying maturities issued by states, municipalities and public
authorities to obtain funds for various public purposes such as constructing
public facilities and making loans to public institutions. Certain types of
municipal bonds are issued to obtain funding for privately operated
facilities. The level of support for these obligations can range from
obligations supported by the issuer's pledge of its full faith, credit and
taxing power for the payment of principal and interest, to obligations payable
only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or
other specific source.
<PAGE>
REPURCHASE AGREEMENTS are transactions by which the Fund purchases a
security and simultaneously commits to resell that security to the seller at
an agreed upon date and price reflecting a market rate of interest unrelated
to the coupon rate or maturity of the purchased security. While it is not
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities, as
well as delays and costs to the Fund if the other party to the repurchase
agreement becomes bankrupt), it is the policy of the Fund to limit repurchase
transactions to primary dealers and banks whose creditworthiness has been
reviewed and found satisfactory by RSMC.
STAND-BY COMMITMENTS represent a right to sell a particular obligation at
an agreed upon price at any time during a stated period or on a certain date.
The amount payable by the other party to the commitment during the time the
commitment is exercisable, absent unusual circumstances relating to a change
in market value, is substantially the same as the value of the underlying
municipal obligation.
TIME DEPOSITS are bank deposits for fixed periods of time.
U.S. GOVERNMENT OBLIGATIONS are debt securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. Agencies and
instrumentalities include executive departments of the U.S. Government or
independent federal organizations supervised by Congress, such as the Federal
National Mortgage Association, the Student Loan Marketing Association, the
Federal Home Loan Mortgage Corporation and the Tennessee Valley Authority.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on
these obligations is generally backed directly or indirectly by the U.S.
Government. This support can range from securities supported by the full faith
and credit of the United States (for example, securities of the Government
National Mortgage Association), to securities that are supported solely or
primarily by the creditworthiness of the issuer, such as securities of the
Federal National Mortgage Association, Federal Home Loan Mortgage Corporation
and the Tennessee Valley Authority. In the case of obligations not backed by
the full faith and credit of the United States, the Fund must look principally
to the agency or instrumentality issuing or guaranteeing the obligation for
ultimate repayment and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet its
commitments.
VARIABLE AND FLOATING RATE SECURITIES are securities the yield on which
is adjusted in relation to changes in specific market rates, such as the prime
rate. Certain of these obligations also may carry a demand feature that gives
the holder the right to demand prepayment of the principal amount of the
security prior to maturity. The demand feature usually is backed by an
irrevocable letter of credit or guarantee by a bank. Fund investments in
these securities must comply with conditions established by the SEC under
which they may be considered to have remaining maturities of 397 days or less.
WHEN-ISSUED PURCHASES are new issues of obligations, as described above,
offered on a when-issued basis. This means that delivery and payment for the
securities normally will take place 15 to 90 days after the date of the
transaction. The payment obligation and the interest rate that will be
received on securities purchased on a when-issued basis are each fixed at the
time the buyer enters into the commitment.
<PAGE>
DESCRIPTION OF S&P'S HIGHEST COMMERCIAL PAPER RATING:
A-1 - This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
DESCRIPTION OF MOODY'S HIGHEST COMMERCIAL PAPER RATING:
P-1 - This designation indicates a superior ability for repayment of
senior short-term debt obligations. P-1 repayment ability will often be
evidenced by many of the following characteristics:
_ Leading market position in well-established industries.
_ High rates of return on funds employed.
_ Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
_ Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
_ Well-established access to a range of financial markets and assured
sources of alternate liquidity.
DESCRIPTION OF S&P'S TWO HIGHEST CORPORATE AND MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by S&P. 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 highest rated issues only in a small degree.
DESCRIPTION OF MOODY'S TWO HIGHEST CORPORATE BOND RATINGS:
Aaa - Bonds 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
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds which are 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 risk appear somewhat larger than the Aaa
securities.
DESCRIPTION OF S&P'S HIGHEST STATE AND MUNICIPAL NOTES RATING:
S&P's tax-exempt note ratings are generally given to such notes that
mature in three years or less. The highest rating category is as follows:
SP-1 - Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
<PAGE>
DESCRIPTION OF MOODY'S HIGHEST STATE AND MUNICIPAL NOTES RATING:
Moody's ratings for state and municipal and other short-term obligations
are designated Moody's Investment Grade ("MIG," or for variable or floating
rate obligations, "VMIG"). This distinction is in recognition of the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower are uppermost in importance in short-
term borrowing, while various factors of the first importance in long-term
borrowing risk are of lesser importance in the short run. The symbol used is
as follows:
MIG 1/VMIG 1 - Notes bearing this designation are of the best quality
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broadbased access to the market for refinancing.
<PAGE>
WT LIQUID ASSETS TRUST
WT MONEY MARKET FUND
RETAIL CLASS
- ------------------------------------------------------------------------------
The WT Money Market Fund (the "Fund") is a diversified series of the WT
Liquid Assets Trust (the "Trust"), an open-end, management investment company.
The Fund seeks a high level of current income consistent with the preservation
of capital and liquidity by investing in money market instruments pursuant to
its investment practices. The Fund currently offers two classes of shares.
The shares offered by this Prospectus are the Retail Class shares (the "Retail
Class").
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00.
PROSPECTUS
JULY ___, 1996
This Prospectus sets forth concise information about the Fund and the
Retail Class that you should know before investing. Please read and retain
this document for future reference. A Statement of Additional Information
(dated July _, 1996) containing additional information about the Fund and both
of its classes of shares has been filed with the Securities and Exchange
Commission and, as amended or supplemented from time to time, is incorporated
by reference herein. A copy of the Statement of Additional Information may be
obtained, without charge, from certain institutions, such as banks or
securities dealers, that have entered into servicing agreements ("Service
Organizations") with Rodney Square Distributors, Inc. ("RSD") or by calling
the number below, or by writing to RSD at the address noted on the back cover
of this Prospectus. RSD is a wholly owned subsidiary of Wilmington Trust
Company, a bank chartered in the State of Delaware.
- ------------------------------------------------------------------------------
FOR FURTHER INFORMATION OR ASSISTANCE IN OPENING AN ACCOUNT, PLEASE CALL:
* NATIONWIDE (800) XXX-XXXX
- ------------------------------------------------------------------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
WILMINGTON TRUST COMPANY, NOR ARE THE SHARES INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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.
<PAGE>
- ------------------------------------------------------------------------------
EXPENSE TABLE
- ------------------------------------------------------------------------------
RETAIL CLASS
SHARES
------------
SHAREHOLDER TRANSACTION COSTS:* None
ANNUAL FUND OPERATING EXPENSES:**
(as a percentage of average net assets)
Advisory Fee................................ 0.15%
12b-1 Fee***................................ 0.55%
Other Expenses
Administration Fee..................... 0.05%
Shareholder Servicing Fee.............. 0.20%
Other Expenses........................ 0.35%
----
Total Other Expenses......... 0.40%
Total Fund Operating Expenses............... 1.10%
====
Example****
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period:
One year $11
Three years 35
- -----------------------------------
* Service Organizations may charge their clients a fee for providing
administrative or other services in connection with investments in Retail
Class shares.
** See "Management of the Fund" for additional information. As the Fund has
no operating history, "Other Operating Expenses" are based on estimated
amounts for the Fund's first fiscal period of operations. The Fund's
actual expenses will depend upon, among other things, the level of
average net assets and the extent to which the Fund incurs variable
expenses.
*** Long-term shareholders may pay more than the economic equivalent of the
front-end sales charge permitted by the National Association of
Securities Dealers, Inc. rules regarding investment companies.
**** The assumption in the Example of a 5% annual return is required by the
Securities and Exchange Commission and is applicable to all mutual funds;
the assumed 5% annual return is not a prediction of, and does not
represent, the Retail Class' projected or actual performance.
The purpose of the preceding table is solely to aid shareholders and
prospective investors in understanding the various expenses that investors in
the Retail Class will bear directly or indirectly.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES
OR PERFORMANCE. ACTUAL EXPENSES INCURRED AND RETURNS MAY BE GREATER OR LESSER
THAN THOSE SHOWN.
<PAGE>
- ------------------------------------------------------------------------------
QUESTIONS AND ANSWERS ABOUT THE FUND
- ------------------------------------------------------------------------------
The information provided in this section is qualified in its entirety by
reference to more detailed information elsewhere in this Prospectus.
WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
The Fund seeks a high level of current income consistent with the
preservation of capital and liquidity by investing in money market
instruments pursuant to its investment practices. There can be no
assurance that the Fund will achieve its objective. (See "Investment
Objective and Policies.")
All assets of the Fund are invested in fixed-income obligations
maturing in 397 days or less, and the dollar-weighted average maturity of
the Fund's portfolio will not exceed 90 days. The Fund also has a
fundamental policy requiring it to use its best efforts to maintain a
constant net asset value of $1.00 per share, although under certain
circumstances this may not be possible. (See "How Net Asset Value Is
Determined.")
HOW CAN YOU BENEFIT BY INVESTING IN THE FUND RATHER THAN BY INVESTING DIRECTLY
IN MONEY MARKET INSTRUMENTS?
Investing in the Fund offers several key benefits.
FIRST: By pooling the monies of its many investors, the Fund
enables each investor to benefit from the greater liquidity and higher
yields offered by large denomination ($1,000,000 or more) money market
instruments.
SECOND: The Fund offers a way to keep money invested in a
professionally managed portfolio of high quality money market instruments
while at the same time maintaining full liquidity on a day-to-day basis.
There is no minimum period for investment, and no fees will be charged
upon redemption.
THIRD: Investors in the Fund need not become involved with the
detailed bookkeeping and operating procedures normally associated with
direct investment in money market instruments.
HOW ARE THE FUND'S PORTFOLIO SECURITIES VALUED?
In valuing the portfolio securities, the Fund uses the amortized
cost method of valuation. (See "Investment Objective and Policies" and
"How Net Asset Value Is Determined.")
WHO IS THE ADVISER?
Rodney Square Management Corporation ("RSMC"), a wholly owned
subsidiary of Wilmington Trust Company ("WTC"), serves as the Fund's
Adviser. (See "Management of the Fund.")
WHO IS THE ADMINISTRATOR, TRANSFER AGENT AND ACCOUNTING AGENT?
RSMC serves as the Administrator of the Fund and also provides
transfer agency and accounting services for the Fund. (See "Management of
the Fund.")
<PAGE>
WHO IS THE DISTRIBUTOR?
Rodney Square Distributors, Inc. ("RSD"), another wholly owned
subsidiary of WTC, serves as the Distributor. (See "Management of the
Fund.")
HOW DO YOU PURCHASE RETAIL CLASS SHARES?
Retail Class shares may be purchased only as described below. The
minimum initial investment in the Retail Class is $1,000, but additional
investments may be made in any amount.
Shares of the Retail Class are offered on a continuous basis by RSD.
Shares may be purchased directly from RSD or by clients of certain
institutions that have entered into servicing agreements ("Service
Organizations") with RSD through their accounts with those Service
Organizations. A Service Organization may receive payments from RSD out
of compensation RSD receives pursuant to a Plan of Distribution adopted
with respect to the Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act"). A Service Organization may also
receive a monthly fee from the Fund pursuant to a Shareholder Servicing
Agreement between the Fund and the Service Organization. (See
"Management of the Fund.") Shares may also be purchased directly by wire
or by mail. (See "Purchase of Shares.")
Receipt of federal funds or monies immediately convertible to
federal funds is necessary before investments may be credited to your
account in the Retail Class. The Fund and RSD reserve the right to reject
new account applications and to close, by redemption, an account without
a certified Social Security or other taxpayer identification number.
Please call your Service Organization or the number listed below for
further information about the Retail Class or for assistance in opening
an account.
- ------------------------------------------------------------------------------
* NATIONWIDE.......................................(800) XXX-XXXX
- ------------------------------------------------------------------------------
HOW DO YOU REDEEM YOUR RETAIL CLASS SHARES?
If you purchased your Retail Class shares through an account at a
Service Organization, you may redeem all or any part of your Retail Class
shares in accordance with the instructions pertaining to that account.
Other shareholders may redeem their Retail Class shares by check, by
telephone or by mail. (See "Redemption of Shares.") There is no fee
charged upon redemption.
HOW ARE DIVIDENDS PAID?
Substantially all of the net investment income allocable to the Fund
is declared as a dividend each day that the net asset value is
determined, and dividends are paid no later than seven days after the end
of the month in which they are declared. Shareholders may elect to
receive dividends in cash by checking the appropriate boxes on the
Application & New Account Registration form at the end of this Prospectus
("Application"). (See "Dividends and Taxes.")
<PAGE>
- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
- ------------------------------------------------------------------------------
The investment objective of the Fund is to seek a high level of current
income consistent with the preservation of capital and liquidity by investing
in money market instruments pursuant to its investment practices.
The Fund's permitted investments are as follows:
(i) U.S. dollar-denominated obligations of major banks, including
certificates of deposit, time deposits or bankers' acceptances of U.S. banks
and their branches located outside of the United States, of U.S. branches of
foreign banks, of foreign branches of foreign banks, of U.S. agencies of
foreign banks and of wholly owned banking subsidiaries of foreign banks
located in the United States, provided that the bank has capital, surplus and
undivided profits (as of the date of its most recently published annual
financial statements) in excess of $100,000,000 at the date of investment;
(ii) commercial paper and corporate obligations rated at least A-1 or AA by
Standard & Poor's Ratings Services ("S&P ") or P-1 or Aa by Moody's Investors
Service, Inc. ("Moody's") at the time of investment, or if unrated, determined
to be of comparable quality by RSMC under the direction of, and subject to the
review of, The Trust's Board of Trustees; (iii) U.S. Government obligations;
(iv) high quality municipal securities; and (v) repurchase agreements
involving U.S. Government obligations. (See the Appendix to this Prospectus.)
Obligations of agencies and instrumentalities of the U.S. Government are not
direct obligations of the U.S. Treasury and include obligations backed by the
"full faith and credit" of the United States and obligations supported
primarily or solely by the creditworthiness of the issuer. Notwithstanding
the requirements set forth in (i) above, RSMC requires that a bank have assets
in excess of $5 billion at the time of investment.
The Fund may enter into repurchase agreements involving U.S. Government
obligations, even though the underlying security matures in more than 397
days. While it does not presently appear possible to eliminate all risks from
these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delay and costs to the Fund in
the event of a default of the seller), it is the policy of the Fund to limit
repurchase transactions to those banks and primary dealers in U.S. Government
obligations whose creditworthiness has been reviewed and found satisfactory by
RSMC.
The Fund's investments in the obligations of foreign banks and other
foreign issuers and their branches, agencies or subsidiaries may be
obligations of the parent, of the issuing branch, agency or subsidiary, or
both. Obligations of such issuers are subject to the same risks that pertain
to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, obligations of foreign entities may be subject to certain
additional risks, including adverse political and economic developments in a
foreign country, the extent and quality of government regulation of financial
markets and institutions, interest limitations, currency controls, foreign
withholding taxes, and expropriation or nationalization of foreign issuers and
their assets. There may be less publicly available information about foreign
issuers than about domestic issuers, and foreign issuers may not be subject to
the same accounting, auditing and financial recordkeeping standards and
requirements as are domestic issuers. RSMC carefully considers these factors
when making investments, and foreign issuers will be required to meet the same
tests of financial strength as the domestic issuers approved for the Fund.
<PAGE>
The Fund may invest in municipal bonds, including "general obligation"
and "revenue" bonds, with less than 397 days remaining until maturity,
floating and variable rate obligations, participation interests and short-term
municipal notes. Frequently, the municipal obligations acquired by the Fund
are secured by letters of credit or other credit support arrangements provided
by domestic or foreign banks or insurance companies. Although the interest
on municipal securities may be exempt from federal income tax, dividends
paid by the Fund to its shareholders attributable to such interest will
not be tax-exempt.
The Fund may borrow money from a bank for temporary or emergency purposes
(not for leveraging or investment) but not in excess of one-third of the
current value of its net assets. The Fund will not purchase securities for
investment while any bank borrowing equaling 5% of the Fund's total assets is
outstanding. The Fund may also invest up to 10% of its net assets in
repurchase agreements not entitling the holder to payment of principal within
seven days and other securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily available
market. There is no limit on the Fund's investment in restricted securities
that are liquid. The Fund may also purchase stand-by commitments and money
market instruments on a "when-issued" basis.
The investment objective, policies and limitations set forth above are
supplemented by the information contained in the Fund's Statement of
Additional Information. Except as noted, the Fund's policies and limitations
are non-fundamental and may be changed by the Trust's Board of Trustees
without shareholder approval.
The Fund has a fundamental policy requiring it to use its best efforts to
maintain a constant net asset value of $1.00 per share, although under certain
circumstances this may not be possible. There can be no assurance that the
Fund will achieve its investment objective.
- ------------------------------------------------------------------------------
PURCHASE OF SHARES
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HOW TO PURCHASE SHARES. Retail Class shares are offered on a continuous
basis by RSD. Shares may be purchased directly from RSD or by clients of
Service Organizations through their Service Organization accounts. The
minimum initial investment is $1,000, but subsequent investments may be made
in any amount. The Fund and RSD each reserve the right to reject any purchase
order and may suspend the offering of Retail Class shares for a period of
time.
THROUGH SERVICE ORGANIZATIONS: Investors may submit their initial and
subsequent investments directly through Service Organizations. For an initial
investment, investors should submit payment and, if required, a completed
Application to their Service Organization, who will transmit such payment to
RSMC on behalf of the investor and supply RSMC with required account
information. Some Service Organizations may charge a fee for their services.
Investors who purchase shares through a Service Organization will be subject
to the procedures of their Service Organization, which may include investment
minimums, cut off times and other restrictions in addition to, or different
from, those applicable to shareholders who invest in the Fund directly.
<PAGE>
For customers of Service Organizations who offer the service, investors
may have their "free credit" cash balances automatically invested in the
Fund's shares on a daily basis. Automatic purchases and redemptions of Fund
shares are treated on the same basis as direct purchases and redemptions from
the Fund. "Free-credit" cash balances begin to earn dividends on the first
day following the date that the share purchase or exchange order is effected
and through the date that a redemption order is effected. For further
information and for details concerning the automatic purchase and redemption
of Fund shares, contact your Service Organization or RSD. The Fund is not
responsible for any delay caused by Service Organizations in forwarding an
order to the Fund.
BY MAIL: You may purchase shares by sending a check drawn on a U.S. bank
payable to WT Money Market Fund, along with a completed Application (included
at the end of this Prospectus), to WT Liquid Assets Trust, WT Money Market
Fund, Retail Class, c/o Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A purchase order sent by overnight mail should be
sent to WT Liquid Assets Trust, WT Money Market Fund, Retail Class, c/o Rodney
Square Management Corporation, Rodney Square North, 1105 N. Market Street,
Wilmington, DE 19801. If a subsequent investment is being made, the check
should also indicate your Fund account number. When you purchase by check, the
Fund may withhold payment on redemptions until it is reasonably satisfied that
the funds are collected (which can take up to 10 days). If you purchase shares
with a check that does not clear, your purchase will be canceled and you will
be responsible for any losses or fees incurred in that transaction.
BY WIRE: You may purchase shares by wiring federal funds. To advise the
Fund of the wire, and if making an initial purchase, to obtain an account
number, you must telephone RSMC at (800) XXX-XXXX. Once you have an account
number, instruct your bank to wire federal funds to RSMC, c/o Wilmington Trust
Company, Wilmington, DE-ABA #0311-0009-2, attention: WT Liquid Assets Trust,
WT Money Market Fund, Retail Class, DDA# 2610-605-2, further credit-your
account number and your name. If you make an initial purchase by wire, you
must promptly forward a completed Application to RSMC at the address stated
above under "By Mail." If you are making a subsequent purchase, the wire
should also indicate your Fund account number.
INDIVIDUAL RETIREMENT ACCOUNTS. Shares of the Fund may be purchased for a
tax-deferred retirement plan such as an individual retirement account ("IRA").
For an Application for an IRA and a brochure describing a Fund IRA, call RSMC
at (800) XXX-XXXX. WTC makes available its services as IRA custodian for each
shareholder account that is established as an IRA. For these services, WTC
receives an annual fee of $10.00 per account, which fee is paid directly to
WTC by the IRA shareholder. If the fee is not paid by the date due, Fund
shares owned by the IRA will be redeemed automatically for purposes of making
the payment.
AUTOMATIC INVESTMENT PLAN. Shareholders may purchase Retail Class shares
through an Automatic Investment Plan. Under the Plan, RSMC, at regular
intervals, will automatically debit a shareholder's bank checking account in
an amount of $50 or more (subsequent to the $1,000 minimum initial
investment), as specified by the shareholder. A shareholder may elect to
invest the specified amount monthly, bimonthly, quarterly, semiannually or
annually. The purchase of Retail Class shares will be effected at their
offering price at 12 noon, Eastern time, on or about the 20th day of the
month. For an Application for the Automatic Investment Plan, check the
appropriate box of the Application at the end of this Prospectus, or call RSMC
<PAGE>
at (800) XXX-XXXX. This service may also not be available for Service
Organization clients who are provided similar services by those organizations.
ADDITIONAL PURCHASE INFORMATION. Retail Class shares of the Fund are
offered at their net asset value next determined after a purchase order is
received by RSMC and accepted by RSD. Purchase orders received by RSMC and
accepted by RSD before 12 noon, Eastern time, on any Business Day of a Fund
will be priced at the net asset value per share that is determined at 12 noon.
(See "How Net Asset Value Is Determined.") Purchase orders received by RSMC
and accepted by RSD after 12 noon, Eastern time, will be priced as of 12 noon
on the following Business Day of a Fund. A "Business Day of a Fund " is any
day on which the New York Stock Exchange (the "Exchange"), RSMC and the
Philadelphia branch office of the Federal Reserve are open for business. The
following are not Business Days of a Fund: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
Investments in the Retail Class shares are accepted on the Business Day
of the Fund that (i) federal funds are deposited for your account on or before
12 noon, Eastern time, (ii) monies immediately convertible to federal funds
are deposited for your account on or before 12 noon, Eastern time, or (iii)
checks deposited for your account have been converted to federal funds
(usually within two Business Days of a Fund after receipt). All investments
are credited to your account in the form of shares of the Retail Class shares
immediately upon acceptance and become entitled to dividends declared as of
the day of investment.
It is the responsibility of the Service Organization involved to transmit
orders for the purchase of shares by its customers to RSMC and to deliver
required funds on a timely basis, in accordance with the procedures stated
above.
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SHAREHOLDER ACCOUNTS
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RSMC, as Transfer Agent, maintains for each shareholder an account
expressed in terms of full and fractional shares of the Retail Class rounded
to the nearest 1/1000th of a share. Investors purchasing shares through a
Service Organization may or may not be the shareholder of record.
In the interest of economy and convenience, the Retail Class does not
issue share certificates. Each shareholder is sent a statement at least
quarterly showing all purchases in or redemptions from the shareholder's
account. The statement also sets forth the balance of shares held in the
account by Class.
Due to the relatively high cost of maintaining small shareholder
accounts, the Fund reserves the right to close any account with a current
value of less than $500 by redeeming all shares in the account and
transferring the proceeds to the shareholder. Shareholders will be notified if
their account value is less than $500 and will be allowed 60 days in which to
increase their account balance to $500 or more to prevent the account from
being closed.
<PAGE>
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REDEMPTION OF SHARES
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Shareholders may redeem their shares by mail, telephone or check, as
described below. If you purchased your shares through an account at a Service
Organization, you may redeem all or part of your shares in accordance with the
instructions pertaining to that account. Corporations, other organizations,
trusts, fiduciaries and other institutional investors may be required to
furnish certain additional documentation to authorize redemptions. Redemption
requests should be accompanied by the Fund's name, the class and your account
number.
THROUGH SERVICE ORGANIZATIONS: Shareholders may redeem shares by
instructing their Service Organizations to effect their redemption
transactions. The Service Organization will transmit the required redemption
information to the Fund and the proceeds from that redemption will be
transmitted to the securities dealer for the account of the shareholder.
Service Organizations may impose service fees or other requirements in
connection with redemptions.
BY MAIL: Shareholders redeeming their shares by mail should submit
written instructions with a guarantee of their signature by an eligible
institution acceptable to the Fund's Transfer Agent, such as a bank, broker,
dealer, municipal securities dealer, government securities dealer, credit
union, national securities exchange, registered securities association,
clearing agency, or savings association ("eligible institution"), to: WT Money
Market Fund, Retail Class, c/o Rodney Square Management Corporation, P.O. Box
8987, Wilmington, DE 19899-9752. A redemption order sent by overnight mail
should be sent to WT Liquid Assets Trust, WT Money Market Fund, Retail Class,
c/o Rodney Square Management Corporation, Rodney Square North, 1105 N. Market
Street, Wilmington, DE 19801. The instructions should indicate Retail Class
shares are to be redeemed, the Fund account number and the name of the person
in whose name the account is registered. A signature and a signature guarantee
are required for each person in whose name the account is registered.
BY TELEPHONE: Shareholders who prefer to redeem their shares by telephone
must elect to do so by applying in writing for telephone redemption privileges
by completing the Application for Telephone Redemptions (included at the end
of this Prospectus) which describes the telephone redemption procedures in
more detail and requires certain information that will be used to identify the
shareholder when a telephone redemption request is made. In order to redeem
by telephone, you must indicate your name, the Fund's name, the class, the
account number, the number of shares you wish to redeem and certain other
information necessary to identify you as the shareholder. The Fund will employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine and will not be liable for any losses due to unauthorized or
fraudulent telephone transactions. During times of drastic economic or market
changes, the telephone redemption privilege may be difficult to implement. In
the event that you are unable to reach RSMC by telephone, you may make a
redemption request by mail.
<PAGE>
BY CHECK: A shareholder may utilize the checkwriting option to redeem
Retail Class shares by drawing a check for $500 or more against the Fund
account. When the check is presented for payment, a sufficient number of
shares will be redeemed from the shareholder's Fund account to cover the
amount of the check. This procedure enables the shareholder to continue
receiving dividends on those shares until the check is presented for payment.
Canceled checks are not returned; however, shareholders may obtain photocopies
of their canceled checks upon request. If a shareholder does not own
sufficient shares to cover a check, the check will be returned to the payee
marked "nonsufficient funds." Checks written in amounts less than $500 will
also be returned. Because the aggregate amount of Retail Class shares owned by
a shareholder is likely to change each day, a shareholder should not attempt
to redeem all shares held in an account by using the checkwriting procedure.
Charges will be imposed for specially imprinted checks, business checks,
copies of cancelled checks, stop payment orders, checks returned due to
"nonsufficient funds" and returned checks; these charges will be paid by
redeeming automatically an appropriate number of Retail Class shares. The Fund
and RSMC reserve the right to terminate or alter the checkwriting service at
any time. RSMC also reserves the right to impose a service charge in
connection with the checkwriting service. Shareholders who are interested in
the checkwriting service should obtain the necessary forms from RSMC. The
service may also not be available for Service Organization clients who are
provided a similar service by those organizations.
ADDITIONAL REDEMPTION INFORMATION. You may redeem all or any part of the
value of your account on any Business Day of a Fund. Redemptions are effected
at the net asset value next calculated after RSMC has received your redemption
request. (See "How Net Asset Value Is Determined.") The Fund imposes no fee
when shares are redeemed although a Service Organization may impose such a
fee. It is the responsibility of the Service Organization to transmit
redemption orders and credit their customers' accounts with redemption
proceeds on a timely basis.
Redemption checks are mailed on the next Business Day of the Fund
following acceptance of redemption instructions but in no event later than 7
days following such receipt and acceptance. Amounts redeemed by wire are
normally wired on the date of receipt and acceptance of redemption
instructions (if received by RSMC before 12 noon, Eastern time) or the next
Business Day of a Fund (if received after 12 noon, Eastern time, or on a non
Business Day of a Fund), but in no event later than 7 days following such
receipt and acceptance. If the shares to be redeemed represent an investment
made by check, the Fund reserves the right not to make the redemption proceeds
available until it has reasonable grounds to believe that the check has been
collected (which could take up to 10 days).
Redemption proceeds may be wired to your predesignated bank account in
any commercial bank in the United States if the amount is $1,000 or more. The
receiving bank may charge a fee for this service. Alternatively, proceeds may
be mailed to your bank or, for amounts of $10,000 or less, mailed to your Fund
account address of record if the address has been established for a minimum of
60 days. In order to authorize the Fund to mail redemption proceeds to your
Fund account address of record, complete the appropriate section of the
Application for Telephone Redemptions or include your Fund account address of
record when you submit written instructions. You may change the account which
you have designated to receive amounts redeemed at any time. Any request to
change the account designated to receive redemption proceeds should be
accompanied by a guarantee of the shareholder's signature by an eligible
<PAGE>
institution. A signature and a signature guarantee are required for each
person in whose name the account is registered. Further documentation will be
required to change the designated account when shares are held by a
corporation, other organization, trust, fiduciary or other institutional
investor.
For more information on redemption services, contact RSMC or, if your
shares are held in an account with a Service Organization, contact the Service
Organization.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders who own shares of the Retail
Class with a value of $10,000 or more may participate in the Systematic
Withdrawal Plan. For an application for the Systematic Withdrawal Plan, check
the appropriate box of the Application at the end of this Prospectus or call
RSMC at (800) XXX-XXXX. Under the Plan, shareholders may automatically redeem
a portion of their Retail Class shares monthly, bimonthly, quarterly,
semiannually or annually. The minimum withdrawal available is $100. The
redemption of Retail Class shares will be effected at their net asset value at
12 noon, Eastern time, on or about the 25th day of the month. This service may
also not be available for Service Organization clients who are provided a
similar service by those organizations.
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HOW NET ASSET VALUE IS DETERMINED
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RSMC determines the net asset value per share of the Fund as of 12 noon,
Eastern time, on each Business Day of the Fund. That net asset value is
calculated by adding the value of all securities and other assets in the
Fund's portfolio, deducting its actual and accrued liabilities and dividing by
the number of the Fund's shares outstanding. Net asset value is determined
separately for each class of the Fund's shares. It is a fundamental policy of
the Fund to use its best efforts to maintain a per share net asset value of
$1.00 for each class. The Fund values its portfolio securities by the
amortized cost method of valuation, that is, the market value of an instrument
is approximated utilizing amortizing the difference between the acquisition
cost and value at maturity of the instrument on a straight-line basis over its
remaining life. All cash, receivables and current payables are carried at
their face value. Other assets, if any, are valued at fair value as determined
in good faith by or under the direction of the Trust's Board of Trustees.
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DIVIDENDS AND TAXES
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DIVIDENDS. Substantially all of the Fund's net investment income
(consisting of accrued interest and earned discount, less amortization of
premium and accrued expenses) is declared as a dividend daily and paid
monthly. The Fund expects to distribute net realized gains, if any, once each
year, although it may distribute them more frequently if necessary in order to
maintain a net asset value of $1.00 per share.
Dividends and other distributions on both classes of the Fund shares are
calculated at the same time and in the same manner. Dividends on Retail Class
shares are expected to be lower than those on the other class of Fund shares
because of the higher expenses resulting from the distribution and shareholder
servicing fees borne by the Retail Class shares.
<PAGE>
The Retail Class's net investment income is determined by RSMC on each
day that the net asset value is calculated. Each dividend is payable to
shareholders of record at the time of its declaration (including, for this
purpose, holders of shares purchased, but excluding holders of shares
redeemed, on that day). Dividends declared on the Retail Class shares are
accrued throughout the month and are paid to the holders thereof no later than
seven days after the end of the month in which the dividends are declared. The
dividend payment program is administered by RSMC, as the Fund's dividend
disbursing agent.
Dividends paid on the Retail Class shares are automatically reinvested in
additional Retail Class shares unless a shareholder has elected to receive
dividends in cash by selecting the cash distribution option on the
Application.
TAXES. The Fund intends to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so
that it will be relieved of federal income tax on that part of its investment
company taxable income (generally, net investment income plus any realized net
short-term capital gain) that is distributed to its shareholders. Dividends
paid on the Retail Class shares generally are taxable to the holders thereof
as ordinary income, notwithstanding that such dividends are paid in additional
shares of the Retail Class. The Fund notifies its shareholders following the
end of each calendar year of the amount of dividends paid that year.
The Fund is required to withhold 31% of all taxable dividends paid to any
individuals and certain other noncorporate shareholders who do not provide the
Fund with a correct taxpayer identification number or who otherwise are
subject to backup withholding. In connection with this withholding
requirement, each investor must certify on the Application at the end of this
Prospectus that the Social Security or other taxpayer identification number
provided thereon is correct and that the investor is not otherwise subject to
backup withholding.
The foregoing is only a summary of some of the important federal income
tax considerations generally affecting the Fund and its shareholders; a
further discussion appears in the Statement of Additional Information. In
addition to these considerations, which are applicable to any investment in
the Retail Class, there may be other federal, state or local tax
considerations applicable to a particular investor. Prospective investors are
therefore urged to consult their tax advisers with respect to the effects of
an investment on their own tax situations.
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PERFORMANCE INFORMATION
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From time to time, quotations of the "yield," "effective yield," "average
annual total return," "cumulative total return" and "total return" of the
Retail Class may be included in advertisements, sales literature or
shareholder reports. These figures are based on historical performance, show
the performance of a hypothetical investment and are not intended to indicate
future performance. The yield refers to the net investment income generated by
the Fund over a specified seven-day period. This income is then annualized.
That is, the amount of income generated by the Fund during that week is
assumed to be generated during each week over a 52-week period and is shown as
<PAGE>
a percentage of the investment. The effective yield is expressed similarly,
but, when annualized, the income earned by an investment in the Fund is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. The
average annual total return is the average annual compound rate of return.
One-year, five-year and ten-year periods will be shown, unless the Retail
Class has been in existence for a shorter period. Cumulative total return is
the cumulative rate of return on a hypothetical initial investment for a
specified period. Both the average annual total return and the cumulative
total return quotations assume that all dividends during the period were
reinvested. Total return is the rate of return on an investment for a
specified period of time calculated in the manner of cumulative total return.
Performance figures for the Retail Class will vary based upon, among other
things, changes in market conditions, the level of interest rates and the
level of the Retail Class' expenses. The Retail Class performance will also
vary from that of the Fund's other classes. Past performance is no guarantee
of future performance.
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MANAGEMENT OF THE FUND
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WT Liquid Assets Trust's Board of Trustees supervises the management,
activities and affairs of the Fund and has approved contracts with various
financial organizations to provide, among other services, day-to-day
management required by the Fund and its shareholders.
FUND ADVISOR, ADMINISTRATOR, TRANSFER AGENT AND DIVIDEND PAYING AGENT.
RSMC, the Fund's Adviser, Administrator, Transfer Agent and Dividend Paying
Agent, is a wholly owned subsidiary of WTC, which in turn is wholly owned by
Wilmington Trust Corporation. RSMC currently acts as Adviser, Administrator,
Transfer Agent and Dividend Paying Agent for the Rodney Square Fund, the
Rodney Square Tax-Exempt Fund and the Rodney Square Multi-Manager Fund and as
Administrator, Transfer Agent and Dividend Paying Agent to the Rodney Square
Strategic Fixed-Income Fund portfolios and the Rodney Square International
Equity Fund. RSMC also provides asset management services to collective
investment funds maintained by WTC. In the past, RSMC has provided asset
management services to individuals, personal trusts, municipalities,
corporations and other organizations. At March 31, 1996, the aggregate assets
of the investment companies managed by RSMC totaled approximately $1.6
billion. RSMC also serves as Sub-Investment Adviser to three portfolios of the
Emerald Funds, which portfolio assets totaled approximately $450 million at
March 31, 1996.
As Adviser, RSMC, subject to the supervision of the Board of Trustees,
directs the investments of the Fund in accordance with the Fund's investment
objective, policies and limitations. For the services provided as adviser,
RSMC receives a monthly fee from the Fund at an annual rate of 0.15% of the
Fund's average daily net assets.
As Administrator, RSMC supplies office facilities, non-investment related
statistical and research data, stationary and office supplies, executive and
administrative services, internal auditing and regulatory compliance services.
RSMC assists in the preparation of reports to shareholders, prepares proxy
statements, updates prospectuses and makes filings with the SEC and state
<PAGE>
securities authorities. RSMC also performs certain budgeting, financial
reporting and compliance monitoring activities. For the services provided as
administrator, RSMC receives a monthly administration fee from the Fund at an
annual rate of 0.05% of the Fund's average daily net assets, subject to a
$50,000 annual minimum.
CUSTODIAN. WTC serves as Custodian of the Fund. For its custody
services, the Fund pays WTC an annual fee based upon the average net assets of
the Fund as follows: 0.02% on the first $100 million and 0.15% for over $100
million plus, $15 per purchase, sale or maturity of a portfolio security. The
custodian fee is subject to a minimum charge of $500 per month, exclusive of
any transaction charges.
ACCOUNTING SERVICES. RSMC determines the net asset value per share of the
Fund and provides accounting services to the Fund pursuant to an Accounting
Services Agreement. For providing these services RSMC receives an annual fee
of $45,000 plus an amount equal to 0.02% of the average daily net assets of
the Fund in excess of $100 million, plus out-of-pocket expenses, such as
pricing of portfolio securities.
DISTRIBUTION AGREEMENT. Pursuant to a Distribution Agreement, RSD
manages the Fund's distribution efforts and provides assistance and expertise
in developing marketing plans and materials, enters into dealer agreements
with securities dealers to sell shares of the Fund and, directly or through
its affiliates, provides shareholder support services.
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 (the
"Distribution Plan") in accordance with the regulations under the 1940 Act.
Under the Distribution Plan, the Fund pays RSD a monthly distribution fee at
an annual rate of 0.55% of the average daily net assets of the Retail Class.
The distribution fee is used by the Distributor to finance activities
primarily intended to result in the sale of shares of the Fund including the
payment of ongoing commissions and the costs associated with the preparation
of sales literature, advertising and printing and distributing prospectuses
and other shareholder materials to prospective investors. Payments to the
Distributor under the Plan are not directly tied to expenses and payments
under the Plan may be more or less than actual expenses incurred by the
Distributor. The excess of fees received over expenditures may constitute a
"profit" to the Distributor.
SHAREHOLDER SERVICING AGREEMENTS. The Trust may enter into shareholder
servicing agreements with Service Organizations pursuant to which the Service
Organizations provide a variety` of shareholder services, such as maintaining
shareholder accounts and records, answering inquiries regarding the Fund, and
processing purchase and redemption orders. For services provided, the Trust
would pay each Service Organization a fee (which varies depending upon the
services provided) at an annual rate of 0.20% of the average daily net assets
of Retail Class shares owned by shareholders with whom the Service
Organization has a servicing relationship. Some Service Organizations may
impose additional or different conditions on their clients such as requiring
their clients to invest more than the minimum initial or subsequent
investments specified by the Trust or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Trust. Shareholders using Service
Organizations are urged to consult them regarding any such fees or conditions.
BANKING LAWS. Applicable banking laws prohibit deposit-taking
institutions and certain of their affiliates from underwriting or distributing
<PAGE>
securities. WTC believes, and counsel to WTC has advised the Fund, that WTC
and its affiliates may perform the services contemplated by their respective
agreements with the Fund without violation of applicable banking laws or
regulations. If WTC or its affiliates were prohibited from performing these
services, it is expected that the Boards of Trustees would consider entering
into agreements with other entities. If a bank were prohibited from acting as
a Service Organization, its shareholder clients would be expected to be
permitted to remain Fund shareholders and alternative means for servicing such
shareholders would be sought. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.
FUND EXPENSES. In addition to the fees set forth above, the Fund incurs
various other expenses in its operations such as professional fees, expenses
of board and shareholder meetings, fees and expenses related to the
registration of its shares, taxes and governmental fees, fees and expenses of
the independent trustees, costs of obtaining fidelity bond and other insurance
coverage, expenses of printing and distributing shareholder materials,
organizational expenses and extraordinary expenses, including costs or losses
in any litigation.
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DESCRIPTION OF THE TRUST
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GENERAL. The Trust is registered with the SEC as an open-end, management
investment company and was organized on May 17, 1996 as a Delaware business
trust under Delaware law by Certificate of Trust. The Board of Trustees is
authorized to issue an unlimited number of shares of beneficial interest in
separate series, par value $0.001 per share, and to create classes of shares
within each series. Currently the Fund is the only series of the Trust.
Shares entitle holders to one vote per share and fractional votes for
fractional shares held. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable. Separate votes are
taken by each class of the Fund if a matter affects only that class.
The Trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by the shareholders, at which time the Trustees then
in office will call a shareholders' meeting for the election of Trustees.
Under the 1940 Act, shareholders of record owning no less than two-thirds of
the outstanding shares of a fund may remove a Trustee by vote cast in person
or by proxy at a meeting called for that purpose. The Trustees are required
to call a meeting of shareholders for the purpose of voting upon the question
of removal of any Trustee when requested in writing to do so by the
shareholders of record owning not less than 10% of the Fund's outstanding
shares.
As of the date of this Prospectus, RSMC owns all the outstanding shares
of beneficial interest in the Fund and, until such time as the Fund issues
shares to the public will be deemed to control the Trust and the Fund under
the 1940 Act.
OTHER CLASSES OF SHARES. In addition to the Retail Class, the Fund
currently offers one other class of shares, the Institutional Class. Shares
of the Institutional Class are offered to high net worth individual investors,
corporations and the institutional investors subject to a $1,000,000 minimum
initial investment.
<PAGE>
Each class of the Fund has a different expense ratio, which will affect
each class' performance and result in the amount of dividends and other
distributions to differ among the classes. For more information on any class
of shares of the Fund, please contact RSD or your Service Organization or call
(800) XXX-XXXX.
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APPENDIX
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The following paragraphs provide a brief description of the securities in
which the Fund may invest. The Fund is not limited by this discussion,
however, and may purchase other types of securities if they meet the Fund's
quality standards.
MONEY MARKET INSTRUMENTS are liquid, short-term, high-grade debt
securities. These instruments include U.S. Government obligations, commercial
paper, certificates of deposit, bankers' acceptances, time deposits, municipal
securities and corporate obligations.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation of
a bank to pay a draft which has been drawn on it by a customer. These
instruments reflect the obligation of both the bank and the drawer to pay the
face amount of the instrument upon maturity.
CERTIFICATES OF DEPOSIT are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to one year) at a stated or variable interest rate.
Variable rate certificates of deposit provide that the interest rate will
fluctuate on designated dates based on changes in a designated base rate (such
as the composite rate for certificates of deposit established by the Federal
Reserve Bank of New York).
CERTIFICATES OF PARTICIPATION give the investor an undivided interest in
the municipal obligation in the proportion that the investor's interest bears
to the total principal amount of the municipal obligation and provides a
demand repurchase feature.
COMMERCIAL PAPER consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by corporations in order to finance their
current operations.
CORPORATE OBLIGATIONS are bonds or notes issued by corporations and other
business organizations in order to finance their long-term credit needs. The
Fund's investments in these obligations will be limited to those obligations
that may be considered to have remaining maturities of 397 days or less
pursuant to Rule 2a-7 under the 1940 Act.
MUNICIPAL SECURITIES (including bonds and short-term notes) are debt
obligations of varying maturities issued by states, municipalities and public
authorities to obtain funds for various public purposes such as constructing
public facilities and making loans to public institutions. Certain types of
municipal bonds are issued to obtain funding for privately operated
facilities. The level of support for these obligations can range from
obligations supported by the issuer's pledge of its full faith, credit and
taxing power for the payment of principal and interest, to obligations payable
only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or
other specific source.
<PAGE>
REPURCHASE AGREEMENTS are transactions by which the Fund purchases a
security and simultaneously commits to resell that security to the seller at
an agreed upon date and price reflecting a market rate of interest unrelated
to the coupon rate or maturity of the purchased security. While it is not
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities, as
well as delays and costs to the Fund if the other party to the repurchase
agreement becomes bankrupt), it is the policy of the Fund to limit repurchase
transactions to primary dealers and banks whose creditworthiness has been
reviewed and found satisfactory by RSMC.
STAND-BY COMMITMENTS represent a right to sell a particular obligation at
an agreed upon price at any time during a stated period or on a certain date.
The amount payable by the other party to the commitment during the time the
commitment is exercisable, absent unusual circumstances relating to a change
in market value, is substantially the same as the value of the underlying
municipal obligation.
TIME DEPOSITS are bank deposits for fixed periods of time.
U.S. GOVERNMENT OBLIGATIONS are debt securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. Agencies and
instrumentalities include executive departments of the U.S. Government or
independent federal organizations supervised by Congress, such as the Federal
National Mortgage Association, the Student Loan Marketing Association, the
Federal Home Loan Mortgage Corporation and the Tennessee Valley Authority.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on
these obligations is generally backed directly or indirectly by the U.S.
Government. This support can range from securities supported by the full faith
and credit of the United States (for example, securities of the Government
National Mortgage Association), to securities that are supported solely or
primarily by the creditworthiness of the issuer, such as securities of the
Federal National Mortgage Association, Federal Home Loan Mortgage Corporation
and the Tennessee Valley Authority. In the case of obligations not backed by
the full faith and credit of the United States, the Fund must look principally
to the agency or instrumentality issuing or guaranteeing the obligation for
ultimate repayment and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet its
commitments.
VARIABLE AND FLOATING RATE SECURITIES are securities the yield on which
is adjusted in relation to changes in specific market rates, such as the prime
rate. Certain of these obligations also may carry a demand feature that gives
the holder the right to demand prepayment of the principal amount of the
security prior to maturity. The demand feature usually is backed by an
irrevocable letter of credit or guarantee by a bank. Fund investments in
these securities must comply with conditions established by the SEC under
which they may be considered to have remaining maturities of 397 days or less.
WHEN-ISSUED PURCHASES are new issues of obligations, as described above,
offered on a when-issued basis. This means that delivery and payment for the
securities normally will take place 15 to 90 days after the date of the
transaction. The payment obligation and the interest rate that will be
received on securities purchased on a when-issued basis are each fixed at the
time the buyer enters into the commitment.
<PAGE>
DESCRIPTION OF S&P'S HIGHEST COMMERCIAL PAPER RATING:
A-1 - This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
DESCRIPTION OF MOODY'S HIGHEST COMMERCIAL PAPER RATING:
P-1 - This designation indicates a superior ability for repayment of
senior short-term debt obligations. P-1 repayment ability will often be
evidenced by many of the following characteristics:
_ Leading market position in well-established industries.
_ High rates of return on funds employed.
_ Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
_ Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
_ Well-established access to a range of financial markets and assured
sources of alternate liquidity.
DESCRIPTION OF S&P'S TWO HIGHEST CORPORATE AND MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by S&P. 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 highest rated issues only in a small degree.
DESCRIPTION OF MOODY'S TWO HIGHEST CORPORATE BOND RATINGS:
Aaa - Bonds 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
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds which are 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 risk appear somewhat larger than the Aaa
securities.
DESCRIPTION OF S&P'S HIGHEST STATE AND MUNICIPAL NOTES RATING:
S&P's tax-exempt note ratings are generally given to such notes that
mature in three years or less. The highest rating category is as follows:
SP-1 - Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
<PAGE>
DESCRIPTION OF MOODY'S HIGHEST STATE AND MUNICIPAL NOTES RATING:
Moody's ratings for state and municipal and other short-term obligations
are designated Moody's Investment Grade ("MIG," or for variable or floating
rate obligations, "VMIG"). This distinction is in recognition of the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower are uppermost in importance in short-
term borrowing, while various factors of the first importance in long-term
borrowing risk are of lesser importance in the short run. The symbol used is
as follows:
MIG 1/VMIG 1 - Notes bearing this designation are of the best quality
enjoying strong protection from established cash flows, superior liquidity
support or demonstrated broadbased access to the market for refinancing.
<PAGE>
WT LIQUID ASSETS TRUST
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
WT Liquid Assets Trust (the "Trust") consists of one series,
the
WT Money Market Fund (the "Fund"). The Fund
seeks a high level of current income consistent with the
preservation of capital and liquidity by investing in
money market instruments pursuant to its
investment practices. The Fund offers two classes of
shares; the Retail Class and the Institutional Class.
- ---------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
July __, 1996
- ---------------------------------------------------------------
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the current
Prospectus of the applicable class of shares of the Fund, dated
July __, 1996, as amended from time to time. A copy of the
current Prospectus may be obtained without charge, by writing
to Rodney Square Distributors, Inc. ("RSD"), Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-
0001, and from certain institutions such as banks or broker-
dealers that have entered into servicing agreements with RSD or
by calling (800) XXX-XXXX.
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
INVESTMENT POLICIES................................ 1
INVESTMENT LIMITATIONS............................. 4
TRUSTEES AND OFFICERS.............................. 6
RODNEY SQUARE MANAGEMENT CORPORATION............... 8
INVESTMENT ADVISORY SERVICES....................... 9
ADMINISTRATION, TRANSFER AGENCY AND
ACCOUNTING AGREEMENTS........................... 9
DISTRIBUTION ARRANGEMENTS.......................... 11
SHAREHOLDER SERVICE ARRANGEMENTS................... 12
PORTFOLIO TRANSACTIONS............................. 13
REDEMPTIONS........................................ 13
NET ASSET VALUE AND DIVIDENDS...................... 14
PERFORMANCE INFORMATION............................ 15
TAXES.............................................. 18
DESCRIPTION OF THE TRUST........................... 18
OTHER INFORMATION.................................. 19
FINANCIAL STATEMENTS............................... 19
<PAGE>
INVESTMENT POLICIES
The following information supplements the information
concerning the Fund's investment objective, policies and
limitations found in the Prospectuses for its two classes of
shares.
The Fund has a fundamental policy requiring it to use its
best efforts to maintain a constant net asset value of $1.00
per share, although this may not be possible under certain
circumstances. The Fund values its portfolio securities on the
basis of amortized cost (see "Net Asset Value and Dividends")
pursuant to Rule 2a-7 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). As conditions of that rule, the
Trust's Board of Trustees has established procedures reasonably
designed to stabilize the price per share of each class of the
Fund $1.00 per share. The Fund maintains a dollar-weighted
average portfolio maturity of 90 days or less; purchases only
instruments having remaining maturities of 397 days or less;
and invests only in securities that are of high quality as
determined by a major rating service or, in the case of
instruments that are not rated, are of comparable quality as
determined by the Fund's investment adviser, Rodney Square
Management Corporation ("RSMC").
BANK OBLIGATIONS. The Fund's investments in obligations
of U.S. branches and agencies of foreign banks and of wholly
owned banking subsidiaries of foreign banks located in the
United States may be affected by adverse developments in the
country in which the parent bank is located, and obligations of
foreign branches of U.S. and foreign banks may be affected by
adverse developments in the country of domicile of the branch.
Various provisions of federal law governing the establishment
and operation of domestic branches of U.S. banks do not apply
to their foreign branches. U.S. agencies of foreign banks may
not accept deposits and thus are not eligible for Federal
Deposit Insurance Corporation ("FDIC") insurance (although such
insurance may not be of material benefit to the Fund, depending
upon the principal amount of the obligations of a particular
bank held by the Fund).
In the event of a default of an obligation of a foreign
branch of a foreign bank, whether a general obligation of the
parent bank or limited to the assets of the branch, the Fund
would be required to pursue its claim in the court where the
branch or the principal office of the parent bank was located.
The merits of the claim and the enforcement of any judgment
would be determined by foreign law. A claim against a U.S.
branch, agency or subsidiary of a foreign bank generally will
be subject to the jurisdiction of the U.S. courts. Enforcement
of judgments against U.S. branches, agencies or subsidiaries of
foreign banks with respect to assets located in the United
States will be governed by the law of the state where the
assets are located. However, enforcement of a judgment of a
U.S. court with respect to assets located outside the United
States may be subject to the law of the country where such
assets are located. Therefore, recovery in the event of
default on the obligations of a foreign branch of a foreign or
<PAGE>
U.S. bank or a U.S. branch, agency or subsidiary of a foreign
bank may potentially be a more difficult and expensive process
than in the case of a U.S. branch of a U.S. bank.
FOREIGN SECURITIES. At the present time, portfolio
securities of the Fund which are purchased outside the United
States are maintained in the custody of foreign branches of
U.S. banks. To the extent that the Fund may maintain portfolio
securities in the custody of foreign subsidiaries of U.S.
banks, and foreign banks or clearing agencies in the future,
those sub-custodian arrangements are subject to regulations
under the 1940 Act that govern custodial arrangements with
entities incorporated or organized in countries outside of the
United States.
MUNICIPAL SECURITIES. The Fund may invest in debt
obligations issued by states, municipalities and public
authorities ("Municipal Securities") to obtain funds for
various public purposes. The Municipal Securities must be
rated at least AA, A-1 or SP-1 by Standard & Poor's Ratings
Services ("S&P ") or Aa, MIG 1/VMIG 1 or P-1 by Moody's
Investors Service, Inc. ("Moody's") at the time of investment
or, if not rated, must be determined to be of comparable
quality by RSMC. Yields on Municipal Securities are the
product of a variety of factors, including the general
conditions of the money market and of the municipal bond and
municipal note markets, the size of a particular offering, the
maturity of the obligation and the rating of the issue.
Although the interest on Municipal Securities may be exempt
from federal income tax when received by the Fund, dividends
paid by the Fund to its shareholders attributable to that
interest will not be tax-exempt. A brief description of some
typical types of municipal securities follows:
BOND ANTICIPATION NOTES normally are issued to provide
interim financing until long-term financing can be
arranged. The long-term bonds then provide money for the
repayment of the notes.
CONSTRUCTION LOAN NOTES are sold to provide construction
financing. After successful completion and acceptance,
many projects receive permanent financing through the
Federal Housing Administration under "Fannie Mae" (the
Federal National Mortgage Association) or "Ginnie Mae" (the
Government National Mortgage Association).
GENERAL OBLIGATION BONDS are backed by the taxing power
of the issuing municipality and are considered the safest
type of municipal bond.
INDUSTRIAL DEVELOPMENT BONDS ("IDB'S") AND PRIVATE
ACTIVITY BONDS ("PAB'S") are specific types of revenue
bonds issued by or on behalf of public authorities to
finance various privately operated facilities, such as
solid waste facilities and sewage plants. PAB's generally
are such bonds issued after August 15, 1986. These
obligations are included within the term "municipal bonds"
if the interest paid thereon is exempt from federal income
<PAGE>
tax in the opinion of the bond issuer's counsel. IDB's and
PAB's are in most cases revenue bonds and thus are not
payable from the unrestricted revenues of the issuer. The
credit quality of IDB's and PAB's is usually directly
related to the credit standing of the user of the
facilities being financed, or some form of credit
enhancement such as a letter of credit.
PUT BONDS are municipal bonds which give the holder the
unconditional right to sell the bond back to the issuer at
a specified price and exercise date, which is typically
well in advance of the bond's maturity date.
REVENUE ANTICIPATION NOTES are issued in expectation of
receipt of other kinds of revenue, such as federal revenues
available under the Federal Revenue Sharing Program.
REVENUE BONDS are backed by the revenues of a project or
facility.
TAX ANTICIPATION NOTES finance working capital needs of
municipalities and are issued in anticipation of various
seasonal tax revenues, to be payable for these specific
future taxes.
TAX-EXEMPT COMMERCIAL PAPER AND SHORT-TERM MUNICIPAL
NOTES provide for short-term capital needs and usually have
maturities of one year or less. They include tax
anticipation notes, revenue anticipation notes, bond
anticipation notes and construction loan notes.
WHEN-ISSUED SECURITIES. New issues of money market
instruments may be offered on a when-issued basis. This means
that delivery and payment for the securities normally will
take place approximately 15 to 90 days after the date of the
transaction. The payment obligation and the interest rate that
will be received on securities purchased on a when-issued
basis are each fixed at the time the buyer enters into the
commitment. The Fund will make commitments to purchase such
securities only with the intention of actually acquiring the
securities, but the Fund may dispose of the commitment before
the settlement date if it is deemed advisable as a matter of
investment strategy. A separate account of the Fund will be
established at the Trust's custodian bank, into which cash and/
or marketable high quality debt securities equal to the amount
of the above commitments will be deposited. If the market value
of the deposited securities declines, additional cash or
securities will be placed in the account on a daily basis so
that the market value of the account will equal the amount of
such commitments by the Fund.
A security purchased on a when-issued basis is recorded as
an asset on the commitment date and is subject to changes in
market value generally based upon changes in the level of
interest rates. Thus, upon delivery, its market value may be
higher or lower than its cost. When payment for a when-issued
security is due, the Fund will meet its obligations from then-
available cash flow, the sale of the securities held in the
<PAGE>
separate account or the sale of other securities. The sale of
securities to meet such obligations carries with it a greater
potential for the realization of capital gains, which are
subject to federal income tax.
CERTIFICATES OF PARTICIPATION. The floating and variable
rate demand instruments that the Fund may purchase include
certificates of participation in municipal obligations
(primarily private activity or industrial development bonds)
purchased from and owned by financial institutions, primarily
banks. Each certificate of participation is backed by an
irrevocable letter of credit or guarantee of a bank (which may
be the bank issuing the certificate of participation, a bank
issuing a confirming letter of credit to that of the issuing
bank or a bank serving as agent of the issuing bank with
respect to the possible repurchase of the certificate of
participation) that RSMC has determined meets the prescribed
quality standards for the Fund. The Fund has the right to sell
the instrument back to the issuing bank or draw on the letter
of credit on demand, generally after seven days' notice. The
sale may be for all or in some cases part of the full principal
amount of the Fund's participation, plus accrued interest.
Banks will retain a service and letter of credit fee and a fee
for issuing repurchase commitments in an amount equal to the
excess of the interest paid on the municipal obligations over
the negotiated yield at which the participations are purchased
by the Fund. To the extent that payment of an obligation is
backed by a bank's letter of credit or guarantee, such payment
may be subject to the bank's ability to satisfy that
commitment. RSMC will monitor the pricing, quality, and
liquidity of the participation interests held by the Fund, and
the credit standing of banks issuing letters of credit or
guarantees supporting such participation interests on the basis
of published financial information, reports of rating services
and bank analytical services.
The Fund expects that stand-by commitments will generally
be available without the payment of any direct or indirect
consideration. However, if necessary and advisable, the Fund
may pay for stand-by commitments either separately in cash or
by paying a higher price for the obligations acquired subject
to such a commitment (thus reducing the yield to maturity
otherwise available for the same securities). Stand-by
commitments purchased by the Fund will be valued at zero in
determining net asset value and will not affect the valuation
of the obligations subject to the commitments. Any
consideration paid for a stand-by commitment will be accounted
for as unrealized depreciation and will be amortized over the
period the commitment is held by the Fund.
YIELDS AND RATINGS OF MONEY MARKET INSTRUMENTS. The
yields on the money market instruments in which the Fund
invests (such as commercial paper, bank obligations and
Municipal Securities) are dependent on a variety of factors,
including general money market conditions, conditions in the
particular market for the obligation, the financial condition
of the issuer, the size of the offering, the maturity of the
obligation and the ratings of the issue. The ratings of
<PAGE>
Moody's and S&P represent their opinions as to quality of the
obligations they undertake to rate. Ratings, however, are
general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and
interest rate may have different market prices. Subsequent to
its purchase by the Fund, an issue may cease to be rated or its
rating may be reduced. RSMC, and in certain cases, as required
by Rule 2a-7 under the 1940 Act, the Trust's Board of Trustees
(the "Board"), will consider whether the Fund should continue
to hold the obligation.
ILLIQUID SECURITIES. The Fund may not purchase the
securities or invest in repurchase agreements with respect to
any securities, if, as a result, more than 10% of the Fund's
net assets (taken at current value) would be invested in
repurchase agreements which do not entitle the holder to
payment of principal within seven days and in securities that
are illiquid by virtue of legal or contractual restrictions on
resale or the absence of a readily available market.
In recent years a large institutional market has developed
for certain securities that are not registered under the
Securities Act of 1933, as amended (the "1933 Act"), including
private placements, repurchase agreements, commercial paper,
foreign securities and corporate bonds and notes. These
instruments are often restricted securities because the
securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often
depend either on an efficient institutional market in which
such unregistered securities can be readily resold or on an
issuer's ability to honor a demand for repayment. Therefore,
the fact that there are contractual or legal restrictions on
resale to the general public or certain institutions is not
dispositive of the liquidity of such investments.
For example, commercial paper issues in which the Fund may
invest include securities issued by major corporations without
registration under the 1933 Act in reliance on the exemption
from such registration afforded by Section 3(a)(3) thereof and
commercial paper issued in reliance on the "private placement"
exemption from registration afforded, under Section 4(2) of the
1933 Act ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws
in that any resale must similarly be made in an exempt
transaction. However, Section 4(2) paper is normally resold to
other institutional investors through or with the assistance of
investment dealers who make a market in Section 4(2) paper,
thus providing liquidity.
To facilitate the increased size and liquidity of the
institutional markets for unregistered securities, the
Securities and Exchange Commission (the "SEC") adopted Rule
144A under the 1933 Act. Rule 144A established a "safe harbor"
from the registration requirements of the 1933 Act for resales
of certain securities to qualified institutional buyers.
Section 4(2) paper that is issued by a company that files
reports under the Securities Exchange Act of 1934, as amended,
<PAGE>
as well as other types of securities, are generally eligible to
be resold in reliance on the safe harbor of Rule 144A.
Institutional markets for restricted securities have developed
as a result of Rule 144A, providing both readily ascertainable
values for restricted securities and the ability to liquidate
an investment in order to satisfy share redemption orders.
Such markets include automated systems for the trading,
clearance and settlement of unregistered securities, such as
the PORTAL system sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified
institutional buyers interested in purchasing certain
restricted securities held by the Fund, however, could affect
adversely the marketability of such securities and the Fund
might be unable to dispose of such securities promptly or at
reasonable prices.
The Board has the ultimate responsibility for determining
whether specific securities are liquid or illiquid. The Board
has delegated the function of making day-to-day determinations
of liquidity to RSMC, pursuant to guidelines approved by the
Board. RSMC will monitor the liquidity of securities held by
the Fund and report periodically on such decisions to the
Board. RSMC takes into account a number of factors in reaching
liquidity decisions, including (1) the frequency of trades for
the security, (2) the number of dealers that make quotes for
the security, (3) the number of dealers that have undertaken to
make a market in the security, (4) the number of other
potential purchasers and (5) the nature of the security and how
trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of
transfer).
LOANS OF PORTFOLIO SECURITIES. Although the Fund has no
present intention of doing so in excess of 5% of the Fund's net
assets, the Fund may from time to time lend its portfolio
securities to brokers, dealers and financial institutions.
Such loans by the Fund will in no event exceed one-third of the
Fund's total assets and will be secured by collateral in the
form of cash or securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government
Securities"), which at all times while the loan is outstanding
will be maintained in an amount at least equal to the current
market value of the loaned securities.
The primary risk involved in lending securities is that of
a financial failure by the borrower. In such a situation, the
borrower might be unable to return the loaned securities at a
time when the value of the collateral has fallen below the
amount necessary to replace the loaned securities. The
borrower would be liable for the shortage, but the Fund would
be an unsecured creditor with respect to such shortage and
might not be able to recover all or any of it. In order to
minimize this risk, the Fund will make loans of securities only
to firms deemed creditworthy by RSMC and only when, in the
judgment of RSMC, the consideration that the Fund will receive
from the borrower justifies the risk.
<PAGE>
INVESTMENT LIMITATIONS
The investment limitations described below are fundamental
and may not be changed without the affirmative vote of the
lesser of (i) 67% or more of the shares of the Fund present at
a shareholders' meeting if holders of more than 50% of the
outstanding shares of the Fund are present in person or by
proxy or (ii) more than 50% of the outstanding shares of the
Fund.
Notwithstanding any other investment policy or limitation
of the Fund, the Fund may invest all of its investable assets
(cash, securities and receivables related to securities) in an
open-end management investment company (or a series of such a
company) having substantially the same investment objective,
policies and limitations as the Fund. In addition, the Fund
will not, as a matter of fundamental policy:
1. purchase the securities of any one issuer if, as a result,
more than 5% of the Fund's total assets would be invested
in the securities of such issuer, or the Fund would own or
hold 10% or more of the outstanding voting securities of
that issuer, except that up to 25% of the Fund's total
assets may be invested without regard to these limitations
and provided that these limitations do not apply to U.S.
Government Securities;
2. purchase the securities of any issuer if, as a result,
more than 25% of the Fund's total assets would be invested
in the securities of one or more issuers having their
principal business activities in the same industry,
provided, however, that the Fund may invest more than 25%
of its total assets in the obligations of banks (neither
finance companies as a group nor utility companies as a
group are considered a single industry for purposes of
this policy and the exclusion for obligations of banks
shall include both foreign and U.S. bank obligations.)
3. borrow money, except (i) from a bank for temporary or
emergency purposes (not for leveraging or investment), or
(ii) by engaging in reverse repurchase agreements,
provided that borrowings do not exceed an amount equal to
one-third of the current value of the Fund's assets taken
at market value, less liabilities other than borrowings;
4. make loans, except (i) the purchase of a portion of an
issue of debt securities in accordance with its investment
objective, policies and limitations, (ii) engaging in
repurchase agreements, or (iii) engaging in securities
loan transactions limited to one-third of the Fund's total
assets;
5. underwrite any issue of securities, except to the extent
that the Fund may be considered to be acting as
underwriter in connection with the disposition of any
portfolio security;
<PAGE>
6. purchase or sell real estate, but this limitation shall
not prevent the Fund from investing in obligations secured
by real estate or interests therein or obligations issued
by companies that invest in real estate or interests
therein; or
7. purchase or sell physical commodities or contracts
relating to physical commodities, provided that currencies
and currency-related contracts will not be deemed physical
commodities.
In addition, the Fund has adopted several nonfundamental
policies, which can be changed by the Board without
shareholder approval.
As a matter of nonfundamental policy, the Fund will not:
1. purchase the securities of any one issuer if as a result
more than 5% of the Fund's total assets would be invested
in the securities of such issuer, provided that this
limitation does not U.S. Government Securities;
2. purchase or retain the securities of any issuer other than
the Trust, if, to the Trust's knowledge, those Trustees
and officers of the Trust or those Directors and officers
of the Trust's investment adviser who individually own
beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more
than 5% of such outstanding securities;
3. purchase the securities of any issuer (including its
predecessor) which has been in operation for less than
three years if, as a result, more than 5% of the value of
the Fund's total assets would be invested in the
securities of such issuer;
4. invest in oil, gas or other mineral exploration or
development programs, or leases; provided that the Fund
may invest in securities issued by companies engaged in
such activities;
5. purchase or otherwise acquire any security or invest in a
repurchase agreement with respect to any securities if, as
a result, more than 10% of the Fund's net assets (taken at
current value) would be invested in repurchase agreements
not entitling the holder to payment of principal within
seven days and in securities that are illiquid by virtue
of legal or contractual restrictions on resale or the
absence of a readily available market;
6. purchase securities for investment while any bank
borrowing equaling 5% or more of the Fund's total assets
is outstanding and if at any time the Fund's borrowings
exceed the Fund's investment limitations due to a decline
in net assets, such borrowings will be promptly (within 3
days) reduced to the extent necessary to comply with the
limitations;
<PAGE>
7. make short sales of securities or purchase securities on
margin (but the Fund may obtain such credits as may be
necessary for the clearance of purchases and sales of
securities);
8. purchase the securities of any open-end investment
company, or securities of any closed-end investment
company except by purchase in the open market where no
commission or profit to a sponsor or dealer results from
such purchase, provided that in any event the Fund may not
invest more than 10% of its total assets in securities
issued by investment companies, more than 5% of its total
assets in securities issued by any one investment company
or in more than 3% of the voting securities of any one
such investment company, and except when such purchase is
part of a plan of merger, consolidation, reorganization or
acquisition of assets;
9. make loans of portfolio securities unless such loans are
fully collateralized by cash, U.S. Government Securities,
or any combination of cash and such securities, marked to
market value daily; or
10. invest in real estate limited partnerships.
Whenever an investment policy or limitation states a
maximum percentage of the Fund's assets that may be invested in
any security or other asset or sets forth a policy regarding
quality standards, such percentage or standard limitation shall
be determined immediately after the Fund's acquisition of such
security or other asset. Accordingly, any later increase or
decrease resulting from a change in values, net assets or other
circumstances will not be considered when determining whether
the investment complies with the Fund's investment policies and
limitations (except where explicitly noted above and except
that, as a condition of Rule 2a-7 under the 1940 Act, quality
standards must be maintained for certain obligations).
TRUSTEES AND OFFICERS
The Trust has a Board, currently composed of five
Trustees, which supervises the Fund's activities and reviews
contractual arrangements with companies that provide the Fund
with services. The Trust's Trustees and officers are listed
below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last
five years. All persons named as Trustees also serve in
similar capacities for The Rodney Square Fund, The Rodney
Square Tax-Exempt Fund, The Rodney Square Multi-Manager Fund
and The Rodney Square Strategic Fixed-Income Fund. Those
Trustees who are "interested persons" of the Trust (as defined
in the 1940 Act) by virtue of their positions with either RSMC
or Wilmington Trust Company ("WTC "), the parent of RSMC, are
indicated by an asterisk (*).
<PAGE>
*MARTIN L. KLOPPING, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, President and Trustee, age 43, has
been President and Director of RSMC since 1984. He is also a
Director of Rodney Square Distributors, Inc. ("RSD"), elected
in 1992. He is also a Chartered Financial Analyst and member
of the SEC Rules and Investment Advisers Committees of the
Investment Company Institute.
ERIC BRUCKER, School of Management, University of Michigan,
Dearborn, MI 48128, Trustee, age 54, has been Dean of the
School of Management at the University of Michigan since June
1992. He was Professor of Economics, Trenton State College
from September 1989 through June 1992. He was Vice President
for Academic Affairs, Trenton State College, from September
1989 through June 1991. From 1976 until September 1989, he was
Dean of the College of Business and Economics and Chairman of
various committees at the University of Delaware.
FRED L. BUCKNER, 5 Hearth Lane, Greenville, DE 19807, Trustee,
age 63, has retired as President and Chief Operating Officer of
Hercules Incorporated (diversified chemicals), positions he
held from March 1987 through March 1992. He also served as a
member of the Hercules Incorporated Board of Directors from
1986 through March 1992.
*ROBERT J. CHRISTIAN, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Trustee, age 47, has been Chief
Investment Officer of WTC since February 1996 and Director of
RSMC since February 1996. He was Chairman and Director of PNC
Equity Advisors Company, and President and Chief Investment
Officer of PNC Asset Management Group, Inc. from 1994 to 1996.
He was Chief Investment Officer of PNC Bank, N.A. from 1992 to
1996, Director of Provident Capital Management from 1993 to
1996, and Director of Investment Strategy PNC Bank, N.A. from
1989 to 1992. He is also a Trustee of LaSalle University and a
member of the Board of Governors for the Pennsylvania Economy
League.
JOHN J. QUINDLEN, 313 Southwinds, 1250 West Southwinds
Boulevard, Vero Beach, FL 32963, Trustee, age 63, has retired
as Senior Vice President-Finance of E.I. du Pont de Nemours and
Company, Inc. (diversified chemicals), a position he held from
1984 to November 1993. He served as Chief Financial Officer of
E.I. du Pont de Nemours and Company, Inc. from 1984 through
June 1993. He also serves as Trustee of the Kiewit Fund and
Director of St. Joe Paper Co.
JOSEPH M. FAHEY, JR., Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Vice President, age 39, has been
with RSMC since 1984, as a Secretary of RSMC since 1986 and a
Vice President of RSMC since 1992. He was an Assistant Vice
President of RSMC from 1988 to 1992.
ROBERT C. HANCOCK, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Vice President and Treasurer, age
43, has been a Vice President of RSMC since 1988 and Treasurer
of RSMC since 1990. He is also a member of the
Accounting/Treasurer Committee of the Investment Company
Institute.
<PAGE>
DIANE D. MARKY, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Assistant Secretary, age 31, has
been a Senior Fund Administrator of RSMC since 1994. She was a
Fund Administration Officer of RSMC from 1991 to July 1994.
She was a Mutual Fund Accountant for RSMC from 1989 to 1991.
CONNIE L. MEYERS, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Assistant Secretary, age 35, has
been a Fund Administrator of RSMC since August 1994. She was a
Corporate Custody Administrator for Wilmington Trust Company
from 1989 to 1994.
LOUIS C. SCHWARTZ, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Assistant Secretary, age 28, has
been a Senior Fund Administrator of RSMC since 1995. He was an
Associate at the law offices of Mason, Briody, Gallagher &
Taylor from 1993 to 1995.
JOHN J. KELLEY, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Assistant Treasurer, age 36, has
been a Vice President of RSMC since 1995. He was an Assistant
Vice President of RSMC from 1989 to 1995.
As of the date of this Statement of Additional
Information, the Trustees and officers of the Trust, as a
group, own beneficially, or may be deemed to own beneficially,
less than 1% of the outstanding shares of the Fund.
The fees of the Trustees who are not "interested persons"
of the Trust ("Independent Trustees"), as defined in the 1940
Act are paid by the Trust. The Trust may also reimburse the
Independent Trustees for expenses incurred in attending
meetings. The following table includes certain information
relating to the compensation of the Independent Trustees.
Compensation Table
Pension or
Aggregate Retirement
Compensation Accrued as Estimated Total Compensation
Independent From the Part of Fund Annual From the Trust and
Trustee Trust* Expenses Retirement the Fund Complex**
- ----------- ------------ ------------ ---------- ------------------
Eric Brucker $ 6,300 -- -- $
Fred L. Buckner $ 6,300 -- -- $
John J. Quindlen $ 6,300 -- -- $
* Represents amounts estimated to be paid during the fiscal year ending
June 30, 1997.
** Compensation from the Fund Complex represents amounts paid during the
calendar year ended December 31, 1995.
<PAGE>
RODNEY SQUARE MANAGEMENT CORPORATION
RSMC has entered into agreements to serve as the Fund's
Adviser, Administrator, Transfer Agent, Dividend Paying Agent
and Accounting Services Agent. RSMC is a Delaware corporation
organized on September 17, 1981, which enjoys a reputation for
managing high quality portfolios using a conservative
investment approach. In a time when safety of principal and
liquidity are critical, RSMC's experienced management team will
continue to operate with strict internal controls and high
credit quality standards. RSMC's investment management
services and specialized investment techniques are normally
available only to institutional clients.
RSMC is a wholly owned subsidiary of WTC, a state-
chartered bank organized as a Delaware corporation in 1903.
WTC is the wholly owned subsidiary of Wilmington Trust
Corporation, a publicly held bank holding company. RSMC may
occasionally consult, on an informal basis, with personnel of
WTC's investment departments. WTC takes no part, however, in
determining which securities are to be purchased or sold by the
Fund. Prior to RSMC's formation as a separate company, most of
its investment management staff and some of its officers were
employed by WTC in various money market and other fixed-income
investment management and trading departments.
Certain affiliates of RSMC are also engaged in the
investment advisory business. Wilmington Trust FSB, a wholly
owned subsidiary of Wilmington Trust Corporation, has
investment discretion over certain institutional accounts.
RSD, a wholly owned subsidiary of WTC and the Trust's
Distributor is a registered broker-dealer. Wilmington
Brokerage Services Company, another wholly owned subsidiary of
WTC, is a registered investment adviser and a registered broker-
dealer.
INVESTMENT ADVISORY SERVICES
ADVISORY AGREEMENT. RSMC serves as investment adviser to
the Fund pursuant to an Investment Advisory Agreement with the
Trust and is responsible for the provision of investment
management and related services to the Trust, subject to the
direction of the Board and the officers of the Trust. For the
services provided by RSMC under the Investment Advisory
Agreement, the Fund pays a monthly advisory fee to RSMC at the
annual rate of 0.15% of the average daily net assets of the
Fund as determined at the close of business on each day
throughout the month.
is responsible for the provision of investment management
and related services to the Trust, subject to the direction of
the Board of Trustees and the officers of the Trust.
Under the Agreement, the Trust on behalf of the Fund
assumes responsibility for paying or entering into arrangements
with third parties to pay all Fund expenses which are not
<PAGE>
expressly assumed by RSMC. Such expenses include: (i) fees
payable for administrative services provided by the Fund's
administrator; (ii) fees payable for services provided by the
Fund's independent public accountants; (iii) fees payable for
transfer agent, registrar, dividend disbursement and
shareholder recordkeeping services; (iv) fees payable for
accounting services; (v) fees payable for custodial services;
(vi) the cost of obtaining quotations for calculating the value
of the assets of the Fund; (vii) taxes levied against the Fund
and the Fund's pro-rata share of taxes levied against the
Trust; (viii) brokerage fees, mark-ups and commissions in
connection with the purchase and sale of portfolio securities;
(ix) costs, including the interest expense, of borrowing money;
(x) the Fund's pro-rata share of costs and/or fees incident to
holding meetings of the Trustees and shareholders, preparation
(including typesetting, printing and EDGAR filing charges) and
mailing of prospectuses, reports and proxy materials to the
existing shareholders of the Trust, filing of reports with
regulatory bodies, maintenance of the Trust's corporate
existence, and registration of shares with federal and state
securities authorities; (xi) legal fees and expenses; (xii) the
costs of printing share certificates representing shares of the
Fund; (xiii) the Fund's pro-rata share of fees payable to, and
expenses of, members of the Trustees who are not "interested
persons" of the Fund; (xiv) out-of-pocket expenses incurred in
connection with the provision of administration, accounting,
custodial, and transfer agency services; (xv) the Fund's pro-
rata share of premiums payable on the fidelity bond required by
Section 17(g) of the 1940 Act, and any other premiums payable
on insurance policies related to the Fund's business and the
investment activities of its funds; (xvi) distribution fees;
(xvii) service fees, if any, payable for the provision of
personal services to the shareholders of each Fund and for
maintaining shareholder accounts for those shareholders;
(xviii) fees, voluntary assessments and other expense incurred
in connection with the Trust's membership in investment company
organizations; and (xiv) such non-recurring expenses as may
arise, including actions, suits or proceedings to which the
Trust is a party and the Fund's pro-rata share of the legal
obligation which the Trust may have to indemnify its Trustees
and officers with respect thereto.
The Agreement provides that RSMC, in the absence of
willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties under such Agreement, shall
not be liable to the Fund or its shareholders for any act or
omission in the course of, or connected with, providing
services under the Agreement or for any losses that may be
sustained in the purchase, holding or sale of any security.
The Agreement is terminable without penalty on sixty days'
written notice by RSMC or by the Trust (by action of its Board
or by vote of a majority of the Fund's outstanding voting
securities), and terminates automatically in the event of its
assignment. The Agreement continues from year-to-year so long
as its continuance is approved at least annually (i) by the
vote of a majority of the Independent Trustees at a meeting
called for the purpose of voting on such approval and (ii) by
the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of the Fund.
<PAGE>
ADMINISTRATION, TRANSFER AGENCY AND ACCOUNTING AGREEMENTS
ADMINISTRATION AGREEMENT. RSMC, a Delaware corporation
organized on September 17, 1981, serves as Administrator of the
Fund pursuant to an Administration Agreement. For the services
provided, RSMC receives a monthly administration fee from the
Fund at an annual rate of 0.05% of the Fund's average daily net
assets.
Under the terms of the Administration Agreement, RSMC
agrees to: (a) supply office facilities (which may be in RSMC's
or its affiliates' own offices), non-investment related
statistical and research data, executive and administrative
services, stationary and office supplies at Trust expense, and
corporate secretarial services such as the preparation and
distribution of materials at Trust expense for meetings of the
Board of Trustees or shareholders; (b) prepare and file, if
necessary, reports to shareholders of the Trust and reports
with the Securities and Exchange Commission (the "SEC"), state
securities authorities including preliminary and definitive
proxy materials, post-effective amendments too the Trust's
registration statement, Rule 24f-2 Notices, Form N-SAR filings
and prospectus supplements; (c) monitor the Fund's compliance
with the investment restrictions and limitations imposed by the
1940 Act and state Blue Sky laws and applicable regulations
thereunder, the fundamental and nonfundamental investment
policies and limitations set forth in the Prospectus and this
Statement of Additional Information, and the investment
restrictions and limitations necessary for the Fund to continue
to qualify as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"); (d) monitor sales of the Fund's shares and ensure
that such shares are properly registered with the SEC and
applicable state authorities; (e) prepare and distribute to
appropriate parties notices announcing the declaration of
dividends and other distributions to shareholders; (f) prepare
financial statements and footnotes and other financial
information with such frequency and in such format as required
to be included in reports to shareholders and the SEC; (g)
review sales literature and file such with regulatory
authorities, as necessary; (h) maintain Fund/Serv membership;
(i) provide information regarding material developments in
state securities regulation; and (j) provide personnel to serve
as officers of the Trust if so elected by the Board of
Trustees. Additionally, RSMC agrees to create and maintain all
necessary records in accordance with all applicable laws, rules
and regulations pertaining to the various functions performed
by it and not otherwise created and maintained by other party
pursuant to contract with the Fund. RSMC may at any time or
times in its discretion appoint (and may at any time remove)
other parties as its agent to carry out any of the provisions
of the Administration Agreement.
The Administration Agreement provides that RSMC and its
affiliates shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
<PAGE>
connection with the matters to which the Administration
Agreement relates, except to the extent of a loss resulting
from willful misfeasance, bad faith or gross negligence on
their part in the performance of their obligations and duties
under the Administration Agreement.
The Administration Agreement continues in effect from year
to year so long as its continuance is approved at least
annually by a majority of the Directors, including a majority
of the Independent Directors. The Agreement is terminable by
the Fund at sixty (60) days' written notice given to RSMC or by
RSMC on six (6) months' written notice given to the Fund.
The salaries of any officers and the interested Trustees
of the Trust who are affiliated with RSMC and the salaries of
all personnel of RSMC performing services for the Trust
relating to research, statistical and investment activities are
paid by RSMC.
TRANSFER AGENCY AGREEMENT. RSMC also serves as Transfer
Agent and Dividend Paying Agent pursuant to a Transfer Agency
Agreement with the Trust. Compensation for the services and
duties performed is paid by the Trust in accordance with the
Transfer Agency Agreement. Certain other fees and expenses
incurred in connection with the provision of these services are
payable by the Trust or the shareholder on whose behalf the
service is performed.
ACCOUNTING SERVICES AGREEMENT. RSMC also provides
portfolio accounting services to the Trust pursuant to an
Accounting Services Agreement with the Trust.
Under the terms of the Accounting Services Agreement, RSMC
agrees to: (a) perform the following accounting functions on a
daily basis: (1) journalize the Fund's investment, capital
share and income and expense activities, (2) verify investment
buy/sell trade tickets when received from Adviser and transmit
trades to the Trust's Custodian on behalf of the Fund for
proper settlement, (3) maintain individual ledgers for
investment securities, (4) maintain historical tax lots for
each security, (5) reconcile cash and investment balances of
the Fund with the Custodian, and provide Adviser with the
beginning cash balance available for investment purposes, (6)
update the Fund's cash availability throughout the day as
required by Adviser, (7) post to and prepare the Fund's
Statement of Assets and Liabilities and the Statement of
Operations, (8) calculate various contractual expenses (e.g.,
advisory fees) for the Fund, (9) control all disbursements from
the Trust on behalf of each Fund and authorize such
disbursements upon written instructions, (10) calculate capital
gains and losses, (11) determine the Fund's net income, (12)
obtain security market quotes from services approved by
Adviser, or if such quotes are unavailable, then obtain such
prices from services approved by the Adviser, and in either
case calculate the market or fair value of the Fund's
investments, (13) distribute a copy of the Fund's portfolio
valuation to Adviser, (14) compute the net asset value of each
class of each Fund, (15) compute the yields, total return and
<PAGE>
expense ratios of each class of each Fund's portfolio turnover
rate, and (16) monitor the expense accruals and notify Trust
management of any proposed adjustments; (b) prepare monthly
financial statements for the Fund which include the Schedule of
Investments, the Statement of Assets and Liabilities, the
Statement of Operations, the Statement of Changes in Net
Assets, the Cash Statement and the Schedule of Capital Gains
and Losses; (c) prepare monthly security transactions listings;
(d) prepare quarterly broker security transactions summaries;
(e) supply various Trust, Fund and class statistical data as
requested on an ongoing basis; (f) assist in the preparation of
support schedules necessary for completion of federal and state
tax returns; (g) assist in the preparation and filing of the
Trust's semiannual reports with the SEC on Form N-SAR; (h)
assist in the preparation and filing of the Trust's annual and
semiannual shareholder reports and proxy statements; (i) assist
with the preparation of and amendments to the Trust's
registration statements on Form N-1A and other filings relating
to the registration of shares; (j) prepare and monitor an
expense budget for the Fund including setting and revising
accruals for each category of expenses; (k) determine the
amounts of dividends and other distributions payable to
shareholders as necessary to, among other things, maintain the
Fund's continued qualification for treatment as a RIC under the
Code and avoid imposition of a 4% excise tax imposed on RICs in
certain situations; (l) prepare and distribute to appropriate
parties notices announcing the declaration of dividends and
other distributions to shareholders; (m) prepare financial
statements and footnotes and other financial information with
such frequency and in such format as required to be included in
reports to shareholders and the SEC; (n) supervise the
preparation of federal and state tax returns; and (o) act as
liaison with the Trust's independent public accountants and
provide account analyses, fiscal year summaries and other audit
related schedules. Additionally, RSMC agrees to keep, in
accordance with all applicable laws, rules and regulations, all
books and records with respect to the Trust's books of account
and records of the Fund's securities transactions.
The Accounting Services Agreement provides that RSMC shall
not be liable for any act or omission which does not constitute
willful misfeasance, bad faith or gross negligence on the part
of RSMC in the performance of its obligations and duties under
the Accounting Services Agreement or reckless disregard by RSMC
of such duties and obligation.
The Accounting Services Agreement continues in effect from
year to year so long as its continuance is approved at least
annually by a majority of the Trustees, including a majority of
the Independent Trustees. The Agreement is terminable by the
Trust or RSMC on 6 months' written notice.
<PAGE>
DISTRIBUTION ARRANGEMENTS
DISTRIBUTION AGREEMENT. RSD serves as Distributor of the
Fund's shares pursuant to a Distribution Agreement with the
Trust. Pursuant to the terms of the Distribution Agreement,
RSD is granted the right to sell the shares as agent for the
Trust. Shares of the Fund are offered continuously.
Under the terms of the Distribution Agreement, RSD agrees
to use all reasonable efforts to secure purchasers for shares
of the Fund. The Distribution Agreement provides that RSD, in
the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under the
Agreement, will not be liable to the Trust or its shareholders
for losses arising in connection with the sale of Fund shares.
The Distribution Agreement continues in effect from year
to year as long as its continuance is approved at least
annually by a majority of the Trustees, including a majority of
the Independent Trustees. The Distribution Agreement
terminates automatically in the event of its assignment. The
Agreement is also terminable without payment of any penalty
with respect to the Fund (i) by the Trust (by vote of a
majority of the Trustees of the Trust who are not interested
persons of the Trust and who have no direct or indirect
financial interest in the operation of any Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan")
applicable to the Trust or any agreements related to the 12b-1
Plan or by vote of a majority of the outstanding voting
securities of the applicable Fund) on 60 days' written notice
to RSD; or (ii) by RSD on 60 days' written notice to the Trust.
RULE 12B-1 PLAN. The Trust has adopted a Rule 12b-1 with
respect to the distribution the Retail Class shares. The 12b-
1 Plan for the Retail Class provides that the Fund is
authorized to pay RSD a distribution fee of 0.55% of the
average daily net assets of the Retail Class. The Rule 12b-1
Plan further provides that, as the distributor of the Trust,
RSD may spend such amounts as it deems appropriate on any
activities primarily intended to result in the sale of Retail
Class shares of the Fund including the payment of ongoing
commissions and costs associated with the preparation of sales
literature, advertising and printing and distributing
prospectuses and other shareholder materials to prospective
investors.
The Rule 12b-1 Plan also provides that (1) RSD will submit
to the Board at least quarterly, and the Trustees will review,
reports regarding all amounts expended under the Plan and the
purposes for which such expenditures were made, (2) the Plan
will continue in effect only so long as it is approved, by the
Board, including those Trustees who are not "interested
persons" of the Trust and who have no direct or indirect
financial interest in the operation of the plan or any
agreement related to the Plan, acting in person at a meeting
called for that purpose, (3) payments by the Fund under the
Plan shall not be materially increased without the affirmative
<PAGE>
vote of the holders of a majority of the outstanding voting
securities of the Retail Class and (4) while the Plan remains
in effect, the selection and nomination of the Trustees who are
not "interested persons" of the Trust shall be committed to the
discretion of the Trustees who are not interested persons of
the Trust.
Under the 12b-1 Plan, if any payments made by RSMC out of
its management fee, not to exceed the amount of that fee, to
any third parties (including banks), including payments for
shareholder servicing and transfer agent functions, were deemed
to be indirect financing by the Trust of the distribution of
its shares, such payments are authorized. The Trust may
execute portfolio transactions with and purchase securities
issued by depository institutions that receive payments under
the 12b-1 Plans. No preference for instruments issued by such
depository institutions is shown in the selection of
investments.
SHAREHOLDER SERVICE ARRANGEMENTS
The Trust may enter into a shareholder servicing
agreements with Service Organizations pursuant to which the
Service Organizations provide a variety` of shareholder
services, such as maintaining shareholder accounts and records,
answering inquiries regarding the Fund, and processing purchase
and redemption orders. The Trust pays to Service Organizations
(which may vary depending upon the services provided) in
amounts of up to but not to exceed an annual rate of 0.20% of
the daily net assets of Retail Class shares owned by
shareholders with whom the Service Organization has a servicing
relationship. Some Service Organizations impose additional or
different conditions on their clients such as requiring their
clients to invest more than the minimum initial or subsequent
investments specified by the Trust or charging a direct fee for
servicing. If imposed, these fees would be in addition to any
amounts which might be paid to the Service Organization by the
Trust. Shareholders using Service Organizations are urged to
consult them regarding any such fees or conditions.
PORTFOLIO TRANSACTIONS
All portfolio transactions are placed on behalf of the
Fund by RSMC pursuant to authority contained in the Management
Agreement. Debt securities purchased and sold by the Fund are
generally traded on the dealer market on a net basis (i.e.,
without commission) through dealers acting for their own
account and not as brokers, or otherwise involve transactions
directly with the issuer of the instrument. This means that a
dealer (the securities firm or bank dealing with the Trust)
makes a market for securities by offering to buy at one price
and sell at a slightly higher price. The difference between
the prices is known as a spread. When securities are purchased
in underwritten offerings, they include a fixed amount of
compensation to the underwriter.
<PAGE>
The primary objective of RSMC in placing orders on behalf
of the Fund for the purchase and sale of securities is to
obtain best execution at the most favorable prices through
responsible brokers or dealers and, where the spread or
commission rates are negotiable, at competitive rates.
Although the Trust has no current arrangement to pay higher
commissions or spreads in return for research, analysis, advice
and similar services, the Trust may do so if it is determined
that the commission or spread is reasonable in relation to the
value of the research services that have been provided. In
selecting a broker or dealer, RSMC considers, among other
things: (i) the price of the securities to be purchased or
sold; (ii) the rate of the spread or commission; (iii) the size
and difficulty of the order; (iv) the nature and character of
the spread or commission for the securities to be purchased or
sold; (v) the reliability, integrity, financial condition,
general execution and operational capability of the broker or
dealer; and (vi) the quality of any services provided by the
broker or dealer to the Fund or to RSMC.
RSMC cannot readily determine the extent to which spreads
or commission rates or net prices charged by brokers or dealers
reflect the value of their research, analysis, advice and
similar services. In such cases, RSMC receives services it
otherwise might have had to perform itself. The research,
analysis, advice and similar services provided by brokers or
dealers can be useful to RSMC in serving its other clients, as
well as in serving the Trust. Conversely, information provided
to RSMC by brokers or dealers who have executed transaction
orders on behalf of other clients of RSMC may be useful to RSMC
in providing services to the Trust.
Some of RSMC's other clients have investment objectives
and programs similar to that of the Fund. Occasionally, RSMC
may make recommendations to other clients which result in their
purchasing or selling securities simultaneously with the Fund.
Consequently, the demand for securities being purchased or the
supply of securities being sold may increase, and this could
have an adverse effect on the price of those securities. It is
RSMC's policy not to favor one client over another in making
recommendations or in placing orders. In the event of a
simultaneous transaction, purchases or sales are averaged as to
price and allocated between the Fund and RSMC's other clients
as to amount according to a formula deemed equitable to the
Fund and such other clients.
REDEMPTIONS
To ensure proper authorization before redeeming shares of
the Fund, the Transfer Agent, RSMC, may require additional
documents such as, but not restricted to, stock powers, trust
instruments, death certificates, appointments as fiduciary,
certificates of corporate authority and waivers of tax required
in some states when settling estates.
<PAGE>
Clients of Service Organizations who have purchased shares
through their accounts with those Service Organizations should
contact the Service Organization prior to submitting a
redemption request to ensure that all necessary documents
accompany the request. When shares are held in the name of a
corporation, other organization, trust, fiduciary or other
institutional investor, RSMC requires, in addition to the stock
power, certified evidence of authority to sign the necessary
instruments of transfer. THESE PROCEDURES ARE FOR THE
PROTECTION OF SHAREHOLDERS AND SHOULD BE FOLLOWED TO ENSURE
PROMPT PAYMENT. Redemption requests must not be conditional as
to date or price of the redemption. Proceeds of a redemption
will be sent within 7 days of acceptance of shares tendered for
redemption. Delay may result if the purchase check has not yet
cleared, but the delay will be no longer than required to
verify that the purchase check has cleared, and the Trust will
act as quickly as possible to minimize delay.
A shareholder's right to redeem shares and to receive
payment therefor may be suspended when (a) the New York Stock
Exchange (the "Exchange") is closed, other than customary
weekend and holiday closings, (b) trading on the Exchange is
restricted, (c) an emergency exists as a result of which it is
not reasonably practicable to dispose of the Fund's securities
or to determine the value of the Fund's net assets, or (d)
ordered by a governmental body having jurisdiction over the
Trust for the protection of the Trust's shareholders, provided
that applicable rules and regulations of the SEC (or any
succeeding governmental authority) shall govern as to whether a
condition described in (b), (c) or (d) exists. In case of such
suspension, shareholders of the Fund may withdraw their
requests for redemption or may receive payment based on the net
asset value of the Fund next determined after the suspension is
lifted.
The Trust reserves the right, if conditions exist which
make cash payments undesirable, to honor any request for
redemption by making payment in whole or in part with readily
marketable securities chosen by the Trust and valued in the
same way as they would be valued for purposes of computing the
net asset value of the Fund. If payment is made in securities,
a shareholder may incur transaction expenses in converting
these securities into cash. The Trust has elected, however, to
be governed by Rule 18f-1 under the 1940 Act, as a result of
which the Trust is obligated to redeem shares solely in cash if
the redemption requests are made by one shareholder account up
to the lesser of $250,000 or 1% of the net assets of the Fund
during any 90-day period. This election is irrevocable unless
the SEC permits its withdrawal.
NET ASSET VALUE AND DIVIDENDS
NET ASSET VALUE. The Fund's securities are valued on the
basis of the amortized cost valuation method. This involves
valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the
<PAGE>
market value of the instrument. The valuation of the Fund's
instruments based upon their amortized cost and the
accompanying maintenance of the Fund's per share net asset
value of $1.00 is permitted in accordance with Rule 2a-7 under
the 1940 Act. Certain conditions imposed by that rule are set
forth under "Investment Policies." In connection with the use
of the amortized cost valuation method, the Board has
established procedures delegating to RSMC the responsibility
for maintaining a constant net asset value per share. Such
procedures include a daily review of the Fund's holdings to
determine whether its net asset value, calculated based upon
available market quotations, deviates from $1.00 per share.
Should any deviation exceed 1/2 of 1% of $1.00, the Trustees will
promptly consider whether any corrective action should be
initiated to eliminate or reduce material dilution or other
unfair results to shareholders. Such corrective action may
include selling of portfolio instruments prior to maturity to
realize capital gains or losses, shortening average portfolio
maturity, withholding dividends, redeeming shares in kind and
establishing a net asset value per share based upon available
market quotations.
Should the Fund incur or anticipate any unusual expense or
loss or depreciation that would adversely affect its net asset
value per share or income for a particular period, the Trustees
would at that time consider whether to adhere to the current
dividend policy or to revise it in light of the then prevailing
circumstances. For example, if the Fund's net asset value per
share were reduced, or were anticipated to be reduced, below
$1.00, the Trustees could suspend or reduce further dividend
payments until net asset value returned to $1.00 per share.
Thus, such expenses or losses or depreciation could result in
investors receiving no dividends or reduced dividends for the
period during which they held their shares or in their
receiving upon redemption a price per share lower than that
which they paid.
DIVIDENDS. Dividends are declared on each Business Day of
the Fund (as defined in the Prospectus). The dividend for such
a Business Day immediately preceding a weekend or holiday
normally includes an amount equal to the net income for the
subsequent non-Business Days of the Fund on which dividends are
not declared. However, no such dividend includes any amount of
net income earned in a subsequent semiannual accounting period.
PERFORMANCE INFORMATION
The performance of each class of the Fund may be quoted in
terms of its yield and its total return in advertising and
other promotional materials ("performance advertisements").
Performance data quoted represents past performance and is not
intended to indicate future performance. Performance will vary
based on changes in market conditions and the level of
expenses. These performance figures are calculated in the
following manner:
<PAGE>
A. YIELD is the net annualized yield for a specified
seven calendar days calculated at simple interest
rates. Yield is calculated by determining the net
change, exclusive of capital changes, in the value of
a hypothetical pre-existing account having a balance
of one share at the beginning of the period,
subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing
the difference by the value of the account at the
beginning of the base period to obtain the base
period return. The yield is annualized by
multiplying the base period return by 365/7. The
yield figure is stated to the nearest hundredth of
one percent.
B. EFFECTIVE YIELD is the net annualized yield for
a specified seven calendar days assuming reinvestment
of income or compounding. Effective yield is
calculated by the same method as yield except the
yield figure is compounded by adding one, raising the
sum to a power equal to 365 divided by seven, and
subtracting one from the result, according to the
following formula:
Effective yield = [(Base Period Return + 1)365/7] - 1.
C. AVERAGE ANNUAL TOTAL RETURN is the average annual
compound rate of return for one-year, five-year and
ten-year periods (or life of class, if shorter)
all ended on the last day of a recent calendar
quarter. Average annual total return quotations
reflect changes in the price of a class' shares, if
any, and assume that all dividends during the
respective periods were reinvested in Fund shares.
Average annual total return is calculated by finding
the average annual compound rates of return of a
hypothetical investment over such periods, according
to the following formula (average annual total
return is then expressed as a percentage):
T = (ERV/P)1/n - 1
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
D. CUMULATIVE TOTAL RETURN is the cumulative rate of
return on a hypothetical initial investment of
$1,000 for a specified period. Cumulative total
return quotations reflect the change in the price of
a Class' shares, if any, and assume that all
<PAGE>
dividends and capital gains distributions, if any,
during the period were reinvested in Fund shares.
Cumulative total return is calculated by finding the
cumulative rates of return of a hypothetical
investment over such periods, according to the
following formula (cumulative total return is then
expressed as a percentage):
C = (ERV/P)-1
Where: C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of
a hypothetical $1,000 investment made at the
beginning of the applicable period.
E. TOTAL RETURN is the rate of return on an investment
for a specified period of time calculated in the
manner of Cumulative Total Return.
COMPARISON OF FUND PERFORMANCE. A comparison of the
quoted performance offered for various investments is valid
only if performance is calculated in the same manner. Since
there are many methods of calculating performance, investors
should consider the effects of the methods used to calculate
performance when comparing performance of the Fund with
performance quoted with respect to other investment companies
or types of investments. For example, it is useful to note
that yields reported on debt instruments are generally
prospective, contrasted with the historical yields reported by
the Trust.
In connection with communicating its performance to
current or prospective shareholders, the Fund also may compare
these figures to the performance of other mutual funds tracked
by mutual fund rating services or to unmanaged indices which
may assume reinvestment of dividends but generally do not
reflect deductions for administrative and management costs.
From time to time, in marketing and other literature, the
Fund's performance may be compared to the performance of broad
groups of comparable mutual funds or unmanaged indexes of
comparable securities such as the Donoghue Tier One Money
Market Index. The Fund's yield and performance over time may
also be compared to the performance of bank money market
deposit accounts and fixed-rate insured certificates of deposit
("CDs"), or unmanaged indices of securities that are comparable
to money market funds in their terms and intent, such as
Treasury bills, bankers' acceptances, negotiable order of
withdrawal accounts, and money market certificates. Most bank
CDs differ from money market funds in several ways: the
interest rate is fixed for the term of the CD, there are
interest penalties for early withdrawal of the deposit from a
CD, and the deposit principal in a CD is insured by the FDIC.
<PAGE>
Since the assets in all funds are constantly changing, the
Fund may be ranked within one asset-size class at one time and
in another asset-size class at some other time. In addition,
the independent organization chosen to rank the Fund in
marketing and promotional literature may change from time to
time depending upon the basis of the independent organization's
categorizations of mutual funds, changes in the Fund's
investment policies and investments, the Fund's asset size and
other factors deemed relevant. Advertisements and other
marketing literature will indicate the time period and Lipper
Analytical Services, Inc. asset-size class or other performance
ranking company criteria, as applicable, for the ranking in
question.
Evaluations of Fund performance made by independent
sources may also be used in advertisements concerning a Fund,
including reprints of, or selections from, editorials or
articles about the Fund. Sources for performance information
and articles about the Fund may include the following:
BARRON'S, a Dow Jones and Company, Inc. business and financial
weekly that periodically reviews mutual fund performance data.
CDA INVESTMENT TECHNOLOGIES, INC., an organization that
provides performance and ranking information through examining
the dollar results of hypothetical mutual fund investments and
comparing these results against appropriate market indices.
CHANGING TIMES, The Kiplinger Magazine, a monthly investment
advisory publication that periodically features the performance
of a variety of securities.
CONSUMER DIGEST, a monthly business/financial magazine that
includes a "Money Watch" section featuring financial news.
FINANCIAL WORLD, a general business/financial magazine that
includes a "Market Watch" department reporting on activities in
the mutual fund industry.
FORBES, a national business publication that from time to time
reports the performance of specific investment companies in the
mutual fund industry.
FORTUNE, a national business publication that periodically
rates the performance of a variety of mutual funds.
IBC'S MONEY FUND REPORT, a weekly publication of IBC/Donoghue,
Inc., of Ashland, Massachusetts, reporting on the performance
of the nation's money market funds, summarizing money market
fund activity, and including certain averages as performance
benchmarks, specifically "IBC's Money Fund Average," and
"IBC's Government Money Fund Average."
IBC'S MONEY FUND DIRECTORY, an annual directory ranking money
market mutual funds.
INVESTMENT COMPANY DATA, INC., an independent organization that
provides performance ranking information for broad classes of
mutual funds.
<PAGE>
INVESTOR'S DAILY, a daily newspaper that features financial,
economic, and business news.
LIPPER ANALYTICAL SERVICES, INC.'S MUTUAL FUND PERFORMANCE
ANALYSIS, a weekly publication of industry-wide mutual fund
averages by type of fund.
MONEY, a monthly magazine that from time to time features both
specific funds and the mutual fund industry as a whole.
MUTUAL FUND VALUES, a biweekly Morningstar, Inc. publication
that provides ratings of mutual funds based on fund
performance, risk and portfolio characteristics.
THE NEW YORK TIMES, a nationally distributed newspaper that
regularly covers financial news.
PERSONAL INVESTING NEWS, a monthly news publication that often
reports on investment opportunities and market conditions.
PERSONAL INVESTOR, a monthly investment advisory publication
that includes a "Mutual Fund Outlook" section reporting on
mutual fund performance measures, yields, indices and portfolio
holdings.
SUCCESS, a monthly magazine targeted to the world of
entrepreneurs and growing business, often featuring mutual fund
performance data.
USA TODAY, the nation's number one daily newspaper.
U.S. NEWS AND WORLD REPORT, a national business weekly that
periodically reports mutual fund performance data.
WALL STREET JOURNAL, a Dow Jones and Company, Inc. newspaper
that regularly covers financial news.
WIESENBERGER INVESTMENT COMPANIES SERVICES, an annual
compendium of information about mutual funds and other
investment companies, including comparative data on funds'
backgrounds, management policies, salient features, management
results, income and dividend records, and price ranges.
TAXES
GENERAL. In order to qualify for treatment as a RIC under
the Code, the Fund must distribute annually to its shareholders
at least 90% of its investment company taxable income
(generally, net investment income plus net short-term capital
gain, if any) and must meet several additional requirements.
These requirements include the following: (1) the Fund must
derive at least 90% of its gross income each taxable year from
dividends, interest and gains from the sale or other
disposition of securities, or other income derived with respect
to its business of investing in securities; (2) the Fund must
derive less than 30% of its gross income each taxable year from
the sale or other disposition of securities held for less than
<PAGE>
three months; (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets
must be represented by cash and cash items, U.S. Government
Securities and other securities, with those other securities
limited, in respect of any one issuer, to an amount that does
not exceed 5% of the value of the Fund's total assets; and (4)
at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested
in securities (other than U.S. Government Securities) of any
one issuer.
DISTRIBUTIONS. The Fund will be subject to a
nondeductible 4% excise tax to the extent it fails to
distribute by the end of any calendar year substantially all of
its ordinary income for that year and capital gain net income
for the one-year period ending on October 31 of that year, plus
certain other amounts.
Distributions from the Fund's investment company taxable
income, if any, are taxable to its shareholders as ordinary
income to the extent of its earnings and profits. Because the
Fund's net investment income is derived from interest rather
than dividends, no portion of the distributions by the Fund is
eligible for the dividends-received deduction allowed to
corporations.
Shortly after the end of each year, RSMC calculates the
federal income tax status of all distributions made during the
year. In addition to federal income tax, shareholders may be
subject to state and local taxes on distributions from the
Fund. Shareholders should consult their tax advisers regarding
specific questions relating to federal, state and local taxes.
DESCRIPTION OF THE TRUST
The Trust is organized as a Delaware business trust.
Although Delaware law statutorily limits the potential
liabilities of a Delaware business trust's shareholders to the
same extent as it limits the potential liabilities of
shareholders of a Delaware corporation, shareholders of the
Fund could be held personally liable for the obligations of the
Trust or the Fund if Delaware law was not applied in other
states. To guard against the risk that Delaware law may not be
applied in other states, the Trust's Trust Instrument disclaims
shareholder liability for acts or obligations of the Trust or
its series and requires that notice of such disclaimer be given
in each written obligation of the Trust or any series. The
Trust Instrument provides for indemnification out of the assets
of the applicable series of the Trust of any shareholder held
personally liable solely by reason of his or her being or
having been a shareholder of the series. The Trust Instrument
also provides that the Trust, on behalf of the applicable
series, shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the
series and satisfy any judgment thereon from the assets of the
series. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to
<PAGE>
circumstances in which a series itself would be unable to meet
its obligations. RSMC believes that, in view of the above, the
risk of personal liability to shareholders is remote.
The Trust Instrument provides that the Trust shall have
perpetual existence. The Trust Instrument further provides,
however that the Trust or a series of the Trust may be
terminated: (a) subject to a majority shareholder vote of the
Trust or of each series to be affected or (b) if a majority of
the Trustees determine that the continuation of the Trust or
series is not in the best interest of the Trust such series, or
their respective shareholders. A termination may involve (a)
the sale of the Trust's assets or a series' assets to another
series of the Trust or to another open-end management
investment company or series thereof; or (b) the liquidation of
the Trust or a series of the Trust.
OTHER INFORMATION
INDEPENDENT AUDITORS. Ernst & Young LLP, 1 North Charles
Street, Baltimore, MD 21201, serves as the Trust's independent
auditors, providing services which include (1) audit of the
annual financial statements for the Fund, (2) assistance and
consultation in connection with SEC filings and (3) preparation
of the annual federal income tax returns filed on behalf of the
Fund.
LEGAL COUNSEL. Kirkpatrick & Lockhart LLP, 1800
Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-
1800, serves as counsel to the Trust and has passed upon the
legality of the shares offered by the Prospectuses and this
Statement of Additional Information.
CUSTODIAN. Wilmington Trust Company, Rodney Square North,
1100 N. Market Street, Wilmington, DE 19890-0001, serves as the
Trust's custodian.
TRANSFER AGENT. Rodney Square Management Corporation,
Rodney Square North, 1100 N. Market Street, Wilmington, DE
19890-0001, serves as the Trust's Transfer agent and dividend
paying agent.
FINANCIAL STATEMENTS
<PAGE>
THE WT TRUST
Items Required By Form N-1A
PART C - OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial Statements*
b. Exhibits:
1. (a) Certificate of Trust dated May 17, 1996
(b) Trust Instrument of the Registrant
2. By-Laws of the Registrant
3. Voting Trust Agreement - None.
4. Instruments Defining the Rights of Shareholders.
5. Form of Advisory Agreement between the Registrant and
Rodney Square Management Corporation.*
6. (a) Form of Distribution Agreement between Registrant
and Rodney Square Distributors, Inc.
(b) Form of Selected Dealer Agreement.*
7. Bonus, Profit Sharing or Pension Plans - None.
8. (a) Form of Custodian Contract between the Registrant
and Wilmington Trust Company*
9. (a) Form of Transfer Agency Agreement between the
Registrant and Rodney Square Management Corporation.*
(b) Form of Accounting Services Agreement between
Registrant and Rodney Square Management Corporation.*
(c) Form of Administration Agreement between the Registrant
and Rodney Square Management Corporation.*
(d) Form of Shareholder Servicing Agreement.*
10. Opinion and Consent of Counsel.*
11. Other opinions, appraisals, rulings and consents: Accountants
Consent.*
12. Financial Statements Omitted from Part B - None.
13. Letter of Investment Intent.*
14. Prototype Retirement Plan - None.
15. Plan of Distribution Pursuant to Rule 12b-1 under the Investment
Company Act of 1940 with respect to the Retail Class.*
16. Schedule for Computation of Performance Quotations - None.
17. Financial Data Schedule - None.
1
THE WT TRUST
Items Required By Form N-1A (CONTINUED)
PART C - OTHER INFORMATION (CONTINUED)
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED).
18. Rule 18f-3 Plan.*
* To be filed by amendment
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
a. Persons Controlled by Registrant: None
b. Persons who may be deemed to be under Common Control with
Registrant in the event Wilmington Trust Company ("WTC")
and/or Wilmington Trust Corporation ("WTC Corp.") may be
deemed to be a controlling persons of the Registrant:
MUTUAL FUNDS
------------
The Rodney Square Fund
The Rodney Square Fund
The Rodney Square Tax-Exempt Fund
The Rodney Square Strategic Fixed-Income Fund
The Rodney Square Multi-Manager Fund
The Rodney Square International Securities Fund, Inc.
% HELD BY
CORPORATE ENTITY STATE OF ORG. WTC CORP.
---------------- ------------- ----------
Wilmington Trust Company Delaware 100%
Wilmington Trust FSB Federally Charterd 100%
Wilmington Trust of Pennsylvania Pennsylvania 100%
% HELD
CORPORATE ENTITY STATE OF ORG. BY WTC
---------------- ------------- ------
Brandywine Insurance Agency, Inc. Delaware 100%
Brandywine Finance Corp. Delaware 100%
Brandywine Life Insurance Company, Inc. Delaware 100%
Compton Realty Corporation Delaware 100%
Delaware Corp. Management Delaware 100%
Drew-I Ltd. Delaware 100%
Drew-VIII Ltd. Delaware 100%
Holiday Travel Agency, Inc. Delaware 100%
Rodney Square Distributors, Inc. Delaware 100%
Rodney Square Management Corporation Delaware 100%
Siobain-VI Ltd. Delaware 100%
Wilmington Brokerage Services Company Delaware 100%
Wilmington Capital Management, Inc. Delaware 100%
WTC Corporate Services, Inc. Delaware 100%
WTC Investments, Inc. Delaware 100%
100 West 10th St. Corporation Delaware 100%
2
THE WT TRUST
Items Required By Form N-1A (CONTINUED)
PART C - OTHER INFORMATION (CONTINUED)
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT (CONTINUED).
PARTNERSHIPS
------------
Rodney Square Investors, L.P.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (AS OF ________).
(1) (2)
TITLE OF CLASS NUMBER OF RECORD SHAREHOLDERS
Shares of beneficial interest
WT Money Market Fund
Retail Class Shares 0
Institutional Class Shares 0
ITEM 27. INDEMNIFICATION.
Article IX, Section 2 of the Registrant's Trust Instrument
provides, subject to certain exceptions and limitations, that the
Trust or the appropriate Series of the Registrant will indemnify
a Trustee, officer, employee or agent ("Covered Person") of the
Registrant against liability and against all expenses incurred in
connection with any claim, action, suit, proceeding, or
settlement in which he becomes involved as a party or otherwise
by virtue of being or having been a Trustee or officer, to the
fullest extent permitted by law. No Covered Person, however,
will be indemnified if there is an adjudication that (a) such
person is liable to the Registrant or its shareholders because of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, or
(b) such person did not act in good faith, with the reasonable
belief that his action was in the best interest of the
Registrant. In addition, a Covered Person will not be
indemnified in the event of settlement unless a court or other
body approving the settlement, a majority of disinterested
Trustees, or by written opinion based upon a review of readily
available facts, independent legal counsel determines that the
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. The Registrant may maintain insurance
policies covering such rights of indemnification.
According to Article X, Section 1 of the Trust Instrument, the
Registrant is a trust, not a partnership. Trustees are not
liable personally to any person extending credit to, contracting
with or having any claim against the Registrant. A Trustee,
however, is not protected from liability due to willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
Article X, Section 2 provides that, subject to the provisions
of Article IX the Trustees shall not be liable for errors of
judgment or mistakes of fact or law, or for any act or omission
in accordance with advice of counsel or other experts or for
failing to follow such advice.
Indemnification language with respect to service provider
contracts to be filed by amendment.
3
THE WT TRUST
Items Required By Form N-1A (CONTINUED)
PART C - OTHER INFORMATION (CONTINUED)
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Rodney Square Management Corporation ("RSMC"), a Delaware
corporation, will serve as investment adviser, administrator,
transfer agent and accounting agent to the Registrant. RSMC is a
wholly owned subsidiary of Wilmington Trust Company, also a
Delaware corporation, which in turn is wholly owned by Wilmington
Trust Corporation. Information as to the officers and directors
of RSMC is included in its Form ADV filed on March 11, 1987, and
most recently supplemented on February 26, 1996, with the
Securities and Exchange Commission File No. 801-22071 and is
incorporated by reference herein.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) The Rodney Square Fund
The Rodney Square Strategic Fixed-Income Fund
The Rodney Square International Securities Fund, Inc.
The Rodney Square Multi-Manager Fund
The Rodney Square Tax-Exempt Fund
1838 Investment Advisors Funds
Dracena Funds, Inc.
Heitman Real Estate Fund
The HomeState Group
Kiewit Mutual Fund
The Olstein Funds
(b)
(1) (2) (3)
NAME AND PRINCIPAL POSITION AND OFFICES WITH POSITION AND OFFICES
BUSINESS ADDRESS RODNEY SQUARE DISTRIBUTORS, INC. WITH REGISTRANT
- ------------------ -------------------------------- --------------------
Jeffrey O. Stroble President, Secretary, None
1105 No. Market St. Treasurer & Director
Wilmington, DE 19890
Martin L. Klopping Director President &
Rodney Square North Trustee
1100 No. Market St.
Wilmington, DE 19890
Neil Curran Vice President None
1105 No. Market St.
Wilmington, DE 19890
(c) None.
4
THE WT TRUST
Items Required By Form N-1A (CONTINUED)
PART C - OTHER INFORMATION (CONTINUED)
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Certain accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940
and the rules promulgated thereunder and the records relating to
the duties of the Registrant's transfer agent will be maintained
by Rodney Square Management Corporation, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001.
Records relating to the duties of the Registrant's custodian will
be maintained by Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001.
ITEM 31. MANAGEMENT SERVICES.
Inapplicable.
ITEM 32. UNDERTAKINGS.
The Registrant hereby undertakes to
a. promptly call a meeting of shareholders for the purpose
of voting upon the question of removal of any trusteee or
trustees when requested in writing to do so by the record
holders of not less than 10 per centum of the Registrant's
outstanding shares and to assist its shareholders in
accordance with the requirements of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications; and
b. file a post-effective amendment containing unaudited
financial statements within four to six months from the
effective date of this Registration Statement
c. Registrant hereby undertakes to furnish a copy of the
Registrant's latest Annual Report to Shareholders to each
person to whom a copy of the Registrant's Prospectus is
delivered, upon request and without charge.
5
<PAGE>
File No. 33-
File No. 811-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
THE WT TRUST
<PAGE>
THE WT TRUST
EXHIBIT INDEX
Exhibit 1 (a) Certificate of Trust dated May 17, 1996
(b) Trust Instrument
Exhibit 2 By-Laws of the Registrant
Exhibit 4 Instruments Defining Rights of Shareholders
<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 its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Wilmington, and State of Delaware, on the 23th day of
May, 1996.
WT LIQUID ASSETS TRUST
By: /s/ Martin L. Klopping
-----------------------------
Martin L. Klopping, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Martin L. Klopping President (Principal
- ----------------------- Executive Officer) May 23, 1996
Martin L. Klopping and Trustee
/s/ Eric Brucker
- -----------------------
Eric Brucker* Trustee May 23, 1996
/s/ Fred L. Buckner
- -----------------------
Fred L. Buckner* Trustee May 23, 1996
/s/ Robert J. Christian
- -----------------------
Robert J. Christian* Trustee May 23, 1996
/s/ John J. Quindlen
- -----------------------
John J. Quindlen* Trustee May 23, 1996
/s/ Robert C. Hancock Vice President and
- ----------------------- Treasurer (Principal
Robert C. Hancock Financial and May 23, 1996
Accounting Officer)
*By: /s/ Martin L. Klopping
----------------------
Martin L. Klopping**
** Attorney-in-fact pursuant to a power of attorney filed
herewith.
<PAGE>
POWER OF ATTORNEY
-----------------
Each of the undersigned in his capacity as a Trustee or
officer, or both, as the case may be, of the Registrant, does
hereby appoint Arthur J. Brown and Martin L. Klopping, and each
of them, or jointly, his true and lawful attorney and agent to
execute in his name, place and stead (in such capacity) any and
all post-effective amendments to the Registration Statement and
all instruments necessary or desirable in connection therewith,
to attest the seal of the Registrant thereon and to file the same
with the Securities and Exchange Commission. Each of said
attorneys and agents have power and authority to do and perform
in the name and on behalf of each of the undersigned, in any and
all capacities, every act whatsoever necessary or advisable to be
done in the premises as fully and to all intents and purposes as
each of the undersigned might or could do in person, hereby
ratifying and approving the act of said attorneys and agents and
each of them.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Martin L. Klopping President (Principal
- ----------------------- Executive Officer) May 20, 1996
Martin L. Klopping and Trustee
/s/ Eric Brucker
- -----------------------
Eric Brucker Trustee May 20, 1996
/s/ Fred L. Buckner
- -----------------------
Fred L. Buckner Trustee May 20, 1996
/s/ Robert J. Christian
- -----------------------
Robert J. Christian Trustee May 20, 1996
/s/ John J. Quindlen
- -----------------------
John J. Quindlen Trustee May 20, 1996
/s/ Robert C. Hancock Vice President and
- ----------------------- Treasurer (Principal
Robert C. Hancock Financial and May 20, 1996
Accounting Officer)
Exhibit 1(a)
CERTIFICATE OF TRUST
OF
WT LIQUID ASSETS TRUST
This Certificate of Trust, a business trust to be registered
under the Investment Company Act of 1940, as amended, is
filed in accordance with the provisions of the Delaware
Business Trust Act (Del. Code Ann. tit. 12, Section 3801 et
seq.) and sets forth the following:
1. The name of the trust is: WT Liquid Assets Trust
(the "Trust").
2. The business address of the registered office of
the Trust and of the registered agent of the Trust
is:
Martin L. Klopping
Rodney Square Management Corporation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
3. This Certificate shall be effective upon filing.
4. Notice is hereby given that the Trust shall
consist of one or more series. The debts,
liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect
to a particular series of the Trust shall be
enforceable against the assets of such series only
and not against the assets of the Trust generally
or any other series.
This Certificate is executed this 17th day of May,
1996, in Wilmington, Delaware, upon the penalties of perjury
and constitutes the oath or affirmation that the facts
stated above are true to the undersigned initial trustee's
belief or knowledge.
/s/ Martin L. Klopping
Martin L. Klopping, as
Trustee and not individually
Exhibit 1(b)
WT LIQUID ASSETS TRUST
TRUST INSTRUMENT
MAY 17, 1996
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. Management of the Trust . . . . . . . . . . . 2
Section 2. Initial Trustee; Number and Election of
Trustees. . . . . . . . . . . . . . . . . . . 2
Section 3. Term of Office. . . . . . . . . . . . . . . . 3
Section 4. Vacancies; Appointment of Trustees. . . . . . 3
Section 5. Temporary Vacancy or Absence. . . . . . . . . 3
Section 6. Chairman. . . . . . . . . . . . . . . . . . . 3
Section 7. Action by the Trustees. . . . . . . . . . . . 4
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. . . . . . . . . . . . . 7
ARTICLE IV
SERIES; CLASSES; SHARES. . . . . . . . . . . . . . . . . . . . 8
Section 1. Establishment of Series or Class. . . . . . . 8
Section 2. Shares. . . . . . . . . . . . . . . . . . . . 8
Section 3. Investment in the Trust . . . . . . . . . . . 9
Section 4. Assets and Liabilities of Series. . . . . . . 9
Section 5. Ownership and Transfer of Shares. . . . . . . 10
Section 6. Status of Shares; Limitation of Shareholder
Liability . . . . . . . . . . . . . . . . . . 11
ARTICLE V
DISTRIBUTIONS AND REDEMPTIONS. . . . . . . . . . . . . . . . . 11
Section 1. Distributions . . . . . . . . . . . . . . . . 11
Section 2. Redemptions . . . . . . . . . . . . . . . . . 11
Section 3. Determination of Net Asset Value. . . . . . . 12
Section 4. Suspension of Right of Redemption . . . . . . 12
Section 5. Redemptions Necessary for Qualification
as a Regulated Investment Company . . . . . . 13
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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
Section 3. Transfer Agency, Shareholder Services, and
Administration Agreements . . . . . . . . . . 15
Section 4. Custodian . . . . . . . . . . . . . . . . . . 15
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 . . . . . . . . . . . . . . . 17
Section 3. Indemnification of Shareholders . . . . . . . 19
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1. Trust Not a Partnership . . . . . . . . . . . 19
Section 2. Trustee Action; Expert Advice; No Bond or
Surety. . . . . . . . . . . . . . . . . . . . 19
Section 3. Record Dates. . . . . . . . . . . . . . . . . 20
Section 4. Termination of the Trust. . . . . . . . . . . 20
Section 5. Reorganization. . . . . . . . . . . . . . . . 21
Section 6. Trust Instrument. . . . . . . . . . . . . . . 21
Section 7. Applicable Law. . . . . . . . . . . . . . . . 22
Section 8. Amendments. . . . . . . . . . . . . . . . . . 22
Section 9. Fiscal Year . . . . . . . . . . . . . . . . . 23
Section 10. Severability. . . . . . . . . . . . . . . . . 23
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WT LIQUID ASSETS TRUST
This TRUST INSTRUMENT is made on May 26, 1996, 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 The WT Trust.
ARTICLE I
DEFINITIONS
Unless otherwise provided or required by the context:
(a) "By-Laws" means the By-Laws of the Trust adopted by the
Trustees, as amended from time to time;
(b) "Class" means the class of Shares of a Series established
pursuant to Article IV;
(c) "Commission," "Interested Person," and "Principal
Underwriter" have the meanings provided in the Investment Company
Act of 1940, as amended ("1940 Act");
(d) "Covered Person" means a person so defined in Article IX,
Section 2;
(e) "Delaware Act" means Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts," 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 on 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;
(i) "Series" means a series of Shares established pursuant to
Article IV;
(j) "Shareholder" means a record owner of Outstanding Shares;
(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 The WT Trust established hereby, and
reference to the Trust, when applicable to one or more Series,
refers to that Series;
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(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;
and
(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.
ARTICLE II
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 Trustee; Number and Election of Trustees.
The initial Trustee shall be the person initially signing this
Trust Instrument. The number of Trustees (other than the initial
Trustee) shall be fixed from time to time by a majority of the
Trustees; provided, that there shall be at least two (2) Trustees.
The Shareholders shall elect the Trustees (other than the initial
Trustee) on such dates as the Trustees may fix from time to time.
Section 3. Term of Office. Each Trustee shall hold office
for life or until his or her 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 may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other
Trustees, specifying the effective date of removal; (c) any Trustee
who requests to be retired, or who has 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; 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 in the Board of Trustees, 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
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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. The power of appointment is subject to Section 16(a) of
the 1940 Act.
Section 5. Temporary Vacancy or Absence. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled,
or while any Trustee is absent from his or her 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 or her powers as
Trustee for a period not exceeding six (6) months at any one time
to any other Trustee or Trustees.
Section 6. Chairman. The Trustees may appoint one of their
number to be Chairman of the Board of Trustees. He shall perform
any such duties as the Trustees may from time to time designate.
Section 7. Action by the Trustees. The Trustees shall act by
majority vote at a meeting duly called (including at a telephonic
meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting of 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
any meeting. Meetings of the Trustees may be called orally or in
writing by the President of the Trust or by any two 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 or her home or business address at
least twenty-four hours in advance of the meeting or by written
notice mailed to his or her 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 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 Trustees on behalf of the Trust,
except that the Trustees may cause legal title to any Trust
Property to be held by or in the name of the Trust, or in the name
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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.
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 By-Laws, 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; 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.
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
By-Laws, operating documents 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 and securities of any
kind, and without regard to whether they may mature before 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 a registered
investment company, and exercise all the powers necessary and
proper to conduct such a business;
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(c) To adopt By-Laws 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 as they deem appropriate;
(e) To employ as custodian of any assets of the Trust,
subject to any provisions herein or in the By-Laws, 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;
(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 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 By-Laws;
(i) To delegate such authority as they consider desirable to
any officers of the Trust and to any agent, independent contractor,
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 other securities or 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 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
<PAGE>
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
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 property by such
corporation or concern; and to pay calls or subscriptions with
respect to any security held in 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 hereinafter provided for;
(s) To borrow money;
(t) To establish, from time to time, a minimum total
investment for Shareholders, and to require the redemption of the
Shares of any Shareholders whose investment is less than such
minimum upon giving notice to such Shareholder;
(u) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may
consider proper, including a committee consisting of fewer than all
of the Trustees then in office, which may act for and bind the
Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any
legal action, suit or proceeding, pending or threatened;
(v) 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, 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; and
(w) 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.
<PAGE>
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 Class. 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 by the Trustees. The Trustees may designate the
relative rights and preferences of the Shares of each Series. 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 and have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that
expenses allocated to a Class may be borne solely by such Class as
determined by the Trustees and a Series or Class may have exclusive
voting rights with respect to matters affecting only that 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 but 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 shall be entitled to receive his or her pro rata share of
all distributions made with respect to such Series, provided that,
if Classes of a Series are outstanding, each holder of Shares of a
Class shall be entitled to receive his or her pro rata share of all
distributions made with respect to such Class of the Series. Upon
redemption of his or her Shares, such Shareholder shall be paid
solely out of the assets and property of such Series. The Trustees
may change the name of the Trust, or any Series or Class without
shareholder approval.
Section 2. Shares. 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 the Trust and of each Series and Class is unlimited and
each Share shall have a par value of $0.001 per Share. 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.
The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval: to issue
original or additional Shares and fractional Shares at such times
and on such terms and conditions as they deem appropriate; to
<PAGE>
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 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.
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 and fractional Shares at the Net Asset Value per Share
next determined after the investment is received or accepted in
good form 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 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 Series shall belong only to that Series for all
purposes, and to no other Series, subject only to the rights of
creditors of that 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
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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 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
notice in the certificate of trust, the statutory provisions of
Section 3804 of the Delaware Act relating to limitations on
liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust)
shall become applicable to the Trust and each Series. Any person
extending credit to, contracting with or having any claim against
any Series may look only to the assets of that Series to satisfy or
enforce any debt, with respect to that Series. No Shareholder or
former Shareholder of any Series shall have a claim on or any right
to any assets allocated or belonging to any other Series.
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 shall not be required to, but
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 and to have become a party hereto.
No Shareholder shall be personally liable for the debts,
liabilities, obligations and expenses incurred by, contracted for,
or otherwise existing with respect to, the Trust or any Series.
Neither the Trust nor the Trustees 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
<PAGE>
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.
ARTICLE V
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees may declare and pay
dividends and other distributions, including dividends on Shares of
a particular Series and other distributions from the assets
belonging to that 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 or her Shares
at a redemption price per Share equal to the Net Asset Value per
Share at such time as the Trustees shall have prescribed by
resolution. 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 the Trust's Registration Statement for that Series under the
Securities Act of 1933. 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. Upon 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 or her. 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.
<PAGE>
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 the
power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to an investment manager,
administrator or investment adviser, 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 trading 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 a
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 Article X,
Section 4; (e) the amendment of this Trust Instrument to the extent
<PAGE>
and as provided in Article X, Section 8; and (f) such additional
matters relating to the Trust as may be required or authorized by
law, this Trust Instrument, or the By-Laws 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
Series or Classes affected 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 By-Laws. The By-
Laws 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 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 By-Laws.
Section 2. Meetings of Shareholders. The first Shareholders'
meeting shall be held to elect Trustees at such time and place as
the Trustees designate. Annual meetings shall not be required.
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 ten percent of the
Outstanding Shares of such Series or Class entitled to vote.
Special meetings of Shareholders shall be held, notice of such
meetings shall be delivered and waiver of notice shall occur
according to the provisions of the Trust's By-Laws. Any action
that may be taken at a meeting of Shareholders may be taken without
a meeting according to the procedures set forth in the By-Laws.
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. Any lesser number shall
be sufficient for adjournments. Any adjourned session of a
Shareholders' meeting may be held within a reasonable time without
further notice. Except when a larger vote is required by law, this
Trust Instrument or the By-Laws, a majority of the Outstanding
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
Outstanding 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 Outstanding Shares of that Series or Class (or, if
<PAGE>
required or permitted by law, regulation, Commission order, or no-
action letter, a Majority Shareholder Vote of that Series or Class)
voted in person or by proxy voted 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.
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
or servicing agents.
Section 2. Principal Underwriter. The Trustees may enter into
contracts on behalf of the Trust or any Series or Class, providing
for the distribution and sale of Shares by the 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.
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 with a custodian 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) to receive and receipt for any moneys due to the Trust
or any Series and deposit the same in its own banking department or
<PAGE>
elsewhere, (c) to disburse such funds upon orders or vouchers, and
(d) to 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 or her
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; provided, that the
contract was reasonable and fair and not inconsistent with this
Trust Instrument or the By-Laws.
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 issue,
repurchase and redemption of Shares; 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 reports for Shareholders and
delivering them to Shareholders; expenses of meetings of
Shareholders and proxy solicitations therefor (unless otherwise
agreed to by another party); 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
<PAGE>
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.
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 and officers 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, investment adviser or independent
contractor of the Trust, but nothing contained in this Trust
Instrument or in the Delaware Act shall protect any Trustee or
officer of the Trust against liability to the Trust or to
Shareholders to which he or she 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 or
her office.
Section 2. Indemnification. (a) Subject to the exceptions
and limitations contained in subsections (b) and (c) below:
(i) every person who is, or has been, a Trustee or an
officer, employee or agent of the Trust ("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 him or her in connection with any
claim, action, suit or proceeding in which he or she
becomes involved as a party or otherwise by virtue of his
or her being or having been a Covered Person and against
amounts paid or incurred by him or her in the settlement
thereof;
(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, and the words "liability"
and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
<PAGE>
(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 or
her office, or (B) not to have acted in good faith in the
reasonable belief that his or her action was in the best
interest of the Trust; or
(ii) in the event of a settlement, unless there has been
a determination that such Covered Person did not engage
in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct
of his or her office; (A) by the court or other body
approving the settlement; (B) by the vote of at least a
majority of those Trustees who are neither Interested
Persons of the Trust nor are parties to the proceeding
based upon a review of readily available facts (as
opposed to a full trial-type inquiry); or (C) by written
opinion of independent legal counsel based upon a review
of readily available facts (as opposed to a full
trial-type inquiry).
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not be exclusive of or affect any other rights to
which any Covered Person may now or hereafter be entitled, and
shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.
(d) 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 him or
her to the Trust or applicable Series if it is ultimately
determined that he or she 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 proceeding, 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.
(e) 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 By-Laws inconsistent with this
Article, shall be prospective only, to the extent that such repeal
or modification would, if applied retrospectively, adversely affect
<PAGE>
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 his or her being or having
been a Shareholder and not because of his or her acts or omissions
or for some other reason, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators or other legal
representatives or in the case of any entity, its general
successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against
all loss and expense arising from such liability. The Trust, on
behalf of the affected Series, shall, upon request by such
Shareholder, assume the defense of any 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. Record dates for adjourned meetings of Shareholders shall
be set according to the Trust's By-Laws.
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
<PAGE>
(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 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.
(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. Notwithstanding anything else
herein, to change the Trust's form of organization the Trustees
may, without Shareholder approval, (a) 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 to or assume the Trust's registration under the 1940
Act, or (b) cause the Trust to incorporate under the laws of
<PAGE>
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.
Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or
consolidation approved by the Trustees in accordance with this
Section 5 may effect any amendment to the Trust Instrument or
effect the adoption of a new trust instrument of the Trust if it is
the surviving or resulting trust in the merger or consolidation.
Section 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, storage or other manner of holding of trust assets, or
(vii) the establishment of fiduciary or other standards of
responsibilities or limitations on the acts or powers of trustees,
which are inconsistent with the limitations or liabilities or
authorities 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.
<PAGE>
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 1, (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 of the Outstanding Shares of the Trust
entitled to vote thereon.
Section 9. Fiscal Year. The fiscal year of the Trust shall
end on a specified date as set forth in the By-Laws. 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
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.
IN WITNESS WHEREOF, the undersigned, being the initial
Trustee, have executed this Trust Instrument as of the date first
above written.
/s/ Martin L. Klopping
Martin L. Klopping, as
Trustee and not individually
Address: 1100 North Market Street
Wilmington, DE 19890-0001
<PAGE>
WT LIQUID ASSETS TRUST
TRUST INSTRUMENT
May 17, 1996
SCHEDULE A
----------
Money Market Fund
<PAGE>
SCHEDULE B
----------
MONEY MARKET FUND
- -----------------
Retail Class
Institutional Class
Service Class
Exhibit 2
WT LIQUID ASSETS TRUST
BY-LAWS
May 17, 1996
TABLE OF CONTENTS
<PAGE>
Page
ARTICLE I
PRINCIPAL OFFICE AND SEAL. . . . . . . . . . . . . . . . . . . 1
Section 1. Principal Office. . . . . . . . . . . . . . . 1
Section 2. Seal. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
MEETINGS OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Action by Trustees. . . . . . . . . . . . . . 1
Section 2. Compensation of Trustees. . . . . . . . . . . 1
ARTICLE III
COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Establishment . . . . . . . . . . . . . . . . 1
Section 2. Proceedings; Quorum; Action . . . . . . . . . 2
Section 3. Compensation of Committee Members . . . . . . 2
ARTICLE IV
OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. General . . . . . . . . . . . . . . . . . . . 2
Section 2. Election, Tenure and Qualifications of
Officers. . . . . . . . . . . . . . . . . . . 2
Section 3. Vacancies and Newly Created Offices . . . . . 2
Section 4. Removal and Resignation . . . . . . . . . . . 2
Section 5. President . . . . . . . . . . . . . . . . . . 3
Section 6. Vice President(s) . . . . . . . . . . . . . . 3
Section 7. Treasurer and Assistant Treasurer(s). . . . . 3
Section 8. Secretary and Assistant Secretaries . . . . . 3
Section 9. Compensation of Officers. . . . . . . . . . . 4
Section 10. Surety Bond . . . . . . . . . . . . . . . . . 4
ARTICLE V
MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . 4
Section 1. No Annual Meetings. . . . . . . . . . . . . . 4
Section 2. Special Meetings. . . . . . . . . . . . . . . 4
Section 3. Notice of Meetings; Waiver. . . . . . . . . . 5
Section 4. Adjourned Meetings. . . . . . . . . . . . . . 5
Section 5. Validity of Proxies . . . . . . . . . . . . . 5
Section 6. Record Date . . . . . . . . . . . . . . . . . 6
Section 7. Action Without a Meeting. . . . . . . . . . . 6
<PAGE>
ARTICLE VI
SHARES OF BENEFICIAL INTEREST. . . . . . . . . . . . . . . . . 6
Section 1. No Share Certificates . . . . . . . . . . . . 6
Section 2. Transfer of Shares. . . . . . . . . . . . . . 6
ARTICLE VII
CUSTODY OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 7
Section 1. Employment of a Custodian . . . . . . . . . . 7
Section 2. Termination of Custodian Agreement. . . . . . 7
Section 3. Other Arrangements. . . . . . . . . . . . . . 7
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT . . . . . . . . . . . . . . . . . . 7
Section 1. Fiscal Year . . . . . . . . . . . . . . . . . 7
Section 2. Accountant. . . . . . . . . . . . . . . . . . 7
ARTICLE IX
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1. General . . . . . . . . . . . . . . . . . . . 8
Section 2. By Shareholders Only. . . . . . . . . . . . . 8
ARTICLE X
NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1. Inspection of Books . . . . . . . . . . . . . 8
Section 2. Severability. . . . . . . . . . . . . . . . . 9
Section 3. Headings. . . . . . . . . . . . . . . . . . . 9
<PAGE>
BY-LAWS
OF
WT LIQUID ASSETS TRUST
These By-Laws of WT Liquid Assets Trust (the "Trust"), a
Delaware business trust, are subject to the Trust Instrument of
the Trust dated as of May 17, 1996, as from time to time amended,
supplemented or restated (the "Trust Instrument"). Capitalized
terms used herein have the same meanings as in the Trust
Instrument.
ARTICLE I
PRINCIPAL OFFICE AND SEAL
Section 1. Principal Office. The principal office of the Trust
shall be located in Wilmington, Delaware or such other location as
the Trustees determine. The Trust may establish and maintain other
offices and places of business as the Trustees determine.
Section 2. Seal. The Trustees may adopt a seal for the Trust in
such form and with such inscription as the Trustees determine. Any
Trustee or officer of the Trust shall have authority to affix the
seal to any document.
ARTICLE II
MEETINGS OF TRUSTEES
Section 1. Action by Trustees. Trustees may take actions at
meetings held at such places and times as the Trustees may
determine, or without meetings, all as provided in Article II,
Section 7, of the Trust Instrument.
Section 2. Compensation of Trustees. Each Trustee who is neither
an employee of an investment adviser of the Trust or any Series nor
an employee of an entity affiliated with the investment adviser may
receive such compensation from the Trust for services and
reimbursement for expenses as the Trustees may determine.
ARTICLE III
COMMITTEES
Section 1. Establishment. The Trustees may designate one or more
committees of the Trustees, which may include an Executive
Committee, a Nominating Committee, and an Audit Committee. The
Trustees shall determine the number of members of each committee
and its powers and shall appoint its members and its chair. Each
committee member shall serve at the pleasure of the Trustees. The
Trustees may abolish any committee at any time. Each committee
shall maintain records of its meetings and report its actions to
the Trustees. The Trustees may rescind any action of any
committee, but such rescission shall not have retroactive effect.
The Trustees may delegate to any committee any of its powers,
subject to the limitations of applicable law.
<PAGE>
Section 2. Proceedings; Quorum; Action. Each committee may adopt
such rules governing its proceedings, quorum and manner of acting
as it shall deem proper and desirable. In the absence of such
rules, a majority of any committee shall constitute a quorum, and
a committee shall act by the vote of a majority of a quorum.
Section 3. Compensation of Committee Members. Each committee
member who is not an "interested person" of the Trust, as defined
in the 1940 Act ("Disinterested Trustees") may receive such
compensation from the Trust for services and reimbursement for
expenses as the Trustees may determine.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Trust shall include a
President, one or more Vice Presidents, a Treasurer, and a
Secretary, and may include one or more Assistant Treasurers or
Assistant Secretaries and such other officers ("Other Officers") as
the Trustees may determine.
Section 2. Election, Tenure and Qualifications of Officers. The
Trustees shall elect the officers of the Trust. 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 death, inability to serve, or resignation. Any person may
hold one or more offices, except that the Chairman and the
Secretary may not be the same individual. 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.
No officer of the Trust need be a Trustee or Shareholder.
Section 3. Vacancies and Newly Created Offices. Whenever a
vacancy shall occur in any office or if any new office is created,
the Trustees may fill such vacancy or new office.
Section 4. Removal and Resignation. Officers serve at the
pleasure of the Trustees and may be removed at any time with or
without cause. The Trustees may delegate this power to the
President with respect to any Other Officer. Such removal shall be
without prejudice to the contract rights, if any, of the person so
removed. Any officer may resign from office at any time by
delivering a written resignation to the Trustees or the President.
Unless otherwise specified therein, such resignation shall take
effect upon delivery.
Section 5. President. The President shall be the chief executive
officer of the Trust. Subject to the direction of the Trustees,
the President shall have general charge, supervision and control
over the Trust's business affairs and shall be responsible for the
management thereof and the execution of policies established by the
Trustees. The President shall preside at any Shareholders'
meetings and at all meetings 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. The President also shall have the
<PAGE>
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 assign to
the President.
Section 6. Vice President(s). The Vice President(s) shall have
such powers and perform such duties as the Trustees or the
President may determine. At the request or in the absence or
disability of the President, the Vice President(s) shall perform
all the duties of the President and, when so acting, shall have all
the powers of the President.
Section 7. Treasurer and Assistant Treasurer(s). The Treasurer
shall be the principal financial and accounting officer of the
Trust. The Treasurer shall have general charge of the finances and
books of the Trust, and shall report to the Trustees annually
regarding the financial condition of each Series as soon as
possible after the close of such Series' fiscal year. The
Treasurer shall be responsible for the delivery of all funds and
securities of the Trust to such company as the Trustees shall
retain as Custodian. The Treasurer shall furnish such reports
concerning the financial condition of the Trust as the Trustees may
request. The Treasurer shall perform all acts incidental to the
office of Treasurer, subject to the Trustees' supervision, and
shall perform such additional duties as the Trustees may 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 8. 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 notices of
the Trust. The Secretary shall have custody of any seal of the
Trust and shall be responsible for the records of the Trust,
including the Share register and such other books and documents as
may be required by the Trustees or by law. 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 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 9. Compensation of Officers. Each officer may receive
such compensation from the Trust for services and reimbursement for
expenses as the Trustees may determine.
Section 10. 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, as amended ("1940 Act") and the rules and regulations of the
Securities and Exchange Commission ("Commission") to the Trust in
such sum and with such surety or sureties as the Trustees may
<PAGE>
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. No Annual Meetings. There shall be no annual
Shareholders' meetings, unless required by law.
Section 2. Special Meetings. The Secretary shall call a special
meeting of Shareholders of any Series or Class whenever ordered by
the Trustees.
The Secretary also shall call a special meeting of
Shareholders of any Series or Class upon the written request of
Shareholders owning at least ten percent of the Outstanding Shares
of such Series or Class 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 when required to do so, the Trustees or the Shareholders
requesting such a meeting may, in the name of the Secretary, call
the meeting by giving the required notice. The Secretary shall not
call a special meeting upon the request of Shareholders of any
Series or Class to consider any matter that is substantially the
same as a matter voted upon at any special meeting of Shareholders
of such Series or Class held during the preceding twelve months,
unless requested by the holders of a majority of the Outstanding
Shares of such Series or Class entitled to be voted at such
meeting.
A special meeting of Shareholders of any Series or Class shall
be held at such time and place as is determined by the Trustees and
stated in the notice of that meeting.
Section 3. Notice of Meetings; Waiver. The Secretary shall call
a special meeting of Shareholders by giving written notice of the
place, date, time, and purposes of that meeting at least fifteen
days before the date of such meeting. The Secretary may deliver or
mail, postage prepaid, the written notice of any meeting 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.
Section 4. Adjourned Meetings. A Shareholders' meeting may be
adjourned one or more times for any reason, including the failure
of the presence of a quorum to attending the meeting. No notice of
adjournment of a meeting to another time or place need be given to
Shareholders if such time and place are announced at the meeting at
which the adjournment is taken or reasonable notice is given to
persons present at the meeting, and if the adjourned meeting is
held within a reasonable time after the date set for the original
<PAGE>
meeting. Any business that might have been transacted at the
original meeting may be transacted at any adjourned meeting. If
after the adjournment a new record date is fixed for the adjourned
meeting, the Secretary shall give notice of the adjourned meeting
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 5. 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) the Shareholder or
his or her duly authorized attorney has signed and dated a written
instrument authorizing such proxy to act, 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 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 for more than eleven months prior to 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. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. At every meeting of Shareholders,
unless the voting is conducted by inspectors, the chairman of the
meeting shall decide all questions concerning the qualifications of
voters, the validity of proxies, and the acceptance or rejection of
votes. Subject to the provisions of the Delaware Business Trust
Act, the Trust Instrument, or these By-Laws, the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder shall govern all matters
concerning the giving, voting or validity of proxies, as if the
Trust were a Delaware corporation and the Shareholders were
shareholders of a Delaware corporation.
Section 6. Record Date. The Trustees may fix in advance a date up
to ninety days prior to the date of any Shareholders' meeting as a
record date for the determination of the Shareholders entitled to
notice of, and to vote at, any such meeting. The Shareholders of
record entitled to vote at a Shareholders' meeting shall be deemed
the Shareholders of record at any meeting reconvened after one or
more adjournments, unless the Trustees have fixed a new record
date. If the Shareholders' meeting is adjourned for more than
sixty days after the original date, the Trustees shall establish a
new record date.
<PAGE>
Section 7. Action Without a Meeting. Shareholders may take any
action without a meeting if a majority (or such greater 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 Shareholders' meetings.
Such written consent shall be treated for all purposes as a vote at
a meeting of the Shareholders.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 1. No Share Certificates. Neither the Trust nor any
Series or Class shall issue certificates certifying the ownership
of Shares, unless the Trustees may otherwise specifically authorize
such certificates.
Section 2. Transfer of Shares. Shares 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. Shares may be freely transferred and the
Trustees may, from time to time, adopt rules and regulations
regarding the method of transfer of such Shares.
ARTICLE VII
CUSTODY OF SECURITIES
Section 1. Employment of a Custodian. The Trust shall at all
times place and maintain all cash, securities and other assets of
the Trust and of each Series in the custody of a custodian meeting
the requirements set forth in Article VII, Section 4 of the Trust
Instrument ("Custodian"). The Custodian shall be appointed from
time to time by the Board of Trustees, who shall determine its
remuneration.
Section 2. Termination of Custodian Agreement. Upon termination
of any Custodian Agreement or the inability of the Custodian to
continue to serve as custodian, in either case with respect to the
Trust or any Series, the Board of Trustees shall (a) use its best
efforts to obtain a successor Custodian; and (b) require that the
cash, securities and other assets owned by the Trust or any Series
be delivered directly to the successor Custodian.
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 end on
June 30th.
Section 2. Accountant. The Trust shall employ independent
certified public accountants as its 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.
<PAGE>
A majority of the Disinterested Trustees shall select the
Accountant at any meeting held within ninety days before or after
the beginning of the fiscal year of the Trust, acting upon the
recommendation of the Audit Committee. The employment of the
Accountant shall be conditioned upon the right of the Trust to
terminate such employment without any penalty by vote of a Majority
Shareholder Vote at any Shareholders' meeting called for that
purpose.
ARTICLE IX
AMENDMENTS
Section 1. General. Except as provided in Section 2 of this
Article, these By-Laws may be amended by the Trustees, or by the
affirmative vote of a majority of the Outstanding Shares entitled
to vote at any meeting.
Section 2. By Shareholders Only. After the issue of any Shares,
this Article may only be amended by the affirmative vote of the
holders of the lesser of (a) at least two-thirds of the Outstanding
Shares present and entitled to vote at any meeting, or (b) at least
fifty percent of the Outstanding Shares.
ARTICLE X
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 determined by or under the direction of the
Trustees. Net Asset Value per Share shall be determined separately
for each Series and each Class and shall be determined on such days
and at such times as the Trustees may determine. The Trustees
shall make such determination 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 1940 Act and the rules, regulations and
interpretations thereof promulgated or issued by the SEC or insofar
as permitted by any order of the SEC applicable to the Series or to
the Class. The Trustees may delegate any of their powers and
duties under this Article X 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 Board of 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 Board of Trustees or by resolution of
Shareholders.
<PAGE>
Section 2. Severability. The provisions of these By-Laws are
severable. If the Board of 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 these
By-Laws; provided, however, that such determination shall not
affect any of the remaining provisions of these By-Laws 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 By-
Laws.
Section 3. Headings. Headings are placed in these By-Laws for
convenience of reference only and in case of any conflict, the text
of these By-Laws rather than the headings shall control.
Exhibit 4
WT LIQUID ASSETS TRUST
Exhibit 4 to N-1A
INSTRUMENTS DEFINING THE RIGHTS OF SHAREHOLDERS
(Relevant portions)
(a) Trust Instrument dated May 17, 1996
Article II - Trustees.
Initial Trustee; Number and Election of Trustees - Section
2. The initial Trustee shall be the person initially signing
this Trust Instrument. The number of Trustees (other than the
initial Trustee) shall be fixed from time to time by a majority
of the Trustees; provided, that there shall be at least two (2)
Trustees. The Shareholders shall elect the Trustees (other than
the initial Trustee) on such dates as the Trustees may fix from
time to time.
Term of Office - Section 3. Each Trustee shall hold office
for life or until his or her 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 may be removed with or without
cause at any time by a written instrument signed by at least
two-thirds of the other Trustees, specifying the effective date
of removal; (c) any Trustee who requests to be retired, or who
has 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; 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.
Vacancies; Appointment of Trustees - Section 4. Whenever a
vacancy shall exist in the Board of Trustees, 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. The power of appointment is
subject to Section 16(a) of the 1940 Act.
<PAGE>
Ownership of Trust Property - Section 8. 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 Trustees on behalf of the
Trust, except that the Trustees may cause legal title to any
Trust Property to be held by or in the name of the Trust, or in
the name of any person as nominee. No Shareholder shall be
deemed to have a severable ownership in any individual asset of
the Trust or of any Series or any right of partition or
possession thereof, but each Shareholder shall have, as provided
in Article IV, a proportionate undivided beneficial interest in
the Trust or Series represented by Shares.
Trustees, etc. as Shareholders - Section 10. Subject to any
restrictions in the By-Laws, 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; 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.
Article IV - Series; Classes; Shares.
Establishment of Series or Class - Section 1. 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 by the Trustees. The Trustees
may designate the relative rights and preferences of the Shares
of each Series. 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 and have
identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that expenses allocated to a
Class may be borne solely by such Class as determined by the
Trustees and a Series or Class may have exclusive voting rights
with respect to matters affecting only that 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 but 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 shall be entitled to receive his or her pro rata
share of all distributions made with respect to such Series,
provided that, if Classes of a Series are outstanding, each
holder of Shares of a Class shall be entitled to receive his or
her pro rata share of all distributions made with respect to such
Class of the Series. Upon redemption of his or her Shares, such
Shareholder shall be paid solely out of the assets and property
of such Series. The Trustees may change the name of the Trust,
or any Series or Class without shareholder approval.
Shares - Section 2. 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 the Trust and of each Series and Class is unlimited and
<PAGE>
each Share shall have a par value of $0.001 per Share. 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.
The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval: to issue
original or additional Shares and fractional Shares at such times
and on such terms and conditions as they deem appropriate; 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
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.
Investment in the Trust - Section 3. 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 and fractional Shares at the Net
Asset Value per Share next determined after the investment is
received or accepted in good form 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 shall have the
right to refuse to accept investments in any Series at any time
without any cause or reason therefor whatsoever.
Assets and Liabilities of Series - Section 4. 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 Series shall belong only
to that Series for all purposes, and to no other Series, subject
only to the rights of creditors of that 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,
<PAGE>
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 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 notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect
under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and
each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets
of that Series to satisfy or enforce any debt, with respect to
that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or
belonging to any other Series.
Ownership and Transfer of Shares - Section 5. 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 shall not be
required to, but 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.
Status of Shares; Limitation of Shareholder Liability -
Section 6. 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
<PAGE>
held expressly to have assented to and agreed to be bound by the
terms of this Trust Instrument and to have become a party hereto.
No Shareholder shall be personally liable for the debts,
liabilities, obligations and expenses incurred by, contracted
for, or otherwise existing with respect to, the Trust or any
Series. Neither the Trust nor the Trustees 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.
Article V - Distributions and Redemptions
Distributions - Section 1. The Trustees may declare and pay
dividends and other distributions, including dividends on Shares
of a particular Series and other distributions from the assets
belonging to that 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.
Redemptions - Section 2. 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 or her
Shares at a redemption price per Share equal to the Net Asset
Value per Share at such time as the Trustees shall have
prescribed by resolution. 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 the Trust's Registration Statement
for that Series under the Securities Act of 1933. 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. Upon 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
<PAGE>
purchase of Shares issued to him or her. 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.
Determination of Net Asset Value - Section 3. 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 the
power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to an investment
manager, administrator or investment adviser, 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 trading on the New York Stock Exchange on each day for
all or part of which such Exchange is open for unrestricted
trading.
Suspension of Right of Redemption - Section 4. 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.
Redemptions Necessary for Qualification as a Regulated
Investment Company - Section 5. 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.
<PAGE>
Article VI - Shareholders' Voting Power and Meetings.
Voting Powers - Section 1. 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
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
or authorized by law, this Trust Instrument, or the By-Laws 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
Series or Classes affected 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
By-Laws. The By-Laws 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 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 By-Laws.
Meetings of Shareholders - Section 2. The first
Shareholders' meeting shall be held to elect Trustees at such
time and place as the Trustees designate. Annual meetings shall
not be required. 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 ten percent of the Outstanding Shares of such Series or
Class entitled to vote. Special meetings of Shareholders shall
be held, notice of such meetings shall be delivered and waiver of
notice shall occur according to the provisions of the Trust's By-
Laws. Any action that may be taken at a meeting of Shareholders
may be taken without a meeting according to the procedures set
forth in the By-Laws.
Quorum; Required Vote - Section 3. 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
<PAGE>
with respect to the entire Trust, respectively. Any lesser
number shall be sufficient for adjournments. Any adjourned
session of a Shareholders' meeting may be held within a
reasonable time without further notice. Except when a larger
vote is required by law, this Trust Instrument or the By-Laws, a
majority of the Outstanding 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 Outstanding 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
Outstanding Shares of that Series or Class (or, if required or
permitted by law, regulation, Commission order, or no-action
letter, a Majority Shareholder Vote of that Series or Class)
voted in person or by proxy voted 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.
Article IX - Limitation of Liability and Indemnification.
Indemnification of Shareholders - Section 3. If any
Shareholder or former Shareholder of any Series shall be held
personally liable solely by reason of his or her being or having
been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or
other legal representatives or in the case of any entity, its
general successor) shall be entitled out of the assets belonging
to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The
Trust, on behalf of the affected Series, shall, upon request by
such Shareholder, assume the defense of any 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.
Trust Not a Partnership - Section 1. 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.
Record Dates - Section 3. 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. Record dates for adjourned meetings of
Shareholders shall be set according to the Trust's By-Laws.
<PAGE>
Termination of the Trust - Section 4. (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 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.
(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.
Amendments - Section 8. The Trustees may, without any
Shareholder vote, amend or otherwise supplement this Trust
<PAGE>
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 1, (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 of the Outstanding Shares of the Trust entitled to
vote thereon.
(b) By-Laws of the Registrant dated May 17, 1996
Article V - Meetings of Shareholders.
No Annual Meetings - Section 1. There shall be no annual
Shareholders' meetings, unless required by law.
Special Meetings - Section 2. The Secretary shall call a
special meeting of Shareholders of any Series or Class whenever
ordered by the Trustees.
The Secretary also shall call a special meeting of
Shareholders of any Series or Class upon the written request of
Shareholders owning at least ten percent of the Outstanding
Shares of such Series or Class 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 when required to do so, the Trustees or
the Shareholders requesting such a meeting may, in the name of
the Secretary, call the meeting by giving the required notice.
The Secretary shall not call a special meeting upon the request
of Shareholders of any Series or Class to consider any matter
that is substantially the same as a matter voted upon at any
special meeting of Shareholders of such Series or Class held
during the preceding twelve months, unless requested by the
holders of a majority of the Outstanding Shares of such Series or
Class entitled to be voted at such meeting.
A special meeting of Shareholders of any Series or Class
shall be held at such time and place as is determined by the
Trustees and stated in the notice of that meeting.
<PAGE>
Notice of Meetings; Waiver - Section 3. The Secretary shall
call a special meeting of Shareholders by giving written notice
of the place, date, time, and purposes of that meeting at least
fifteen days before the date of such meeting. The Secretary may
deliver or mail, postage prepaid, the written notice of any
meeting 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.
Adjourned Meetings - Section 4. A Shareholders' meeting may
be adjourned one or more times for any reason, including the
failure of the presence of a quorum to attending the meeting. No
notice of adjournment of a meeting to another time or place need
be given to Shareholders if such time and place are announced at
the meeting at which the adjournment is taken or reasonable
notice is given to persons present at the meeting, and if the
adjourned meeting is held within a reasonable time after the date
set for the original meeting. Any business that might have been
transacted at the original meeting may be transacted at any
adjourned meeting. If after the adjournment a new record date is
fixed for the adjourned meeting, the Secretary shall give notice
of the adjourned meeting 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.
Validity of Proxies - Section 5. Subject to the provisions
of the Trust Instrument, Shareholders entitled to vote may vote
either in person or by proxy; provided, that either (1) the
Shareholder or his or her duly authorized attorney has signed and
dated a written instrument authorizing such proxy to act, 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 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 for more than eleven months
prior to 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. A proxy
purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the
challenger. At every meeting of Shareholders, unless the voting
is conducted by inspectors, the chairman of the meeting shall
decide all questions concerning the qualifications of voters, the
validity of proxies, and the acceptance or rejection of votes.
<PAGE>
Subject to the provisions of the Delaware Business Trust Act, the
Trust Instrument, or these By-Laws, the General Corporation Law
of the State of Delaware relating to proxies, and judicial
interpretations thereunder shall govern all matters concerning
the giving, voting or validity of proxies, as if the Trust were a
Delaware corporation and the Shareholders were shareholders of a
Delaware corporation.
Record Date - Section 6. The Trustees may fix in advance a
date up to ninety days prior to the date of any Shareholders'
meeting as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such
meeting. The Shareholders of record entitled to vote at a
Shareholders' meeting shall be deemed the Shareholders of record
at any meeting reconvened after one or more adjournments, unless
the Trustees have fixed a new record date. If the Shareholders'
meeting is adjourned for more than sixty days after the original
date, the Trustees shall establish a new record date.
Action Without a Meeting - Section 7. Shareholders may take
any action without a meeting if a majority (or such greater
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
Shareholders' meetings. Such written consent shall be treated
for all purposes as a vote at a meeting of the Shareholders.
Article VI - Shares of Beneficial Interest.
No Share Certificates - Section 1. Neither the Trust nor
any Series or Class shall issue certificates certifying the
ownership of Shares, unless the Trustees may otherwise
specifically authorize such certificates.
Transfer of Shares - Section 2. Shares 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. Shares may be
freely transferred and the Trustees may, from time to time, adopt
rules and regulations regarding the method of transfer of such
Shares.
Article IX - Amendments.
General - Section 1. Except as provided in Section 2 of
this Article, these By-Laws may be amended by the Trustees, or by
the affirmative vote of a majority of the Outstanding Shares
entitled to vote at any meeting.
By Shareholders Only - Section 2. After the issue of any
Shares, this Article may only be amended by the affirmative vote
of the holders of the lesser of (a) at least two-thirds of the
Outstanding Shares present and entitled to vote at any meeting,
or (b) at least fifty percent of the Outstanding Shares.
<PAGE>
Article XI - Miscellaneous.
Inspection of Books - Section 1. The Board of 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 Board of Trustees
or by resolution of Shareholders.
