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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1996
1940 Act File No. 811-07667
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 1 /x/
(Check appropriate box or boxes)
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
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(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
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Gerard M. Lavin, 210 University Boulevard, Suite 900, Denver, CO 80206
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(Name and Address of Agent for Service)
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EXPLANATORY NOTE
This amendment to Registration Statement on Form N-1A (the
"Registration Statement") has been filed by the Registrant pursuant to
Section 8(b) of the Investment Company Act of 1940, as amended. However,
beneficial interests in the Registrant are not being registered under the
Securities Act of 1933, as amended (the "1933 Act") because such interests
will be issued solely in private placement transactions that do not involve
any "public offering" within the meaning of Section 4(2) of the 1933 Act.
Investments in the Registrant may only be made by investment companies,
common or commingled trust funds or similar organizations or entities that
are "accredited investors" within the meaning of Regulation D under the 1933
Act. The Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any beneficial interests in the Registrant.
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BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
PART A
Responses to Items 1, 2, 3 and 5A have been omitted pursuant to
paragraph 4 of General Instruction F to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT
Berger/BIAM Worldwide Portfolios Trust, a Delaware business trust
("Worldwide Portfolios"), is registered as an open-end management investment
company. Worldwide Portfolios was organized on May 31, 1996. Worldwide
Portfolios is authorized to issue an unlimited number of interests in series.
Currently, the series comprising the Berger/BIAM International Portfolio (the
"Portfolio") is the only series established under Worldwide Portfolios,
although others may be added in the future.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933 (the "1933 Act").
Investments in the Portfolio may only be made by investment companies, common
or commingled trust funds or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.
The Portfolio is advised by BBOI Worldwide LLC ("BBOI Worldwide" or
the "Advisor"), which has delegated daily portfolio management of the
Portfolio to Bank of Ireland Asset Management (U.S.) Limited ("BIAM" or the
"Sub-Advisor").
INVESTMENTS IN THE PORTFOLIO ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK (INCLUDING BANK OF IRELAND). INTERESTS IN
THE PORTFOLIO ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. AN
INVESTMENT IN THE PORTFOLIO IS SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
The Portfolio will commence operations upon the transfer to the
Portfolio of assets held in a pooled trust (the "Pool") maintained by
Citizens Bank New Hampshire, for which BIAM has provided day-to-day portfolio
management as sub-advisor since the inception of the Pool. BIAM's bank
holding company parent indirectly owns a 23.5% interest in the parent of
Citizens Bank New Hampshire. The Pool has substantially the same investment
objective, policies and limitations of the Portfolio. Assets from the Pool
will be transferred to a separate fund investing in the Portfolio which, in
turn, will transfer those
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assets to the Portfolio in exchange for an interest in the Portfolio. As a
result of this transaction, the investment holdings in the Portfolio will be
the same as the investment holdings in the portfolio of the Pool immediately
prior to the transfer, except for the seed capital provided by another party.
INVESTMENT OBJECTIVE AND POLICIES AND RISK FACTORS
The investment objective of the Portfolio is long-term capital
appreciation. The Portfolio seeks to achieve this objective by investing
primarily in common stocks of well established companies located outside the
United States. A company will be considered to be located outside the United
States if the principal securities trading market for its equity securities
is located outside the U.S. or it is organized under the laws of, and has a
principal office in, a country other than the U.S. The Portfolio may also
invest in securities other than common stock if the Sub-Advisor believes
these are likely to be the best suited at that time to achieve the
Portfolio's objective. These include equity-related securities (such as
preferred stocks and convertible securities), debt securities issued by
foreign governments or foreign corporations, U.S. or foreign short-term
investments or other securities described on the following pages. The
Portfolio intends to diversify its holdings among several countries and to
have, under normal market conditions, at least 65% of the Portfolio's total
assets invested in the securities of companies located in at least five
countries, not including the United States. Current income is not an
investment objective of the Portfolio and any income produced will be only of
secondary importance as a by-product of the investment selection process used
to achieve the Portfolio's objective.
INVESTMENT SELECTION
In selecting its portfolio securities, the Portfolio places primary
emphasis on fundamentally undervalued stocks as determined by a range of
characteristics, including relatively low price/earnings multiples, dividend
yield, consistency of earnings growth and cash flow, financial strength,
realizable asset value and liquidity. Securities of companies with medium to
large market capitalizations usually constitute the majority of the
Portfolio's investments. The Portfolio currently considers medium to large
market capitalizations to be those in excess of $1 billion. Market
capitalization is defined as total current market value of a company's
outstanding common stock. In addition, the Portfolio is presently anticipated
to be weighted largely toward companies located in Western Europe (for
example, the United Kingdom, Germany, France, Italy, Spain, Switzerland, the
Netherlands, Sweden, Ireland and Finland), Australia and the Far East (for
example, Japan, Hong Kong, Singapore, Malaysia, Thailand, Indonesia and the
Philippines). However, the Portfolio is free to invest in companies of any
size and in companies located in other foreign countries, including
developing countries.
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INVESTMENT DECISION MAKING PROCESS
The Sub-Advisor's investment approach is based on "bottom-up"
fundamental analysis of individual companies within a framework of dynamic
economic and business themes that are believed to provide the best
opportunities for effective stock selection. Stock selection decisions are
guided by:
- - GLOBAL ECONOMIC AND BUSINESS THEMES. The Sub-Advisor identifies
economic and business themes and trends that have the potential to
support the long-term growth prospects of companies best positioned to
take advantage of them. These themes and trends may transcend
political and geographic boundaries and may be global or regional in
nature. Current themes and trends include, for example, worldwide
growth in telecommunications and multimedia, rapid economic
development in the Pacific Basin, global healthcare trends and unique
consumer franchises.
- - FINANCIAL FUNDAMENTALS. The Sub-Advisor seeks to identify companies
that it believes are best positioned to benefit from the identified
themes and trends. It conducts an extensive "bottom-up" analysis
seeking individual quality companies with stocks that are
fundamentally undervalued relative to their long-term prospective
earnings growth rate, their historic valuation levels and their peer
group. This process includes examining financial statements,
evaluating management and products, assessing competitive position and
strengths, as well as analyzing the economic variables affecting the
company's operating environment. This in-depth, fundamental analysis
is believed to be the most important step in identifying stock
selections for the Portfolio.
Actual country weightings are a by-product of the bottom-up stock
selection approach. Accordingly, the country in which a company is located
is considered by the Sub-Advisor to be less important than the diversity of
its sources of earnings and earnings growth.
SECURITIES, INVESTMENT PRACTICES AND RISK FACTORS
Since interests in the Portfolio represent an investment in common
stocks, investors should understand that the net asset value of the Portfolio
will change as the market value of the securities held in the Portfolio
changes and that the value of an interest in the Portfolio will go up and
down. Investors should also be aware that investment in foreign securities
carries additional risks not present when investing in domestic securities.
See "Foreign Securities" below.
The Portfolio is not intended as a complete or balanced investment
vehicle, but rather as an investment for those who are in a financial
position to assume the risk and price
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volatility associated with foreign investments. As a result, the Portfolio
should be considered as a long-term investment vehicle.
The investment objective of the Portfolio is considered
fundamental, meaning that it cannot be changed without a vote of the
investors in the Portfolio. There can be no assurance that the Portfolio's
investment objective will be realized. Following is additional information
about some of the specific types of securities in which the Portfolio may
invest.
FOREIGN SECURITIES. Investments in foreign securities involve some
risks that are different from the risks of investing in securities of U.S.
issuers, such as the risk of adverse political, social, diplomatic and
economic developments and, with respect to certain countries, the possibility
of expropriation, taxes imposed by foreign countries or limitations on the
removal of monies or other assets of the Portfolio. Moreover, the economies
of individual foreign countries will vary in comparison to the U.S. economy
in such respects as growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments
position. Securities of some foreign companies, particularly those in
developing countries, are less liquid and more volatile than securities of
comparable domestic companies. Investing in the securities of developing
countries may involve exposure to economic structures that are less diverse
and mature, and to political systems that can be expected to have less
stability than developed countries. The Portfolio's investments may include
American Depositary Receipts (ADRs). The Portfolio may also invest in
European Depositary Receipts (EDRs) which are similar to ADRs, in bearer
form, designed for use in the European securities markets, and in Global
Depositary Receipts (GDRs). Some of the companies in which the Portfolio
invests may be considered passive foreign investment companies (PFICs), which
are described in greater detail in Part B.
There also may be less publicly available information about foreign
issuers and securities than domestic issuers and securities, and foreign
issuers generally are not subject to accounting, auditing and financial
reporting standards, requirements and practices comparable to those
applicable to domestic issuers. Also, there is generally less government
supervision and regulation of exchanges, brokers, financial institutions and
issuers in foreign countries than there is in the U.S. Foreign financial
markets typically have substantially less volume than U.S. markets. Foreign
markets also have different clearance and settlement procedures and, in
certain markets, delays or other factors could make it difficult to effect
transactions, potentially causing the Portfolio to experience losses or miss
investment opportunities.
Costs associated with transactions in foreign securities are
generally higher than with transactions in U.S. securities. The Portfolio
will incur greater costs in maintaining assets in foreign jurisdictions and
in buying and selling foreign securities generally, resulting in part from
converting foreign currencies into U.S. dollars. In addition, the Portfolio
might have greater difficulty taking appropriate legal action with respect to
foreign investments in non-U.S. courts than with respect to domestic issuers
in U.S. courts, which may heighten the risk of possible losses through the
holding of securities by custodians and securities depositories in foreign
countries.
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Since the Portfolio will invest in securities denominated or quoted
in currencies other than the U.S. dollar, changes in foreign currency
exchange rates will affect the value of the investments in its portfolio and
the unrealized appreciation or depreciation of investments insofar as U.S.
investors are concerned. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the currency would
adversely affect the value of the securities expressed in dollars. Foreign
currency exchange rates are determined by forces of supply and demand on the
foreign exchange markets, which are in turn affected by the international
balance of payments and other economic and financial conditions, government
intervention, speculation and other factors.
CONVERTIBLE SECURITIES. The Portfolio may purchase securities that
are convertible into common stock when the Sub-Advisor believes they offer
the potential for a higher total return than nonconvertible securities.
While fixed income securities generally have a priority claim on a
corporation's assets over that of common stock, some of the convertible
securities which the Portfolio may hold are high-yield/high-risk securities
that are subject to special risks, including the risk of default in interest
or principal payments which could result in a loss of income to the Portfolio
or a decline in the market value of the securities. Convertible securities
often display a degree of market price volatility that is comparable to
common stocks. The credit risk associated with convertible securities
generally is reflected by their being rated below investment grade by
organizations such as Moody's Investors Service, Inc., and Standard & Poor's
Corporation, or being of similar creditworthiness in the determination of the
Sub-Advisor. The Portfolio has no pre-established minimum quality standards
for convertible securities and may invest in convertible securities of any
quality, including lower rated or unrated securities. However, the Portfolio
will not invest in any security in default at the time of purchase or in any
nonconvertible debt securities rated below investment grade, and the
Portfolio will invest less than 20% of the market value of its net assets at
the time of purchase in convertible securities rated below investment grade.
If convertible securities purchased by the Portfolio are downgraded following
purchase, or if other circumstances cause 20% or more of the Portfolio's
assets to be invested in convertible securities rated below investment grade,
the trustees of Worldwide Portfolios, in consultation with the Sub-Advisor,
will determine what action, if any, is appropriate in light of all relevant
circumstances. For a further discussion of debt security ratings, see
Appendix A to Part B.
SECURITIES OF SMALLER COMPANIES. The Portfolio may invest in
securities of companies with small or medium market capitalizations. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development
and may have limited product lines, reduced market liquidity for their
shares, limited financial resources or less depth in management than larger
or more well established companies. Smaller companies also may be less
significant factors within their industries and may have difficulty
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withstanding competition from larger companies. While smaller companies may
be subject to these additional risks, they may also realize more substantial
growth than larger or more well established companies.
LENDING PORTFOLIO SECURITIES. The Portfolio may lend its
securities to qualified institutional investors such as brokers, dealers or
other financial organizations. This practice permits the Portfolio to earn
income, which, in turn, can be invested in additional securities to pursue
its investment objective. Loans of securities by the Portfolio will be
collateralized by cash, letters of credit, or securities issued or guaranteed
by the U.S. Government or its agencies. The collateral will equal at least
100% of the current market value of the loaned securities, marked-to-market
on a daily basis. The Portfolio bears a risk of loss in the event that the
other party to a securities lending transaction defaults on its obligations
and the Portfolio is delayed in or prevented from exercising its rights to
dispose of the collateral, including the risk of a possible decline in the
value of the collateral securities during the period in which the Portfolio
seeks to assert these rights, the risk of incurring expenses associated with
asserting these rights and the risk of losing all or a part of the income
from the transaction. The Portfolio will not lend any security if, as a
result of such loan, the aggregate value of securities then on loan would
exceed 33-1/3% of the market value of the Portfolio's total assets.
HEDGING TRANSACTIONS. The Portfolio is authorized to make limited
commitments in certain forward contracts, but only for the purpose of
hedging, that is, protecting against the risk of market movements that may
adversely affect the value (in foreign currency or U.S. dollar terms) of the
Portfolio's securities or the price of securities that the Portfolio is
considering purchasing. Forward contracts are obligations between two
parties to exchange particular goods or instruments (such as foreign
currencies) at a set price on a future date. The Portfolio currently intends
that it will use forward contracts only for hedging purposes and that it may
enter into forward foreign currency exchange contracts, provided the
aggregate value of all outstanding contracts does not exceed the value of the
Portfolio's assets. Although a hedging transaction may, for example,
partially protect the Portfolio from a decline in the foreign exchange price
of a particular security or its portfolio generally, hedging may also limit
the potential return to the Portfolio due to positive foreign exchange
movements, and the cost of the transaction will reduce the potential return
on the security or the portfolio. In addition, forward foreign currency
exchange contracts do not eliminate fluctuations in the prices of the
underlying securities the Portfolio owns or intends to acquire.
The Portfolio will generally enter into forward foreign currency
exchange contracts either with respect to specific transactions or with
respect to the Portfolio's security positions. For example, the Portfolio
may enter into a forward contract in order to fix the price (in terms of a
specified currency, which may be U.S. dollars or a foreign currency) for
securities it has agreed to buy or sell or is considering buying or selling.
Further, when the Sub-Advisor believes that a particular foreign currency in
which some or all of the Portfolio's investments are denominated may decline
compared to the U.S. dollar, the
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Portfolio may enter into a forward contract to sell the currency that is
expected to decline (or another currency which acts as a proxy for that
currency). However, the Portfolio will be permitted to make such investments
for hedging purposes only, and only if the aggregate amount of its
obligations under these contracts does not exceed the total market value of
the assets the Portfolio is attempting to hedge, such as a portion or all of
its securities denominated in a specific foreign currency. To ensure that
the Portfolio will be able to meet its obligations under its forward foreign
currency exchange contracts, the Portfolio will be required to place liquid
assets in a segregated account with its custodian bank or to set aside
securities to "cover" its commitments in these contracts.
Forward foreign currency exchange contracts are privately
negotiated (i.e., over-the-counter) and the parties may agree to offset or
terminate the contract before its maturity or may hold the contract to
maturity and complete the contemplated delivery of the underlying foreign
currency. Transactions in forward foreign currency exchange contracts by the
Portfolio involve the potential for a loss that may exceed the amount of
commitment the Portfolio would be permitted to make in those contracts under
its investment limitations. The principal risks of the Portfolio's use of
forward foreign currency exchange contracts are: (a) losses resulting from
currency market movements not anticipated by the Portfolio; (b) possible
imperfect correlation between movements in the prices of forward contracts
and movements in the spot (i.e., cash) prices of the currencies hedged or
used to cover such positions; (c) lack of assurance that the Portfolio will
be able to enter into an offset or termination of the contract at any
particular time; (d) the need for additional information and skills beyond
those required for the management of a portfolio of traditional securities;
and (e) possible need to defer closing out certain forward contracts in order
to facilitate the qualification of certain investors in the Portfolio for
beneficial tax treatment afforded "regulated investment companies" under the
Internal Revenue Code of 1986. In addition, when the Portfolio enters into
an over-the-counter contract with a counterparty, the Portfolio will assume
counterparty credit risk, that is, the risk that the counterparty will fail
to perform its obligations, in which case the Portfolio could be worse off
than if the contract had not been entered into.
Although they currently have no intention of doing so, the trustees
of Worldwide Portfolios may, without shareholder approval, authorize the
Portfolio to invest in certain types of other instruments for hedging
purposes, such as financial futures and options. Appropriate notice to
shareholders will be provided of any intention to commence investing in such
instruments. Additional detail concerning the Portfolio's transactions in
forwards, futures and options and the risks of such investments can be found
in Part B.
ILLIQUID SECURITIES. The Portfolio is authorized to invest in
securities which are illiquid or not readily marketable because they are
subject to restrictions on their resale ("restricted securities") or because,
based upon their nature or the market for such securities, no ready market is
available. However, the Portfolio may not purchase any security, the purchase
of which would cause the Portfolio to invest more than 15% of its net assets,
measured at the time of purchase, in illiquid securities. If securities
become illiquid
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following purchase or other circumstances cause more than 15% of the
Portfolio's net assets to be invested in illiquid securities, the trustees of
Worldwide Portfolios, in consultation with the Sub-Advisor, will determine
what action, if any, is appropriate in light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be considered as
illiquid for purposes of this restriction. Certain restricted securities,
such as Rule 144A securities, may be treated as liquid under this restriction
if a determination is made that such securities are readily marketable.
Investments in illiquid securities involve certain risks to the extent that
the Portfolio may be unable to dispose of such a security at the time desired
or at a reasonable price or, in some cases, may be unable to dispose of it at
all. In addition, in order to resell a restricted security, the Portfolio
might have to incur the potentially substantial expense and delay associated
with effecting registration.
INVESTMENT RESTRICTIONS
In addition to its investment objective, the Portfolio has adopted
a number of restrictions on its investments and other activities that may not
be changed without investor approval. For example, the Portfolio may not
borrow money, except borrowing undertaken from banks for temporary or
emergency purposes in amounts not to exceed 25% of the market value of its
total assets (including the amount borrowed) and may not make loans (except
that the Portfolio may lend portfolio securities and enter into repurchase
agreements in accordance with its investment policies). The Portfolio may
not invest in any one industry 25% or more of the value of its total assets
at the time of investment, nor invest in commodities, except, only for the
purpose of hedging, the Portfolio may invest in forward foreign currency
exchange contracts and other instruments as specified in greater detail above
and in Part B.
Further, with respect to 100% of its total assets, the Portfolio
may not purchase securities of any issuer (except U.S. Government securities)
if, immediately after and as a result of such purchase, the value of the
Portfolio's holdings in the securities of that issuer exceeds 5% of the value
of its total assets or it owns more than 10% of the outstanding voting
securities or of any class of securities of such issuer, although this
restriction may be reduced to apply to 75% or more of the Portfolio's total
assets without a shareholder vote.
Also, the Portfolio does not currently intend to purchase or sell
securities on a when-issued or delayed delivery basis if as a result, more
than 5% of its total assets would be invested in such securities, although
this restriction may be changed without investor approval. For more detail
about the Portfolio's investment restrictions, see Part B.
PORTFOLIO TURNOVER
In pursuit of the Portfolio's investment objective, the Sub-Advisor
continuously monitors the Portfolio's investments and makes portfolio changes
whenever changes in investment themes, the fundamentals of any portfolio
company or the price of any
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portfolio security indicate to the Sub-Advisor that more attractive
alternatives exist or that the Portfolio's investment objective could be
better achieved by investment in another security, regardless of portfolio
turnover. In addition, portfolio turnover may increase as a result of large
amounts of increases and withdrawals of interests in the Portfolio due to
economic, market or other factors that are not within the control of
management. Although the annual portfolio turnover rate of the Portfolio will
vary, it is normally expected to range from 25% to 75%.
ITEM 5. MANAGEMENT OF THE REGISTRANT
The trustees of Worldwide Portfolios have overall responsibility
for operation of the Portfolio.
THE ADVISOR
The investment advisor to the Portfolio is BBOI Worldwide LLC (the
"Advisor" or "BBOI Worldwide"), 210 University Boulevard, Denver, CO 80206.
The Advisor oversees, evaluates and monitors the investment advisory services
provided to the Portfolio by the Portfolio's Sub-Advisor and is responsible
for furnishing general business management and administrative services to the
Portfolio, such as coordinating certain matters relating to the operations of
the Portfolio and monitoring the Portfolio's compliance with all applicable
federal and state securities laws. Currently, the Advisor serves in this
capacity only to the Portfolio.
The Advisor is a Delaware limited liability company formed in 1996.
Since the Advisor was only recently formed, it has no prior experience as an
investment advisor. However, Berger Associates, Inc. ("Berger Associates"),
which owns 100% of the Advisor, has been in the investment advisory business
for over 20 years. Berger Associates serves as investment advisor or
sub-advisor to mutual funds, pension and profit-sharing plans, and
institutional and private investors, and has assets under management of more
than $3.5 billion as of April 30, 1996. Kansas City Southern Industries,
Inc. ("KCSI") owns approximately 80% of the outstanding shares of Berger
Associates. KCSI is a publicly traded holding company with principal
operations in rail transportation, through its subsidiary The Kansas City
Southern Railway Company, and financial asset management businesses. Also,
see below under "Pending Sale of Interest in Advisor".
THE SUB-ADVISOR
Since its founding in 1966, Bank of Ireland's investment management
group has become recognized among international and global investment
managers, serving clients in Europe, the United States, Canada, Australia and
South Africa. Bank of Ireland Asset Management (U.S.) Limited ("BIAM"), the
Sub-Advisor to the Portfolio, is an indirect wholly-owned subsidiary of Bank
of Ireland. Bank of Ireland, founded in 1783, is a publicly traded,
diversified financial services group with business operations worldwide.
Bank of
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Ireland provides investment management services through a network of related
companies, including BIAM which serves primarily institutional clients in the
United States and Canada. Bank of Ireland and its affiliates managed assets
for clients worldwide in excess of $16 billion as of April 30, 1996.
As permitted in its Investment Advisory Agreement with the
Portfolio, the Advisor has delegated day-to-day portfolio management
responsibility to BIAM, as the Sub-Advisor. As Sub-Advisor, BIAM manages the
investments in the Portfolio and determines what securities and other
investments will be purchased, retained, sold or loaned, consistent with the
investment objective and policies established by the trustees of Worldwide
Portfolios.
BIAM serves as investment advisor or sub-advisor to pension and
profit-sharing plans and other institutional investors and mutual funds.
BIAM's main offices are at 26 Fitzwilliam Place, Dublin 2, Ireland. BIAM
maintains a representative office at 2 Greenwich Plaza, Greenwich, CT 06830.
All investment decisions made for the Portfolio by the Sub-Advisor
are made by a team of BIAM investment personnel. No one individual is
primarily responsible for making the day-to-day investment decisions for the
Portfolio. Most of the investment professionals at BIAM have been with BIAM
at least 10 years.
Investment decisions for the Portfolio and other accounts advised
by the Sub-Advisor are made independently with a view to achieving each of
their respective investment objectives and after consideration of such
factors as their current holdings, availability of cash for investment and
the size of their investments generally. However, certain investments may be
appropriate for the Portfolio and one or more such accounts. If the
Portfolio and other accounts advised by the Sub-Advisor are contemporaneously
engaged in the purchase or sale of the same security, the orders may be
aggregated and/or the transactions averaged as to price and allocated
equitably to the Portfolio and each participating account. While in some
cases, this policy might adversely affect the price paid or received by the
Portfolio or other participating accounts, or the size of the position
obtained or liquidated, the Sub-Advisor will aggregate orders if it believes
that coordination of orders and the ability to participate in volume
transactions will result in the best overall combination of net price and
execution.
Bank of Ireland or its affiliates may have deposit, loan or other
commercial or investment banking relationships with the issuers of securities
which may be purchased by the Portfolio, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits the
Sub-Advisor, in making investment decisions, from using material non-public
information in its possession or in the possession of any of its affiliates.
In addition, in making investment decisions for the Portfolio, the
Sub-Advisor will not take into consideration whether an issuer
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of securities proposed for purchase or sale by the Portfolio is a customer of
Bank of Ireland or its affiliates.
The Glass-Steagall Act prohibits a depository institution (such as
a bank) from underwriting or distributing most securities and from
affiliating with businesses engaged in certain similar activities. BIAM
believes, based on advice of its counsel, that it may perform the services
for the Portfolio contemplated by this Part A consistent with the
Glass-Steagall Act and other applicable banking laws and regulations.
However, future changes in either Federal or state statutes and regulations
concerning the permissible activities of banks and their affiliates, as well
as future judicial or administrative decisions or interpretations of present
and future statutes and regulations, might prevent BIAM from continuing to
perform those services for the Portfolio. State laws on this issue may
differ from the interpretations of relevant Federal law and banks and
financial institutions may be required to register as dealers pursuant to
state securities law. If the circumstances described above should change,
the trustees of Worldwide Portfolios would review the relationships with BIAM
and consider taking all actions appropriate under the circumstances.
ADVISORY FEES
Under the Investment Advisory Agreement for the Portfolio, the
Advisor is compensated for its services to the Portfolio by the payment of a
fee at the annual rate of 0.90% of the average daily net assets of the
Portfolio. Until at least April 30, 1998, the Advisor has agreed voluntarily
to waive the investment advisory fee paid by the Portfolio under the
Investment Advisory Agreement to the extent that the Portfolio's normal
operating expenses in any fiscal year, including the investment advisory fee
and custodian fees, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.00% of the Portfolio's average daily net
assets for that fiscal year. Any reduction in the advisory fee paid by the
Portfolio will also reduce the pro rata share of the advisory fee borne
indirectly by the investors in the Portfolio.
The Portfolio pays no fees directly to the Sub-Advisor. The
Sub-Advisor will receive from the Advisor a fee at the annual rate of 0.45%
of the average daily net assets of the Portfolio. During certain periods,
the Sub-Advisor may voluntarily waive all or a portion of its fee under the
Sub-Advisory Agreement, which will not affect the fee paid by the Portfolio
to the Advisor.
PENDING SALE OF INTEREST IN ADVISOR
As mentioned above, the Portfolio's Advisor, BBOI Worldwide, is a
limited liability company formed in 1996 and 100% owned by Berger Associates.
BBOI Worldwide was organized by Berger Associates in anticipation of forming
a joint venture with BIAM for the purpose of managing international and
global mutual funds. Pursuant to the Amended and Restated Operating
Agreement of BBOI Worldwide LLC, dated as of May 1, 1996, between Berger
Associates and BIAM (the "Joint Venture Agreement"), BIAM (or an
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affiliate) has agreed to acquire a 50% interest in the Advisor and thereby
enter into a joint venture with Berger Associates to become effective upon
receipt of all regulatory approvals. Berger Associates' role in the joint
venture will be to provide administration and marketing, and BIAM's role will
be to provide international and global investment management expertise.
Day-to-day portfolio management of the Portfolio will continue to be provided
by BIAM under the Sub-Advisory Agreement.
The Joint Venture Agreement provides that Berger Associates and
BIAM will each own a 50% membership interest in the Advisor and each will
have an equal number of representatives on the Advisor's Board of Managers.
Agreement of representatives of both Berger Associates and BIAM will be
required for all significant management decisions.
BIAM's acquisition of an interest in the Advisor is subject to
approval of the Federal Reserve Board of the United States and the Central
Bank of Ireland. In the event the joint venture is not consummated, Berger
Associates anticipates continuing to provide the Portfolio with
administrative services, and BIAM has agreed to continue to serve as the
Sub-Advisor to the Portfolio for a period of not less than six months
thereafter, on usual and customary contractual terms.
Consummation of BIAM's acquisition of a membership interest in the
Advisor might be deemed to effect a change of control in the Advisor and
thereby an "assignment" (as defined in the Investment Company Act of 1940)
and termination of the Portfolio's Investment Advisory and Sub-Advisory
Agreements. However, the trustees of Worldwide Portfolios have considered the
terms of the joint venture and various factors related to the proposal,
including that the day-to-day management of the Portfolio by BIAM is not
proposed to change. On the basis of the factors considered, the trustees,
including the trustees of Worldwide Portfolios who are not "interested
persons" (as that term is defined in the Investment Company Act of 1940) of
the Trust, the Advisor or Sub-Advisor, voting separately, have approved new
Investment Advisory and Sub-Advisory Agreements that will come into effect
upon consummation of the joint venture and any change of control in the
Advisor that may be deemed to result. The new Agreements have also been
approved by the Portfolio's initial investors. The new Agreements are
identical in their terms to the initial Agreements described in this
Registration Statement, except for commencement date. No further trustee or
investor vote is anticipated to approve the new Agreements upon consummation
of the joint venture. Accordingly, prospective investors should consider
BIAM's pending acquisition of an interest in the Advisor at the time they
consider their initial investment in the Portfolio.
See Item 16 in Part B for more information about the Portfolio's
service providers, their fees and Portfolio expenses.
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ITEM 6. CAPITAL STOCK AND OTHER SECURITIES
Worldwide Portfolios is a Delaware business trust organized on May
31, 1996. The Portfolio was established on May 31, 1996, as a series or fund
under Worldwide Portfolios. Since Worldwide Portfolios and the Portfolio
were only recently organized, they have no prior operating history. For a
short period of time prior to the Portfolio commencing operations, all of the
outstanding interests in the Portfolio are expected to be owned by two mutual
fund investors, all of whose outstanding shares are expected to be owned by
Berger Associates, which will provide the seed capital necessary to establish
the investors' trust.
Worldwide Portfolios is authorized to issue an unlimited number of
interests in series. Currently, the series comprising the Berger/BIAM
International Portfolio is the only series established under Worldwide
Portfolios, although others may be added in the future.
Under Delaware law, investors in Worldwide Portfolios will enjoy
the same limitations on personal liability as extended to stockholders of a
Delaware corporation. Further, the Trust Instrument of Worldwide Portfolios
provides that no investor shall be personally liable for the debts,
liabilities, obligations and expenses incurred by, contracted for or
otherwise existing with respect to, Worldwide Portfolios or any particular
series (fund) of Worldwide Portfolios. However, the principles of law
governing the limitations of liability of beneficiaries of a business trust
have not been authoritatively established as to business trusts organized
under the laws of one jurisdiction but operating or owning property in other
jurisdictions. In states that have adopted legislation containing provisions
comparable to the Delaware Business Trust Act, it is believed that the
limitation of liability of beneficial owners provided by Delaware law should
be respected. In those jurisdictions that have not adopted similar
legislative provisions, it is possible that a court might hold that investors
in Worldwide Portfolios are not entitled to the limitations of liability set
forth in Delaware law or the Trust Instrument and, accordingly, that they may
be personally liable for the obligations of Worldwide Portfolios.
In order to protect investors from such potential liability,
Worldwide Portfolios' Trust Instrument requires that every written obligation
of Worldwide Portfolios or any series thereof contain a statement to the
effect that such obligation may only be enforced against the assets of
Worldwide Portfolios or such series. The Trust Instrument also provides for
indemnification from the assets of the relevant series for all losses and
expenses incurred by any investor by reason of being or having been an
investor, and that Worldwide Portfolios shall, upon request, assume the
defense of any such claim made against such investor for any act or
obligation of the relevant series and satisfy any judgment thereon from the
assets of that series.
As a result, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which the
Portfolio itself would be unable to meet its obligations. Worldwide
Portfolios believes that, in view of the above, the risk of
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personal liability to investors in Worldwide Portfolios is remote. The
trustees intend to conduct the operations of Worldwide Portfolios and the
Portfolio so as to avoid, to the extent possible, liability of investors for
liabilities of Worldwide Portfolios or the Portfolio.
Each investor in the Portfolio is entitled to a vote in proportion
to the amount of its investment in the Portfolio. Interests in the Portfolio
have no preemptive rights, and since the Portfolio has only one class of
securities there are no sinking funds or arrearage provisions which may
affect the rights of interests in the Portfolio. Investors have no
conversion or subscription rights.
The Portfolio determines its net income and realized capital gains,
if any, on each business day and allocates all such income and gain pro rata
among the investors in the Portfolio at the time of such determination in
accordance with their interests, as set forth in the Trust Instrument.
Under its anticipated method of operation, the Portfolio will not
be subject to any income tax. However, each investor in the Portfolio will
be taxable on its share (as determined in accordance with the governing
instruments of Worldwide Portfolios) of the Portfolio's ordinary income and
capital gain in determining its income tax liability. The determination of
such share will be made in accordance with the Internal Revenue Code of 1986,
as amended (the "Code"), and regulations promulgated thereunder.
It is intended that the Portfolio's assets, income and
distributions will be managed in such a way that an investor in the Portfolio
will be able to satisfy the requirements of Subchapter M of the Code,
assuming that the investor invested all of its assets in the Portfolio.
For more information on tax matters, see Item 20 in Part B.
Investor inquiries regarding Worldwide Portfolios may be directed
to Worldwide Portfolios at 210 University Blvd., Suite 900, Denver, Colorado
80202, 1-303-329-0200.
ITEM 7. PURCHASE OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may
only be made by investment companies, common or commingled trust funds or
similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act.
Each investor in the Portfolio may add to or reduce its investment
in the Portfolio on each day on which the net asset value is determined. The
net asset value of the Portfolio is determined at the close of the regular
trading session of the New York Stock
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Exchange (the "Exchange") (normally 4:00 p.m., New York time) each day that
the Exchange is open. The net asset value of the Portfolio is determined by
dividing the total value of its assets, less liabilities, by the total number
of beneficial interests outstanding.
The Portfolio's securities and other assets are valued as follows:
securities listed or traded primarily on national exchanges, The Nasdaq Stock
Market and foreign exchanges are valued at the last sale price on such
markets, or, if such a price is lacking for the trading period immediately
preceding the time of determination, such securities are valued at the mean
of their current bid and asked prices. Securities that are traded in the
over-the-counter market are valued at the mean between their current bid and
asked prices. The market value of individual securities held by the
Portfolio will be determined by using prices provided by pricing services
which provide market prices to other mutual funds or, as needed, by obtaining
market quotations from independent broker/dealers. Short-term money market
securities maturing within 60 days are valued on the amortized cost basis,
which approximates market value. All assets and liabilities initially
expressed in terms of non-U.S. dollar currencies are translated into U.S.
dollars at the prevailing market rates as quoted by one or more banks or
dealers shortly before the close of the Exchange. Securities and assets for
which quotations are not readily available are valued at fair values
determined in good faith pursuant to consistently applied procedures
established by the trustees.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the Exchange. The
values of foreign securities used in computing the net asset value of the
Portfolio are determined as of the earlier of such market close or the
closing time of the Exchange. Occasionally, events affecting the value of
such securities may occur between the times at which they are determined and
the close of the Exchange, or when the foreign market on which such
securities trade is closed but the Exchange is open, which will not be
reflected in the computation of net asset value. If during such periods,
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in good
faith pursuant to consistently applied procedures established by the trustees.
The securities held by the Portfolio may be listed primarily on
foreign exchanges or over-the-counter dealer markets which may trade on days
when the Exchange is closed (such as a customary U.S. holiday) and on which
the Portfolio's net asset value is not calculated. As a result, the net
asset value of the Portfolio may be significantly affected by such trading on
days when investors cannot purchase or redeem their interests in the
Portfolio.
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The Portfolio does not impose any front end sales load or
redemption fee on any purchase or redemption of an interest in the Portfolio.
There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times
as is reasonably practicable in order to enhance the return on its assets,
investments should be made in federal funds (i.e., monies credited to the
account of the Portfolio's custodian bank by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments in
the Portfolio at any time or to reject any investment order. No share
certificate will be issued representing interests in the Portfolio.
ITEM 8. REDEMPTION OR REPURCHASE
An investor in the Portfolio may withdraw all or any
portion of its investment at the net asset value next determined if a
withdrawal request in proper form is furnished by the investor to Worldwide
Portfolios by the designated cutoff time for each accredited investor. The
proceeds of a reduction or withdrawal will be paid by Worldwide Portfolios in
federal funds normally on the business day the withdrawal is effected, but in
any event within seven days. Worldwide Portfolios, on behalf of the
Portfolio, reserves the right to pay redemptions in kind. See Item 19 in
Part B. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect
to any withdrawal may be suspended or the payment of the withdrawal proceeds
postponed during any period in which the Exchange is closed (other than
weekends or holidays) or trading on the Exchange is restricted or, to the
extent otherwise permitted by the Investment Company Act of 1940, if an
emergency exists.
ITEM 9. PENDING LEGAL PROCEEDINGS
None.
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PART B
ITEM 10. COVER PAGE
This Part B sets forth information which may be of
interest to investors but which is not necessarily included in Part A as it
may be amended from time to time. This Part B should be read only in
conjunction with Part A, a copy of which may be obtained by an investor
without charge by writing Worldwide Portfolios or calling 1-800-706-0539.
ITEM 11. TABLE OF CONTENTS
General Information and History B-1
Investment Objective and Policies B-1
Management of the Registrant B-9
Control Persons and Principal Holders of Securities B-14
Investment Advisory and Other Services B-14
Brokerage Allocation and Other Practices B-16
Capital Stock and Other Securities B-17
Purchase, Redemption, and Pricing of Securities Being Offered B-18
Tax Status B-18
Underwriters B-20
Calculation of Performance Data B-20
Financial Statements B-20
Appendix B-21
ITEM 12. GENERAL INFORMATION AND HISTORY
Not applicable.
ITEM 13. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Portfolio is long-term
capital appreciation. Current income is not an investment objective of the
Portfolio and any income produced will be only of secondary importance as a
by-product of the investment selection process used to achieve the
Portfolio's objective.
INVESTMENT POLICIES
Part A discusses the investment objective of the
Portfolio and the policies to be employed to achieve that objective. This
section contains supplemental information concerning the types of securities
and other instruments in which the Portfolio may invest, the investment
policies and portfolio strategies that the Portfolio may utilize and certain
risks attendant to those investments, policies and strategies.
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ILLIQUID AND RESTRICTED SECURITIES. The Portfolio is authorized to
invest in securities which are illiquid or not readily marketable because
they are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. However, the Portfolio may not purchase any security,
the purchase of which would cause the Portfolio to invest more than 15% of
its net assets, measured at the time of purchase, in illiquid securities.
Investments in illiquid securities involve certain risks to the extent that
the Portfolio may be unable to dispose of such a security at the time desired
or at a reasonable price or, in some cases, may be unable to dispose of it at
all. In addition, in order to resell a restricted security, the Portfolio
might have to incur the potentially substantial expense and delay associated
with effecting registration. If securities become illiquid following
purchase or other circumstances cause more than 15% of the Portfolio's net
assets to be invested in illiquid securities, the trustees of Worldwide
Portfolios, in consultation with the Sub-Advisor, will determine what action,
if any, is appropriate in light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to
guidelines established by the trustees, the Portfolio's Sub-Advisor will
determine whether securities eligible for resale to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933 should be
treated as illiquid investments considering, among other things, the
following factors: (1) the frequency of trades and quotes for the security;
(2) the number of dealers wanting to purchase or sell the security and the
number of other potential purchasers; (3) dealer undertakings to make a
market in the security; and (4) the nature of the security and the
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of the transfer). The
liquidity of the Portfolio's investments in Rule 144A securities could be
impaired if qualified institutional buyers become uninterested in purchasing
these securities.
REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is a means of investing cash for a short period. A
repurchase agreement is an agreement under which the Portfolio acquires a
debt security (generally a security issued or guaranteed by the U.S.
government or an agency thereof, a banker's acceptance or a certificate of
deposit) from a commercial bank, broker or dealer, subject to resale to the
seller at an agreed upon price and date (normally, the next business day). A
repurchase agreement may be considered a loan collateralized by securities.
The resale price reflects an agreed upon interest rate effective for the
period the instrument is held by the Portfolio and is unrelated to the
interest rate on the underlying instrument.
In these transactions, the securities acquired by the Portfolio
(including accrued interest earned thereon) must have a total value equal to
or in excess of the value of the repurchase agreement and are held by the
Portfolio's custodian bank until repurchased. In addition, the trustees will
establish guidelines and standards for review by the Sub-Advisor
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of the creditworthiness of any bank, broker or dealer party to a repurchase
agreement with the Portfolio. The Portfolio will not enter into a repurchase
agreement maturing in more than seven days if as a result more than 15% of
the Portfolio's net assets would be invested in such repurchase agreements
and other illiquid securities.
The use of repurchase agreements involves certain risks. For
example, if the other party to the agreement defaults on its obligation to
repurchase the underlying security at a time when the value of the security
has declined, the Portfolio may incur a loss upon disposition of the
security. If the other party to the agreement becomes insolvent and subject
to liquidation or reorganization under the bankruptcy or other laws, a court
may determine that the underlying security is collateral for a loan by the
Portfolio not within the control of the Portfolio and therefore the
realization by the Portfolio on such collateral may automatically be stayed.
Finally, it is possible that the Portfolio may not be able to substantiate
its interest in the underlying security and may be deemed an unsecured
creditor of the other party to the agreement. Although these risks are
acknowledged, it is expected that they can be controlled through careful
monitoring procedures.
UNSEASONED ISSUERS. The Portfolio may invest to a limited degree
in securities of unseasoned issuers. Unseasoned issuers are companies with a
record of less than three years' continuous operation, even including the
operations of any predecessors and parents. Unseasoned issuers by their
nature have only a limited operating history which can be used for evaluating
the company's growth prospects. As a result, investment decisions for these
securities may place a greater emphasis on current or planned product lines
and the reputation and experience of the company's management and less
emphasis on fundamental valuation factors than would be the case for more
mature growth companies. In addition, many unseasoned issuers may also be
small companies and involve the risks and price volatility associated with
smaller companies. The Portfolio may invest up to 5% of its total assets in
securities of unseasoned issuers.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Portfolio may
purchase the securities of certain foreign investment funds or trusts
considered Passive Foreign Investment Companies (PFICs) under U.S. tax laws.
In addition to bearing their proportionate share of the Portfolio's expenses
(management fees and operating expenses), investors and their beneficial
owners will also indirectly bear similar expenses of such PFIC. PFIC
investments also may be subject to less favorable U.S. tax treatment, as
discussed in Item 20 in Part B.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may
purchase and sell securities on a when-issued or delayed delivery basis.
However, the Portfolio does not currently intend to purchase or sell
securities on a when-issued or delayed delivery basis, if as a result more
than 5% of its net assets taken at market value at the time of purchase would
be invested in such securities. When-issued or delayed delivery transactions
arise when securities are purchased or sold by the Portfolio with payment and
delivery taking place in the future in order to secure what is considered to
be an advantageous price or yield.
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However, the yield on a comparable security available when delivery takes
place may vary from the yield on the security at the time that the
when-issued or delayed delivery transaction was entered into. Any failure to
consummate a when-issued or delayed delivery transaction may result in the
Portfolio missing the opportunity of obtaining a price or yield considered to
be advantageous. When-issued and delayed delivery transactions may generally
be expected to settle within one month from the date the transactions are
entered into, but in no event later than 90 days. However, no payment or
delivery is made by the Portfolio until it receives delivery or payment from
the other party to the transaction.
When the Portfolio purchases securities on a when-issued basis, it
will maintain in a segregated account with its custodian cash, U.S.
government securities or other liquid assets having an aggregate value equal
to the amount of such purchase commitments, until payment is made. If
necessary, additional assets will be placed in the account daily so that the
value of the account will equal or exceed the amount of the Portfolio's
purchase commitments.
LENDING OF SECURITIES. As discussed in Part A, the Portfolio may
lend its securities to qualified institutional investors who need to borrow
securities in order to complete certain transactions, such as covering short
sales, avoiding failures to deliver securities, or completing arbitrage
operations. By lending its securities, the Portfolio will be attempting to
generate income through the receipt of interest on the loan which, in turn,
can be invested in additional securities to pursue the Portfolio's investment
objective. Any gain or loss in the market price of the securities loaned
that might occur during the term of the loan would be for the account of the
Portfolio. The Portfolio may lend its portfolio securities to qualified
brokers, dealers, banks or other financial institutions, so long as the
terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, or the Rules and
Regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder, which currently require that (a) the borrower
pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit or securities issued or guaranteed by the U.S.
government having a value at all times not less than 100% of the value of the
securities loaned, (b) the borrower add to such collateral whenever the price
of the securities loaned rises (i.e., the borrower "marks to the market" on a
daily basis), (c) the loan be made subject to termination by the Portfolio at
any time and (d) the Portfolio receive reasonable interest on the loan, which
interest may include the Portfolio's investing cash collateral in interest
bearing short-term investments, and (e) the Portfolio receive all dividends
and distributions on the loaned securities and any increase in the market
value of the loaned securities.
The Portfolio bears a risk of loss in the event that the other
party to a securities lending transaction defaults on its obligations and the
Portfolio is delayed in or prevented from exercising its rights to dispose of
the collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Portfolio seeks to
assert these rights, the risk of incurring expenses associated with asserting
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these rights and the risk of losing all or a part of the income from the
transaction. The Portfolio will not lend its portfolio securities if, as a
result, the aggregate value of such loans would exceed 33-1/3% of the value
of the Portfolio's total assets. Loan arrangements made by the Portfolio
will comply with all other applicable regulatory requirements, including the
rules of the Exchange, which rules presently require the borrower, after
notice, to redeliver the securities within the normal settlement time of
three business days. All relevant facts and circumstances, including
creditworthiness of the broker, dealer or institution, will be considered in
making decisions with respect to the lending of securities, subject to review
by Worldwide Portfolio's trustees.
HEDGING TRANSACTIONS. As described in Part A, the Portfolio is
authorized to make limited commitments in certain forward contracts, but only
for the purpose of hedging, that is, protecting against the risk of market
movements that may adversely affect the value (in foreign currency or U.S.
dollar terms) of the Portfolio's securities or the price of securities that
the Portfolio is considering purchasing. A hedging transaction may partially
protect the Portfolio from a decline in the value of a particular security or
its portfolio generally, although the cost of the transaction will reduce the
potential return on the security or the portfolio. In addition, hedging
transactions do not eliminate fluctuations in the prices of the underlying
securities the Portfolio owns or intends to acquire.
Any utilization of forwards or any other hedging technique
(investing, for example, in futures or options) is subject to policies and
procedures which may be established and changed by the trustees from time to
time without shareholder vote. Currently, the Portfolio is authorized to
invest only in forward contracts for hedging purposes and is not permitted to
invest in futures or options. If the trustees ever authorize the Portfolio
to invest in futures or options, such investments would be permitted solely
for hedging purposes, and the Portfolio would not be permitted to invest more
than 5% of its net assets at the time of purchase in initial margins for
financial futures transactions and premiums for options. In addition, the
Advisor or Sub-Advisor may be required to obtain bank regulatory approval
before the Portfolio engages in futures and options transactions. The
following information should be read in conjunction with the information
concerning the Portfolio's investment in forwards and the risks of such
investments contained in Part A.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward contract is
an agreement between two parties in which one party is obligated to deliver a
stated amount of a stated asset at a specified time in the future and the
other party is obligated to pay a specified invoice amount for the asset at
the time of delivery. The Portfolio currently intends that the only forward
contracts or commitments that it might enter into are forward foreign
currency exchange contracts and that it may enter into such contracts solely
for hedging purposes, although the Portfolio may enter into additional forms
of forward contracts or commitments in the future for hedging purposes if
they become available and advisable in light of the Portfolio's objective and
investment policies. Forward contracts generally are negotiated in an
interbank market conducted directly between traders (usually large commercial
banks) and their customers. Unlike futures contracts, which are
standardized, exchange-traded contracts,
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forward contracts can be specifically drawn to meet the needs of the parties
that enter into them. The parties to a forward contract may agree to offset
or terminate the contract before its maturity, or may hold the contract to
maturity and complete the contemplated exchange.
The following discussion summarizes the Portfolio's principal uses
of forward foreign currency exchange contracts ("forward currency
contracts"). The Portfolio may enter into forward currency contracts with
aggregate stated contract values of up to the value of the Portfolio's
assets. A forward currency contract is an obligation to buy or sell an amount
of a specified currency for an agreed price (which may be in U.S. dollars or
a foreign currency). The Portfolio will exchange foreign currencies for U.S.
dollars and for other foreign currencies in the normal course of business and
may buy and sell currencies through forward currency contracts in order to
fix a price (in terms of a specified currency) for securities it has agreed
to buy or sell ("transaction hedge"). The Portfolio also may hedge some or
all of its investments denominated in foreign currency against a decline in
the value of that currency relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency (or a proxy
currency whose price movements are expected to have a high degree of
correlation with the currency being hedged) approximating the value of some
or all of its portfolio securities denominated in that currency ("position
hedge"). The Portfolio also may enter into a forward currency contract with
respect to a currency where the Portfolio is considering the purchase or sale
of investments denominated in that currency but has not yet selected the
specific investments ("anticipatory hedge").
These types of hedging minimize the effect of currency appreciation
as well as depreciation, but do not eliminate fluctuations in the underlying
U.S. dollar equivalent value of the proceeds of or rates of return on the
Portfolio's foreign currency denominated portfolio securities. The matching
of the increase in value of a forward foreign currency exchange contract and
the decline in the U.S. dollar equivalent value of the foreign currency
denominated asset that is the subject of the hedge generally will not be
precise. Shifting the Portfolio's currency exposure from one foreign
currency to another limits the Portfolio's opportunity to profit from
increases in the value of the original currency and involves a risk of
increased losses to the Portfolio if the Sub-Advisor's projection of future
exchange rates is inaccurate.
The Portfolio will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency
underlying the forward contract or the currency being hedged. To the extent
that the Portfolio is not able to cover its forward currency positions with
underlying portfolio securities, the Portfolio's custodian will segregate
cash or liquid assets having a value equal to the aggregate amount of the
Portfolio's commitments under forward contracts entered into. If the value
of the securities used to cover a position or the value of segregated assets
declines, the Portfolio must find alternative cover or segregate additional
cash or liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of the Portfolio's commitments
with respect to such contracts.
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While forward contracts are not currently regulated by the
Commodity Futures Trading Commission ("CFTC"), the CFTC may in the future
assert authority to regulate forward contracts. In such event, the
Portfolio's ability to utilize forward contracts may be restricted. The
Portfolio may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Portfolio assets. In addition, when the Portfolio enters into a
privately negotiated forward contract with a counterparty, the Portfolio
assumes counterparty credit risk, that is, the risk that the counterparty
will fail to perform its obligations, in which case the Portfolio could be
worse off than if the contract had not been entered into. Unlike many
exchange-traded futures contracts and options on futures, there are no daily
price fluctuation limits with respect to forward contracts and other
negotiated or over-the-counter instruments, and with respect to those
contracts, adverse market movements could therefore continue to an unlimited
extent over a period of time. However, the Portfolio intends to monitor its
investments closely and will attempt to renegotiate or close its positions
when the risk of loss to the Portfolio becomes unacceptably high.
PORTFOLIO TURNOVER. Although the annual portfolio turnover rate of
the Portfolio will vary, it is normally expected to range from 25% to 75%.
In pursuit of the Portfolio's investment objective, the Sub-Advisor
continuously monitors the Portfolio's investments and makes portfolio changes
whenever changes in investment themes, the fundamentals of any portfolio
company or the price of any portfolio security indicate to the Sub-Advisor
that more attractive alternatives exist or that the Portfolio's investment
objective could be better achieved by investment in another security,
regardless of portfolio turnover. In addition, portfolio turnover may
increase as a result of large amounts of purchases and redemptions of
interests in the Portfolio due to economic, market or other factors that are
not within the control of management.
INVESTMENT RESTRICTIONS
The Portfolio has adopted certain fundamental restrictions on its
investments and other activities, and none of these restrictions may be
changed without the approval of (i) 67% or more of the total beneficial
interest of the Portfolio present at a meeting of investors thereof if the
holders of more than 50% of the total beneficial interest are present or
represented by proxy, or (ii) more than 50% of the total beneficial interest
of the Portfolio.
The following fundamental restrictions apply to the Portfolio. The
Portfolio may not:
1. With respect to 75% of the Portfolio's total assets, purchase
the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the
holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets or (b) the Portfolio owns more than 10%
of the outstanding voting securities of such issuer.
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2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Portfolio's total assets
(including the amount borrowed) taken at market value, nor pledge, mortgage
or hypothecate its assets, except to secure permitted indebtedness and then
only if such pledging, mortgaging or hypothecating does not exceed 25% of the
Portfolio's total assets taken at market value. When borrowings exceed 5% of
the Portfolio's total assets, the Portfolio will not purchase portfolio
securities.
4. Act as a securities underwriter (except to the extent the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a security), issue senior securities (except to the extent
permitted under the Investment Company Act of 1940), invest in real estate
(although it may purchase shares of a real estate investment trust), or
invest in commodities or commodity contracts except financial futures
transactions, futures contracts on securities and securities indices and
options on such futures, forward foreign currency exchange contracts, forward
commitments or securities index put or call options.
5. Make loans, except that the Portfolio may enter into
repurchase agreements and may lend portfolio securities in accordance with
the Portfolio's investment policies. The Portfolio does not, for this
purpose, consider the purchase of all or a portion of an issue of publicly
distributed bonds, bank loan participation agreements, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities, to be the
making of a loan.
In applying the industry concentration investment restriction (no.
2 above), the Portfolio uses the industry groups designated by the Financial
Times World Index Service.
The trustees have adopted additional non-fundamental investment
restrictions for the Portfolio. These limitations may be changed by the
trustees without a vote of investors. The non-fundamental investment
restrictions include the following:
1. With respect to 100% of the Portfolio's total assets, the
Portfolio may not purchase the securities of any one issuer (except U.S.
government securities) if immediately after and as a result of such purchase
(a) the value of the holdings of the Portfolio in the securities of such
issuer exceeds 5% of the value of the Portfolio's total assets or (b) the
Portfolio owns more than 10% of the outstanding voting securities of such
issuer.
2. The Portfolio may not purchase securities of any company
which, including its predecessors and parents, has a record of less than
three years' continuous operation, if such purchase would cause the
Portfolio's investments in all such companies taken at cost to exceed 5% of
the value of the Portfolio's total assets.
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3. The Portfolio may not purchase securities on margin from a
broker or dealer, except that the Portfolio may obtain such short-term
credits as may be necessary for the clearance of transactions, and may not
make short sales of securities. This limitation shall not prohibit or
restrict the Portfolio from entering into futures, forwards and options
contracts or from making margin payments and other deposits in connection
therewith.
4. The Portfolio may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary
broker's commission).
5. The Portfolio may not invest in companies for the purposes of
exercising control of management.
6. The Portfolio may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Portfolio, taken at
market value at the time of purchase would be invested in such securities.
7. The Portfolio may not enter into any futures, forwards or
options, except that only for the purpose of hedging, the Portfolio may enter
into forward foreign currency exchange contracts with stated contract values
of up to the value of the Portfolio's assets.
8. The Portfolio may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in
such securities.
9. The Portfolio may not purchase or sell any interest in an oil,
gas or mineral development or exploration program, including investments in
oil, gas or other mineral leases, rights or royalty contracts (except that
the Portfolio may invest in the securities of issuers engaged in the
foregoing activities).
10. The Portfolio may not invest more than 5% of its net assets in
warrants. Included in that amount, but not to exceed 2% of net assets, are
warrants whose underlying securities are not traded on principal domestic or
foreign exchanges. Warrants acquired by the Portfolio in units or attached
to securities are not subject to these limits.
The Portfolio also currently intends to prohibit the purchase or
retention by the Portfolio of the securities of any issuer if the officers,
directors or trustees of the Portfolio, its advisors, or managers owning
beneficially more than 1/2 of 1% of the securities of an issuer together own
beneficially more than 5% of the securities of that issuer.
ITEM 14. MANAGEMENT OF THE REGISTRANT
The trustees and executive officers of Worldwide Portfolios are
listed below, together with information which includes their principal
occupations during the past five years and other principal business
affiliations. The trustees and executive officers of the Trust also serve in
the same capacities as trustees and officers of Worldwide Portfolios.
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* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO
80206, age 53. President and a trustee of Berger/BIAM Worldwide
Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their
inception in May 1996. President and a trustee of Berger
Institutional Products Trust since its inception in October 1995.
President and a director since April 1995 of Berger Associates,
Inc. A Vice President of DST Systems, Inc. (data processing) since
July 1995. Director of First of Michigan Capital Corp. (holding
company) and First of Michigan Corp. (broker-dealer) since March
1995. Formerly President and Chief Executive Officer of Investors
Fiduciary Trust Company (banking) from February 1992 to March 1995
and Chief Operating Officer of SUNAMERICA Asset Management Co.
(money management) from January 1990 to February 1992.
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age
67. President, Baldwin Financial Counseling. Formerly (1978-
1990), Vice President and Denver Office Manager of Merrill Lynch
Capital Markets. Director of Berger 100 Fund and Berger Growth and
Income Fund. Trustee of Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger/BIAM Worldwide Funds Trust and
Berger/BIAM Worldwide Portfolios Trust.
* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 70. Director and, formerly, President (1974-1994) of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust since its inception in August
1993 (Chairman of the Trustees through November 1994). Trustee of
Berger Institutional Products Trust since its inception in October
1995. Trustee of Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust since their inception in May 1996.
Chairman (since 1994) and a Director (since 1973) and, formerly,
President (1973-1994) of Berger Associates, Inc.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 70.
President, Climate Engineering, Inc. (building environmental
systems). Director of Berger 100 Fund and Berger Growth and Income
Fund. Trustee of Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger/BIAM Worldwide Funds Trust and
Berger/BIAM Worldwide Portfolios Trust.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 51.
President, Cattanach & Associates, Ltd. (investment consulting
firm). Formerly (1981-1988), Executive Vice President, Captiva
Corporation, Denver, Colorado (private investment management firm).
Ph.D. in Finance (Arizona State University); Chartered Financial
Analyst (CFA). Director of Berger 100 Fund and Berger Growth and
Income Fund. Trustee of Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger/BIAM Worldwide Funds Trust and
Berger/BIAM Worldwide Portfolios Trust.
LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 68.
Associate, University College, University of Denver. Formerly,
President of the Colorado State Board of Land Commissioners (1989-
1995), and Vice President and Economist (1983-1988) and Consulting
Economist (1989) for First Interstate Bank of
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Denver. Ph.D. in Economics (Harvard University). Director of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide
Portfolios Trust.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602,
age 50. Since 1991, Director, Chairman, President and Chief
Executive Officer of Catalyst Institute (international public
policy research organization focused primarily on financial markets
and institutions) and Catalyst Consulting (international financial
institutions business consulting firm). Formerly (1988-1991),
Director, President and Chief Executive Officer of Kessler Asher
Group (brokerage, clearing and trading firm). Director of Berger
100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide
Portfolios Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202,
age 63. Self-employed as a private investor. Formerly (1981-
1988), Senior Vice President, Rocky Mountain Region, of Dain
Bosworth Incorporated and member of that firm's Management
Committee. Director of Berger 100 Fund and Berger Growth and
Income Fund. Trustee of Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger/BIAM Worldwide Funds Trust and
Berger/BIAM Worldwide Portfolios Trust.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT
59717, age 59. Since 1994, Dean, and since 1989, a member of the
Finance faculty, of the College of Business, Montana State
University. Self-employed as a financial and management
consultant, and in real estate development. Formerly (1976-1989),
Chairman and Chief Executive Officer of Royal Gold, Inc. (mining).
Chairman of the Board of Berger 100 Fund and Berger Growth and
Income Fund. Chairman of the Trustees of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age
67. President, Sinclaire Cattle Co., and private investor.
Director of Berger 100 Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust, Berger Institutional
Products Trust, Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust.
* CRAIG D. CLOYED, 210 University Boulevard, Suite 900, Denver, CO
80206, age 50. Vice President of Berger/BIAM Worldwide Funds Trust
and Berger/BIAM Worldwide Portfolios Trust since their inception in
May 1996. Also, Vice President and Chief Marketing Officer of
Berger Associates, Inc., since August 1995, and President, CEO and
a director of Berger Distributors, Inc., since its inception in May
1996. Formerly (September 1989 to August 1995), Senior Vice
President of INVESCO Funds Group (mutual funds).
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* KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206,
age 40. Vice President, Secretary and Treasurer of Berger 100 Fund
and Berger Growth and Income Fund since October 1991, of Berger
Investment Portfolio Trust since its inception in August 1993, of
Berger Institutional Products Trust since its inception in October
1995 and of Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust since their inception in May 1996.
Also, Vice President-Finance and Administration, Secretary and
Treasurer of Berger Associates, Inc., since September 1991, and a
director of Berger Distributors, Inc., since its inception in May
1996. Formerly, Financial Consultant (registered representative)
with Neidiger Tucker Bruner, Inc. (broker-dealer) (October 1989 to
September 1991) and Financial Consultant with Merrill Lynch,
Pierce, Fenner & Smith, Inc. (October 1985 to October 1989).
________________
* Interested person (as defined in the Investment Company Act of 1940) of the
Portfolio and of the Portfolio's Advisor or Sub-Advisor.
TRUSTEE COMPENSATION
Officers of Worldwide Portfolios receive no compensation from
Worldwide Portfolios. However, trustees of Worldwide Portfolios who are not
interested persons of the Portfolio's Advisor or Sub-Advisor are compensated for
their services according to a fee schedule, allocated among the Berger and
Berger/BIAM Funds, which includes an annual fee component and a per meeting fee
component. Neither the officers of Worldwide Portfolios nor the trustees
receive any form of pension or retirement benefit compensation from Worldwide
Portfolios.
Set forth below is information regarding compensation (including
reimbursement of expenses) estimated to be paid or accrued during the current
fiscal year ended July 31, 1997, for each trustee of Worldwide Portfolios and of
the other funds in the Berger Fund and Berger/BIAM Fund complex.
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NAME AND POSITION WITH AGGREGATE AGGREGATE
BERGER AND BERGER/BIAM COMPENSATION COMPENSATION
FUNDS FROM FROM
THE ALL BERGER
PORTFOLIO(1) AND
BERGER/BIAM
FUNDS(2)
- -------------------------------------------------------------------------------
Dennis E. Baldwin(3) $924 $41,083
- -------------------------------------------------------------------------------
William M.B. Berger(3),(5) $0 $0
- -------------------------------------------------------------------------------
Louis R. Bindner(3) $786 $34,965
- -------------------------------------------------------------------------------
Katherine A. Cattanach(3) $892 $39,657
- -------------------------------------------------------------------------------
Lucy Black Creighton(3) $757 $33,602
- -------------------------------------------------------------------------------
Paul R. Knapp(3) $1,010 $44,919
- -------------------------------------------------------------------------------
Gerard M. Lavin(4),(5) $0 $0
- -------------------------------------------------------------------------------
Harry T. Lewis(3) $863 $38,357
- -------------------------------------------------------------------------------
Michael Owen(3) $1,142 $50,720
- -------------------------------------------------------------------------------
William Sinclaire(3) $759 $33,697
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Comprised of the portion of the estimated trustee compensation to be paid
by Worldwide Portfolios to its trustees, which is allocated among the investors
in Worldwide Portfolios.
(2) Consisting of Berger 100 Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(3) Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(4) Trustee of Berger Institutional Products Trust, Berger/BIAM Worldwide Funds
Trust and Berger/BIAM Worldwide Portfolios Trust.
(5) Interested person of the Berger/BIAM Worldwide Funds Trust and/or the
Portfolio's Advisor or Sub-Advisor.
Trustees may elect to defer receipt of all or a portion of their
fees pursuant to a fee deferral plan adopted by Worldwide Portfolios. Under
the plan, deferred fees are credited to an account and adjusted thereafter to
reflect the investment experience of whichever of the Berger or Berger/BIAM
Funds (or approved money market funds) is designated by the trustees for this
purpose. Pursuant to an exemptive order of the Commission, Worldwide
Portfolios is permitted to purchase shares of the designated funds in order
to offset its obligation to the trustees participating in the plan.
Purchases made pursuant to the plan are excepted from any otherwise
applicable investment restriction limiting the purchase of securities of any
other investment company. Worldwide Portfolios'
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<PAGE>
obligation to make payments of deferred fees under the plan is a general
obligation of Worldwide Portfolios.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
For a short period of time prior to the Portfolio commencing
operations, all of the outstanding interests in the Portfolio are expected to
be owned by two mutual fund investors, all of whose outstanding shares are
expected to be owned by Berger Associates, Inc., a Delaware corporation and
controlling person of the Advisor, which will provide the seed capital
necessary to establish the investors' trust.
As of the date of this Registration Statement, the officers and
trustees of Worldwide Portfolios as a group owned of record or beneficially
no interest in the Portfolio.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES
For information concerning the Advisor and the Sub-Advisor, their
controlling persons and affiliates, see Items 5 and 14 above.
For its services under the Investment Advisory Agreement, the
Advisor is paid a fee described in Item 5 of Part A. For its services under
the Sub-Advisory Agreement, the Sub-Advisor is also paid a fee described in
Item 5 in Part A.
Under the Investment Advisory Agreement between the Advisor and
Berger/BIAM Worldwide Portfolios Trust with respect to the Portfolio, the
Advisor oversees, evaluates and monitors the investment advisory services
provided to the Portfolio by the Sub-Advisor and is responsible for
furnishing general business management and administrative services to the
Portfolio.
The Investment Advisory Agreement will continue in effect until
April 1998, and thereafter from year to year if such continuation is
specifically approved at least annually by the trustees or by vote of a
majority of the outstanding shares of the Portfolio and in either case by
vote of a majority of the trustees of Worldwide Portfolios who are not
"interested persons" (as that term is defined in the Investment Company Act
of 1940) of the Portfolio or the Advisor. The Agreement is subject to
termination by the Portfolio or the Advisor on 60 days' written notice, and
terminates automatically in the event of its assignment.
Under the Sub-Advisory Agreement between the Advisor and the
Sub-Advisor, the Advisor has delegated day-to-day portfolio management
responsibility to the Sub-Advisor. The Sub-Advisor manages the investments
in the Portfolio and determines what securities and other investments will be
purchased, retained, sold or loaned, consistent with the investment objective
and policies established by the trustees of Worldwide Portfolios.
The Sub-Advisory Agreement will continue in effect until April
1998, and thereafter from year to year if such continuation is specifically
approved at least annually by the trustees or by vote of a majority of the
outstanding shares of the Portfolio and in either
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case by vote of a majority of the trustees of Worldwide Portfolios who are
not "interested persons" (as that term is defined in the Investment Company
Act of 1940) of the Portfolio or the Advisor or the Sub-Advisor. The
Sub-Advisory Agreement is subject to termination by the Portfolio, the
Advisor or the Sub-Advisor on 60 days' written notice, and terminates
automatically in the event of its assignment and in the event of termination
of the Investment Advisory Agreement.
Expenses of the Portfolio include, among others, its pro rata share
of the expenses of Worldwide Portfolios of which the Portfolio is a series,
such as: expenses of registering Worldwide Portfolios with securities
authorities; the compensation of its trustees who are not "interested
persons" (as that term is defined in the Investment Company Act of 1940) of
the Trust, the Advisor or Sub-Advisor; expenses of preparing reports to
investors and to governmental offices and commissions; expenses of meetings
of investors and trustees of Worldwide Portfolios; legal fees; and insurance
premiums of Worldwide Portfolios. Expenses of the Portfolio also include,
among others, expenses connected with the execution of portfolio
transactions, including brokerage commissions on purchases and sales of
portfolio securities (which are considered a cost of securities of the
Portfolio); custodian fees; auditors' fees; interest and taxes imposed on the
Portfolio; transfer agent, recordkeeping and pricing agent fees; the fees
payable to the Advisor under the Investment Advisory Agreement; and such
other non-recurring and extraordinary items as may arise from time to time.
Until at least April 30, 1998, the Advisor has agreed voluntarily
to waive the investment advisory fee paid by the Portfolio under the
Investment Advisory Agreement to the extent that the Portfolio's normal
operating expenses in any fiscal year, including the investment advisory fee
and custodian fees, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.00% of the Portfolio's average daily net
assets for that fiscal year.
SERVICE ARRANGEMENTS FOR THE PORTFOLIO
Under the Investment Advisory Agreement between the Advisor and the
Portfolio, in addition to providing advisory services, the Advisor is
responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. The Advisor is
responsible for providing certain of these services at its own expense, such
as compliance monitoring and investor communications, which have been
delegated to Berger Associates as part of a Sub-Administration Agreement.
Other services are procured from third party service providers at the
Portfolio's own expense, such as custody, recordkeeping and pricing services.
The Portfolio has appointed IFTC as recordkeeping and pricing agent to
calculate the daily net asset value of the Portfolio and to perform certain
accounting and recordkeeping functions required by the Portfolio. In
addition, the Portfolio has appointed IFTC as its custodian and transfer
agent. IFTC has engaged State Street Bank and Trust Company ("State Street")
as sub-custodian for the Portfolio. For custodian, recordkeeping and pricing
services, the Portfolio pays fees directly to IFTC based on a percentage of
its net assets, subject to certain minimums and reimburses IFTC for certain
out-of-pocket expenses.
B-15
<PAGE>
The trustees of Worldwide Portfolios have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions
are effected through DSTS, the commission received by DSTS is credited
against, and thereby reduces, certain operating expenses that the Portfolio
would otherwise be obligated to pay. No portion of the commission is
retained by DSTS.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Although the Portfolio retains full control over its own investment
policies, the Sub-Advisor is authorized to place the portfolio transactions
of the Portfolio. The Sub-Advisor is required to report on the placement of
brokerage business to the trustees of Worldwide Portfolios every quarter,
indicating the brokers with whom portfolio business was placed and the basis
for such placement.
The Investment Advisory Agreement that the Portfolio has with the
Advisor and the Sub-Advisory Agreement between the Advisor and the
Sub-Advisor authorizes and directs portfolio transactions for the Portfolio
to be placed only with brokers and dealers who render satisfactory service in
the execution of orders at the most favorable prices and at reasonable
commission rates. However, the Sub-Advisor is specifically authorized to
place such transactions with a broker with whom it has negotiated a
commission that is in excess of the commission another broker or dealer would
have charged for effecting that transaction if the Sub-Advisor determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker viewed
in terms of either that particular transaction or the overall
responsibilities of the Sub-Advisor.
In accordance with these provisions, the Sub-Advisor may place
portfolio brokerage business of the Portfolio with brokers who provide useful
research services to the Sub-Advisor. Such research services would typically
consist of studies made by investment analysts or economists relating either
to the past record of and future outlook for companies and the industries in
which they operate, or to national and worldwide economic conditions,
monetary conditions and trends in investors' sentiment, and the relationship
of these factors to the securities market. In addition, such analysts may be
available for regular consultation so that the Sub-Advisor may be apprised of
current developments in the above-mentioned factors.
The research services received from brokers could be helpful to the
Sub-Advisor in performing its investment advisory responsibilities to the
Portfolio, but they are not essential, and the availability of such services
from brokers does not reduce the responsibility of the Sub-Advisor's advisory
personnel to analyze and evaluate the securities in which the Portfolio
invests. The research services obtained as a result of the Portfolio's
brokerage business may also be useful to the Sub-Advisor in making investment
decisions for its other advisory accounts, and, conversely, information
obtained by reason of placement of brokerage business of such other accounts
may be used by the Sub-Advisor in rendering investment advice to the
Portfolio. Although such research services may be deemed to be of value to
the Sub-Advisor, they are not expected to decrease the expenses that the
Sub-Advisor would otherwise incur in performing its investment advisory
services for the Portfolio nor will the fee that is received by the
Sub-Advisor from the Advisor or the
B-16
<PAGE>
advisory fee received by the Advisor from the Portfolio be reduced as a
result of the availability of such research services from brokers.
The trustees of Worldwide Portfolios have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions
are effected through DSTS, the commission received by DSTS is credited
against, and thereby reduces, certain operating expenses that the Portfolio
would otherwise be obligated to pay. No portion of the commission is
retained by DSTS.
The trustees of Worldwide Portfolios have also authorized the
Sub-Advisor to consider sales of shares of the funds investing in the
Portfolio by a broker-dealer or the recommendations of a broker-dealer to its
customers that they purchase such shares as a factor in the selection of
broker-dealers to execute securities transactions for the Portfolio. In
placing portfolio business with such broker-dealers, the Sub-Advisor will
seek the best execution of each transaction.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES
Interests in the Portfolio are fully paid and nonassessable when
sold. All interests sold by the Portfolio participate in proportionately in
distributions by the Portfolio, and in the residual assets of the Portfolio
in the event of its liquidation.
Investors in the Portfolio and the other series of Worldwide
Portfolios generally vote separately on matters relating to those respective
series, although they vote together and with the holders of any other series
of Worldwide Portfolios issued in the future in the election of trustees and
on all matters relating to the trust as a whole. Each investor in the
Portfolio is entitled to a vote proportionate to its interest in the
Portfolio. Interests in the Portfolio have noncumulative voting rights,
which means that the holders of more than 50% of the beneficial interest in
the Portfolio voting for the election of trustees can elect 100% of the
trustees if they choose to do so and, in such event, the holders of the
remaining less than 50% of the interest voting for the election of trustees
will not be able to elect any person or persons as trustees. The Portfolio
is not required to hold annual investor meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by
the trustees.
If investors owning at least 10% of the outstanding interest in
Worldwide Portfolios so request, a special investors' meeting will be held
for the purpose of considering the removal of a trustee. Special meetings
will be held for other purposes if the holders of at least 25% of the total
beneficial interest in Worldwide Portfolios so request. Subject to certain
limitations, Worldwide Portfolios will facilitate appropriate communications
by investors desiring to call a special meeting for the purpose of
considering the removal of a trustee.
For additional information concerning interests in the Portfolio,
see Item 6 in Part A.
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<PAGE>
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. See Item 4 in Part A.
For a description of the method by which the net asset value of the
Portfolio is calculated, see Item 7 in Part A.
The right of redemption may be suspended for any period during
which the Exchange is closed or the Commission determines that trading on the
Exchange is restricted, or when there is an emergency as determined by the
Commission as a result of which it is not reasonably practicable for the
Portfolio to dispose of securities owned by it or to determine the value of
its net assets, or for such other period as the Commission may by order
permit for the protection of investors in the Portfolio.
The Portfolio intends to redeem interests only for cash, although
it retains the right to redeem interests in kind under unusual circumstances,
in order to protect the interests of the remaining investors, by the delivery
of securities selected from its assets at its discretion. The Portfolio is,
however, governed by Rule 18f-1 under the Investment Company Act of 1940
pursuant to which the Portfolio is obligated to redeem interests solely in
cash up to the lesser of $250,000 or 1% of the net assets of the Portfolio
during any 90-day period for any one investor. Should redemptions by any
investor during any 90-day period exceed such limitation, the Portfolio will
have the option of redeeming the excess in cash or in kind. If interests are
redeemed in kind, the redeeming investor generally will incur brokerage costs
in converting the assets to cash. The method of valuing securities used to
make redemption in kind will be the same as the method of valuing portfolio
securities described above. Investors have the ability to request in writing
a review of the valuation of in-kind redemptions, which will be considered by
the trustees of Worldwide Portfolios within 90 days of such written request.
ITEM 20. TAX STATUS
It is anticipated that (1) the Portfolio will be treated for U.S.
Federal income tax purposes as a partnership, and (2) for purposes of
determining whether a mutual fund investing in the Portfolio satisfies the
income and diversification requirements to maintain its status as a regulated
investment company under the Code, the investor in the Portfolio will be
deemed to own a proportionate share of the Portfolio's assets and will be
deemed to be entitled to the Portfolio's income or loss attributable to that
share. The Portfolio has advised its initial investors that it intends to
conduct its operations so as to enable its investors to satisfy those
requirements.
The Portfolio itself is not expected to be subject to federal
income tax, but each investor will be required to take into account for
Federal U.S. income tax purposes its share of the Portfolio's income, gains,
losses, deductions, credits and tax preference items, without regard to
whether it has received any cash distributions from the Portfolio.
B-18
<PAGE>
Withdrawals by investors from the Portfolio generally will not
result in their recognizing any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent that any cash
distributed exceeds the basis of the investor's interest in the Portfolio
prior to the distribution, (2) income or gain will be recognized if the
withdrawal is in liquidation of the investor's entire interest in the
Portfolio and includes a disproportionate share of any unrealized receivables
held by the Portfolio, and (3) loss, if realized, will be recognized if the
distribution is in liquidation of that entire interest and consists solely of
cash and/or unrealized receivables. The basis of an investor's interest in a
Portfolio generally equals the amount of cash and the basis of any property
that the investor invests in the Portfolio, increased by the investor's share
of income from the Portfolio and decreased by the amount of any cash
distributions and the basis of any property distributed from the Portfolio.
Although, as described above, the Portfolio is not expected to be
subject to federal income tax, it will file appropriate income tax returns.
FOREIGN SOURCE INCOME
Income received by the Portfolio from sources within foreign
countries may be subject to withholding and other income or similar taxes
imposed by such countries. The U.S. has entered into tax treaties with many
foreign countries that, in some circumstances, may entitle the Portfolio to a
reduced rate of tax or exemption from tax on such income.
The amount, timing and character of Portfolio income may be
affected by certain special U.S. tax rules that may apply to various
investments of the Portfolio, including the following:
CURRENCY TRANSACTIONS. On the disposition of foreign
currency, foreign currency denominated debt securities, and certain
financial contracts, forward contracts and options, gains or losses
attributable to currency fluctuations will be treated as ordinary gain
or loss. These gains or losses, termed "section 988" gains or losses,
may increase, decrease or eliminate the ordinary income of the
Portfolio.
HEDGING TRANSACTIONS. On the disposition of certain
contracts, such as options, futures contracts and forward contracts
(termed "section 1256 contracts"), the resulting gains or losses
generally are considered 60% long-term and 40% short-term capital
gains or losses, regardless of the amount of time the Portfolio has
held the contract. However, foreign currency gains or losses (as
discussed above) arising from certain section 1256 contracts may be
treated as ordinary income or loss. In addition, section 1256
contracts held by the Portfolio at the end of each taxable year and on
certain other dates prescribed by the tax laws are "marked-to-market"
such that unrealized gains or losses are treated as though they were
realized. Further, requirements relating to the tax status of certain
investors in the Portfolio as regulated investment companies may limit
the extent to which the Portfolio will be able to engage in
transactions in such contracts.
B-19
<PAGE>
Hedging transactions undertaken by the Portfolio may result
in "straddles" for U.S. Federal income tax purposes, affecting the
character of gains (or losses) realized by the Portfolio. In
addition, losses realized by the Portfolio on straddle positions may
be deferred.
PASSIVE FOREIGN INVESTMENT COMPANIES. The Portfolio may
invest in foreign entities that are classified as passive foreign
investment companies ("PFICs") for U.S. tax purposes. If the
Portfolio receives an "excess distribution" with respect to PFIC
stock, the Portfolio itself or its investors may be subject to tax on
a portion of the excess distribution. However, the Portfolio may be
eligible to elect one of two alternative tax treatments with respect
to PFIC shares which would avoid the foregoing "excess distribution"
taxes, but also may affect, among other things, the amount and
character of gain or loss and the timing of the recognition of income
with respect to PFIC shares. Accordingly, the amounts, character and
timing of income distributed to investors of the Portfolio may differ
substantially as compared to a fund that did not invest in PFIC
shares.
The foregoing is not an exhaustive presentation of all tax issues
relevant to an investment in the Portfolio. Accordingly, investors are
advised to consult their own tax advisors with respect to the particular tax
consequences to them of an investment in the Portfolio.
ITEM 21. UNDERWRITERS
The Portfolio has no principal underwriter or distributor.
Eligible investors may continuously invest in the Portfolio.
ITEM 22. CALCULATION OF PERFORMANCE DATA
Not applicable.
ITEM 23. FINANCIAL STATEMENTS
Investors of record will receive unaudited semi-annual reports and
annual reports audited by the Portfolio's independent public accountants.
The financial statements included herein have been included in
reliance upon the report of Price Waterhouse LLP, independent public
accountants, as experts in accounting and auditing:
For Berger/BIAM Worldwide Portfolios Trust:
Report of the Independent Accountants, dated October 7, 1996
Statement of Assets and Liabilities, as of October 4, 1996
Notes to Financial Statement, dated October 4, 1996
B-20
<PAGE>
APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Portfolio may purchase securities which are convertible into
common stock when the Portfolio's Sub-Advisor believes they offer the
potential for a higher total return than nonconvertible securities. While
fixed income securities generally have a priority claim on a corporation's
assets over that of common stock, some of the convertible securities which
the Portfolio may hold are high-yield/high-risk securities that are subject
to special risks, including the risk of default in interest or principal
payments which could result in a loss of income to the Portfolio or a decline
in the market value of the securities. Convertible securities often display
a degree of market price volatility that is comparable to common stocks.
Specifically, corporate debt securities which are below investment
grade (securities rated Ba or lower by Moody's or BB or lower by Standard &
Poor's) and unrated securities which the Portfolio may purchase and hold are
subject to a higher risk of non-payment of principal or interest, or both,
than higher grade debt securities. Generally speaking, the lower the quality
of a debt security (which may be reflected in its Moody's and/or Standard &
Poor's ratings), the higher the yield it will provide, but the greater the
risk that interest or principal payments will not be made when due. Thus,
the lower the grade of a security, the more speculative characteristics it
generally has. Information about the ratings of Moody's and Standard &
Poor's, and the investment risks associated with the various ratings, is set
forth below.
The market prices of these lower grade convertible securities are
generally less sensitive to interest rate changes than higher-rated
investments, but more sensitive to economic changes or individual corporate
developments. Periods of economic uncertainty and change can be expected to
result in volatility of prices of these securities. Lower rated securities
also may have less liquid markets than higher rated securities, and their
liquidity as well as their value may be adversely affected by poor economic
conditions. Adverse publicity and investor perceptions as well as new or
proposed laws may also have a negative impact on the market for
high-yield/high-risk bonds.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard &
Poor's are a generally accepted measurement of credit risk. However, they
are subject to certain limitations. Ratings are generally based upon
historical events and do not necessarily reflect the future. In addition,
there is a period of time between the issuance of a rating and the update of
the rating, during which time a published rating may be inaccurate.
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is
B-21
<PAGE>
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A-Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment sometime
in the future.
Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba-Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during good and bad times over the future.
Uncertainty of position characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca-Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower end of its
generic category.
B-22
<PAGE>
KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small degree.
A-Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions, or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.
BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are out-weighed by the large uncertainties or major
risk exposures to adverse conditions.
C1-The rating C1 is reserved for income bonds on which no interest
is being paid.
D-Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
B-23
<PAGE>
Report of Independent Accountants
To the Investors and Trustees of
Berger/BIAM International Portfolio
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of Berger/BIAM
International Portfolio (the sole portfolio comprising Berger/BIAM Worldwide
Portfolios Trust, hereafter referred to as the "Portfolio") at October 4, 1996,
in conformity with generally accepted accounting principles. This financial
statement is the responsibility of the Portfolio's management; our
responsibility is to express an opinion on this financial statement in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Denver, Colorado
October 7, 1996
F-1
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 4, 1996
Assets
Cash $ 100,000
---------
Total Assets 100,000
---------
Liabilities
Total Liabilities 0
---------
Net Assets $ 100,000
---------
---------
NOTES TO FINANCIAL STATEMENT
NOTE 1 - ORGANIZATION
The Berger/BIAM International Portfolio (the "Portfolio") is a series of the
Berger/BIAM Worldwide Portfolios Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware on May 31, 1996, and has been
inactive since that date except for matters relating to its organization and
registration as an investment company under the Investment Company Act of 1940,
as amended, and the sales of beneficial interests in the Portfolio in the
respective amounts of $70,000 and $30,000 to the Berger/BIAM International CORE
Fund and the Berger/BIAM International Institutional Fund, respectively, each a
series of the Berger/BIAM Worldwide Funds Trust.
All costs in organizing the Trust were paid by Berger Associates, Inc.
("Berger"), which currently owns 100% of BBOI Worldwide LLC ("BBOI"), the
investment advisor to the Portfolio.
NOTE 2 - INVESTMENT VALUATION
The Portfolio's securities and other assets are valued at the close of the
regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m. New York time) each day the Exchange is open. The value of
an investor's beneficial interest in the Portfolio is equal to the product of
(i) the aggregate net asset value of the Portfolio, effective for that day,
multiplied by (ii) the percentage representing that investor's share of the
aggregate beneficial interest in the Portfolio, effective for that day.
F-2
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENT (CONTINUED)
OCTOBER 4, 1996
NOTE 3 - AGREEMENTS
The Portfolio has entered into an Investment Advisory Agreement with BBOI, under
which BBOI is responsible for providing investment advisory and related
administrative services to the Portfolio. Pursuant to the Investment Advisory
Agreement, BBOI has delegated day-to-day management of the Portfolio to Bank of
Ireland Asset Management (U.S.) Limited ("BIAM"), and has delegated certain
administrative duties to Berger.
The Portfolio pays no fees directly to Berger or BIAM.
NOTE 4 - OTHER
Certain officers and trustees of the Trust are also officers and directors of
Berger.
F-3
<PAGE>
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
In Part A of the Registration Statement:
None.
In Part B of the Registration Statement:
For Berger/BIAM International Portfolio:
Report of the Independent Accountants, dated October 7, 1996
Statement of Assets and Liabilities of Berger/BIAM International
Portfolio, as of October 4, 1996
Notes to Financial Statement, dated October 4, 1996
In Part C of the Registration Statement:
None.
(b) Exhibits
The Exhibit Index following the signature pages below is
incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
For a short period of time prior to the Portfolio commencing
operations, all of the outstanding interests in the Portfolio are expected to
be owned by two mutual fund investors, all of whose outstanding shares are
expected to be owned by Berger Associates, which will provide the seed
capital necessary to establish the investors' trust. Consequently, Berger
Associates will be a control person of the Registrant. Berger Associates
will continue to be a control person of the Registrant so long as it holds,
directly or indirectly, more than 25% of the Registrant's outstanding
interests, as the term "control" is defined in the Investment Company Act of
1940. So long as the Registrant is controlled by Berger Associates, it will
also be under the control of the corporate parent of Berger Associates,
Kansas City Southern Industries, Inc. ("KCSI"). See "Management of the
Registrant" in Part A for more information on KCSI and its affiliates.
C-1
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders of beneficial interests in the
Registrant as of the date of this amendment to the Registration Statement,
was as follows:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SERIES OR PORTFOLIO NUMBER OF HOLDERS
OF INTERESTS
- -----------------------------------------------------------------------------
Berger/BIAM International Portfolio 2
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ITEM 27. INDEMNIFICATION
Article IX, Section 2 of the Trust Instrument for Worldwide
Portfolios provides for indemnification of certain persons acting on behalf
of Worldwide Portfolios to the fullest extent permitted by the law. In
general, trustees, officers, employees and agents will be indemnified against
liability and against all expenses incurred by them in connection with any
claim, action, suit or proceeding (or settlement thereof) in which they
become involved by virtue of their trust office, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that
they have not acted in good faith in the reasonable belief that their actions
were in or not opposed to the best interests of Worldwide Portfolios.
Worldwide Portfolios also may advance money for these expenses, provided that
the trustees, officers, employees or agents undertake to repay Worldwide
Portfolios if their conduct is later determined to preclude indemnification.
Worldwide Portfolios has the power to purchase insurance on behalf of its
trustees, officers, employees and agents, whether or not it would be
permitted or required to indemnify them for any such liability under the
Trust Instrument or applicable law, and Worldwide Portfolios has purchased
and maintains an insurance policy covering such persons against certain
liabilities incurred in their official capacities.
Section 16 of the Investment Advisory Agreement between BBOI
Worldwide and Worldwide Portfolios with respect to the Portfolio also
provides as follows:
"Worldwide Portfolios hereby indemnifies and holds harmless BBOI
Worldwide and its officers, managers, members, employees and agents,
and any controlling person thereof, and any person to whom BBOI
Worldwide has delegated any of its duties and responsibilities
pursuant to Section 13 hereof, including Bank of Ireland Asset
Management (U.S.) Limited, to which BBOI Worldwide has delegated its
duties and responsibilities specified in Section 2 of this Agreement
(the "Sub-Advisor") and Berger Associates, Inc., to which BBOI
Worldwide has delegated its duties and responsibilities specified in
Section 3 of this Agreement (the "Sub-Administrator"), from all
losses, charges, claims and liabilities, and all costs and expenses,
including without limitation reasonable attorneys' fees and
disbursements, arising from any action which BBOI Worldwide or the
Sub-Advisor or the Sub-Administrator takes or omits to take pursuant
to written instructions from the Trustees of Worldwide Portfolios
based on resolutions duly adopted by the Trustees, provided that no
person shall be indemnified hereunder against any
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<PAGE>
liability to Worldwide Portfolios or its shareholders (or any expenses
incident to such liability) arising out of their own willful
misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their duties or
obligations under this Agreement.
"BBOI Worldwide hereby indemnifies and holds harmless Worldwide
Portfolios and its Trustees, officers, shareholders, employees and
agents, and any controlling person thereof, from all losses, charges,
claims and liabilities, and all costs and expenses, including without
limitation reasonable attorneys' fees and disbursements, arising out
of BBOI Worldwide's or the Sub-Advisor's or the Sub-Administrator's
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its duties or
obligations under this Agreement, provided that no person shall be
indemnified hereunder against any liability to Worldwide Portfolios or
its shareholders (or any expenses incident to such liability) arising
out of their own willful misfeasance, bad faith or gross negligence in
the performance of their duties or by reason of their reckless
disregard of their duties or obligations under this Agreement."
Section 11 of the Sub-Advisory Agreement between BBOI Worldwide and
BIAM with respect to the Portfolio also provides as follows:
"BBOI Worldwide hereby indemnifies and holds harmless BIAM and its
officers, directors, shareholders, employees and agents, and any
controlling person thereof, from all losses, charges, claims and
liabilities, and all costs and expenses, including without limitation
reasonable attorneys' fees and disbursements, arising out of any
action which BIAM takes or omits to take pursuant to written
instructions from BBOI Worldwide, the Sub-Administrator, or from
officers or Trustees of Worldwide Portfolios, provided that no person
shall be indemnified hereunder against any liability to Worldwide
Portfolios or its shareholders (or any expenses incident to such
liability) arising out of such person's own willful misfeasance, bad
faith or gross negligence in the performance of their duties or by
reason of their reckless disregard of their duties or obligations
under this Agreement." and
"BIAM hereby indemnifies and holds harmless BBOI Worldwide and
Worldwide Portfolios, and each of their Trustees, officers, managers,
shareholders, members, employees and agents, and any controlling
person thereof, from all losses, charges, claims and liabilities, and
all costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, arising out of BIAM's willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its duties or
obligations under this Agreement, provided that no person shall be
indemnified hereunder against any liability to Worldwide Portfolios or
its shareholders (or any expenses incident to such liability) arising
out of such person's own willful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of their
reckless disregard of their duties or obligations under this
Agreement."
C-3
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF ADVISER
The business of BBOI Worldwide, the Advisor of the Portfolio, and
Berger Associates, the sole owner of BBOI Worldwide, are described in Item 6 of
Part A above.
The business of BIAM, the Sub-Advisor to the Berger/BIAM International
Portfolio, is also described in Item 6 of Part A. Information relating to the
business and other connections of the officers and directors of BIAM (current
and for the past two years) is listed in Schedules A and D of BIAM's Form ADV as
filed with the Securities and Exchange Commission (File No. 801-29606, dated
June 28, 1996), which information from such schedules is incorporated herein by
reference.
ITEM 29. PRINCIPAL UNDERWRITERS
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained as follows:
(a) Investor records and accounting records relating to
cash and other money balances; asset, liability,
reserve, capital, income and expense accounts;
portfolio securities; purchases and sales; and
brokerage commissions are maintained by the
Registrant's Recordkeeping, Pricing and Transfer
Agent, Investors Fiduciary Trust Company ("IFTC"),
127 West 10th Street, Kansas City, Missouri 64105.
Other records of the Registrant relating to purchases
and sales; the Trust Instrument, minute books and
other trust records; brokerage orders; performance
information and other records are maintained at the
offices of the Registrant at 210 University Boulevard,
Suite 900, Denver, Colorado 80206.
(b) Certain records relating to day-to-day portfolio
management of the Berger/BIAM International Portfolio
are kept at Bank of Ireland Asset Management (U.S.)
Limited, 26 Fitzwilliam Street, Dublin 2, Ireland; or
at Bank of Ireland Asset Management (U.S.) Limited, 2
Greenwich Plaza, Greenwich, Connecticut 06830.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) The Registrant undertakes to furnish each person to whom
a Part A is delivered with a copy of Registrant's latest annual report,
upon request and without charge.
C-4
<PAGE>
(b) Registrant undertakes to comply with the following
policy with respect to calling meetings of investor for the purpose of voting
upon the removal of any trustee of the Registrant and facilitating investor
communications related to such meetings:
1. The trustees will promptly call a meeting of investors for
the purpose of voting upon the removal of any trustee of the Registrant when
requested in writing to do so by the record holders of at least 10% of the
outstanding interests of the Registrant.
2. Whenever ten or more investors of record who have been
investors of the Registrant for at least six months, and who hold in the
aggregate either interests having a net asset value of at least $25,000 or at
least 1% of the outstanding interests of the Registrant, whichever is less,
apply to the trustees in writing stating that they wish to communicate with
other investors with a view to obtaining signatures to request such a meeting,
and deliver to the trustees a form of communication and request which they wish
to transmit, the trustees within 5 business days after receipt of such
application either will (i) give such applicants access to a list of the names
and addresses of all investors of record of the Registrant, or (ii) inform such
applicants of the approximate number of investors of record and the approximate
cost of mailing the proposed communication and form of request.
3. If the trustees elect to follow the course specified in clause
(ii), above, the trustees, upon the written request of such applicants
accompanied by tender of the material to be mailed and the reasonable expenses
of the mailing, will, with reasonable promptness, mail such material to all
investors of record, unless within 5 business days after such tender the
trustees shall mail to such applicants and file with the Securities and Exchange
Commission (the "Commission"), together with a copy of the material requested to
be mailed, a written statement signed by at least a majority of the trustees to
the effect that in their opinion either such material contains untrue statements
of fact or omits to state facts necessary to make the statements contained
therein not misleading, or would be in violation of applicable law, and
specifying the basis of such opinion.
4. If the Commission enters an order either refusing to sustain
any of the trustees' objections or declaring that any objections previously
sustained by the Commission have been resolved by the applicants, the
trustees will cause the Registrant to mail copies of such material to all
investors of record with reasonable promptness after the entry of such order and
the renewal of such tender.
(c) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the provisions set forth
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liability (other than the payment by the
Registrant of expense incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act
of 1940, the Registrant, Berger/BIAM Worldwide Portfolios Trust, has duly caused
this amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of Denver, and
State of Colorado, on the 8th day of October, 1996.
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
(Registrant)
By /s/ Gerard M. Lavin
-----------------------------------
Name: Gerard M. Lavin
Title: President
Pursuant to the requirements of the Investment Company Act of 1940,
this amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated for Berger/BIAM Worldwide
Portfolios Trust and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Gerard M. Lavin President (Principal October 8, 1996
- ----------------------------------- Executive Officer)
Gerard M. Lavin and Trustee
/s/ Kevin R. Fay Vice President, October 8, 1996
- ----------------------------------- Secretary and Treasurer
Kevin R. Fay (Principal Financial
and Accounting Officer)
/s/ Dennis E. Baldwin* Trustee October 8, 1996
- -----------------------------------
Dennis E. Baldwin
/s/ William M.B. Berger* Trustee October 8, 1996
- -----------------------------------
William M.B. Berger
/s/ Louis R. Bindner* Trustee October 8, 1996
- -----------------------------------
Louis R. Bindner
C-6
<PAGE>
/s/ Katherine A. Cattanach* Trustee October 8, 1996
- -----------------------------------
Katherine A. Cattanach
/s/ Lucy Black Creighton* Trustee October 8, 1996
- -----------------------------------
Lucy Black Creighton
/s/ Paul R. Knapp* Trustee October 8, 1996
- -----------------------------------
Paul R. Knapp
/s/ Harry T. Lewis, Jr.* Trustee October 8, 1996
- -----------------------------------
Harry T. Lewis, Jr.
/s/ Michael Owen* Trustee October 8, 1996
- -----------------------------------
Michael Owen
/s/ William Sinclaire* Trustee October 8, 1996
- -----------------------------------
William Sinclaire
/s/ Gerard M. Lavin
- -----------------------------------
*By: Gerard M. Lavin
Attorney-in-Fact
C-7
<PAGE>
EXHIBIT INDEX
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ----------------- ---------- --------------------------------
* Exhibit 1 EX-99.B1 Trust Instrument
* Exhibit 2 EX-99.B2 Bylaws
Exhibit 3 Not applicable
Exhibit 4 Not applicable
* Exhibit 5.1 EX-99.B5.1 Form of Investment Advisory
Agreement between Berger/BIAM
Worldwide Portfolios Trust and
BBOI Worldwide LLC with respect to
the Berger/BIAM International
Portfolio
* Exhibit 5.2 EX-99.B5.2 Form of Sub-Advisory Agreement
between BBOI Worldwide LLC and
Bank of Ireland Asset Management
(U.S.) Limited with respect to the
Berger/BIAM International
Portfolio
Exhibit 6 Not applicable
Exhibit 7 Not Applicable
* Exhibit 8 EX-99.B8 Form of Custody Agreement between
IFTC and Berger/BIAM Worldwide
Portfolios Trust
* Exhibit 9.1 EX-99.B9.1 Form of Recordkeeping, Pricing
Agent and Transfer Agency
Agreement
Exhibit 10 Not Applicable
Exhibit 11 Not Applicable
Exhibit 12 Not applicable
* Exhibit 13 EX-99.B13 Investment Letter from Initial
Investors
Exhibit 14 Not applicable
Exhibit 15 Not applicable
Exhibit 16 Not applicable
** Exhibit 17 Financial Data Schedule for
Berger/BIAM International
Portfolio
Exhibit 18 Not Applicable
_________________
* Filed herewith.
** Not required to be filed until financial statements for Portfolio
are required.
C-8
<PAGE>
EXHIBIT 1
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
(A Delaware Business Trust)
TRUST INSTRUMENT
Dated May 31, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. Management of the Trust. . . . . . . . . . . . . . . . 2
Section 2. Initial Trustees and Number of Trustees. . . . . . . . 3
Section 3. Term of Office of Trustees . . . . . . . . . . . . . . 3
Section 4. Vacancies; Appointment of Trustees . . . . . . . . . . 3
Section 5. Temporary Vacancy or Absence . . . . . . . . . . . . . 3
Section 6. Chairman . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7. Action by the Trustees . . . . . . . . . . . . . . . . 4
Section 8. Ownership of Trust Property. . . . . . . . . . . . . . 4
Section 9. Effect of Trustees Not Serving . . . . . . . . . . . . 5
Section 10. Trustees, Etc. as Holders. . . . . . . . . . . . . . . 5
ARTICLE III POWERS OF THE TRUSTEES . . . . . . . . . . . . . . . . . . 5
Section 1. Powers . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2. Certain Transactions . . . . . . . . . . . . . . . . . 8
ARTICLE IV SERIES; INTERESTS. . . . . . . . . . . . . . . . . . . . . 9
Section 1. Establishment of Series. . . . . . . . . . . . . . . . 9
Section 2. Interests. . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. Investment in the Trust. . . . . . . . . . . . . . . . 9
Section 4. Assets and Liabilities of Series . . . . . . . . . . . 10
Section 5. Ownership of Interests . . . . . . . . . . . . . . . . 11
Section 6. Status of Interests: Limitation of Holder
Liability. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V PURCHASES, DECREASES AND WITHDRAWALS . . . . . . . . . . . 12
Section 1. Purchases. . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. Decreases and Withdrawals. . . . . . . . . . . . . . . 12
ARTICLE VI DETERMINATION OF BOOK CAPITAL ACCOUNT
BALANCES, NET INCOME AND DISTRIBUTIONS . . . . . . . . . . 12
Section 1. Book Capital Account Balances. . . . . . . . . . . . . 12
Section 2. Distributions and Allocations to Holders . . . . . . . 13
Section 3. Allocation of Certain Tax Items. . . . . . . . . . . . 13
Section 4. Power to Modify Foregoing Procedures . . . . . . . . . 13
Section 5. No Deficit Makeup Requirement. . . . . . . . . . . . . 14
ARTICLE VII HOLDERS' VOTING POWERS AND MEETINGS. . . . . . . . . . . . 14
Section 1. Voting Powers. . . . . . . . . . . . . . . . . . . . . 14
Section 2. Meetings of Holders. . . . . . . . . . . . . . . . . . 15
Section 3. Quorum; Required Vote. . . . . . . . . . . . . . . . . 15
i
<PAGE>
Page
----
ARTICLE VIII CONTRACTS WITH SERVICE PROVIDERS . . . . . . . . . . . . . 15
Section 1. Investment Adviser . . . . . . . . . . . . . . . . . . 15
Section 2. Placement Agent. . . . . . . . . . . . . . . . . . . . 16
Section 3. Transfer Agency, Holder Services and
Administration Agreements. . . . . . . . . . . . . . . 16
Section 4. Custodian. . . . . . . . . . . . . . . . . . . . . . . 16
Section 5. Parties to Contracts with Service
Providers. . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IX EXPENSES OF THE TRUST AND SERIES . . . . . . . . . . . . . 17
ARTICLE X LIMITATION OF LIABILITY AND INDEMNIFICATION. . . . . . . . 17
Section 1. Limitation of Liability. . . . . . . . . . . . . . . . 17
Section 2. Indemnification. . . . . . . . . . . . . . . . . . . . 18
Section 3. Indemnification of Holders . . . . . . . . . . . . . . 20
ARTICLE XI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 20
Section 1. Trust Not a Partnership. . . . . . . . . . . . . . . . 20
Section 2. Trustee Action; Expert Advice; No Bond or
Surety . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3. Record Dates . . . . . . . . . . . . . . . . . . . . . 20
Section 4. Termination of the Trust . . . . . . . . . . . . . . . 21
Section 5. Reorganization; Merger; Consolidation. . . . . . . . . 22
Section 6. Trust Instrument . . . . . . . . . . . . . . . . . . . 22
Section 7. Applicable Law . . . . . . . . . . . . . . . . . . . . 23
Section 8. Amendments . . . . . . . . . . . . . . . . . . . . . . 23
Section 9. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . 24
Section 10. Severability. . . . . . . . . . . . . . . . . . . . . 24
Section 11. Use of the Names "Berger" and "BIAM". . . . . . . . . 24
Section 12. Tax Matters Partner . . . . . . . . . . . . . . . . . 25
Section 13. Withholding . . . . . . . . . . . . . . . . . . . . . 25
Section 14. Future Treasury Regulations . . . . . . . . . . . . . 25
ii
<PAGE>
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
TRUST INSTRUMENT
This TRUST INSTRUMENT is made on May 31, 1996, by the Trustees, to
establish a business trust under the law of Delaware for the investment and
reinvestment of funds contributed to the Trust by investors. The Trustees
declare that all money and property contributed to the Trust shall be held and
managed in trust pursuant to this Trust Instrument. The name of the Trust
created by this Trust Instrument is Berger/BIAM Worldwide Portfolios Trust.
ARTICLE I
DEFINITIONS
Unless otherwise provided or required by the context:
(a) "Book Capital Account" means, for any Holder at any time, the book
capital account of the Holder at such time, determined in accordance with
generally accepted accounting principles and pursuant to Article VI of this
Trust Instrument, and based upon the net asset value of the Trust Property
determined in accordance with applicable provisions of the 1940 Act and the
Code.
(b) "Bylaws" means the Bylaws of the Trust adopted by the Trustees, which
Bylaws are incorporated by reference herein in their entirety, as amended from
time to time;
(c) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder, as adopted or amended from
time to time;
(d) "Commission," "Interested Person," and "Principal Underwriter" have
the meanings provided in the 1940 Act;
(e) "Covered Person" means a person so defined in Article X, Section 2;
(f) "Delaware Act" means the Delaware Business Trust Act, 12 Del.C.
Section 3801 ET SEQ., as amended from time to time;
(g) "Holder" means a record owner of Outstanding Interests;
(h) "Interest" means the interest of a Holder in the Trust or a Series,
including all rights, powers and privileges accorded to Holders in this Trust
Instrument, which interest may be expressed as a percentage, determined by
calculating, at any time of determination, the ratio of each Holder's Book
Capital Account balances of the Trust or a Series to the total of all Holders'
Book
<PAGE>
Capital Account balances of the Trust or a Series, as applicable. Reference
herein to a specified percentage in, or a fraction of, Interests of the Holders
shall mean Holders whose combined Book Capital Accounts represent such specified
percentage or fraction of the total of the Book Capital Accounts of all Holders
of the Trust or of a Series, as relevant.
(i) "Majority Holder Vote" means "the vote of a majority of the
outstanding voting securities" as defined in the 1940 Act;
(j) "Outstanding Interests" means Interests shown in the books of the
Trust or its transfer agent as then outstanding;
(k) "Series" means a series of Interests established pursuant to
Article IV;
(l) "Trust" means Berger/BIAM Worldwide Portfolios Trust established
hereby, and reference to the Trust, when applicable to one or more Series,
refers to that Series;
(m) "Trustees" means the persons who have signed this Trust Instrument, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who may from time to time be duly qualified and serving as
Trustees in accordance with Article II, in all cases in their capacities as
Trustees hereunder;
(n) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or the
Trustees on behalf of the Trust. The Trustees may authorize the division of
Trust Property into one or more Series, in accordance with the provisions of
Article IV hereof, in which case all references in this Trust Instrument to
Trust Property, Interests therein, or Holders thereof shall be deemed to refer
to each such Series, as the case may be, except as the context otherwise
requires;
(o) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
THE TRUSTEES
SECTION 1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by or under the direction of the Trustees, and they shall have
all powers necessary or desirable to carry out that responsibility. The
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive.
-2-
<PAGE>
SECTION 2. INITIAL TRUSTEES AND NUMBER OF TRUSTEES. The initial Trustees
shall be the persons signing this Trust Instrument. The exact number of
Trustees (other than the initial Trustees) shall be fixed from time to time by a
majority of the Trustees, provided, that there shall be at least two (2)
Trustees. Other than the initial Trustees and Trustees appointed to fill
vacancies pursuant to Section 4 of this Article, the Holders shall elect the
Trustees by a plurality vote on such dates as the Trustees may fix from time to
time.
SECTION 3. TERM OF OFFICE OF TRUSTEES. Each Trustee shall hold office for
life or until his successor is elected and qualified or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees or to
any Trust officer a written resignation effective upon such delivery or a later
date specified therein; (b) any Trustee who requests to be retired, or who has
become physically or mentally incapacitated or is otherwise unable to serve, may
be retired by a written instrument signed by a majority of the other Trustees,
specifying the effective date of retirement; (c) any Trustee shall be retired or
removed with or without cause at any time upon the unanimous written request of
the remaining Trustees; and (d) any Trustee may be removed at any meeting of the
Holders by a vote of at least two-thirds of the Outstanding Interests.
SECTION 4. VACANCIES; APPOINTMENT OF TRUSTEES. Whenever a vacancy shall
exist, regardless of the reason for such vacancy, the remaining Trustees shall
appoint any person as they determine in their sole discretion to fill that
vacancy, consistent with the limitations under the 1940 Act. Such appointment
shall be made by a written instrument signed by a majority of the Trustees or by
a resolution of the Trustees, duly adopted and recorded in the records of the
Trust, specifying the effective date of the appointment. The Trustees may
appoint a new Trustee as provided above in anticipation of a vacancy expected to
occur because of the retirement, resignation or removal of a Trustee, or an
increase in number of Trustees, provided that such appointment shall become
effective only at or after the expected vacancy occurs. As soon as any such
Trustee has accepted his or her appointment in writing, the Trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he or she shall be deemed a Trustee hereunder.
SECTION 5. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in the
Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not to exceed six (6)
months, unless otherwise
-3-
<PAGE>
extended for one or more additional consecutive six (6) month periods, to any
other Trustee or Trustees.
SECTION 6. CHAIRMAN. The Trustees may appoint one of their number to be a
non-officer Chairman of the Trustees. In such event, the Chairman shall preside
at all meetings of the Trustees and Holders.
SECTION 7. ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote at a meeting duly called (including at a telephonic meeting at which all
participants can hear one another, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at which
a quorum is present or by written consent of a majority of Trustees (or such
greater number as may be required by applicable law) without a meeting. One-
third of the Trustees shall constitute a quorum at any meeting. Meetings of the
Trustees may be called orally or in writing by the Chairman of the Trustees or
by any two other Trustees. Notice of the time, date and place of all Trustees
meetings shall be given to each Trustee by telephone, facsimile or other
electronic mechanism sent to his home or business address at least twenty-four
hours in advance of the meeting or by written notice mailed to his home or
business address at least seventy-two hours in advance of the meeting. Notice
need not be given to any Trustee who attends the meeting without objecting to
the lack of notice or who signs a waiver of notice either before, at or after
the meeting. Subject to the requirements of the 1940 Act, the Trustees by
majority vote may delegate to any Trustee or Trustees authority to approve
particular matters or take particular actions on behalf of the Trust. Any
written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.
SECTION 8. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the Trust
and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. All of the Trust Property and legal title thereto
shall at all times be considered as vested in the Trust, provided that the
Trustees may cause legal title to any Trust Property to be held by or in the
name of the Trustees acting on behalf of the Trust, or in the name of any person
as nominee. No Holder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Series or any right of partition or
possession thereof, but each Holder shall have, as provided in Article IV, a
proportionate undivided beneficial interest in the Trust or Series represented
by Interests. The Trust or the Trustees on behalf of the Trust shall be deemed
to hold legal and beneficial ownership of any income earned on securities held
by the Trust issued by any business entity formed, organized or existing under
the laws of any jurisdiction other than a state, commonwealth, possession or
colony of the United States or the laws of the United States.
-4-
<PAGE>
SECTION 9. EFFECT OF TRUSTEES NOT SERVING. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Trust Instrument.
SECTION 10. TRUSTEES, ETC. AS HOLDERS. Subject to any restrictions in the
Bylaws, any Trustee, officer, agent or independent contractor of the Trust may
acquire, own and dispose of Interests to the same extent as any other Holder,
and the Trustees may issue and sell Interests to and buy Interests from any such
person or any firm or company in which such person is interested, subject only
to any general limitations herein.
ARTICLE III
POWERS OF THE TRUSTEES
SECTION 1. POWERS. The Trustees in all instances shall act as principals,
free of the control of the Holders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the Bylaws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested, without in any event being bound or limited by any
current or future law or custom concerning investments by trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or
all of the Trust Property; to invest in obligations, securities and assets of
any kind, and without regard to whether they may mature before or after the
possible termination of the Trust; and without limitation to invest all or any
part of its cash and other assets and property in securities issued by any
investment company or series thereof;
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and proper to conduct such a business;
(c) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent such right is not reserved to the Holders;
-5-
<PAGE>
(d) To elect and remove such officers and appoint and terminate such
agents, independent contractors and delegatees as they deem appropriate;
(e) To employ an investment adviser (subject to such general or
specific instruments as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of Trust Property on behalf of the Trustees
or may authorize any officer, employee or Trustee to effect such purchases,
sales, loans or exchanges pursuant to recommendations of any such investment
adviser;
(f) To employ as custodian of any Trust Property, subject to any
provisions herein or in the Bylaws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such;
(g) To retain one or more transfer agents, dividend disbursing
agents, placement agents, administrators, or Holder servicing agents, or both;
(h) To provide for the distribution of Interests, either through a
Principal Underwriter or distributor as provided herein, or by the Trust itself,
or both, or pursuant to a distribution plan of any kind;
(i) To set record dates in the manner provided for herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, subagent, independent contractor,
delegatee, manager, investment adviser, custodian or underwriter;
(k) To sell or exchange any or all of the Trust Property, subject to
Article XI, Section 5;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to securities or other property; and to execute and deliver powers of
attorney delegating such power to other persons;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or other Trust Property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies;
-6-
<PAGE>
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Interests representing beneficial interests in such Series, all in
accordance with the provisions of Article IV;
(p) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular Series
or to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article IV,
Section 4;
(q) To consent to or participate in any plan for the liquidation,
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held by the Trust;
(r) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(s) To make distributions of income and of capital gains to Holders
in the manner provided for in this Trust Instrument or in the Bylaws;
(t) To borrow money and in connection therewith to issue notes or
other evidences of indebtedness and to pledge or grant security interests in
Trust Property as security therefor;
(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper;
(v) To sell, add, reduce and otherwise deal in Interests; to
establish terms and conditions regarding the sale, reduction, addition or
dealing in of Interests; and, subject to Articles V and VI, to apply to any such
reduction any funds or property of the Trust or of the particular Series with
respect to which such Interests are sold;
(w) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(x) To endorse or guarantee the payment of any notes or other
obligations of any person or to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(y) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and
-7-
<PAGE>
other retirement, incentive and benefit plans, trusts and provisions, including
the purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust;
(z) To join with other security holders in acting through a
committee, depository, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depository or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depository or trustee as the
Trustees shall deem proper;
(aa) To sell all or a portion of its Interests to another investment
company that is registered under the 1940 Act, in the Trustees' sole discretion,
without the vote or approval of any Holder or Holders, notwithstanding any other
provision of this Trust Instrument or the Bylaws to the contrary; and
(bb) To carry on any other business in connection with or incidental
to any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Trust Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
SECTION 2. CERTAIN TRANSACTIONS. Except as prohibited by applicable law,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such
person is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
-8-
<PAGE>
ARTICLE IV
SERIES; INTERESTS
SECTION 1. ESTABLISHMENT OF SERIES. The Trust shall consist of one or
more Series. The Trustees hereby establish the Series listed in Schedule A
attached hereto and made a part hereof. Each additional Series shall be
established by the adoption of a resolution of the Trustees. The Trustees by
resolution may designate the relative rights and preferences of the Interests of
each Series. The Trust shall maintain separate and distinct records for each
Series and hold and account for the assets thereof separately from the other
assets of the Trust or of any other Series. A Series may sell any number of
Interests and need not sell Interests. Each holder of Interests of a Series
shall be entitled to receive his pro rata share of all distributions made with
respect to such Series. Upon redemption of his Interests, such Holder shall be
paid solely out of the funds and property of such Series. The Trustees may
change the name of any Series. At any time that there are no Interests
outstanding of any particular Series previously established and designated, the
Trustees may by a majority vote abolish that Series and rescind the
establishment and designation thereof. The Trustees by resolution, adopted in
their sole discretion, may divide the Shares of any Series into classes and
designate the relative rights and preferences thereof, in which case each class
of a Series shall represent interests in the assets of that Series.
SECTION 2. INTERESTS. The beneficial interest in the Trust shall be
divided into Interests of one or more separate and distinct Series established
by the Trustees. The number of Interests of each Series is unlimited.
Interests shall not be transferable, unless the prospective transferor obtains
the prior unanimous consent of the Holders to the transfer. All Interests sold
hereunder shall be fully paid and nonassessable. Holders shall have no
preemptive or other right to subscribe to any additional Interests or other
interests sold by the Trust or any Series. The Trustees shall have full power
and authority, in their sole discretion and without obtaining Holder approval:
to sell original or additional Interests at such times and for the amount and
type of consideration and on such terms and conditions as they deem appropriate;
to sell fractional Interests; to establish and to change in any manner Interests
of any Series with such preferences, terms of conversion, voting powers, rights
and privileges as the Trustees may determine (but without a vote of a majority
of the Outstanding Interests of the Series, voting as a Series, the Trustees may
not change Outstanding Interests in a manner materially adverse to the Holders
of such Interests); to classify or reclassify any Interests of any Series into
one or more Series of Interests; to abolish any one or more Series of Interests;
to sell Interests to acquire other assets (including assets subject to, and in
connection with, the assumption of liabilities) and businesses; and to take such
other action with respect to the Interests as the Trustees may deem desirable.
-9-
<PAGE>
SECTION 3. INVESTMENT IN THE TRUST. The Trustees shall accept investments
in any Series from such persons and on such terms as they may from time to time
authorize; provided, however, that S corporations (as defined in Code Section
1361 ET SEQ.), partnerships and grantor trusts (as those terms are defined for
Federal income tax purposes) may not purchase Interests. At the Trustees'
discretion, such investments, subject to applicable law, may be in the form of
cash or securities in which that Series is authorized to invest. Investments in
a Series shall be credited to each Holder's Book Capital Account after the
investment is received and accepted. The Trustees shall have the right to
refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
SECTION 4. ASSETS AND LIABILITIES OF SERIES. All consideration received
by the Trust for the sale of Interests of a particular Series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof (including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the other assets of the Trust and
every other Series and are referred to as "assets belonging to" that Series.
The assets belonging to a particular Series shall belong only to that Series for
all purposes, and to no other Series, subject only to the rights of creditors of
that particular Series. Any assets, income, earnings, profits and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Series shall be allocated by the Trustees between and among one
or more Series as the Trustees deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Holders of all Series for all purposes,
and such assets, earnings, income, profits or funds, or payments and proceeds
thereof shall be referred to as assets belonging to that Series. The assets
belonging to a Series shall be so recorded upon the books of the Trust, and
shall be held by the Trustees in trust for the benefit of the Holders of that
Series. The assets belonging to a Series shall be charged with the liabilities
of that Series and all expenses, costs, charges and reserves attributable to
that Series. Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees between or among any one
or more of the Series or, if appropriate, between or among any one or more of
the Series and any other investment company advised by the same investment
adviser, in each case in such manner as the Trustees deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Holders of all
Series for all purposes.
Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise
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existing with respect to a particular Series shall be enforceable against the
assets of such Series only, and not against the assets of the Trust generally or
of any other Series. Notice of this contractual limitation on liabilities among
Series may, in the Trustees' discretion, be set forth in the certificate of
trust of the Trust (whether originally or by amendment) as filed or to be filed
in the Office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act, and upon the giving of such notice in the certificate of trust,
the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under
Section 3804 of setting forth such notice in the certificate of trust) shall
become applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, liability, obligation or
expense incurred, contracted for or otherwise existing with respect to that
Series. No Holder or former Holder of any Series shall have a claim on or any
right to any assets allocated or belonging to any other Series. No Holder or
former Holder of any particular Series shall have any claim or right to
institute suit against or in the right of the Trust or any Series with respect
to any matter that does not directly affect that particular Series.
SECTION 5. OWNERSHIP OF INTERESTS. The Trust shall maintain a register
containing the names and addresses of the Holders of each Series and the Book
Capital Account balances of each Holder. The register shall be conclusive as to
the identity of Holders of record and the Interests held by them from time to
time.
SECTION 6. STATUS OF INTERESTS: LIMITATION OF HOLDER LIABILITY.
Interests shall be deemed to be personal property giving Holders only the rights
provided in this Trust Instrument. Every Holder, by virtue of having acquired an
Interest, shall be held expressly to have assented to and agreed to be bound by
the terms of this Trust Instrument. No Holder shall be personally liable for
the debts, liabilities, obligations and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Series. Neither the Trust
nor the Trustees shall have any power to bind any Holder personally or to demand
payment from any Holder for anything, other than as agreed by the Holder.
Holders shall have the same limitation of personal liability as is extended to
shareholders of a private corporation for profit incorporated in the State of
Delaware. Every written obligation of the Trust or any Series shall contain a
statement to the effect that such obligation may only be enforced against the
assets of the Trust or such Series; however, the omission of such statement
shall not operate to bind or create personal liability for any Holder or
Trustee.
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ARTICLE V
PURCHASES, DECREASES AND WITHDRAWALS
SECTION 1. PURCHASES. The Trustees may permit the purchase of Interests
from the Trust, but only if the purchaser is a qualified Holder and the
beneficial owner of the Interests. The Trustees, in their discretion, may, from
time to time, without a vote of the Holders, permit the purchase of Interests by
such party or parties (or increase in the Interests of a Holder) and for such
type of consideration, including cash or property, at such time or times
(including, without limitation, each business day), and on such terms as the
Trustees may deem best, and may in such manner acquire other assets (including
the acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses.
SECTION 2. DECREASES AND WITHDRAWALS. A Holder shall have the authority
to redeem its Interest in the Trust or a portion thereof, at such Holder's
option, subject to the terms and conditions provided in this Article V. The
Trust shall, upon application of any Holder or pursuant to authorization from
any Holder, and subject to this Section 2, redeem such Holder's Interest;
provided that (a) the amount of such redemption shall not exceed the reduction
in the Holder's Book Capital Account effected by such redemption of its Interest
and (b) if so authorized by the Trustees, the Trust may, at any time and from
time to time, charge fees for effecting such redemption at such rates as the
Trustees may establish, and may, at any time and from time to time, suspend such
right of redemption subject to the applicable requirements of the 1940 Act. The
procedures for effecting redemptions shall be as determined by the Trustees from
time to time.
ARTICLE VI
DETERMINATION OF BOOK CAPITAL ACCOUNT
BALANCES, NET INCOME AND DISTRIBUTIONS
SECTION 1. BOOK CAPITAL ACCOUNT BALANCES. An individual Book Capital
Account shall be maintained for each Holder.
(a) The balance of each Holder's Book Capital Account shall consist
of its original contribution of capital, increased by additional contributions
and by allocations of income or gain and decreased by allocations of loss and
expenses and by distributions, including distributions pursuant to redemptions
of a Holder's Interests in the Trust.
(b) The Book Capital Accounts of the Holders shall be adjusted daily
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(g) to reflect the
revaluation of Trust assets on the Trust's books as if such assets had been sold
for fair market value. For purposes of maintaining the Book Capital Accounts,
gain or loss in such case, and in the case of an actual sale of Trust
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assets, shall be computed by reference to the book value of the assets and not
their tax basis. Such Book Capital Accounts shall be further adjusted as
necessary to meet the requirements of Treasury Regulation Section 1.704-
1(b)(2)(iv) under the Code. The Trustees may adopt resolutions setting forth
the specific method of determining the Book Capital Account balances of each
Holder.
(c) The power and duty to make calculations pursuant to such
resolutions may be delegated by the Trustees to the Trust's investment adviser,
administrator, custodian, or other such person as the Trustees may determine.
SECTION 2. DISTRIBUTIONS AND ALLOCATIONS TO HOLDERS. The Trust shall, in
compliance with the regulations promulgated under applicable provisions of the
Code (i) allocate daily the income or loss of the Trust to each Holder of
Interests in the Trust in proportion to such Holder's Book Capital Account, (ii)
make distributions to each Holder in proportion to such Holder's Book Capital
Account and (iii) upon liquidation, make a final distribution to each Holder in
accordance with such Holders' positive Book Capital Account balance, as
determined after taking into account all Book Capital Account adjustments for
the Trust's taxable year during which the liquidation occurs (other than those
adjustments made pursuant to this Section 2 and Section 5 hereof), by the end of
such taxable year (or, if later, within 90 days after the date of the
liquidation). The Trustees may also retain from the amounts to be distributed
such amount as they may deem necessary to pay the debts or expenses of the Trust
or to meet obligations of the Trust, or as they may deem desirable to use in the
conduct of its affairs or to retain for future requirements or extensions of the
business. The Trustees may from time to time modify the Trust's obligation or
methodology under this Section 2 to the extent necessary or desirable (in the
sole discretion of the Trustees or their delegate) to comply with the Code, any
regulations promulgated thereunder, or other Internal Revenue Service
pronouncements.
SECTION 3. ALLOCATION OF CERTAIN TAX ITEMS. If any property of the Trust
is reflected in the Book Capital Accounts of the Holders and on the books of the
Trust at a book value that differs from the adjusted tax basis of such property,
then the tax items with respect to such property shall, in accordance with the
requirements of Treasury Regulations Section 1.704-1(b)(4)(i) under the Code, be
shared among the Holders in a manner that takes account of the variation between
the adjusted tax basis of the applicable property and its book value in the same
manner as variations between the adjusted tax basis and fair market value of
property contributed to the Trust are taken into account in determining the
Holders' share of tax items under Code Section 704(c).
SECTION 4. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any of
the foregoing provisions of this Article VI, but subject to the requirements of
the Code and the Regulations
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thereunder, the Trustees may prescribe, in their absolute discretion, such other
bases and times for determining the net income and net assets of the Trust, the
allocation of income or the payment of distributions to the Holders of Interests
in the Trust as they may deem necessary or desirable to enable the Trust to
comply with any applicable provisions of the 1940 Act, the Code, any rule or
regulation thereunder, or any order of exemption issued by the Commission, as in
effect now or hereafter amended or modified.
SECTION 5. NO DEFICIT MAKEUP REQUIREMENT. In the event the Trust is
"liquidated" within the meaning of Treasury Regulation Section 1.704-
1(b)(2)(ii)(g)(i), distributions shall be made pursuant to Section 2 hereof to
any Holders who have positive Book Capital Account balances, in compliance with
Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2). Under no circumstances may
a Holder be called upon to assume any losses of the Trust or suffer an
assessment of any kind by virtue of the ownership of an Interest.
ARTICLE VII
HOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. VOTING POWERS. The Holders shall have power to vote only with
respect to (a) the election of Trustees; (b) the removal of Trustees; (c) any
investment advisory contract; (d) any termination of the Trust as provided in
Article XI, Section 4; (e) the amendment of this Trust Instrument to the extent
and as provided in Article XI, Section 8; and (f) such additional matters
relating to the Trust as may be required by law, this Trust Instrument, or the
Bylaws or any registration of the Trust with the Commission or any State, or as
the Trustees may consider desirable.
On any matter submitted to a vote of the Holders, all Interests shall be
voted by individual Series, except (a) when required by the 1940 Act, Interests
shall be voted in the aggregate and not by individual Series, and (b) when the
Trustees have determined that the matter affects the interests of more than one
Series, then the Holders of all such affected Series shall be entitled to vote
thereon. Each Holder shall be entitled to vote based on the ratio its Interest
bears to the Interests of all Holders entitled to vote. There shall be no
cumulative voting in the election of Trustees. Interests may be voted in person
or by proxy or in any manner provided for in the Bylaws. The Bylaws may provide
that proxies may be given by any electronic or telecommunications device or in
any other manner, but if a proposal by anyone other than the officers or
Trustees is submitted to a vote of the Holders of the Trust or of any Series, or
if there is a proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or Trustees, Interests may be voted only in person
or by written proxy. Until Interests of a Series are issued, as to that Series
the Trustees may exercise all rights
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of Holders and may take any action required or permitted to be taken by Holders
by law, this Trust Instrument or the Bylaws.
SECTION 2. MEETINGS OF HOLDERS. Special meetings of the Holders of any
Series may be called by the Trustees and shall be called by the Trustees upon
the written request of Holders owning at least twenty-five percent (25%) of the
Outstanding Interests of such Series entitled to vote. Holders shall be
entitled to at least ten days notice of any meeting, given as determined by the
Trustees.
SECTION 3. QUORUM; REQUIRED VOTE. One-third of the Outstanding Interests
of each Series, or one-third of the Outstanding Interests of the Trust, entitled
to vote in person or by proxy shall be a quorum for the transaction of business
at a Holders meeting with respect to such Series, or with respect to the entire
Trust, respectively. Except when a larger vote is required by law, this Trust
Instrument or the Bylaws, at any meeting at which a quorum is present, a
majority of the total Interests voted in person or by proxy shall decide any
matters to be voted upon with respect to the entire Trust and a plurality of
such Interests shall elect a Trustee; provided, that if this Trust Instrument or
applicable law permits or requires that Interests be voted on any matter by
individual Series, then a majority of the Interests of that Series (or, if
required by law, a Majority Holder Vote of that Series) voted in person or by
proxy on the matter shall decide that matter insofar as that Series is
concerned.
Holders may act as to the Trust or any Series by the written consent of a
majority (or such greater amount as may be required by applicable law) of the
Outstanding Interests of the Trust or of such Series, as the case may be. If
the consents of all Holders entitled to vote have not been solicited in writing
and if the unanimous written consent of all such Holders shall not have been
received, the Secretary shall give prompt notice of the action approved by the
Holders without a meeting.
Notwithstanding any other provision herein or in the Bylaws, any meeting of
Holders, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the total Interests represented at that meeting,
either in person or by proxy. Any adjourned session of a meeting of Holders may
be held within a reasonable time without further notice.
ARTICLE VIII
CONTRACTS WITH SERVICE PROVIDERS
SECTION 1. INVESTMENT ADVISER. Subject to a Majority Holder Vote, the
Trustees may enter into one or more investment advisory contracts on behalf of
the Trust or any Series, providing for investment advisory services, statistical
and research facilities and services, and other facilities and services to be
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furnished to the Trust or Series on terms and conditions acceptable to the
Trustees. Any such contract may provide for the investment adviser to effect
purchases, sales or exchanges of portfolio securities or other Trust Property on
behalf of the Trustees or may authorize any officer or agent of the Trust to
effect such purchases, sales or exchanges pursuant to recommendations of the
investment adviser. The Trustees may authorize the investment adviser to employ
one or more sub-advisers. Any reference in this Trust Instrument to the
investment adviser shall be deemed to include such sub-advisers, unless the
context otherwise requires.
SECTION 2. PLACEMENT AGENT. The Trustees may enter into contracts with
another party on behalf of the Trust or any Series, providing for the placement
and sale of Interests by such other party, either directly or as sales agent, on
terms and conditions acceptable to the Trustees.
SECTION 3. TRANSFER AGENCY, HOLDER SERVICES AND ADMINISTRATION AGREEMENTS.
The Trustees, on behalf of the Trust or any Series, may enter into transfer
agency agreements, Holder service agreements and administration and management
agreements with any party or parties on terms and conditions acceptable to the
Trustees.
SECTION 4. CUSTODIAN. The Trustees shall at all times place and maintain
the securities and similar investments of the Trust and of each Series in
custody meeting the requirements of Section 17(f) of the 1940 Act and the rules
thereunder. The Trustees, on behalf of the Trust or any Series, may enter into
an agreement with a custodian on terms and conditions acceptable to the
Trustees, providing for the custodian, among other things, to (a) hold the
securities owned by the Trust or any Series and deliver the same upon written
order or oral order confirmed in writing, (b) receive and receipt for any moneys
due to the Trust or any Series and deposit the same in its own banking
department or elsewhere, (c) disburse such funds upon orders or vouchers, and
(d) employ one or more sub-custodians.
SECTION 5. PARTIES TO CONTRACTS WITH SERVICE PROVIDERS. The Trustees may
enter into any contract referred to in this Article with any entity, although
one or more of the Trustees or officers of the Trust may be an officer,
director, trustee, partner, shareholder or member of such entity, and no such
contract shall be invalidated or rendered void or voidable because of such
relationship. No person having such a relationship shall be disqualified from
voting on or executing a contract in his capacity as Trustee and/or Holder, or
be liable merely by reason of such relationship for any loss or expense to the
Trust with respect to such a contract or accountable for any profit realized
directly or indirectly therefrom.
Any contract referred to in Sections 1 and 2 of this Article shall be
consistent with and subject to the applicable requirements of Section 15 of the
1940 Act and the rules and orders
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thereunder with respect to its continuance in effect, its termination and the
method of authorization and approval of such contract or renewal. No amendment
to a contract referred to in Section 1 of this Article shall be effective unless
assented to in a manner consistent with the requirements of Section 15 of the
1940 Act, and the rules and orders thereunder.
ARTICLE IX
EXPENSES OF THE TRUST AND SERIES
Subject to Article IV, Section 4, the Trust or a particular Series shall
pay, or shall reimburse the Trustees from the Trust estate or the assets
belonging to the particular Series, for their expenses and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of pricing Trust portfolio securities; expenses of sale,
addition and reduction of Interests; certain insurance premiums; applicable
fees, interest charges and expenses of third parties, including the Trust's
investment advisers, managers, administrators, distributors, custodians,
transfer agents and fund accountants; fees of pricing, interest, dividend,
credit and other reporting services; costs of membership in trade associations;
telecommunications expenses; funds transmission expenses; auditing, legal and
compliance expenses; costs of forming the Trust and its Series and maintaining
its existence; costs of preparing and printing the prospectuses of the Trust and
each Series, statements of additional information and Holder reports and
delivering them to Holders; expenses of meetings of Holders and proxy
solicitations therefor; costs of maintaining books and accounts; costs of
reproduction, stationery and supplies; fees and expenses of the Trustees;
compensation of the Trust's officers and employees and costs of other personnel
performing services for the Trust or any Series; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign securities
laws registration fees and related expenses; and for such non-recurring items as
may arise, including litigation to which the Trust or a Series (or a Trustee or
officer of the Trust acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust. The Trustees shall
have a lien on the assets belonging to the appropriate Series, or in the case of
an expense allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Holders thereto, for the reimbursement
to them of such expenses, disbursements, losses and liabilities. This Article
shall not preclude the Trust from directly paying any of the aforementioned fees
and expenses.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 1. LIMITATION OF LIABILITY. All persons contracting with or
having any claim against the Trust or a
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particular Series shall look only to the assets of the Trust or such Series for
payment under such contract or claim; and neither the Trustees nor any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care
and have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees, officers, employees and managers of the
Trust shall not be responsible or liable for any act or omission or for neglect
or wrongdoing of them or any officer, agent, employee, manager, investment
adviser, delegatee or independent contractor of the Trust, but nothing contained
in this Trust Instrument or in the Delaware Act shall protect any Trustee,
officer, employee or manager of the Trust against liability to the Trust or to
Holders to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
SECTION 2. INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in
subsection (b) below:
(i) every person who is, or has been, a Trustee, officer,
employee, manager or agent of the Trust (including persons who serve at the
Trust's request as directors, trustees, officers or agents of another
organization in which the Trust has any interest as a shareholder, creditor or
otherwise) ("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by such person in connection
with any claim, action, suit or proceeding in which such person becomes involved
as a party or otherwise by virtue of being or having been a Covered Person and
against amounts paid or incurred by such person in the settlement thereof,
whether or not such person is a Covered Person at the time such expenses are
incurred;
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include, without
limitation, attorney's fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) Who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to
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the Trust or its Holders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office, or (B) not to have acted in good faith in the reasonable belief that his
action was in or not opposed to the best interests of the Trust; or
(ii) In the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office: (A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither Interested Persons
of the Trust nor are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); or (C) by written
opinion of independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry).
(c) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by such person to the Trust or
applicable Series if it is ultimately determined that such person is not
entitled to indemnification under this Section; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any such
advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(d) The rights of indemnification herein provided shall be severable,
shall not be exclusive of or affect any other rights to which any Covered Person
may now or hereafter be entitled, and shall inure to the benefit of the heirs,
executors and administrators of a Covered Person.
(e) By action of the Trustees, and notwithstanding any interest of
the Trustees in the action, the Trust shall have power to purchase and maintain
insurance, in such amounts as the Trustees deem appropriate, on behalf of any
Covered Person, whether or not such person is indemnified against such liability
or expense under the provisions of this Article X and whether or not the Trust
would have the power or would be required to indemnify such person against such
liability under the provisions of this Article X or of the Delaware Act or by
any other applicable law, subject only to any limitations imposed by the 1940
Act.
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(f) Any repeal or modification of this Article X by the Holders of
the Trust, or adoption or modification of any other provision of the Trust
Instrument or Bylaws inconsistent with this Article, shall be prospective only,
to the extent that such repeal or modification would, if applied
retrospectively, adversely affect any limitation on the liability of any Covered
Person or indemnification available to any Covered Person with respect to any
act or omission which occurred prior to such repeal, modification or adoption.
SECTION 3. INDEMNIFICATION OF HOLDERS. If any Holder or former Holder of
any Series shall be held personally liable solely by reason of being or having
been a Holder and not because of acts or omissions or for some other reason, the
Holder or former Holder (or such person's heirs, executors, administrators or
other legal representatives or in the case of any entity, its general successor)
shall be entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense arising from
such liability. The Trust, on behalf of the affected Series, shall, upon
request by such Holder, assume the defense of any such claim made against such
Holder for any act or obligation of the Series and satisfy any judgment thereon
from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
SECTION 1. TRUST NOT A PARTNERSHIP. This Trust Instrument creates a trust
and not a partnership, except to the extent such trust is deemed to constitute a
partnership under the Code and applicable state tax laws. No Trustee shall have
any power to bind personally either the Trust's officers or any Holder.
SECTION 2. TRUSTEE ACTION; EXPERT ADVICE; NO BOND OR SURETY. The exercise
by the Trustees of their powers and discretion hereunder in good faith and with
reasonable care under the circumstances then prevailing shall be binding upon
everyone interested. Subject to the provisions of Article X, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to the meaning and
operation of this Trust Instrument, and subject to the provisions of Article X,
shall not be liable for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is obtained.
SECTION 3. RECORD DATES. The Trustees may fix in advance a date up to
sixty (60) days before the date of any Holders meeting, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Interests shall go into effect as a record date for the determination of the
Holders entitled to notice of, and to vote at, any such meeting, or to
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receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Interests. Any Holder who was a
Holder at the date and time so fixed shall be entitled to vote at such meeting
or any adjournment thereof.
SECTION 4. TERMINATION OF THE TRUST.
(a) Except as provided herein, the Trust shall have perpetual
existence. Upon the death, insanity, bankruptcy, retirement, resignation or
expulsion of any Holder, the Trust shall be dissolved effective 90 days after
such event. Within this 90-day period following any such event, the Holders
may, by a unanimous vote of the Interests of the Trust at any meeting of the
Holders or by an instrument in writing without a meeting signed by a majority of
the Trustees and unanimously consented to by the Holders of such Interests,
agree to continue the business of the Trust. In addition, subject to a Majority
Holder Vote of the Trust or of each Series to be affected, the Trustees may:
(i) Sell and convey all or substantially all of the assets
of the Trust or any affected Series to another Series or to another entity which
is an open-end investment company as defined in the 1940 Act, or is a series
thereof, for adequate consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of or interests
in such Series, entity or series thereof; or
(ii) At any time sell and convert into money all or
substantially all of the assets of the Trust or any affected Series.
Upon making reasonable provision for the payment of all known liabilities
of the Trust or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Holders of the Trust or any affected Series.
(b) The Trustees may take any of the actions specified in
subsection (a)(i) and (ii) above without obtaining a Majority Holder Vote of the
Trust or any Series if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the Trust,
such Series, or their respective Holders as a result of factors or events
adversely affecting the ability of the Trust or such Series to conduct its
business and operations in an economically viable manner. Such factors and
events may include the inability of the Trust or a Series to maintain its assets
at an appropriate size, changes in laws or regulations governing the Trust or
the Series or affecting assets of the type in which the Trust or Series invests,
or economic developments or trends having a significant adverse impact on the
business or operations of the Trust or such Series.
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(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
SECTION 5. REORGANIZATION; MERGER; CONSOLIDATION.
(a) Notwithstanding anything else herein, to change the Trust's form
of organization the Trustees may, without Holder approval, (i) cause the Trust
to merge or consolidate with or into one or more entities, if the surviving or
resulting entity is the Trust or another open-end management investment company
under the 1940 Act, or a series thereof, that will succeed to or assume the
Trust's registration under the 1940 Act, (ii) cause the Interests to be
exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware. Any agreement of merger or consolidation or certificate of merger may
be signed by a majority of Trustees and facsimile signatures conveyed by
electronic or telecommunication means shall be valid.
(b) Any merger, consolidation or incorporation of the Trust other
than those described in Section 5(a) hereof may be approved by the affirmative
vote of both a majority of the Trustees voting at a duly constituted meeting of
Trustees at which a quorum is present and the holders of one-half (1/2) of the
Outstanding Interests of the Trust entitled to vote thereon.
(c) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Act, an agreement of merger or consolidation
approved in accordance with this Section 5 may effect any amendment to the
governing instrument of the Trust or effect the adoption of a new trust
instrument of the Trust if it is the surviving or resulting trust in the merger
or consolidation.
SECTION 6. TRUST INSTRUMENT. The original or a copy of this Trust
Instrument and of each amendment hereto or Trust Instrument supplemental shall
be kept at the office of the Trust where it may be inspected by any Holder.
Anyone dealing with the Trust may rely on a certificate by a Trustee or an
officer of the Trust as to the authenticity of the Trust Instrument or any such
amendments or supplements and as to any matters in connection with the Trust.
The masculine gender herein shall include the feminine and neuter genders.
Headings herein are for convenience only and shall not affect the construction
of this Trust Instrument. This Trust Instrument may be executed in any number
of counterparts, each of which shall be deemed an original.
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<PAGE>
SECTION 7. APPLICABLE LAW. This Trust Instrument and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Trust Instrument (a) the provisions of Section 3540 of Title 12 of the Delaware
Code, or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust,
(v) the allocation of receipts and expenditures to income or principal,
(vi) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding of trust assets, or (vii) the establishment
of fiduciary or other standards of responsibility or limitations on the acts or
powers of trustees, which are inconsistent with the limitations on liabilities
or authority and powers of the Trustees set forth or referenced in this Trust
Instrument. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.
SECTION 8. AMENDMENTS. The Trustees may, without any Holder vote, amend
or otherwise supplement this Trust Instrument by making an amendment, a Trust
Instrument supplemental hereto or an amended and restated trust instrument;
provided, that Holders shall have the right to vote on any amendment (a) which
would affect the voting rights of Holders granted in Article VII, Section 1,
(b) to this Section 8, (c) required to be approved by Holders by law or by the
Trust's registration statement(s) filed with the Commission, and (d) submitted
to them by the Trustees in their discretion. Any amendment submitted to Holders
which the Trustees determine would affect the Holders of any Series shall be
authorized by vote of the Holders of such Series and no vote shall be required
of Holders of a Series not affected.
Notwithstanding anything else herein, any amendment to Article X which
would have the effect of reducing the indemnification and other rights provided
thereby to Trustees, officers, employees and agents of the Trust or to Holders
or former Holders, and any repeal or amendment of this sentence, shall each
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<PAGE>
require the affirmative vote of the holders of two-thirds (2/3) of the
Outstanding Interests of the Trust entitled to vote thereon.
SECTION 9. FISCAL YEAR. The fiscal year of the Trust shall end on the
date set by resolution approved by the Trustees. The Trustees may change the
fiscal year of the Trust without Holder approval.
SECTION 10. SEVERABILITY. The provisions of this Trust Instrument are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Trust Instrument; provided, however, that such determination shall not affect
any of the remaining provisions of this Trust Instrument or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Trust
Instrument.
SECTION 11. USE OF THE NAMES "BERGER" AND "BIAM".
(a) Berger Associates, Inc. ("Berger") has consented to and granted a
non-exclusive license for the use by the Trust and by each Series thereof to the
identifying word "Berger" in the name of the Trust and of each Series. Such
consent is conditioned upon the Trust's employment of Berger or its affiliate as
investment adviser to the Trust and to each Series. As between Berger and the
Trust, Berger shall control the use of such name insofar as such name contains
the identifying word "Berger." Berger may from time to time use the identifying
word "Berger" in other connections and for other purposes, including without
limitation in the names of other investment companies, corporations or
businesses that it may manage, advise, sponsor or own or in which it may have a
financial interest. Berger may require the Trust or any Series to cease using
the identifying word "Berger" in the name of the Trust or any Series if the
Trust or Series ceases to employ Berger or affiliate thereof as investment
adviser.
(b) Bank of Ireland Asset Management (U.S.) Limited ("BIAM") has
consented to and granted a non-exclusive license for the use by the Trust and by
each Series thereof to the identifying words "Bank of Ireland Asset Management"
or the initials thereof in the name of the Trust and of each Series. Such
consent is conditioned upon the Trust's employment of BIAM or its affiliate as
investment adviser to the Trust and to each Series. As between BIAM and the
Trust, BIAM shall control the use of such name insofar as such name contains the
identifying words "Bank of Ireland Asset Management" or the initials thereof.
BIAM may from time to time use the identifying words "Bank of Ireland Asset
Management" or the initials thereof in other connections and for other purposes,
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<PAGE>
including without limitation in the names of other investment companies,
corporations or businesses that it may manage, advise, sponsor or own or in
which it may have a financial interest. BIAM may require the Trust or any
Series to cease using the identifying words "Bank of Ireland Asset Management"
or the initials thereof in the name of the Trust or any Series if the Trust or
Series ceases to employ BIAM or affiliate thereof as investment adviser.
SECTION 12. TAX MATTERS PARTNER. The Trustees shall appoint one of the
Holders as tax matters partner ("TMP") in accordance with Section 6231(a)(7) of
the Code for federal income tax purposes.
(a) The TMP shall be charged with all authority and duties accorded
tax matters partners under the Code and applicable regulations. In the event
the Trust is subject to administrative or judicial proceedings for the
assessment and collection of deficiencies for federal taxes or for the refund of
overpayments of federal taxes arising out of a Holder's distributive share of
income, losses, gain, credits and deductions, the TMP shall have all the powers
and duties assigned to the TMP under Sections 6221-6233 of the Code and
regulations thereunder. Such powers include the right of the TMP, in its
absolute discretion, to make or to refuse to make any election, or to take or to
refuse to take any action, permitted to be made or taken pursuant to the
provisions of Sections 6221-6232 of the Code. In addition, the TMP shall have
similar authority and duties with respect to all state and local tax matters.
(b) Nothing in this Section 12 shall be construed to prohibit the TMP
from delegating its authority and duties as TMP to the Trustees or an agent or
adviser selected with the approval of the Trustees.
(c) The TMP, Trustees, agent or adviser, as the case may be, shall
send to each Holder within sixty (60) days after the end of each taxable year,
the information necessary for the Holder to complete its federal and state
income tax or information returns and a copy of the Trust's federal, state and
local income tax or information returns for the year.
SECTION 13. WITHHOLDING. Should any Holder be subject to withholding
pursuant to the Code or any other provision of law, the Trust shall withhold all
amounts otherwise distributable to such Holder as shall be required by law and
any amounts so withheld shall be deemed to have been distributed to such Holder
under this Trust Instrument. If any sums are withheld pursuant to this
provision, the Trust shall remit the sums so withheld to and file the required
forms with the Internal Revenue Service, or other applicable government agency.
SECTION 14. FUTURE TREASURY REGULATIONS. In the event that future
Temporary or Final Treasury Regulations are adopted relating to the
characterization of entities as partnerships for
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<PAGE>
Federal income tax purposes, the Trustees shall have the right to make any
elections under such Regulations as they deem advisable and to reform this Trust
Instrument (and other related instruments) to reflect those Regulations and any
elections made thereunder, provided that any elections so made shall be for the
purpose of qualifying this Trust and all Series thereof as one or more
partnerships for Federal income tax purposes and shall otherwise comply with
applicable law.
[the balance of this page left intentionally blank]
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<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees,
have executed this Trust Instrument as of the date first above written.
/s/ Michael Owen
----------------------------------------
Michael Owen, as
Trustee and not individually
/s/ Dennis E. Baldwin
----------------------------------------
Dennis E. Baldwin, as
Trustee and not individually
/s/ William M.B. Berger
----------------------------------------
William M.B. Berger, as
Trustee and not individually
/s/ Louis R. Binder
----------------------------------------
Louis R. Bindner, as
Trustee and not individually
/s/ Katherine A. Cattanach
----------------------------------------
Katherine A. Cattanach, as
Trustee and not individually
/s/ Lucy Black Creighton
----------------------------------------
Lucy Black Creighton, as
Trustee and not individually
/s/ Paul R. Knapp
----------------------------------------
Paul R. Knapp, as
Trustee and not individually
/s/ Gerard M. Lavin
----------------------------------------
Gerard M. Lavin, as
Trustee and not individually
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<PAGE>
/s/ Harry T. Lewis, Jr.
----------------------------------------
Harry T. Lewis, Jr., as
Trustee and not individually
/s/ William Sinclaire
----------------------------------------
William Sinclaire, as
Trustee and not individually
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<PAGE>
SCHEDULE A
SERIES OF THE TRUST
Berger/BIAM International Portfolio
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<PAGE>
EXHIBIT 2
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
(A Delaware Business Trust)
BYLAWS
May 31, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I NAME OF TRUST, PRINCIPAL OFFICE AND SEAL...................... 1
Section 1. Principal Office............................................ 1
Section 2. Delaware Office............................................. 1
Section 3. Seal........................................................ 1
ARTICLE II MEETINGS OF TRUSTEES.......................................... 1
Section 1. Meetings.................................................... 1
Section 2. Action Without a Meeting.................................... 2
Section 3. Compensation of Trustees.................................... 2
ARTICLE III COMMITTEES.................................................... 2
Section 1. Organization................................................ 2
Section 2. Executive Committee......................................... 2
Section 3. Nominating Committee........................................ 2
Section 4. Audit Committee............................................. 2
Section 5. Other Committees............................................ 3
Section 6. Proceedings and Quorum...................................... 3
Section 7. Compensation of Committee Members........................... 3
ARTICLE IV OFFICERS...................................................... 3
Section 1. General..................................................... 3
Section 2. Election, Tenure and Qualifications of
Officers.................................................... 3
Section 3. Vacancies and Newly Created Offices......................... 3
Section 4. Removal and Resignation..................................... 4
Section 5. Chairman.................................................... 4
Section 6. President................................................... 4
Section 7. Vice President.............................................. 4
Section 8. Treasurer and Assistant Treasurers.......................... 4
Section 9. Secretary and Assistant Secretaries......................... 5
Section 10. Subordinate Officers........................................ 5
Section 11. Compensation of Officers.................................... 6
Section 12. Surety Bond................................................. 6
ARTICLE V MEETINGS OF HOLDERS........................................... 6
Section 1. Annual Meetings............................................. 6
Section 2. Special Meetings............................................ 6
Section 3. Notice of Meetings.......................................... 6
Section 4. Validity of Proxies......................................... 7
Section 5. Place of Meeting............................................ 8
Section 6. Action Without a Meeting.................................... 8
(i)
<PAGE>
Page
----
ARTICLE VI INTERESTS IN THE TRUST........................................ 8
Section 1. Certificates................................................ 8
Section 2. Transfer of Interests....................................... 8
ARTICLE VII CUSTODY OF SECURITIES......................................... 8
Section 1. Employment of a Custodian................................... 8
Section 2. Termination of Custodian Agreement.......................... 9
Section 3. Other Arrangements.......................................... 9
ARTICLE VIII FISCAL YEAR AND ACCOUNTANT.................................... 9
Section 1. Fiscal Year................................................. 9
Section 2. Accountant.................................................. 9
ARTICLE IX AMENDMENTS.................................................... 9
Section 1. General..................................................... 9
ARTICLE X MISCELLANEOUS................................................. 10
Section 1. Inspection of Books......................................... 10
Section 2. Severability................................................ 10
Section 3. Headings.................................................... 10
(ii)
<PAGE>
BYLAWS
OF
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
(A Delaware Business Trust)
These Bylaws of Berger/BIAM Worldwide Portfolios Trust (the "Trust"), a
Delaware business trust, are subject to the Trust Instrument of the Trust dated
May 31, 1996, as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein have the same meaning as in the
Trust Instrument.
ARTICLE I
NAME OF TRUST, PRINCIPAL OFFICE AND SEAL
SECTION 1. PRINCIPAL OFFICE. The principal office of the Trust shall be
located in Denver, Colorado, or such other location as the Trustees may from
time to time determine. The Trust may establish and maintain other offices and
places of business as the Trustees may from time to time determine.
SECTION 2. DELAWARE OFFICE. The Trustees shall establish a registered
office in the State of Delaware and shall appoint as the Trust's registered
agent for service of process in the State of Delaware an individual resident of
the State of Delaware or a Delaware corporation or a corporation authorized to
transact business in the State of Delaware and in any case the business office
of such registered agent for service of process shall be identical with the
registered Delaware office of the Trust.
SECTION 3. SEAL. The Trustees may adopt a seal which shall be in such
form and have such inscription as the Trustees may from time to time determine.
Any Trustee or officer of the Trust shall have authority to affix the seal to
any document, provided that the failure to affix the seal shall not affect the
validity or effectiveness of any document.
ARTICLE II
MEETINGS OF TRUSTEES
SECTION 1. MEETINGS. Meetings of the Trustees may be held at such places
and such times as the Trustees may from time to time determine. Such meetings
may be called orally or in writing by the Chairman of the Trustees or by any two
other Trustees. Each
<PAGE>
Trustee shall be given notice of any meeting as provided in Article II,
Section 7, of the Trust Instrument.
SECTION 2. ACTION WITHOUT A MEETING. Actions may be taken by the Trustees
without a meeting or by a telephone meeting, as provided in Article II,
Section 7, of the Trust Instrument.
SECTION 3. COMPENSATION OF TRUSTEES. Each Trustee may receive such
compensation from the Trust for his or her services and reimbursement for his or
her expenses as may be fixed from time to time by the Trustees.
ARTICLE III
COMMITTEES
SECTION 1. ORGANIZATION. The Trustees may designate one or more
committees of the Trustees. The Chairmen of such committees shall be elected by
the Trustees. The number composing such committees and the powers conferred
upon the same shall be determined by the vote of a majority of the Trustees.
All members of such committees shall hold office at the pleasure of the
Trustees. The Trustees may abolish any such committee at any time in their sole
discretion. Any committee to which the Trustees delegate any of their powers
shall maintain records of its meetings and shall report its actions to the
Trustees. The Trustees shall have the power to rescind any action of any
committee, but no such rescission shall have retroactive effect. The Trustees
shall have the power at any time to fill vacancies in the committees. The
Trustees may delegate to these committees any of its powers, except the power to
authorize the sale of Interests, recommend to Holders any action requiring
Holders' approval, amend these Bylaws, approve any merger or reorganization,
approve or terminate any contract with an investment adviser, transfer agent,
custodian or other service provider, or to take any other action required by
applicable law to be taken by the Trustees or to be approved by Holders.
SECTION 2. EXECUTIVE COMMITTEE. The Trustees may elect from their own
number an Executive Committee which shall have any or all the powers of the
Trustees when the Trustees are not in session.
SECTION 3. NOMINATING COMMITTEE. The Trustees may elect from their own
number a Nominating Committee which shall have the power to select and nominate
Trustees who are not Interested Persons, and shall have such other powers and
perform such other duties as may be assigned to it from time to time by the
Trustees.
SECTION 4. AUDIT COMMITTEE. The Trustees may elect from their own number
an Audit Committee which shall have the power to review and evaluate the audit
function, including recommending independent certified public accountants, and
shall have such other
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<PAGE>
powers and perform such other duties as may be assigned to it from time to time
by the Trustees.
SECTION 5. OTHER COMMITTEES. The Trustees may appoint other committees
whose members need not be Trustees. Each such committee shall have such powers
and perform such duties as may be assigned to it from time to time by the
Trustees, but shall not exercise any power which may lawfully be exercised only
by the Trustees or a committee thereof.
SECTION 6. PROCEEDINGS AND QUORUM. In the absence of an appropriate
resolution of the Trustees, each committee may adopt such rules and regulations
governing its proceedings, quorum and manner of acting as it shall deem proper
and desirable. In the event any member of any committee is absent from any
meeting, the members present at the meeting, whether or not they constitute a
quorum, may appoint a member of the Trustees to act in the place of such absent
member.
SECTION 7. COMPENSATION OF COMMITTEE MEMBERS. Each committee member may
receive such compensation from the Trust for his or her services and
reimbursement for his or her expenses as may be fixed from time to time by the
Trustees.
ARTICLE IV
OFFICERS
SECTION 1. GENERAL. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and may include a Chairman of the Trustees, one or more
Vice Presidents, Assistant Treasurers or Assistant Secretaries, and such other
officers as the Trustees may from time to time elect. It shall not be necessary
for any Trustee or other officer to be a Holder of the Trust.
SECTION 2. ELECTION, TENURE AND QUALIFICATIONS OF OFFICERS. The officers
of the Trust, except those appointed as provided in Section 9 of this Article,
shall be elected by the Trustees. Each officer elected by the Trustees shall
hold office until his or her successor shall have been elected and qualified or
until his or her earlier resignation. Any person may hold one or more offices
of the Trust except that no one person may serve concurrently as both President
and Secretary. A person who holds more than one office in the Trust may not act
in more than one capacity to execute, acknowledge or verify an instrument
required by law to be executed, acknowledged or verified by more than one
officer. No officer need be a Trustee.
SECTION 3. VACANCIES AND NEWLY CREATED OFFICES. Whenever a vacancy shall
occur in any office, regardless of the reason for such vacancy, or if any new
office shall be created, such vacancies or newly created offices may be filled
by the Trustees or, in the case of any office created pursuant to
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<PAGE>
Section 9 of this Article, by any officer upon whom such power shall have been
conferred by the Trustees.
SECTION 4. REMOVAL AND RESIGNATION. Any officer may be removed from
office at any time, with or without cause, by the Trustees. In addition, any
officer or agent appointed in accordance with the provisions of Section 10 of
this Article may be removed, with or without cause, by any officer upon whom
such power of removal shall have been conferred by the Trustees. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees, the President, the Secretary, or any Assistant Secretary. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
SECTION 5. CHAIRMAN. The Chairman of the Trustees, if such an officer is
elected by the Trustees, shall preside at all meetings of the Trustees and at
all meetings of the Holders, and shall exercise and perform such other powers
and duties as may be from time to time assigned to the Chairman by the Trustees
or prescribed by these Bylaws.
SECTION 6. PRESIDENT. The President shall be the chief executive officer
of the Trust. The President must be a Trustee. Subject to the direction of the
Trustees, the President shall have general charge of the business affairs,
policies and property of the Trust and general supervision over its officers,
employees and agents. In the absence of the Chairman of the Trustees or if no
Chairman of the Trustees has been elected, the President shall preside at all
Holders' meetings and at all meetings of the Trustees and shall in general
exercise the powers and perform the duties of the Chairman of the Trustees.
Except as the Trustees may otherwise order, the President shall have the power
to grant, issue, execute or sign such powers of attorney, proxies, agreements or
other documents as may be deemed advisable or necessary in the furtherance of
the interests of the Trust or any Series or Class thereof. The President also
shall have the power to employ attorneys, accountants and other advisers and
agents for the Trust. The President shall exercise such other powers and
perform such other duties as the Trustees may from time to time assign to the
President.
SECTION 7. VICE PRESIDENT. The Trustees may from time to time elect one
or more Vice Presidents who shall have such powers and perform such duties as
may from time to time be assigned to them by the Trustees or the President. At
the request or in the absence or disability of the President, the Vice President
(or, if there are two or more Vice Presidents, then the first appointed of the
Vice Presidents present and able to act) may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 8. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall be the
principal financial and accounting officer
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<PAGE>
of the Trust and shall have general charge of the finances and books of the
Trust. The Treasurer shall deliver all funds and securities of the Trust to
such company as the Trustees shall retain as custodian in accordance with the
Trust Instrument, these Bylaws, and applicable law. The Treasurer shall make
annual reports regarding the business and financial condition of the Trust as
soon as possible after the close of the Trust's fiscal year. The Treasurer also
shall furnish such other reports concerning the business and financial condition
of the Trust as the Trustees may from time to time require. The Treasurer shall
perform all acts incidental to the office of Treasurer, subject to the
supervision of the Trustees, and shall perform such additional duties as the
Trustees may from time to time designate.
Any Assistant Treasurer may perform such duties of the Treasurer as the
Trustees or the Treasurer may assign, and, in the absence of the Treasurer, may
perform all the duties of the Treasurer.
SECTION 9. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
record all votes and proceedings of the meetings of Trustees and Holders in
books to be kept for that purpose. The Secretary shall be responsible for
giving and serving of all notices of the Trust. The Secretary shall have
custody of any seal of the Trust. The Secretary shall be responsible for the
records of the Trust, including the Interest register and such other books and
papers as the Trustees may direct and such books, reports, certificates and
other documents required by law. All of such records and documents shall at all
reasonable times be kept open by the Secretary for inspection by any Trustee for
any proper Trust purpose. The Secretary shall perform all acts incidental to
the office of Secretary, subject to the supervision of the Trustees, and shall
perform such additional duties as the Trustees may from time to time designate.
Any Assistant Secretary may perform such duties of the Secretary as the
Trustees or the Secretary may assign, and, in the absence of the Secretary, may
perform all the duties of the Secretary.
SECTION 10. SUBORDINATE OFFICERS. The Trustees may appoint from time to
time such other officers and agents as they may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the Trustees may determine. The Trustees may delegate
from time to time to one or more officers or committees of Trustees the power to
appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties. Any officer or
agent appointed in accordance with the provisions of this Section 9 may be
removed, either with or without cause, by any officer upon whom such power of
removal shall have been conferred by the Trustees.
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<PAGE>
SECTION 11. COMPENSATION OF OFFICERS. Each officer may receive such
compensation from the Trust for services and reimbursement for expenses as may
be fixed from time to time by the Trustees.
SECTION 12. SURETY BOND. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond required by
the Investment Company Act of 1940 and the rules and regulations of the
Securities and Exchange Commission) to the Trust in such sum and with such
surety or sureties as the Trustees may determine, conditioned upon the faithful
performance of his or her duties to the Trust, including responsibility for
negligence and for the accounting of any of the Trust's property, funds or
securities that may come into his or her hands.
ARTICLE V
MEETINGS OF HOLDERS
SECTION 1. ANNUAL MEETINGS. There shall be no annual Holders' meetings
except as required by law or as hereinafter provided.
SECTION 2. SPECIAL MEETINGS. Special meetings of Holders of the Trust or
of any Series shall be called by the President, Vice President or Secretary
whenever ordered by the Trustees, and shall be held at such time and place as
may be stated in the notice of the meeting.
Special meetings of the Holders of the Trust or of any Series shall be
called by the Secretary upon the written request of Holders owning at least
twenty-five percent (25%) of the Outstanding Interests entitled to vote at such
meeting, provided that (1) such request shall state the purposes of such meeting
and the matters proposed to be acted on, and (2) the Holders requesting such
meeting shall have paid to the Trust the reasonably estimated cost of preparing
and mailing the notice thereof, which the Secretary shall determine and specify
to such Holders.
If the Secretary fails for more than thirty days to call a special meeting,
the Trustees or the Holders requesting such a meeting may, in the name of the
Secretary, call the meeting by giving the required notice. If the meeting is a
meeting of Holders of any Series, but not a meeting of all Holders of the Trust,
then only a special meeting of Holders of such Series need be called and, in
such case, only Holders of such Series shall be entitled to notice of and to
vote at such meeting.
SECTION 3. NOTICE OF MEETINGS. Except as provided in Section 2 of this
Article, the Secretary shall cause written notice of the place, date and time,
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Notice
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<PAGE>
shall be given as determined by the Trustees at least ten (10) and not more than
sixty (60) days before the date of the meeting. The written notice of any
meeting may be delivered or mailed, postage prepaid, to each Holder entitled to
vote at such meeting. If mailed, notice shall be deemed to be given when
deposited in the United States mail directed to the Holder at his or her address
as it appears on the records of the Trust. Notice of any Holders' meeting need
not be given to any Holder if a written waiver of notice, executed before, at or
after such meeting, is filed with the record of such meeting, or to any Holder
who is present at such meeting in person or by proxy unless the Holder is
present solely for the purpose of objecting to the call of the meeting. Notice
of adjournment of a Holders' meeting to another time or place need not be given,
if such time and place are announced at the meeting at which the adjournment is
taken and the adjourned meeting is held within a reasonable time after the date
set for the original meeting. At the adjourned meeting the Trust may transact
any business which might have been transacted at the original meeting. If after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to Holders of record entitled to vote at
such meeting. Any irregularities in the notice of any meeting or the nonreceipt
of any such notice by any of the Holders shall not invalidate any action
otherwise properly taken at any such meeting.
SECTION 4. VALIDITY OF PROXIES. Subject to the provisions of the Trust
Instrument, Holders entitled to vote may vote either in person or by proxy,
provided that either (1) a written instrument authorizing such proxy to act has
been signed and dated by the Holder or by his or her duly authorized attorney,
or (2) the Trustees adopt by resolution an electronic, telephonic, computerized
or other alternative to execution of a written instrument authorizing the proxy
to act, but if a proposal by anyone other than the officers or Trustees is
submitted to a vote of the Holders of the Trust or of any Series, or if there is
a proxy contest or proxy solicitation or proposal in opposition to any proposal
by the officers or Trustees, Interests may be voted only in person or by written
proxy. Unless the proxy provides otherwise, it shall not be valid if executed
more than eleven months before the date of the meeting. All proxies shall be
delivered to the Secretary or other person responsible for recording the
proceedings before being voted. A proxy with respect to Interests held in the
name of two or more persons shall be valid if executed by one of them unless at
or prior to exercise of such proxy the Trust receives a specific written notice
to the contrary from any one of them. Unless otherwise specifically limited by
their terms, proxies shall entitle the Holder to vote at any adjournment of a
Holders meeting. At every meeting of Holders, unless the voting is conducted by
inspectors, all questions concerning the qualifications of voters, the validity
of proxies, and the acceptance or rejection of votes, shall be decided by the
chairman of the meeting. Subject to the provisions of the Trust Instrument or
these Bylaws, all matters concerning the giving, voting or validity of proxies
shall be governed by the General
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Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Holders were shareholders of a Delaware corporation.
SECTION 5. PLACE OF MEETING. All special meetings of Holders shall be
held at the principal place of business of the Trust or at such other place as
the Trustees may from time to time designate.
SECTION 6. ACTION WITHOUT A MEETING. Any action to be taken by Holders
may be taken without a meeting if a majority (or such other amount as may be
required by law) of the Outstanding Interests entitled to vote on the matter
consent to the action in writing and such written consents are filed with the
records of the Holders' meetings. Such written consent shall be treated for all
purposes as a vote at a meeting of the Holders held at the principal place of
business of the Trust. If the unanimous written consent of all Holders entitled
to vote shall not have been received, the Secretary shall give prompt notice of
the action approved by the Holders without a meeting.
ARTICLE VI
INTERESTS IN THE TRUST
SECTION 1. CERTIFICATES. No certificates certifying the ownership of
Interests shall be issued. In lieu of issuing certificates of Interests, the
Trustees or the transfer agent or Holder servicing agent may either issue
receipts or may keep accounts upon the books of the Trust for record holders of
such Interests. In either case, the record holders shall be deemed, for all
purposes, to be holders of certificates for such Interests as if they accepted
such certificates and shall be held to have expressly consented to the terms
thereof.
SECTION 2. NON-TRANSFERABILITY OF INTERESTS. Interests in the Trust shall
not be transferable unless the prospective transferor obtains the prior
unanimous consent of the Holders to the transfer. The Trust shall be entitled
to treat the holder of record of any Interest or Interests as the absolute owner
for all purposes, and shall not be bound to recognize any legal, equitable or
other claim or interest in such Interest or Interests on the part of any other
person except as otherwise expressly provided by law.
ARTICLE VII
CUSTODY OF SECURITIES
SECTION 1. EMPLOYMENT OF A CUSTODIAN. The Trust shall at all times place
and maintain all funds, securities and similar
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investments of the Trust and of each Series in the custody of a Custodian,
including any sub-custodian for the Custodian (the "Custodian"). The Custodian
shall be one or more banks or trust companies of good standing having an
aggregate capital surplus, and undivided profits of not less than two million
dollars ($2,000,000), or such other financial institutions or other entities as
shall be permitted by rule or order of the Securities and Exchange Commission.
The Custodian shall be appointed from time to time by the Trustees, who shall
determine its remuneration.
SECTION 2. TERMINATION OF CUSTODIAN AGREEMENT. Upon termination of the
Custodian Agreement or inability of the Custodian to continue to serve, the
Trustees shall promptly appoint a successor Custodian, but in the event that no
successor Custodian can be found who has the required qualifications and is
willing to serve, the Trustees shall promptly call a special meeting of the
Holders to determine whether the Trust shall function without a Custodian or
shall be liquidated. If so directed by resolution of the Trustees or by vote of
a majority of Outstanding Interests of the Trust, the Custodian shall deliver
and pay over all property of the Trust or any Series held by it as specified in
such vote.
SECTION 3. OTHER ARRANGEMENTS. The Trust may make such other arrangements
for the custody of its assets (including deposit arrangements) as may be
required by any applicable law, rule or regulation.
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT
SECTION 1. FISCAL YEAR. The fiscal year of the Trust shall be as
determined by the Trustees.
SECTION 2. ACCOUNTANT. The Trust shall employ independent certified
public accountants as its accountant ("Accountant") to examine the accounts of
the Trust and to sign and certify financial statements filed by the Trust. The
Accountant's certificates and reports shall be addressed both to the Trustees
and to the Holders.
ARTICLE IX
AMENDMENTS
SECTION 1. GENERAL. All Bylaws of the Trust shall be subject to
amendment, alteration or repeal, and new Bylaws may be made by the affirmative
vote of a majority of either: (1) the Outstanding Interests of the Trust
entitled to vote at any meeting; or (2) the Trustees at any meeting.
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ARTICLE X
MISCELLANEOUS
SECTION 1. INSPECTION OF BOOKS. The Trustees shall from time to time
determine whether and to what extent, and at what times and places, and under
what conditions the accounts and books of the Trust or any Series shall be open
to the inspection of Holders. No Holder shall have any right to inspect any
account or book or document of the Trust except as conferred by law or otherwise
by the Trustees.
SECTION 2. SEVERABILITY. The provisions of these Bylaws are severable.
If the Trustees determine, with the advice of counsel, that any provision hereof
conflicts with the Investment Company Act of 1940, the Delaware Act or with
other applicable laws and regulations the conflicting provision shall be deemed
never to have constituted a part of these Bylaws; provided, however, that such
determination shall not affect any of the remaining provisions of these Bylaws
or render invalid or improper any action taken or omitted prior to such
determination. If any provision hereof shall be held invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall attach only to
such provision only in such jurisdiction and shall not affect any other
provision of these Bylaws.
SECTION 3. HEADINGS. Headings are placed in these Bylaws for convenience
of reference only and in case of any conflict, the text of these Bylaws rather
than the headings shall control.
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EXHIBIT 5.1
BERGER/BIAM INTERNATIONAL PORTFOLIO
(A SERIES OF BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST)
INVESTMENT ADVISORY AGREEMENT
(BBOI WORLDWIDE LLC)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this day
of , 1996, between BBOI WORLDWIDE LLC, a Delaware limited liability
company ("BBOI Worldwide"), and BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST, a
Delaware business trust ("Worldwide Portfolios"), with respect to BERGER/BIAM
INTERNATIONAL PORTFOLIO (the "Portfolio"), a series of Worldwide Portfolios.
RECITALS
A. Worldwide Portfolios is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act").
B. Worldwide Portfolios is authorized to create separate series of
interests in Worldwide Portfolios, each with its own separate investment
portfolio, and has created the Portfolio as one such series.
C. Worldwide Portfolios and BBOI Worldwide deem it mutually advantageous
that BBOI Worldwide should be appointed to assume responsibility for the day-to-
day management of the Portfolio and of the securities in the Portfolio in
accordance with the terms and conditions of this Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT. Worldwide Portfolios hereby appoints BBOI Worldwide as
investment advisor and manager with respect to the Portfolio for the period and
on the terms set forth in this Agreement. BBOI Worldwide hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY SERVICES. BBOI Worldwide undertakes to act as
investment advisor to the Portfolio and to discharge the following duties,
subject to the oversight of the Trustees of Worldwide Portfolios:
(a) to manage the investment operations of the Portfolio and the
composition of its investment portfolio, and to determine, without
prior consultation with Worldwide Portfolios, what securities and
other assets of the Portfolio will be acquired, held, disposed of or
loaned, in conformity with
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the investment objective, policies and restrictions and the other
statements concerning the Portfolio in Worldwide Portfolios' Trust
Instrument, Bylaws and registration statement under the Investment
Company Act of 1940 (the "1940 Act"), the Investment Advisers Act of
1940 ("Advisers Act"), the rules thereunder, and all other applicable
federal and state laws and regulations, and to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended from
time to time, if applicable to any of the investors investing in the
Portfolio;
(b) to cause its officers to attend meetings and furnish oral or written
reports, as Worldwide Portfolios may reasonably require, in order to
keep the Trustees and appropriate officers of Worldwide Portfolios
fully informed as to the condition of the investment portfolio of the
Portfolio, the investment decisions of BBOI Worldwide, and the
investment considerations which have given rise to those decisions;
(c) to place orders for the purchase and sale of securities for
investments of the Portfolio and for other related transactions; to
give instructions to the custodian (including any subcustodian) of the
Portfolio as to deliveries of securities to and from such custodian
and receipt and payments of cash for the account of the Portfolio, and
advise Worldwide Portfolios on the same day such instructions are
given; to submit such reports relating to the valuation of the
Portfolio's assets and to otherwise assist in the calculation of the
net asset value of interests in the Portfolio as may reasonably be
requested; on behalf of the Portfolio, to exercise such voting rights,
subscription rights, rights to consent to corporate action and any
other rights pertaining to the Portfolio's assets that may be
exercised, in accordance with any policy pertaining to the same that
may be adopted or agreed to by the Trustees of Worldwide Portfolios,
or, in the event that Worldwide Portfolios retains the right to
exercise such voting and other rights, to furnish Worldwide Portfolios
with advice as to the manner in which such rights should be exercised;
(d) to maintain all books and records required to be maintained by BBOI
Worldwide pursuant to the 1940 Act and the rules and regulations
promulgated thereunder, as the same may be amended from time to time,
with respect to transactions on behalf of the Portfolio, and to
furnish the Trustees with such periodic and special reports as the
Trustees reasonably may request. BBOI Worldwide hereby agrees that
all records which it maintains for the Portfolio or Worldwide
Portfolios are the property of Worldwide Portfolios, agrees to permit
the reasonable inspection thereof by Worldwide Portfolios or its
designees and agrees to preserve for the periods prescribed under the
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1940 Act any records which it maintains for Worldwide Portfolios and
which are required to be maintained under the 1940 Act, and further
agrees to surrender promptly to Worldwide Portfolios or its designees
any records which it maintains for Worldwide Portfolios upon request
by Worldwide Portfolios; and
(e) at such times as shall be reasonably requested by the Trustees, to
provide the Trustees with economic, operational and investment data
and reports, including without limitation all information and
materials reasonably requested by or requested to be delivered to the
Trustees of Worldwide Portfolios pursuant to Section 15(c) of the 1940
Act, and to make available to the Trustees any economic, statistical
and investment services normally available to similar investment
company clients of BBOI Worldwide.
3. MANAGERIAL AND ADMINISTRATIVE SERVICES. BBOI Worldwide shall perform,
or arrange for the performance of, all managerial and administrative services
necessary for the operation of the Portfolio, subject to the monitoring of the
Trustees of Worldwide Portfolios, including but not limited to:
(a) providing the Portfolio with office space, personnel, equipment and
facilities for maintaining its organization;
(b) on behalf of the Portfolio, supervising relations with, and monitoring
the performance of custodians, subcustodians, depositories, transfer
and pricing agents, accountants, attorneys, placement agents, insurers
and other persons in any capacity deemed to be necessary or desirable;
(c) preparing all general investor communications, including investor
reports;
(d) providing personnel and assistance necessary to maintain the
registration, qualification or exemption to sell interests under the
federal securities laws and in each state where BBOI Worldwide has
determined such registration, qualification or exemption to be
advisable;
(e) monitoring the Portfolio's compliance with, insofar as they relate to
the Portfolio, (i) Worldwide Portfolios' Trust Instrument, Bylaws and
currently effective registration statement under the 1940 Act and any
amendments or supplements thereto ("Registration Statement"); (ii) the
written policies, procedures and guidelines of the Portfolio, and
written instructions from the Trustees of Worldwide Portfolios based
on resolutions duly adopted by the Trustees; (iii) the requirements of
the Securities Act of 1933, the 1940 Act, the Advisers Act, the rules
thereunder, and all other applicable federal and state laws and
regulations; and (iv) the provisions of Subchapter M of the Internal
Revenue Code, if applicable to any of the investors investing in the
Portfolio;
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(f) arranging for and supervising the preparation of any or all
registration statements, tax returns, proxy materials, financial
statements, notices and reports for filings with regulatory
authorities and distribution to holders of interests in the Portfolio;
(g) conducting investor relations;
(h) maintaining the Portfolio's existence and its records; and
(i) investigating the development of and developing and implementing, if
appropriate, management and investor services designed to enhance the
value or convenience of the Portfolio as an investment vehicle.
4. FURTHER OBLIGATIONS. In all matters relating to the performance of
this Agreement, BBOI Worldwide shall act in conformity with Worldwide
Portfolios' Trust Instrument, Bylaws and Registration Statement and with the
written policies, procedures and guidelines of the Portfolio, and written
instructions from the Trustees of Worldwide Portfolios based on resolutions duly
adopted by the Trustees, and comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. Worldwide Portfolios agrees to provide to BBOI Worldwide
copies of Worldwide Portfolios' Trust Instrument, Bylaws, Registration
Statement, written policies, procedures and guidelines and written instructions
of the Trustees based on resolutions duly adopted by the Trustees, and any
amendments or supplements to any of them at, or, if practicable, before the time
such materials become effective. BBOI Worldwide may perform its services
through any qualified employee, officer or agent of BBOI Worldwide, and
Worldwide Portfolios shall not be entitled to the efforts, advice,
recommendations or judgment of any specific person.
5. OBLIGATIONS OF WORLDWIDE PORTFOLIOS. Worldwide Portfolios shall have
the following obligations under this Agreement:
(a) to keep BBOI Worldwide continuously and fully informed (or cause the
custodian of the Portfolio's assets to keep BBOI Worldwide so
informed) as to the composition of the investment portfolio of the
Portfolio, cash requirements and cash available for investment in the
Portfolio and the nature of all of the Portfolio's assets and
liabilities;
(b) to furnish BBOI Worldwide with a certified copy of any financial
statement or report prepared for the Portfolio by certified or
independent public accountants and with copies of any financial
statements or reports made to the Portfolio's investors or to any
governmental body or securities exchange;
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(c) to furnish BBOI Worldwide with any further materials or information
which BBOI Worldwide may reasonably request to enable it to perform
its function under this Agreement; and
(d) to compensate BBOI Worldwide for its services and in accordance with
the provisions of Section 6 hereof.
6. COMPENSATION. Worldwide Portfolios shall pay to BBOI Worldwide for
its services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.90% of the average daily net asset value of the Portfolio.
This fee shall be computed and accrued daily and payable monthly on the last day
of each month during which or part of which this Agreement is in effect. BBOI
Worldwide reserves the right to waive or reimburse all or any portion of its
fees hereunder.
7. EXPENSES AND EXCLUDED EXPENSES. BBOI Worldwide shall pay all its own
costs and expenses incurred in rendering the services required under this
Agreement. Notwithstanding any other provision hereof, it is expressly agreed
that BBOI Worldwide shall not be responsible to pay, directly or on behalf of
the Portfolio, any of the Portfolio's expenses, which shall remain Worldwide
Portfolios' own obligation and responsibility to pay, including without
limitation: (a) expenses of registering Worldwide Portfolios with securities
authorities, or registration or filing fees incurred in the registration,
qualification or exemption of interests in the Portfolio with securities
authorities; (b) compensation (including reimbursement of expenses) of the
Trustees of Worldwide Portfolios who are not "interested persons" as defined in
the 1940 Act; (c) expenses of preparing, printing and mailing reports, notices,
proxy materials and other required communications to investors in the Portfolio;
(d) all expenses incidental to holding meetings of the Trustees of Worldwide
Portfolios and of investors in the Portfolio, including proxy solicitations
therefor; (e) legal and audit expenses; (f) insurance premiums for fidelity and
other coverage; (g) brokerage commissions and other costs in connection with the
purchase and sale of securities and other assets of the Portfolio; (h)
custodian, transfer agent, recordkeeping and pricing agent fees and expenses;
(i) interest and taxes; and (j) such non-recurring or extraordinary expenses as
may arise, including those relating to actions, suits or proceedings to which
Worldwide Portfolios is a party and the legal obligation which Worldwide
Portfolios may have to indemnify its Trustees and officers with respect thereto.
8. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. Absent instructions from Worldwide Portfolios to the
contrary, BBOI Worldwide shall place all orders for the purchase and sale of
securities for the Portfolio with brokers and dealers selected by BBOI
Worldwide. BBOI Worldwide is authorized and directed to place portfolio
transactions for the Portfolio only with brokers and dealers who render
satisfactory service in the execution of orders at the most favorable prices and
at reasonable commission rates, provided, however, that BBOI Worldwide may pay a
broker an amount of commission for effecting a securities transaction in excess
of the amount of commission another broker would have charged for
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effecting that transaction if BBOI Worldwide determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such broker viewed in terms of either that
particular transaction or the overall responsibilities of BBOI Worldwide. BBOI
Worldwide is also authorized to consider sales of shares in any fund investing
in the Portfolio as a factor in selecting broker-dealers to execute portfolio
transactions for the Portfolio. In placing portfolio business with such broker-
dealers, BBOI Worldwide shall seek the best execution of each transaction.
Subject to the terms of this Agreement and the applicable requirements and
provisions of the law, including the 1940 Act and the Securities Exchange Act of
1934, as amended, and in the event that BBOI Worldwide or an affiliate is
registered as a broker-dealer, BBOI Worldwide may select a broker with which it
or any of its affiliates or the Portfolio is affiliated. BBOI Worldwide or such
affiliated broker may effect or execute Portfolio securities transactions on an
agency basis, whether on a securities exchange or in the over-the-counter
market, and receive compensation from the Portfolio therefor. Notwithstanding
the foregoing, Worldwide Portfolios shall retain the right to direct the
placement of all portfolio transactions, and the Trustees of Worldwide
Portfolios may establish policies or guidelines to be followed by BBOI Worldwide
in placing portfolio transactions for the Portfolio pursuant to the foregoing
provisions. BBOI Worldwide shall report on the placement of portfolio
transactions in the prior fiscal quarter at each quarterly meeting of such
Trustees. To the extent consistent with applicable law, purchase or sell orders
for the Portfolio may be aggregated with simultaneous purchase or sell orders
for other clients of BBOI Worldwide. Whenever BBOI Worldwide simultaneously
places orders to purchase or sell the same security on behalf of the Portfolio
and one or more other clients of BBOI Worldwide, such orders will be allocated
as to price and amount among all such clients in a manner reasonably believed by
BBOI Worldwide to be fair and equitable to each client. Worldwide Portfolios
recognizes that in some cases, this procedure may adversely affect the results
obtained for the Portfolio.
9. REPRESENTATIONS OF BBOI WORLDWIDE. BBOI Worldwide hereby represents,
warrants and covenants as follows:
(a) BBOI Worldwide: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or
the Advisers Act from performing the services contemplated by this
Agreement; (iii) has met, and will continue to meet for so long as
this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirement of any regulatory or
industry self-regulatory organization necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
legal and corporate authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify
Worldwide Portfolios of the occurrence of any event that would
disqualify BBOI Worldwide from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or
otherwise, and of the institution of any
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administrative, regulatory or judicial proceeding against BBOI
Worldwide that could have a material adverse effect upon BBOI
Worldwide's ability to fulfill its obligations under this Agreement.
(b) BBOI Worldwide has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide
Worldwide Portfolios with a copy of such code of ethics, together with
evidence of its adoption. Within 45 days after the end of the last
quarter of each fiscal year of Worldwide Portfolios that this
Agreement is in effect, BBOI Worldwide shall certify to Worldwide
Portfolios that BBOI Worldwide has complied with the requirements of
Rule 17j-1 during the previous year and that there has been no
violation of BBOI Worldwide's code of ethics or, if such a violation
has occurred, that appropriate action was taken in response to such
violation. Upon the written request of Worldwide Portfolios, BBOI
Worldwide shall permit Worldwide Portfolios, its employees or its
agents to examine the reports required to be made to BBOI Worldwide by
Rule 17j-1(c)(1) and all other records relevant to BBOI Worldwide's
code of ethics.
(c) BBOI Worldwide has provided Worldwide Portfolios with a copy of its
Form ADV as most recently filed with the U.S. Securities and Exchange
Commission ("SEC") and will, promptly after filing any amendment to
its Form ADV with the SEC, furnish a copy of such amendment to
Worldwide Portfolios.
(d) BBOI Worldwide will notify Worldwide Portfolios of any change or
proposed change in the identity or control of its members as soon as
known by BBOI Worldwide.
10. TERM. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until the last day of April, 1998,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of Worldwide Portfolios who are not parties hereto or interested
persons of Worldwide Portfolios or BBOI Worldwide, cast in person at a meeting
called for the purpose of voting on the approval of the terms of such renewal,
and by either the Trustees of Worldwide Portfolios or the affirmative vote of a
majority of the outstanding voting securities of the Portfolio.
11. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of Worldwide Portfolios, or by the holders of interests
in the Portfolio acting by vote of at least a majority of its outstanding voting
securities, provided in either case that 60 days' advance written notice of
termination be given to BBOI Worldwide at its principal place of business. This
Agreement may also be terminated by Worldwide Portfolios: (i) upon material
breach by BBOI Worldwide of any of the representations and warranties set forth
in
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Section 9 of this Agreement, if such breach shall not have been cured within a
20-day period after notice of such breach; or (ii) if BBOI Worldwide becomes
unable to discharge its duties and obligations under this Agreement. This
Agreement may be terminated by BBOI Worldwide at any time, without penalty, by
giving 60 days' advance written notice of termination to Worldwide Portfolios,
addressed to its principal place of business.
12. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate in the event of its assignment. This Agreement may be amended by the
parties only in a written instrument signed by all parties to this Agreement and
only if such amendment is specifically approved (i) by a majority of the
Trustees, including a majority of the Trustees who are not interested persons of
Worldwide Portfolios or BBOI Worldwide, and (ii) if required by applicable law,
by the affirmative vote of a majority of the outstanding voting securities of
the Portfolio. Notwithstanding the foregoing, Worldwide Portfolios'
Registration Statement and the written policies, procedures and guidelines, and
written instructions from the Trustees of Worldwide Portfolios based on
resolutions duly adopted by the Trustees referred to in Section 4 hereof may be
amended by Worldwide Portfolios or the Trustees from time to time; provided,
however, that BBOI Worldwide shall not be obligated to follow any such amendment
until BBOI Worldwide has received such amendment in writing from Worldwide
Portfolios or the Trustees.
13. DELEGATION. Notwithstanding anything herein to the contrary, BBOI
Worldwide may delegate any or all of its duties and responsibilities under this
Agreement to one or more parties subject to the approval of the Trustees of
Worldwide Portfolios and, if required by applicable law, by the affirmative vote
of a majority of the outstanding voting securities of the Portfolio, pursuant in
each case to a written agreement with a party that, if applicable, meets the
requirements of Section 15 of the 1940 Act and the rules thereunder applicable
to contracts for service as an investment adviser of a registered investment
company, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission. No delegation pursuant to this provision
shall relieve BBOI Worldwide of its duties or responsibilities hereunder, and
BBOI Worldwide shall appropriately oversee, monitor and evaluate the activities
of any party appointed hereunder for the Portfolio.
14. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that
Worldwide Portfolios is a business trust organized under the Delaware Business
Trust Act pursuant to a Certificate of Trust filed in the office of the
Secretary of State of the State of Delaware. All parties to this Agreement
acknowledge and agree that Worldwide Portfolios is a series trust and all debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets held with respect to such series only, and not against the assets of
Worldwide Portfolios generally or against the assets held with respect to any
other series and further that no Trustee, officer or holder of shares of
beneficial interest of Worldwide Portfolios shall be personally liable for any
of the foregoing.
15. LIMITATION OF LIABILITY OF BBOI WORLDWIDE. BBOI Worldwide shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any
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investment or for any act or omission taken with respect to the Portfolio,
except for willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. BBOI Worldwide
shall be entitled to rely upon any written instructions from the Trustees of
Worldwide Portfolios based on resolutions duly adopted by the Trustees and shall
incur no liability to Worldwide Portfolios or the Portfolio in acting upon such
written instructions. As used in this section, "BBOI Worldwide" shall include
any affiliate of BBOI Worldwide performing services for the Portfolio
contemplated hereunder, the Sub-Advisor and the Sub-Administrator as defined in
Section 16 hereof, and managers, directors, officers and employees of BBOI
Worldwide and each of the foregoing.
16. INDEMNIFICATION. Worldwide Portfolios hereby indemnifies and holds
harmless BBOI Worldwide and its officers, managers, members, employees and
agents, and any controlling person thereof, and any person to whom BBOI
Worldwide has delegated any of its duties and responsibilities pursuant to
Section 13 hereof, including Bank of Ireland Asset Management (U.S.) Limited, to
which BBOI Worldwide has delegated its duties and responsibilities specified in
Section 2 of this Agreement (the "Sub-Advisor") and Berger Associates, Inc., to
which BBOI Worldwide has delegated its duties and responsibilities specified in
Section 3 of this Agreement (the "Sub-Administrator"), from all losses, charges,
claims and liabilities, and all costs and expenses, including without limitation
reasonable attorneys' fees and disbursements, arising from any action which BBOI
Worldwide or the Sub-Advisor or the Sub-Administrator takes or omits to take
pursuant to written instructions from the Trustees of Worldwide Portfolios based
on resolutions duly adopted by the Trustees, provided that no person shall be
indemnified hereunder against any liability to Worldwide Portfolios or its
shareholders (or any expenses incident to such liability) arising out of their
own willful misfeasance, bad faith or gross negligence in the performance of
their duties or by reason of their reckless disregard of their duties or
obligations under this Agreement.
BBOI Worldwide hereby indemnifies and holds harmless Worldwide Portfolios
and its Trustees, officers, shareholders, employees and agents, and any
controlling person thereof, from all losses, charges, claims and liabilities,
and all costs and expenses, including without limitation reasonable attorneys'
fees and disbursements, arising out of BBOI Worldwide's or the Sub-Advisor's or
the Sub-Administrator's willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
duties or obligations under this Agreement, provided that no person shall be
indemnified hereunder against any liability to Worldwide Portfolios or its
shareholders (or any expenses incident to such liability) arising out of their
own willful misfeasance, bad faith or gross negligence in the performance of
their duties or by reason of their reckless disregard of their duties or
obligations under this Agreement.
17. ACTIVITIES OF BBOI WORLDWIDE. The services of BBOI Worldwide
hereunder are not to be deemed to be exclusive, and BBOI Worldwide is free to
render services to other parties, so long as its services under this Agreement
are not materially adversely affected or otherwise impaired thereby. Nothing in
this Agreement shall limit or restrict the
9
<PAGE>
right of any manager, officer or employee of BBOI Worldwide to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
18. INDEPENDENT CONTRACTOR. BBOI Worldwide shall for all purposes
hereunder be deemed to be an independent contractor and shall, unless otherwise
provided or authorized, have no authority to act for or represent Worldwide
Portfolios or the Portfolio in any way, nor otherwise be deemed an agent of,
partner or joint venturer with, Worldwide Portfolios or the Portfolio.
19. NAMES. Worldwide Portfolios and the Portfolio (together, the "Trust
Entities") may use the name "Bank of Ireland Asset Management" or "Berger" or
any name derived from or similar to "Bank of Ireland Asset Management" or
"Berger Associates, Inc.," including without limitation "Berger/BIAM," only for
so long as this Agreement or any extension, renewal or amendment hereof shall
remain in effect. At such time as such a contract shall no longer be in effect,
each of the Trust Entities will (to the extent that each lawfully can) cease to
use such a name or any other name indicating that it is advised by or otherwise
connected with Bank of Ireland Asset Management (U.S.) Limited, an Irish company
("BIAM"), or Berger Associates, Inc., a Delaware company ("Berger Associates").
The Trust Entities acknowledge that they have adopted the term "Berger/BIAM" as
part of their names through permission of BIAM and Berger Associates,
respectively, and agree that BIAM and Berger Associates each reserve to
themselves, their respective affiliates and any successors to their respective
businesses the right to grant the non-exclusive right to use the name "Bank of
Ireland Asset Management," "BIAM," "Berger" or "BAI" or any similar names to any
other corporation or entity.
20. CERTAIN DEFINITIONS. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "approved at least
annually" and "interested persons" shall have the same meanings as when used in
the 1940 Act (in each case as the 1940 Act is now in effect or hereafter may be
amended) and the rules and regulations thereunder, subject to such orders,
exemptions and interpretations as may be issued by the SEC under the 1940 Act
and as may be then in effect. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive by a rule, regulation, order, interpretation or other authority of
the SEC, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation, order, interpretation
or other authority.
21. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
22. MISCELLANEOUS. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or
10
<PAGE>
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused their duly authorized member or
officer to execute this Agreement as of the date and year first above written.
BBOI WORLDWIDE LLC
By: Berger Associates, Inc.,
Its Member
By
--------------------------------
Title:
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST,
with respect to the BERGER/BIAM
INTERNATIONAL PORTFOLIO
By
--------------------------------------
Title:
11
<PAGE>
EXHIBIT 5.2
SUB-ADVISORY AGREEMENT
Agreement made as of this ___ day of _______, 1996, between BBOI
Worldwide LLC ("BBOI Worldwide"), a Delaware limited liability company, and Bank
of Ireland Asset Management (U.S.) Limited ("BIAM"), an Irish corporation.
WHEREAS, BBOI Worldwide has entered into an Investment Advisory
Agreement (the "Advisory Agreement") with Berger/BIAM Worldwide Portfolios Trust
("Worldwide Portfolios"), a Delaware business trust and an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), with respect to Berger/BIAM International Portfolio
(the "Portfolio"), a separate series of Worldwide Portfolios; and
WHEREAS, BBOI Worldwide desires to delegate to BIAM its duties and
responsibilities for providing investment advisory services to the Portfolio,
and BIAM is willing to accept such delegation and to render such investment
advisory services.
NOW, THEREFORE, the parties agree as follows:
1. DELEGATION. Pursuant to Section 13 of the Advisory Agreement,
BBOI Worldwide hereby delegates to BIAM all the duties and responsibilities
required to be performed
<PAGE>
by BBOI Worldwide for the Portfolio pursuant to Section 2 of the Advisory
Agreement. BIAM hereby accepts such delegation and agrees to perform such
duties and assume such responsibilities, subject to the oversight of BBOI
Worldwide and the trustees of Worldwide Portfolios (the "Trustees"). No
provision of this Agreement shall relieve BBOI Worldwide of its duties or
responsibilities under the Advisory Agreement, and BBOI Worldwide shall
appropriately oversee, monitor and evaluate BIAM's performance of its duties and
responsibilities under this Agreement.
2. FURTHER OBLIGATIONS. In all matters relating to the performance
of this Agreement, BIAM shall act in conformity with Worldwide Portfolios' Trust
Instrument, Bylaws and currently effective registration statement under the 1940
Act and any amendments or supplements thereto (the "Registration Statement") and
with the written policies, procedures and guidelines of the Portfolio, written
instructions from the Trustees based on resolutions duly adopted by the
Trustees, and written instructions from BBOI Worldwide, officers of Worldwide
Portfolios, and/or the Sub-Administrator (as defined in the Advisory Agreement)
and comply with the requirements of the 1940 Act, the Investment Advisers Act of
1940, as amended, the rules thereunder, and all other applicable federal and
state laws and regulations. BBOI Worldwide agrees to provide to BIAM copies of
Worldwide
<PAGE>
Portfolios' Trust Instrument, Bylaws, Registration Statement, written policies,
procedures, and guidelines, written instructions of the Trustees based on
resolutions duly adopted by the Trustees, and written instructions from BBOI
Worldwide, officers of Worldwide Portfolios, and the Sub-Administrator, and any
amendments or supplements to any of them at, or, if practicable, before the time
such materials become effective. BIAM may perform its services through any
qualified employee, officer or agent of BIAM, and BBOI Worldwide and Worldwide
Portfolios shall not be entitled to the efforts, advice, recommendations or
judgment of any specific person.
3. OBLIGATIONS OF BBOI WORLDWIDE. BBOI Worldwide shall have the
following obligations under this Agreement:
(a) To keep BIAM continuously and fully informed (or cause the
custodian of the Portfolio's assets to keep BIAM so informed) as to the
composition of the investment portfolio of the Portfolio, cash requirements
and cash available for investment in the Portfolio and the nature of all of
the Portfolio's assets and liabilities;
(b) To furnish BIAM with a certified copy of any financial statement
or report prepared for the Portfolio by certified or independent public
<PAGE>
accountants and with copies of any financial statements or reports made to
the Portfolio's investors or to any governmental body or securities
exchange;
(c) To furnish BIAM with any further materials or information which
BIAM may reasonably request to enable it to perform its function under this
Agreement;
(d) To compensate BIAM for its services in accordance with the
provisions of Section 4 hereof.
4. COMPENSATION. BBOI Worldwide shall pay to BIAM for its services
under this Agreement a fee, payable in United States dollars, at an annual rate
of 0.45% of the average daily net asset value of the Portfolio. This fee shall
be computed and accrued daily and payable monthly on the last day of each month
during which or part of which this Agreement is in effect. BIAM reserves the
right to waive or reimburse all or any portion of its fees hereunder. BIAM
hereby waives all fees payable under this Agreement during the four-year period
beginning on the date on which shares of the first series of Berger/BIAM
Worldwide Funds Trust that invests all of its investable assets in the Portfolio
are first offered to the public (the "Launch Date") and ending on the fourth
anniversary of the Launch Date, or such other shorter period as the Board of
Managers of BBOI Worldwide may determine, PROVIDED that such waiver shall not
apply to any fees for services in respect of the
<PAGE>
assets in the Portfolio which are assets of those clients of BIAM designated as
"Converted Clients" on ATTACHMENT A, and FURTHER PROVIDED that such waiver shall
no longer apply as of the date on which BIAM and Berger Associates, Inc.
("Berger") agree that The Governor and Company of the Bank of Ireland shall
withdraw its application for approval by the Board of Governors of the Federal
Reserve System for BIAM or a designated affiliate to acquire a 50% interest in
BBOI Worldwide.
5. EXPENSES AND EXCLUDED EXPENSES. BIAM shall pay all its own costs
and expenses incurred in rendering the services required under this Agreement.
Notwithstanding any other provision hereof, it is expressly agreed that BIAM
shall not be responsible to pay, directly or on behalf of the Portfolio, any of
the Portfolio's expenses, including without limitation the expenses described in
Section 7(a) through (j) of the Advisory Agreement, which expenses shall remain
Worldwide Portfolios' own obligation and responsibility to pay.
6. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. Absent instructions from BBOI Worldwide or Worldwide
Portfolios to the contrary, BIAM
<PAGE>
shall place all orders for the purchase and sale of securities for the Portfolio
with brokers and dealers selected by BIAM. BIAM is authorized and directed to
place portfolio transactions for the Portfolio only with brokers and dealers who
render satisfactory service in the execution of orders at the most favorable
prices and at reasonable commission rates, PROVIDED, however, that BIAM may pay
a broker an amount of commission for effecting a securities transaction in
excess of the amount of commission another broker would have charged for
effecting that transaction if BIAM determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker viewed in terms of either that particular
transaction or the overall responsibilities of BIAM. BIAM is also authorized to
consider sales of shares in any fund investing in the Portfolio as a factor in
selecting broker-dealers to execute portfolio transactions for the Portfolio.
In placing portfolio business with such broker-dealers, BIAM shall seek the best
execution of each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the 1940 Act and
the Securities Exchange Act of 1934, as amended, and in the event that BIAM or
an affiliate is registered as a broker-dealer, BIAM may select a broker with
which it or any of its
<PAGE>
affiliates or the Portfolio is affiliated. BIAM or such affiliated broker may
effect or execute Portfolio securities transactions on an agency basis, whether
on a securities exchange or in the over-the-counter market, and receive
compensation from the Portfolio therefor.
Notwithstanding the foregoing, Worldwide Portfolios shall retain the
right to direct the placement of all portfolio transactions, and BBOI Worldwide
or the Trustees may establish policies or guidelines to be followed by BIAM in
placing portfolio transactions for the Portfolio pursuant to the foregoing
provisions. BIAM shall report on the placement of portfolio transactions in the
prior fiscal quarter at each quarterly meeting of the Trustees. To the extent
consistent with applicable law, purchase or sell orders for the Portfolio may be
aggregated with simultaneous purchase or sell orders for other clients of BIAM.
Whenever BIAM simultaneously places orders to purchase or sell the same security
on behalf of the Portfolio and one or more other clients of BIAM, such orders
will be allocated as to price and amount among all such clients in a manner
reasonably believed by BIAM to be fair and equitable to each client. BBOI
Worldwide and Worldwide Portfolios recognize that, in some cases, this procedure
may adversely affect the results obtained for the Portfolio.
<PAGE>
7. TERM. This Agreement shall become effective as of the date first
set forth above and shall continue in effect until the last day of April 1998,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees who are not parties hereto or interested persons of Worldwide
Portfolios or BBOI Worldwide, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by either
the Trustees or the affirmative vote of a majority of the outstanding voting
securities of the Portfolio.
8. TERMINATION. This Agreement may be terminated at any time,
without penalty, by BBOI Worldwide, the Trustees, or by the holders of interests
in the Portfolio acting by vote of at least a majority of its outstanding voting
securities, provided in any such case that 60 days' advance written notice of
termination be given to BIAM at its principal place of business. This Agreement
may also be terminated by BBOI Worldwide or Worldwide Portfolios if BIAM becomes
unable to discharge its duties and obligations under this Agreement. This
Agreement may be terminated by BIAM at any time, without penalty, by giving
<PAGE>
60 days' advance written notice of termination to BBOI Worldwide and to
Worldwide Portfolios.
9. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate in the event of its assignment. This Agreement may be amended by the
parties only in a written instrument signed by all parties to this Agreement and
only if such amendment is specifically approved (i) by a majority of the
Trustees, including a majority of the Trustees who are not interested persons of
Worldwide Portfolios, BBOI Worldwide or its affiliates, and (ii) if required by
applicable law, by the affirmative vote of a majority of the outstanding voting
securities in the Portfolio. Notwithstanding the foregoing, Worldwide
Portfolios' Registration Statement and the written policies, procedures and
guidelines, and written instructions from the Trustees based on resolutions duly
adopted by the Trustees referred to in Section 2 hereof may be amended by
Worldwide Portfolios or the Trustees from time to time; PROVIDED, however, that
BIAM shall not be obligated to follow any such amendment until BIAM has received
such amendment in writing from Worldwide Portfolios, the Trustees or from BBOI
Worldwide.
10. LIMITATION OF LIABILITY OF BIAM. BIAM shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or
<PAGE>
omission taken with respect to the Portfolio, except for willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder and except to the
extent otherwise provided by law. BIAM shall be entitled to rely upon any
written instructions from the Trustees of Worldwide Portfolios based on
resolutions duly adopted by the Trustees, and shall incur no liability to BBOI
Worldwide, Worldwide Portfolios or the Portfolio in acting upon such written
instructions. In addition, BIAM shall be entitled to rely upon any written
instructions from BBOI Worldwide, the Sub-Administrator or officers of Worldwide
Portfolios, and shall incur no liability to BBOI Worldwide in acting upon such
written instructions. As used in this section, "BIAM" shall include any
affiliate of BIAM performing services for the Portfolio contemplated hereunder
and managers, directors, officers and employees of BIAM and such affiliates.
11. INDEMNIFICATION. BBOI Worldwide hereby indemnifies and holds
harmless BIAM and its officers, directors, shareholders, employees and agents,
and any controlling person thereof, from all losses, charges, claims and
liabilities, and all costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, arising from any action which BIAM takes or
<PAGE>
omits to take pursuant to written instructions from BBOI Worldwide, the Sub-
Administrator, or from officers or Trustees of Worldwide Portfolios, provided
that no person shall be indemnified hereunder against any liability to Worldwide
Portfolios or its shareholders (or any expenses incident to such liability)
arising out of such person's own willful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of their reckless
disregard of their duties or obligations under this Agreement.
BBOI Worldwide acknowledges and agrees that BIAM, as the party to whom
BBOI Worldwide has delegated pursuant to Section 13 of the Advisory Agreement
all of BBOI Worldwide's duties and responsibilities required to be performed by
BBOI Worldwide for the Portfolio pursuant to Section 2 of the Advisory
Agreement, is a person entitled to indemnification by Worldwide Portfolios
pursuant to Section 16 of the Advisory Agreement.
BIAM hereby indemnifies and holds harmless BBOI Worldwide and
Worldwide Portfolios, and each of their Trustees, officers, managers,
shareholders, members, employees and agents, and any controlling person thereof,
from all losses, charges, claims and liabilities, and all costs and expenses,
including without limitation reasonable attorneys' fees and disbursements,
arising out of BIAM's
<PAGE>
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its duties or obligations under
this Agreement, provided that no person shall be indemnified hereunder against
any liability to Worldwide Portfolios or its shareholders (or any expenses
incident to such liability) arising out of such person's own willful
misfeasance, bad faith or gross negligence in the performance of their duties or
by reason of their reckless disregard of their duties or obligations under this
Agreement.
12. ACTIVITIES OF BIAM. The investment advisory services provided by
BIAM hereunder are not exclusive, and BIAM is free to render similar services to
others so long as its services under this Agreement are not materially adversely
affected or otherwise materially impaired thereby. Nothing in this Agreement
shall limit or restrict the right of any director, officer, or employee of BIAM
to engage in any other business or to devote his or her time and attention in
part to the management or other aspects of any business, whether of a similar
nature or a dissimilar nature.
13. INDEPENDENT CONTRACTOR. BIAM shall for all purposes hereunder be
deemed to be an independent contractor and shall, unless otherwise provided or
authorized, have no authority to act for or represent BBOI Worldwide, the
<PAGE>
Portfolio or Worldwide Portfolios in any way, nor otherwise be deemed an agent
of, partner or joint venturer with, BBOI Worldwide, the Portfolio or Worldwide
Portfolios.
14. THIRD PARTY BENEFICIARY. The parties expressly acknowledge and
agree that Worldwide Portfolios is a third party beneficiary of this Agreement
and that Worldwide Portfolios shall have the full right to sue upon and enforce
this Agreement in accordance with its terms as if it were a signatory hereto.
15. NOTICES. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
certified or registered mail, return receipt requested and postage prepaid:
(a) To BBOI Worldwide at:
BBOI Worldwide LLC
210 University Boulevard
Denver, Colorado 80206
Attention: Berger Associates, Inc.,
Gerard M. Lavin, President
Phone: (303) 329-0200
Fax: (303) 394-4397
(b) To BIAM at:
Bank of Ireland Asset Management
(U.S.) Limited
26 Fitzwilliam Place
Dublin 2, Ireland
Attention: William R. Cotter
Phone: 011 353 1 661 6433
Fax: 011 353 1 678 5342
with a copy to:
<PAGE>
Bank of Ireland Asset Management
(U.S.) Limited
Two Greenwich Plaza
Greenwich, Connecticut 06830
Attention: Denis Curran
Phone: (203) 869-0111
Fax: (203) 869-0268
and
Debevoise & Plimpton
555 13th Street, N.W.
Washington, D.C. 20004
Attention: Marcia L. MacHarg
Phone: (202) 383-8058
Fax: (202) 383-8118
(c) To Worldwide Portfolios at:
Berger/BIAM Worldwide Portfolios Trust
210 University Boulevard
Suite 900
Denver, Colorado 80206
Attention: Gerard M. Lavin, President
Phone: (303) 329-0200
Fax: (303) 394-4397
with a copy to:
Davis, Graham & Stubbs LLP
370 Seventeenth Street
Suite 4700
Denver, Colorado 80202
Attention: Lester Woodward
Phone: (303) 892-9400
Fax: (303) 892-7400
16. CERTAIN DEFINITIONS. As used in this Agreement, the terms "vote
of a majority of the outstanding voting securities," "assignment," "approved at
least annually," and "interested persons" shall have the same meanings as when
used in the 1940 Act (in each case as the 1940 Act is now in effect or hereafter
may be amended) and the rules and regulations thereunder, subject to such
<PAGE>
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission (the "SEC") under the 1940 Act and as may be then in effect.
Where the effect of a requirement of the federal securities laws reflected in
any provision of this Agreement is made less restrictive by a rule, regulation,
order, interpretation or other authority of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation, order, interpretation or other authority.
17. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York (without giving effect to the conflicts
of laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of New York conflict with the applicable provisions of the
1940 Act, the latter shall control.
18. MISCELLANEOUS. This Agreement may be executed in two or more
counterparts, which taken together shall constitute one and the same instrument.
The headings in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions thereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
<PAGE>
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
19. FORM ADV. BBOI Worldwide hereby acknowledges receipt of the Form
ADV, Part II which BIAM represents is the most recent version of such form which
BIAM has filed with the SEC. BIAM will, promptly after filing any amendment to
its Form ADV with the SEC, furnish a copy of such amendment to BBOI Worldwide
and to Worldwide Portfolios.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
BBOI WORLDWIDE LLC
By: Berger Associates, Inc.,
its Sole Member
By:
------------------------------
Name:
Title:
BANK OF IRELAND ASSET
MANAGEMENT (U.S.) LIMITED
By:
------------------------------
Name:
Title:
<PAGE>
ATTACHMENT A
CONVERTED CLIENTS
<PAGE>
EXHIBIT 8
CUSTODY AGREEMENT
THIS AGREEMENT made effective as of the ____ day of ____________, 1996,
by and between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered
under the laws of the state of Missouri, having its trust office located at 127
West 10th Street, Kansas City, Missouri 64105 ("Custodian"), and BERGER/BIAM
WORLDWIDE PORTFOLIOS TRUST, a Delaware business trust, referred to as the
"Fund," consisting of separate portfolios represented by separate series of
shares of beneficial interest (referred to herein, together with any such
portfolios hereafter constituted, where appropriate, individually as a
"Portfolio," or collectively as the "Portfolios,") having its principal office
and place of business at 210 University Boulevard, Suite 900, Denver, Colorado
80206.
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian of the securities and monies of Fund's investment portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian
as custodian of the Fund which is to include appointment as custodian of
the securities and monies at any time owned by the Fund.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
Custodian prior to the effective date of this Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Resolutions of the Trustees of Fund appointing Custodian as custodian
hereunder and approving the form of this Agreement; and
<PAGE>
B. Resolutions of the Trustees of Fund designating certain persons to
give instructions on behalf of Fund to Custodian and authorizing
Custodian to rely upon written instructions over their signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. DELIVERY OF ASSETS
Fund will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as
practicable, and from time to time thereafter, all portfolio
securities acquired by it and monies then owned by it except as
permitted by the Investment Company Act of 1940 or from time to time
coming into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies not so
delivered. All securities so delivered to Custodian (other than
bearer securities) shall be registered in the name of the applicable
Portfolio or its nominee, or of a nominee of Custodian, or shall be
properly endorsed and in form for transfer satisfactory to Custodian.
B. DELIVERY OF ACCOUNTS AND RECORDS
Fund shall turn over to Custodian all of each Portfolio's relevant
accounts and records previously maintained by it. Custodian shall be
entitled to rely conclusively on the completeness and correctness of
the accounts and records turned over to it by Fund, and Fund shall
indemnify and hold Custodian harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other deficiency of
such accounts and records or in the failure of Fund to provide any
portion of such or to provide any information needed by the Custodian
knowledgeably to perform its function hereunder.
C. DELIVERY OF ASSETS TO THIRD PARTIES
Custodian will receive delivery of and keep safely the assets of each
Portfolio delivered to it from time to time segregated in a separate
account. Custodian will not deliver, assign, pledge or hypothecate
any such assets to any person except as permitted by the provisions of
this Agreement or any agreement executed by
2
<PAGE>
it according to the terms of section 3.S. of this Agreement. Upon
delivery of any such assets to a subcustodian pursuant to Section 3.S.
of this agreement, Custodian will create and maintain records
identifying those assets which have been delivered to the subcustodian
as belonging to each such Portfolio. The Custodian is responsible for
the securities and monies of Fund only until they have been
transmitted to and received by other persons as permitted under the
terms of this Agreement, except for securities and monies transmitted
to subcustodians appointed under Section 3.S of this Agreement for
which Custodian remains responsible to the extent provided in Section
3.S of this Agreement. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System or Participant Trust
Company (PTC) or other depository approved by the Fund (as such
entities are defined at 17 CFR Section 270.17f-4(b)) (each a
"Depository" and collectively the "Depositories").
D. REGISTRATION OF SECURITIES
Custodian will hold stocks and other registerable portfolio securities
of Fund registered in the name of the applicable Portfolio or in the
name of any nominee of Custodian for whose fidelity and liability
Custodian will be fully responsible, or in street certificate form,
so-called, with or without any indication of fiduciary capacity.
Unless otherwise instructed, Custodian will register all such
portfolio securities in the name of its authorized nominee. All
securities, and the ownership thereof by Fund, which are held by
Custodian hereunder, however, shall at all times be identifiable on
the records of the Custodian. The Fund agrees to hold Custodian and
its nominee harmless for any liability arising solely from Custodian
or its nominee acting as a recordholder of securities held in custody.
3
<PAGE>
E. EXCHANGE OF SECURITIES
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of Fund for other securities or
cash issued or paid in connection with any reorganization,
recapitalization, merger, consolidation, split-up of shares, change of
par value, conversion or otherwise, and will deposit any such
securities in accordance with the terms of any reorganization or
protective plan. Without instructions, Custodian is authorized to
exchange securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par value of
the stock is changed, and, upon receiving payment therefor, to
surrender bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that Custodian shall
receive instructions prior to surrendering any convertible security.
F. PURCHASES OF INVESTMENTS OF THE FUND
Fund will, on each business day on which a purchase of securities
shall be made by it, deliver to Custodian instructions which shall
specify with respect to each such purchase:
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
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In accordance with such instructions, Custodian will pay for out of
monies held for the account of the Portfolio, but only insofar as
monies are available therein for such purpose, and receive the
portfolio securities so purchased by or for the account of the
Portfolio except that Custodian may in its sole discretion advance
funds for the account of the Portfolio which may result in an
overdraft because the monies held by the Custodian for the account of
the Portfolio of the Fund are insufficient to pay the total amount
payable upon such purchase. Except as otherwise instructed by Fund,
such payment shall be made by the Custodian only upon receipt of
securities: (a) by the Custodian; (b) by a clearing corporation of a
national exchange of which the Custodian is a member; or (c) by a
Depository. Notwithstanding the foregoing, (i) in the case of a
repurchase agreement, the Custodian may release funds to a Depository
prior to the receipt of advice from the Depository that the securities
underlying such repurchase agreement have been transferred by book-
entry into the account maintained with such Depository by the
Custodian, on behalf of its customers, provided that the Custodian's
instructions to the Depository require that the Depository make
payment of such funds only upon transfer by book-entry of the
securities underlying the repurchase agreement in such account; (ii)
in the case of time deposits, call account deposits, currency deposits
and other deposits, foreign exchange transactions, futures contracts
or options, the Custodian may make payment therefor before receipt of
an advice or confirmation evidencing said deposit or entry into such
transaction; and (iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make, or cause a subcustodian appointed pursuant to
Section 3.S.2. of this Agreement to make, payment therefor in
accordance with generally accepted local custom and market practice.
G. SALES AND DELIVERIES OF INVESTMENTS OF THE FUND - OTHER THAN OPTIONS
AND FUTURES
Fund will, on each business day on which a sale of investment
securities of Fund has been made, deliver to Custodian instructions
specifying with respect to each such sale:
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1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of the Portfolio to the broker or other person specified in the
instructions relating to such sale. Except as otherwise instructed by
Fund, such delivery shall be made upon receipt of: (a) payment
therefor in such form as is satisfactory to the Custodian; (b) credit
to the account of the Custodian with a clearing corporation of a
national securities exchange of which the Custodian is a member; or
(c) credit to the account of the Custodian, on behalf of its
customers, with a Depository. Notwithstanding the foregoing: (i) in
the case of securities held in physical form, such securities shall be
delivered in accordance with "street delivery custom" to a broker or
its clearing agent; or (ii) in the case of the sale of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make, or cause a subcustodian appointed pursuant to
Section 3.S.2. of this Agreement to make, such delivery upon payment
therefor in accordance with generally accepted local custom and market
practice.
H. PURCHASES OR SALES OF SECURITY OPTIONS, OPTIONS ON INDICES AND
SECURITY INDEX FUTURES CONTRACTS
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Fund will, on each business day on which a purchase or sale of the
following options and/or futures shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
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j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. Option on Index Future Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. SECURITIES PLEDGED OR LOANED
If specifically allowed for in the prospectus of Fund:
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1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by Fund; provided, however, that the securities
shall be released only upon payment to Custodian of the monies
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, further securities
may be released or caused to be released for that purpose upon
receipt of instructions. Upon receipt of instructions, Custodian
will pay, but only from funds available for such purpose, any
such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
J. ROUTINE MATTERS
Custodian will, in general, attend to all routine and mechanical
matters in connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with securities or other property of Fund
except as may be otherwise provided in this Agreement or directed from
time to time by the Trustees of Fund.
K. DEPOSIT ACCOUNT
Custodian will open and maintain a special purpose deposit account in
the name of Custodian ("Account"), subject only to draft or order by
Custodian upon receipt of instructions. All monies received by
Custodian from or for the account of a Portfolio shall be deposited in
the Account of such Portfolio. Barring events not in the control of
the Custodian such as strikes, lockouts or labor disputes,
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riots, war or equipment or transmission failure or damage, fire,
flood, earthquake or other natural disaster, action or inaction of
governmental authority or other causes beyond its control, at 9:00
a.m., Kansas City time, on the second business day after deposit of
any check into a Portfolio's Account, Custodian agrees to make Fed
Funds available to such Portfolio in the amount of the check.
Deposits made by Federal Reserve wire will be available to the Fund
immediately and ACH wires will be available to the Fund on the next
business day. Income earned on the portfolio securities will be
credited to the Account of the applicable Portfolio based on the
schedule attached as Exhibit A. The Custodian will be entitled to
reverse any credited amounts where credits have been made and monies
are not finally collected, provided that the Custodian has made
reasonable efforts to collect such uncollected income. If monies are
collected after such reversal, the Custodian will credit the
applicable Portfolio in that amount. Custodian may open and maintain
Accounts in State Street Bank and Trust Company, and in such other
banks or trust companies as may be designated by Custodian and as
properly authorized by resolution of the Trustees of the Fund, such
Accounts, however, to be in the name of Custodian and subject only to
its draft or order.
L. INCOME AND OTHER PAYMENTS TO THE PORTFOLIO
Custodian will:
1. Collect, claim and receive and deposit for the account of the
Portfolio all income and other payments which become due and
payable on or after the effective date of this Agreement with
respect to the securities deposited under this Agreement, and
credit the account of the applicable Portfolio in accordance with
the schedule attached hereto as Exhibit A. If, for any reason, a
Portfolio is credited with income that is not subsequently
collected, Custodian may reverse that credited amount provided
that the Custodian has made reasonable efforts to collect such
uncollected income;
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2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
notice of which is contained in publications of the
type to which it normally subscribes for such purpose;
and
b. the endorsement for collection, in the name of Fund, of all
checks, drafts or other negotiable instruments.
Custodian, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to instructions.
Unless prior instructions have been received to the contrary,
Custodian will, without further instructions, sell any rights held for
the account of a Portfolio on the last trade date prior to the date of
expiration of such rights.
M. PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS
On the declaration of any dividend or other distribution on the shares
of the Fund ("Fund Shares") by the Trustees of Fund, Fund shall
deliver to Custodian instructions with respect thereto. Except if the
ex-dividend date and the reinvestment date of any dividend are the
same, in which case funds shall remain in the Custody Account, on the
date specified in such Resolution for the payment
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of such dividend or other distribution, Custodian will pay out of the
monies held for the account of the applicable Portfolio, insofar as
the same shall be available for such purposes, and credit to the
account of the Dividend Disbursing Agent for Fund, such amount as may
be necessary to pay the amount per share payable in cash on Fund
Shares issued and outstanding on the record date as given in such
instructions.
N. SHARES OF FUND PURCHASED BY FUND
Whenever any Fund Shares are repurchased or redeemed by Fund, Fund or
its agent shall advise Custodian of the aggregate dollar amount to be
paid for such shares and shall confirm such advice in writing. Upon
receipt of such advice, Custodian shall charge such aggregate dollar
amount to the Account of the applicable Portfolio and either deposit
the same in the account maintained for the purpose of paying for the
repurchase or redemption of Fund Shares or deliver the same in
accordance with such advice.
Custodian shall not have any duty or responsibility to determine that
Fund Shares have been removed from the proper shareholder account or
accounts or that the proper number of such shares have been cancelled
and removed from the shareholder records.
O. SHARES OF FUND PURCHASED FROM FUND
Whenever Fund Shares are purchased from Fund, Fund will deposit or
cause to be deposited with Custodian the amount received for such
shares.
Custodian shall not have any duty or responsibility in its capacity as
Custodian of the Fund to determine that Fund Shares purchased from
Fund have been added to the proper shareholder account or accounts or
that the proper number of such shares have been added to the
shareholder records.
P. PROXIES AND NOTICES
Custodian will promptly deliver or mail or have delivered or mailed to
Fund all proxies properly signed, all notices of meetings, all proxy
statements and other notices, requests or announcements affecting or
relating to securities held by Custodian for Fund and will, upon
receipt of instructions, execute and deliver or
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cause its nominee to execute and deliver or mail or have delivered or
mailed such proxies or other authorizations as may be required.
Except as provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee will
exercise any power inherent in any such securities, including any
power to vote the same, or execute any proxy, power of attorney, or
other similar instrument voting any of such securities, or give any
consent, approval or waiver with respect thereto, or take any other
similar action.
Q. DISBURSEMENTS
Custodian will pay or cause to be paid insofar as funds are available
for the purpose, bills, statements and other obligations of Fund
(including but not limited to obligations in connection with the
conversion, exchange or surrender of securities owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. DAILY STATEMENT OF ACCOUNTS
Custodian will, within a reasonable time, render to Fund as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of the Portfolio during said day. Custodian will, from time
to time, upon request by Fund, render a detailed statement of the
securities and monies held for the Portfolios under this Agreement,
and Custodian will maintain such books and records as are necessary to
enable it to do so and will permit such persons as are authorized by
Fund, including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, will permit federal and state regulatory agencies to examine
the securities, books and records. Upon the written instructions of
Fund or as demanded by federal or state regulatory agencies, Custodian
will instruct any subcustodian to give such persons as are
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authorized by the Fund, including Fund's independent public
accountants, access to such records or confirmation of the contents of
such records; and if demanded, to permit federal and state regulatory
agencies to examine the books, records and securities held by
subcustodian which relate to Fund.
S. APPOINTMENT OF SUBCUSTODIAN
1. Notwithstanding any other provisions of this Agreement, all or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies selected by Custodian. Any such
subcustodian selected by the Custodian must have the
qualifications required for custodian under the Investment
Company Act of 1940, as amended. Custodian shall be responsible
to the Fund for any loss, damage or expense suffered or incurred
by the Fund resulting from the actions or omissions of any
subcustodians selected and appointed by Custodian (except
subcustodians appointed at the request of Fund and as provided in
Subsection 2 below) to the same extent Custodian would be
responsible to the Fund under Section 5. of this Agreement if it
committed the act or omission itself. Upon request of the Fund,
Custodian shall be willing to contract with other subcustodians
reasonably acceptable to the Custodian for purposes of (i)
effecting third-party repurchase transactions with banks,
brokers, dealers, or other entities through the use of a common
custodian or subcustodian, or (ii) providing depository and
clearing agency services with respect to certain variable rate
demand note securities, or (iii) for other reasonable purposes
specified by Fund; provided, however, that the Custodian shall be
responsible to the Fund for any loss, damage or expense suffered
or incurred by the Fund resulting from the actions or omissions
of any such subcustodian only to the same extent such
subcustodian is responsible to the Custodian. The Fund shall be
entitled to review the Custodian's contracts with any such
subcustodians appointed at the request of Fund.
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2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts reasonably necessary to effect Fund's
foreign securities transactions, may be held in the custody of
one or more banks or trust companies acting as subcustodians,
according to Section 3.S.1; and thereafter, pursuant to a written
contract or contracts as approved by Fund's governing Board, may
be transferred to an account maintained by such subcustodian with
an eligible foreign custodian, as defined in Rule 17f-5(c)(2),
provided that any such arrangement involving a foreign custodian
shall be in accordance with the provisions of Rule 17f-5 under
the Investment Company Act of 1940 as that Rule may be amended
from time to time. The Fund shall be provided the contract with
the domestic subcustodian who shall contract with the eligible
foreign subcustodians. The Custodian shall be responsible for
the monies and securities of Fund held by eligible foreign
subcustodians to the extent the domestic subcustodian with which
the Custodian contracts is responsible to Custodian.
T. ACCOUNTS AND RECORDS PROPERTY OF FUND
Custodian acknowledges that all of the accounts and records maintained
by Custodian pursuant to this Agreement are the property of Fund, and
will be made available to Fund for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist Fund's
independent auditors, or upon approval of Fund, or upon demand, any
regulatory body having jurisdiction over the Fund or Custodian, in any
requested review of Fund's accounts and records but shall be
reimbursed for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews.
U. ADOPTION OF PROCEDURES
Custodian and Fund may from time to time adopt procedures as they
agree upon, and Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates any
requirements of its prospectus,
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Trust Instrument, Bylaws, or any rule or regulation of any regulatory
body or governmental agency. Fund will be responsible to notify
Custodian of any changes in statutes, regulations, rules or policies
not specifically governing custodians or banks which might necessitate
changes in Custodian's responsibilities or procedures.
V. ADVANCES
In the event Custodian or any subcustodian shall, in its sole
discretion, advance cash or securities for any purpose (including but
not limited to securities settlements, purchase or sale of foreign
exchange or foreign exchange contracts and assumed settlement) for the
benefit of any Portfolio, the advance shall be payable by the Fund on
demand. Any such cash advance shall be subject to an overdraft charge
at the rate set forth in the then-current fee schedule from the date
advanced until the date repaid. As security for each such advance,
Fund hereby grants Custodian and such subcustodian a lien on and
security interest in all property at any time held for the account of
the applicable Portfolio, including without limitation all assets
acquired with the amount advanced. Should the Fund fail to promptly
repay the advance, the Custodian and such subcustodian shall be
entitled to utilize available cash and to dispose of such Portfolio's
assets pursuant to applicable law to the extent necessary to obtain
reimbursement of the amount advanced and any related overdraft
charges.
W. EXERCISE OF RIGHTS; TENDER OFFERS
Upon receipt of instructions, the Custodian shall: (a) deliver
warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to the agent of such issuer or trustee, for the
purpose of exercise or sale, provided that the new securities, cash or
other assets, if any, are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be paid or delivered to
the Custodian or the tendered securities are to be returned to the
Custodian.
4. INSTRUCTIONS.
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A. The term "instructions", as used herein, means written or oral
instructions to Custodian from a designated representative of Fund.
Certified copies of resolutions of the Trustees of Fund naming one or
more designated representatives to give instructions in the name and
on behalf of Fund, may be received and accepted from time to time by
Custodian as conclusive evidence of the authority of any designated
representative to act for Fund and may be considered to be in full
force and effect (and Custodian will be fully protected in acting in
reliance thereon) until receipt by Custodian of notice to the
contrary. Unless the resolution delegating authority to any person to
give instructions specifically requires that the approval of anyone
else will first have been obtained, Custodian will be under no
obligation to inquire into the right of the person giving such
instructions to do so. Notwithstanding any of the foregoing
provisions of this Section 4, no authorizations or instructions
received by Custodian from Fund will be deemed to authorize or permit
any trustee, officer, employee, or agent of Fund to withdraw any of
the securities or similar investments of Fund upon the mere receipt of
such authorization or instructions from such trustee, officer,
employee or agent.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgment if required at the discretion of
Custodian) of the instructions of a designated representative of Fund
will undertake to deliver for Fund's account monies, (provided such
monies are on hand or available) in connection with Fund's
transactions and to wire transfer such monies to such broker, dealer,
subcustodian, bank or other agent specified in such instructions by a
designated representative of Fund.
B. No later than the next business day immediately following each oral
instruction, Fund will send Custodian written confirmation of such
oral instruction. At Custodian's sole discretion, Custodian may
record on tape, or otherwise, any oral instruction whether given in
person or via telephone, each such recording identifying the parties,
the date and the time of the beginning and ending of such oral
instruction.
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C. If Custodian shall provide Fund direct access to any computerized
recordkeeping and reporting system used hereunder or if Custodian and
Fund shall agree to utilize any electronic system of communication,
Fund shall be fully responsible for any and all consequences of the
use or misuse of the terminal device, passwords, access instructions
and other means of access to such system(s) which are utilized by,
assigned to or otherwise made available to the Fund. Fund agrees to
implement and enforce appropriate security policies and procedures to
prevent unauthorized or improper access to or use of such system(s).
Custodian shall be fully protected in acting hereunder upon any
instructions, communications, data or other information received by
Custodian by such means as fully and to the same effect as if
delivered to Custodian by written instrument signed by the requisite
authorized representative(s) of Fund. Fund shall indemnify and hold
Custodian harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability which
may be suffered or incurred by Custodian as a result of the use or
misuse, whether authorized or unauthorized, of any such system(s) by
Fund or by any person who acquires access to such system(s) through
the terminal device, passwords, access instructions or other means of
access to such system(s) which are utilized by, assigned to or
otherwise made available to the Fund, except to the extent
attributable to any negligence or willful misconduct by Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Notwithstanding any other provisions of this Agreement, Custodian will
hold harmless and indemnify Fund from and against any loss or
liability, including attorney's fees, arising out of Custodian's
breach of this Agreement or its negligence, willful misconduct or bad
faith. Custodian shall not be liable for consequential, special, or
punitive damages. Custodian may request and obtain the advice and
opinion of counsel for Fund, or of its own counsel with respect to
questions or matters of law, and it shall be without liability to Fund
for any action taken or omitted by it in good faith, in conformity
with such advice or opinion. If Custodian reasonably believes that it
could not prudently act according to the
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instructions of the Fund or the Fund's counsel, it may in its
discretion, with notice to the Fund, not act according to such
instructions.
B. Fund shall hold harmless and indemnify Custodian from and against any
loss or liability, including attorney's fees, arising out of Fund's
breach of this Agreement or its negligence, willful misconduct or bad
faith.
C. Custodian may rely upon the advice of Fund and upon statements of
Fund's public accountants and other persons believed by it in good
faith, to be expert in matters upon which they are consulted, and
Custodian shall not be liable for any actions taken, in good faith,
upon such statements.
D. If Fund requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable
for payment of monies or in any other way, Custodian, upon notice to
Fund given prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian against any
liability on account of such action.
E. Custodian shall be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for such cash disbursements, costs
and expenses as may be agreed upon from time to time by Custodian and
Fund.
F. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to
have been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from Fund hereunder, a
certificate signed by the Fund's President, or other officer
specifically authorized for such purpose.
G. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any securities purchased by or for
Fund, the legality of the purchase thereof or evidence of
ownership required by
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Fund to be received by Custodian, or the propriety of the
decision to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of beneficial
interest of Fund, or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any stock
dividend.
H. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the payment
of money received by it on behalf of Fund, until Custodian actually
receives such money, provided only that it shall advise Fund promptly
if it fails to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund toward the
end that such money shall be received.
I. Except as otherwise provided in this Agreement, Custodian shall not be
responsible for loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other person
with whom Custodian may deal in the absence of negligence, or bad
faith on the part of Custodian.
J. Custodian shall be responsible to the Fund for any loss, damage or
expense suffered or incurred by the Fund resulting from the actions or
omissions of any Depository only to the same extent such Depository is
responsible to Custodian.
K. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section
3.S.2. must, provide Fund for its approval, agreements with banks or
trust companies which will act as subcustodians for Fund pursuant to
Section 3.S. of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
the Fee Schedule attached hereto as Exhibit B which may be changed from
time to time as
20
<PAGE>
agreed to in writing by Custodian and Fund. Custodian may charge such
compensation against monies held by it for the account of Fund. Custodian
will also be entitled, notwithstanding the provisions of Sections 5.C. or
5.D. hereof, to charge against any monies held by it for the account of
Fund the amount of any loss, damage, liability, advance, or expense for
which it shall be entitled to reimbursement from the Fund under the
provisions of this Agreement including fees or expenses due to Custodian
for other services provided to the Fund by the Custodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than sixty (60) days prior to the date upon
which such termination will take effect. Upon termination of this
Agreement, Fund will pay to Custodian such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund will use its best efforts to obtain a successor custodian.
Unless the holders of a majority of the outstanding shares of the Fund vote
to have the securities, funds and other properties held under this
Agreement delivered and paid over to some other person, firm or corporation
specified in the vote, having not less the Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report, and meeting such other qualifications for custodian as
set forth in the governing documents of Fund, the Trustees of Fund will,
forthwith upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian a bank or trust company having such
qualifications. Custodian will, upon termination of this Agreement,
deliver to the successor custodian so specified or appointed, at
Custodian's office, all securities then held by Custodian hereunder, duly
endorsed and in form for transfer, all funds and other properties of Fund
deposited with or held by Custodian hereunder, or will co-operate in
effecting changes in book-entries at the Depository Trust Company or in the
Treasury/Federal Reserve Book-Entry System or other depository pursuant to
31 CFR Sec. 306.118. In the event no such vote has been adopted by the
stockholders of Fund and no written order designating a successor custodian
has been delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds and
properties of Fund to a bank or trust
21
<PAGE>
company at the selection of Custodian and meeting the qualifications for
custodian, if any, set forth in the governing documents of Fund and having
not less than Two Million Dollars ($2,000,000) aggregate capital, surplus
and undivided profits, as shown by its last published report. Upon either
such delivery to a successor custodian, Custodian will have no further
obligations or liabilities under this Agreement. Thereafter such bank or
trust company will be the successor custodian under this Agreement and will
be entitled to reasonable compensation for its services. In the event that
no such successor custodian can be found, Fund will submit to its
shareholders, before permitting delivery of the cash and securities owned
by Fund to anyone other than a successor custodian, the question of whether
Fund will be liquidated or function without a custodian. Notwithstanding
the foregoing requirement as to delivery upon termination of this
Agreement, Custodian may make any other delivery of the securities, funds
and property of Fund which is permitted by the Investment Company Act of
1940, Fund's Trust Instrument and Bylaws then in effect or apply to a court
of competent jurisdiction for the appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received by
Fund at 210 University Boulevard, Suite 900, Denver, Colorado 80206 or
at such other address as Fund may have designated to Custodian in writing,
will be deemed to have been properly given to Fund hereunder; and notices,
requests, instructions and other writings received by Custodian at its
offices at 127 West 10th Street, Kansas City, Missouri 64105, or to such
other address as it may have designated to Fund in writing, will be deemed
to have been properly given to Custodian hereunder.
9. LIMITATION OF LIABILITY. Notice is hereby given that the Fund is a
business trust organized under the Delaware Business Trust Act pursuant to
a Certificate of Trust filed in the office of the Secretary of State of the
State of Delaware. All parties to this Agreement acknowledge and agree
that the Fund is a series Fund and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect
to such series only, and not against the assets of the Fund general or
against the assets held
22
<PAGE>
with respect to any other series and further that no trustee, officer or
holder of shares of beneficial interest of the Fund shall be personally
liable for any of the foregoing.
10. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
G. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without prior
written consent of the other party.
I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of
23
<PAGE>
1940 and the rules and regulations promulgated thereunder, such
statutes, rules and regulations shall be deemed to control and
supersede such provision without nullifying or terminating the
remainder of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
------------------------------------
Title:
---------------------------------
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
By:
------------------------------------
Title:
---------------------------------
24
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTION DTC PHYSICAL FED
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
- ---- ----------- ---------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Int. Paydate C Paydate C N/A
Floating Rate Int.(No Rate) N/A As Rate Received C N/A
Mtg. Backed P&I Paydate C Paydate + 1 Bus. Day C Paydate F
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Legend
- ------
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
25
<PAGE>
EXHIBIT 9.1
RECORDKEEPING, PRICING AGENT
AND TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made to be effective as of this _____ day of ______________,
1996, by and between BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST, a Delaware business
trust, referred to as the "Fund," consisting of separate portfolios represented
by separate series of shares of beneficial interest, (referred to herein,
together with any such portfolios hereafter constituted, where appropriate,
individually as a "Portfolio," and collectively as the "Portfolios), having its
place of business at 210 University Boulevard, Suite 900, Denver, Colorado 80206
("Fund"), and INVESTORS FIDUCIARY TRUST COMPANY, a state chartered trust company
organized and existing under the laws of the State of Missouri, having its
principal place of business at 127 West 10th Street, Kansas City, Missouri,
64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Recordkeeping and Pricing Agent
and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, mutually covenant and agree
as follows:
1. APPOINTMENT OF RECORDKEEPING AND PRICING AGENT
Fund hereby constitutes and appoints IFTC as Recordkeeping and Pricing
Agent to calculate the daily net asset value of each Portfolio and to
perform certain accounting and recordkeeping functions required of Fund as
a registered investment company under the Investment Company Act of 1940,
as amended (the "Act"); to provide certain information necessary for Fund
to file financial and other reports; to prepare, maintain and preserve
certain required books, accounts and records as the basis for such reports;
to perform certain daily functions in connection with such accounts and
records; and, upon request, to act as liaison with the Fund's independent
auditors.
2. DELIVERY OF CORPORATE DOCUMENTS
Fund shall deliver to IFTC prior to the effective date of this Agreement
copies of a resolution of the Trustees of Fund certified by the Secretary
or Assistant Secretary of the Fund, appointing IFTC as Recordkeeping and
Pricing Agent for Fund and approving the
<PAGE>
form of this Agreement. Fund shall also deliver a resolution of the
Trustees of the Fund designating certain persons to give instructions on
behalf of the Fund to IFTC, and authorizing IFTC to rely upon written
instructions over his/her/their signatures.
3. REPRESENTATIONS AND WARRANTIES OF FUND
A. Fund represents and warrants that it is a business trust duly
organized as an investment company and existing and in good standing
under the laws of the State of Delaware;
B. Fund represents and warrants that it has the power and authority under
applicable laws, its Trust Instrument and bylaws, and has taken all
action necessary to enter into and perform this Agreement, including
appropriate authorization from the Fund's Trustees;
C. Fund represents and warrants that it has determined that the automated
data processing system on which IFTC shall prepare, maintain and
preserve the books and records of the Fund (the "Portfolio System") is
suitable for its needs;
D. Fund acknowledges that IFTC, as Licensee, and DST Systems, Inc., as
Licensor ("Licensor"), have proprietary rights in and to the Portfolio
System and that the Portfolio System and the programs, documentation,
books, records, lists, pricing schedules, designs, plans and other
information relating to the Portfolio System or the business of IFTC
("IFTC Confidential Information") are confidential and constitute
trade secrets of IFTC.
E. During the term of this Agreement and for a period of five years after
termination of this Agreement, Fund shall preserve the confidentiality
of the IFTC Confidential Information and prevent its disclosure to
persons other than its own employees and agents who reasonably have a
need to know or have access to the IFTC Confidential Information
pursuant to this Agreement, and shall take appropriate action to
protect the rights of IFTC and Licensor as to the IFTC Confidential
Information, including, but not limited to notification to all
employees and agents of the Fund of the necessity to maintain the
confidentiality of IFTC Confidential Information, provided, that IFTC
shall be solely responsible for protecting any trademarks, patents,
copyrights and licenses against
2
<PAGE>
unauthorized use and infringement by parties other than the Fund, its
employees and agents.
4. REPRESENTATION AND WARRANTIES OF IFTC
A. IFTC is a trust company duly organized and existing and in good
standing under the laws of the State of Missouri.
B. IFTC has the power and authority under applicable laws, its charter
and bylaws, and has taken all action necessary, to enter into this
Agreement and perform the services contemplated herein, and this
Agreement constitutes a legal, valid and binding obligation of IFTC,
enforceable in accordance with its terms.
C. IFTC has obtained and shall maintain throughout the term of this
Agreement all necessary proprietary rights and approvals, licenses and
permits which are required for IFTC to perform its duties and
obligations hereunder and to use the Portfolio System.
D. IFTC presently has, and shall maintain throughout the term of this
Agreement, facilities, equipment, computer hardware and software, and
personnel necessary to perform its duties and obligations under this
Agreement, and shall maintain or otherwise have readily available,
reasonable back-up facilities and equipment to ensure that there is no
material interruption in the services contemplated by this Agreement,
except as provided in Section 7 hereof.
5. DUTIES AND RESPONSIBILITIES OF IFTC
A. DELIVERY OF RECORDS.
Fund shall turn over to IFTC all of Fund's accounts and records
previously maintained relating to the services to be provided by IFTC
hereunder. IFTC shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund or its previous service provider and Fund shall
indemnify and hold IFTC harmless of and from any and all costs,
expenses, damages, losses and liabilities whatsoever, including
attorney's fees (collectively, "Damages"), arising out of or in
connection with any error, omission, inaccuracy or other deficiency of
such accounts and records or in the failure of Fund or its previous
service provider to provide any portion of such
3
<PAGE>
account and records or to provide any information needed by IFTC to
perform its function hereunder.
B. ACCOUNTING AND PORTFOLIO DUTIES.
IFTC shall perform the duties specified on Schedule A attached hereto.
C. ACCOUNTS AND RECORDS
1. IFTC, with the direction of the Fund, its accountants and/or its
advisors, shall prepare, maintain and preserve all books, records,
ledgers, journals, accounts and other documents, containing such
information as may be required from time to time under the Act
relating to the activities performed by IFTC pursuant to Schedule A
(the "Records"); preserve the Records in a readily accessible location
for at least the periods required under the Act, at all times during
the term of this Agreement and, as may be reasonably necessary,
following the termination of this Agreement, make the Records
available for examination by the Securities and Exchange Commission,
the Fund, the Fund's accountants and such other persons as the Fund
may deem appropriate; and maintain facilities and equipment necessary
for producing readable projections or hard copies of Records.
Notwithstanding the terms of this Section C.1. as heretofore provided,
IFTC shall not be responsible for maintaining or furnishing such
Records after termination of the Agreement to the extent that such
Records have been forwarded to the Fund or its agent. Hard copies of
Records will be furnished to the Fund without additional cost unless
such requests for Records are unusual, repetitive, require special
handling, or otherwise reasonably warrant the Fund's reimbursement for
the costs associated therewith. The Fund shall pay for the costs of
maintaining microfiche records.
2. It shall be the responsibility of Fund to furnish IFTC with the
declaration, record and payment dates and amounts of any dividends or
other distributions, other special actions, and the value or price of
the securities in Fund's portfolio to the extent such information is
not available from generally accepted securities industry services or
publications.IFTC shall incur no liability and Fund shall indemnify
and hold IFTC harmless from any liability in connection with the
4
<PAGE>
Fund's furnishing of such information.
3. The accounts, books and records prepared, maintained and preserved by
IFTC pursuant to this Agreement shall be the property of the Fund and
shall be made available to the Fund for inspection or reproduction
promptly upon demand.
4. IFTC shall assist Fund's independent accountants, and upon instruction
from Fund or upon proper demand, shall assist any court or regulatory
body, in any requested review of Fund's accounts and records prepared
and maintained by IFTC. Fund shall reimburse IFTC for all reasonable
expenses and employee time associated with any such review which is
not part of routine or normal periodic reviews, unless such expenses
are incurred as a result of a breach of this Agreement by IFTC or
IFTC's negligence or willful misconduct. For purposes of this
Agreement, routine or normal periodic reviews include the annual audit
of the Fund and routine interim audits or reviews by the Fund's
independent accountants and the routine reviews by the Securities and
Exchange Commission (SEC).
5. IFTC shall provide Fund with information for tax returns,
questionnaires, and periodic reports to shareholders and such other
reports and information as Fund may request in conjunction with IFTC's
stated duties hereunder. IFTC shall provide such information as soon
as reasonably practicable following the Fund's request or as may be
otherwise agreed to by the parties.
6. IFTC and Fund may from time to time adopt procedures as they may agree
upon, and IFIC may conclusively assume that any procedure approved by
Fund, or directed by Fund in the manner prescribed by Section 6.B.,
does not conflict with or violate any requirements of Fund's
prospectus, Trust Instrument, bylaws, or any law, rule or regulation
applicable to Fund. Fund shall be responsible to notify IFTC of any
changes in its prospectus, Trust Instrument, bylaws, or policies
applicable to the Fund which may necessitate changes in IFTC's
responsibilities or procedures. The Fund may conclusively assume that
any procedure adopted by IFTC does not conflict with or violate any
requirements of IFTC's chater, bylaws, or any law, rule or regulation
applicable to IFTC. IFTC shall be
5
<PAGE>
responsible to notify the Fund of any changes in its charter, bylaws,
or policies which which may affect the Fund's responsibilities or
procedures.
7. IFTC will calculate each Portfolio's daily closing net asset value, in
accordance with its prospectus. IFTC will prepare and maintain a daily
valuation of securities held in the Portfolios for which market
quotations are available by the use of outside services normally used
and contracted for this purpose; all other securities will be valued
in accordance with Fund's instructions.
8. IFTC shall also serve as transfer agent of the Fund. In such
capacity, IFTC shall maintain records of each holder's Book Capital
Account, including all contributions and redemptions, representing
ownership of a beneficial interest in any such Portfolio.
6. LIMITATION OF LIABILITY OF IFTC
A. IFTC shall not be liable for any loss or damage resulting from its
action or omission to act or otherwise, except for any loss or damage
arising from any breach of this Agreement or any negligent act or
omission or willful misconduct of IFTC and IFTC shall indemnify and
hold harmless Fund from and against any Damages arising from such
breach, negligence or willful misconduct. Without limiting the
generality of the foregoing, IFTC will use best efforts to resolve to
the satisfaction of the Fund the effect on shareowners of any IFTC
error which causes an incorrect calculation of the net asset value of
the Portfolios and which effect is considered material, as such term
is generally used by accountants in the mutual fund industry. IFTC
shall not be liable for consequential, special, or punitive damages.
IFTC may request and obtain the advice and opinion of counsel for Fund
or its own counsel at the reasonable expense of Fund with respect to
questions or matters of law relating to its performance of this
Agreement, and it shall be without liability to Fund for any action
taken or omitted by it in good faith, in conformity with such advice
or opinion.
6
<PAGE>
B. IFTC may rely, and be protected in acting in reliance upon any
instruction, advice, notice, consent, resolution, opinion, certificate
or other written instrument appearing to be genuine and properly
executed by an authorized representative of the Fund or any oral
instruction from an authorized representative of the Fund
("Instruction"), except trade instructions and adjustments to the
Fund's trial balance sheet, general ledger or balance sheet, which
must be in writing executed by two authorized representatives of the
Fund, unless IFTC has actual knowledge that any such Instruction is
incorrect or unauthorized.
C. IFTC shall be entitled to receive and Fund agrees to pay to IFTC, on
demand, reimbursement for such cash disbursements, costs and expenses
as may be agreed upon in writing from time to time by IFTC and Fund.
D. During the term of this Agreement and for a period of five years after
termination of this Agreement, IFTC shall not use and shall preserve
the confidentiality of all accounting and financial information,
investment portfolio records including, but not limited to,
transactional information, share subscription and redemption records,
and other records made available to or created by IFTC under the terms
of this Agreement ("Fund Confidential Information"), other than for
purposes of complying with its duties and responsibilities under this
Agreement or as specifically authorized by Fund in writing. IFTC shall
prevent disclosure of Fund Confidential Information to persons other
than its own agents and employees who reasonably have a need to know
or have access to Fund Confidential Information pursuant to this
Agreement, and shall take appropriate action to protect the rights of
Fund in such Fund Confidential Information including, but not limited
to, notification to all its employees and agents of the necessity to
maintain the confidentiality of Fund Confidential Information,
provided, that Fund shall be solely responsible for protecting any
trademarks, patents, copyrights and licenses against unauthorized use
and infringement by parties other than IFTC, its employees and agents.
7
<PAGE>
7. FORCE MAJEURE
IFTC shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including without limitation any interruption, loss or malfunction
of any utility, transportation, computer (hardware or software) or
communication service; or inability to obtain labor, material, equipment or
transportation; nor shall any such failure or delay give Fund any
additional right to terminate this Agreement.
8. ADDITIONAL FUNDS
IFTC shall act as Recordkeeping and Pricing Agent for additional Portfolios
upon 30 days notice to IFTC provided that IFTC consents in writing in
advance to such arrangement. Rates or charges for serving as Recordkeeping
and Pricing Agent for any such additional Portfolios shall be as agreed to
by IFTC and Fund in writing.
9. COMPENSATION
Fund shall pay to IFTC such compensation at such time as may from time to
time be agreed upon in writing by IFTC and Fund. The initial compensation
schedule is attached hereto as Schedule B.
10. TERMINATION
Either party to this Agreement may terminate same by notice in writing
received by the other party not less than sixty (60) days prior to the date
upon which such termination shall take effect. Upon termination of this
Agreement, Fund shall pay to IFTC such compensation for its reimbursable
disbursements, costs and expenses paid or incurred to such date and Fund
shall use its best efforts to obtain a successor agent. IFTC shall, upon
termination of this Agreement, deliver to the successor so specified or
appointed, or to Fund, at IFTC's office, all books, records, ledgers,
accounts, journals and other documents and information then held by IFTC
hereunder, all money, instruments and other funds and other properties of
Fund deposited with or held by IFTC hereunder. In the event no written
order designating a successor (which may be Fund) shall have been delivered
to IFTC on or before the date when such termination shall become effective,
then IFTC shall deliver such records, funds and properties of Fund to a
bank or trust
8
<PAGE>
company at the selection of IFTC having not less than $2,000,000 aggregate
capital, surplus and undivided profits as shown by its most recent
published report, and meeting the requirements of the Act, or if a
satisfactory successor cannot be obtained, IFTC may deliver the assets to
the Fund, at IFTC's officers or as otherwise agreed to between the parties.
Thereafter the Fund or such bank or trust company shall be the successor
under this Agreement and shall be entitled to reasonable compensation for
its services. Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, IFTC may make any other delivery of the
records, funds and property of Fund which shall be permitted by the Act and
Fund's Trust Instrument or bylaws then in effect.
11. NOTICES
Notices, requests, instructions and other writings received by Fund at 210
University Boulevard, Suite 900, Denver, Colorado 80206, or at such address
as Fund may have designated to IFTC in writing, shall be deemed to have
been properly given to Fund hereunder; and notices, requests, instructions
and other writings received by IFTC at its offices at 127 West 10th Street,
Kansas City, Missouri 64105, or to such other address as it may have
designated to Fund in writing, shall be deemed to have been properly given
to IFTC hereunder.
12. LIMITATION OF LIABILITY.
Notice is hereby given that the Fund is a business trust organized under
the Delaware Business Trust Act pursuant to a Certificate of Trust filed in
the office of the Secretary of State of the State of Delaware. All parties
to this Agreement acknowledge and agree that the Fund is a series Fund and
all debts, liabilities, obligations and expenses incurred, contracted for
or otherwise existing with respect to a particular series shall be
enforceable against the assets held with respect to such series only, and
not against the assets of the Fund generally or against the assets held
with respect to any other series; and further that no trustee, officer or
holder of shares of beneficial interest of the Fund shall be personally
liable for any of the foregoing.
9
<PAGE>
13. MISCELLANEOUS
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in the Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
G. This Agreement may not be assigned by either party without prior
written consent of the other party.
10
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized corporate or trust officers.
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST
By:
------------------------------------
Title:
---------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By:
------------------------------------
Title:
---------------------------------
11
<PAGE>
Schedule - A
ACCOUNTING AND PORTFOLIO DUTIES
In its capacity as the Recordkeeping and Pricing Agent for the Fund, IFTC
shall perform the following responsibilities:*
A. ON A DAILY BASIS.
1. Prepare available cash forecasts and communicate balances to the Fund.
2. Review investment portfolio for cash and stock dividends and stock
splits.
3. Prepare compliance reports including data necessary to monitor
compliance with limitations prescribed by the Investment Company Act
of 1940 with respect to the types and amounts of securities held in
the Portfolio.
4. Review failed security transaction report; investigate failed
transactions and report status to Fund.
5. Prepare overdraft report with explanation of overdraft.
6. Post receivables and payables to the Fund's general ledger; send
general ledger reflecting all the day's activities to Fund preferably
by 3:30 p.m. Mountain time but in no event later than 8 a.m. Mountain
time the next day.
7. Enter security transactions reported by the Fund.
8. Post bank activity to general ledger; account for all items on bank
statements, and prepare and complete daily bank reconciliations,
including documentation of reconciling items.
9. Post manual journal entries to the general ledger.
10. Review current daily security transactions for dividends, splits and
other corporate activity.
11. Prepare Net Asset rollforward
12. Enter manual prices.
13. Review pricing stratification report for unusual price movements in
individual securities; investigate and trace items to the particular
pricing sources; and consult with Fund. Review pricing report for
detection of stock splits and dividends, cash dividends and corporate
action. Review for incorrect CUSIP
12
<PAGE>
numbers or ticker symbols or incorrectly posted purchases and sales of
securities. Review income and expense accruals and posting of gains
and losses for proper recording.
14. Review for ex-dividend items indicated by pricing sources.
15. Attend to routine matters in connection with the calculation of the
aggregate asset value.
B. ON A PERIODIC BASIS.
1. Provide information prepared by IFTC during the performance of its
duties hereunder for Fund's semiannual reports within 15 calendar days
after March 31st and September 30th or the end of the reporting period
of the Fund, as applicable.
2. As agreed upon, deliver information to Fund on days when the NYSE is
not open.
3. Prepare allocation of realized and unrealized security gains and
losses according to partnership rules using the aggregate method,
subject to review by fund auditors.
*INFORMATION SHALL BE PROVIDED BY IFTC'S NORMAL MEANS AS ACCEPTABLE TO THE FUND.
COSTS FOR COMMUNICATING ROUTINE INFORMATION, INCLUDING MICROFICHE, SHALL BE
BORNE BY THE FUND.
13
<PAGE>
EXHIBIT 13
SUBSCRIPTION AGREEMENT FOR INTERESTS
IN THE BERGER/BIAM INTERNATIONAL PORTFOLIO
(SERIES OF BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST)
The undersigned, Berger/BIAM Worldwide Funds Trust, on behalf of each of
the series specified below, hereby subscribes for the purchase of beneficial
interests ("Interests") in the Berger/BIAM International Portfolio, a series of
Berger/BIAM Worldwide Portfolios Trust (the "Trust"), as follows:
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SERIES PERCENTAGE INTEREST CONSIDERATION
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Berger/BIAM International 30% $30,000
Institutional Fund
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Berger/BIAM International 70% $70,000
CORE Fund
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Submitted herewith in consideration for the Interests to the Trust, or its
transfer agent, is the amount specified above.
The undersigned hereby represents that the Interests are being acquired by
the undersigned solely for investment, for the sole account of the series
specified, and not with a view to distribution within the meaning of the
Securities Act of 1933 (the "Act") and the rules and regulations thereunder.
The undersigned further hereby represents to the Trust, as an inducement for the
Interests to be sold to the undersigned, that the present and anticipated
financial position of the undersigned permits it to purchase the Interests and
to hold them for investment purposes and that the undersigned has no present
intention to redeem or resell such Interests. The undersigned is thoroughly
familiar with the proposed business of the Trust and has made all investigations
which it deems necessary or desirable in connection with this purchase. The
undersigned is headquartered in the State of Colorado. The undersigned has been
advised that the availability of the exemption from registration under the Act
relied upon by the Trust in issuing these Interests is dependent in part upon
the truth of the foregoing representations.
Prior to making a commitment to purchase the Interests, the Trust has
informed the undersigned: (i) that the Interests are not registered under the
Act and may not be resold unless they are subsequently so registered or unless
an exemption from such registration is available; (ii) that Rule 144 under the
Act is presently not applicable to a resale of the Interests; (iii) that any
certificates representing the Interests may bear a legend in customary form
drawing attention to the restrictions on their transferability.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement effective as of the 4th day of October, 1996.
BERGER/BIAM WORLDWIDE FUNDS TRUST, on
behalf of each of its series known as
the Berger/BIAM International
Institutional Fund and the Berger/BIAM
International CORE Fund
By: /s/ Gerard M. Lavin
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Name: Gerard M. Lavin
Title: President
