<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1997.
1933 ACT REGISTRATION NO. 333-
1940 ACT REGISTRATION NO. 811-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A
<TABLE>
<CAPTION>
<S> <C>
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [_]
Post-Effective Amendment No. [_]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [_]
</TABLE>
(Check appropriate box or boxes)
----------------
ZURICH YIELDWISE MONEY FUND
(Exact name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, 60606
Illinois
(Address of Principal Executive (Zip Code)
Office)
Registrant's Telephone Number, including Area Code: (312) 537-7000
Philip J. Collora, Secretary With a copy to:
Zurich YieldWise Money Fund Cathy G. O'Kelly
222 South Riverside Plaza David A. Sturms
Chicago, Illinois 60606-5808 Vedder, Price, Kaufman & Kammholz
(Name and Address of Agent for Service) 222 North LaSalle Street
Chicago, Illinois 60601
APPROXIMATE DATE OF PROPOSED OFFERING: As soon as practicable after the
effective date of this Registration Statement.
Pursuant to Reg. (S) 270.24f-2 under the Investment Company Act of 1940,
Registrant hereby declares that an indefinite number or amount of shares are
being registered under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS
EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR
UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ZURICH YIELDWISE MONEY FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER OF FORM N-1A LOCATION IN PROSPECTUS
- ------------------------ ----------------------
<S> <C>
1.Cover Page................................. Cover Page
2.Synopsis................................... Overview; Summary of Expenses
3.Condensed Financial Information............ Inapplicable
4.General Description of Registrant.......... Overview; Capital Structure; How the Fund
Works; Investment Objective, Policies and
Risk Factors
5.Management of the Fund..................... Overview; Investment Manager; How to Make a
Purchase
5A.Management's Discussion of Fund Perfor-
mance....................................... Inapplicable
6.Capital Stock and Other Securities......... Overview; Capital Structure; Dividends and
Taxes;
How to Make a Purchase; Investment
Objective, Policies and Risk Factors
7.Purchase of Securities Being Offered....... Overview; How to Make a Purchase;
Determining Share Price; Investment
Manager; Special Features; Account Services
Directory
8.Redemption or Repurchase................... Overview; How to Make a Redemption; Special
Features; Account Services Directory
9.Pending Legal Proceedings.................. Inapplicable
</TABLE>
<PAGE>
ZURICH YIELDWISE MONEY FUND
PROSPECTUS
, 1997
ZURICH YIELDWISE MONEY FUND
222 SOUTH RIVERSIDE PLAZA,
CHICAGO, ILLINOIS 60606-5808,
1-800-537-6001.
The Fund seeks maximum current income to the extent consistent with stability
of principal. The Fund is designed for investors who are willing to make high
minimum investments and to pay for certain individual transactions in order to
pursue higher yields through lower expenses. The Fund invests exclusively in
high quality money market instruments.
This prospectus contains information about the Fund that a prospective investor
should know before investing and should be retained for future reference. A
Statement of Additional Information dated , 1997, has been filed
with the Securities and Exchange Commission and is incorporated herein by ref-
erence. It is available upon request without charge from the Fund at the ad-
dress above or by calling 1-800-537-6001.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERN-
MENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR EN-
DORSED BY, ANY BANK. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Overview.................................................................... 2
Summary of Expenses......................................................... 3
How the Fund Works.......................................................... 3
Investment Objective, Policies and Risk
Factors.................................................................... 4
Determining Share Price..................................................... 6
How To Make a Purchase...................................................... 7
How To Make a Redemption.................................................... 9
Moving to Another Fund...................................................... 12
Special Features............................................................ 12
Dividends and Taxes......................................................... 13
Investment Manager.......................................................... 14
Performance................................................................. 15
Capital Structure........................................................... 16
Account Services Directory.................................................. 17
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
OVERVIEW
INVESTMENT OBJECTIVE
Zurich YieldWise Money Fund (the "Fund") is an open-end, diversified,
management investment company designed to provide you with professional
management of your short-term investment dollars; the dollars that you want to
know are in high quality investments.
The Fund seeks maximum current income to the extent consistent with
stability of principal by investing in high-quality short-term money market
instruments. The Fund is designed for investors who are willing to make high
minimum investments and to pay for certain individual transactions in order to
pursue higher yields through lower costs. See "Summary of Expenses" and "How
to Make a Redemption" for a description of the individual account maintenance
and transaction fees.
The Fund may use a variety of investment techniques in seeking its objective
including the purchase of repurchase agreements and variable rate securities.
The Fund seeks to maintain a net asset value of $1.00 per share; however,
there is no assurance that the Fund's objective will be achieved or that the
Fund will be able to maintain a net asset value of $1.00 per share. See "How
the Fund Works" and "Investment Objective, Policies and Risk Factors."
INVESTMENT MANAGER
Zurich Kemper Investments, Inc. ("ZKI") is the investment manager for the
Fund and provides the Fund with continuous professional investment
supervision. ZKI is paid an annual investment management fee, payable monthly,
on a graduated basis ranging from .50% of the first $215 million of average
daily net assets of the Fund to .25% of average daily net assets of the Fund
over $800 million. See "Investment Manager."
BUYING AND SELLING SHARES
You may buy and sell shares of the Fund at net asset value with no sales
charge. The minimum initial investment is $25,000 and the minimum subsequent
investment is $1,000 (or $500 by Automatic Purchase Plan). Accounts may be
opened using the account application available from the Fund. Shares may be
purchased by mailing a check, by wire transfer or in person in downtown Chi-
cago and Kansas City. Please see "How To Make a Purchase" for more information
on how easy it is to invest. You may sell or redeem your shares by written re-
quest or by using one of the Fund's expedited redemption procedures. See "How
To Make a Redemption" for specific details.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested in additional shares of the Fund, unless you elect to be paid by
check. See "Dividends and Taxes."
SPECIAL FEATURES
A number of features are available to you, including Electronic Funds Trans-
fer Programs. See "Special Features" and "Account Services Directory" for a
description of these and other features.
2
<PAGE>
SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES*
<TABLE>
<S> <C>
Sales Load on Purchases................................................ None
Sales Load on Reinvested Dividends..................................... None
Deferred Sales Load.................................................... None
Electronic Funds Transfer Fee on
Redemption............................................................ $2 each
Exchange and Telephone Transaction Fee on Redemption................... $5 each
Wire Transaction Fee on Redemption..................................... $10 each
Checkwriting Fee on Redemption......................................... $2 each
Account Closeout Fee................................................... $5**
</TABLE>
The fees listed above (other than the account closeout fee) are waived if
your account balance is $100,000 or more at the time of the transaction.
The individual transaction fees paid by shareholders will accrue to the
Fund. The fees will be utilized to offset transfer agency and out-of-pocket
expenses of the Fund, which should benefit all Fund shareholders by helping to
reduce the Fund's expenses.
- -------
*Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their mate-
rials for details. The table does not include the $1.00 monthly small account
fee. See "How to Make a Redemption."
**There is a $10 fee for closing an account within one year of opening the ac-
count.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets after management fee and expense
reduction)
<S> <C>
Management Fees......................................................... 0.00%
-----
12b-1 Fees.............................................................. None
Other Expenses.......................................................... 0.00%
-----
Total Operating Expenses................................................ 0.00%
-----
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
<S> <C>
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each time period:
</TABLE>
<TABLE>
<CAPTION>
ACCOUNT ACCOUNT
OPEN CLOSED
------- -------
<S> <C> <C>
After 1 year $ 2 $ 7
After 3 years $15 $20
</TABLE>
The purpose of the table above is to assist you in understanding the various
costs and expenses that an investor in the Fund will bear directly or indi-
rectly. As discussed more fully under "Investment Manager," the Fund's invest-
ment manager has agreed to temporarily reduce its management fee to 0% and
temporarily reimburse or pay 100% of the Fund's other operating expenses for a
period of at least six months from the date the Fund commences operations. It
is anticipated that the Fund will commence operations on or about
, 1997. In addition, the Fund's investment manager has agreed to waive its
management fee and absorb operating expenses to the extent necessary to main-
tain the Fund's total operating expenses at no more than .45% until January 1,
1999. Without such fee reduction and expense reimbursement, "Management Fees"
would be .50%, "Other Expenses" would be .13%, and "Total Operating Expenses"
would be .63%. "Other Expenses" (without the effects of the reimbursement) is
an estimate for the current fiscal year. The Example assumes a 5% annual rate
of return pursuant to requirements of the Securities and Exchange Commission.
This hypothetical rate of return is not intended to be representative of past
or future performance of the Fund. The Example should not be considered to be
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.
HOW THE FUND WORKS
Zurich YieldWise Money Fund is designed to provide you with professional
management of short-term investment dollars. The Fund seeks maximum current
income consistent with stability of principal. It is designed for investors
who are willing to make high minimum investments and to pay for certain indi-
vidual transactions in order to pursue higher yields through lower expenses.
With all other things being equal, the lower a fund's expenses, the higher the
return. Because the Fund combines its shareholders' money, it can buy and sell
large blocks of securities, which reduces transaction costs and maximizes
yields. The Fund is managed by investment professionals who analyze market
trends to take advantage of changing conditions and who seek to minimize risk
by diversifying the Fund's investments.
3
<PAGE>
The Fund seeks to maintain a net asset value of $1.00 per share. Thus, the
Fund is designed for investors who want to avoid the fluctuations of principal
commonly associated with equity and long-term bond investments. The fluctua-
tions of these other types of investments are often represented by the move-
ment of various unmanaged market indexes, such as the Dow Jones Industrial Av-
erage. In addition, there can be no guarantee that the Fund will achieve its
objective or that it will maintain a net asset value of $1.00 per share.
INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
THE FUND SEEKS MAXIMUM CURRENT INCOME TO THE EXTENT CONSISTENT WITH STABIL-
ITY OF PRINCIPAL. The Fund pursues its objective by investing exclusively in
the following types of U.S. Dollar denominated money market instruments that
mature in 397 days or less:
1. Obligations of, or guaranteed by, the U.S. or Canadian governments, their
agencies or instrumentalities.
2. Bank certificates of deposit, time deposits or bankers' acceptances of
U.S. banks (including their foreign branches) and Canadian chartered banks
having total assets in excess of $1 billion.
3. Bank certificates of deposit, time deposits or bankers' acceptances of
foreign banks (including their U.S. and foreign branches) having total assets
in excess of $10 billion.
4. Commercial paper, notes, bonds, debentures, participation certificates or
other debt obligations that (i) have received a high-quality short-term rating
by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P"), Duff & Phelps, Inc. ("Duff"), Fitch Investors Services, Inc.
("Fitch"), or any other nationally recognized statistical rating organization
as determined by the Securities and Exchange Commission; or (ii) if unrated,
are determined to be at least equal in quality to one or more of the above
ratings in the discretion of the Fund's investment manager. Currently, only
obligations in the top two short-term rating categories are considered to be
rated high quality. The two highest short-term rating categories of Moody's,
S&P, Duff and Fitch for commercial paper are Prime-1 and Prime-2; A-1 and A-2;
Duff-1 and Duff-2; and F-1 and F-2, respectively. For a description of these
ratings, see "Appendix--Ratings of Investments" in the Statement of Additional
Information.
5. Repurchase agreements of obligations that are suitable for investment un-
der the categories set forth above. Repurchase agreements are discussed below.
Investments by the Fund in Eurodollar certificates of deposit issued by Lon-
don branches of U.S. banks, or obligations issued by foreign entities, includ-
ing foreign banks, involve risks that are different from investments in secu-
rities of domestic branches of U.S. banks. These risks may include future un-
favorable political and economic developments, possible withholding taxes on
interest payments, seizure of foreign deposits, currency controls, interest
limitations or other governmental restrictions that might affect payment of
principal or interest. The market for such obligations may be less liquid and,
at times, more volatile than for securities of domestic branches of U.S.
banks. Additionally, there may be less public information available about for-
eign banks and their branches. The profitability of the banking industry is
dependent largely upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions. General
economic conditions as well as exposure to credit losses arising from possible
financial difficulties of borrowers play an important part in banking opera-
tions. As a result of federal and state laws and regulations, domestic banks
are, among other things, required to maintain specified levels of reserves,
limited in the amounts they can loan to a single borrower and subject to other
regulations designed to promote financial soundness. However, not all such
laws and regulations apply to the foreign branches of domestic banks. Foreign
branches of foreign banks are not regulated by U.S. banking authorities, and
generally are not bound by accounting, auditing and financial reporting stan-
dards comparable to U.S. banks. Bank obligations held by the Fund do not bene-
fit materially from insurance from the Federal Deposit Insurance Corporation.
The Fund may invest in commercial paper which is issued by major corpora-
tions without registration under the Securities Act of 1933 in reliance upon
the exemption from registration afforded by Section 3(a)(3) thereof.
4
<PAGE>
Investment Objective and Policies--continued
Such commercial paper may be issued only to finance current transactions and
must mature in nine months or less. Trading of such commercial paper is con-
ducted primarily by institutional investors through investment dealers, and in-
dividual investor participation in the commercial paper market is very limited.
The Fund may also invest in commercial paper issued in reliance upon the so-
called "private placement" exemption from registration afforded by Section 4(2)
of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is re-
stricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) pa-
per normally is resold to other institutional investors like the Fund through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. The Fund's investment manager
considers the legally restricted but readily saleable Section 4(2) paper to be
liquid; however, pursuant to procedures approved by the Board of Trustees of
the Fund, if a particular investment in Section 4(2) paper is not determined to
be liquid, that investment will be included within the 10% limitation on illiq-
uid securities discussed under "The Fund" below. The Fund's investment manager
monitors the liquidity of the Fund's investments in Section 4(2) paper on a
continuous basis.
The Fund may invest in high quality participation certificates ("certifi-
cates") representing undivided interests in trusts that hold a portfolio of re-
ceivables from consumer and commercial credit transactions, such as transac-
tions involving consumer revolving credit card accounts or commercial revolving
credit loan facilities. The receivables would include amounts charged for goods
and services, finance charges, late charges and other related fees and charges.
Interest payable on the certificates may be fixed or may be adjusted periodi-
cally or "float" continuously according to a formula based upon an objective
standard such as the 30-day commercial paper rate. See "Additional Investment
Information" below for a discussion of "Variable Rate Securities." A trust may
have the benefit of a letter of credit from a bank at a level established to
satisfy rating agencies as to the credit quality of the assets supporting the
payment of principal and interest on the certificates. Payments of principal
and interest on the certificates would be dependent upon the underlying
receivables in the trust and may be guaranteed under a letter of credit to the
extent of such credit. The quality rating by a rating service of an issue of
certificates is based primarily upon the value of the receivables held by the
trust and the credit rating of the issuer of any letter of credit and of any
other guarantor providing credit support to the trust. The Fund's investment
manager considers these factors as well as others, such as any quality ratings
issued by the rating services identified above, in reviewing the credit risk
presented by a certificate and in determining whether the certificate is appro-
priate for investment by the Fund. Collection of receivables in the trust may
be affected by various social, legal and economic factors affecting the use of
credit and repayment patterns, such as changes in consumer protection laws, the
rate of inflation, unemployment levels and relative interest rates. It is an-
ticipated that for most publicly offered certificates there will be a liquid
secondary market or there may be demand features enabling the Fund to readily
sell its certificates prior to maturity to the issuer or a third party. While
the Fund may invest without limit in certificates, it is currently anticipated
that such investments will not exceed 25% of the Fund's assets.
The Fund may concentrate 25% or more of its assets in bank certificates of
deposit, time deposits or banker's acceptances of United States banks in accor-
dance with its investment objective and policies. Accordingly, the Fund may be
more adversely affected by changes in market or economic conditions and other
circumstances affecting the banking industry than it would be if the Fund's as-
sets were not so concentrated.
ADDITIONAL INVESTMENT INFORMATION
In addition to the specific investment objective and policies listed above,
the Fund limits its investments to securities that meet the requirements of
Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"). See "De-
termining Share Price."
5
<PAGE>
Investment Objective and Policies--continued
The Fund may invest in instruments that have interest rates that adjust peri-
odically or that "float" continuously according to formulae intended to mini-
mize fluctuation in values of the instruments ("Variable Rate Securities"). The
interest rate on a Variable Rate Security is ordinarily determined by reference
to or is a percentage of an objective standard such as a bank's prime rate, the
90-day U.S. Treasury bill rate, or the rate of return on commercial paper or
bank certificates of deposit. Generally, the changes in the interest rate on
Variable Rate Securities reduce the fluctuation in the market value of such se-
curities. Accordingly, as interest rates decrease or increase, the potential
for capital appreciation or depreciation is less than for fixed-rate obliga-
tions. Some Variable Rate Securities ("Variable Rate Demand Securities") have a
demand feature entitling the purchaser to resell the securities at an amount
approximately equal to amortized cost or the principal amount thereof plus ac-
crued interest. As is the case for other Variable Rate Securities, the interest
rate on Variable Rate Demand Securities varies according to some objective
standard intended to minimize fluctuation in the values of the instruments. The
Fund determines the maturity of Variable Rate Securities in accordance with Se-
curities and Exchange Commission rules which allow the Fund to consider certain
of such instruments as having maturities shorter than the maturity date on the
face of the instrument.
The Fund may invest in repurchase agreements, which are instruments under
which the Fund acquires ownership of a security from a broker-dealer or bank
that agrees to repurchase the security at a mutually agreed upon time and price
(which price is higher than the purchase price), thereby determining the yield
during the Fund's holding period. Maturity of the securities subject to repur-
chase may exceed 397 days. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund might incur expenses in enforcing
its rights, and could experience losses, including a decline in the value of
the underlying securities and loss of income.
The Fund will not purchase illiquid securities if, as a result thereof, more
than 10% of the Fund's net assets valued at the time of the transaction would
be invested in such securities.
The Fund may not borrow money except as a temporary measure for extraordinary
or emergency purposes, and then only in an amount up to one-third of the value
of its total assets, in order to meet redemption requests without immediately
selling any portfolio securities. Any such borrowings under this provision will
not be collateralized. If for any reason the current value of the Fund's total
assets falls below an amount equal to three times the amount of its indebted-
ness from money borrowed, the Fund will, within three business days, reduce its
indebtedness to the extent necessary. The Fund will not borrow for leverage
purposes.
The Fund has adopted certain investment restrictions that are presented in
the Statement of Additional Information and that, together with the investment
objective of the Fund, cannot be changed without approval by holders of a ma-
jority of its outstanding voting shares. As defined in the 1940 Act, this means
the lesser of the vote of (a) 67% of the shares of the Fund present at a meet-
ing where more than 50% of the outstanding shares are present in person or by
proxy; or (b) more than 50% of the outstanding shares of the Fund. Policies of
the Fund that are not incorporated into any of the fundamental investment re-
strictions referred to above may be changed by the Board of Trustees of the
Fund without shareholder approval.
DETERMINING SHARE PRICE
The price you pay when you buy shares in the Fund and the price you receive
if you redeem is the net asset value computed after we receive your order to
buy or redeem in proper form (as described under "How To Make a Purchase"). The
net asset value per share of the Fund is calculated by dividing the total value
of the assets of the Fund, minus its liabilities, by the total number of its
shares outstanding. The Fund seeks to maintain a net asset value of $1.00 per
share, although there can be no assurance that it will be able to do so.
The net asset value per share of the Fund is determined on each day the New
York Stock Exchange is open for trading, at 11:00 a.m., 1:00 p.m. and 3:00 p.m.
Central time.
6
<PAGE>
Determining Account Value--continued
The Fund values its portfolio instruments at amortized cost in accordance
with Rule 2a-7 under the 1940 Act, which means that they are valued at their
acquisition cost (as adjusted for amortization of premium or discount) rather
than at current market value. Calculations are made to compare the value of
the Fund's investments valued at amortized cost with market-based value. Mar-
ket-based valuations are obtained by using actual quotations provided by mar-
ket makers, estimates of market value, or values obtained from yield data re-
lating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the instruments. If a devia-
tion of 1/2of 1% or more were to occur between the Fund's net asset value per
share calculated by reference to market-based values and the Fund's $1.00 per
share net asset value, or if there were any other deviation that the Board of
Trustees believed would result in a material dilution to shareholders or pur-
chasers, the Board of Trustees would promptly consider what action, if any,
should be initiated. In order to value its investments at amortized cost, the
Fund purchases only securities with a maturity of 397 days or less and main-
tains a dollar-weighted average portfolio maturity of 90 days or less. In ad-
dition, the Fund limits its portfolio investments to securities that meet the
quality and diversification requirements of Rule 2a-7.
HOW TO MAKE A PURCHASE
Whether you're opening an account or adding to it, we hope that you'll find
that we've made your shareholder transactions easy. Shares of the Fund are
sold at their net asset value with no sales charge. To open an account you
should use the account application available from the Fund and choose one of
the methods outlined in the table on the following page. Call 1-800-537-6001
if you have questions or need assistance.
<TABLE>
<CAPTION>
Minimum Investment Amounts
- -------------------------------------------
<S> <C>
INITIAL INVESTMENT $25,000
For Individual Retirement Accounts $10,000
SUBSEQUENT PURCHASE $ 1,000
For Individual Retirement Accounts $ 1,000
Automatic Purchase Plan* $ 500
MINIMUM BALANCE REQUIREMENT** $10,000
</TABLE>
- -------
*See "Special Features" for more information regarding Automatic Purchase
Plan.
**There is a $1 per month small account fee for account balances under
$10,000.
7
<PAGE>
How To Make A Purchase--continued
HOW TO MAKE A PURCHASE
<TABLE>
<CAPTION>
INITIAL INVESTMENT ($25,000 OR MORE) SUBSEQUENT INVESTMENT ($1,000 OR
MORE)
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BY MAIL . Complete the Account Application and mail . Make your check payable to
it with your check (payable to ZYWMF) to: ZYWMF and mail it to:
Zurich Kemper Service Company Zurich Kemper Service Company
Transfer Agency Division Transfer Agency Division
P.O. Box 419356 P.O. Box 419154
Kansas City, Missouri 64141-6356 Kansas City, Missouri 64141-
6154
. To exchange by mail, send your
request to:
Zurich YieldWise Money Fund
P.O. Box
Attention: Exchange Department
Kansas City, Missouri 64141-
6557
- -----------------------------------------------------------------------------------------------------------------
BY PHONE . Call 1-800- to exchange from a . Call 1-800- to exchange
Zurich Money Funds account. from a Zurich Money Funds
account.
- -----------------------------------------------------------------------------------------------------------------
IN PERSON . In downtown Chicago, you can make a . In downtown Chicago, you can
direct investment at our Service Center at make a direct investment at our
222 South Riverside Plaza. In Kansas City, Service Center at 222 South
you can make a direct investment at 811 Riverside Plaza. In Kansas City,
Main Street, 7th Floor. you can make a direct investment
at 811 Main Street, 7th Floor.
- -----------------------------------------------------------------------------------------------------------------
BY WIRE TRANSFER . To open an account through wire transfer . Instruct your bank to wire your
(FEDERAL FUNDS) of Federal Funds, call 1-800-537-6001. investment, together with your
name and account number, to:
. Provide your account registration Zurich YieldWise Money Fund,
instruction to the service representative. United Missouri Bank
You will be provided with your new account of Kansas City, N.A.
number over the phone. ABA #1010-0069-5
Fund Account #
. The Fund accepts wires at no charge, . The Fund accepts wires at no
although your bank may charge you for this charge, although your bank may
service. charge you for this service.
. Instruct your bank to wire your
investment, together with your name and
new account number, to:
Zurich YieldWise Money Fund:
United Missouri Bank of Kansas City, N.A.
ABA # 1010-0069-5
Fund Account #
- -----------------------------------------------------------------------------------------------------------------
BY ELECTRONIC FUNDS TRANSFER . Unavailable for opening an account. Please see "Special Features" for
(AUTOMATED CLEARING HOUSE FUNDS) more information on these
services.
. EZ Transfer
. Automatic Purchase Plan ($500
minimum)
All transactions are via the
Automated
Clearing House ("ACH") System.
</TABLE>
8
<PAGE>
How To Make A Purchase--continued
OTHER INFORMATION
Purchases by check or other negotiable bank draft will be invested as of 3:00
p.m. Central time on the next business day after receipt and such shares will
begin earning dividends the following calendar day. Purchases by check drawn on
a foreign bank will normally be effective after the check clears. See "Purchase
and Redemption of Shares" in the Statement of Additional Information.
Purchases by wire of Federal Funds (i.e. monies credited to a bank's account
with its regional Federal Reserve Bank) will be effected at the next determined
net asset value. Purchases will receive that day's dividend if effected at or
prior to 1:00 p.m. Central time and will receive the dividend for the next cal-
endar day if effected at 3:00 p.m. Central time.
The Fund reserves the right to withdraw all or any part of the offering made
by this prospectus or to reject purchase orders. The Fund also reserves the
right at any time to waive or increase the minimum investment requirements. All
orders to purchase shares are subject to acceptance by the Fund and are not
binding until confirmed or accepted in writing. Any purchase that would result
in total account balances for a single shareholder in excess of $3 million is
subject to prior approval by the Fund. Share certificates are issued only on
request to the Fund and may not be available for certain types of account reg-
istrations. Investments may also be made in the Fund through broker-dealers and
others, who may charge a commission or other fee for their services. A $10
service fee will be charged when a check for the purchase of shares is returned
because of insufficient or uncollected funds or a stop payment order.
If you elect to redeem Fund shares purchased by check or through EZ Transfer
or Automatic Purchase Plan, the Fund may delay transmittal of redemption pro-
ceeds until it has determined that collected funds have been received for the
purchase of such shares, which may be up to 10 calendar days from receipt by
the Fund of the purchase amount. See also "How to Make a Redemption."
HOW TO MAKE A REDEMPTION
You can access all or part of your account by selling your shares. Your
shares will be redeemed at the next determined net asset value after your re-
quest has been received in proper form. If processed at 3:00 p.m. Central time,
you will receive that day's dividend on the shares you sold. If you redeem all
your shares, you will receive the net asset value of such shares and all de-
clared but unpaid dividends on such shares. You may use any of the methods de-
scribed in the following chart to sell your shares.
If your account balance is less than $100,000, the following fees apply to
individual redemption transactions: $2 for each check you write and for each
electronic funds transfer, $5 for each exchange and telephone redemption, and
$10 for each bank wire. There is a $5 fee for closing an account; however,
there is a $12 fee for closing an individual retirement account and a $10 fee
for closing an account within one year of opening the account.
The individual transaction fees paid by shareholders will accrue to the Fund.
The fees will be utilized to offset transfer agency and out-of-pocket expenses
of the Fund, which should benefit all Fund shareholders by helping to reduce
the Fund's expenses.
9
<PAGE>
How To Make A Redemption--continued
HOW TO MAKE A REDEMPTION
<TABLE>
<C> <S>
BY REDEMPTION CHECK . All Redemption Checks should be for a
($2 per check fee) minimum of $1,000. Redemption Checks
written in an amount less than $1,000
will be charged a $10 service fee.
. Redemption Checks should not be used to
close your account since the account
normally includes accrued but unpaid
dividends and the account closeout fee
must be deducted from your balance.
- -------------------------------------------------------------------------------
BY PHONE . Telephone requests may be made by
($5 fee--check by mail) calling (800)- Monday-Friday, 7
($2 fee--electronic funds transfer) a.m. to 6 p.m. CST and Saturday, 8 a.m.
to 3 p.m. CST or use 24-hour Zurich
Infoline (800) . You may receive
the proceeds via:
.check by mail to the address to which
your account is registered, or
.electronic funds transfer (minimum
$1,000 and maximum $50,000) to a pre-
authorized bank account.
See "Special Features--EZ Transfer."
. You may exchange to Zurich Money Funds.
See "Moving to Another Fund".
- -------------------------------------------------------------------------------
BY WIRE . You need to have signed up for the wire
($10 fee) transfer privilege and have the forms on
file with the Shareholder Service Agent
before using it. Minimum wire: $1,000
. Telephone requests may be made by
calling 1-800- .
. Proceeds will be sent only to the bank
or trust company you have designated on
the Account Application.
- -------------------------------------------------------------------------------
BY MAIL . Complete a written request that includes
the following information: each account
owner's name, your account number, the
amount to be redeemed, and the signature
of each owner exactly as it appears on
the account, including any special
capacity of the registered owner. See
"Signature Guarantee may be Required"
below.
. Mail the written request to Zurich
Kemper Service Company, Transfer Agency
Division, P.O. Box 419557, Kansas City,
Missouri 64141-6557.
</TABLE>
SIGNATURE GUARANTEE REQUIREMENTS
If the proceeds of a redemption are $50,000 or less and the proceeds are
payable to the shareholder of record at the address of record, normally a tel-
ephone request or a written request by any one account holder without a signa-
ture guarantee is sufficient for redemptions by individual or joint account
holders, and trust, executor and guardian account holders (excluding custodial
accounts for gifts and transfers to minors), provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders and guardian account holders of custodial accounts for gifts and
transfers to minors may exercise the special privilege of redeeming shares by
telephone request or written request without signature guarantee subject to
the same conditions as individual account holders and subject to the limita-
tions on liability described under "General" below, provided that the privi-
lege has been pre-authorized by the institutional account holder or guardian
account holder by written instruction to Zurich Kemper Service Company (the
"Shareholder Service Agent") with signatures guaranteed. All other redemption
requests must include a signature guaranteed by a commercial bank, trust com-
pany, savings and loan association, federal savings bank, member firm of a na-
tional securities exchange or other eligible financial institution. The privi-
lege of redeeming shares by telephone request or by written request without a
signature guarantee may not be used to redeem shares held in certificated form
and may not be used if the shareholder's account has had an address change
within 30 days of the redemption request.
ADDITIONAL INFORMATION
. REDEMPTION BY WIRE. Requests for wire transfer redemptions received by the
Shareholder Service Agent prior to 11:00 a.m. Central time will result in
shares being redeemed that day and normally a wire transfer will be sent to
the designated account that day. Dividends for that day will not be earned.
The Fund is not responsible for the efficiency of the federal wire system or
the account holder's financial services firm or bank. You are responsible for
any charges your firm or bank makes for sending or receiving wire transfers.
To change the designated account to receive wire redemption proceeds, send a
written request to the Shareholder Service Agent with signatures guaranteed as
described above.
10
<PAGE>
How To Make A Redemption--continued
. REDEMPTION BY REDEMPTION CHECK. If you select the checkwriting method of re-
demption on your account application, you will normally receive drafts ("Re-
demption Checks") within 2 weeks of opening your account which you may use to
draw on your Fund account, but not to close it. When a Redemption Check is pre-
sented for payment, a sufficient number of full and fractional shares in your
account will be redeemed at the next determined net asset value to cover the
amount of the Redemption Check. This will enable you to continue earning daily
dividends until the Fund receives the Redemption Check.
You may write Redemption Checks payable to the order of any person in any
amount not less than $1,000 but not more than $5 million. Unless one signer is
authorized on the account application, Redemption Checks must be signed by all
account holders. If the Shareholder Service Agent receives written notice by
any owner revoking the authorization to sign individually, all account owners
will be required to sign. Redemption Checks must be signed exactly as the ac-
count is registered. The Fund may refuse to honor Redemption Checks whenever
the right of redemption has been suspended or postponed, or whenever the ac-
count is otherwise impaired. A $10 service fee will be charged when a Redemp-
tion Check is presented to redeem Fund shares in excess of the value of your
Fund account or in an amount less than $1,000; when a Redemption Check is pre-
sented that would require redemption within 10 days of shares that were pur-
chased by check or through EZ Transfer or Automatic Purchase Plan; or when you
request "stop payment" of a Redemption Check by telephone or in writing. A
"stop payment" request may be made by calling 1-800- .
GENERAL
If shares of the Fund to be redeemed were purchased by check or through EZ
Transfer or Automatic Purchase Plan (see "Special Features--Electronic Funds
Transfer Programs") the Fund may delay transmittal of redemption proceeds until
it has determined that collected funds have been received for the purchase of
such shares, which will be up to 10 days from receipt by the Fund of the pur-
chase amount. Shareholders may not use wire transfer or Redemption Check fea-
tures until the shares being redeemed have been owned for at least 10 days.
There is no such delay when the shares being redeemed were originally purchased
by wiring Federal Funds. The Fund reserves the right to terminate or modify the
telephone, wire transfer or check redemption privileges at any time.
If shares being redeemed were acquired from an exchange of shares of a mutual
fund that were offered subject to a contingent deferred sales charge as de-
scribed in the prospectus for that other fund, the redemption of such shares
may be subject to a contingent deferred sales charge as explained in such pro-
spectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individual
and institutional accounts and pre-authorized telephone redemption transactions
for certain institutional accounts. Shareholders may choose these privileges on
the account application or by contacting the Shareholder Service Agent for ap-
propriate instructions. Please note that the telephone exchange privilege is
automatic unless the shareholder refuses it on the account application. The
Fund or its agents may be liable for losses, expenses or costs arising out of
fraudulent or unauthorized telephone requests pursuant to these privileges, un-
less the Fund or its agent reasonably believe, based upon reasonable verifica-
tion procedures, that the telephonic instructions are genuine. The SHAREHOLDER
WILL BEAR THE RISK OF LOSS, including loss resulting from fraudulent or unau-
thorized transactions, as long as the reasonable verification procedures are
followed. The verification procedures include recording instructions, requiring
certain identifying information before acting upon instructions and sending
written confirmations.
THE FUND MAY ASSESS A MONTHLY FEE OF $1 ON ANY ACCOUNT WITH A BALANCE BELOW
$10,000 FOR 30 CONSECUTIVE DAYS. For complete redemptions, a $5.00 transaction
fee will be charged before proceeds are distributed. There is a $12.00 fee for
closing an individual retirement account and a $10.00 fee for closing an ac-
count within one year of opening the account.
11
<PAGE>
MOVING TO ANOTHER FUND
You may exchange your shares of the Fund for shares of Zurich Money Funds.
Exchanges are made based on relative dollar values of the shares involved in
the exchange. If your account balance is less than $100,000, there will be a
$5.00 fee for each exchange out of the Fund. In addition, dealers or other
firms may charge for their services. The exchange minimum is $1,000. To ex-
change shares, call us or contact your financial adviser to obtain a prospec-
tus for Zurich Money Funds. You may make an exchange by mail or by telephone:
BY TELEPHONE
Once you've completed the authorization section on the account application
and we have it on file, the Shareholder Service Agent will honor requests by
telephone at (800) , subject to the limitations on liability described
under "How To Make a Redemption--General." During periods when it is difficult
to contact the Shareholder Service Agent by telephone, it may be difficult to
use the telephone exchange privilege.
BY MAIL
Send your request to:
Zurich YieldWise Money Fund
P.O. Box 419557
Attention: Exchange Department
Kansas City, Missouri 64141-6557
Exchanges will be effected by redemption of shares of the fund held and pur-
chase of shares of the other fund. For federal income tax purposes, any such
exchange constitutes a sale upon which a gain or loss may be realized, depend-
ing upon whether the value of the shares being exchanged is more or less than
the shareholder's adjusted cost basis. The exchange privilege is not a right
and may be suspended, terminated or modified at any time. Except as otherwise
permitted by applicable regulation, 60 days prior written notice of any termi-
nation or material change will be provided.
AUTOMATIC EXCHANGE PLAN
With an account balance of $10,000 or more, shareholders may authorize the
automatic exchange of a specified amount ($1,000 minimum) of shares of the
Fund for shares of Zurich Money Funds. If selected, exchanges will be made au-
tomatically until the privilege is terminated by the shareholder or the Fund.
Exchanges are subject to the terms and conditions described above except that
there is no minimum investment requirement for the Zurich Money Funds acquired
on exchange. Each automatic exchange out of the Fund is subject to the $5.00
exchange fee.
SPECIAL FEATURES
. ELECTRONIC FUNDS TRANSFER PROGRAMS
For your convenience, the Fund has established several investment and re-
demption programs using electronic funds transfer via the ACH System which are
described below. There is currently a $2.00 fee for each redemption using
electronic funds transfer. Shareholders should contact the Shareholder Service
Agent at 1-800-621-1048 for more information.
. EZ-TRANSFER With just one easy phone call, EZ-Transfer allows you to quickly
and conveniently transfers money (minimum $1,000 and maximum $50,000) from
your bank, savings and loan or credit union account to purchase shares in the
Fund. You can also redeem shares (minimum $1,000 and maximum $50,000) from
your Fund account and transfer the proceeds to your bank, savings and loan or
credit union checking account. When you choose to participate in the EZ-Trans-
fer program, you designate the bank, savings and loan or credit union account
which will be debited or credited under the program. After you have received a
notice confirming that this service has been added to your Fund account,
please allow a minimum of 20 days for bank notification and processing. By
choosing to participate in this program, you authorize the Shareholder Service
Agent to rely upon telephone instructions from any person to transfer the
specified amounts between your Fund account and your predesignated bank, sav-
ings and loan or credit union account, subject to the limitations on liability
under "How To Make a Redemption--General." The Shareholder Service Agent will
then purchase or redeem sufficient full and fractional shares in your account
to satisfy the request. Once you are enrolled in EZ-Transfer, you can initiate
a transaction by simply calling Shareholder Services toll free at 1-800-621-
1048
12
<PAGE>
Special Features--continued
Monday through Friday, 8:00 a.m. to 3:00 p.m. Central time or by calling the
Zurich InfoLine at 1-800- 24 hours a day. See "How To Make a Redemp-
tion--General" for information on our 10 day hold policy. Any account holder
may terminate this privilege by sending written notice to Zurich YieldWise
Money Fund, P.O. Box 419415, Kansas City, Missouri 64141-6415. Termination
will become effective as soon as the Shareholder Service Agent has had a rea-
sonable time to act upon the request. EZ-Transfer cannot be used with passbook
savings accounts. This program may not be used for tax-deferred plans such as
Individual Retirement Accounts (IRAs).
. AUTOMATIC PURCHASE PLAN You may establish an automatic investment program
with your Fund account. With Automatic Purchase Plan, monthly investments
(minimum $500 and maximum $50,000) are made automatically from your account at
a bank, savings and loan, or credit union into your Fund account. By signing
up for this privilege, you authorize the Fund and its agents to take money out
of your predesignated bank, savings and loan or credit union account and in-
vest that money in your Fund account. Any account owner may terminate this
privilege simply by sending written notice to Zurich YieldWise Money Fund,
P.O. Box 419415, Kansas City, Missouri 64141-6415. Termination will become ef-
fective as soon as the Shareholder Service Agent has had a reasonable time to
act upon the request. This privilege may not be used with passbook savings ac-
counts.
. DIRECT CHECK DEPOSIT SERVICE You may conveniently invest in the Fund through
Payroll Direct Deposit or Government Direct Deposit. You can arrange to have
all or a portion of your net pay or government check ($500 minimum) automati-
cally invested in your Fund account each payment period. You may terminate
your participation in these programs by giving written notice to your employer
or the government agency, as appropriate. (A reasonable time to act is re-
quired.) The Fund is not responsible for the efficiency of your employer or
the government agency making the payment or any financial institution trans-
mitting payment.
To use these features, the participating financial institution must be af-
filiated with the ACH System. This ACH affiliation permits the Shareholder
Service Agent to electronically transfer money between your bank account or
employer's payroll bank in the case of Payroll Direct Deposit or the U.S. Gov-
ernment in the case of Government Direct Deposit, and your Fund account. Your
financial institution's crediting policies for these transferred funds may
vary. These features may be amended or terminated at any time by the Fund.
OTHER SPECIAL FEATURES
Information about the following special features is contained in the State-
ment of Additional Information. Additional information may also be obtained by
contacting the Shareholder Service Agent at 1-800- .
--Automatic Withdrawal Plan
--Tax Sheltered Retirement Programs
DIVIDENDS AND TAXES
. DIVIDEND PAYMENT
To help keep your account growing, dividends from the Fund are automatically
reinvested in additional shares of the Fund, unless you request payment by
check on your account application or make such a request later. Dividends are
declared daily and paid monthly.
Dividends are normally reinvested on the 25th of each month if a business
day, otherwise on the prior business day. If you've chosen to receive divi-
dends in cash, checks will be mailed monthly to you or any person you desig-
nate. You may request this option by contacting the Shareholder Service Agent
(see "How To Make a Purchase").
The Fund will reinvest dividend checks (and future dividends) in shares of
the Fund if checks are returned as undeliverable. Dividends and other distri-
butions of the Fund in the aggregate amount of $10 or less are automatically
reinvested in shares of the Fund unless you request that such policy not be
applied to your account.
. THE FUND
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code") and if so qualified
will not be subject to federal income taxes to the extent its earnings
13
<PAGE>
Dividends and Taxes--continued
are distributed. Dividends derived from interest and short-term capital gains
are taxable as ordinary income whether received in cash or reinvested in addi-
tional shares. Dividends from the Fund do not qualify for the dividends re-
ceived deduction available to corporate shareholders.
Dividends declared in October, November or December to shareholders of rec-
ord as of a date in one of those months and paid during the following January
are treated as paid on December 31 of the calendar year in which declared for
federal income tax purposes. The Fund may adjust its schedule for dividend re-
investment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
The Fund is required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification num-
ber (in the case of individuals, a social security number) and in certain
other circumstances. Trustees of qualified retirement plans and 403(b)(7) ac-
counts are required by law to withhold 20% of the taxable portion of any dis-
tribution that is eligible to be "rolled over." The 20% withholding require-
ment does not apply to distributions from IRAs or any part of a distribution
that is transferred directly to another qualified retirement plan, 403(b)(7)
account, or IRA. You should consult your tax adviser regarding the 20% with-
holding requirement.
You will receive a monthly statement giving complete details of dividend re-
investment and purchase and redemption transactions during the month. Tax in-
formation will be provided annually. You should retain copies of your monthly
account statements or year-end statement for tax reporting purposes. However,
those who have incomplete records may obtain historical account transaction
information at a reasonable fee.
When more than one shareholder resides at the same address, certain reports
and communications to be delivered to such shareholders may be combined in the
same mailing package, and certain duplicate reports and communications may be
eliminated. Similarly, account statements to be sent to such shareholders may
be combined in the same mailing package or consolidated into a single state-
ment. However, you may request that the foregoing policies not be applied to
your account.
INVESTMENT MANAGER
Zurich Kemper Investments, Inc. ("ZKI"), 222 South Riverside Plaza, Chicago,
Illinois 60606-5808, is the investment manager of the Fund and provides the
Fund with continuous professional investment supervision. ZKI has been engaged
in the management of investment funds for more than forty-eight years and is
one of the largest investment managers in the country. ZKI and its affiliates
provide investment advice and manage investment portfolios for the Kemper
Funds, Zurich Money Funds, affiliated insurance companies and other corporate,
pension, profit-sharing and individual accounts representing approximately $79
billion under management, including $10 billion in money market fund assets.
ZKI acts as investment manager for 32 open-end and seven closed-end investment
companies, with 79 separate investment portfolios, representing more than 2.5
million shareholder accounts. ZKI is the investment manager for Zurich Money
Market Fund, which commenced operations in 1974, and which is one of the old-
est money market funds in existence. ZKI is an indirect subsidiary of Zurich
Insurance Company, an internationally recognized provider of financial serv-
ices in property/casualty and life insurance, reinsurance and asset manage-
ment. The Zurich family of companies manages over $150 billion in assets
worldwide.
Responsibility for overall management of the Fund rests with its Board of
Trustees and officers. Professional investment supervision is provided by ZKI.
The investment management agreement provides that ZKI shall act as the Fund's
investment adviser, manage its investments and provide it with various serv-
ices and facilities.
Frank J. Rachwalski, Jr. is the portfolio manager of the Fund. He has served
in this capacity since the Fund commenced operations in April 1997. Mr.
Rachwalski joined ZKI in January, 1973 and is currently a Senior Vice Presi-
dent of ZKI and a Vice President of the Fund.
14
<PAGE>
Investment Manager--continued
He received a B.B.A. and an M.B.A. from Loyola University, Chicago, Illinois.
For the services and facilities furnished, the Fund pays an annual invest-
ment management fee, payable monthly, on a graduated basis ranging from .50%
of the first $215 million of average daily net assets of the Fund, to .25% of
average daily net assets of the Fund over $800 million.
ZKI has agreed to temporarily reduce its management fee to 0% and temporar-
ily reimburse or pay 100% of the Fund's other operating expenses for a period
of at least six months from the date the Fund commences operations. The total
operating expenses of the Fund set forth under "Summary of Expenses" include
the effect of this management fee and operating expense reduction. ZKI re-
serves the right to terminate its fee reduction and expense absorption at any
time after this six-month period. ZKI has also agreed to waive its management
fee and absorb operating expenses to the extent necessary to maintain the
Fund's total operating expenses at no more than .45% until January 1, 1999, at
which time ZKI may terminate such fee waiver and expense absorbtion. For pur-
poses of these fee waivers and expense limitations, "operating expenses" do
not include taxes, interest, extraordinary expenses, brokerage commissions or
transaction costs.
Zurich Kemper Distributors, Inc. ("ZKDI"), 222 South Riverside Plaza, Chica-
go, Illinois 60606-5808, an affiliate of ZKI, is the principal underwriter of
the Fund and acts as agent of the Fund in the sale of its shares.
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas
City, Missouri 64105, as custodian, and State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110, as sub-custodian, have cus-
tody of all securities and cash of the Fund. They attend to the collection of
principal and income, and payment for and collection of proceeds of securities
bought and sold by the Fund. IFTC is also the Fund's transfer and dividend-
paying agent. Pursuant to a services agreement with IFTC, Zurich Kemper Serv-
ice Company, 811 Main Street, Kansas City, Missouri 64105, an affiliate of
ZKI, serves as Shareholder Service Agent of the Fund.
PERFORMANCE
The Fund may advertise several types of performance information, including
"yield," "effective yield," "total return," and "average annual total return."
Please remember that performance information is based upon historical earnings
and is not representative of future performance. The yield of the Fund refers
to the net investment income generated by a hypothetical investment in the
Fund over a specific seven-day period. This net investment income is then
annualized, which means that the net investment income generated during the
seven-day period is assumed to be generated each week over an annual period
and is shown as a percentage of the investment. The effective yield is calcu-
lated similarly, but the net investment income earned by the investment is as-
sumed to be compounded weekly when annualized. The effective yield will be
slightly higher than the yield due to this compounding effect. Average annual
total return and total return measure both net investment income and any real-
ized or unrealized appreciation or depreciation of the Fund's investments, as-
suming reinvestment of all dividends. Average annual total return represents
the average annual percentage change over the period and total return repre-
sents the aggregate percentage or dollar value change over the period.
The performance of the Fund may be compared to that of other money market
mutual funds or mutual fund indexes as reported by independent mutual fund re-
porting services such as Lipper Analytical Services, Inc. ("Lipper"). The
Fund's performance, expenses and its relative size may be compared to other
money market mutual funds as reported by IBC Financial Data, Inc.'s Money Fund
Report(R) or Money Market Insight(R), reporting services on money market
funds. Investors may want to compare the Fund's performance to that of various
bank products as reported by BANK RATE MONITOR(TM), a financial reporting
service that weekly publishes average rates of bank and thrift institution
money market deposit accounts and interest bearing checking accounts or vari-
ous certificate of deposit indexes. The performance of the Fund also may be
compared to that of U.S. Treasury bills and notes. Certain of these alterna-
tive investments may offer fixed rates of return and guaranteed principal and
may be insured. In addition, investors may
15
<PAGE>
Performance--continued
want to compare the Fund's performance to the Consumer Price Index either di-
rectly or by calculating its "real rate of return," which adjusts its return
for the effects of inflation.
Information may be quoted from publications such as Morningstar, Inc., The
Wall Street Journal, Money Magazine, Forbes, Barron's, Fortune, The Chicago
Tribune, USA Today, Institutional Investor and Registered Representative. The
Fund may depict the historical performance of the securities in which the Fund
may invest over periods reflecting a variety of market or economic conditions
either alone or in comparison with alternative investments, performance indexes
of those investments or economic indicators. The Fund may also describe its
portfolio holdings and depict its size or relative size compared to other
mutual funds, the number and make-up of its shareholder base and other descrip-
tive factors concerning the Fund.
The Fund's returns will fluctuate. Shares of the Fund are not insured. Addi-
tional information concerning the Fund's performance appears in the Statement
of Additional Information.
CAPITAL STRUCTURE
The Fund is an open-end, diversified, management investment company, orga-
nized as a business trust under the laws of Massachusetts on June 12, 1995. ZKI
invested the "seed money" as the sole shareholder of the Fund before the public
offering of its shares and therefore, as of the date of this prospectus, con-
trolled the Fund. The Fund may issue an unlimited number of shares of benefi-
cial interest, all having no par value, which may be divided by the Board of
Trustees into classes of shares, subject to compliance with the Securities and
Exchange Commission regulations permitting the creation of separate classes of
shares. The Fund's shares are not currently divided into classes. While only
shares of a single series are presently being offered, the Board of Trustees
may authorize the issuance of additional series if deemed desirable, each with
its own investment objective, policies and restrictions. Since the Fund may of-
fer multiple series, it is known as a "series company." Shares of a series have
equal noncumulative voting rights and equal rights with respect to dividends,
assets and liquidation of such series subject to any preferences, rights or
privileges of any classes of shares within the series. Generally, each class of
shares issued by a particular series would differ as to the allocation of cer-
tain expenses of the series, such as distribution and administrative expenses,
permitting, among other things, different levels of services or methods of dis-
tribution among various classes. Shares are fully paid and nonassessable when
issued, are transferable without restriction and have no preemptive or conver-
sion rights. The Fund is not required to hold annual shareholders' meetings and
does not intend to do so. However, it will hold special meetings as required or
deemed desirable for such purposes as electing trustees, changing fundamental
policies or approving an investment management agreement. Subject to the Agree-
ment and Declaration of Trust of the Fund, shareholders may remove trustees. If
shares of more than one series are outstanding, shareholders will vote by se-
ries and not in the aggregate or by class except when voting in the aggregate
is required under the 1940 Act, such as for the election of trustees or when
the Board of Trustees determines that voting by portfolio or by class is appro-
priate.
Rather than invest in securities directly, the Fund may in the future seek to
achieve its investment objective by pooling its assets with assets of other mu-
tual funds managed by ZKI or its affiliates for investment in another invest-
ment company having the same investment objective and substantially the same
investment policies and restrictions as the Fund. The purpose of such an ar-
rangement is to achieve greater operational efficiencies and to reduce costs.
It is expected that any such investment company will be managed by ZKI in sub-
stantially the same manner as the Fund. Shareholders of the Fund will be given
at least 30 days prior notice of any such investment, although they will not be
entitled to vote on the action. Such investment would be made only if the
trustees determine it to be in the best interests of the Fund and its share-
holders.
16
<PAGE>
ACCOUNT SERVICES DIRECTORY
TO OPEN A NEW ACCOUNT
The minimum to open an account is $25,000 (or $10,000 for an IRA). Call a Zu-
rich Money Fund Specialist at 1-800-537-6001 Monday through Friday between 8
a.m. and 6 p.m. Central time to:
. learn the current yield
. get answers about fund features, benefits, services, and fees
. request an application
. receive assistance completing an application
. set up a wire transfer initial purchase.
FOR CURRENT ACCOUNT ASSISTANCE
Call a Zurich Shareholder Services representative at
1-800- Monday through Friday between 7 a.m. and 6 p.m. Central time and
on Saturday between 8 a.m. and 3 p.m. to:
. establish new account services
. inquire about current statement or tax forms
. request duplicate statements or tax forms
. change the frequency or amount of automated transactions
. initiate a redemption or exchange
. follow-up on correspondence
. learn how to use the Zurich InfoLine automated phone system.
24-HOUR ACCOUNT INFORMATION
Call Zurich InfoLine at 1-800- to make automated account inquiries and
transactions 24 hours a day from a touch-tone phone, including:
. account balance
. current yield
. transaction confirmation
. last dividend paid
. checkbook and investment slip reorders
. duplicate statement request
. pre-authorized transfers to and from a bank account
. fund redemption requests.
TO START AN AUTOMATIC PURCHASE PLAN
Call 1-800- for the proper forms to add $500 or more to your account
automatically with direct deposit:
. all or part of your paycheck
. all or part of your government check
. an amount you specify directly from your designated bank account.
TO MAKE A WIRE TRANSFER PURCHASE
Both methods require $1,000 minimum investment:
. Wire with Federal Funds (same day credit if received before 1 p.m. Central
time)
. EZ Transfer with ACH Funds (next business day credit if received before 11
a.m. Central time)
Send to: United Missouri Bank (ABA # 1010-0069-5), 10th and Grand, Kansas City,
MO for credit to Zurich YieldWise Money Fund (Fund bank account
# ) and further credit to your account number.
TO MAKE A WIRE TRANSFER REDEMPTION
Both methods require $1,000 minimum and a call to Shareholder Services at 1-
800- :
. Federal Funds (same day if received before 11 p.m. Central time; $10 fee per
transfer)
. EZ Transfer with ACH Funds (generally within two business days; $2 fee per
transfer).
The financial institution receiving your transfer may also charge a fee.
For additional information on account transactions, see tables on pages 8 and
10.
17
<PAGE>
PROSPECTUS
--------------------
ZURICH YIELDWISE
MONEY FUND
, 1997
[ZURICH LOGO]
Investment Manager:
Zurich Kemper Investments, Inc.
Principal Underwriter:
Zurich Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
[ZURICH LOGO]
ZYMF ( /97) [LOGO]PRINTED ON RECYCLED PAPER
<PAGE>
ZURICH YIELDWISE MONEY FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
LOCATION IN STATEMENT OF
ITEM NUMBER OF FORM N-1A ADDITIONAL INFORMATION
------------------------ ------------------------
<C> <S>
10. Cover Page............................... Cover Page
11. Table of Contents........................ Table of Contents
12. General Information and History.......... Inapplicable
13. Investment Objectives and Policies....... Investment Restrictions;
Appendix
14. Management of the Fund................... Investment Manager; Officers
and Trustees
15. Control Persons and Principal Holders of
Securities............................... Officers and Trustees
16. Investment Advisory and Other Services... Investment Manager; Officers
and Trustees
17. Brokerage Allocation and Other Practices. Portfolio Transactions
18. Capital Stock and Other Securities....... Shareholder Rights
19. Purchase, Redemption and Pricing of Secu-
rities Purchase and Redemption of
Being Offered............................ Shares;
Dividends and Net Asset Value
20. Tax Status............................... Inapplicable
21. Underwriters............................. Investment Manager
22. Calculations of Performance Data......... Performance
23. Financial Statements..................... Report of Independent Auditors,
Statement of Net Assets
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
, 1997
ZURICH YIELDWISE MONEY FUND
222 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606-5808
(800) 621-1048
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus of Zurich YieldWise Money Fund (the
"Fund") dated , 1997. The prospectus may be obtained without charge
by calling or writing the Fund.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Restrictions............................................. B-1
Investment Manager.................................................. B-2
Portfolio Transactions.............................................. B-3
Purchase and Redemption of Shares................................... B-4
Dividends and Net Asset Value....................................... B-4
Performance......................................................... B-5
Officers and Trustees............................................... B-7
Special Features.................................................... B-9
Shareholder Rights.................................................. B-9
Report of Independent Auditors ( , 1997)....................... B-11
Statement of Net Assets ( , 1997)........................... B-12
Appendix--Ratings of Investments.................................... B-13
</TABLE>
ZYMF-01 /
[LOGO] printed on recycled paper
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions which, together with the
investment objective of the Fund, cannot be changed without approval by
holders of a majority of the Fund's outstanding voting shares. As defined in
the Investment Company Act of 1940, this means the lesser of the vote of (a)
67% of the shares of the Fund present at a meeting where more than 50% of the
outstanding shares of the Fund are present in person or by proxy; or (b) more
than 50% of the outstanding shares of the Fund.
The Fund may not:
(1) Purchase more than 10% of any class of voting securities of any issuer.
(2) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and
policies).
(3) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments (any such borrowings under this section will not be
collateralized). If, for any reason, the current value of the Fund's total
assets falls below an amount equal to three times the amount of its
indebtedness from money borrowed, the Fund will, within three days (not
including Sundays and holidays), reduce its indebtedness to the extent
necessary. The Fund will not borrow for leverage purposes.
(4) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the clearance
of transactions.
(5) Invest in commodities or commodity futures contracts or in real estate (or
real estate limited partnerships), although it may invest in securities which
are secured by real estate and securities of issuers which invest or deal in
real estate.
(6) Underwrite securities issued by others except to the extent the Fund may
be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(7) Issue senior securities except as permitted under the Investment Company
Act of 1940.
(8) Concentrate 25% or more of the Fund's assets in any one industry;
provided, however, that the Fund reserves freedom of action to (a) invest up
to 100% of its assets in obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities, and (b) invest 25% or more of
its assets in bank certificates of deposit, time deposits or banker's
acceptances of United States banks, in accordance with its investment
objective and policies.
If the Fund adheres to a percentage restriction at the time of investment, a
later increase or decrease in percentage beyond the specified limit resulting
from a change in values or net assets will not be considered a violation. The
Fund has adopted the following non-fundamental restrictions, which may be
changed by the Board of Trustees without shareholder approval. The Fund may
not:
(i) Invest more than 10% of the its net assets in illiquid securities.
(ii) Write, purchase or sell puts, calls or combinations thereof.
(iii) Invest for the purpose of exercising control or management of another
issuer.
B-1
<PAGE>
INVESTMENT MANAGER
INVESTMENT MANAGER. Zurich Kemper Investments, Inc. ("ZKI") is the Fund's
investment manager. ZKI is wholly owned by ZKI Holding Corp. ZKI Holding Corp.
is a more than 90% owned subsidiary of Zurich Holding Company of America, Inc.,
which is a wholly owned subsidiary of Zurich Insurance Company, an
internationally recognized company providing services in life and non-life
insurance, reinsurance and asset management. Pursuant to an investment
management agreement, ZKI acts as the Fund's investment adviser, manages its
investments, administers its business affairs, furnishes office facilities and
equipment, provides clerical, bookkeeping and administrative services, provides
shareholder and information services and permits any of its officers or
employees to serve without compensation as trustees or officers of the Fund if
elected to such positions. The Fund pays the expenses of its operations,
including the fees and expenses of independent auditors, counsel, custodian and
transfer agent and the cost of share certificates, reports and notices to
shareholders, costs of calculating net asset value, brokerage commissions or
transaction costs, taxes, registration fees, the fees and expenses of
qualifying the Fund and its shares for distribution under federal and state
securities laws and membership dues in the Investment Company Institute or any
similar organization.
The Fund's investment management agreement has an initial term ending December
1, 1998 and it continues in effect from year to year so long as its
continuation is approved at least annually (a) by a majority of the trustees
who are not parties to such agreement or interested persons of any such party
except in their capacity as trustees of the Fund and (b) by the shareholders of
the Fund or the Board of Trustees. The agreement may be terminated at any time
upon 60 days' notice by either party, or by a majority vote of the outstanding
shares of the Fund, and will terminate automatically upon assignment. If
additional series become subject to the investment management agreement, the
provisions concerning continuation, amendment and termination shall be on a
series by series basis. Additional series may be subject to a different
agreement. The agreement provides that ZKI shall not be liable for any error of
judgment or of law, or for any loss suffered by the Fund in connection with the
matters to which the agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of ZKI in the
performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under the agreement.
For the services and facilities furnished, the Fund pays an annual investment
management fee, payable monthly, on a graduated basis of .50% of the first $215
million of average daily net assets of the Fund, .375% on the next $335
million, .30% on the next $250 million and .25% of average daily net assets of
the Fund over $800 million.
PRINCIPAL UNDERWRITER. Zurich Kemper Distributors, Inc. ("ZKDI"), an affiliate
of ZKI, is the principal underwriter for shares of the Fund and acts as agent
of the Fund in the sale of its shares. The Fund pays the cost for the
prospectus and shareholder reports to be set in type and printed for existing
shareholders, and ZKDI pays for the printing and distribution of copies thereof
used in connection with the offering of shares to prospective investors. ZKDI
also pays for supplementary sales literature and advertising costs. Terms of
continuation, termination and assignment under the underwriting agreement are
identical to those described above with regard to the investment management
agreement, except that termination other than upon assignment requires six
months notice.
Certain officers or trustees of the Fund are also directors or officers of ZKI
and ZKDI as indicated under "Officers and Trustees."
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary
Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, as sub-custodian, have custody of all securities
and cash of the
B-2
<PAGE>
Fund. They attend to the collection of principal and income, and payment for
and collection of proceeds of securities bought and sold by the Fund. IFTC is
also the Fund's transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Zurich Kemper Service Company ("ZKSvC"), an affiliate of
ZKI, serves as "Shareholder Service Agent of the Fund and, as such, performs
all of IFTC's duties as transfer agent and dividend paying agent." IFTC
receives, as transfer agent, and pays to ZKSvC, annual account fees of a
maximum of $8 per account plus account set-up, transaction, maintenance and
out-of-pocket expense reimbursement.
INDEPENDENT AUDITORS AND REPORTS TO SHAREHOLDERS. The Fund's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Fund's annual financial statements, review certain
regulatory reports and the Fund's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to
do so by the Fund. Shareholders will receive annual audited financial
statements and semi-annual unaudited financial statements.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
the Fund in relation to movements in the general level of interest rates, to
invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of the Fund depending upon management's ability
to correctly time and execute such transactions. Since the Fund's assets are
invested in securities with short maturities, its portfolio will turn over
several times a year. Securities with maturities of less than one year are
excluded from required portfolio turnover rate calculations, so the Fund's
portfolio turnover rate for reporting purposes is likely to be zero.
ZKI and its affiliates furnish investment management services for Zurich Money
Funds, the Kemper Funds and other clients including affiliated insurance
companies. These entities may share some common research and trading
facilities. At times investment decisions may be made to purchase or sell the
same investment security for the Fund and for one or more of the other clients
of ZKI or its affiliates. When two or more of such clients are simultaneously
engaged in the purchase or sale of the same security through the same trading
facility, the transactions are allocated as to amount and price in a manner
considered equitable to each.
ZKI, in effecting purchases and sales of portfolio securities for the account
of the Fund, will implement the Fund's policy of seeking the best execution of
orders. Consistent with this policy, orders for portfolio transactions are
placed with broker-dealer firms giving consideration to the quality, quantity
and nature of the firm's professional services which include execution,
financial responsibility, responsiveness, clearance procedures, wire service
quotations and statistical and other research information provided to the Fund
and ZKI and its affiliates. Subject to seeking best execution of an order,
brokerage is allocated on the basis of all services provided. Any research
benefits derived are available for all clients, including clients of ZKI and
its affiliates. The Fund expects that purchases and sales of portfolio
securities usually will be principal transactions. Portfolio securities will
normally be purchased directly from the issuer or from an underwriter or
market maker for the securities. There are normally no brokerage commissions
paid by the Fund for such purchases. Purchases from underwriters include a
commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market makers include the spread between the bid and
asked prices.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are sold at their net asset value next determined after an
order and payment are received in the form described in the Fund's prospectus.
There is no sales charge. The minimum initial investment is $25,000 ($10,000
for IRAs) and the minimum subsequent investment is $1,000 but such minimum
amounts may be
B-3
<PAGE>
changed at any time. See the prospectus for certain exceptions to these
minimums. An investor wishing to open an account should use the account
application form available from the Fund and choose one of the methods of
purchase described in the Fund's prospectus. An order for the purchase of
shares that is accompanied by a check drawn on a foreign bank (other than a
check drawn on a Canadian bank in U.S. Dollars) will not be considered in
proper form and will not be processed unless and until the Fund determines that
it has received payment of the proceeds of the check. The time required for
such a determination will vary and cannot be determined in advance.
Upon receipt by the Shareholder Service Agent, of a request for redemption in
proper form, shares will be redeemed by the Fund at the applicable net asset
value as described in the Fund's prospectus. A shareholder may elect to use
either the regular or expedited redemption procedures.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period
in which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of the Fund's investments is
not reasonably practicable, or (ii) it is not reasonably practicable for the
Fund to determine the value of its net assets, or (c) for such other periods as
the Securities and Exchange Commission may by order permit for the protection
of the Fund's shareholders.
Although it is the Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Fund will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur
certain transaction costs. Such a redemption would not be as liquid as a
redemption entirely in cash. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940 pursuant to which the Fund is
obligated to redeem shares of the Fund solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder of record.
DIVIDENDS AND NET ASSET VALUE
DIVIDENDS. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the Fund unless they elect to receive
cash. Dividends will be reinvested monthly at the net asset value normally on
the 25th of each month if a business day, otherwise on the prior business day.
The Fund will pay shareholders who redeem their entire accounts all unpaid
dividends at the time of redemption not later than the next dividend payment
date.
The Fund calculates its dividends based on its daily net investment income. For
this purpose, the net investment income of the Fund consists of (a) accrued
interest income plus or minus amortized discount or premium, (b) plus or minus
all short-term realized gains and losses on portfolio assets and (c) minus
accrued expenses. Expenses of the Fund are accrued each day. While the Fund's
investments are valued at amortized cost, there will be no unrealized gains or
losses on portfolio securities. However, should the net asset value of the Fund
deviate significantly from market value, the Board of Trustees could decide to
value the portfolio securities at market value and then unrealized gains and
losses would be included in net investment income above.
NET ASSET VALUE. As described in the prospectus, the Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument
B-4
<PAGE>
at its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument. Calculations are made to compare the value of the Fund's
investments valued at amortized cost with market values. Market valuations are
obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the mean between the bid
and asked prices for the instruments. If a deviation of 1/2 of 1% or more were
to occur between the net asset value per share calculated by reference to
market values and the Fund's $1.00 per share net asset value, or if there were
any other deviation that the Board of Trustees of the Fund believed would
result in a material dilution to shareholders or purchasers, the Board of
Trustees would promptly consider what action, if any, should be initiated. If
the Fund's net asset value per share (computed using market values) declined,
or were expected to decline, below $1.00 (computed using amortized cost), the
Board of Trustees of the Fund might temporarily reduce or suspend dividend
payments in an effort to maintain the net asset value at $1.00 per share. As a
result of such reduction or suspension of dividends or other action by the
Board of Trustees, an investor would receive less income during a given period
than if such a reduction or suspension had not taken place. Such action could
result in investors receiving no dividends for the period during which they
held shares and receiving, upon redemption, a price per share lower than that
which they paid. On the other hand, if the Fund's net asset value per share
(computed using market values) were to increase, or were anticipated to
increase, above $1.00 (computed using amortized cost), the Board of Trustees of
the Fund might supplement dividends in an effort to maintain the net asset
value at $1.00 per share.
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for the
Fund may be shown in the form of "yield," "effective yield," "total return,"
and "average annual total return." These various measures of performance are
described below. ZKI has agreed to temporarily reduce its management fee to 0%
and absorb other operating expenses of the Fund to the extent specified in the
prospectus. See "Investment Manager." This fee reduction and expense absorption
will improve the performance results of the Fund.
The Fund's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the current yield quotation is based on a seven-day period and is
computed as follows. The first calculation is net investment income per share,
which is accrued interest on portfolio securities, plus or minus amortized
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return"). The result is then divided by 7 and multiplied
by 365 and the resulting yield figure is carried to the nearest one-hundredth
of one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation.
The Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed
compounding. The formula for the effective yield is: (base period return +
1)/365/7/ - 1.
Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first day
of the period and computing the "redeemable value" of that investment at the
end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all dividends have
been reinvested at net asset value on the reinvestment dates.
B-5
<PAGE>
Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.
The Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in the Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in the Fund is held, but also on such matters as Fund
expenses.
As indicated in the prospectus (see "Performance"), the performance of the Fund
may be compared to that of other mutual funds tracked by Lipper Analytical
Services, Inc. ("Lipper"). Lipper performance calculations include the
reinvestment of all capital gain and income dividends for the periods covered
by the calculations. The Fund's performance also may be compared to other money
market funds reported by IBC Financial Data, Inc.'s Money Fund Report(R) or
Money Market Insight(R), reporting services on money market funds. As reported
by IBC, all investment results represent total return (annualized results for
the period net of management fees and expenses) and one year investment results
are effective annual yields assuming reinvestment of dividends.
As indicated in the prospectus, the Fund's performance also may be compared to
various bank products, including the average rate of bank and thrift
institution money market deposit accounts, interest bearing checking accounts
and certificates of deposit as reported in the BANK RATE MONITOR National
Index(TM) of 100 leading bank and thrift institutions as published by the BANK
RATE MONITOR(TM), N. Palm Beach, Florida 33408. The rates published by the BANK
RATE MONITOR National Index(TM) are averages of the personal account rates
offered on the Wednesday prior to the date of publication by 100 large banks
and thrifts in the top ten Consolidated Standard Metropolitan Statistical
Areas.
With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
the number of checks that may be written. If more than one rate is offered, the
lowest rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the
rates offered for these products take market conditions and competitive product
yields into consideration when set. Bank products represent a taxable
alternative income producing product. Bank and thrift institution deposit
accounts may be insured. Shareholder accounts in the Fund are not insured. Bank
passbook savings accounts compete with money market mutual fund products with
respect to certain liquidity features but may not offer all of the features
available from a money market mutual fund, such as check writing. Bank passbook
savings accounts normally offer a fixed rate of interest while the yield of the
Fund fluctuates. Bank checking accounts normally do not pay interest but
compete with money market mutual fund products with respect to certain
liquidity features (e.g., the ability to write checks against the account).
Bank certificates of deposit may offer fixed or variable rates for a set term.
(Normally, a variety of terms are available.) Withdrawal of these deposits
prior to maturity will normally be subject to a penalty. In contrast, shares of
the Fund are redeemable at the net asset value (normally, $1.00 per share) next
determined after a request is received.
Investors may also want to compare the Fund's performance to that of U.S.
Treasury bills or notes because such instruments represent alternative income
producing products. Treasury obligations are issued in selected denominations.
Rates of U.S. Treasury obligations are fixed at the time of issuance and
payment of principal and interest is backed by the full faith and credit of the
U.S. Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. The Fund's yield will
fluctuate. Also, while the Fund seeks to maintain a net asset value per share
of $1.00, there is no assurance that it will be able to do so.
B-6
<PAGE>
OFFICERS AND TRUSTEES
The officers and trustees of the Fund, their birthdates, their principal
occupations and their affiliations, if any, with ZKI, the Fund's investment
manager, and ZKDI, the principal underwriter, or their affiliates, are as
follows (the number following each person's title is the number of investment
companies managed by ZKI and its affiliates for which he or she holds similar
positions):
DAVID W. BELIN (6/20/28), Trustee, (26), 2000 Financial center, 7th and Walnut,
Des Moines, Iowa; Member, Belin Lamson McCormick Zumbach Flynn, P.C.
(attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee, (26), 16410 Avila Boulevard, Tampa,
Florida; Director, Management Consulting Services, McNulty & Company; formerly,
Executive Vice President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee, (26), 7515 Pelican Bay Boulevard, Naples,
Florida; Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, (26), 800 North Lindbergh Boulevard, St.
Louis, Missouri; Senior Vice President and Chief Financial Officer, Monsanto
Company (chemical products); prior thereto, Vice President, FMC Corporation
(manufacturer of machinery and chemicals); prior thereto, Director, Executive
Vice President and Chief Financial Officer, Staley Continental, Inc. (food
products).
DONALD R. JONES (1/17/30), Trustee, (26), 1776 Beaver Pond Road, Inverness,
Illinois, Retired; Director, Motorola, Inc. (manufacturer of electronic
equipment and components); formerly, Executive Vice President and Chief
Financial Officer, Motorola, Inc.
DOMINIQUE P. MORAX (10/2/48), Trustee*, (39), 222 South Riverside Plaza,
Chicago, Illinois; Member, Extended Corporate Executive Board, Zurich Insurance
Company; Director, ZKI.
SHIRLEY D. PETERSON (9/3/41), Trustee (26), 401 Rosemont Avenue, Frederick,
Maryland; President, Hood College, Maryland; prior thereto, Partner, Steptoe &
Johnson (attorneys); prior thereto, Commissioner of Internal Revenue Service;
prior thereto, Assistant Attorney General, U.S. Department of Treasury.
WILLIAM P. SOMMERS (7/22/33), Trustee, (26), 333 Ravenswood Avenue, Menlo park,
California; President and Chief Executive Officer, SRI International (research
and development); prior thereto, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton, Inc. (management consulting
firm) (retired); Director, Rohr, Inc. Therapeutic discovery Corp. and Litton
Industries.
STEPHEN B. TIMBERS (8/8/44), President and Trustee*, (39), 222 South Riverside
Plaza, Chicago, Illinois; President, Chief Executive Officer, Chief Investment
Officer and Director, ZKI; Director, ZKDI and LTV Corporation.
JOHN E. NEAL (3/9/50), Vice President*, (39), 222 South Riverside Plaza,
Chicago, Illinois; President, Kemper Funds Group, a unit of ZKDI; Director, ZKI
and ZKDI.
CHARLES R. MANZONI, JR. (1/23/47), Vice President*, (39), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President, Secretary and General
Counsel of ZKI; Secretary, ZKI Holding Corp.; Secretary, ZKI Agency, Inc.;
formerly, Partner, Gardner, Carton & Douglas (attorneys).
B-7
<PAGE>
J. PATRICK BEIMFORD, JR. (5/25/50), Vice President*, (24), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President and Chief Investment
Officer--Fixed Income Investments, ZKI.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, (9), 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice president, ZKI.
JEROME L. DUFFY (6/29/36), Treasurer*, (39), 222 South Riverside Plaza,
Chicago, Illinois; Senior Vice President, ZKI.
PHILLIP J. COLLORA (11/15/45), Vice President and Secretary*, (39), 222 South
Riverside Plaza, Chicago, Illinois; Attorney, Senior Vice President and
Assistant Secretary, ZKI.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary*, (31), 222 South Riverside
Plaza, Chicago, Illinois; Vice President, ZKI; and Vice President and Director
of State Registrations, ZKDI.
*Interested persons as defined in the Investment Company Act of 1940.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Fund. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons". The
information in the last column is for calendar year 1996. The Fund has not yet
adopted a trustee compensation schedule.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE ZKI - MANAGED
COMPENSATION FUNDS PAID TO
NAME OF TRUSTEE FROM FUND TRUSTEES**
- --------------------------------------------------------------------------------
<S> <C> <C>
David W. Belin*................................. -- $143,000
Lewis A. Burnham................................ -- $ 88,800
Donald L. Dunaway*.............................. -- $141,000
Robert B. Hoffman............................... -- $ 92,100
Donald R. Jones................................. -- $ 92,100
Shirley D. Peterson............................. -- $ 89,800
William P. Sommers.............................. -- $ 87,500
</TABLE>
* Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with ZKI-Managed Funds. Deferred amounts accrue
interest monthly at a rate equal to the yield of Zurich Money Funds--Zurich
Money Market Fund. Total deferred fees and interest accrued are $16,700 for
Mr. Belin and $18,600 for Mr. Dunaway.
** Includes compensation for services as trustee on twenty-four fund boards
with forty-one portfolios. Each trustee currently serves as a trustee of
twenty-six ZKI-Managed Funds and forty-three portfolios.
As of , 1997, ZKI owned all of the 100,000 outstanding shares of the
Fund.
SPECIAL FEATURES
AUTOMATIC WITHDRAWAL PLAN. If you own $10,000 or more of the Fund's shares you
may provide for the payment from your account of any requested dollar amount
to be paid to you or your designated payee monthly, quarterly, semi-annually
or annually. Dividend distributions will be automatically reinvested at net
asset value. A sufficient number of full and fractional shares will be
redeemed to make the designated payment. Depending upon the size of the
payments requested, redemptions for the purpose of making such payments may
reduce or even exhaust the account. Additionally, there is a $1/month small
account fee for account balances under $10,000. The program may be amended on
thirty days notice by the Fund and may be terminated at any time by the
shareholder or the Fund. The minimum automatic withdrawal amount is $1,000 and
the shareholder will be charged a $5.00 fee for each withdrawal.
B-8
<PAGE>
TAX-SHELTERED RETIREMENT PROGRAMS. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any of
the following types of retirement plans:
. Individual Retirement Accounts (IRAs) with IFTC as custodian. This includes
Simplified Employee Pension Plan (SEP) IRA accounts and prototype documents.
. 403(b) Custodial Accounts also with IFTC as custodian. This type of plan is
available to employees of most non-profit organizations.
. Prototype money purchase pension and profit-sharing plans may be adopted by
employers. The maximum contribution per participant is the lesser of 25% of
compensation or $30,000.
Brochures describing the above plans as well as providing model defined benefit
plans, target benefit plans, 457 plans, 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon
request. The brochures for plans with IFTC as custodian describe the current
fees payable to IFTC for its services as custodian. Investors should consult
with their own tax advisers before establishing a retirement plan.
SHAREHOLDER RIGHTS
The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Fund ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption of any contract for which shareholder approval
is required by the Investment Company Act of 1940 ("1940 Act"); (c) any
termination of the Fund to the extent and as provided in the Declaration of
Trust; (d) any amendment of the Declaration of Trust (other than amendments
changing the name of the Fund or any portfolio, establishing a portfolio,
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision thereof); (e) as to
whether a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Fund or the
shareholders, to the same extent as the stockholders of a Massachusetts
business corporation; and (f) such additional matters as may be required by
law, the Declaration of Trust, the By-laws of the Fund, or any registration of
the Fund with the Securities and Exchange Commission or any state, or as the
trustees may consider necessary or desirable. The shareholders also would vote
upon changes in fundamental investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of
his successor or until such trustee sooner dies, resigns, retires or is removed
by a majority vote of the shares entitled to vote (as described below) or a
majority of the trustees. In accordance with the 1940 Act (a) the Fund will
hold a shareholder meeting for the election of trustees at such time as less
than a majority of the trustees have been elected by shareholders, and (b) if,
as a result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled
only by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting
shall be held upon the written request of the holders of not less than 10% of
the outstanding shares. Upon the written request of ten or more shareholders
who have been such for at least six months and who hold shares constituting at
least 1% of the outstanding shares of the Fund stating that such shareholders
wish to communicate with the other shareholders for the purpose of obtaining
the signatures necessary to demand a meeting to consider removal of a trustee,
the Fund has undertaken to disseminate appropriate materials at the expense of
the requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Fund
B-9
<PAGE>
could take place even if less than a majority of the shareholders were
represented on its scheduled date. Shareholders would in such a case be
permitted to take action which does not require a larger vote than a majority
of a quorum, such as the election of trustees and ratification of the selection
of auditors. Some matters requiring a larger vote under the Declaration of
Trust, such as termination or reorganization of the Fund and certain amendments
of the Declaration of Trust, would not be affected by this provision; nor would
matters which under the 1940 Act require the vote of a "majority of the
outstanding voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Fund (or any portfolio) by notice to the shareholders without
shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
will be covered by insurance which the Trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by ZKI remote and not
material since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.
B-10
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholder
Zurich YieldWise Money Fund
We have audited the accompanying statement of net assets of Zurich YieldWise
Money Fund as of , 1997. This statement of net assets is the
responsibility of the Fund's management. Our responsibility is to express an
opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of net
assets. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of net assets presentation. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the financial position of Zurich YieldWise Money
Fund at , 1997 in conformity with generally accepted accounting
principles.
Chicago, Illinois
, 1997
B-11
<PAGE>
ZURICH YIELDWISE MONEY FUND
STATEMENT OF NET ASSETS-- , 1997
ASSETS
<TABLE>
<S> <C>
Cash................................................................ $10,000,000
===========
</TABLE>
NET ASSETS
<TABLE>
<S> <C>
Net assets, applicable to 100,000 shares of beneficial interest
(unlimited number
of shares authorized, no par value) outstanding.................. $10,000,000
===========
</TABLE>
THE PRICING OF SHARES
<TABLE>
<S> <C>
Net asset value and redemption price per share
$100,000 / 100,000 shares outstanding................................... $1.00
Maximum offering price per share (net asset value)....................... $1.00
</TABLE>
Notes:
Zurich YieldWise Money Fund (the "Fund") was organized as a business trust
under the laws of The Commonwealth of Massachusetts on June 12, 1995. All
shares of beneficial interest of the Fund were issued to Zurich Kemper
Investments, Inc. ("ZKI"), the investment manager, on [ ], 1997. The
Fund may establish multiple series; currently, a single series has been
established.
The costs of organization of the Fund will be paid by ZKI.
B-12
<PAGE>
APPENDIX--RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2; PRIME-1, PRIME-2, DUFF-1, DUFF-2; AND F-1, F-2 COMMERCIAL PAPER
RATINGS
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at
least two additional channels of borrowing. Basic earnings and cash flow have
an upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of
the issuer; (2) economic evaluation of the issuer's industry or industries and
an appraisal of speculative-type risks which may be inherent in certain areas;
(3) evaluation of the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1, 2 or 3.
The rating Duff-1 is the highest commercial paper rating assigned by Duff &
Phelps Inc. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors that are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and company fundamentals. Risk factors are small.
The ratings F-1 and F-2 are the highest commercial paper ratings assigned by
Fitch Investors Services, Inc. Issues assigned a rating of F-1 are regarded as
having the strongest degree of assurance for timely payment. Issues assigned a
rating of F-2 have a satisfactory degree of assurance for timely payment, but
the margin of safety is not as great as for issues assigned an F-1 rating.
B-13
<PAGE>
ZURICH YIELDWISE MONEY FUND
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(i) Financial statements included in Part A of the Registration
Statement: None.
(ii) Financial statements included in Part B of the Registration
Statement:
Statement of Net Assets*
Report of Independent Auditors*
Schedules I, II, III, IV and V are omitted as the required information
is not present.
(b) Exhibits
<TABLE>
<C> <S>
99.B1(a) Agreement and Declaration of Trust.
Written Instrument Amending the Agreement and Declaration of
99.B1(b) Trust.
Written Instrument Amending the Agreement and Declaration of
99.B1(c) Trust.
99.B2 By-Laws.*
99.B3 Inapplicable.
99.B4 Text of Share Certificate.*
99.B5 Investment Management Agreement.*
99.B6(a) Underwriting Agreement.*
99.B6(b) Form of Selling Group Agreement.*
99.B7 Inapplicable.
99.B8 Custody Agreement.*
99.B9 Agency Agreement.*
99.B10(a) Legal Opinion and Consent of Vedder, Price, Kaufman & Kammholz.*
99.B10(b) Legal Opinion and Consent of Ropes & Gray.*
99.B11 Report and Consent of Independent Auditors.*
99.B12 Inapplicable.
99.B13 Subscription Agreement.*
99.B14 Model Individual Retirement Account.*
99.B15 Inapplicable.
99.B16 Inapplicable.
99.B18 Inapplicable.
99.B24 Powers of Attorney.
27 Inapplicable.
</TABLE>
--------
*To be filed before the effective date of the Registration
Statement.
C-1
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Inapplicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of January 31, 1997, there were no holders of record of shares of the
Registrant.
ITEM 27. INDEMNIFICATION
Article VIII of the Registrant's Agreement and Declaration of Trust (Exhibit
1 hereto, which is incorporated herein by reference) provides in effect that
the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, 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 liabilities (other than the payment by the
Registrant of expenses 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 as to
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-2
<PAGE>
ITEM 28 (a) BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information pertaining to business and other connections of the
Registrant's investment adviser is hereby incorporated by reference to the
section of the Prospectus captioned "Investment Manager" and to the section of
the Statement of Additional Information captioned "Investment Manager."
Zurich Kemper Investments, Inc., investment adviser of the Registrant, is
investment adviser of:
Kemper Mutual Funds:
Kemper Technology Fund
Kemper Total Return Fund
Kemper Growth Fund
Kemper Small Capitalization Equity Fund
Kemper Income and Capital Preservation Fund
Kemper Money Funds
Kemper National Tax-Free Income Series
Kemper Diversified Income Fund
Kemper High Yield Fund
Cash Equivalent Fund
Kemper U.S. Government Securities Fund
Kemper International Fund
Kemper Portfolios
Kemper State Tax-Free Income Series
Tax-Exempt California Money Market Fund
Kemper Adjustable Rate U.S. Government Fund
Kemper Blue Chip Fund
Kemper Global Income Fund
Kemper Target Equity Fund
Cash Account Trust
Investors Cash Trust
Tax-Exempt New York Money Market Fund
Kemper Value Plus Growth Fund
Kemper Quantitative Equity Fund
Kemper Horizon Fund
Kemper Europe Fund
Kemper Asian Growth Fund
Kemper Aggressive Growth Fund
Kemper Closed-End Funds:
Kemper High Income Trust
Kemper Intermediate Government Trust
Kemper Municipal Income Trust
Kemper Multi-Market Income Trust
Kemper Strategic Municipal Income Trust
The Growth Fund of Spain, Inc.
Kemper Strategic Income Fund
Zurich Kemper Investments, Inc. also furnishes investment advice to and
manages investment portfolios for other clients including Kemper Investors Fund
and Kemper International Bond Fund.
C-3
<PAGE>
Item 28(b)(i) Business and Other Connections of Officers and Directors of Zurich
Kemper Investments, Inc., the Investment Advisor
TIMBERS, STEPHEN B.
Director, President, Chief Executive Officer and Chief Investment Officer,
Zurich Kemper Investments, Inc.
Director, Kemper Distributors, Inc.
Director, Zurich Investment Management, Inc.
Director, Chairman, Kemper Service Company
Director, Dreman Value Advisors, Inc.
Director, President, Kemper International Management, Inc. Trustee and
President, Kemper Funds
Director, The LTV Corporation
Governor, Investment Company Institute
NEAL, JOHN E.
Director, Zurich Kemper Investments, Inc.
President, Kemper Funds Group, a unit of Zurich Kemper Investments, Inc.
Director, President, Kemper Service Company
Director, Kemper Distributors, Inc.
Director, Zurich Investment Management, Inc.
Director, Dreman Value Advisors, Inc.
Director, ZKI Agency, Inc.
Director, Community Investment Corporation
Director, Continental Community Development Corporation
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
Director, RespiteCare
Director, Urban Shopping Centers, Inc.
Vice President, Kemper Funds
C-4
<PAGE>
MORAX, DOMINIQUE P.
Director, Zurich Kemper Investments, Inc.
Senior Vice President, Member Extended Corporate Executive Board,
Zurich Insurance Company Trustee, Kemper Funds
CHAPMAN, II, WILLIAM E.
President, Kemper Retirement Plans Group, a unit of Zurich Kemper
Investments, Inc.
Director, Executive Vice President, Kemper Distributors, Inc.
VOGEL, VICTOR E.
Senior Executive Vice President, Zurich Kemper Investments, Inc.
Trustee, Zurich Kemper Investments, Inc. Profit Sharing Plan & Money
Purchase Pension Plan
BEIMFORD, JR., JOSEPH P.
Executive Vice President, Chief Investment Officer - Fixed Income, Zurich
Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Galaxy Offshore, Inc.
Vice President, Investors Cash Trust
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Global Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Intermediate Government Trust
Vice President, Kemper International Bond Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Money Funds
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Municipal Income Trust
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Portfolios
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Income Fund
Vice President, Kemper Strategic Municipal Income Trust
Vice President, Kemper U.S. Government Securities Fund
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
COXON, JAMES H.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Vice President, Galaxy Offshore, Inc.
C-5
<PAGE>
Executive Vice President, Zurich Investment Management, Inc.
GREENAWALT, JAMES L.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, President, Kemper Distributors, Inc.
LANGBAUM, GARY A.
Executive Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Total Return Fund
Vice President, Kemper Investors Fund
MANZONI, JR., CHARLES R.
Executive Vice President, Secretary & General Counsel, Zurich Kemper
Investments, Inc.
Vice President, Kemper Funds
Secretary, ZKI Agency, Inc.
Secretary, Kemper Service Company
Secretary, Kemper Distributors, Inc.
Secretary, ZKI Holding Corporation
MURRIHY, MAURA J.
Executive Vice President, Zurich Kemper Investments, Inc.
REYNOLDS, STEVEN H.
Executive Vice President, Chief Investment Officer - Equities, Zurich
Kemper Investments, Inc.
Vice President, Kemper Technology Fund
Vice President, Kemper Total Return Fund
Vice President, Kemper Growth Fund
Vice President, Kemper Small Capitalization Equity Fund
Vice President, Kemper International Fund
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Target Equity Fund
Vice President, Kemper Horizon Fund
Vice President, Kemper Investors Fund
Vice President, The Growth Fund of Spain, Inc.
Vice President, Kemper Europe Fund
C-6
<PAGE>
ROBERTS, SCOTT A.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Executive Vice President, Zurich Investment Management Inc.
SILIGMUELLER, DALE S.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Executive Vice President, Kemper Service Company
WEISS, ROBERT
Executive Vice President, Zurich Kemper Investments, Inc.
Executive Vice President, Zurich Investment Management, Inc.
BUKOWSKI, DANIEL J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Investors Fund
BUTLER, DAVID H.
Senior Vice President, Zurich Kemper Investments, Inc.
CERVONE, DAVID M.
Senior Vice President, Zurich Kemper Investments, Inc.
CESSINE, ROBERT S.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Investors Fund
CHESTER, TRACY McCORMICK
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Target Equity Fund
CHIEN, CHRISTINE
Senior Vice President, Zurich Kemper Investments, Inc.
CIARLELLI, ROBERT W.
Senior Vice President, Zurich Kemper Investments, Inc.
Executive Vice President, Kemper Service Company
COLLORA, PHILIP J.
Senior Vice President and Assistant Secretary, Zurich Kemper
Investments, Inc.
Vice President and Secretary, Kemper Funds
C-7
<PAGE>
Assistant Secretary, Kemper International Management, Inc.
Assistant Secretary, Zurich Investment Management, Inc.
Assistant Secretary, Dreman Value Advisors, Inc.
Assistant Secretary, ZKI Agency, Inc.
DUDASIK, PATRICK H.
Senior Vice President, Zurich Kemper Investments, Inc.
Executive Vice President, Chief Financial Officer and Treasurer,
Dreman Value Advisors, Inc.
Vice President and Treasurer, Zurich Investment Management, Inc.
Treasurer and Chief Financial Officer, Kemper Distributors, Inc.
Treasurer and Chief Financial Officer, Kemper Service Company
Director and Treasurer, Zurich Investment Management Limited
DUFFY, JEROME L.
Senior Vice President, Zurich Kemper Investments, Inc.
Treasurer, Kemper Funds
FENGER, JAMES E.
Senior Vice President, Zurich Kemper Investments, Inc.
FINK, THOMAS M.
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Zurich Investment Management, Inc.
GALLAGHER, MICHAEL L.
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Kemper Service Company
GOERS, RICHARD A.
Senior Vice President, Zurich Kemper Investments, Inc.
GREENWALD, MARSHALL L.
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Zurich Investment Management, Inc.
HARRINGTON, MICHAEL E.
Senior Vice President, Zurich Kemper Investments, Inc.
KLEIN, GEORGE
Senior Vice President, Zurich Kemper Investments, Inc.
Director, Executive Vice President, Zurich Investment Management, Inc.
KLEIN, MARTY
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Zurich Investment Management, Inc.
KORTH, FRANK D.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Technology Fund
McNAMARA, MICHAEL A.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
C-8
<PAGE>
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
MOELLER, JAMES V.
Senior Vice President, Zurich Kemper Investments, Inc.
MOORE, C. PERRY
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, ZKI Agency, Inc.
MIER, CHRISTOPHER J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Municipal Income Trust
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Municipal Income Trust
RABIEGA, CRAIG F.
Senior Vice President, Zurich Kemper Investments, Inc.
First Vice President, Kemper Service Company
RACHWALSKI, JR. FRANK J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Investors Cash Trust
Vice President, Kemper Investors Fund
Vice President, Kemper Money Funds
Vice President, Kemper Portfolios
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
REGNER, THOMAS M.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Horizon Fund
Vice President, Kemper Investors Fund
RESIS, JR., HARRY E.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
SCHUMACHER, ROBERT T.
Senior Vice President, Zurich Kemper Investments, Inc.
SILVIA, JOHN E.
Senior Vice President, Zurich Kemper Investments, Inc.
SMITH, JR., EDWARD BYRON
Senior Vice President, Zurich Kemper Investments, Inc.
SWANSON, DAVID
Senior Vice President, Zurich Kemper Investments, Inc.
C-9
<PAGE>
VANDENBERG, RICHARD
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper U.S. Government Securities Fund
Vice President, Kemper Portfolios
Vice President, Kemper Adjustable Rate U.S. Government Fund
VINCENT, CHRISTOPHER T.
Senior Vice President, Zurich Kemper Investments, Inc.
First Vice President, Zurich Investment Management, Inc.
WONNACOTT, LARRY R.
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Zurich Investment Management, Inc.
BAZAN, KENNETH M.
First Vice President, Zurich Kemper Investments, Inc.
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
BOEHM, JONATHAN J.
First Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Kemper Service Company
BURROW, DALE R.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Strategic Municipal Income Trust
BYRNES, ELIZABETH A.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Intermediate Government Trust
CHRISTIANSEN, HERBERT A.
First Vice President, Zurich Kemper Investments, Inc.
First Vice President, Kemper Service Company
COHEN, JERRI I.
First Vice President, Zurich Kemper Investments, Inc.
DeMAIO, CHRIS C.
First Vice President, Zurich Kemper Investments, Inc.
Vice President and Chief Accounting Officer, Kemper Service
Company
C-10
<PAGE>
DEXTER, STEPHEN P.
First Vice President, Zurich Kemper Investments, Inc.
DOYLE, DANIEL J.
First Vice President, Zurich Kemper Investments, Inc.
HALE, DAVID D.
First Vice President, Zurich Kemper Investments, Inc.
HAUSKEN, PHILIP D.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Distributors, Inc.
HORTON, ROBERT J.
First Vice President, Zurich Kemper Investments, Inc.
INNES, BRUCE D.
First Vice President, Zurich Kemper Investments, Inc.
Co-President, International Association of Corporate and
Professional Recruiters
JACOBS, PETER M.
First Vice President, Zurich Kemper Investments, Inc.
KEELEY, MICHELLE M.
First Vice President, Zurich Kemper Investments, Inc.
KIEL, CAROL L.
First Vice President, Zurich Kemper Investments, Inc.
KNAPP, WILLIAM M.
First Vice President, Zurich Kemper Investments, Inc.
LAUGHLIN, ANN M.
First Vice President, Zurich Kemper Investments, Inc.
LENTZ, MAUREEN P.
First Vice President, Zurich Kemper Investments, Inc.
McCRINDLE-PETRARCA, SUSAN
First Vice President, Zurich Kemper Investments, Inc.
MINER, EDWARD
First Vice President, Zurich Kemper Investments, Inc.
MURRAY, SCOTT S.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
NORRIS, JOHNSTON A.
First Vice President, Zurich Kemper Investments, Inc.
C-11
<PAGE>
PANOZZO, ROBERTA L.
First Vice President, Zurich Kemper Investments, Inc.
PONTECORE, SUSAN E.
First Vice President, Zurich Kemper Investments, Inc.
RADIS, STEVE A.
First Vice President, Zurich Kemper Investments, Inc.
RATEKIN, DIANE E.
First Vice President, Assistant General Counsel and Assistant
Secretary, Zurich Kemper Investments, Inc.
Assistant Secretary, Kemper Distributors, Inc.
SMITH, ROBERT G.
First Vice President, Zurich Kemper Investments, Inc.
STUEBE, JOHN W.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
TEPPER, SHARYN A.
First Vice President, Zurich Kemper Investments, Inc.
TRUTTER, JONATHAN W.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
WETHERALD, ROBERT F.
First Vice President, Zurich Kemper Investments, Inc.
WILLSON, STEPHEN R.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Strategic Municipal Income Trust
WITTNEBEL, MARK E.
First Vice President, Zurich Kemper Investments, Inc.
ADAMS, DONALD
Vice President, Zurich Kemper Investments, Inc.
ALLEN, PATRICIA L.
Vice President, Zurich Kemper Investments, Inc.
ANDREASEN, AMY
Vice President, Zurich Kemper Investments, Inc.
ANTONAK, GEORGE A.
Vice President, Zurich Kemper Investments, Inc.
BALASUBRAMANIAM, KALAMADI
Vice President, Zurich Kemper Investments, Inc.
BARRY, JOANN M.
Vice President, Zurich Kemper Investments, Inc.
C-12
<PAGE>
BIEBERLY, CHRISTINE A.
Vice President, Zurich Kemper Investments, Inc.
BODEM, RICHARD A.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
BRENNAN, ELEANOR R.
Vice President, Zurich Kemper Investments, Inc.
BUCHANAN, PAMELA S.
Vice President, Zurich Kemper Investments, Inc.
BURKE, MARY PAT
Vice President, Zurich Kemper Investments, Inc.
BURSHTAN, DAVID H.
Vice President, Zurich Kemper Investments, Inc.
CARNEY, ANNE T.
Vice President, Zurich Kemper Investments, Inc.
CACCIOLA, RONALD
Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Zurich Investment Management, Inc.
CARTER, PAUL J.
Vice President and Compliance Manager, Zurich Kemper Investments, Inc.
COHEN, JERRI I.
Vice President, Zurich Kemper Investments, Inc.
COULTER, STEVAN F.
Vice President, Zurich Kemper Investments, Inc.
ESOLA, CHARLES J.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
FRIHART, THORA A.
Vice President, Zurich Kemper Investments, Inc.
GERACI, AUGUST L.
Vice President, Zurich Kemper Investments, Inc.
GOLAN, JAMES S.
Vice President, Zurich Kemper Investments, Inc.
GOODWIN, JUDITH C.
Vice President, Zurich Kemper Investments, Inc.
GRAY, PATRICK
Vice President, Zurich Kemper Investments, Inc.
GROOTENDORST, TONYA
Vice President, Zurich Kemper Investments, Inc.
HECHT, MARC L.
Vice President, Zurich Kemper Investments, Inc.
Assistant Secretary, Kemper Distributors, Inc.
Assistant Secretary, ZKI Holding Corporation
Assistant Secretary, ZKI Agency, Inc.
C-13
<PAGE>
HUOT, LISA L.
Vice President, Zurich Kemper Investments, Inc.
JASINSKI, R. ANTHONY
Vice President, Zurich Kemper Investments, Inc.
KARWOWSKI, KENNETH F.
Vice President, Zurich Kemper Investments, Inc.
KENNEDY, PATRICK J.
Vice President, Zurich Kemper Investments, Inc.
KOBS, MICHAEL G.
Vice President, Zurich Kemper Investments, Inc.
KOCH, DEBORAH L.
Vice President, Zurich Kemper Investments, Inc.
KOURY, KATHRYN E.
Vice President, Zurich Kemper Investments, Inc.
KOWALCZYK, MARK A.
Vice President, Zurich Kemper Investments, Inc.
KRANZ, KATHY J.
Vice President, Zurich Kemper Investments, Inc.
KRUEGER, PAMELA D.
Vice President, Zurich Kemper Investments, Inc.
KYCE, JOYCE
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
LASKA, ROBERTA E.
Vice President, Zurich Kemper Investments, Inc.
LAUTZ, STEPHEN
Vice President, Zurich Kemper Investments, Inc.
LeFEBVRE, THOMAS J.
Vice President, Zurich Kemper Investments, Inc.
McGINN, MARTHA R.
Vice President, Zurich Kemper Investments, Inc.
McGOVERN, KAREN B.
Vice President, Zurich Kemper Investments, Inc.
MILLER, GARY L.
Vice President, Zurich Kemper Investments, Inc.
MILLIGAN, BRIAN J.
Vice President, Zurich Kemper Investments, Inc.
C-14
<PAGE>
MULLEN, TERRENCE
Vice President, Zurich Kemper Investments, Inc.
MURPHY, THOMAS M.
Vice President, Zurich Kemper Investments, Inc.
NEVILLE, BRIAN P.
Vice President, Zurich Kemper Investments, Inc.
NORMAN, JR., DONALD L.
Vice President, Zurich Kemper Investments, Inc.
NOWAK, GREGORY J.
Vice President, Zurich Kemper Investments, Inc.
PANOZZO, ALBERT R.
Vice President, Zurich Kemper Investments, Inc.
PAXTON, THOMAS
Vice President, Zurich Kemper Investments, Inc.
QUADRINI, LISA L.
Vice President, Zurich Kemper Investments, Inc.
RANDALL, JR., WALTER R.
Vice President, Zurich Kemper Investments, Inc.
ROBINSON, DEBRA A.
Vice President, Zurich Kemper Investments, Inc.
RODGERS, JOHN B.
Vice President, Zurich Kemper Investments, Inc.
ROKOSZ, PAUL A.
Vice President, Zurich Kemper Investments, Inc.
ROSE, KATIE M.
Vice President, Zurich Kemper Investments, Inc.
RUDIN, MICHELE I.
Vice President, Zurich Kemper Investments, Inc.
SAENGER, MARYELLEN
Vice President, Zurich Kemper Investments, Inc.
SHULTZ, KAREN D.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
SOPHER, EDWARD O.
Vice President, Zurich Kemper Investments, Inc.
C-15
<PAGE>
SPILLER, KATHLEEN A.
Vice President, Zurich Kemper Investments, Inc.
SPURLING, CHRIS
Vice President, Zurich Kemper Investments, Inc.
STROMM, LAWRENCE D.
Vice President, Zurich Kemper Investments, Inc.
THOMAS, JILL
Vice President, Zurich Kemper Investments, Inc.
VANDEMERKT, RICHARD J.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
WALKER, ANGELA
Vice President, Zurich Kemper Investments, Inc.
WATKINS, JAMES K.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
WERTH, ELIZABETH C.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Distributors, Inc.
Assistant Secretary, Kemper Open-End Mutual Funds
WILNER, MITCHELL
Vice President, Zurich Kemper Investments, Inc.
WIZER, BARBARA K.
Vice President, Zurich Kemper Investments, Inc.
ZURAWSKI, CATHERINE N.
Vice President, Zurich Kemper Investments, Inc.
C-16
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Kemper Distributors, Inc. acts as principal underwriter of the
Registrant's shares and acts as principal underwriter of the Kemper Mutual
Funds, Kemper Investors Fund, Kemper International Bond Fund and the Kemper-
Dreman Fund, Inc.
(b) Information on the officers and directors of Kemper Distributors,
Inc., principal underwriter for the Registrant is set forth below. The principal
business address is 222 South Riverside Plaza, Chicago, Illinois 60606.
<TABLE>
<CAPTION>
POSITIONS AND
POSITIONS AND OFFICES OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- ---------------- ----------
<S> <C> <C>
James L. Greenawalt Director, President None
William E. Chapman, II Director, Executive Vice President None
John E. Neal Director Vice President
Stephen B. Timbers Director President, Trustee
Patrick H. Dudasik Financial Principal, Treasurer
and Chief Financial Officer None
Linda A. Bercher Senior Vice President None
Thomas V. Bruns Senior Vice President None
Terry Cunningham Senior Vice President None
John H. Robinson, Jr. Senior Vice President None
Henry J. Schulthesz Senior Vice President None
Philip D. Hausken Vice President None
Carlene D. Merold Vice President None
Elizabeth C. Werth Vice President Assistant Secretary
Charles R. Manzoni, Jr. Secretary Vice President
Marc L. Hecht Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
</TABLE>
(c) Not applicable.
C-17
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents are maintained at the offices of the
Registrant, the offices of Registrant's investment adviser, Zurich Kemper
Investments, Inc. and the Registrant's principal underwriter, Kemper
Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606 or, in
the case of records concerning custodial functions, at the offices of the
custodian, Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105 or, in the case of records concerning transfer
agency functions, at the offices of IFTC and of the shareholder service agent,
Kemper Service Company, 811 Main Street, Kansas City, Missouri 64105.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) The Registrant undertakes to file a Post-Effective Amendment using
financial statements of Registrant, which need not be certified, within four
to six months from the effective date of the Registration Statement.
(c) Not applicable.
C-18
<PAGE>
S I G N A T U R E S
-------------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois, on the 31st day of
January, 1997.
ZURICH YIELDWISE MONEY FUND
By /s/ Stephen B. Timbers
-----------------------------------
Stephen B. Timbers, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 31, 1997 on behalf of
the following persons in the capacities indicated.
Signature Title
--------- -----
/s/ Stephen B. Timbers President (Principal
---------------------------------- Executive Officer) and
Stephen B. Timbers Trustee
/s/ David W. Belin* Trustee
----------------------------------
/s/ Lewis A. Brunham* Trustee
----------------------------------
/s/ Donald L. Dunaway* Trustee
----------------------------------
/s/ Robert B. Hoffman* Trustee
-----------------------------------
/s/ Donald R. Jones* Trustee
---------------------------------
/s/ Dominique P. Morax* Trustee
----------------------------------
/s/ Shirley D. Peterson* Trustee
----------------------------------
/s/ William P. Sommers* Trustee
----------------------------------
/s/ Jerome L. Duffy Treasurer (Principal
---------------------------------- Financial and
Jerome L. Duffy Accounting Officer)
*Philip J. Collora signs this document pursuant to powers of attorney
filed herewith.
/s/ Philip J. Collora
-------------------------
Philip J. Collora
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
REFERENCE
---------
<C> <S> <C>
99.B1(a) Agreement and Declaration of Trust.
99.B1(b) Written Instrument Amending the Agreement and Declaration of
Trust.
99.B1(c) Written Instrument Amending the Agreement and Declaration of
Trust.
99.B2 By-Laws.*
99.B3 Inapplicable.
99.B4 Text of Share Certificate.*
99.B5 Investment Management Agreement.*
99.B6(a) Underwriting Agreement.*
99.B6(b) Form of Selling Group Agreement.*
99.B7 Inapplicable.
99.B8 Custody Agreement.*
99.B9 Agency Agreement.*
99.B10(a) Legal Opinion and Consent of Vedder, Price, Kaufman &
Kammholz.*
99.B10(b) Legal Opinion and Consent of Ropes & Gray.*
99.B11 Report and Consent of Independent Auditors.*
99.B12 Inapplicable.
99.B13 Subscription Agreement.*
99.B14 Model Individual Retirement Account.*
99.B15 Inapplicable.
99.B16 Inapplicable.
99.B18 Inapplicable.
99.B24 Powers of Attorney.
27 Inapplicable.
</TABLE>
- --------
*To be filed before the effective date of the Registration Statement.
<PAGE>
KEMPER TRUST #26
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Boston,
Massachusetts, this 12th day of June, 1995, by the Trustees
hereunder, and by the holders of shares of beneficial interest to
be issued hereunder as hereinafter provided.
WITNESSETH
WHEREAS, the Trustees hereunder are desirous of forming a
trust for the purposes of carrying on the business of a
management investment company; and
WHEREAS, in furtherance of such purposes, the Trustees are
acquiring and may hereafter acquire assets and properties, to
hold and manage as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets and properties which
they may from time to time acquire in any manner as Trustees
hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the
holders from time to time of shares in this Trust as hereinafter
set forth.
ARTICLE I
Name and Definitions
Name and Registered Agent
Section 1. This Trust shall be known as Kemper Trust #26
and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time
determine. The registered agent for the Trust in Massachusetts
shall be CT Corporation System whose address is 2 Oliver Street,
Boston, Massachusetts or such other person as the Trustees may
from time to time designate.
Definitions
Section 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
<PAGE>
(a) The "Trust" refers to the Massachusetts voluntary
association established by this Agreement and Declaration of
Trust, as amended from time to time, pursuant to Massachusetts
General Laws, Chapter 182;
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV and then in
office;
(c) "Shares" mean the equal proportionate transferable
units of interest into which the beneficial interest in the Trust
shall be divided from time to time or, if more than one series or
class of shares is authorized under or pursuant to Article III,
the equal proportionate transferable units of interest into which
each such series or class shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 (and any successor statute) and the Rules and Regulations
thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter" and
"vote of a majority of the outstanding voting securities" shall
have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time;
(i) "Net asset value" shall have the meaning set forth in
Section 6 of Article VI hereof;
(j) The terms "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
authorized under or pursuant to Article III into which the assets
and liabilities of the Trust may be divided and the Shares of the
Trust representing the beneficial interest of Shareholders in
such respective portfolios; and
(k) The terms "class" or "class of Shares" refers to the
division of Shares representing any series into two or more
classes authorized under or pursuant to Article III.
2
<PAGE>
ARTICLE II
Nature and Purpose
The Trust is a voluntary association (commonly known as a
business trust) of the type referred to in Chapter 182 of the
General Laws of the Commonwealth of Massachusetts. The Trust is
not intended to be, shall not be deemed to be, and shall not be
treated as, a general or a limited partnership, joint venture,
corporation or joint stock company, nor shall the Trustees or
Shareholders or any of them for any purpose be deemed to be, or
be treated in any way whatsoever as though they were, liable or
responsible hereunder as partners or joint venturers. The
purpose of the Trust is to engage in, operate and carry on the
business of an open-end management investment company and to do
any and all acts or things as are necessary, convenient,
appropriate, incidental or customary in connection therewith.
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without Shareholder approval,
authorize from time to time. Each series shall be preferred over
all other series in respect of the assets allocated to that
series as hereinafter provided. The beneficial interest in each
series shall at all times be divided into Shares (without par
value) of such series, each of which shall, except as provided in
the following sentence, represent an equal proportionate interest
in such series with each other Share of the same series, none
having priority or preference over another Share of the same
series. The Trustees may, without Shareholder approval, divide
the Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights
or privileges (including conversion rights, if any) as the
Trustees may determine. The number of Shares authorized shall be
unlimited, and the Shares so authorized may be represented in
part by fractional Shares. The Trustees may from time to time
divide or combine the shares of any series or class into a
greater or lesser number without thereby changing the
proportionate beneficial interests in the series or class.
Without limiting the authority of the Trustees set forth in this
Section 1 to establish and designate any further series or class,
the Trustees hereby establish and designate one series of Shares
to be known as the "Initial Portfolio." The establishment and
designation of any series or class of Shares in addition to the
foregoing shall be effective upon the execution by a majority of
the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and
3
<PAGE>
preferences of such series or class. As provided in Article IX,
Section 1 hereof, any series or class of Shares (whether or not
there shall then be Shares outstanding of said series or class)
may be terminated by the Trustees by written notice to the
Shareholders of such series or class or by the vote of the
Shareholders of such series or class entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter. In the event of any such termination, a majority of the
then Trustees shall execute an instrument setting forth the
termination of such series or class.
Ownership of Shares
Section 2. The ownership and transfer of Shares shall be
recorded on the books of the Trust or its transfer or similar
agent. No certificates certifying the ownership of Shares shall
be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer
of Shares and similar matters. The record books of the Trust as
kept by the Trust or any transfer or similar agent of the Trust,
as the case may be, shall be conclusive as to who are the
Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each
Shareholder.
Investment in the Trust; Assets of a Series
Section 3. The Trustees may issue Shares of the Trust to
such persons and on such terms and, subject to any requirements
of law, for such consideration, which may consist of cash or
tangible or intangible property or a combination thereof, as they
may from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of a particular series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall, irrevocably belong to
such series of Shares for all purposes, subject only to the
rights of creditors, and shall be so handled upon the books of
account of the Trust and are herein referred to as "assets of"
such series. Any allocation of the assets of a series among any
classes of Shares of such series shall be made in a manner
consistent with the preferences and special or relative rights or
privileges of such classes.
Right to Refuse Orders
Section 4. The Trust by action of its Trustees shall have
the right to refuse to accept any subscription for its Shares at
4
<PAGE>
any time without any cause or reason therefore whatsoever.
Without limiting the foregoing, the Trust shall have the right
not to accept subscriptions under circumstances or in amounts as
the Trustees in their sole discretion consider to be
disadvantageous to existing Shareholders and the Trust may from
time to time set minimum and/or maximum amounts which may be
invested in Shares by a subscriber.
Order in Proper Form
Section 5. The criteria for determining what constitutes an
order in proper form and the time of receipt of such an order by
the Trust shall be prescribed by resolution of the Trustees.
When Shares Become Outstanding
Section 6. Shares subscribed for and for which an order in
proper form has been received shall be deemed to be outstanding
as of the time of acceptance of the order therefor and the
determination of the net price thereof, which price shall be then
deemed to be an asset of the Trust.
Merger or Consolidation
Section 7. In connection with the acquisition of all or
substantially all the assets or stock of another investment
company, investment trust, or of a company classified as a
personal holding company under Federal Income Tax laws, the
Trustees may issue or cause to be issued Shares of a series or
class and accept in payment therefor, in lieu of cash, such
assets at their market value, or such stock at the market value
of the assets held by such investment company or investment
trust, either with or without adjustment for contingent costs or
liabilities.
No Preemptive Rights, Etc.
Section 8. Shareholders shall have no preemptive or other
right to receive, purchase or subscribe for any additional Shares
or other securities issued by the Trust. The Shareholders shall
have no appraisal rights with respect to their Shares and, except
as otherwise determined by the Trustees in their sole discretion,
shall have no exchange or conversion rights with respect to their
Shares.
Status of Shares and Limitation of Personal Liability
Section 9. Shares shall be deemed to be personal property
giving only the rights provided in this instrument. Every
Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms of the
Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall
5
<PAGE>
not operate to terminate the same nor entitle the representative
of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees,
but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any
title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power
to bind personally any Shareholder, nor except as specifically
provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
Shareholder Inspection Rights
Section 10. Any Shareholder or his agent may inspect and
copy during normal business hours any of the following documents
of the Trust: By-Laws, minutes of the proceedings of the
Shareholders and annual financial statements of the Trust,
including a balance sheet and financial statements of operations.
The foregoing rights of inspection of Shareholders of the Trust
are the exclusive and sole rights of the Shareholders with
respect thereto and no Shareholder of the Trust shall have, as a
Shareholder, the right to inspect or copy any of the books,
records or other documents of the Trust except as specifically
provided in this Section 10 of this Article III or except as
otherwise determined by the Trustees.
ARTICLE IV
The Trustees
Number, Designation, Election, Term, Etc.
Section 1.
(a) Initial Trustee. Upon his execution of this
Declaration of Trust or a counterpart hereof or some other
writing in which he accepts such Trusteeship and agrees to the
provisions hereof, Antonio DeSpirito III shall become a Trustee
hereof.
(b) Number. The Trustees serving as such, whether named
above or hereafter becoming Trustees, may increase or decrease
the number of Trustees to a number other than the number
theretofore determined which number shall not be less than three
nor more than fifteen except during the period prior to any sale
of Shares pursuant to any public offering. No decrease in the
number of Trustees shall have the effect of removing any Trustee
from office prior to the expiration of his term, but the number
6
<PAGE>
of Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 1.
(c) Term and Election. Each Trustee, whether named above
or hereafter becoming a Trustee, shall serve as a Trustee until
the next meeting of Shareholders, if any, called for the purpose
of considering the election or re-election of such Trustee or of
a successor to such Trustee, and until the election and
qualification of his successor, if any, elected at such meeting,
or until such Trustee sooner dies, resigns, retires or is
removed. Upon the election and qualification of a new Trustee,
the Trust estate shall vest in the new Trustee (together with the
continuing or other new Trustees) without any further act or
conveyance. Prior to any sale of Shares pursuant to any public
offering, the initial Trustee named above (and any individual
appointed by such initial Trustee to act as sole Trustee) shall
have the right to appoint other persons as Trustees each to serve
as Trustees as aforesaid until the first meeting of Shareholders
called for the purpose of the election or re-election of such
Trustee or of a successor to such Trustee.
(d) Resignation and Retirement. Any Trustee may resign his
trust or retire as a Trustee, by written instrument signed by him
and delivered to the other Trustees or to the Chairman of the
Board, if any, the President or the Secretary of the Trust, and
such resignation or retirement shall take effect upon such
delivery or upon such later date as is specified in such
instrument.
(e) Removal. Any Trustee may be removed for cause at any
time by written instrument, signed by at least a majority of the
number of Trustees prior to such removal, specifying the date
upon which such removal shall become effective. Any Trustee may
be removed with or without cause (i) by the vote of the
Shareholders entitled to vote more than fifty percent (50%) of
the votes entitled to be cast on the matter voting together
without regard to series or class at any meeting called for such
purpose, or (ii) by a written consent filed with the custodian of
the Trust's portfolio securities and executed by the Shareholders
entitled to vote more than fifty percent (50%) of the votes
entitled to be cast on the matter voting together without regard
to series or class.
Whenever ten or more Shareholders of record who have been
such for at least six months preceding the date of application,
and who hold in the aggregate Shares constituting at least one
percent of the outstanding Shares of the Trust, shall apply to
the Trustees in writing, stating that they wish to communicate
with other Shareholders with a view to obtaining signatures to a
request for a meeting to consider removal of a Trustee and
accompanied by a form of communication and request that they wish
to transmit, the Trustees shall within five business days after
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receipt of such application inform such applicants as to the
approximate cost of mailing to the Shareholders of record the
proposed communication and form of request. Upon the written
request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing,
the Trustees shall, within reasonable promptness, mail such
material to all Shareholders of record at their addresses as
recorded on the books of the Trust. Notwithstanding the
foregoing, the Trustees may refuse to mail such material on the
basis and in accordance with the procedures set forth in the last
two paragraphs of Section 16(c) of the 1940 Act.
(f) Vacancies. Any vacancy or anticipated vacancy
resulting from any reason, including without limitation the
death, resignation, retirement, removal or incapacity of any of
the Trustees, or resulting from an increase in the number of
Trustees by the other Trustees may (but so long as there are at
least three remaining Trustees at all times subsequent to any
sale of Shares pursuant to any public offering, need not unless
required by the 1940 Act) be filled either by a majority of the
remaining Trustees, even if less than a quorum, through the
appointment in writing of such other person as such remaining
Trustees in their discretion shall determine or, whenever deemed
appropriate by the remaining Trustees, by the election by the
Shareholders, at a meeting called for such purpose, of a person
to fill such vacancy. Upon the appointment or election and
qualification of a new Trustee as aforesaid, the Trust estate
shall vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance, except that any
such appointment or election in anticipation of a vacancy to
occur by reason of retirement, resignation, or increase in number
of Trustees to be effective at a later date shall become
effective only at or after the effective date of said retirement,
resignation, or increase in number of Trustees.
(g) Mandatory Election by Shareholders. Notwithstanding
the foregoing provisions of this Section 1, the Trustees shall
call a meeting of the Shareholders for the election of one or
more Trustees at such time or times as may be required in order
that the provisions of the 1940 Act may be complied with, and the
authority hereinabove provided for the Trustees to appoint any
successor Trustee or Trustees shall be restricted if such
appointment would result in failure of the Trust to comply with
any provision of the 1940 Act.
(h) Effect of Death, Resignation, Etc. The death,
resignation, retirement, removal or incapacity of the Trustees,
or any one of them, shall not operate to annul or terminate the
Trust or to revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this Declaration
of Trust.
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(i) No Accounting. Except under circumstances which would
justify his removal for cause, no person ceasing to be a Trustee
as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required
to make an accounting to the Shareholders or remaining Trustees
upon such cessation.
Powers
Section 2. The Trustees, subject only to the specific
limitations contained in this Declaration of Trust or otherwise
imposed by the 1940 Act or other applicable law, shall have,
without further or other authorization and free from any power or
control of the Shareholders, full, absolute and exclusive power,
control and authority over the Trust assets and the business and
affairs of the Trust to the same extent as if the Trustees were
the sole and absolute owners thereof in their own right and to do
all such acts and things as in their sole judgment and discretion
are necessary and incidental to, or desirable for the carrying
out of any of the purposes of the Trust or conducting the
business of the Trust. Any determination made in good faith by
the Trustees of the purposes of the Trust or the existence of any
power or authority hereunder shall be conclusive. In construing
the provisions of this Declaration of Trust, there shall be a
presumption in favor of the grant of power and authority to the
Trustees. Without limiting the foregoing, the Trustees may adopt
By-Laws not inconsistent with this Declaration of Trust
containing provisions relating to the business of the Trust, the
conduct of its affairs, its rights or powers and the rights or
powers of its Shareholders, Trustees, officers, employees and
other agents and may amend and repeal them to the extent that
such By-Laws do not reserve that right to the Shareholders; fill
vacancies in their number, including vacancies resulting from
increases in their number, unless a vote of the Trust's
Shareholders is required to fill such vacancies pursuant to the
1940 Act; elect and remove such officers and appoint and
terminate such agents as they consider appropriate; appoint from
their own number, and terminate, any one or more committees
consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session,
exercise some or all of the powers and authority of the Trustees
as the Trustees may determine; appoint an advisory board, the
members of which shall not be Trustees and need not be
Shareholders; employ one or more investment advisers or managers
as provided in Section 6 of this Article IV; employ one or more
custodians of the assets of the Trust and authorize such
custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of
securities; retain a transfer agent or a Shareholder services
agent, or both; provide for the distribution of Shares by the
Trust, through one or more principal underwriters or otherwise;
set record dates for the determination of Shareholders with
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respect to various matters; and in general delegate such
authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of
the Trust or to any such custodian or underwriter.
In furtherance of and not in limitation of the foregoing,
the Trustees shall have power and authority:
(a) To invest and reinvest in, to buy or otherwise acquire,
to hold, for investment or otherwise, to sell or otherwise
dispose of, to lend or to pledge, to trade in or deal in
securities or interests of all kinds, however evidenced, or
obligations of all kinds, however evidenced, or rights, warrants,
or contracts to acquire such securities, interests, or
obligations, of any private or public company, corporation,
association, general or limited partnership, trust or other
enterprise or organization, foreign or domestic, or issued or
guaranteed by any national or state government, foreign or
domestic, or their agencies, instrumentalities or subdivisions
(including but not limited to, bonds, debentures, bills, time
notes and all other evidences of indebtedness); negotiable or
non-negotiable instruments; any and all futures contracts;
government securities and money market instruments (including but
not limited to, bank certificates of deposit, finance paper,
commercial paper, bankers acceptances, and all kinds of
repurchase agreements);
(b) To invest and reinvest in, to buy or otherwise acquire,
to hold, for investment or otherwise, to sell or otherwise
dispose of foreign currencies, and funds and exchanges, and make
deposits in banks, savings banks, trust companies, and savings
and loan associations, foreign or domestic;
(c) To acquire (by purchase, lease or otherwise) and to
hold, use, maintain, develop, and dispose of (by sale or
otherwise) any property, real or personal, and any interest
therein;
(d) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the Trust;
(e) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to
such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(f) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
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(g) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust
or in the name of a custodian, subcustodian or other depositary
or a nominee or nominees or otherwise;
(h) Subject to the provisions of Article III, to allocate
assets, liabilities, income and expenses of the Trust to a
particular series of Shares or to apportion the same among two or
more series, provided that any liabilities or expenses incurred
by a particular series shall be payable solely out of the assets
of that series; and to the extent necessary or appropriate to
give effect to the preferences and special or relative rights or
privileges of any classes of Shares, to allocate assets,
liabilities, income and expenses of a series to a particular
class of Shares of that series or to apportion the same among two
or more classes of Shares of that series;
(i) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
issuer, any security or property of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase or
sale of property by such corporation or issuer, and to pay calls
or subscriptions with respect to any security held in the Trust;
(j) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security
to, any such committee, depositary 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, depositary or
trustee as the Trustees shall deem proper;
(k) 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;
(l) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(m) To borrow funds;
(n) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
and to mortgage and pledge the Trust property or any part thereof
to secure any of or all such obligations;
(o) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for the
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conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of
distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such
office or position, or by reason of any action alleged to have
been taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including any
action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to
indemnify such person against such liability; and
(p) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit
plans, 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.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees of common law trusts. Except as otherwise provided
herein or from time to time in the By-Laws, any action to be
taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (if a quorum by present), within
or without Massachusetts, including any meeting held by means of
a conference telephone or other communications equipment by means
of which all persons participating in the meeting can communicate
with each other simultaneously and participation by such means
shall constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
Payment of Expenses, Allocation of Liabilities
Section 3. The Trustees are authorized to pay or to
cause to be paid out of the principal or income of the Trust, or
partly out of principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities incurred
or arising in connection with the Trust, or in connection with
the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser
or manager, principal underwriter, auditor, counsel, custodian,
transfer agent, shareholder servicing agent, and such other
agents or independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur.
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The assets of a particular series of Shares shall be charged
with the liabilities (including, in the discretion of the
Trustees or their delegate, accrued expenses and reserves)
incurred in respect of such series (but not with liabilities
incurred in respect of any other series) and such series shall
also be charged with its share of any other liabilities. Any
allocation of the liabilities of a series among classes of Shares
of that series shall be done in a manner consistent with the
preferences and special or relative rights or privileges of such
classes. The determination of the Trustees shall be final and
conclusive as to the amount of liabilities to be charged to one
or more particular series or class. The Trustees may delegate
from time to time the power to make such allocation to one or
more Trustees or to an agent of the Trust appointed for such
purpose. The liabilities with which a series is so charged are
herein referred to as the "liabilities of" such series.
Section 4. The Trustees shall have the power, as
frequently as they may determine, to cause each Shareholder to
pay directly, in advance or arrears, for charges for the Trust's
custodian or transfer or shareholder service or similar agent, an
amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid
dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full
and/or fractional Shares which represents the outstanding amount
of such charges due from such Shareholder.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of
the Trust and of the Trust shall at all times be considered as
vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable vote of a majority of
the outstanding voting securities of a series of the Trust, the
Trustees may on behalf of such series, at any time and from time
to time, contract for exclusive or nonexclusive advisory and/or
management services for such series with a corporation, trust,
association or other organization, every such contract to comply
with such requirements and restrictions as may be set forth in
the By-Laws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of such series shall be held
uninvested and to make changes in such series' investments. The
Trustees may also, at any time and from time to time, contract
with a corporation, trust, association or other organization,
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appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with
such requirements and restrictions as may be set forth in the By-
Laws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
The fact that:
(a) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, advisor, principal underwriter, or distributor
or agent of or for any corporation, trust, association, or other
organization, or of or for any parent or affiliate of any
organization, with which an advisory or management or principal
underwriter's or distributor's contract, or transfer, shareholder
services or other agency contract may have been or may hereafter
be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the
Trust, or that
(b) any corporation, trust, association or other
organization with which an advisory or management or principal
underwriter's or distributor's contract, or transfer, shareholder
services or other agency contract may have been or may hereafter
be made also has an advisory or management contract, or principal
underwriter's or distributor's contract, or transfer, shareholder
services or other agency contract with one or more other corpora-
tions, trusts, associations, or other organizations, or has other
businesses or interests shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any
liability or accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. Subject to the voting provisions of one or
more classes of Shares, the Shareholders shall have power to vote
only: (a) for the election or removal of Trustees as provided in
Article IV, Section 1; (b) with respect to any investment adviser
or manager as provided in Article IV, Section 6; (c) with respect
to any termination or reorganization of the Trust or any series
or class thereof to the extent and as provided in Article IX,
Section 1; (d) with respect to any amendment of this Declaration
of Trust to the extent and as provided in Article IX, Section 4;
and (e) with respect to such additional matters relating to the
Trust as may be required by law, the 1940 Act, this Declaration
of Trust, the By-Laws or any registration of the Trust with the
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Securities and Exchange Commission (or any successor agency) or
any state, or as the Trustees may consider necessary or desir-
able.
Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote. Notwith-
standing any other provision of the Declaration of Trust, on any
matter submitted to a vote of Shareholders all Shares of the
Trust then entitled to vote shall, except to the extent otherwise
required or permitted by the preferences and special or relative
rights or privileges of any classes of Shares, be voted by
individual series and not in the aggregate or by class, except
(a) when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series; and (b) when the Trustees
have determined that the matter affects only the interests of one
or more series or classes, then only Shareholders of such series
or class shall be entitled to vote thereon. There shall be no
cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy.
A proxy with respect to Shares held in the name of two or
more persons shall be valid if executed by any one of them unless
at or prior to the exercise of the proxy the Trust receives a
specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the
challenger.
Until Shares of any series or class are issued, the Trustees
may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be
taken by Shareholders of such series or class.
Shareholder Meetings
Section 2. Meetings of Shareholders (including meetings
involving only one or more but less than all series or classes)
may be called and held from time to time for the purpose of
taking action upon any matter requiring the vote or authority of
the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Such
meetings shall be held at the principal office of the Trust as
set forth in the By-Laws of the Trust or at any such other place
within the United States as may be designated in the call there-
of, which call shall be made by the Trustees or the President of
the Trust. Meetings of Shareholders may be called by the Trust-
ees or such other person or persons as may be specified in the
By-Laws upon written application by Shareholders holding at least
twenty-five percent (25%) (or ten percent (10%) if the purpose of
the meeting is to determine if a Trustee is to be removed from
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office) of the Shares then outstanding of all series and classes
entitled to vote at such meeting requesting a meeting be called
for a purpose requiring action by the Shareholders as provided
herein or in the By-Laws which purpose shall be specified in any
such written application.
Shareholders shall be entitled to at least seven days'
written notice of any meeting of the Shareholders.
Quorum and Required Vote
Section 3. The presence at a meeting of Shareholders in
person or by proxy of Shareholders entitled to vote at least
thirty percent (30%) of all votes entitled to be cast at the
meeting of each series or class entitled to vote as a series or
class shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or
of this Declaration of Trust permits or requires that the holders
of Shares shall vote in the aggregate and not as a series or
class, then the presence in person or by proxy of Shareholders
entitled to vote at least thirty percent (30%) of all votes
entitled to be cast at the meeting (without regard to series or
class) shall constitute a quorum. Any lesser number, however,
shall be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set
for the original meeting without the necessity of further notice.
Except when a larger vote is required by any provisions of
the 1940 Act, this Declaration of Trust or the By-Laws, a
majority of the Shares of each series or class voted on the
matter shall decide that matter insofar as that series or class
is concerned, provided that where any provision of law, this
Declaration of Trust or the By-Laws permits or requires that the
holders of Shares vote in the aggregate and not as a series or
class, then a majority of the Shares voted on any matter (without
regard to series or class) shall decide such matter and a
plurality shall elect a Trustee.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken
without a meeting if Shareholders entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter of each series or class or, where any provision of law,
this Declaration of Trust or the By-Laws permits or requires that
the holders of Shares vote in the aggregate and not as a series
or class, if Shareholders entitled to vote more than fifty
percent (50%) of the votes entitled to be cast thereon (without
regard to series or class) (or in either case such larger vote as
shall be required by any provision of this Declaration of Trust
or the By-Laws) consent to the action in writing and such written
consents are filed with the records of the meetings of
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Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Additional Provisions
Section 5. The By-Laws may include further provisions
for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
Distributions, Redemptions and Repurchases,
and Determination of Net Asset Value
Distributions
Section 1. The Trustees may in their sole discretion
from time to time distribute to the Shareholders of any series
such income and gains, accrued or realized, as the Trustees may
determine, after providing for actual and accrued expenses and
liabilities of such series (including such reserves as the
Trustees may establish) determined in accordance with this
Declaration of Trust and good accounting practices. The Trustees
shall have full discretion to determine which items shall be
treated as income and which items as capital and their
determination shall be binding upon the Shareholders.
Distributions to any series, if any be made, shall be in Shares
of such series, in cash or otherwise and on a date or dates
determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders
of any series as of a record date or dates determined by the
Trustees, in Shares of such series, in cash or otherwise, all or
part of any gains realized on the sale or disposition of property
of the series or otherwise, or all or part of any other principal
of the Trust attributable to the series. Except to the extent
otherwise required or permitted by the preferences and special or
relative rights or privileges of any classes of Shares of that
series, each distribution pursuant to this Section 1 shall be
made ratably according to the number of Shares of the series held
by the several Shareholders on the applicable record date
thereof, provided that distributions from assets of a series may
only be made to the holders of the Shares of such series and
provided that no distributions need be made on Shares purchased
pursuant to orders received, or for which payment is made, after
such time or times as the Trustees may determine. Any
distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them. Any
distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with this Declaration of
Trust. The Trustees have the power, in their discretion, to
distribute for any year amounts sufficient to enable the Trust to
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qualify as a "regulated investment company" under the Internal
Revenue Code as amended (or any successor thereto) to avoid any
liability for federal income tax in respect of that year.
Redemptions and Repurchases
Section 2. Any holder of Shares of the Trust may, by
presentation of a request in proper form, together with his
certificates, if any, for such Shares, in proper form for
transfer to the Trust or duly authorized agent of the Trust,
request redemption of his shares for the net asset value thereof
determined and computed in accordance with the provisions of this
Section 2 and the provisions of Section 6 of this Article VI.
Upon receipt by the Trust or its duly authorized agent, as
the case may be, of such a request for redemption of Shares in
proper form, such Shares shall be redeemed at the net asset value
per share of the particular series or class next determined after
such request is received or determined as of such other time
fixed by the Trustees as may be permitted or required by the 1940
Act. The criteria for determining what constitutes a request for
redemption in proper form and the time of receipt of such request
shall be fixed by the Trustees.
The obligation of the Trust to redeem its Shares as set
forth above in this Section 2 shall be subject to the condition
that such obligation may be suspended by the Trust by or under
authority of the Trustees during any period or periods when and
to the extent permissible under the 1940 Act. If there is such a
suspension, any Shareholder may withdraw any request for
redemption which has been received by the Trust during any such
period and the applicable net asset value with respect to which
would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the Trust shall return to the
Shareholder the certificates therefor, if any.
The Trust may also purchase, repurchase or redeem Shares in
accordance with such other methods, upon such other terms and
subject to such other conditions as the Trustee may from time to
time authorize at a price not exceeding the net asset value of
such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made. Shares redeemed or
repurchased by the Trust hereunder shall be cancelled upon such
redemption or repurchase without further action by the Trust or
the Trustees and the number of issued and outstanding Shares of
the relevant series and class shall thereupon be reduced by such
amount.
Payment for Shares Redeemed
Section 3. Payment of the redemption price for Shares
redeemed pursuant to this Article VI shall be made by the Trust
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or its duly authorized agent after receipt by the Trust or its
duly authorized agent of a request for redemption in proper form
(together with any certificates for such Shares as provided in
Section 2 above) in accordance with procedures and subject to
conditions prescribed by the Trustees; provided, however, that
payment may be postponed during the period in which the
redemption of Shares is suspended under Section 2 above. Subject
to any generally applicable limitation imposed by the Trustees,
any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or
partly in kind, instead of in cash. Such payment in kind shall
be made by distributing securities or other property,
constituting, in the opinion of the Trustees, a fair
representation of the various types of securities and other
property then held by the series of Shares being redeemed,
purchased or repurchased (but not necessarily involving a portion
of each of the series' holdings) and taken at their value used in
determining the net asset value of the Shares in respect of which
payment is made.
Redemptions at the Option of the Trust
Section 4. The Trust shall have the right at its option
and at any time and from time to time to redeem Shares of any
Shareholder at the net asset value thereof as determined in
accordance with Section 6 of this Article VI, if at such time
such Shareholder owns fewer shares of a series or class than, or
Shares of a series or class having an aggregate net asset value
of less than, an amount determined from time to time by the
Trustees. Any such redemption at the option of the Trust shall
be made in accordance with such other criteria and procedures for
determining the Shares to be redeemed, the redemption date and
the means of effecting such redemption as the Trustees may from
time to time authorize.
Additional Provisions Relating to Dividends, Redemptions and
Repurchases
Section 5. The completion of redemption, purchase or
repurchase of Shares shall constitute a full discharge of the
Trust and the Trustees with respect to such Shares. No dividend
or distribution (including, without limitation, any distribution
paid upon termination of the Trust or of any series or class)
with respect to, nor any redemption or repurchase of, the Shares
of any series or class shall be effected by the Trust other than
from the assets of such series.
Determination of Net Asset Value
Section 6. The term "net asset value" of each Share of a
series or class as of any particular time shall be the quotient
obtained by dividing the value, as at such time, of the net
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<PAGE>
assets of such series or class (i.e., the value of the assets of
such series or class less the liabilities of such series or
class, exclusive of liabilities represented by the Shares of such
series or class) by the total number of Shares of such series or
class outstanding at such time, all determined and computed in
accordance with the Trust's current prospectus.
The Trustees, or any officer, or officers or agent of the
Trust designated for the purpose by the Trustees shall determine
the net asset value of the Shares of each series or class, and
the Trustees shall fix the time or times as of which the net
asset value of the Shares of each series or class shall be
determined and shall fix the periods during which any such net
asset value shall be effective as to sales, redemptions and
repurchases of, and other transactions in, the Shares of such
series or class, except as such times and periods for any such
transaction may be fixed by other provisions of this Declaration
of Trust or by the By-Laws.
Determinations in accordance with this Section 6 made in
good faith shall be binding on all parties concerned.
How Long Shares are Outstanding
Section 7. Shares of the Trust surrendered to the Trust
for redemption by it pursuant to the provisions of Section 2 of
this Article VI shall be deemed to be outstanding until the
redemption price thereof is determined pursuant to this Article
VI and, thereupon and until paid, the redemption price thereof
shall be deemed to be a liability of the Trust. Shares of the
Trust purchased by the Trust in the open market shall be deemed
to be outstanding until confirmation of purchase thereof by the
Trust and, thereupon and until paid, the purchase price thereof
shall be deemed to be a liability of the Trust. Shares of the
Trust redeemed by the Trust pursuant to Section 4 of this Article
VI shall be deemed to be outstanding until said Shares are deemed
to be redeemed in accordance with procedures adopted by the
Trustees pursuant to said Section 4.
ARTICLE VII
Compensation and Limitation of Liability
of Trustees and Shareholders
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust if the rate thereof is
prescribed by such Trustees. Nothing herein shall in any way
prevent the employment of any Trustee for advisory, management,
legal, accounting, investment banking or other services and
payment for the same by the Trust, it being recognized that such
employment may result in such Trustee being considered an
Affiliated Person or an Interested Person.
20
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Limitation of Liability
Section 2. The Trustees shall not be responsible or
liable in any event for any neglect or wrongdoing of any officer,
agent, employee, investment adviser or manager, principal
underwriter or custodian, nor shall any Trustee be responsible
for the act or omission of any other Trustee. Nothing in this
Declaration of Trust shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the
office of Trustee.
Every note, bond, contract, instrument, certificate, Share
or undertaking and every other act or thing whatsoever executed
or done by or on behalf of the Trust or the Trustees or any of
them in connection with the Trust shall be conclusively deemed to
have been executed or done only in or with respect to their or
his capacity as Trustees or Trustee and neither such Trustees or
Trustee nor the Shareholders shall be personally liable thereon.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers or
officer shall give notice that this Declaration of Trust is on
file with the Secretary of State of The Commonwealth of
Massachusetts and shall recite that the same was executed or made
by or on behalf of the Trust by them as Trustees or Trustee or as
officers or officer and not individually and that the obligations
of such instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the assets
and property of the Trust or a particular series of Shares, and
may contain such further recital as he or they may deem
appropriate, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares
shall look only to the assets of the Trust or the assets of that
particular series of Shares, as the case may be, for payment
under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be
personally liable therefor.
Trustees' Good Faith Action, Expert Advice, No Bond or Surety
Section 3. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. A Trustee shall be liable only for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee, and
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<PAGE>
for nothing else, and 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 Declaration of Trust and their duties as
Trustees hereunder, and shall be under no liability for any act
or omission in accordance with such advice or for failing to
follow such advice. In discharging their duties, the Trustees,
when acting in good faith, shall be entitled to rely upon the
books of account of the Trust and upon written reports made to
the Trustees by any officer appointed by them, any independent
public accountant and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee
of any other party to any contract entered into pursuant to
Section 2 of Article IV. The Trustees shall not be required to
give any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
Section 4. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
ARTICLE VIII
Indemnification
Subject to the exceptions and limitations contained in this
Article, every person who is, or has been, a Trustee or officer
of the Trust (including persons who serve at the request of the
Trust as directors, officers or trustees of another organization
in which the Trust has an interest as a shareholder, creditor or
otherwise) hereinafter referred to as a "Covered Person", shall
be indemnified by the Trust to the fullest extent permitted by
law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action,
suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been such a Trustee,
director or officer and against amounts paid or incurred by him
in settlement thereof.
No indemnification shall be provided hereunder to a Covered
Person:
(a) against any liability to the Trust or its Shareholders
by reason of a final adjudication by the court or other body
before which the proceeding was brought that he engaged in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
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<PAGE>
(b) with respect to any matter as to which he shall have
been finally adjudicated not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(c) in the event of a settlement or other disposition not
involving a final adjudication (as provided in paragraph (a) or
(b)) and resulting in a payment by a Covered Person, unless there
has been either 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 by the court or other body approving the settlement or
other disposition or a reasonable determination, based on a
review of readily available facts (as opposed to a full trial-
type inquiry) that he did not engage in such conduct:
(i) by a vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or
(ii) by written opinion of independent legal
counsel.
The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable,
shall not affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who
has ceased to be such a Covered Person and shall inure to the
benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel other than Covered
Persons may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any
claim, action, suit or proceeding subject to a claim for
indemnification under this Article shall be advanced by the Trust
prior to final disposition thereof upon receipt of an undertaking
by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification
under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some
other appropriate security or the Trust shall be insured against
losses arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees
then in office act on the matter) or independent legal counsel in
a written opinion shall determine, based upon a review of the
readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
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As used in this Article, a "Disinterested Trustee" is one
(a) who is not an "interested person" of the Trust, as defined in
the 1940 Act (including anyone who has been exempted from being
an "interested person" by any rule, regulation or order of the
Commission), and (b) against whom none of such actions, suits or
other proceedings or another action, suit or other proceeding on
the same or similar grounds is then or has been pending.
As used in this Article, the words "claim", "action", "suit"
or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals), actual
or threatened; and the words "liability" and "expenses" shall
include without limitation, attorneys' fees, cost, judgments,
amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or
other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified against all
loss and expense arising from such liability but only out of the
assets of the particular series of Shares of which he or she is
or was a Shareholder; provided, however, there shall be no
liability or obligation of the Trust arising hereunder to
reimburse any Shareholder for taxes paid by reason of such
Shareholder's ownership of Shares or for losses suffered by
reason of any changes in value of any Trust assets.
ARTICLE IX
Miscellaneous
Duration, Termination and Reorganization of Trust
Section 1. Unless terminated as provided herein, the
Trust shall continue without limitation of time. The Trust may
be terminated at any time by the Trustees by written notice to
the Shareholders without a vote of the Shareholders of the Trust
or by the vote of the Shareholders entitled to vote more than
fifty percent (50%) of the votes of each series or class entitled
to be cast on the matter. Any series or class of Shares may be
terminated at any time by the Trustees by written notice to the
Shareholders of such series or class without a vote of the
Shareholders of such series or class or by the vote of the
Shareholders of such series or class entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter.
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<PAGE>
Upon termination of the Trust or of any one or more series
or classes of Shares, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued
or anticipated, of the particular series or class as may be
determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce to
the extent necessary the remaining assets of the particular
series to distributable form in cash or other securities, or any
combination thereof, and distribute the proceeds to the
Shareholders of the series or class involved, ratably according
to the number of Shares of such series or class held by the
several Shareholders of such series or class on the date of
termination. Any such distributions with respect to any series
which has one or more classes of Shares outstanding shall be made
ratably to such classes in the same proportion as the number of
Shares of each class bears to the total number of Shares of the
series, except to the extent otherwise required or permitted by
the preferences and special or relative rights or privileges of
any classes of Shares of any such series.
At any time by the affirmative vote of the Shareholders of
the affected series entitled to vote more than fifty percent
(50%) of the votes entitled to be cast on the matter, the
Trustees may sell, convey and transfer the assets of the Trust,
or the assets belonging to any one or more series, to another
trust, partnership, association or corporation organized under
the laws of any state of the United States, or to the Trust to be
held as assets belonging to another series of the Trust, in
exchange for cash, shares or other securities (including, in the
case of a transfer to another series of the Trust, Shares of such
other series) with such transfer being made subject to or with
the assumption by the transferee of, the liabilities belonging to
each series the assets of which are so distributed. Following
such transfer, the Trustees shall distribute such cash, shares or
other securities (giving due effect to the assets and liabilities
belonging to and any other differences among the various series
the assets belonging to which have so been transferred) among the
Shareholders of the series the assets belonging to which have
been so transferred; and if all the assets of the Trust have been
so distributed, the Trust shall be terminated.
Filing of Copies, References, Headings
Section 2. The original or a copy of this instrument and
of each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time
be required. Anyone dealing with the Trust may rely on a
certificate by any officer of the Trust as to whether or not any
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<PAGE>
such amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as
if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument, and all expressions like "herein",
"hereof", and "hereunder", shall be deemed to refer to this
instrument as amended from time to time. Headings are placed
herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction
or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an
original.
Applicable Law
Section 3. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to
be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Amendments
Section 4. This Declaration of Trust may be amended at
any time by an instrument in writing signed by a majority of the
then Trustees when authorized so to do by vote of Shareholders
holding more than fifty percent (50%) of the Shares of each
series entitled to vote, except that an amendment which in the
determination of the Trustees shall affect the holders of one or
more series or classes of Shares but not the holders of all
outstanding series and classes shall be authorized by vote of the
Shareholders holding more than fifty percent (50%) of the Shares
entitled to vote of each series or class affected and no vote of
Shareholders of a series or class not affected shall be required.
Amendments having the purpose of changing the name of the Trust
or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any provision which is defective or
inconsistent with the 1940 Act or with the requirements of the
Internal Revenue Code and the regulations thereunder for the
Trust's obtaining the most favorable treatment thereunder
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<PAGE>
available to regulated investment companies shall not require
authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned has hereunto set his
hand and seal for himself and his assigns, as of the day and year
first above written.
/s/ Antonio DeSpirito III
-------------------------------
(SEAL) Antonio DeSpirito III, Trustee
Residence Address:
145 Endicott St., Apt 12
-------------------------------
Boston, MA 02113
-------------------------------
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
Then personally appeared the above-named Antonio DeSpirito
III who acknowledged the foregoing instrument to be his free act
and deed, before me this 12 day of June, 1995.
/s/ Michael DeFao
------------------------------
Notary Public
My Commission Expires: Aug 7 1998
----------
27
<PAGE>
KEMPER TRUST #26
WRITTEN INSTRUMENT AMENDING THE
AGREEMENT AND DECLARATION OF TRUST
AUGUST 23, 1996
The undersigned, being the sole trustee of Kemper Trust #26 (the
"Trust"), a business trust organized pursuant to an Agreement and
Declaration of Trust dated June 12, 1995 (the "Declaration of Trust"),
pursuant to Section 1 of Article I and Section 4 of Article IX of the
Declaration of Trust, does hereby change the name of the Trust to
"Kemper Savers Money Fund." This instrument shall constitute an
amendment to the Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has this 23rd day of August,
1996, signed these presents.
/s/ Philip J. Collora
----------------------------------------
Philip J. Collora, Sole Trustee
2734 Lawndale Avenue
Evanston, Illinois 60201
The address of the Trust is:
120 South LaSalle Street
Chicago, Illinois 60603
<PAGE>
KEMPER SAVERS MONEY FUND
WRITTEN INSTRUMENT AMENDING THE
AGREEMENT AND DECLARATION OF TRUST
NOVEMBER 6, 1996
The undersigned, being the sole trustee of Kemper Savers Money
Fund (the "Trust"), a business trust organized pursuant to an
Agreement and Declaration of Trust dated June 12, 1995 (the
"Declaration of Trust"), pursuant to Section 1 of Article I and
Section 4 of Article IX of the Declaration of Trust, does hereby
change the name of the Trust to "Zurich YieldWise Money Fund." This
instrument shall constitute an amendment to the Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has this 6th day of November,
1996, signed these presents.
/s/ Philip J. Collora
-------------------------------------
Philip J. Collora, Sole Trustee
2734 Lawndale Avenue
Evanston, Illinois 60201
The address of the Trust is:
222 South Riverside Plaza
Chicago, Illinois 60606
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's
attorney-in-fact to sign and file on such person's behalf individually and in
the capacity stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other documents with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering of shares of
Zurich YieldWise Money Fund.
Signature Title Date
/s/ Stephen B. Timbers Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's attorney-in-
fact to sign and file on such person's behalf individually and in the capacity
stated below such registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with the Securities and
Exchange Commission or any other regulatory authority as may be desirable or
necessary in connection with the public offering of shares of Zurich YieldWise
Money Fund.
Signature Title Date
/s/ David W. Belin Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's attorney-in-
fact to sign and file on such person's behalf individually and in the capacity
stated below such registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with the Securities and
Exchange Commission or any other regulatory authority as may be desirable or
necessary in connection with the public offering of shares of Zurich YieldWise
Money Fund.
Signature Title Date
/s/ Lewis A. Burnham Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's
attorney-in-fact to sign and file on such person's behalf individually and in
the capacity stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other documents with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering of shares of
Zurich YieldWise Money Fund.
Signature Title Date
/s/ Donald L. Dunaway Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's attorney-in-
fact to sign and file on such person's behalf individually and in the capacity
stated below such registration statements, amendments, post-effective
amendments, exhibits, applications and other documents with the Securities and
Exchange Commission or any other regulatory authority as may be desirable or
necessary in connection with the public offering of shares of Zurich YieldWise
Money Fund.
Signature Title Date
/s/ Robert B. Hoffman Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as his attorney-in-fact to sign
and file on his behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Zurich YieldWise Money Fund.
Signature Title Date
/s/ Donald R. Jones Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's
attorney-in-fact to sign and file on such person's behalf individually and in
the capacity stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other documents with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering of shares of
Zurich YieldWise Money Fund.
Signature Title Date
/s/ Dominique P. Morax Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's
attorney-in-fact to sign and file on such person's behalf individually and in
the capacity stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other documents with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering of shares of
Zurich YieldWise Money Fund.
Signature Title Date
/s/ Shirley D. Peterson Trustee January 21, 1997
- ----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints Stephen B.
Timbers, Charles R. Manzoni, Jr. and Philip J. Collora and each of them, any of
whom may act without the joinder of the others, as such person's
attorney-in-fact to sign and file on such person's behalf individually and in
the capacity stated below such registration statements, amendments,
post-effective amendments, exhibits, applications and other documents with the
Securities and Exchange Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering of shares of
Zurich YieldWise Money Fund.
Signature Title Date
/s/ William P. Sommers Trustee January 21, 1997
- ----------------------------
