SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.___ )
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
U.S. GLOBAL INVESTORS FUNDS
------------------
BONNEL GROWTH FUND
MEGATRENDS FUND
REGENT EASTERN EUROPEAN FUND
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
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PRELIMINARY NOTICE OF SPECIAL MEETING AND PROXY STATEMENT
---------------------------------------------------------
June 26, 2000
Dear Shareholder:
Enclosed is a proxy statement describing important proposals for you to
consider. You are eligible to vote on these proposals because you were a
shareholder of record of one or more of the funds listed below on June 19, 2000.
o China Region Opportunity Fund
o All American Equity Fund
o Real Estate Fund
o Equity Income Fund
o Gold Shares Fund
o World Gold Fund
o Global Resources Fund
o Tax Free Fund
o Near-Term Tax Free Fund
o U.S. Government Securities Savings Fund
o U.S. Treasury Securities Cash Fund
I'm sure you, like most people, lead a busy life and are tempted to put this
proxy aside. Please don't. When shareholders do not vote, the funds incur
additional expenses to pay for follow-up mailings and telephone calls. Please
take a few minutes to review this proxy statement and sign and return the proxy
card today or you can vote on the Internet or by telephone (see enclosed
instructions).
The board of trustees has unanimously approved these proposals and recommends a
vote "FOR" each one. If you have any questions regarding the issues to be voted
on or need assistance completing your proxy card, please contact us at
1-800-873-8637 weekdays from 7:00 a.m. to 7:00 p.m. central daylight time.
I appreciate your taking the time to consider these important proposals. Thank
you for investing with U.S. Global Investors Funds.
Sincerely,
Susan B. McGee
President, General Counsel
President's Letter
Page 1 of 24
<PAGE>
[GRAPHIC: U.S. GLOBAL INVESTORS, INC. LOGO]
Proxy Statement
June 26, 2000
IMPORTANT VOTING INFORMATION INSIDE!
Table of Contents
PROXY STATEMENT SUMMARY ................................................... 2
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS OF U.S. ...................
GLOBAL INVESTORS FUNDS ................................................. 4
PROXY STATEMENT FOR SPECIAL JOINT MEETING OF SHAREHOLDERS OF U.S. GLOBAL
INVESTORS FUNDS ....................................................... 5
PROPOSAL ONE - ALL FUNDS - TO ELECT TWO TRUSTEES ...................... 7
PROPOSAL TWO - ALL FUNDS - TO RATIFY THE SELECTION OF INDEPENDENT
AUDITORS ........................................................... 9
PROPOSAL THREE - ALL FUNDS - TO AUTHORIZE THE TRUSTEES TO ADOPT
AN AMENDED AND RESTATED MASTER TRUST AGREEMENT ..................... 9
PROPOSAL FOUR - TO RECLASSIFY OR AMEND CERTAIN INVESTMENT RESTRICTIONS .... 10
PROPOSAL 4A - All Funds - To Amend the Fundamental Investment
Restriction Concerning the Issuance of Senior Securities ......... 10
PROPOSAL 4B - All Funds - To Amend the Fundamental Investment
Restriction Concerning Underwriting ............................. 11
PROPOSAL 4C - All Funds - To Amend the Fundamental Investment
Limitation Concerning Borrowing ................................. 11
PROPOSAL 4D - All Funds - To Amend the Fundamental Investment
Restriction Concerning Investments in Real Estate ............... 12
PROPOSAL 4E - All Funds - To Amend the Fundamental Investment
Restriction Concerning Purchase or Sale of Commodities or
Commodity Futures Contracts ..................................... 13
PROPOSAL 4F - All Funds - To Amend the Fundamental Investment
Restriction Concerning the Lending of Assets .................... 13
PROPOSAL 4G - All Funds - To Amend and Reclassify the Fundamental
Investment Restriction Concerning Margin Purchases
of Securities ................................................... 14
PROPOSAL 4H - All Funds - To Amend and Reclassify the Fundamental
Investment Restriction Concerning Short Sales ................... 14
PROPOSAL 4I - All Funds - To Eliminate the Fundamental Investment
Restriction Concerning Restricted Securities .................... 15
PROPOSAL 4J - Gold Shares Fund - To Eliminate the Fundamental
Investment Restriction Concerning Investments in
Restricted Securities of Issuers with less than Two Years of
Continuous Operations ........................................... 15
PROPOSAL 4K - Gold Shares Fund - To Eliminate the Fundamental
Investment Restriction Concerning Investments in Warrants ....... 15
PROPOSAL 4L - U.S. Treasury Securities Cash Fund and
U.S. Government Securities Savings Fund - To Amend the
Fundamental Investment Restriction Concerning Industry
Concentration ................................................... 16
PROPOSAL 4M - All Funds except the Gold Shares, World Gold and
Global Resources Funds - To Eliminate the Fundamental
Issuer Percentage Restriction of Investments .................... 16
PROPOSAL FIVE - CHINA REGION OPPORTUNITY FUND - TO CHANGE THE
STATUS OF THE CHINA REGION OPPORTUNITY FUND TO
NONDIVERSIFIED STATUS ................................................ 17
PROPOSAL SIX - REAL ESTATE FUND - TO LIQUIDATE THE REAL ESTATE FUND ..... 18
EXHIBIT 1 - FORM OF AMENDED AND RESTATED MASTER TRUST AGREEMENT ......... 20
Proxy Statement Summary
Page 1 of 24
<PAGE>
PROXY STATEMENT SUMMARY
The following questions and answers provide a brief summary of the proposals to
be considered at the special meeting of shareholders. The information below is
qualified in its entirety by more detailed information contained elsewhere in
this proxy statement. Please read all of the enclosed proxy materials before
voting.
I'M A SMALL INVESTOR. WHY SHOULD I BOTHER TO VOTE?
Your vote makes a difference. If many shareholders just like you fail to
vote, the funds may not receive enough votes to hold the meeting. If this
happens, the trustees will solicit votes again - a costly proposition for
the funds.
WHEN WILL THE SPECIAL MEETING BE HELD? WHO IS ELIGIBLE TO VOTE?
The meeting will be held on Monday, August 17, 2000, at 10:00 a.m.
Central Daylight time, at 7900 Callaghan Road, San Antonio, Texas. This
will be a business meeting only. There will be no presentations about the
funds. The record date for the meeting is the close of business June 19,
2000. Only shareholders who own shares on the record date are entitled to
vote at the meeting.
WHAT AM I BEING ASKED TO VOTE UPON?
All shareholders are being asked to vote on four items:
1. Election of two Trustees
2. Ratification of the selection of Auditors
3. Approval of an amended and restated master trust agreement
4. Reclassification or amendment of certain investment restrictions
In addition, shareholders of the China Region Opportunity Fund are being
asked to vote on a proposal to change the fund's classification to
"non-diversified" and shareholders of the Real Estate Fund are voting on
a proposal to approve liquidation of the fund.
HOW DO THE TRUSTEES RECOMMEND THAT I VOTE ON THESE PROPOSALS?
The trustees unanimously recommend that you vote "FOR" all proposals.
WHEN WILL THE PROPOSALS TAKE EFFECT IF APPROVED?
The proposals will take effect on November 1, 2000.
WHO IS ASKING FOR MY VOTE?
Your board of trustees is asking you to sign and return the enclosed
proxy card so your votes can be cast at the meeting. In the event the
meeting is adjourned, these proxies also would be voted at the reconvened
meeting.
HOW DO I VOTE MY SHARES?
We've made it easy for you. You can vote through the Internet, by mail,
or in person.
o To vote through the Internet, just visit the website address
indicated on the enclosed instructions (you will need the control
number that appears on your proxy card).
o To vote by telephone, just dial the toll free number indicated on
the enclosed sheet and follow the instructions that you hear on the
phone.
Proxy Statement Summary
Page 2 of 24
<PAGE>
We encourage you to vote by Internet or telephone, using the control
number that appears on your proxy card. These voting methods will save
the funds a good deal of money because the fund will not have to pay for
return- mail postage.
o To vote by mail, sign and send us the enclosed proxy card in the
envelope provided. Note: If you vote by internet or telephone,
please do not return your proxy card.
o Or, you can vote in person at the meeting on August 17, 2000.
I PLAN TO VOTE ON THE INTERNET OR TELEPHONE. HOW DOES INTERNET OR TELEPHONE
VOTING WORK?
Just follow the instructions on the enclosed sheet.
I PLAN TO VOTE BY MAIL. HOW SHOULD I SIGN MY PROXY CARD?
If you are an individual account owner, please sign exactly as your name
appears on the proxy card. Either owner of a joint account may sign the
proxy card, but the signer's name must exactly match one that appears on
the card. You should sign proxy cards for other types of accounts in a
way that indicates your authority (for instance, "John Doe, Custodian").
IF I SEND MY PROXY IN NOW, CAN I CHANGE MY VOTE LATER?
A proxy can be revoked at any time by:
o Revoting through the Internet or by telephone, o Sending us
another proxy card, o Writing to us, or
o Attending the meeting and voting in person. Even if you plan
to attend the meeting and vote in person, we ask that you return
the enclosed proxy card. Doing so will help us ensure that an
adequate number of shares are present at the meeting.
If you have any questions regarding the proxy statement or need assistance in
voting your shares, please call us at 816-531-5575 weekdays from 7 a.m. to 7
p.m. Central Daylight time.
Proxy Statement Summary
Page 3 of 24
<PAGE>
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS OF
U.S. GLOBAL INVESTORS FUNDS
------------------------------------
CHINA REGION OPPORTUNITY FUND
ALL AMERICAN EQUITY FUND
REAL ESTATE FUND
EQUITY INCOME FUND
GOLD SHARES FUND
WORLD GOLD FUND
GLOBAL RESOURCES FUND
TAX FREE FUND
NEAR-TERM TAX FREE FUND
U.S. GOVERNMENT SECURITIES SAVINGS FUND
U.S. TREASURY SECURITIES CASH FUND
To the Shareholders of the Funds:
A Special Joint Meeting of Shareholders (Meeting) of the China Region
Opportunity Fund, All American Equity Fund, Real Estate Fund, Equity Income
Fund, Gold Shares Fund, World Gold Fund, Global Resources Fund, Tax Free Fund,
Near-Term Tax Free Fund, U.S. Government Securities Savings Fund, and the U.S.
Treasury Securities Cash Fund (the funds) will be held at 7900 Callaghan, San
Antonio, Texas 78229, on August 17, 2000, at 10:00 a.m., Central Daylight time.
The purpose of the Meeting is to consider and act on the following proposals and
to transact other business as may properly come before the Meeting or any
adjournments of the Meeting.
1. To elect two trustees
2. To ratify the selection of the Independent Auditors
3. To approve an amended and restated master trust agreement
4. To reclassify or amend certain investment restrictions
5. To liquidate the Real Estate Fund.
6. To change the status of the China Region Opportunity Fund to
nondiversified status
The board of trustees has fixed the close of business on June 19, 2000, as the
record date for the determination of the shareholders of each fund entitled to
notice of, and to vote at, the Meeting.
Your vote is important - please vote promptly.
We urge any shareholder who does not expect to attend the meeting to indicate
voting instructions on the enclosed proxy card, date and sign it, and return it
in the envelope provided, which needs no postage if mailed in the United States
or to vote by internet or telephone. To avoid unnecessary expense, we ask your
cooperation in mailing your proxy card promptly, no matter how large or small
your holdings may be.
By Order of the Board of Trustees,
Susan B. McGee
Secretary of the Trust
Dated: June 26, 2000
Notice of Special Meeting of Shareholders
Page 4 of 24
<PAGE>
Proxy Statement for Special Joint Meeting
of Shareholders of U.S. Global Investors Funds
------------------------------------
China Region Opportunity Fund
All American Equity Fund
Real Estate Fund
Equity Income Fund
Gold Shares Fund
World Gold Fund
Global Resources Fund
Tax Free Fund
Near-Term Tax Free Fund
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund
This proxy statement is furnished to shareholders of the all of the series of
U.S. Global Investors Funds, a Massachusetts business trust (Trust). This proxy
statement is furnished in connection with the solicitation of proxies by and on
behalf of the board of trustees of the Trust to be used at a special meeting of
shareholders to be held at 7900 Callaghan Road, San Antonio, Texas 78229 on
August 17, 2000, at 10:00 a.m., or at any adjournments thereof.
The purpose of the Meeting is set forth in the accompanying Notice. This proxy
statement and the accompanying proxy are expected to be mailed to shareholders
on or about June 26, 2000. Shareholders of record at the close of business on
June 19, 2000, shall be entitled to notice of and to vote at the meeting or any
adjournment thereof.
All shares represented at the meeting by properly executed proxies will be voted
in accordance with the instructions thereon, if any. If no instructions are
given, the proxy will be voted for approval of the proposals. The board of
trustees does not know of any action to be considered at the meeting other than
the proposals, which are discussed below.
The proxy may be revoked at any time before it is exercised by the subsequent
execution and submission of a revised proxy, by written notice of revocation to
the Secretary of the Trust, or by voting in person at the meeting.
The cost of the solicitation of proxies by the board of trustees of the Trust
for this meeting of shareholders will be borne by the Trust and will include any
reimbursement paid to fiduciaries, brokerage firms, nominees, and custodians for
their expenses in forwarding solicitation material regarding the meeting to
beneficial owners. DF King & Co., Inc. will provide the Trust with solicitation
services that will include soliciting shareholder votes by mail or telephone and
planning the voting process, tabulation and reporting. The estimated cost of
these solicitation services is approximately $160,000. In addition to the
solicitation of proxies by mail, officers and employees of the Trust and U.S.
Global Investors, Inc. (Adviser), without additional compensation, may solicit
proxies in person or by telephone or other means of communication.
Shares of each fund of the trust issued and outstanding as of June 19, 2000,are
indicated in the table below. Each full share outstanding is entitled to one
full vote and each fractional share outstanding is entitled to a proportionate
share of one vote.
China Region Opportunity Fund 00,000,000
All American Equity Fund 00,000,000
Real Estate Fund 00,000,000
Equity Income Fund 00,000,000
Gold Shares Fund 00,000,000
World Gold Fund 00,000,000
Global Resources Fund 00,000,000
Tax Free Fund 00,000,000
Near-Term Tax Free Fund 00,000,000
U.S. Government Securities Savings Fund 00,000,000
U.S. Treasury Securities Cash Fund 00,000,000
VOTE REQUIRED
A plurality of all votes cast at the meeting is sufficient to approve Proposal
One (Election of Two Trustees). Approval of Proposal Two (Ratification of
Auditors) requires a majority of all votes cast at the Meeting, provided a
quorum is present.
Proxy Statement
Page 5 of 24
<PAGE>
Approval of Proposal Three (To adopt an Amended and Restated Master Trust
Agreement) requires a majority vote of the shares entitled to vote at the
Meeting. All outstanding shares of the Trust as of the record date will be
entitled to vote for Proposal Three. Approval of each of Proposals 4A-4M
(changes to certain investment restrictions) requires the affirmative vote of a
"majority of the outstanding voting securities" of each fund voting thereon.
Proposal Five (Change to a Non-Diversified Status) requires the affirmative vote
of a "majority of the outstanding securities" of the China Region Opportunity
Fund and Proposal Six (Liquidation of the Real Estate Fund) requires the
affirmative vote of a "majority of the outstanding securities" of the Real
Estate Fund. For these purposes, the vote of a "majority of the outstanding
voting securities" means the affirmative vote of the lesser of (a) 67% or more
of the voting securities present at the meeting or represented by proxy if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy or (b) more than 50% of the outstanding voting securities.
On Proposals One, Two and Three, all shares of the Trust will vote together as a
single class. On Proposal Four (changes to certain investment restrictions),
Five (Change to a Non-Diversified Status) and Six (Liquidation of the Real
Estate Fund), each appropriate fund will vote separately.
The Master Trust Agreement provides that a quorum to conduct business shall
consist of a majority of the shares entitled to vote at a shareholder meeting. A
lesser number is sufficient for adjournments.
In tallying shareholder votes, abstentions and "broker non-votes" (i.e. shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or persons entitled to vote; and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for convening
the meeting. On Proposal One (Election of Trustees), abstentions and broker
non-votes will have no effect; the two nominees receiving the largest number of
votes will be elected. On Proposal Two (Ratification of Auditors), abstentions
and broker non-voting will not be counted as "votes cast" and will have no
effect on the result of the vote. On Proposal Three (to amend and restate the
Master Trust Agreement), abstentions and broker non-votes will have the effect
of being counted as voted against the Proposal. On Proposal Four (changes to
certain investment restrictions), Five (Change to a Non-Diversified Status) and
Six (Liquidation of the Real Estate Fund), abstentions and broker non-votes will
have the effect of being counted as voted against the Proposals.
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve one or more of the proposed items are
not received, or if other matters arise requiring shareholder attention, the
persons named as proxy agents may propose one or more adjournments of the
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
Meeting or represented by proxy. When voting on a proposed adjournment, the
persons named as proxy agents will vote FOR the proposed adjournment all shares
that they are entitled to vote with respect to each item, unless directed to
vote AGAINST the item, in which case such shares will be voted AGAINST the
proposed adjournment with respect to that item. A shareholder vote may be taken
on one or more of the items in this Proxy Statement prior to such adjournment if
sufficient votes have been received and it is otherwise appropriate.
The following chart illustrates the proposals for which various fund
shareholders may vote.
<TABLE>
<CAPTION>
SHAREHOLDERS OF
THESE FUNDS-- -- VOTE FOR THESE PROPOSALS
------------------ ------------------------------------------------------------------
1 2 3 4A 4B 4C 4D 4E 4F 4G 4H 4I 4J 4K 4L 4M 5 6
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
China Region
Opportunity Fund X X X X X X X X X X X X X X
All American
Equity Fund X X X X X X X X X X X X X
Real Estate Fund X X X X X X X X X X X X X X
Equity Income Fund X X X X X X X X X X X X X
Gold Shares Fund X X X X X X X X X X X X X X
World Gold Fund X X X X X X X X X X X X
Global Resources
Fund X X X X X X X X X X X X
Tax Free Fund X X X X X X X X X X X X X
Near-Term Tax
Free Fund X X X X X X X X X X X X X
U.S. Government
Securities X X X X X X X X X X X X X X
Savings Fund
U.S. Treasury
Securities Cash X X X X X X X X X X X X X X
Fund
</TABLE>
Proxy Statement
Page 6 of 24
<PAGE>
PROPOSAL ONE
(ALL FUNDS)
TO ELECT TWO TRUSTEES
Two candidates, Mr. Clark R. Mandigo and Mr. W.W. McAllister, III, have been
nominated for election as trustees of the Trust, both of whom currently are
trustees. Vacancies on the board generally are filled by appointment by the
remaining trustees. However, the Investment Company Act of 1940 provides that
trustees may not fill vacancies unless thereafter at least two-thirds of the
trustees will have been elected by shareholders. To enable the requirement to be
met in the future without the necessity of calling additional shareholder
meetings, the trustees are asking shareholders at this Meeting to elect the two
trustees listed below. If, at any time, less than a majority of the trustees
holding office has been elected by the shareholders, the trustees then in office
will promptly call a shareholders meeting for the purpose of electing a board of
trustees. Otherwise, there will normally be no meeting of shareholders for the
purpose of electing trustees. The Board has approved a policy that would require
Trustees to retire at age 65. Additionally, the Board approved a waiver of this
policy for certain trustees as follows: John P. Allen will retire during the
year in which he reaches age 72, E. Douglas Hodo and W.C.J. van Rensburg each
will retire during the year in which that individual reaches age 70. The two
candidates are "independent trustees," i.e., trustees who are not "interested
persons" of the Trust, as that term is defined in the 1940 Act. The candidates
for election as trustees have been proposed by the trustees now serving.
Set forth below is information concerning the trustees.
NAME (AGE)
BUSINESS ADDRESS TRUSTEE
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------ ----------------------------------------- -------
Clark R. Mandigo (57)(1) Business consultant since 1991. From 1985 1993
15050 Jones Maltsberger to 1991, President, Chief Executive
San Antonio, Texas 78247 Officer, and Director of Intelogic Trace,
Inc., a nationwide company that sells,
Trustee leases and maintains computers and
telecommunications systems and equipment.
Prior to 1985, President of BHP Petroleum
(Americas), Ltd., an oil and gas
exploration and development company.
Director of Palmer Wireless, Inc., Lone
Star Steakhouse & Saloon, Inc. and
Physician Corporation of America.
Formerly a Director of Datapoint
Corporation. Trustee of U.S. Global
Investors Funds since May 22, 1998.
Trustee for Pauze'/Swanson United
Services Funds from November 1993 to
February 1996.
------------------------
W. W. McAllister, Director of Texas Capital Banc Shares, 1998
III (58)(1) ` Inc from 19___ to present. Chairman of the
7550 IH-10 West Board of Texas Insurance Agency, Inc. from
Suite 700 1981 to present. Chairman of the Board of
San Antonio, Texas 78247 Bomac Sports Limited d.b.a. SA Sports
Unlimited from December 1995 to present.
Trustee Currently a director of Alamo Title
Holding Co. and Alamo Title Insurance of
Texas. General Partner of
_________________________ Bomac
Transportation Limited Company from
January 1994 through August 1995.
Consultant to River Valley Bank from
September 1992 through September 1994.
President of San Antonio Savings
Association and its successor companies
from 1976 to 1982 and Chairman of the
Board from 1982 to 1992.
------------------------
John P. Allen (70)1 President, Rio Cibolo Ranch, Inc. 1973
P.O. Box 160323
San Antonio, Texas 78280
Trustee
------------------------
E. Douglas Hodo (65)(1) Chief Executive Officer of Houston Baptist 1981
7702 Fondren University. Formerly Dean and Professor of
Houston, Texas 77074 Economics and Finance, College of
Business, University of Texas at San
Trustee Antonio.
Proxy Statement
Page 7 of 24
<PAGE>
NAME (AGE)
BUSINESS ADDRESS TRUSTEE
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------ ----------------------------------------- -------
W.C.J. van Rensburg (61)1 Professor of Geological Science and 1978
6010 Sierra Arbor Court Petroleum Engineering, University of Texas
Austin, Texas 78759 at Austin. Former Associate Director,
Bureau of Economic Geology, University of
Trustee Texas. Former Chairman, Department of
Geosciences, West Texas State University.
Former technical director of South African
Minerals Bureau and British Petroleum
Professor of Energy Economics at the Ran
Afrikaans University, Johannesburg, South
Africa.
------------------------
Frank E. Holmes (45)* Chairman of the Board of Directors and 1989
Chief Executive Officer of the Adviser.
Trustee, President, Chief Since October 1989 Mr. Holmes has served
Executive Officer, Chief and continues to serve in various
Investment Officer positions with the Adviser, its
subsidiaries and the investment companies
it sponsors. Director of FrancOr Resource
Corp. from November 1994 to November1996.
Director of Adventure Capital Limited from
January 1996to July 1997 and Director of
Vedron Gold, Inc. from August 1996 to
March 1997. Director of 71316 Ontario,
Inc. since April 1987 and of F. E. Holmes
Organization, Inc. since July 1978.
Director of Marleau, Lemire Inc. from
January 1995 to January 1996. Director of
United Services Canada, Inc. since
February 1995 and Chief Executive Officer
from February to August 1995.
------------------------
* A Trustee who is an interested person
(1) The Trustee is an "independent trustee," i.e. a trustee who is not an
"interested person" of the Trust, as that term is defined in the 1940 Act.
The following table sets forth information describing the compensation of each
trustee for his services for the fiscal year ended June 30, 1999.
<TABLE>
<CAPTION>
COMPENSATION TABLE
-------------------------------------------------------------------------------------------------------------
TRUSTEES
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JOHN P. E. DOUGLAS FRANK E. CLARK R. W.W. W.C.J.
NAME OF FUND ALLEN HODO HOLMES(1) MANDIGO(1)(2) MCALLISTER, III VAN RENSBURG
----------------------------- ------- ---------- --------- ------------- --------------- ------------
China Region Opportunity
Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
All American Equity Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
Real Estate Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
Equity Income Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
Gold Shares Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
World Gold Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
Global Resources Fund $ 2,327 $3,464 $0 $2,225 $2,225 $2,318
Tax Free Fund $ 2,327 $3,463 $0 $2,225 $2,225 $2,318
Near-Term Tax Free Fund $ 2,328 $3,463 $0 $2,225 $2,225 $2,318
U.S. Government Securities
Savings Fund $ 2,328 $3,463 $0 $2,225 $2,225 $2,319
U.S. Treasury Securities
Cash Fund $ 2,328 $3,463 $0 $2,225 $2,225 $2,319
Total Compensation from all
funds managed by U.S.
Global Investors, Inc. $25,600 $38,100 $0 $42,575 $24,475 $25,500
------------------------
(1) Messrs. Holmes and Mandigo serve on the U.S. Global Investors Funds and the
U.S. Global Accolade Funds boards of trustees.
(2) Mr. Clark Mandigo was also compensated for serving on the board of trustees
for U.S. Global Accolade Funds
</TABLE>
The Board has an Audit Committee whose members are Messrs. Mandigo, McAllister,
III, Hodo, Allen and van Rensburg. The Audit Committee is responsible for:
o meeting with the trust's auditors to review audit procedures and results
for each fund;
Proxy Statement
Page 8 of 24
<PAGE>
o considering any matters arising from an audit of a fund to be brought to
the attention of the Board as a whole with respect to the trust's fund
accounting or its internal accounting controls; and
o considering such matters as may from time to time be set forth in a
charter adopted by the Board and such committee.
Although the Trust does not have a nominating committee, the selection and
nomination of the trustees who are not interested persons of the Trust are
committed to the discretion of such disinterested trustees.
If elected, the trustees will hold office until age 65 except that (a) any
trustee may resign or retire, by written instrument signed by him and delivered
to the other trustees or to any officer of the Trust; (b) any trustee may be
removed by written instrument, signed by at least two-thirds of the number of
trustees prior to such removal; (c) a trustee may be removed at any Special
Meeting of shareholders by a two-thirds vote of the outstanding voting
securities of the trust; and (d) a trustee may be removed by a written
declaration signed by shareholders holding not less than two-thirds of the
shares then outstanding and filed with the Trust's custodian. In case a vacancy
shall for any reason exist, the remaining trustees may fill such vacancy by
appointing another trustee, so long as, immediately after such appointment, at
least two-thirds of the trustees have been elected by shareholders.
The Trust's board, which is currently composed of one interested and five
non-interested trustees, met four times during the fiscal year ended June 30,
1999. The Audit Committee met two times during the fiscal year ended June 30,
1999. All of the trustees attended all of the meetings of the Board and the
Audit Committee (if a member thereof) during the fiscal year ended June 30,
1999.
In June 19999, in part to compensate Mr. Holmes for becoming the Adviser's chief
investment officer and upon cancellation of Mr. Holmes' warrants and option to
acquire 986,122 shares of class C common stock of the Adviser, the Board of the
Adviser (not the Trust) approved the issuance of 1,000,000 shares of class C
common stock of the Adviser (67% of the outstanding shares) to Mr. Holmes to be
vested over a ten-year period beginning with fiscal year 1999, with an annual
compensation value of $50,000.
TRUST OFFICERS. Information about the executive officers of the Trust (except
for Mr. Holmes, which is set forth on page 9) is set forth below.
NAME (AGE)
BUSINESS ADDRESS OFFICER
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------ ----------------------------------------- -------
Susan B. McGee (41) Executive Vice President, Corporate 1996
7900 Callaghan Road Secretary and General Counsel of the
San Antonio, Texas Adviser. Since September 1992, Ms. McGee
78229 has served and continues to serve in
various positions with the Adviser, its
Executive Vice subsidiaries, and the investment
President, companies it sponsors.
Secretary,
General Counsel
------------------------ ----------------------------------------- -------
David J. Clark (39) Chief Financial Officer, Chief Operating 1998
7900 Callaghan Road Officer of the Adviser. Chief Financial
San Antonio, Texas 78229 Officer of U.S. Global Brokerage, Inc.,
the principal underwriter. Since May
Treasurer 1997, Mr. Clark has served and continues
to serve in various positions with the
Adviser and the investment companies it
sponsors. Foreign Service Officer with
U.S. Agency for International Development
in the U.S. Embassy, Bonn, West Germany
from May 1992 to May 1997. Audit
Supervisor for University of Texas Health
Science Center from April 1991 to April
1992. Auditor-in-Charge for Texaco, Inc.
from August 1987 to June 1990.
Proxy Statement
Page 9 of 22
<PAGE>
NAME (AGE)
BUSINESS ADDRESS OFFICER
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------ ----------------------------------------- -------
Elias Suarez (38) Vice President of the Adviser. Since 1997
7900 Callaghan Road March of 1992, Mr. Suarez served and
San Antonio, Texas 78229 continues to serve in various positions
with the Adviser and United Shareholder
Vice President Services, Inc.
Listed below is the number of shares of each fund owned beneficially by each
Trustee as of June 19, 2000. Also show is the number of shares owned
beneficially by the Trustees and officers as a group. In each case, the amounts
shown are less than 1% of the outstanding shares.
<TABLE>
<CAPTION> ALL
OFFICERS
JOHN P. E. DOUGLAS FRANK E. CLARK R. W.W. W.C.J. AND
NAME OF FUND ALLEN HODO HOLMES(1) MANDIGO(1)(2) MCALLISTER, III VAN RENSBURG TRUSTEES
----------------------------- ------- ---------- --------- ------------- --------------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
China Region Opportunity
Fund
All American Equity Fund
Real Estate Fund
Equity Income Fund
Gold Shares Fund
World Gold Fund
Global Resources Fund
Tax Free Fund
Near-Term Tax Free Fund
U.S. Government Securities
Savings Fund
U.S. Treasury Securities
Cash Fund
</TABLE>
The Trust is aware of the entities shown in the chart below that owned of
record, or beneficially, more than 5% of the outstanding shares of the Trust on
June 19, 2000.
Proxy Statement
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<PAGE>
<TABLE>
<CAPTION>
TYPE OF
NAME/ADDRESS OF OWNER FUND SHARES/% OWNED OWNERSHIP
---------------------------- --------------------------------------- ------------------- ----------
<S> <C> <C> <C>
Charles Schwab & Co., Inc. China Region Opportunity Fund 3,000,000,000/6.50% Beneficial
101 Montgomery Street All American Equity Fund 3,000,000,000/6.50% Beneficial
San Francisco, CA 94104-4122 Tax Free Fund 3,000,000,000/6.50% Beneficial
Near-Term Tax Free Fund 3,000,000,000/6.50% Beneficial
U.S. Treasury Securities Cash Fund 3,000,000,000/6.50% Beneficial
U.S. Government Securities Savings Fund 3,000,000,000/6.50% Beneficial
National Financial Services Corp. All American Equity Fund 3,000,000,000/6.50% Beneficial
Church Street Station Tax Free Fund 3,000,000,000/6.50% Beneficial
New York, NY 10008-3908 Near-Term Tax Free Fund 3,000,000,000/6.50% Beneficial
U.S. Government Securities Savings Fund 3,000,000,000/6.50% Beneficial
</TABLE>
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL ONE.
PROPOSAL TWO
(ALL FUNDS)
TO RATIFY THE SELECTION OF THE INDEPENDENT AUDITORS
By a unanimous vote of the Board of Trustees, including those members of the
Board who are not interested persons of the Trust, the firm of Arthur Andersen
LLP has been selected as independent auditors of the Trust. Pursuant to the
Investment Company Act of 1940, such selection is being submitted to
shareholders for ratification.
The Board selected Arthur Andersen in August 1999 upon the recommendation of the
Audit Committee of the Board following a selection process during which the
Audit Committee reviewed proposals from several large, national accounting firms
with significant investment company experience. The Board selected Arthur
Andersen based upon its expertise as an auditor of investment companies, the
quality of its audit services, it commitment of experienced audit personnel to
the funds, its tax and international experience in the mutual fund area, its
special expertise and practical experience in working with other mutual funds
that share similar investment policies and strategies as certain of the funds,
and its use and commitment of technology in performing its audit functions.
For each of the funds' fiscal years ended June 30, 1999 and 1998, the firm of
PricewaterhouseCoopers LLP (PWC) served as the independent accountants for the
Trust. PWC declined to stand for re-election after the completion of the most
recent audit. The independent accountants' audit reports for each of the funds
for the fiscal years ended June 30, 1999 and 1998 did not contain any adverse
opinion or disclaimer of opinion, nor were such reports qualified or modified as
to uncertainty, audit scope, or accounting principles. Further, there were no
disagreements between the Trust and the independent accountants on accounting
principals or practices, financial statement disclosures, or audit scope
procedures, which if not resolved to the satisfaction of the independent
accountants would have caused them to make reference to the subject matter of
the disagreements in connection with their reports on the financial statements
for such years.
Arthur Andersen has advised the Trust that to the best of its knowledge and
belief, since the date of the firm's professional engagement to examine the
Trust's financial statements, no Arthur Andersen professional has held any
direct or material indirect interest in any fund inconsistent with the
independence standards pertaining to accountants. Representatives of Arthur
Andersen are not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available by
telephone should any matter arise during the Meeting.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL TWO.
PROPOSAL THREE
(ALL FUNDS)
TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDMENT TO THE MASTER TRUST AGREEMENT
The board of trustees has approved and recommends that the shareholders of the
Trust authorize them to adopt an Amended and Restated Master Trust Agreement for
the trust and the funds of the Trust. The Amended and Restated Master Trust
Agreement is substantially the same as the existing Master Trust Agreement
except that it
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Page 11 of 24
<PAGE>
(i) provides the Trustees with the ability to terminate the Trust or its
Sub-Trusts or classes without shareholder approval, (ii) reflects name changes
of the Trustees and Funds, (iii) changes the quorum requirements for shareholder
meetings, and (iv) makes certain other changes to correct and clarify
typographical errors. Please see the Amended and Restated Master Trust Agreement
in Exhibit I of this proxy.
TERMINATION OF THE TRUST OR ITS SUB-TRUSTS OR CLASSES. The current Master Trust
Agreement requires shareholder approval in order to terminate the trust or any
of its sub-trusts. The Amended and Restated Master Trust Agreement generally
permits the trustees, subject to applicable Federal and state law, to terminate
all or a portion of the trust or any of its sub-trusts or classes without
shareholder approval.
Under certain circumstances, it may not be in the shareholders' interest to
require a shareholder meeting to permit the trustees to terminate a fund or
class. The Amended and Restated Master Trust Agreement broadens the trustees'
authority to terminate a fund to include any fund in the Trust in any
circumstance. For example, a fund may have insufficient assets to invest
effectively or excessively high expense levels due to operational needs. Under
such circumstances, absent viable alternatives, the trustees may determine that
terminating the fund is in the shareholders' interest and the only appropriate
course of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the fund's
liquidation and termination and, in general, will increase the costs associated
with the termination. In such a case, it is in the shareholders' interest to
permit fund termination without incurring the costs and delays of a shareholder
meeting.
QUORUM AND REQUIRED VOTE. The current Master Trust Agreement states that in
order to attain quorum for the transaction of business at a shareholders'
meeting, a majority of the shares entitled to vote is required. The Amended and
Restated Master Trust Agreement reduces this requirement by permitting thirty
percent of the shares entitled to vote to constitute quorum. By lowering the
quorum requirement, it will be easier to achieve quorum and will be less costly
to solicit votes. In addition, lowering the quorum is consistent with industry
practice as a business trust.
The proposal to lower the quorum will only affect matters that may be approved
with no more than a quorum of shares being present at a meeting, such as the
election of Trustees and the ratification of the selection of auditors. All
other matters require a higher vote under the terms of the Amended and Restated
Master Trust Agreement or the Investment Company Act of 1940. For such matters,
the change in the quorum requirement will have no effect.
Adoption of the Amended and Restated Master Trust Agreement will not change the
funds' trustees or officers or the investment policies described in the funds'
current prospectuses.
Any exercise of the trustees' increased authority under the Amended and Restated
Master Trust Agreement is also subject to any applicable requirements of the
1940 Act and Massachusetts law.
OTHER MATTERS. The Amended and Restated Master Trust Agreement includes other
nonmaterial changes. All changes are identified in Exhibit I.
BOARD CONCLUSION. The board of trustees has concluded that the proposed adoption
of the Amended and Restated Master Trust Agreement is in the best interests of
the Trust's shareholders.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL THREE.
PROPOSAL FOUR
TO RECLASSIFY OR AMEND CERTAIN INVESTMENT RESTRICTIONS
The board of trustees has proposed that shareholders approve the
reclassification or amendment of certain fundamental investment restrictions of
each of the U.S. Global Investors Funds. The proposed changes to the investment
restrictions of each fund are based on recommendations prepared by the funds'
adviser, U.S. Global Investors, Inc., which were reviewed and approved by the
board at a meeting held on May 22, 2000. The board is recommending that
shareholders approve the proposals.
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Page 12 of 24
<PAGE>
Under the Investment Company Act of 1940, as amended, all investment policies of
a mutual fund must be classified as either "fundamental" or "non-fundamental." A
fundamental policy may not be changed without the approval of the fund's
shareholders; a non-fundamental policy may be changed by the board without
shareholder approval. Under the 1940 Act, only certain policies are required to
be classified as fundamental.
In the past, U.S. Global Investors Funds has adopted certain fundamental
investment restrictions for each fund to reflect regulatory, business or
industry conditions, which in many cases are no longer in effect. The board has
recently reviewed each fund's fundamental investment restrictions and determined
that it would be in the best interest of each fund to eliminate or reclassify as
non-fundamental certain investment restrictions that are not required to be
fundamental under applicable law, and to clarify and to modernize certain
restrictions that are required to be fundamental. The board also analyzed the
various fundamental and non-fundamental investment restrictions of all of the
mutual funds advised by the Adviser, and where practical and appropriate to a
fund's investment objective, proposed to standardize investment restrictions.
The proposed investment restrictions set forth below are expected to become
standard for each of the U.S. Global Investors Funds.
The board believes that the ability of the Adviser to manage the funds'
portfolios in a changing regulatory or investment environment will be enhanced
by approval of these proposals. In addition, the board believes that approval of
these proposals will reduce the need for future shareholder meetings, thereby
reducing the funds' ongoing costs of operation. Furthermore, it is anticipated
that increased standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with fundamental and non-fundamental
investment restrictions.
At the Meeting, shareholders of each fund will vote on each of the proposals
separately. Each change to a fund's fundamental investment restriction will
become effective as soon as practicable following approval by shareholders but
in no event prior to November 1, 2000.
Although the proposed changes to each fund's investment restrictions generally
give broader authority to make certain investments or engage in certain
practices than do the current investment restriction of the funds, the Adviser
does not currently intend to change in any material way the principal investment
strategies or operations of any fund.
PROPOSAL 4A
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING THE ISSUANCE OF SENIOR SECURITIES
The funds' currently have a fundamental investment restriction regarding senior
securities that states:
"A fund may not issue senior securities."
It is proposed that shareholders approve replacing the funds' current investment
restriction with the following fundamental investment restriction governing the
issuance of senior securities:
"A Fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940, as amended, and as interpreted or
modified by regulatory authority having jurisdiction from time to
time."
The proposed fundamental investment restriction clarifies that the funds may
issue senior securities to the full extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory and
regulatory concepts, a senior security is generally thought of as an obligation
of a fund that has a claim to the fund's assets or earnings that takes
precedence over the claims of the fund's shareholders. The 1940 Act generally
prohibits mutual funds from issuing any such security; however, mutual funds are
permitted to borrow money from a bank and, to engage in certain types of
transactions that might be considered "senior securities" as long as certain
conditions are met. For example, a transaction that obligates a fund to pay
money at a future date (e.g., the purchase of securities to be settled on a date
that is farther away than the normal settlement period) may be considered a
"senior security." A mutual fund is permitted to enter into this type of
transaction if it maintains a segregated account containing liquid securities in
an amount to its obligation to pay cash for the securities at a future date.
Funds would utilize transactions that may be considered "senior securities" only
in accordance with applicable regulatory requirements under the 1940 Act.
Proxy Statement
Page 13 of 24
<PAGE>
Adoption of the proposed fundamental investment restriction is not expected to
materially affect the operation of the funds. However, adoption of the proposal
will facilitate the adviser's compliance efforts and will allow the funds to
respond to developments in the mutual fund industry and the law which may make
the use of permissible senior securities advantageous.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4A.
PROPOSAL 4B
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING UNDERWRITING
The funds' current fundamental investment restriction concerning underwriting
states the following:
"A fund may not underwrite securities of other issuers, except for the
Gold Shares Fund, Global Resources Fund and World Gold Fund, to the
extent that these funds may be deemed to act as an underwriter in
certain cases when disposing of restricted securities."
It is proposed that shareholders approve replacing the funds' current
fundamental investment restriction with the following fundamental investment
restriction concerning underwriting:
"A fund may not engage in the business of underwriting securities
issued by other issuers, except to the extent that, in connection with
the disposition of portfolio securities, the fund may be deemed to be
an underwriter under the Securities Act of 1933."
The primary purpose of the proposed amendment is to clarify that a fund is not
prohibited from selling restricted securities if, as a result of the sale, a
fund would be considered an underwriter under federal securities law. It is also
intended to revise the funds' fundamental investment restriction on underwriting
so that it conforms to a restriction that is expected to become standard for all
funds managed by the Adviser. While the proposed change will have no current
impact on the funds, adoption of the proposed standardized fundamental
investment restriction will advance the goals of standardization.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4B.
PROPOSAL 4C
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING
The funds' current fundamental investment restriction concerning borrowing
states the following:
"A fund may not borrow money, except that (i) a fund may borrow not in
excess of 5% of the total assets of that fund from banks as a
temporary measure for extraordinary purposes, and (ii) the Gold Shares
Fund, World Gold Fund, China Region Opportunity Fund, and All American
Equity Fund may borrow money only for temporary or emergency purposes
(not for leveraging or investment), provided that the amount of such
borrowings may not exceed 33 1/3% of a fund's total assets (including
the amount borrowed) less liabilities (other than borrowings)."
It is proposed that shareholders approve replacing the funds' current
fundamental investment restriction with the following:
"A Fund may not borrow money, except as permitted under the 1940 Act,
as amended, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time."
If the proposed change is adopted, the Trustees will also adopt the following
non-fundamental investment restriction:
"A fund may not borrow money, except that a fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in
an amount not exceeding 331/3% of a fund's total assets (including the
amount borrowed) less liabilities (other than borrowings)."
The primary purpose of the proposed change to the fundamental investment
restriction concerning borrowing is to permit each fund to borrow to the full
extent permitted by applicable law. The 1940 Act permits a fund to borrow
provided that a fund maintains 300%
Proxy Statement
Page 14 of 24
<PAGE>
asset coverage, which means, in effect, that a fund would be permitted to borrow
up to an amount equal to 50% of its total assets under the proposed borrowing
policy. Additionally, under the proposed policy, each fund would be permitted to
borrow for any purpose, which includes borrowings for temporary or emergency
purposes or for leverage. However, the board has no current intention of
authorizing borrowing for leverage purposes. For this reason, the Board is
intending to adopt a non-fundamental investment policy that will prohibit
borrowing, except for temporary emergency purposes, regarding borrowing money
for temporary or emergency purposes as described above. If a board subsequently
changed a fund's non-fundamental borrowing policy to permit borrowing for
leverage, such borrowings would increase the fund's volatility and the risk of
loss in a declining market. The proposed amendment is consistent with current
limitations imposed under the 1940 Act. The board believes that these changes
will provide the Adviser with greater flexibility in managing the liquidity
needs of a fund by allowing the fund to use borrowings to satisfy redemptions or
settle securities transactions. Consistent with current policies, a fund would
not be permitted to borrow for the purpose of leveraging its portfolio.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4C.
PROPOSAL 4D
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
INVESTMENTS IN REAL ESTATE
The funds currently have a fundamental investment restriction regarding real
estate that states:
"A fund may not invest in real estate, except as may be represented by
securities for which there is an established market or, with respect
to the Gold Shares Fund, when such interests are an incidental part of
assets acquired through merger or consolidation, and except that this
restriction shall not prevent the Real Estate Fund from making any
investment which is otherwise consistent with its objectives and
policies."
Shareholders are being asked to approve the amendment of the above investment
restriction. As proposed, the funds' current fundamental investment restriction
will be replaced by the following fundamental investment restriction that will
govern future purchases and sales of real estate:
"The Fund may not purchase or sell real estate, which term does not
include securities of companies which deal in real estate and or
mortgages or investments secured by real estate, or interests therein,
except that the Fund reserves freedom of action to hold and to sell
real estate acquired as a result of the Fund's ownership of
securities."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to purchase.
The proposed limitation would make it explicit that each of the funds may
acquire a security or other instrument whose payments of interest and principal
may be secured by a mortgage or other right to foreclose on real estate, in the
event of default.
Any investments in these securities are, of course, subject to the fund's
investment objective and policies and to other limitations regarding
diversification and concentration. The proposed limitation also specifically
permits the fund to hold real estate acquired as a result of ownership of
securities or other instruments. However, in light of the types of securities in
which the funds regularly invest (other than the Real Estate Fund), the Adviser
considers this to be a remote possibility.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4D.
PROPOSAL 4E
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING PURCHASE OR SALE
OF COMMODITIES OR COMMODITY FUTURES CONTRACTS
The fund's current fundamental investment restriction concerning purchases or
sales of commodities states the following:
"A fund may not engage in the purchase or sale of commodities or
commodity futures contracts, except that the Gold Shares Fund and
World Gold Fund may invest not more than 10% of its total assets in
gold and gold bullion, and except that the Gold Shares Fund, World
Gold Fund, China Region Opportunity Fund, and All American Equity Fund
may invest in futures contracts, options on futures contracts, and
similar instruments."
Proxy Statement
Page 15 of 24
<PAGE>
It is proposed that the above fundamental investment restriction is replaced
with the following fundamental investment restriction:
"The fund may not purchase or sell commodities or commodity contracts,
except the Fund may purchase and sell (i) derivatives (including, but
not limited to, options, futures contracts and options on futures
contracts) whose value is tied to the value of a financial index or a
financial instrument or other asset (including, but not limited to,
securities indexes, interest rates, securities, currencies and
physical commodities),and (ii) the Gold Shares Fund, the World Gold
Fund and the Global Resources Fund may purchase precious metals."
The primary purpose of the proposed amendment is to clarify the types of
commodities the funds may purchase. The funds' current policies prohibit the
purchase or sale of commodities or commodity contracts. These policies contain
exceptions for financial futures contracts and options on such contracts. Under
the proposed policy, each fund other than the Gold Shares, the World Gold Fund
and the Global Resources Fund would be prohibited from purchasing physical
commodities. Currently the Gold Shares Fund and the World Gold Fund are
permitted to invest up to 10% of its total assets in gold and gold bullion.
Under the new proposed policy, the Gold Shares, the World Gold Fund and the
Global Resources Fund may be permitted to invest without limit in precious
metals. While the proposed change will have no current impact on the funds, the
adoption of the proposal will standardize and clarify the investment restriction
concerning commodities for the funds.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4E.
PROPOSAL 4F
(ALL FUNDS)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING THE LENDING OF ASSETS
The funds' current fundamental investment restriction concerning lending assets
states the following:
"A fund may not lend its assets, except that any fund may purchase
money market debt obligations and repurchase agreements secured by
money market obligations, and except for the purchase or acquisition
of bonds, debentures or other debt securities of a type customarily
purchased by institutional investors and except that any fund may lend
portfolio securities with an aggregate market value of not more than
one-third of such fund's total net assets. (Accounts receivable for
purchased by telephone shall not be deemed loans.) The Near- Term Tax
Free Fund may not lend its assets, except that purchases of debt
securities in furtherance of investment objectives will not constitute
lending of assets."
It is proposed that shareholders of each fund replace the funds' current
fundamental investment restriction with the following:
"The fund may not make loans except as permitted under the 1940 Act,
as amended, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time."
While the proposed amendments to funds' investment restrictions concerning loans
will not materially affect the operations of the fund, they would standardize
these investment restriction for all funds and permit the funds to lend
securities in a manner to the full extent permitted by the applicable law. The
proposed change would, therefore, permit each fund, subject to the receipt of
any necessary regulatory approval and board authorization, to enter into lending
arrangements under which the funds advised by U.S. Global Investors, Inc. could
for temporary purposes lend money directly to and borrow money directly from
each other through a credit facility. Each fund believes that the flexibility
provided by this policy change could possibly reduce the fund's borrowing costs
and enhance its ability to earn higher rates of interests on short-term lendings
in the event that the board determines that such arrangements are warranted in
light of the funds' particular circumstances.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4F
PROPOSAL 4G
(ALL FUNDS)
TO AMEND AND RECLASSIFY THE FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING MARGIN PURCHASES OF SECURITIES
The funds currently have a fundamental investment restriction stating that
Proxy Statement
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<PAGE>
" . . . a fund may not purchase any security on margin, except that it
may obtain such short-term credits as are necessary for clearance of
securities transactions."
If the proposal is approved, the current fundamental investment restriction will
be replaced with a non-fundamental investment restriction that could be changed
without a shareholder vote. The proposed non-fundamental investment restriction
is as follows:
"A fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not
constitute purchasing securities on margin."
Margin purchases involve the purchase of securities with money borrowed from a
broker. "Margin" is the cash or eligible securities that the borrower places
with a broker as collateral against the loan. The current fundamental investment
restriction prohibits a fund from purchasing securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions. Mutual funds are generally prohibited from entering into most
types of margin purchases. However, policies of the SEC allow mutual funds to
make initial and variation margin payments in connection with the purchase and
sale of futures contracts and options on futures contracts. The proposed
non-fundamental investment restriction would parallel the SEC's policies.
Although reclassification of the funds' fundamental investment restriction on
margin purchases to non-fundamental is unlikely to materially affect any fund's
investment techniques at this time, in the event of a change in federal
regulatory requirements, the funds will be able to alter their investment
practices without the delay and expense of a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4G
PROPOSAL 4H
(ALL FUNDS)
TO AMEND AND RECLASSIFY THE FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING SHORT SALES
Each fund is currently subject to a fundamental investment restriction that
provides that a fund may not make short sales. It is proposed that shareholders
approve the amendment and reclassification of this fundamental investment
restriction.
If the proposal is approved, the current fundamental investment restriction will
be replaced with a non-fundamental investment restriction which could be changed
without a shareholder vote. The proposed non-fundamental investment restriction
is as follows:
"A fund may not sell securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount to the securities
sold short, and provided that transaction in futures contracts and
options are not deemed to constitute selling securities short."
In a short sale, an investor sells a borrowed security and has a corresponding
obligation to the lender to return the identical security. In an investment
technique known as a short sale "against the box," an investor sells short while
owning the same securities in the same amount, or having the right to obtain
equivalent securities. The investor could have the right to obtain equivalent
securities, for example, through its ownership of warrants, options, or
convertible bonds.
The adviser recognizes that short sales may not be appropriate for all of the
funds. If the proposal is approved, the adviser and the board will determine the
appropriateness of short sales on a fund-by-fund basis. Appropriate disclosure
of this practice will also be included in such fund's prospectus and/or
statement of additional information.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4H
PROPOSAL 4I
(ALL FUNDS)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION
CONCERNING RESTRICTED SECURITIES
The funds' current investment restriction states that a fund may not:
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<PAGE>
"A fund may not invest in securities that are subject to legal or
contractual restrictions on resale ("restricted securities"), except
that (i) the China Region Opportunity Fund may invest up to 15% of net
assets in illiquid securities, including securities which are subject
to legal or contractual restrictions on resale, and (ii) the Gold
Shares Fund, the Global Resources Fund and the World Gold Fund may
invest up to 10% of the value of their respective net assets in such
restricted securities."
It is proposed that shareholders approve the elimination of the above
fundamental investment restriction. Current law permits non-money market funds
to invest up to 15% of its net assets and money market funds to invest up to 10%
of its net assets in illiquid securities including restricted securities. The
board believes that elimination of the above investment restriction will benefit
the funds by allowing the Adviser greater investment flexibility. This current
law restriction will remain applicable to the funds whether or not they are
recited as a fundamental investment restriction. As a result, elimination of the
above fundamental investment restriction is not expected to have any material
impact on the funds' investment practices, except to the extent that regulatory
requirements may change in the future.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4I
PROPOSAL 4J
(GOLD SHARES FUND)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING INVESTMENTS
IN RESTRICTED SECURITIES OF ISSUERS WITH LESS THAN
TWO YEARS OF CONTINUOUS OPERATIONS
The Gold Shares Fund currently has the following fundamental investment
restriction concerning investments in issuers with less than two years of
continuous operations:
"Any investments in restricted securities by the Gold Shares Fund will
be in companies that have been in existence for two consecutive years
or more, including operation of predecessors, and that have not
defaulted in the payment of any debt with such two years."
It is proposed that shareholders approve the elimination of the above
fundamental investment restriction.
This investment restriction was originally adopted in response to state "Blue
Sky" requirements in connection with the registration of shares of the fund for
sale. These requirements are no longer applicable to the fund and the 1940 Act
does not contain a similar restriction. The board does not believe that a
blanket prohibition against these type of investments is in the best interest of
the fund.
No other U.S. Global Investors Fund is currently subject to this fundamental
investment restriction.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4J.
PROPOSAL 4K
(GOLD SHARES FUND)
TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
INVESTMENTS IN WARRANTS
The Gold Shares Fund currently has the following fundamental investment
restriction regarding investing in warrants:
"The Gold Shares Fund may not invest more than 2% of the value of its
assets in marketable warrants."
It is proposed that shareholders approve the elimination of the above
fundamental investment restriction. This investment restriction was originally
adopted in response to state "Blue Sky" requirements. These requirements are no
longer applicable to the fund and the 1940 Act does not contain a similar
restriction. The Adviser and the board do not believe that a blanket prohibition
against these type of investments is in the best interests of the fund.
The proposed elimination of the investment restriction will not materially
affect the operations of the fund. This would allow the fund greater investment
flexibility and would allow the fund to respond more quickly to market
developments without the delay or expense of a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4K.
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<PAGE>
PROPOSAL 4L
(U.S. TREASURY SECURITIES CASH FUND AND U.S. GOVERNMENT SECURITIES SAVINGS FUND)
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING
INDUSTRY CONCENTRATION
The U.S. Treasury Securities Cash Fund and the U.S. Government Securities
Savings Fund currently have a fundamental investment restriction concerning
industry concentration that prohibits each Fund from investing more than 25% of
its total assets in securities of companies principally engaged in any one
industry (other than obligations issued or guaranteed by the U.S. Government or
any of its agencies or instrumentalities). In addition, each fund has the
following additional investment restriction concerning industry concentration
(Additional Concentration Restriction) as described below.
The U.S. Treasury Securities Cash Fund has the following Additional
Concentration Restriction:
"The U.S. Treasury Securities Cash Fund will invest exclusively in
short-term debt obligations of the United States Treasury which are
protected by the full faith and credit of the United States
Government, and including repurchase agreements collateralized by such
government obligations."
The U.S. Government Securities Savings Fund has the following Additional
Concentration Restriction:
"The U.S. Government Securities Savings Fund will invest exclusively
in short-term obligations of the U.S. government and its agencies and
instrumentalities."
It is proposed that shareholders approve the elimination of the above exclusive
Additional Concentration Restriction. The Securities and Exchange Commission has
stated, in accordance with the 1940 Act, that if a mutual fund's name implies
that it will invest primarily in a particular type of security, the fund must
have an investment policy requiring that, under normal circumstances, at least
65% of its assets will be invested in the indicated security. The Additional
Concentration Restriction limits the Adviser's management policies in these two
funds by requiring the funds to invest exclusively in their respective, named
securities (i.e.. the U.S. Treasury Securities Cash Fund must invest exclusively
in short-term debt obligations of the U.S. Treasury). The proposed elimination
of the Additional Concentration Restriction would benefit the funds by allowing
the Adviser greater investment flexibility. In addition, the elimination of the
Additional Concentration Restriction will allow the funds to participate in a
securities lending arrangement in which the security loans may be collateralized
in high quality obligations in which the fund may not normally invest. However,
the funds will still be required to follow all current limitations imposed under
the 1940 Act along with the investment policies outlined in the funds' current
prospectus.
The funds' investment policies as stated in their current prospectus are the
following:
The U.S. Treasury Securities Cash Fund invests at least 65% of its
total assets in United States Treasury debt securities, which are
protected by the "full faith and credit" of the United States
government. The fund also invests in repurchase agreements
collateralized with such obligations.
The U.S. Government Securities Savings Fund invests at least 65% of its total
assets in United States Treasury debt securities, which are protected by the
"full faith and credit" of the United States government, and obligations of
agencies and instrumentalities of the United States. The fund may also invest in
repurchase agreements collateralized with such obligations.
The elimination of the Additional Concentration Restriction will not materially
affect the investment strategies of the funds. However, the elimination will
allow the Adviser to manage the funds with more flexibility and to take
advantage of other investment opportunities as permitted by the funds'
prospectus and the 1940 Act.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4L.
PROPOSAL 4M
(ALL FUNDS EXCEPT THE GOLD SHARES, WORLD GOLD AND GLOBAL RESOURCES FUNDS)
TO ELIMINATE THE FUNDAMENTAL ISSUER PERCENTAGE
RESTRICTION (ISSUER PERCENTAGE RESTRICTION)
REGARDING INVESTMENTSDIVERSIFICATION OF INVESTMENTS
The funds currently have an Issuer Percentage Restriction regarding
diversification of investments that states:
"A fund may not (a) invest more than 5% of the value of its total
assets in securities of any one issuer, except such limitation shall
not apply to obligations issued or guaranteed by the U.S. Government,
its agencies or
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<PAGE>
instrumentalities, or (b) acquire more than 10% of the voting
securities of any one issuer. (These limitations as to the Near-Term
Tax Free Fund and China Region Opportunity Fund apply to only 75% of
the value of their respective gross assets.)"
The Funds have elected to be "diversified open-end management investment
companies" under the 1940 Act, which require the limitations contained in the
current fundamental investment restriction to apply to 75% of the total assets
of the funds. The current policy of the funds, except for the Near-Term Tax Free
Fund and the China Region Opportunity Fund, is more restrictive, applying the
limitations on issuer holdings to 100% of its portfolio. The primary purpose of
the proposed change with respect to the funds applying the restrictive standard
is to allow the Funds to invest in accordance with the limits contained in the
1940 Act for diversified companies.
For a < >
This would allow the funds the flexibility to purchase larger amounts of
issuers' securities when the Adviser deems an opportunity attractive. The new
policy would allow the investment policies of the Funds to conform with the
definition of "diversified" as it appears in the 1940 Act. Please note that the
Funds cannot change their election to be a diversified company without a further
shareholder vote.
With respect to the Near-Term Tax Free Fund and the China Region Opportunity
Fund currently applying the 1940 Act standard, the elimination of the
fundamental policy will allow the Funds to respond more quickly to changes of
that standard, as well as to other legal, regulatory, and market developments
without delay or expense of a shareholder vote. The adoption of this change is
not expected materially to affect the operations of the Funds.
PROPOSAL FIVE
(CHINA REGION OPPORTUNITY FUND)
TO CHANGE THE STATUS OF THE CHINA REGION OPPORTUNITY FUND
TO NON-DIVERSIFIED STATUS
DIVERSIFICATION. Under the 1940 Act, every registered investment management
company is required to be classified as either "diversified" or
"non-diversified." An investment company that is classified as diversified may
not change its classification without shareholder approval.
Currently, the China Region Opportunity Fund (fund) is classified as
"diversified" under the 1940 Act. As a diversified company, the fund is required
to comply with the following requirement (commonly referred to as the
"Diversification Requirement"):
. . . at least 75% of the value of the fund's total assets must be
represented by cash and cash items, U.S. government securities,
securities of other investment companies, and other securities limited
with respect to any one issuer to an amount not greater in value than
5% of the value of the total assets of the fund and to not more than
10% of the outstanding voting securities of such issuers.
In substance, the Diversification Requirement prevents the fund (with respect to
75% of its total assets) from investing more than 5% of its total assets in the
securities of a single issuer or holding more than 10% of the voting securities
of a single issuer.
The fund's current fundamental investment restriction in the prospectus (the
"Investment Restriction"), which applies to 75% of the fund's total assets,
reads as follows:
. . . the fund will not (a) invest more than 5% of its total assets in
securities of any one issuer, except such limitation shall not apply
to obligations issued or guaranteed by the United States government,
its agencies or instrumentalities or (b) acquire more than 10% of the
voting securities in any one issuer.
As with the Diversification Requirement, the Investment Restriction for the fund
may not be changed without shareholder approval.
If Proposal Four is approved, the fund will no longer be subject to the
Diversification Requirement and, in turn, the fund's Investment Restriction will
be eliminated. Accordingly, the fund will be allowed to invest, without
limitation, in the securities of any single issuer, subject to certain
limitations of the Internal Revenue Code, as described more fully below.
RATIONALE FOR THE CHANGE. The fund's objective is long-term capital appreciation
and, consistent with its objective and investment strategy, the fund invests
primarily in equity securities issued by China region companies. However,
because of the
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<PAGE>
Diversification Requirement and the Investment Restriction, with respect to 75%
of the fund's assets, the fund currently may not invest more that 5% of its
assets in any single company within the China region or any other region.
The Adviser believes that, over the long term, it can maximize growth of capital
by employing a flexible strategy of under- weighting and over-weighting holdings
relative to an appropriate benchmark index of the China region, such as the Hang
Seng 100. The Hang Seng 100 is a market capitalization weighted index
representing mid to large-cap companies in Hong Kong. Currently, the top five
companies of the Hang Seng 100 represent approximately 60% of the index with
several securities comprising more than 5% each. For example, China Telecom and
HSBC both represent about 20% of the index. Hutchinson Whampo represents another
11% and C&W HKTel and Cheung Kong count for more than 5% each. In order for the
fund to maintain a portfolio concentration relative to its benchmark index, the
Diversification Restriction and the Investment Restriction must be eliminated.
In addition, foreign investors in the Public Republic of China are limited to
investing in "B-Shares" class of issuers. Currently there are two B-share
securities markets consisting of 54 individual securities with a total market
cap of only $2 billion. This market has a very limited number of B-share
securities available to foreign investors as compared to the S&P 500 Index and
other United States indexes. To take advantage of investment opportunities in
China's B-shares market, the fund must pursue an investment strategy that is
more flexible than allowed by the Diversification Requirement.
The board of trustees believes that it is in the best interest of the fund and
its shareholders to align the fund's portfolio with the performance and risk
parameters of the Hang Seng 100 Index and China's B-share market. Removing the
Diversification Restriction and the Investment Restriction will allow the fund
to pursue this investment strategy.
RISK. If a fund becomes non-diversified, the fund's portfolio may include the
securities of a smaller total number of issuers than if the fund were
diversified. Changes in the financial condition or market assessment of a single
issuer may, therefore, cause greater fluctuation and volatility in the fund's
total return or asset valuation than if the fund were required to hold the
securities of a larger number of issuers. The fund is particularly vulnerable to
risks specific to investing in foreign securities. These risks include currency
fluctuation, less public disclosure, as well as economic and political risk.
DIVERSIFICATION FOR TAX PURPOSES. Although the fund seeks non-diversified status
within the meaning of the 1940 Act, the fund intends to continue to qualify as a
"regulated investment company" (commonly referred to as a "RIC") for Federal
income tax purposes. To qualify as a RIC, the fund must satisfy the
diversification requirements of the Internal Revenue Code. These requirements
include a 50% and a 25% test. The 50% test requires that at the end of each
quarter of the taxable year, at least 50% of the value of the RIC's total assets
must be represented by cash and cash items, U.S. government securities,
securities of other RICs, and other securities. For this purpose, "other
securities" does not include investments in the securities of any one issuer
that represent more than 5% of the value of the investment company's total
assets or more than 10% of the issuer's outstanding voting securities. The 25%
test requires that at the end of each quarter of its taxable year, not more than
25% of a RIC's total assets may be invested in the securities of any one issuer,
except for the securities of the U.S. government or other RICs. Compliance with
these tax diversification requirements may limit, from time to time, the extent
to which the fund may be able to pursue a non-diversified investment strategy.
BOARD CONSIDERATION. At a meeting of the board of trustees held on May 22, 2000,
the Adviser recommended that the board take action to change the classification
of the fund to "non-diversified" under the 1940 Act and eliminate the Investment
Restriction. The trustees considered a variety of factors, including the
information described above, and concluded that the proposed change would be in
the best interest of the fund and its shareholders.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL FIVE.
PROPOSAL SIX
(REAL ESTATE FUND)
TO LIQUIDATE THE REAL ESTATE FUND
As of May 31, 2000 the Real Estate Fund has total net assets of approximately
$5,197,406 and has not attracted the shareholder following that was originally
anticipated. Despite the Adviser's and Sub-Adviser's continued efforts to
improve the performance of the fund and the marketing strategy to increase the
fund's assets, the Adviser believes that there is no reasonable prospect for
increased investor interest in the foreseeable futures. The fund's small asset
base results in a high per share expense ratio for the fund, which adversely
affects the fund's performance. In addition, the size of the fund impairs the
ability of the fund to participate in many attractive investments. For these
reasons, the Adviser determined that the continued operation of the fund
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<PAGE>
would not be in the best interests of shareholders, and at a meting of the Board
of Trustees held on May 22, 2000, the Adviser recommended that the Trustees
consider liquidating the fund. The Trustees considered such information as they
deemed reasonably necessary to evaluate the Adviser's recommendation and
considered such information as they deemed reasonably necessary to evaluate the
Adviser's recommendation and considered other options to liquidating the fund,
such as merging with another fund. Based upon this information, the Trustees
determined that it would be in the best interests of shareholders to liquidate
the fund, and they voted unanimously to recommend that shareholders approve a
proposal to liquidate the fund.
If shareholders approve liquidation, the fund's assets will be sold in an
orderly manner as soon as practicable following shareholder approval. After
payment of expenses, including the expenses of liquidation, if any, the
remaining cash and other assets will thereafter be distributed to shareholders.
Each share of the fund will entitle the holder to receive its pro rata share of
any cash or other assets distributed. For tax purposes, a shareholder will
recognize gain or loss on the liquidating distribution equal to the difference
between (i) the amount of the liquidating distribution and (ii) the
shareholder's adjusted tax basis in shares of the fund. Such gain or loss will
be treated as a long-term or short-term capital gain or loss depending on the
period of time the shares were held prior to the liquidation. Distributions on
shares held for more than one year will result in a long-term capital gain or
loss, and distributions on shares held for one year or less will result in a
short-term capital gain or loss. Liquidating distributions received by an IRA or
qualified retirement plan will ordinarily not be subject to taxation. All
shareholders are urged to seek independent advice regarding the possible federal
income tax consequences of the proposed liquidation as applied to the
shareholder's own special circumstances.
It should be noted that the Amended and Restricted Master Trust Agreement being
submitted to shareholders under Proposal 3 would permit the Trustees to
liquidate a fund without shareholder approval. If shareholders of the Real
Estate Fund do not approve liquidation of the fund but shareholders of the Trust
approve Proposal 3, the Board may still proceed to liquidate the Real Estate
Fund under the authority of the new Amended and Restated Master Trust Agreement.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL SIX.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is expected
to come before the meeting, but should any other matters requiring a vote of
shareholders arise, including a question of adjourning the meeting, the persons
named in the accompanying proxy will vote thereon according to their best
judgment in the interests of the funds.
THE FUNDS' ANNUAL AND SEMI-ANNUAL REPORT IS AVAILABLE AT NO CHARGE, UPON
REQUEST.
TO REQUEST INFORMATION:
BY PHONE 1-800-US-FUNDS
BY MAIL Shareholder Services U.S. Global Investors Funds P.O. Box
781234 San Antonio, TX 78278-1234
BY INTERNET HTTP://WWW.US-GLOBAL.COM.
ACTIVITIES AND MANAGEMENT OF U.S. GLOBAL INVESTORS, INC.
ADVISER. U.S. Global Investors, Inc. is a Texas corporation with its principal
executive offices located at 7900 Callaghan Road, San Antonio, Texas 78229. U.S.
Global is the investment Adviser to the funds.
SUB-ADVISER. Goodman & Company N.Y. Ltd., 40 King Street West, Toronto, Ontario
MSH 4A9, Canada, serves as sub- adviser to the Real Estate Fund.
PRINCIPAL UNDERWRITER. U.S. Global Brokerage, Inc. (U.S. Global Brokerage), a
wholly owned subsidiary of U.S. Global, is a Texas corporation with its
principal executive offices at 7900 Callaghan Road, San Antonio, Texas, 78229.
U.S. Global Brokerage is the principal underwriter and distributor of the U.S.
Global Investors Funds.
Proxy Statement
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<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
Since the funds do not hold annual shareholders meetings, the anticipated date
of the next special shareholders meeting (if any) cannot be provided.
The foregoing notice and proxy statement are sent by order of the board of
trustees.
Susan B. McGee
Secretary of the Trust
Dated: June 26, 2000
Proxy Statement
Page 23 of 24
<PAGE>
EXHIBIT 1
UNDERLINED language will be added; [bracketed] language will be deleted
-----------
FORM OF AMENDED AND RESTATED MASTER TRUST AGREEMENT
Exhibit I to Proxy Statement
Page 24 of 24
U.S. GLOBAL INVESTORS FUNDS
SECOND AMENDED AND RESTATED
MASTER TRUST AGREEMENT
____, 2000
(C) 1995 Goodwin, Procter & Hoar
All Rights Reserved
<PAGE>
TABLE OF CONTENTS
Page
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS...........................................1
Section 1. 1 Name and Principal Office............................1
Section 1.2 Definitions...........................................1
(a) "Trust"...............................................1
(b) "Trustees"............................................1
(c) "Shares"..............................................1
(d) "Series"..............................................1
(e) "Shareholder".........................................1
(f) "1940 Act"............................................1
(g) "Commission"..........................................2
(h) "Declaration of Trust"................................2
(i) "By-Laws".............................................2
(j) "Class"...............................................2
ARTICLE II - PURPOSE OF TRUST..............................................2
ARTICLE III - THE TRUSTEES.................................................2
Section 3. 1 Number, Designation, Election, Term, etc.............2
(a) Trustees..............................................2
(b) Number................................................2
(c) Election and .........................................2
(d) Resignation and Retirement............................2
(e) Removal...............................................3
(f) Vacancies.............................................3
(g) Effect of Death, Resignation, etc.....................3
(h) No Accounting.........................................3
Section 3.2 Powers of Trustees....................................3
(a) Investments...........................................4
(b) Disposition of Assets.................................4
(c) Ownership Powers......................................4
(d) Subscription..........................................4
(e) Form of Holding.......................................4
(f) Reorganization, etc...................................4
(g) Voting Trusts, etc....................................5
(h) Compromise............................................5
(i) Partnerships, etc.....................................5
(j) Borrowing and Security................................5
(k) Guarantees, etc.......................................5
(1) Insurance.............................................5
(m) Pensions, etc.........................................5
(n) Distribution Plans....................................5
Section 3.3 Certain Contracts.....................................6
(a) Advisory.............................................6
(b) Administration........................................6
(c) Distribution..........................................6
(d) Custodian and Depository..............................6
(e) Transfer and Dividend Disbursing Agency...............6
(f) Shareholder Servicing.................................6
(g) Accounting............................................6
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees........................................................7
Section 3.5 Ownership of Assets of the Trust......................8
ARTICLE IV - SHARES........................................................8
Section 4.1 Description of Shares.................................8
Section 4.2 Establishment and Designation of Sub-Trusts
and Classes.....................................................9
Section 4.3 Rights and Preferences of Sub-Trusts..................9
(a) Assets Belonging to Sub-Trusts........................9
(b) Liabilities Belonging to Sub-Trusts..................10
(c) Determination of Treatment as
Income and/or Capital............................10
(d) Dividends............................................10
(e) Liquidation..........................................11
(f) Voting...............................................11
(g) Redemption by Shareholder............................11
(h) Redemption by Trust..................................11
(i) Net Asset Value......................................12
(j) Transfer.............................................12
(k) Equality.............................................12
(l) Fractions............................................13
(m) Conversion Rights....................................13
(n) Class Differences....................................13
Section 4.4 Ownership of Shares..................................13
Section 4.5 Investments in the Trust.............................13
Section 4.6 No Pre-emptive Rights................................13
Section 4.7 Status of Shares and Limitation of Personal
Liability......................................................13
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS......................14
Section 5.1 Voting Powers........................................14
Section 5.2 Meetings.............................................14
Section 5.3 Record Dates.........................................15
Section 5.4 Quorum and Required Vote.............................15
Section 5.5 Action by Written Consent............................15
Section 5.6 Inspection of Records................................15
Section 5.7 Additional Provisions................................15
Section 5.8 Shareholder Communications...........................15
ARTICLE VI - LIMITATION OF LIABILITY: INDEMNIFICATION.....................16
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable: Notice.................................................16
Section 6.2 Notice for Contracts.................................16
Section 6.3 Trustee's Good Faith Action: Expert Advice:
No Bond or Surety..............................................16
Section 6.4 Indemnification of Shareholders......................17
Section 6.5 Indemnification of Trustees, Officers, etc...........17
Section 6.6 Compromise Payment...................................18
Section 6.7 Indemnification Not Exclusive, etc...................18
Section 6.7 Liability of Third Persons Dealing with Trustees.....18
ARTICLE VII - MISCELLANEOUS...............................................18
Section 7.1 Duration and Termination of Trust....................18
Section 7.2 Reorganization.......................................19
Section 7.3 Amendments...........................................19
Section 7.4 Filing of Copies: References, Headings...............20
Section 7.5 Applicable Law.......................................20
Section 7.6 Resident Agent.......................................20
<PAGE>
U.S. GLOBAL INVESTORS FUNDS
SECOND AMENDED AND RESTATED
MASTER TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST (the "Agreement) made at Boston,
Massachusetts the 31st day of July, 1984 by the Trustees hereunder, and by the
holders of shares of beneficial interest to be issued hereunder, is hereby
amended and restated in its entirety this ___ day of __________ in the City of
San Antonio in the State of Texas, as follows:
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an
investment company; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust or Sub-Trusts created hereunder
as hereinafter set forth.
ARTICLE I - NAME AND DEFINITIONS
Section 1. 1 NAME AND PRINCIPAL OFFICE. This Trust shall be known as U.S.
Global Investors Funds and the Trustees shall conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine. The principal office of the Trust shall be located at 7900 Callaghan
Road, San Antonio, Texas or at such other location as the Trustees may from time
to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established
by this Trust Agreement, as amended from time to time, inclusive of each and
every Sub-Trust established hereunder;
(b) "Trustees" refers to the Trustees of the Trust and of each
Sub-Trust hereunder named herein or elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust and each Sub-Trust of the Trust and/or any
class of any Sub-Trust (as the context may require) shall be divided from time
to time;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV, each of which Series
shall be a Sub-Trust of the Trust;
(e) "Shareholder" means a record owner of Shares;
(f) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(g) The term "Commission" shall have the meaning given it in the 1940
Act;
(h) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time;
(i) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time; and
(j) "Class" refers to any class of Shares of any Series or Sub-Trust
established and designated under or in accordance with the provisions of Article
IV.
ARTICLE 11 - PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company and to
offer Shareholders of the Trust and each Sub-Trust of the Trust one or more
investment programs primarily in securities and debt instruments. The Trust
shall also have the power to invest in precious metals, bullion and gold coins.
ARTICLE III - THE TRUSTEES
Section 3. 1 Number, Designation, Election, Term, etc.
(a) Trustees. The Trustees hereof are John P. Allen, P.O. Box 160323,
San Antonio, Texas; E. Douglas Hodo, 7706 Fondren, Houston, Texas; Frank E.
Holmes, 7900 Callaghan Road, San Antonio, Texas; W.C.J. van Rensburg, 6010
Sierra Arbor Court, Austin, Texas; W.W. McAllister, III, 7550 1H-10 West, Suite
700, San Antonio, Texas; Clark R. Mandigo, 15050 Jones Maltsberger, San Antonio,
Texas.
(b) NUMBER. The Trustee(s) serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the number of Trustees to
a number other than the number theretofore determined. No decrease in the number
of Trustees shall have the effect of removing any Trustee from office prior to
the expiration of his term, but the number of Trustees may be decreased in
conjunction with the removal of a Trustee pursuant to subsection (e) of this
Section 3.1.
(c) ELECTION AND TERM. The Trustees shall be elected by Shareholders
of the Trust. Each Trustee, whether named above or hereafter becoming a Trustee,
shall serve as a Trustee of the Trust and of each Sub-Trust hereunder during the
lifetime of this Trust and until its termination as hereinafter provided except
as such Trustee sooner dies, resigns or is removed. Subject to Section 16(a) of
the 1940 Act, the Trustees may elect their own successors and may, pursuant to
Section 3.1 (f) hereof, appoint Trustees to FILL vacancies.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust or
retire as a Trustee, by written instrument signed by him and delivered to the
other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument and shall be effective as to the Trust and each
Sub-Trust hereunder.
(e) REMOVAL. Any Trustee may be removed with or without cause at any
time: (i) by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date upon which such removal
shall become effective; or (ii) by vote of Shareholders holding not less than
two- thirds of the Shares then outstanding, cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than two-thirds of the Shares then outstanding and
filed with the Trust's Custodian. Any such removal shall be effective as to the
Trust and each Sub-Trust hereunder.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from any
reason, including without limitation the death, resignation, retirement, removal
or incapacity of any of the Trustees, or resulting from an increase in the
number of Trustees by the other Trustees may (but need not unless required by
the 1940 Act) be filled either by a majority of the remaining Trustees, subject
to the provisions of Section 16(a) of the 1940 Act, through the appointment in
writing of such other person as such remaining Trustees in their discretion
shall determine and such appointment shall be effective upon the written
acceptance of the person named therein to serve as a Trustee and agreement by
such person to be bound by the provisions of this Declaration of Trust, except
that any such appointment in anticipation of a vacancy to occur by reason of
retirement, resignation, or increase in number of Trustees to be effective at a
later date shall become effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees. As soon as any
Trustee so appointed shall have accepted such appointment and shall have agreed
in writing to be bound by this Declaration of Trust and the appointment is
effective, the Trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one of them, shall
not operate to annul or terminate the Trust or any Sub- Trust hereunder or to
revoke or terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
(h) NO ACCOUNTING. Except to the extent required by the 1940 Act or
under circumstances which would justify his removal for cause, no person ceasing
to be a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust to
cooperate as a separate and distinct investment medium and with separately
defined investment objectives and policies and distinct investment purpose; they
may from time to time in accordance with the provisions of Section 4.1 hereof
establish classes of Shares of any Series or Sub-Trust or divide the Shares of
any Series or Sub-Trust into classes; they may as they consider appropriate
elect and remove officers and appoint and terminate agents and consultants and
hire and terminate employees, any one or more of the foregoing of whom may be a
Trustee, and may provide for the compensation of all of the foregoing; they may
appoint from their own number, and terminate any one or more committees
consisting of two or more Trustees, including without implied limitation an
executive committee, which may, when the Trustees are not in session and subject
to the 1940 Act, exercise some or all of the power and authority of the Trustees
as the Trustees may determine; in accordance with Section 3.3 they may employ
one or more Advisers, Administrators, Depositories and Custodians and may
authorize any Depository or Custodian to employ subcustodians or agents and to
deposit all or any part of such assets in a system or systems for the central
handling of securities and debt instruments, retain transfer, dividend,
accounting or Shareholder servicing agents or any of the foregoing, provide for
the distribution of Shares by the Trust through one or more distributors,
principal underwriters or otherwise, set record dates or times for the
determination of Shareholders or various of them with respect to various
matters; they may compensate or provide for the compensation of the Trustees,
officers, advisers, administrators, custodians, other agents, consultants and
employees of the Trust or the Trustees on such terms as they deem appropriate;
and in general they may delegate to any officer of the Trust, to any committee
of the Trustees and to any employee, adviser, administrator, distributor,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority
for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) INVESTMENTS. To invest and reinvest cash and other property, and
to hold cash or other property uninvested without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets of the Trust;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any rights
of ownership, with respect to stock or other securities, debt instruments or
property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities, debt instruments
or property as the Trustees shall deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities or debt
instruments;
(e) FORM OF HOLDING. To hold any security, debt instrument or property
in a form not indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust or of any
Sub-Trust or in the name of a custodian, subcustodian or other depositary or a
nominee or nominees or otherwise;
(f) REORGANIZATION, ETC. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or issuer, any
security or debt instrument of which is or was held in the Trust; to consent to
any contract, lease, mortgage, purchase or sale of property by such corporation
or issuer, and to pay calls or subscriptions with respect to any security or
debt instrument held in the Trust;
(g) VOTING TRUSTS, ETC. To join with other holders of any securities
or debt instruments in acting through a committee, depositary, voting trustee or
otherwise, and in that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(h) COMPROMISE. To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any Sub-Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage and pledge
the assets of the Trust or any part thereof to secure obligations arising in
connection with such borrowing;
(k) GUARANTEES, ETC. To endorse or guarantee the payment of any notes
or other obligations of any person; to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of or all such obligations;
(1) INSURANCE. To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, investment advisers, managers,
administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability;
(m) PENSIONS, ETC. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trust and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust; and
(n) DISTRIBUTION PLANS. To adopt on behalf of the Trust or any
Sub-Trust with respect to any class thereof a plan of distribution and related
agreements thereto pursuant to the terms of Rule 12b-1 of the 1940 Act and to
make payments from the assets of the Trust or the relevant Sub-Trust or
Sub-Trusts pursuant to said Rule 12b-1 Plan.
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees on
behalf of the Trust or any Sub-Trust may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at least a majority of
the Trustees then in office, being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law).
Section 3.3 CERTAIN CONTRACTS. Subject to compliance with the provisions of
the 1940 Act, but notwithstanding any limitations of present and future law or
custom in regard to delegation of powers by trustees generally, the Trustees
may, at any time and from time to time and without limiting the generality of
their powers and authority otherwise set forth herein, enter into one or more
contracts with any one or more corporations, trusts, associations, partnerships,
limited partnerships, other type of organizations, or individuals ("Contracting
Party"), to provide for the performance and assumption of some or all of the
following services, duties and responsibilities to, for or on behalf of the
Trust and/or any Sub-Trust, and/or the Trustees, and to provide for the
performance and assumption of such other services, duties and responsibilities
in addition to those set forth below as the Trustees may determine appropriate:
(a) ADVISORY. Subject to the general supervision of the Trustees and
in conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Sub-Trust of the
Trust (as that phrase is defined in subsection (a) of Section 4.2), to manage
such investments and assets, make investment decisions with respect thereto, and
to place purchase and sale orders for portfolio transactions relating to such
investments and assets;
(b) ADMINISTRATION. Subject to the general supervision of the Trustees
and in conformity with any policies of the Trustees with respect to the
operations of the Trust and each Sub-Trust (including any classes thereof), to
supervise all or any part of the operations of the Trust and each Sub-Trust, and
to provide all or any part of the administrative and clerical personnel, office
space and office equipment and services appropriate for the efficient
administration and operations of the Trust and each Sub-Trust;
(c) DISTRIBUTION. To distribute the Shares of the Trust and each
Sub-Trust (including any classes thereof), to be principal underwriter of such
Shares, and/or to act as agent of the Trust and each Sub- Trust in the sale of
Shares and the acceptance or rejection of orders for the purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as depository for and to maintain
custody of the property of the Trust and each Sub-Trust and accounting records
in connection therewith;
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain records of
the ownership of outstanding Shares, the issuance and redemption and the
transfer thereof, and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) SHAREHOLDER SERVICING. To provide service with respect to the
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust and/or the
Trustees, and the contracts with respect thereto may contain such terms
interpretive of or in addition to the delineation of the services, duties and
responsibilities provided for, including provisions that are not inconsistent
with the 1940 Act relating to the standard of duty of and the rights to
indemnification of the Contracting Party and others, as the Trustees may
determine. Nothing herein shall preclude, prevent or limit the Trust or a
Contracting Party from entering into sub-contractual arrangements relative to
any of the matters referred to in Sections 3.3(a) through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any Contracting
Party or that the Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contrast providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any
Sub-Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer
of the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship on interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
Section 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES.
The Trustees are authorized to pay or to cause to be paid out of the
principal or income of the Trust or any Sub-Trust, or partly out of
principal and partly out of income, and to charge or allocate the same to,
between or among such one or more of the Sub-Trusts and/or one or more
classes of Shares thereof that may be established and designated pursuant
to Article IV, as the Trustees deem fair, all expenses, fees, charges,
taxes and liabilities incurred or arising in connection with the Trust, any
Sub-Trust and/or any class of Shares thereof, or in connection with the
management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser, administrator, distributor,
principal underwriter, auditor, counsel, depository, custodian, transfer
agent, dividend disbursing agent, accounting agent, Shareholder servicing
agent, and such other agents, consultants, and independent contractors and
such other expenses and charges as the Trustees may deem necessary or
proper to incur. Without limiting the generality of any other provision
hereof, the Trustees shall be entitled to reasonable compensation from the
Trust for their services as Trustees and may fix the amount of such
compensation.
Section 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV - SHARES
Section 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall be divided into Shares, all without par value, but the Trustees shall have
the authority from time to time to divide the Shares into two or more Series of
Shares, (each of which Series of Shares shall be a separate and distinct
Sub-Trust of the Trust, including without limitation those Sub-Trusts
specifically established and designated in Section 4.2), as they deem necessary
or desirable. Each Sub-Trust established hereunder shall be deemed to be a
separate trust under Massachusetts General Laws Chapter 182. The Trustees shall
have exclusive power without the requirement of shareholder approval to
establish and designate such separate and distinct Sub- Trusts, and to fix and
determine the relative rights and preferences as between the shares of the
separate Sub- Trusts as to right of redemption and the price, terms and manner
of redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the several Sub-Trusts shall have
separate voting rights or no voting rights.
In addition, the Trustees shall have exclusive power, without the
requirement of Shareholder' approval, to issue classes of Shares of any
Sub-Trust or divide the Shares of any Sub-Trust into classes, each class having
such different dividend, liquidation, voting and other rights as the Trustees
may determine, and may establish and designate the specific classes of Shares of
each Sub-Trust. The fact that a Sub-Trust shall have initially been established
and designated without any specific establishment or designation of classes
(i.e., that all Shares of such Sub-Trust are initially of a single class), or
that a Sub-Trust shall have more than one established and designated class,
shall not limit the authority of the Trustees to establish and designate
separate classes, or one or more further classes, of said Sub-Trust without
approval of the holders of the initial class thereof, or previously established
and designated class or classes thereof, provided that the establishment and
designation of such further separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
The number of authorized Shares and the number of Shares of each Sub-Trust
or class thereof that may be issued is unlimited, and the Trustees may issue
Shares of any Sub-Trust or class thereof for such consideration and on such
terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in Subsection (a) of Section 4.3). The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Sub-Trust or class thereof into one or more Sub-Trusts or
classes thereof that may be established and designated from time to time. The
Trustees may hold as treasury Shares, reissue for such consideration and on such
terms as they may determine, or cancel, at their discretion from time to time,
any Shares of any Sub-Trust or class thereof reacquired by the Trust.
The Trustees may, at anytime, abolish or terminate the Trust, Sub-Trust or
class thereof if no shares of that Trust, Sub-Trust or class, as the case may
be, are outstanding.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to or Section
5.3.
The establishment and designation of any Sub-Trust or of any class of
Shares of any Sub-Trust in addition to those established and designated in
Section 4.2 shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Sub-Trust or class, or
as otherwise provided in such instrument. At any time that there are no Shares
outstanding of any particular Sub-Trust or class previously established and
designated the Trustees may by an instrument executed by a majority of their
number (or by an instrument executed by an officer of the Trust pursuant to the
vote of a majority of the Trustees) abolish that Sub-Trust or class and the
establishment and designation thereof. Each instrument referred to in this
paragraph shall have the status of an amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any Organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Sub-Trust (including any classes thereof) of the Trust to the same extent
as if such person were not a Trustee, officer or other agent of the Trust; and
the Trust may issue and sell or cause to be issued and sold and may purchase
Shares of any Sub-Trust (including any classes thereof) from any such person or
any such organization subject only to the general limitations, restrictions or
other provisions applicable to the sale or purchase of Shares of such Sub-Trust
(including any classes thereof) generally.
Section 4.2 ESTABLISHMENT AND DESIGNATION OF SUB-TRUSTS AND CLASSES.
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby establish
and designate eleven Sub-Trusts: Gold Shares Fund, Global Resources Fund, World
Gold Fund, U.S. Treasury Securities Cash Fund, All American Equity Fund, Equity
Income Fund, Tax Free Fund, U.S. Government Securities Savings Fund, Real Estate
Fund, Near-Term Tax Free Fund, and China Region Opportunity Fund. Each such
Sub-Trust shall consist of one class of Shares.
Section 4.3 RIGHTS AND PREFERENCES OF SUB-TRUSTS. The Shares of each
such Sub-Trust and class thereof and any Shares of any further Sub-Trusts or
classes thereof that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect to some
further Sub-Trust or class thereof at the time of establishing and designating
the same) have the following relative rights and preferences:
(a) ASSETS BELONGING TO SUB-TRUSTS. All consideration received by the
Trust for the issue or sale of Shares of a particular Sub-Trust or any classes
thereof, 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 by the Trustees in trust for the benefit of
the holders of Shares of that Sub-Trust or class thereof and shall irrevocably
belong to that Sub-Trust (and be allocable to any classes thereof) for all
purposes, and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, 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, together with any General Items
allocated to that Sub-Trust as provided in the following sentence, are herein
referred to as "assets belonging to" that Sub-Trust (and allocable to any
classes thereof). In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Sub-Trust (collectively "General
Items"), the Trustees shall allocate such General Items to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Sub-Trust shall
belong to that Sub-Trust (and be allocable to any classes thereof). Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Sub-Trusts (including any classes thereof) for all purposes.
(b) LIABILITIES BELONGING TO SUB-TRUSTS. The assets belonging to each
particular Sub-Trust shall be charged with the liabilities in respect of that
Sub-Trust and all expenses, costs, charges and reserves attributable to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Sub-Trust shall be allocated and charged by the Trustees to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. In addition, the liabilities in respect of a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges and reserves
belonging to that class of Shares, and any general liabilities, expenses, costs,
charges or reserves of that particular Sub-Trust which are not readily
identifiable as belonging to any particular class of Shares of that Sub-Trust
shall be allocated and charged by the Trustees to and among any one or more of
the classes of Shares of that Sub-Trust established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable. The liabilities, expenses, costs, charges and reserves
allocated and so charged to a Sub-Trust or class thereof are herein referred to
as "liabilities belonging to" that Sub-Trust or class thereof. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Sub-Trusts (including any
classes thereof) for all purposes. Any creditor of any Sub-Trust may look only
to the assets of that Sub-Trust to satisfy such creditor's debt.
(c) DETERMINATION OF TREATMENT AS INCOME AND/OR CAPITAL. The Trustees
shall have full discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) DIVIDENDS. Dividends and distributions on Shares of a particular
Sub-Trust or any class thereof may be paid with such frequency as the Trustees
may determine, which may be daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Sub-Trust or class, from such of the
income and capital gains, accrued or realized, from the assets belonging to that
Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable
to that class, as the Trustees may determine, after providing for actual and
accrued liabilities belonging to that Sub-Trust or class. All dividends and
distributions on Shares of a particular Sub- Trust or class thereof shall be
distributed pro rata to the holders of Shares of that Sub-Trust or class in
proportion to the number of Shares of that Sub-Trust or class held by such
holders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's purchase
order and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and distributions
may be made in cash or Shares of that Sub-Trust or class or a combination
thereof as determined by the Trustees or pursuant to any program that the
Trustees may have in effect at the time for the election by each Shareholder of
the mode of the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with subsection (i) of Section 4.3.
(e) LIQUIDATION. In the event of the liquidation or dissolution of the
Trust, any Sub-Trust or class thereof the Shareholders of each Sub-Trust or any
class thereof that has been established and designated shall be entitled to
receive, when and as declared by the Trustees, the excess of the assets
belonging to that Sub-Trust, or in the case of a class, belonging to that
Sub-Trust and allocable to that class, over the liabilities belonging to that
Sub-Trust or class. Upon the liquidation or dissolution of the Trust or any
Sub-Trust or class pursuant to this Section 4.3(e) the Trustees shall make
provisions for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or that Sub-Trust or class. The
assets so distributable to the Shareholders of any particular Sub-Trust or class
thereof shall be distributed among such Shareholders in proportion to the
relative net asset value, as defined in Section 4.3(i), of such Shares. The
liquidation or dissolution of any particular Sub-Trust or class thereof may be
authorized by vote of a majority of the Trustees then in office without the
approval of the Shareholders of the Trust or that Sub-Trust or class thereof.
<PAGE>
(f) VOTING. On each matter submitted to a vote of the Shareholders,
each holder of a Share of each Sub-Trust shall be entitled to one vote for each
whole Share and for a proportionate fractional vote for each fractional Share
standing in his name on the books of the Trust and all shares of each Sub-Trust
or class thereof shall vote as a separate class, except as to voting for
Trustees and as otherwise required by the 1940 Act. As to any matter which does
not affect the interest of a particular Sub-Trust or class thereof, only the
holders of Shares of one or more of the affected Sub-Trusts or classes thereof
shall be entitled to vote.
(g) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a particular
Sub-Trust or any class thereof shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each week, to require
the Trust to redeem all or any part of his Shares of that Sub-Trust or class
thereof at a redemption price equal to the net asset value per Share of that
Sub-Trust or class thereof next determined in accordance with subsection (h) of
this Section 4.2 after the Shares are properly tendered for redemption. Payment
of the redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that conditions
exist which make payment wholly in cash unwise or undesirable, the Trust may
make payment wholly or partly in securities or other assets belonging to the
Sub- Trust of which the Shares being redeemed are part at the value of such
securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Sub-Trust or class thereof to require the Trust to redeem Shares of that
Sub-Trust during any period or at any time when and to the extent permissible
under the 1940 Act.
(h) REDEMPTION BY TRUST. Each Share of each Sub-Trust or class thereof
that has been established and designated is subject to redemption by the Trust
at the redemption price which would be applicable if such Share was then being
redeemed by the Shareholder pursuant to subsection (f) of this Section 4.2: (a)
at any time, if the Trustees determine in their sole discretion that failure to
so redeem may have materially adverse consequences to the holders of the Shares
of the Trust or any Sub-Trust thereof or class thereof, or (b) upon such other
conditions as may from time to time be determined by the Trustees and set forth
in the then current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption the holders of
the Shares so redeemed shall have no further right with respect thereto other
than to receive payment of such redemption price.
(i) NET ASSET VALUE. The net asset value per Share of any Sub-Trust
shall be (a) in the case of a Sub-Trust whose Shares are not divided into
classes, the quotient obtained by dividing the value of the net assets of that
Sub-Trust (being the value of the assets belonging to that Sub-Trust less the
liabilities belonging to that Sub-Trust) by the total number of Shares of that
Sub-Trust outstanding, and (b) in the case of a class of Shares of a Sub-Trust
whose Shares are divided into classes, the quotient obtained by dividing the
value of the assets of that Sub-Trust allocable to such class (less the
liabilities belonging to such class) by the total number of Shares of such class
outstanding; all determined in accordance with the methods and procedures,
including without limitation those with respect to rounding, established by the
Trustees from time to time.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Sub-Trust as dividends payable in
additional Shares of that Sub-Trust at the designated constant dollar amount and
for the handling of any losses attributable to that Sub-Trust. Such procedures
may provide that in the event of any loss each Shareholder shall be deemed to
have contributed to the capital of the Trust attributable to that Sub-Trust his
pro rata portion of the total number of Shares required to be canceled in order
to permit the net asset value per Share of that Sub-Trust to be maintained,
after reflecting such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by his investment in
any Sub-Trust with respect to which the Trustees shall have adopted any such
procedure, to make the contribution referred to in the preceding sentence in the
event of any such loss.
(j) TRANSFER. All Shares of each particular Sub-Trust or class thereof
shall be transferable, but transfers of Shares of a particular Sub-Trust or
class thereof will be recorded on the Share transfer records of the Trust
applicable to that Sub-Trust or class only at such times as Shareholders shall
have the right to require the Trust to redeem Shares of that Sub-Trust or class
and at such other times as may be permitted by the Trustees.
(k) EQUALITY. Except as provided herein or in the instrument
designating and establishing any class of Shares or any Sub-Trust, all Shares of
each particular Sub-Trust or class thereof shall represent an equal
proportionate interest in the assets belonging to that Sub-Trust, or in the case
of a class, belonging to that Sub-Trust and allocable to that class (subject to
the liabilities belonging to that Sub-Trust or class), and each Share of any
particular Sub-Trust or class shall be equal to each other Share of that
Sub-Trust or class; but the provisions of this sentence shall not restrict any
distinctions permissible under Subsection (a) of this Section 4.3 that may exist
with respect to dividends and distributions on Shares of the same Sub- Trust or
class. The Trustees may from time to time divide or combine the Shares of any
particular Sub-Trust or class into a greater or lesser number of Shares of that
Sub-Trust or class without thereby changing the proportionate beneficial
interest in the assets belonging to that Sub-Trust or class or in any way
affecting the rights of Shares of any other Sub-Trust or class.
(l) Fractions. Any fractional Share of any Sub-Trust or class, if any
such fractional Share is outstanding, shall carry proportionately all the rights
and obligations of a whole Share of that Sub- Trust or class, including rights
and obligations with respect to voting, receipt of dividends and distributions,
redemption of Shares, and liquidation of the Trust.
(m) CONVERSION RIGHTS. Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Sub-Trust or class thereof shall have the right to convert said
Shares into Shares of one or more other Sub-Trust or class thereof in accordance
with such requirements and procedures as may be established by the Trustees.
(n) CLASS DIFFERENCES. The relative rights and preferences of the
classes of any Sub-Trust may differ in such other respects as the Trustees may
determine to be appropriate in their sole discretion, provided that such
differences are set forth in the resolutions adopted by the Trustees or the
instrument establishing and designating such classes and executed by a majority
of the Trustees (or by an instrument executed by an officer of the Trust
pursuant to a vote of a majority of the Trustees).
Section 4.4 OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the Trust or of a transfer or similar agent for the Trust, which
bocks shall be maintained separately for the Shares of each Sub-Trust and each
class thereof that has been established and designated. No certificates
certifying the ownership of Shares need be issued except as the Trustees may
otherwise determine from time to time. The Trustees may make such rules as they
consider appropriate for the assurance of Shares certificates, the use of
facsimile signatures, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any transfer or similar agent, as the
case may be, shall be conclusive as to who are the Shareholders and as to the
number of Shares of each Sub-Trust and class thereof held from time to time by
each such Shareholder.
Section 4.5 INVESTMENTS IN THE TRUST. The Trustees may accept investments
in the Trust and each Sub-Trust thereof from such persons and on such terms and
for such consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
Section 4.6 NO PRE-EMPTIVE RIGHTS. Shareholders shall have no pre-emptive
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
Section 4.7 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to the personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 VOTING POWERS. The Shareholders shall have power to vote only
(i) for the election or removal of Trustees as provided in Section 3.1, (ii)
with respect to any contract with a Contracting Party as provided in Section 3.3
as to which Shareholder approval is required by the 1940 Act, (iii) with respect
to any reorganization of the Trust or any Sub-Trust to the extent and as
provided in Sections 7.2, (iv) with respect to any amendment of this Declaration
of Trust to the extent and as provided in Section 7.3, (v) to the same extent as
the stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or any Sub-Trust
thereof or the Shareholders, (provided, however, that a shareholder of a
particular Sub-Trust shall not be entitled to a derivative or class action on
behalf of any other Sub-Trust (or shareholder of any other Sub-Trust) of the
Trust) and (vi) with respect to such additional matters relating to the Trust as
may be required by the 1940 Act, this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. Proxies may be given orally or in writing or pursuant to any
computerized or mechanical data gathering process specifically approved by the
Trustees. A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. 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. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 MEETINGS. No annual or regular meeting of Shareholders is
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. The Trustees
shall promptly call and give notice of a meeting of Shareholders for the purpose
of voting upon removal of any Trustee of the Trust when requested to do so in
writing by Shareholders holding not less than 10% of the Shares then
outstanding. If the Trustees shall fail to call or give notice of any meeting of
Shareholders for a period of 30 days after written application by Shareholders
holding at least 10% of the Shares then outstanding requesting a meeting be
called for a purpose requiring action by the Shareholders as provided herein or
in the By-Laws, then Shareholders holding at least 10% of the Shares then
outstanding may call and give notice of such meeting, and thereupon the meeting
shall be held in the manner provided for herein in case of call thereof by the
Trustees.
Section 5.3 RECORD DATES. For the purpose of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
Section 5.4 QUORUM AND REQUIRED VOTE. Thirty percent (30%) of the Shares
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting without the necessity of
further notice. A majority of the Shares voted, at a meeting of which a quorum
is present, shall decide any questions and a plurality shall elect a Trustee,
except when a different vote is required or permitted by any provision of the
1940 Act or other applicable law or by this Declaration of Trust or the By-Laws.
Section 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Section 5.6 INSPECTION OF RECORDS. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is permitted stockholders of
a Massachusetts business corporation under the Massachusetts Business
Corporation Law.
Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include farther
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 SHAREHOLDER COMMUNICATIONS. Whenever ten or more Shareholders
of record have been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least 1 % of the outstanding Shares, whichever
is less, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a Shareholder meeting and accompanied by a form of communication and
request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either (1) afford to such applicants
access to a list of the names and addresses of all Shareholders as recorded on
the books of the Trust or Sub-Trust, as applicable; or (2) inform such
applicants as to the approximate number of Shareholders of record, and the
approximate cost of mailing to them the proposed communication and form of
request.
If the Trustees elect to follow the course specified in Section 5.2 above
the Trustees, upon the written request of such applicants, accompanied by a
tender of the material to be mailed and of the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books, unless within five business
days after such tender the Trustees shall mail to such applicants and file with
the Commission, together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in such violation of applicable law, and specifying the
basis of such opinion. The Trustees shall thereafter comply with the
requirements of the 1940 Act.
ARTICLE VI - LIMITATION OF LIABILITY: INDEMNIFICATION
Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE: NOTICE. All
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. Nothing in this Declaration of Trust shall protect any Trustee or
officer against any liability to the Trust or the Shareholders to which such
Trustee or officer would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee or of such officer.
Section 6.2 NOTICE FOR CONTRACTS. Every note, bond, contract, instrument,
certificate or undertaking made or issued by the Trustees or by any officers or
officer shall give notice that this Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts and shall recite to the effect
that the same was executed - or made by or on behalf of the Trust or by them as
Trustees or Trustee or as officers or officer and not individually and that the
obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the assets and property of
the Trust, or the particular Sub-Trust in question, as the case may be, but the
omission thereof shall not operate to bind any Trustees or Trustee or officers
or officer or Shareholders or Shareholder individually.
Section 6.3 TRUSTEE'S GOOD FAITH ACTION: EXPERT ADVICE: NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee; (b) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust and their
duties as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and (c) in
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written reports
made to the Trustees by any officer appointed by them, any independent public
accountant, and (with respect to the subject matter of the contract involved)
any officer, partner or responsible employee of a Contracting Party appointed by
the Trustees pursuant to Section 3.3. The Trustees as such shall not be required
to give any bond or surety or any other security for the performance of their
duties.
Section 6.4 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder (or
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
Section 6.5 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The Trust shall
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise [hereinafter referred to as
a "Covered Person"]) against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined in one of the manners
described below, that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (either and both of the conduct
described in (i) and (ii) being referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to indemnification, despite
allegations of Disabling Conduct, may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be paid
from time to time in advance of the final disposition of any such action, suit
or proceeding, provided that the Covered Person shall have undertaken to repay
the amounts so paid to the Sub- Trust in question if it is ultimately determined
that indemnification of such expenses is not authorized under this Article VI
and (i) the Covered Person shall have provided security for such undertaking,
(ii) the Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested Trustees who are
not a party to the proceeding, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily available facts (as
opposed to a FULL trial-type inquiry), that there is reason to believe that the
Covered Party ultimately will be found entitled to indemnification.
Section 6.6 COMPROMISE PAYMENT. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not a party to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or
by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
Section 6.7 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used. in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened.
Nothing contained in this article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any such person.
Section 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII - MISCELLANEOUS
Section 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust or class thereof shall operate to
terminate the Trust. The Trust, any Sub-Trust or class thereof may be terminated
at any time by a majority of the Trustees then in office, provided that (1) the
distribution of any remaining proceeds or assets of the Trust, any Sub-Trust or
class thereof, as the case may be, pursuant to Section 4.3(e), has been
completed or (2) no shares of the Trust, such Sub-Trust or class thereof, as the
case may be, are then outstanding.
Section 7.2 REORGANIZATION. The Trustees may sell, convey, merge and
transfer the assets of the Trust, or the assets belonging to any one or more
Sub-Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares
or other securities (including, in the case of a transfer to another Sub-Trust
of the Trust, Shares of such other Sub-Trust or class thereof) with such
transfer either (1) being made subject to, or with the assumption by the
transferee of, the liabilities belonging to each Sub-Trust the assets of which
are so transferred, or (2) not being made subject to, or not with the assumption
of, such liabilities; provided, however, that no assets belonging to any
particular Sub- Trust shall be so transferred unless the terms of such transfer
shall have first been approved at a meeting called for the purpose by the
affirmative vote of the holders of a majority of the outstanding voting Shares,
as defined in the 1940 Act, of that Sub-Trust. Following such transfer, the
Trustees shall distribute such cash, shares or other securities (giving due
effect to the assets and liabilities belonging to and any other difference among
the various Sub-Trusts and classes the assets belonging to which have been so
transferred) among the Shareholders of the Sub-Trust the assets belonging to
which have been so transferred; and if all of the assets of the Trust have been
so transferred, the Trust shall be terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include the purchase or acquisition of any assets of any other trust,
partnership, association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of each Sub-Trust affected thereby.
Section 7.3 AMENDMENTS. All rights granted to the Shareholders under this
Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees). Any
amendment to this Declaration of Trust that adversely affects the rights of
Shareholders may be adopted at any time by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to a vote
of a majority of such Trustees) when authorized to do so by the vote in
accordance with Subsection (f) of Section 4.2 of Shareholders holding a majority
of the Shares entitled to vote. Subject to the foregoing, any such amendment
shall be effective as provided in the instrument containing the terms of such
amendment or, if there is no provision therein with respect to effectiveness,
upon the execution of such instrument and of a certificate (which may be a part
of such instrument) executed by a Trustee or officer of the Trust to the effect
that such amendment has been duly adopted.
Section 7.4 FILING OF COPIES: REFERENCES, HEADINGS. The original or a copy
of this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to time
be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder and, with
the same effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such amendments.
In this instrument and in any such amendment, references to this instrument, and
all expressions like "herein", "hereof' and hereunder" shall be deemed to refer
to this instrument as a whole as the same may be amended or affected by any such
amendments. The masculine gender shall include the feminine and neuter genders.
Headings are placed herein for convenience of reference only and shall not be
taken as a part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 7.5 APPLICABLE LAW. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be amended
from time to time, to which reference is made with the intention that matters
not specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust were a business corporation organized in Massachusetts,
but the reference to said Business Corporation Law is not intended to give the
Trust, the Trustees, the Shareholders or any other person any right, power,
authority or responsibility available only to or in connection with an entity
organized in corporate form. The Trust shall be of the type referred to in
Section 1 of Chapter 182 of the Massachusetts General Laws and of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all cowers which are ordinarily
exercised by such a trust.
Section 7.6 RESIDENT AGENT. Edward T. O'Dell, Jr., Goodwin, Procter & Hoar,
Exchange Place, Boston, Massachusetts is hereby designated as the resident agent
of the Trust in Massachusetts.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand and seals
for themselves and their assigns, as of the day and year first above written.
----------------------------------------
John P. Allen
----------------------------------------
E. Douglas Hodo
----------------------------------------
Frank E. Holmes
----------------------------------------
Clark R. Mandigo
----------------------------------------
Walter W. McAllister, III
----------------------------------------
W.C.J. van Rensburg
<PAGE>
-------------------------
PRELIMINARY FORM OF PROXY
-------------------------
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE THE FUNDS'
SHAREHOLDERS THE EXPENSE OF ADDITIONAL MAILINGS.
U.S. GLOBAL INVESTORS FUNDS
-------------------------------
CHINA REGION OPPORTUNITY FUND
ALL AMERICAN EQUITY FUND
REAL ESTATE FUND
EQUITY INCOME FUND
GOLD SHARES FUND
WORLD GOLD FUND
GLOBAL RESOURCES FUND
TAX FREE FUND
NEAR-TERM TAX FREE FUND
U.S. GOVERNMENT SECURITIES SAVINGS FUND
U.S. TREASURY SECURITIES CASH FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Douglas E.
Hodo and Frank E. Holmes, attorneys, with full power of substitution, to vote
all shares of the fund(s) indicated above that the undersigned is entitled to
vote at the Special Joint Meeting of the Shareholders of the fund(s) to be held
on August 17, 2000, and at any adjournments thereof. This proxy shall be voted
on the proposals described in the Proxy Statement. Receipt of the Notice of
Special Joint Meeting of Shareholders and accompanying Proxy Statement is hereby
acknowledged. If a choice is specified, this proxy will be voted as indicated.
If no choice is specified, this proxy will be voted for the three proposals. As
to any other matter, said attorneys shall vote in accordance with their best
judgment.
NOTE: Please sign exactly as your name appears on this proxy card. When
signing as attorney, executor, administrator, trustee or guardian, give full
title. If a corporation, sign in the full corporate name by president or other
authorized officer. If a partnership, sign in partnership name by authorized
person.
-----------------------------------------------------
SIGNATURE(S) (DATE)
-----------------------------------------------------
SIGNATURE(s) IF HELD JOINTLY
This proxy may be revoked at any time prior to the exercise of the powers
conferred by the proxy.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ALL OF THE PROPOSALS.
IF YOU WISH TO VOTE FOR ALL OF THE PROPOSALS AS RECOMMENDED [ ] FOR ALL
BY THE BOARD OF TRUSTEES AND DO NOT WANT TO CHECK ALL OF THE PROPOSALS
"FOR" BOXES BELOW, YOU MAY CHECK THE BOX AT THE RIGHT
INSTEAD.
1. TO ELECT THE NOMINEES SPECIFIED BELOW AS TRUSTEES
Clark R. Mandigo [ ] FOR all nominees listed [ ] WITHHOLD
W.W. McAllister, III (except as marked to the authority to vote
contrary below) for all nominees
To withhold authority to vote for any individual nominee(s), write the
name(s) of the nominee(s) on this line:_____________________________________
2. TO RATIFY THE SELECTION OF [ ] FOR [ ] AGAINST [ ] ABSTAIN
INDEPENDENT AUDITORS (Shareholders
of ALL FUNDS listed on the reverse
may vote on this proposal.)
3. TO AUTHORIZE THE TRUSTEES TO ADOPT [ ] FOR [ ] AGAINST [ ] ABSTAIN
AN AMENDED AND RESTATED MASTER TRUST
AGREEMENT (Shareholders of ALL FUNDS
may vote on this proposal.)
4. TO RECLASSIFY OR AMEND CERTAIN
INVESTMENT RESTRICTIONS Shareholders
of ALL FUNDS listed on the reverse
may vote on 4A through 4I.
4A. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning the issuance
of senior securities
4B. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning underwriting
4C. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning borrowing
4D. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning investments
in real estate
4E. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning purchase or
sale of commodities or commodity
futures contracts
4F. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning the lending
of assets
4G. To amend and reclassify the [ ] FOR [ ] AGAINST [ ] ABSTAIN
fundamental investment restriction
concerning margin purchases of
securities
4H. To amend and reclassify the [ ] FOR [ ] AGAINST [ ] ABSTAIN
fundamental investment restriction
concerning short sales
4I. To eliminate the fundamental [ ] FOR [ ] AGAINST [ ] ABSTAIN
investment restriction concerning
restricted securities
Only shareholders in the GOLD SHARES
FUND may vote on 4J and 4K.
4J. To eliminate the fundamental [ ] FOR [ ] AGAINST [ ] ABSTAIN
investment restriction concerning
investments in restricted securities
of issuers with less than two years
of continuous operations
4K. To eliminate the fundamental [ ] FOR [ ] AGAINST [ ] ABSTAIN
investment restriction concerning
investments in warrants
Only shareholders in the U.S. TREASURY
SECURITIES CASH FUND and the U.S.
GOVERNMENT SECURITIES SAVINGS FUND may
vote on 4L.
4L. To amend the fundamental investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restriction concerning industry
concentration
Shareholders in all funds except the
GOLD SHARES FUND, the WORLD GOLD FUND,
and the U.S. GOVERNMENT SECURITIES
SAVINGS FUND may vote on 4M.
4M. To eliminate the fundamental issuer [ ] FOR [ ] AGAINST [ ] ABSTAIN
percentage restriction of invest-
ments.
5. TO CHANGE THE STATUS OF THE CHINA [ ] FOR [ ] AGAINST [ ] ABSTAIN
REGION OPPORTUNITY FUND TO
NON-DIVERSIFIED STATUS (Only
shareholders of the CHINA REGION
OPPORTUNITY FUND may vote on this
proposal.)
6. TO LIQUIDATE THE REAL ESTATE FUND [ ] FOR [ ] AGAINST [ ] ABSTAIN
(Only shareholders of the REAL
ESTATE FUND may vote on this
proposal.)
