<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON December 15, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ X ]
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ X ]
AMENDMENT NO. 4
MERRIMAC SERIES
(Exact Name of Registrant as Specified in Charter)
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02116
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, including Area Code: (617) 330-6413
Susan C. Mosher, Secretary
INVESTORS BANK & TRUST COMPANY
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02116
(Name and Address of Agent for Service)
Copy to:
Philip Newman, Esq.
Goodwin, Procter & Hoar, LLP
Exchange Place
Boston, MA 02109
Merrimac Master Portfolio also executed this Registration Statement.
Approximate date of commencement of proposed sale to the public: As soon as
practical after the effective date of the Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on ___________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[X] on March 1, 2001 pursuant to paragraph (a)(2) of rule 485.
To: The Securities and Exchange Commission
The Registrant submits this Post-Effective Amendment No. 5 to its
Registration Statement under the Securities Act of 1933 (Registration No.
333-49693) and this Amendment No. 4 to its Registration Statement under the
Investment Company Act of 1940 (Registration No. 811-08741).
(i)
<PAGE>
Merrimac Logo
MARCH 1, 2001 PROSPECTUS
MERRIMAC SERIES
MERRIMAC CASH SERIES
MERRIMAC TREASURY SERIES
MERRIMAC TREASURY PLUS SERIES
MERRIMAC U.S. GOVERNMENT SERIES
MERRIMAC MUNICIPAL SERIES
Each fund offers three classes of shares: Premium Class, Institutional Class
and Investment Class.
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE>
<TABLE>
<CAPTION>
CONTENTS Page
<S> <C>
THE FUNDS
RISK/RETURN SUMMARIES
Cash Series..............................................................
Treasury Series .........................................................
Treasury Plus Series.....................................................
U.S. Government Series...................................................
Municipal Series.........................................................
FUNDS' MANAGEMENT........................................................
YOUR INVESTMENT
SHAREHOLDER INFORMATION
Purchases................................................................
Redemptions..............................................................
Valuation of Shares......................................................
Dividends and Distributions..............................................
Federal Taxes............................................................
Class Expenses and Distribution and Shareholder Servicing Plans..........
Master/Feeder Structure..................................................
FINANCIAL HIGHLIGHTS.....................................................
APPENDIX A...............................................................
Description Of Securities In Which the Portfolios Can Invest
FOR MORE INFORMATION
Back Cover
</TABLE>
<PAGE>
RISK/RETURN SUMMARIES
The following information is only a summary of important information that you
should know about each series of Merrimac Series (the Funds). As with any
mutual fund, there is no guarantee that the Funds will achieve their goals.
Traditional mutual funds directly acquire and manage their own portfolio
securities. The Funds are organized in a "master-feeder" structure, under
which each Fund invests all of its assets in a corresponding series of
Merrimac Master Portfolio (each, a Portfolio). Each Fund and its
corresponding Portfolio have substantially the same investment objectives and
investment policies.
MERRIMAC CASH SERIES
> THE FUND'S INVESTMENT OBJECTIVE AND MAIN STRATEGY
The Merrimac Cash Series' investment objective is to achieve a high level of
current income consistent with preserving principal and liquidity. Allmerica
Asset Management, Inc. (AAM), the sub-adviser of Merrimac Cash Portfolio,
attempts to achieve the Fund's objective by investing the Portfolio's assets
in high-quality, U.S. dollar-denominated, money market instruments with
maturities of 397 calendar days or less and maintaining a dollar-weighted
average portfolio maturity for the Portfolio of 90 days or less. Most of the
Portfolio's investments will be in corporate debt obligations, asset-backed
securities, variable rate obligations, U.S. Treasury bills, notes and bonds
and repurchase agreements that are collateralized by these instruments, other
instruments issued or guaranteed by the U.S. Government or its agencies,
securities of U.S. and foreign banks or thrift organizations. See Appendix A
for more information regarding the types of securities in which the Fund
invests.
> MAIN RISKS OF INVESTING IN THE FUND
The primary risks in investing in the Fund are interest rate risk and credit
risk.
- INTEREST RATE RISK involves the possibility that the value of the Fund's
investments will decline due to an increase in interest rates.
- CREDIT RISK involves the possibility that an issuer of a security owned by
the Fund has its credit rating downgraded or defaults on its obligation to
pay principal and/or interest.
In view of the risks inherent in all investments in securities, there is no
assurance that the Fund's objective will be achieved.
Money market funds can be confused with savings accounts. The Fund is not a
savings account but, rather, a money market mutual fund that issues and
redeems at the Fund's per share NAV. The Fund always seeks to maintain a
constant NAV of $1.00 per share.
Unlike a savings account, however, an investment in the Fund is not a deposit
of Investors Bank & Trust Company, or any other bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
> THE VALUE OF YOUR INVESTMENT IN THE FUND COULD FLUCTUATE
The Fund is managed in accordance with strict SEC guidelines designed to
preserve the Fund's value at $1.00 per share, although, of course, there
cannot be a guarantee that the value will remain at $1.00 per share. The
value of your investment typically will grow through reinvested dividends.
-1-
<PAGE>
FUND PERFORMANCE
The bar chart and average annual total return table demonstrate the risks of
investing in the Fund. Past performance does not necessarily indicate what
will happen in the future. For the Fund's most current yield information you
may call 1-888-MERRMAC.
TOTAL RETURN - PREMIUM CLASS
[To be filed by amendment]
During the period shown in the bar chart, the highest total return for a
quarter was [ ]% (quarter ending [ ]) and the lowest total return for a
quarter was [ ] % (for the quarter ending ).
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDED DECEMBER 31, 2000
.............................................................................
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND* INCEPTION DATE
<S> <C> <C> <C>
Cash Series - PREMIUM CLASS [ ]% [ ]% June 25, 1998
Cash Series - INSTITUTIONAL CLASS [ ]% [ ]% June 25, 1998
</TABLE>
*Prior to September 1, 1998, The Bank of New York acted as investment
sub-adviser for the Cash Portfolio.
The Investment Class commenced operations on December xx, 2000, and therefore
does not have a full year of performance information to report for the period
ended December 31, 2000.
> FEES AND EXPENSES
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund. There are no fees or sales loads charged to your
account when you buy or sell Fund shares.
ANNUAL FUND OPERATING EXPENSES - EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
.............................................................................
<TABLE>
<CAPTION>
PREMIUM CLASS INSTITUTIONAL CLASS INVESTMENT CLASS
<S> <C> <C> <C>
Management Fees 0.17% 0.17% 0.17%
Distribution (12b-1) Fees None None 0.25%
Other Expenses (1) [ ]% [ ]% [ ]%
----- ----- -----
Total Annual Fund Operating Expenses (2) [ ]% [ ]% [ ]%
===== ===== =====
</TABLE>
------------------
(1) "Other Expenses" include expenses such as legal, accounting, printing
services and shareholder servicing fees for the Institutional Class and
Investment Class.
(2) This table and the example below reflect the Fund's expenses and the
Fund's share of the Portfolio's expenses for the fiscal period ended December
31, 2000. The Investment Class commenced operations on December xx, 2000.
> EXAMPLE
This example is intended to help you compare the cost of investing in the
PREMIUM, INSTITUTIONAL OR INVESTMENT Class of the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the PREMIUM, INSTITUTIONAL OR
INVESTMENT Class of the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
-2-
<PAGE>
Premium Class $ $ $ $
Institutional Class $ $ $ $
Investment Class $ $ $ $
</TABLE>
-3-
<PAGE>
MERRIMAC TREASURY SERIES
> THE FUND'S INVESTMENT OBJECTIVE AND MAIN STRATEGY
The Merrimac Treasury Series' investment objective is to achieve a high level
of current income consistent with preserving principal and liquidity. M&I
Investment Management Corp. (M&I), the sub-adviser of Merrimac Treasury
Portfolio, attempts to achieve the Fund's objective by investing the
Portfolio's assets in U.S. Treasury securities with maturities of 397
calendar days or less and maintaining a dollar-weighted average portfolio
maturity for the Portfolio of 90 days or less. The Portfolio will only invest
in direct obligations of the U.S. Treasury (U.S. Treasury bills, notes and
bonds) or in other mutual funds that invest in such instruments, subject to
regulatory limitations. See Appendix A for more information regarding the
types of securities in which the Fund invests.
> MAIN RISK OF INVESTING IN THE FUND
The primary risk in investing in the Fund is interest rate risk, which
involves the possibility that the value of the Fund's investments will
decline due to an increase in interest rates.
In view of the risks inherent in all investments in securities, there is no
assurance that the Fund's objective will be achieved.
Money market funds can be confused with savings accounts. The Fund is not a
savings account but, rather, a money market mutual fund that issues and
redeems at the Fund's per share NAV. The Fund always seeks to maintain a
constant NAV of $1.00 per share.
Unlike a savings account, however, an investment in the Fund is not a deposit
of Investors Bank & Trust Company, or any other bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
> THE VALUE OF YOUR INVESTMENT IN THE FUND COULD FLUCTUATE
The Fund is managed in accordance with strict SEC guidelines designed to
preserve the Fund's value at $1.00 per share, although, of course, there
cannot be a guarantee that the value will remain at $1.00 per share. The
value of your investment typically will grow through reinvested dividends.
-4-
<PAGE>
FUND PERFORMANCE
The bar chart and average annual total return table demonstrate the risks of
investing in the Fund. Past performance does not necessarily indicate what
will happen in the future. For the Fund's most current yield information you
may call 1-888-MERRMAC.
TOTAL RETURN - PREMIUM CLASS
[To be filed by amendment]
During the period shown in the bar chart, the highest total return for a
quarter was [ ]% (quarter ending [ ]) and the lowest total return for a
quarter was [ ]% (quarter ending [ ]).
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDED DECEMBER 31, 2000
............................................................................
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND INCEPTION DATE
<S> <C> <C> <C>
Treasury Series - PREMIUM CLASS February 19, 1999
Treasury Series-INSTITUTIONAL CLASS [ ]% [ ]%* June 25, 1998
</TABLE>
*Prior to January 4, 1999, Aeltus Investment Management, Inc. acted as
investment sub-adviser for the Treasury Portfolio.
The Investment Class commenced operations on December xx, 2000, and therefore
does not have a full year of performance information to report for the period
ended December 31, 2000.
> FEES AND EXPENSES
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund. There are no fees or sales loads charged to your
account when you buy or sell Fund shares.
ANNUAL FUND OPERATING EXPENSES - EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
.............................................................................
<TABLE>
<CAPTION>
PREMIUM CLASS INSTITUTIONAL CLASS INVESTMENT CLASS
<S> <C> <C> <C>
Management Fees 0.17% 0.17% 0.17%
Distribution (12b-1) Fees None None 0.25%
Other Expenses (1) [ ]% [ ]% [ ]%
---- ---- ----
Total Annual Fund Operating Expenses (2) [ ]% [ ]% [ ]%
==== ==== ====
</TABLE>
-----------------
(1) "Other Expenses" include expenses such as legal, accounting, printing
services and shareholder servicing fees for the Institutional Class and the
Investment Class.
(2) This table and the example below reflect the Fund's expenses and the
Fund's share of the Portfolio's expenses for the fiscal period ended December
31, 2000. The Investment Class commenced operations on December xx, 2000.
> EXAMPLE
This example is intended to help you compare the cost of investing in the
PREMIUM, INSTITUTIONAL OR INVESTMENT Class of the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the PREMIUM, INSTITUTIONAL OR
INVESTMENT Class of the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
-5-
<PAGE>
Premium Class $ $ $ $
Institutional Class $ $ $ $
Investment Class $ $ $ $
</TABLE>
-6-
<PAGE>
MERRIMAC TREASURY PLUS SERIES
> THE FUND'S INVESTMENT OBJECTIVE AND MAIN STRATEGY
The Merrimac Treasury Plus Series' investment objective is to achieve a high
level of current income consistent with preserving principal and liquidity.
M&I, the sub-adviser of Merrimac Treasury Plus Portfolio, attempts to achieve
the Fund's objective by investing the Portfolio's assets in high-quality,
U.S. dollar-denominated, money market instruments with maturities of 397
calendar days or less and maintaining a dollar-weighted average portfolio
maturity for the Portfolio of 90 days or less. The Portfolio will invest
primarily (at least 65% of total assets) in direct obligations of the U.S.
Treasury (U.S. Treasury bills, notes and bonds) or in repurchase agreements
collataralized by these instruments. The Portfolio may invest the remaining
35% of its total assets in securities issued or guaranteed by the U.S.
Government or its agencies and in repurchase agreements that are
collateralized by these instruments. See Appendix A for more information
regarding the types of securities in which the Fund invests.
> MAIN RISKS OF INVESTING IN THE FUND
The primary risks in investing in the Fund are interest rate risk and credit
risk.
- INTEREST RATE RISK involves the possibility that the value of the Fund's
investments will decline due to an increase in interest rates.
- CREDIT RISK involves the possibility that an issuer of a security owned by
the Fund has its credit rating downgraded or defaults on its obligation to
pay principal and/or interest.
In view of the risks inherent in all investments in securities, there is no
assurance that the Fund's objective will be achieved.
Money market funds can be confused with savings accounts. The Fund is not a
savings account but, rather, a money market mutual fund that issues and
redeems at the Fund's per share NAV. The Fund always seeks to maintain a
constant NAV of $1.00 per share.
Unlike a savings account, however, an investment in the Fund is not a deposit
of Investors Bank & Trust Company, or any other bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
> THE VALUE OF YOUR INVESTMENT IN THE FUND COULD FLUCTUATE
The Fund is managed in accordance with strict SEC guidelines designed to
preserve the Fund's value at $1.00 per share, although, of course, there
cannot be a guarantee that the value will remain at $1.00 per share. The
value of your investment typically will grow through reinvested dividends.
FUND PERFORMANCE
The bar chart and average annual total return table demonstrate the risks of
investing in the Fund. Past performance does not necessarily indicate what
will happen in the future. For the Fund's most current yield information you
may call 1-888-MERRMAC.
TOTAL RETURN - INSTITUTIONAL CLASS
[To be filed by amendment]
During the period shown in the bar chart, the highest total return for a
quarter was [ ]% (quarter ending [ ]) and the lowest total return for a
quarter was [ ] % (quarter ending [ ]).
-7-
<PAGE>
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDED DECEMBER 31, 2000
............................................................................
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND INCEPTION DATE
<S> <C> <C> <C>
Treasury Plus Series - INSTITUTIONAL CLASS [ ]% [ ]% January 22, 1999
</TABLE>
Because the Premium Class commenced operations on May 1, 2000 and the
Investment Class commenced operations on December xx, 2000, they do not have
a full year of performance information to report for the period ended
December 31, 2000.
> FEES AND EXPENSES
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund. There are no fees or sales loads charged to your
account when you buy or sell Fund shares.
ANNUAL FUND OPERATING EXPENSES - EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
............................................................................
<TABLE>
<CAPTION>
PREMIUM CLASS INSTITUTIONAL CLASS INVESTMENT CLASS
<S> <C> <C> <C>
Management Fees 0.17% 0.17% 0.17%
Distribution (12b-1) Fees None None 0.25%
Other Expenses (1) % % %
- - -
Total Annual Fund Operating Expenses (2) % % %
= = =
</TABLE>
-----------------
(1) "Other Expenses" include expenses such as legal, accounting, printing
services and shareholder servicing fees for the Institutional Class and the
Investment Class.
(2) This table and the example below reflect the Fund's expenses and the
Fund's share of the Portfolio's expenses for the fiscal period ended December
31, 2000. The Premium Class commenced operations on May 1, 2000 and the
Investment Class commenced operations on December xx, 2000.
> EXAMPLE
This example is intended to help you compare the cost of investing in the
PREMIUM, INSTITUTIONAL OR INVESTMENT Class of the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the PREMIUM, INSTITUTIONAL OR
INVESTMENT Class of the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Premium Class $ $ $ $
Institutional Class $ $ $ $
Investment Class $ $ $ $
</TABLE>
-8-
<PAGE>
MERRIMAC U.S. GOVERNMENT SERIES
> THE FUND'S INVESTMENT OBJECTIVE AND MAIN STRATEGY
The Merrimac U.S. Government Series' investment objective is to achieve a
high level of current income consistent with preserving principal and
liquidity. AAM, the sub-adviser of the Merrimac U.S. Government Portfolio,
attempts to achieve the Fund's objective by investing the Portfolio's assets
in high-quality, U.S. dollar-denominated, money market instruments with
maturities of 397 calendar days or less and maintaining a dollar-weighted
average portfolio maturity for the Portfolio of 90 days or less. The
Portfolio will invest primarily (at least 65% of total assets) in securities
issued or guaranteed as to principal and interest by the U.S. Government or
its agencies or instrumentalities. The Portfolio also may invest in
repurchase agreements that are collateralized by these instruments. See
Appendix A for more information regarding the types of securities in which
the Fund invests.
> MAIN RISKS OF INVESTING IN THE FUND
The primary risks in investing in the Fund are interest rate risk and credit
risk.
- INTEREST RATE RISK involves the possibility that the value of the Fund's
investments will decline due to an increase in interest rates.
- CREDIT RISK involves the possibility that an issuer of a security owned by
the Fund has its credit rating downgraded or defaults on its obligation to
pay principal and/or interest.
In view of the risks inherent in all investments in securities, there is no
assurance that the Fund's objective will be achieved.
Money market funds can be confused with savings accounts. The Fund is not a
savings account but, rather, a money market mutual fund that issues and
redeems at the Fund's per share NAV. The Fund always seeks to maintain a
constant NAV of $1.00 per share.
Unlike a savings account, however, an investment in the Fund is not a deposit
of Investors Bank & Trust Company, or any other bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
> THE VALUE OF YOUR INVESTMENT IN THE FUND COULD FLUCTUATE
The Fund is managed in accordance with strict SEC guidelines designed to
preserve the Fund's value at $1.00 per share, although, of course, there
cannot be a guarantee that the value will remain at $1.00 per share. The
value of your investment typically will grow through reinvested dividends.
FUND PERFORMANCE
The bar chart and average annual total return table demonstrate the risks
of investing in the Fund. Past performance does not necessarily indicate
what will happen in the future. For the Fund's most current yield
information you may call 1-888-MERRMAC.
TOTAL RETURN - INSTITUTIONAL CLASS
[To be filed by amendment]
During the period shown in the bar chart, the highest total return for a
quarter was [ ]% (quarter ending [ ]) and the lowest total return for a
quarter was [ ] % (quarter ending [ ]).
-9-
<PAGE>
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDED DECEMBER 31, 2000
..........................................................................
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND INCEPTION DATE
<S> <C> <C> <C>
U.S. Government Series - INSTITUTIONAL CLASS [ ]% [ ]% June 29, 1999
</TABLE>
Because the Premium Class commenced operations on May 1, 2000 and the
Investment Class commenced operations on December xx, 2000, they do not have
a full year of performance information to report for the period ended
December 31, 2000.
> FEES AND EXPENSES
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund. There are no fees or sales loads charged to your
account when you buy or sell Fund shares.
ANNUAL FUND OPERATING EXPENSES - EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
.............................................................................
<TABLE>
<CAPTION>
PREMIUM CLASS INSTITUTIONAL CLASS INVESTMENT CLASS
<S> <C> <C> <C>
Management Fees 0.17% 0.17% 0.17%
Distribution (12b-1) Fees None None 0.25%
Other Expenses(1) % % %
Total Annual Fund Operating Expenses(2) % % %
</TABLE>
(1) "Other Expenses" include expenses such as legal, accounting, printing
services and shareholder servicing fees for the Institutional Class and
the Investment Class.
(2) This table and the example below reflect the Fund's expenses and the
Fund's share of the Portfolio's expenses for the fiscal period ended
December 31, 2000. The Premium Class commenced operations on May 1, 2000
and the Investment Class commenced operations on December xx, 2000.
EXAMPLE
This example is intended to help you compare the cost of investing in the
PREMIUM, INSTITUTIONAL OR INVESTMENT Class of the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the PREMIUM, INSTITUTIONAL OR
INVESTMENT Class of the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS ONE YEAR THREE YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Premium Class $ $ $ $
Institutional Class $ $ $ $
Investment Class $ $ $ $
</TABLE>
-10-
<PAGE>
MERRIMAC MUNICIPAL SERIES
> THE FUND'S INVESTMENT OBJECTIVE AND MAIN STRATEGY
The Merrimac Municipal Series' investment objective is to preserve principal
and liquidity while providing current income exempt from Federal income tax.
ABN AMRO Asset Management (USA) LLC (ABN AMRO), the sub-adviser of the
Merrimac Municipal Portfolio, attempts to achieve the Fund's objective by
investing substantially all of the Portfolio's assets in high quality money
market instruments issued by municipalities and other issuers with maturities
of 397 calendar days or less (municipal securities). Under normal
circumstances, the Portfolio invests at least 80% of its net assets in
securities that pay income exempt from Federal income tax. These issuers may
be located in any state, territory or possession of the U.S., or the District
of Columbia. ABN AMRO emphasizes particular sectors of the municipal money
market that it expects will outperform the market as a whole. See Appendix A
for more information regarding the types of securities in which the Fund
invests.
ABN AMRO structures the Fund's portfolio based on its outlook on interest rates,
market conditions, and liquidity needs. ABN AMRO monitors the Fund for credit
quality changes and adjusts maturities in anticipation of changes in interest
rates. Important factors include an assessment of Federal Reserve policy and an
analysis of the yield curve.
> MAIN RISKS OF INVESTING IN THE FUND
The primary risks of investing in the Fund are as follows:
- INTEREST RATE RISK involves the possibility that the value of the Fund's
investments will decline due to an increase in interest rates.
- CREDIT RISK involves the possibility that an issuer of a security owned by
the Fund has its credit rating downgraded or defaults on its obligation to
pay principal and/or interest. In addition, since the Fund may purchase
securities supported by credit enhancements from banks and other financial
institutions, changes in the credit quality of these institutions could
adversely affect the value of the Fund's municipal securities.
- PREPAYMENT RISK involves the possibility that when interest rates are
declining, the issuer of a security exercises its right to prepay
principal earlier than scheduled, forcing the Fund to reinvest in lower
yielding securities.
- MUNICIPAL SECURITIES, which comprise at least 80% of the Fund, may be
affected by economic or political changes that impact the ability of
municipal issuers to repay principal and to make interest payments on
municipal securities. Changes to the financial condition of municipal
issuers may also adversely affect the value of the Fund's municipal
securities. Constitutional or legislative limits on borrowing by municipal
issuers may result in reduced supplies of municipal securities. Moreover,
certain municipal securities are backed only by a municipal issuer's
ability to levy and collect taxes.
- CONCENTRATION RISK involves the possibility that the Fund may be more
sensitive to an adverse economic, business or political development if it
invests more than 25% of its assets in municipal instruments the interest
upon which is paid solely from revenues of similar projects, or in
industrial development bonds.
The Fund may take a temporary defensive position when ABN AMRO determines
that market conditions warrant. During these times the Fund may not be
pursuing its investments goals or achieving its investment objective and may
have up to 100% of its assets in cash or money market instruments that
produce Federally taxable income.
In view of the risks inherent in all investments in securities, there is no
assurance that the Fund's objective will be achieved.
-11-
<PAGE>
Money market funds can be confused with savings accounts. The Fund is not a
savings account but, rather, a money market mutual fund that issues and redeems
at the Fund's per share NAV. The Fund always seeks to maintain a constant NAV of
$1.00 per share.
Unlike a savings account, however, an investment in the Fund is not a deposit of
Investors Bank & Trust Company, or any other bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
> THE VALUE OF YOUR INVESTMENT IN THE FUND COULD FLUCTUATE
The Fund is managed in accordance with strict SEC guidelines designed to
preserve the Fund's value at $1.00 per share, although, of course, there
cannot be a guarantee that the value will remain at $1.00 per share. The
value of your investment typically will grow through reinvested dividends.
> FUND PERFORMANCE
Because the Fund has not been in operation for a full calendar year, its
performance has not been included. For the Fund's most current yield
information you may call 1-888-MERRMAC. Past performance does not necessarily
indicate what will happen in the future.
> FEES AND EXPENSES
These tables describe the estimated fees and expenses that you may pay if you
buy and hold shares of the Fund. There are no fees or sales loads charged to
your account when you buy or sell Fund shares.
ANNUAL FUND OPERATING EXPENSES - EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
.............................................................................
<TABLE>
<CAPTION>
PREMIUM CLASS INSTITUTIONAL CLASS INVESTMENT CLASS
<S> <C> <C> <C>
Management Fees % % %
Distribution (12b-1) Fees None None 0.25%
Other Expenses (1) % % %
- - -
Total Annual Fund Operating Expenses (2) % % %
= = =
</TABLE>
-----------------
(1) Other Expenses are estimated based upon the expected expenses that the
Fund would incur in the initial fiscal year. "Other Expenses" include
expenses such as legal, accounting and printing services and shareholder
servicing fees for the Institutional Class and Investment Class.
(2)This table and the example below reflect the Fund's estimated expenses and
the Fund's share of the Portfolio's estimated expenses for the fiscal year
ended December 31, 2001. [Investors Bank & Trust Company has voluntarily
agreed to limit the Fund's annual expenses to 0.xx% of its average net assets
and will reimburse the Fund for all expenses in excess of that amount. This
limitation may be discontinued at any time after 30 days notice to
shareholders.]
> EXAMPLE
This example is intended to help you compare the cost of investing in the
PREMIUM, INSTITUTIONAL OR INVESTMENT Class of the Fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the PREMIUM, INSTITUTIONAL OR
INVESTMENT Class of the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's estimated
operating expenses remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS
<S> <C> <C>
Premium Class $ $
Institutional Class $ $
-12-
<PAGE>
Investment Class $ $
</TABLE>
-13-
<PAGE>
FUNDS' MANAGEMENT
INVESTMENT ADVISER. The Funds have not retained the services of an investment
adviser because each Fund invests all of its investable assets in its
corresponding Portfolio. The Cash Portfolio, Treasury Portfolio, Treasury Plus
Portfolio, U.S. Government Portfolio and Municipal Portfolio (the "Portfolios")
have retained the services of Investors Bank & Trust Company (Investors Bank) as
investment adviser. Investors Bank continuously reviews and supervises the
Portfolios' investment program. Investors Bank discharges its responsibilities
subject to the supervision of, and policies established by, the Board of
Trustees. Investors Bank's business address is 200 Clarendon Street, Boston,
Massachusetts 02116. Investors Bank began acting as an investment adviser at the
commencement of operations of the Cash Portfolio (November 21, 1996). The
Portfolios each pay Investors Bank a unitary fee for providing their services as
Investment Adviser, Administrator, Custodian, Fund Accountant and Transfer
Agent. The fee is computed at an annual rate of 0.17% of average net assets
(ANA) of each of these Portfolios, except the Municipal Portfolio which fee is
computed at an annual rate of [xx%] of ANA.
The investment adviser and sub-advisers may pay out of their respective fees a
transaction, service, administrative, or other similar fee charged by a
financial intermediary, or other financial representative with respect to the
purchase or sale of shares of each Fund. The financial intermediaries also may
impose requirements on the purchase or sale of shares that are different from,
or in addition to, those imposed by each Fund, including requirements as to the
minimum initial and subsequent investment amounts.
The Investment Adviser acts as a "manager of managers" for the Portfolios, and
supervises adherence by the Sub-advisers of each Fund's investment policies and
guidelines. The Investment Adviser also recommends the appointment of additional
or replacement Sub-advisers to the Portfolios' Board of Trustees. The Investment
Adviser, the Portfolios' and the Funds' have jointly requested exemptive relief
from the Securities and Exchange Commission (the "SEC") to permit the Investment
Adviser and the Portfolios to add or terminate Sub-advisers without shareholder
approval.
INVESTMENT SUB-ADVISERS. AAM serves as investment sub-adviser to the Cash
Portfolio and to the U.S. Government Portfolio. AAM manages the Cash Portfolio
and the U.S. Government Portfolio, selects investments and places all orders for
the purchase and sale of the Portfolios' securities, subject to the general
supervision of, and policies established by the Portfolios' Board of Trustees
and Investors Bank. The business address of AAM is 440 Lincoln Street,
Worcester, Massachusetts 01653. AAM has been providing investment advisory
services since it was established in 1993 as an indirect, wholly-owned
subsidiary of Allmerica Financial Corporation. AAM receives a fee from Investors
Bank (and not from each Portfolio) for its services as investment sub-adviser.
M&I serves as investment sub-adviser to the Treasury Portfolio and to the
Treasury Plus Portfolio. M&I manages the Treasury Portfolio and the Treasury
Plus Portfolio, selects investments and places all orders for the purchase and
sale of the Portfolios' securities, subject to the general supervision of, and
policies established by, the Portfolios' Board of Trustees and Investors Bank.
The business address of M&I is 1000 North Water Street, Milwaukee, Wisconsin
53202. M&I has been providing investment advisory services since it was
established in 1973 as a first-tier wholly-owned subsidiary of Marshall & Isley
Corporation, a publicly held bank holding company. M&I receives fees from
Investors Bank (and not from each Portfolio) for its services as investment
sub-adviser.
ABN AMRO serves as investment sub-adviser to the Municipal Portfolio. ABN
AMRO manages the Municipal Portfolio, selects investments and places all
orders for the purchase and sale of the Portfolio's securities, subject to
the general supervision of, and policies established by, the Portfolios'
Board of Trustees and Investors Bank. The business address of ABN AMRO is 208
South LaSalle Street, 4th Floor, Chicago, IL 60604. ABN AMRO has been
providing investment advisory services since it was established in 1991 and
is an indirect wholly-owned subsidiary of ABN AMRO Bank N.V. ABN AMRO manages
assets for individuals and institutions, including corporations, unions,
governments, insurance companies, charitable organizations and investment
companies.
-14-
<PAGE>
SHAREHOLDER INFORMATION
> PURCHASES
GENERAL INFORMATION. Shares may be purchased only through the Distributor,
Funds Distributor Inc., which offers each Fund's shares to the public on a
continuous basis. Shares of each Fund may be purchased only in those states
where they may be lawfully sold. Shares are sold at the NAV per share next
computed after the purchase order is received in good order by the
Distributor and payment for shares is received by Investors Bank, the Funds'
Custodian. See the Account Application or call 1-888-MERRMAC for instructions
on how to make payment for shares to the Custodian. Shareholders may also
make general inquiries by calling 1-888-MERRMAC.
INVESTMENT MINIMUM. The minimum initial investment for Premium Class shares
of the Funds is $10 million. Institutions may satisfy the minimum investment
by aggregating their fiduciary accounts. The minimum initial investment for
Institutional Class and Investment Class shares is $10,000. Subsequent
purchases may be in any amount. Each Fund reserves the right to waive the
minimum initial investment. When a Premium Class shareholder's account
balance falls below $1 million due to redemption, a Fund may close the
account. Such shareholders will be notified if the minimum balance is not
being maintained and will be allowed 60 days to make additional investments
before the account is closed.
Share purchase orders are deemed to be in good order on the date a Fund
receives a completed Account Application (and other documents required by the
Trust) and federal funds become available to the Fund in the Fund's account
with Investors Bank.
Purchases may be made only by wire. Wiring instructions for purchases of
shares of a Fund are as follows:
Investors Bank & Trust Company
ABA #: 011001438
Attn: [Name of Fund]
DDA #: 717171333
Name of Account
Account #
Amount of Wire:
A bank may impose a charge to execute a wire transfer. A purchaser must call
1-888-MERRMAC to inform Investors Bank of an incoming wire transfer. A
purchase order for shares received in proper form before the times set forth
below on a Business Day will be executed at the NAV per share next determined
after receipt of the order, provided that Investors Bank receives the wire by
the close of business on the day the purchase order is received. A Business
Day is any day on which both the NYSE and the New York Federal Reserve Bank
are open. Purchase orders received after the times set forth below will be
effected on the next Business Day if cleared funds are received before the
close of business on the next Business Day.
<TABLE>
<S> <C>
------------------------------- -----------------
Cash Series 4:00 p.m. (ET)
------------------------------- -----------------
Treasury Series 2:00 p.m. (ET)
------------------------------- -----------------
Treasury Plus Series 4:00 p.m. (ET)
------------------------------- -----------------
U.S. Government Series 5:00 p.m. (ET)
------------------------------- -----------------
Municipal Series 2:00 p.m. (ET)
------------------------------- -----------------
</TABLE>
Purchase orders for shares for which payment has not been received by the
close of business will not be accepted, and notice thereof will be given to
the purchaser. The Cash Series, the Treasury Plus Series and the U.S.
Government Series also may limit the amount of a purchase order received
after 3:00 p.m. (ET).
On days when the financial markets close early, such as the day after
Thanksgiving and Christmas Eve, all purchase orders must be received by 12:00
noon (ET).
-15-
<PAGE>
Each Fund reserves the right in its sole discretion (i) to suspend the
offering of a Fund's shares, (ii) to reject purchase orders, and (iii) to
modify or eliminate the minimum initial investment in Fund shares. Purchase
orders may be refused if, for example, they are of a size that could disrupt
management of a Portfolio.
> REDEMPTIONS
Shareholders may redeem all or a portion of their shares on any Business Day.
Shares will be redeemed at the NAV next determined after Investors Bank has
received a proper notice of redemption as described below. If notice of
redemption is received prior to the times set forth below on a Business Day,
the redemption will be effective on the date of receipt. Proceeds of the
redemption will ordinarily be made by wire on the date of receipt, but in any
event within three Business Days from the date of receipt.
Shareholder redemption requests received after the times set forth below on a
Business Day, will ordinarily receive payment by wire on the next Business
Day, but, in any event, within four Business Days from the date of receipt of
a proper notice of redemption. All redemption requests regarding shares of
the Cash Series, the Treasury Plus Series and the U.S. Government Series
placed after 3:00 p.m. may only be placed by telephone.
<TABLE>
<S> <C>
------------------------------- -----------------
Cash Series 4:00 p.m. (ET)
------------------------------- -----------------
Treasury Series 2:00 p.m. (ET)
------------------------------- -----------------
Treasury Plus Series 4:00 p.m. (ET)
------------------------------- -----------------
U.S. Government Series 5:00 p.m. (ET)
------------------------------- -----------------
Municipal Series 2:00 p.m. (ET)
------------------------------- -----------------
</TABLE>
Each Fund reserves the right in its sole discretion to suspend redemptions or
postpone payments when the NYSE is closed or when trading is restricted for
any reason or under emergency circumstances as determined by the SEC. The
Cash Series, the Treasury Plus Series and the U.S. Government Series each
reserve the right to postpone payments for redemption requests received after
3:00 p.m. (ET) until the next Business Day.
On days when the financial markets close early, such as the day after
Thanksgiving and Christmas Eve, all redemption orders must be received by
12:00 noon (ET).
A shareholder may elect to receive payment in the form of a wire or check.
There is no charge imposed by a Fund to redeem shares; however, in the case
of redemption by wire, a shareholder's bank may impose its own wire transfer
fee for receipt of the wire.
REDEMPTION BY WIRE. To redeem shares by wire, a shareholder or any authorized
agent (so designated on the Account Application) must provide Investors Bank
with the dollar amount to be redeemed, the account to which the redemption
proceeds should be wired (such account must have been previously designated
by the shareholder on its Account Application, the name of the shareholder
and the shareholder's account number).
A shareholder may change its authorized agent, the address of record or the
account designated to receive redemption proceeds at any time by writing to
Investors Bank with a signature guaranteed by a national bank which is a
member firm of any national or regional securities exchange (a Signature
Guarantee). If the guarantor institution belongs to one of the Medallion
Signature Programs, it must use the specific Medallion "Guaranteed" stamp.
Notarized signatures are not sufficient. Further documentation may be
required when Investors Bank deems it appropriate.
REDEMPTION BY MAIL. A shareholder who desires to redeem shares by mail may do
so by mailing proper notice of redemption directly to Investors Bank, ATTN:
Transfer Agency, OPS 22, P.O. Box 9130, Boston, MA 02117-9130. Proper notice
of redemption includes written notice requesting redemption along with the
signature of all persons in whose names the shares are registered, signed
exactly as the shares are registered. In certain instances, Investors Bank
may require additional documents such as trust instruments or certificates of
corporate authority. Payment will be mailed to the address of record within
seven days of receipt of a proper notice of redemption.
-16-
<PAGE>
TELEPHONE REDEMPTION. A shareholder may request redemption by calling
Investors Bank at 1-888-MERRMAC. The telephone redemption option is made
available to shareholders of a Fund on the Account Application. Each Fund
reserves the right to refuse a telephone request for redemption if it
believes that it is advisable to do so. Procedures for redeeming shares by
telephone may be modified or terminated at any time by a Fund. Neither the
Funds nor Investors Bank will be liable for following redemption instructions
received by telephone that are reasonably believed to be genuine, and the
shareholder will bear the risk of loss in the event of unauthorized or
fraudulent telephone instructions. Each Fund will employ reasonable
procedures to confirm that instructions communicated by telephone are
genuine. A Fund may be liable for any losses due to unauthorized or
fraudulent instructions in the absence of following these procedures. Such
procedures may include requesting personal identification information or
recording telephone conversations. Redemption checks will be made payable to
the registered shareholder(s) and sent to the address of record on file with
Investors Bank. Payments by wire will only be made to the registered
shareholder through pre-existing bank account instructions.
No bank instruction changes will be accepted over the telephone. See
REDEMPTION BY WIRE for information on how to change bank instructions.
> VALUATION OF SHARES
Each Fund offers its shares at the NAV per share of the Fund, as determined
once each Business Day. This determination is made as of 2:00 p.m. (ET) for
the Treasury Series and the Municipal Series, as of 4:00 p.m. (ET) for the
Cash Series and the Treasury Plus Series, and as of 5:00 p.m. (ET) for the
U.S. Government Series. Securities are stated at amortized cost, which
approximates market value. For more information on how securities are valued,
see the Statement of Additional Information (SAI).
> DIVIDENDS AND DISTRIBUTIONS
Each Fund intends to declare as a dividend substantially all of its net
investment income at the close of each Business Day and will pay such
dividends monthly. Substantially all of a Fund's distributions will be from
net investment income. Shareholders of the Funds' shall be entitled to
receive dividends on the Business Day their purchase is effected but shall
not receive dividends on the Business Day that their redemption is effected.
Distributions of net capital gains, if any, are made annually at the
discretion of the officers of the Fund. Dividends and/or capital gain
distributions will be reinvested automatically in additional shares of a Fund
at NAV and such shares will be automatically credited to a shareholder's
account, unless a shareholder elects to receive either dividends or capital
gains distributions (or both) in cash. Shareholders may change their
distribution option at any time by writing to Investors Bank with a Signature
Guarantee prior to the record date of any such dividend or distribution.
> FEDERAL TAXES
Every January, the Funds provide information to their shareholders about the
Funds' dividends and distributions, and about the shareholders' redemptions
during the previous calendar year. Any shareholder who does not provide the
Funds with a correct taxpayer identification number and required
certification may be subject to federal backup withholding tax.
Each Fund will distribute substantially all of its income and capital gains,
if any. The dividends and distributions you receive, even if reinvested, may
be subject to federal, state and local taxation, depending on your tax
situation. You may be taxed on each sale of Fund shares.
The Municipal Series intends to distribute federally tax-exempt income. This
income may be subject to state and local taxes. The Municipal Series,
however, may invest a portion of its assets in securities that generate
taxable income for federal or state income taxes. Any capital gains
distributed by this Fund may be taxable.
Shareholders should consult their tax advisers about their own particular tax
situations.
-17-
<PAGE>
> CLASS EXPENSES AND DISTRIBUTION AND SHAREHOLDER SERVICING PLANS
Assets of the Premium Class shares of each Fund are not subject to a 12b-1
(Distribution) or shareholder servicing fee. Assets of the Institutional
Class shares of each Fund are subject to a shareholder servicing fee of up to
0.25% of ANA. Assets of the Investment Class shares of each Fund are subject
to a Distribution fee of up to 0.25% of ANA and a shareholder servicing fee
of up to 0.25% of ANA.
The Institutional Class and Investment Class of each Fund offers shares
through certain financial intermediaries, including Investors Bank (Service
Organizations), which have entered into shareholder servicing agreements with
each Fund. Service Organizations agree to perform certain shareholder
servicing, administrative and accounting services for their clients and
customers who are beneficial owners of Fund shares. The Board of Trustees has
approved a Distribution Plan with respect to the Investment Class shares of
each Fund. Under the Distribution Plan, the Agent is entitled to receive a
fee (as set forth above) from each Fund with respect to the assets
contributed to such Fund by shareholders who are clients or customers of the
Agent. Because these fees are paid out of Fund assets on an ongoing basis,
over time the cost of investing in the Funds may cost more than paying other
types of sales charges.
> MASTER/FEEDER STRUCTURE
The Funds are "feeder" funds that invest exclusively in corresponding
"master" portfolios with identical investment objectives. The master
portfolio may accept investments from multiple feeder funds, which bear the
master portfolio's expenses in proportion to their assets.
Each feeder fund and its master portfolio expect to maintain consistent
investment objectives, but if they do not, a Fund will withdraw from the
master portfolio, receiving either cash or securities in exchange for its
interest in the master portfolio. The Trustees would then consider whether a
Fund should hire its own investment adviser, invest in a different portfolio,
or take other action.
-18-
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance since the Funds commenced operations. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Ernst & Young LLP, whose reports, along with the
Funds' financial statements, are included in the annual report, which is
available upon request.
Selected data for a share of beneficial interest outstanding throughout the
period is presented below:
To be Filed by Amendment
-19-
<PAGE>
APPENDIX A
THE FOLLOWING ARE DESCRIPTIONS OF CERTAIN TYPES OF SECURITIES IN WHICH THE
PORTFOLIOS' MAY INVEST:
ASSET-BACKED SECURITIES. The Cash Portfolio may invest in asset-backed
securities. The principal and interest payments on asset-backed securities are
collateralized by pools of assets such as credit card receivables and categories
of receivables, leases, installment sales or loan contracts and personal
property. Such asset pools are securitized through the use of special purpose
trusts or corporations. Payments or distributions of principal and interest on
asset-backed securities may be guaranteed up to certain amounts and for a
certain time period by a letter of credit or a pool insurance policy issued by a
financial institution; however, privately issued obligations collateralized by a
portfolio of privately issued asset-backed securities do not involve any
government-related guaranty or insurance. Asset-backed securities are especially
sensitive to prepayment and extension risk.
COMMERCIAL PAPER. The Cash Portfolio may invest in commercial paper, which is
the term used to designate unsecured short-term promissory notes issued by
corporations and other entities. The Cash Portfolio may invest in commercial
paper with maturities which vary from a few days to nine months. The Cash
Portfolio may also purchase U.S. dollar-denominated commercial paper of a
foreign issuer rated in the highest or second highest rating categories by at
least two NRSROs.
CORPORATE DEBT OBLIGATIONS. Subject to their respective credit quality and
maturity limitations, the Cash Portfolio may invest in corporate bonds,
including obligations of industrial, utility, banking and other financial
issuers.
EURODOLLAR AND YANKEE DOLLAR INVESTMENTS. The Cash Portfolio may invest in
Eurodollar and Yankee Dollar instruments. Eurodollar instruments are bonds of
foreign corporate and government issuers that pay interest and principal in
U.S. dollars held in banks outside the United States, primarily in Europe.
Yankee Dollar instruments are U.S. dollar denominated bonds typically issued
in the U.S. by foreign governments and their agencies and foreign banks and
corporations.
LOAN PARTICIPATIONS. The Cash Portfolio may invest in loan participations,
which represent a participation in a corporate loan of a commercial bank.
Such loans must be to corporations in whose obligations the Cash Portfolio
may invest. Since the issuing bank does not guarantee the participations in
any way, they are subject to the credit risks generally associated with the
underlying corporate borrower. It may be necessary under the terms of the
loan participation for the Cash Portfolio to assert through the issuing bank
such rights as may exist against the corporate borrower, in the event the
underlying corporate borrower fails to pay principal and interest when due.
In such circumstances, the Cash Portfolio may be subject to delays, expenses
and risks that are greater than if the Cash Portfolio had purchased a direct
obligation (such as commercial paper) of such borrower. Further, under the
terms of the loan participation, the Cash Portfolio may be regarded as a
creditor of the issuing bank (rather than the underlying corporate borrower),
so that the Cash Portfolio may also be subject to the risk that the issuing
bank may become insolvent. The secondary market for loan participations is
extremely limited, and therefore loan participations purchased by the Cash
Portfolio are generally regarded as illiquid.
MUNICIPAL SECURITIES. The Municipal Portfolio may invest in Municipal
Securities. Municipal Securities are issued by or on behalf of states,
territories and possessions of the U.S. and their political subdivisions,
agencies and instrumentalities to obtain funds for various public purposes.
The interest on these obligations is generally exempt from federal income tax
in the hands of most investors, except for the possible applicability of the
alternative minimum tax. The two principal classifications of municipal
securities are "Notes" and "Bonds." Municipal Notes are generally used to
provide for short-term capital needs and generally have maturities of one
year or less. Municipal Notes include Tax Anticipation Notes; Revenue
Anticipation Notes; Bond Anticipation Notes; and Construction Loan Notes.
Municipal Bonds, which meet longer term capital needs and generally have
maturities of more than one year when issued, have two principal
classifications: "General Obligation" Bonds and "Revenue" Bonds.
REPURCHASE AGREEMENTS. Each Portfolio, other than the Treasury Portfolio and
the Municipal Portfolio, may enter into repurchase agreements, which are
agreements by which a person obtains a security and simultaneously commits to
return the security to the seller at an agreed upon price (including
principal and interest) on an agreed upon date within a number of days from
the date of purchase. In substance, a repurchase agreement is a loan by the
applicable Portfolio collateralized with securities. Such lending Portfolio's
Custodian or its agent will hold the security as collateral for the
repurchase agreement. All repurchase transactions must be collateralized
initially at a value at least equal to 102% of the repurchase price and
counterparties are
-20-
<PAGE>
required to deliver additional collateral in the event the market value of
the collateral falls below 100%. The repurchase transactions entered into by
the Treasury Plus Portfolio and the U.S. Government Portfolio must be
collateralized by securities issued by the U.S. Government.
RESTRICTED AND ILLIQUID SECURITIES. Each Portfolio may invest in illiquid
securities. Illiquid securities are those that are not readily marketable,
repurchase agreements maturing in more than seven days, time deposits with a
notice or demand period of more than seven days and certain restricted
securities. Based upon continuing review of the trading markets for a
specific restricted security, the security may be determined to be eligible
for resale to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933 and, therefore, to be liquid. Also, certain illiquid
securities may be determined to be liquid if they are found to satisfy
certain relevant liquidity requirements.
VARIABLE AND FLOATING RATE INSTRUMENTS. Certain of the obligations purchased
by each Portfolio may carry variable or floating rates of interest and may
include variable amount master demand notes. A floating rate security
provides for the automatic adjustment of its interest rate whenever a
specified interest rate changes. A variable rate security provides for the
automatic establishment of a new interest rate on set dates. Variable and
floating rate instruments may include variable amount master demand notes
that permit the indebtedness thereunder to vary in addition to providing for
periodic adjustments in the interest rate. There may be no active secondary
market with respect to a particular variable or floating rate instrument.
Nevertheless, the periodic readjustments of their interest rates tend to
assure that their value to such Portfolios will approximate their par value.
Further, some of the demand instruments purchased by such Portfolios derive
their liquidity from the ability of the holder to demand repayment from the
issuer or from a third party providing credit support. The creditworthiness
of issuers of variable and floating rate instruments and their ability to
repay principal and interest will be continuously monitored by AAM, M&I and
[ABN AMRO], as applicable.
ZERO COUPON AND DEFERRED PAYMENT SECURITIES. The Cash Portfolio may invest in
zero coupon and deferred payment securities. Zero coupon securities are
securities sold at a discount to par value and on which interest payments are
not made during the life of the security. Upon maturity, the holder is
entitled to receive the par value of the security. A Portfolio is required to
accrue income with respect to these securities prior to the receipt of cash
payments. Because the Cash Series and U.S. Government Series will each
distribute its share of this accrued income to shareholders, to the extent
that the shareholders and shareholders of other mutual funds that invest in
the Cash Portfolio elect to receive dividends in cash rather than reinvesting
such dividends in additional shares, the Cash Portfolio will have fewer
assets with which to purchase income producing securities. Deferred payment
securities are securities that remain zero coupon securities until a
predetermined date, at which time the stated coupon rate becomes effective
and interest becomes payable at regular intervals. The Treasury Portfolio,
the Treasury Plus Portfolio and the U.S. Government Portfolio may invest in
zero coupon treasury securities.
-21-
<PAGE>
MERRIMAC SERIES
MERRIMAC CASH SERIES
MERRIMAC TREASURY SERIES
MERRIMAC TREASURY PLUS SERIES
MERRIMAC U.S. GOVERNMENT SERIES
MERRIMAC MUNICIPAL SERIES
For investors who want more information about the Funds, the following documents
are available free upon request:
- STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Funds and is legally a part of this prospectus.
- ANNUAL/SEMI-ANNUAL REPORTS: The Funds' and the Portfolios' annual and
semi-annual reports provide additional information about the Portfolios'
investments.
You can get free copies of the SAI, the reports, other information and answers
to your questions about the Funds by contacting the Funds' at 1-888-MERRMAC. You
can also view the SAI and receive the reports free from the SEC's Internet
website at http://www.sec.gov.
Information about the Fund (including the SAI) may be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C., or you may obtain copies, upon
payment of a duplicating fee, by writing to the Public Reference Room of the
SEC, Washington, D.C. 20549-0102 or by electronic request at the following
E-mail address: [email protected]. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 202-942-8090.
Distributed by Funds Distributor Inc.
<PAGE>
MERRIMAC SERIES
Merrimac Cash Series
Merrimac Treasury Series
Merrimac Treasury Plus Series
Merrimac U.S. Government Series
Merrimac Municipal Series
STATEMENT OF ADDITIONAL INFORMATION
March 1, 2001
This Statement of Additional Information (the "SAI") is not a Prospectus, but it
relates to the Prospectus of Merrimac Series dated March 1, 2001. Financial
Statements are incorporated by reference into this SAI from the Funds' most
recent Annual Report. You can get a free copy of the Prospectus for the Merrimac
Series or the Funds' most recent annual and semi-annual reports, request other
information and discuss your questions about the Funds by contacting the Funds
at 1-888-MERRMAC.
Information about the Funds' (including the SAI) may be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., or you may obtain copies,
upon payment of a duplicating fee, by writing to the Public Reference Room of
the SEC, Washington, D.C. 20549-0102 or by electronic request at the following
E-mail address: [email protected]. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 202-942-8090. Reports and
other information about the Funds may be obtained on the Commission's Internet
site at HTTP://WWW.SEC.GOV.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Fund History
Description of the Funds, Their
Investments and Risks
Classification
Investment Strategies and Risks
Fund Policies
Management of the Trusts
Control Persons
Investment Advisory and Other Services
Investment Advisers and
Sub-Advisers
Distributor
Distribution and Shareholder Servicing
Plans
Administrator, Transfer Agent,
Custodian and Fund Accountant
Brokerage Allocation and Other Practices
Capital Stock
Purchase, Redemption and Valuation of
Shares
Purchase and Redemption of Shares
Valuation of Shares
Taxation of the Trust
Calculation of Performance Data
Independent Auditors
Counsel
Financial Statements
Appendix
</TABLE>
<PAGE>
FUND HISTORY
This SAI provides information regarding the Merrimac Series (the "Trust") and
five of its funds: Merrimac Cash Series ("Cash Series"), Merrimac Treasury
Series ("Treasury Series"), Merrimac Treasury Plus Series ("Treasury Plus
Series"), Merrimac U.S. Government Series ("U.S. Government Series") and
Merrimac Municipal Series ("Municipal Series") (each, a "Fund" and
collectively, the "Funds").
The Trust is a business trust organized under the laws of the State of
Delaware pursuant to a Master Trust Agreement dated March 30, 1998, as
amended, and registered as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act").
The Merrimac Cash Portfolio ("Cash Portfolio"), the Merrimac Treasury
Portfolio ("Treasury Portfolio"), the Merrimac Treasury Plus Portfolio
("Treasury Plus Portfolio"), the Merrimac U.S. Government Portfolio ("U.S.
Government Portfolio") and the Merrimac Municipal Portfolio ("Municipal
Portfolio") are each a series or sub-trust of the Merrimac Master Portfolio
(the "Portfolio Trust"), a common law trust organized under New York law on
October 30, 1996, registered as an open-end management investment company
under the 1940 Act.
The Cash Portfolio, Treasury Portfolio, Treasury Plus Portfolio, U.S.
Government Portfolio and Municipal Portfolio are collectively referred to as
(the "Portfolios").
This SAI is not a prospectus and is only authorized for distribution when
preceded or accompanied by the Trust's current Prospectus dated March 1, 2001
(the "Prospectus"). This SAI supplements and should be read in conjunction
with the Prospectus, a copy of which may be obtained without charge by
calling 1-888-MERRMAC. This SAI is not an offer of any Fund for which an
investor has not received a Prospectus.
DESCRIPTION OF THE FUNDS, THEIR INVESTMENTS AND RISKS
CLASSIFICATION
Each Fund is a diversified open-end, management investment company and a
separate series of the Trust.
MASTER/FEEDER STRUCTURE. Each Portfolio has the same investment objective and
restrictions as its corresponding Fund. Because the feeder funds invest all
of their investable assets in their corresponding Portfolios, the description
of each Fund's investment policies, techniques, specific investments and
related risks that follows also applies to the corresponding Portfolio. All
five Funds are sometimes referred to in this SAI as feeder funds.
The following are the feeder funds of the Trust and the corresponding master
portfolios of the Portfolio Trust in which each invest.
<TABLE>
<CAPTION>
----------------------------------------- --------------------------------------
FEEDER FUND MASTER PORTFOLIO
----------------------------------------- --------------------------------------
<S> <C>
Cash Series Cash Portfolio
----------------------------------------- --------------------------------------
Treasury Series Treasury Portfolio
----------------------------------------- --------------------------------------
Treasury Plus Series Treasury Plus Portfolio
----------------------------------------- --------------------------------------
U.S. Government Series U.S. Government Portfolio
----------------------------------------- --------------------------------------
2
<PAGE>
Municipal Series Municipal Portfolio
----------------------------------------- --------------------------------------
</TABLE>
In addition to these feeder funds, other feeder funds may invest in these
Portfolios, and information about the other feeder funds is available by
calling 1-888-637-7622. The other feeder funds invest in the Portfolios on
the same terms as the Funds and bear a proportionate share of the Portfolio's
expenses. The other feeder funds may sell shares on different terms and under
a different pricing structure than the Funds, which may produce different
investment results.
There are certain risks associated with an investment in a master-feeder
structure. Large scale redemptions by other feeder funds in a Portfolio may
reduce the diversification of a Portfolio's investments, reduce economies of
scale and increase a Portfolio's operating expenses. If the Portfolio Trust's
Board of Trustees approves a change to the investment objective of a
Portfolio that is not approved by the Trust's Board of Trustees, a Fund would
be required to withdraw its investment in the Portfolio and engage the
services of an investment adviser or find a substitute master fund.
Withdrawal of a fund's interest in its Portfolio, which may be required by
the Trust's Board of Trustees without shareholder approval, might cause the
fund to incur expenses it would not otherwise be required to pay.
INVESTMENT STRATEGIES AND RISKS
The money market instruments in which the Cash Portfolio invest include
short-term U.S. Government securities (defined below), commercial paper
(promissory notes issued by corporations to finance their short-term credit
needs), negotiable certificates of deposit, non-negotiable fixed time
deposits, bankers' acceptances and repurchase agreements. The Treasury
Portfolio invests only in direct obligations of the U.S. Treasury and the
Treasury Plus Portfolio invests substantially all of its assets in direct
obligations of the U.S. Treasury in U.S. Government Securities (defined
below) and in repurchase agreements. The U.S. Government Portfolio invests
substantially all of its assets in short-term U.S. Government Securities and
in repurchase agreements. The Municipal Portfolio invests in high quality
money market instruments issued by municipalities and other issuers. The
Municipal Series may take a temporary defensive position when its Sub-adviser
determines that market conditions warrant. During these times the Fund may
not be pursuing its investments goals or achieving its investment objective
and may have up to 100% of its assets in cash or money market instruments
that produce Federally taxable income.
MATURITY AND DURATION.
Each of the Portfolios has a policy of investing in instruments with
maturities of 397 days or less. For purposes of complying with this policy,
each Portfolio will determine the maturity of an instrument in accordance
with the requirements of Rule 2a-7 under the 1940 Act. Rule 2a-7 permits each
Portfolio to shorten the maturity of a particular instrument in circumstances
in which the instrument is subject to certain types of demand features or
interest-rate reset provisions.
EXCHANGE COMMERCIAL NOTES ("ECNS"). The Cash Portfolio may invest in ECNs.
ECNs are short-term (90 days or less) securities that automatically extend to
a 390-day maximum maturity if the issuer does not redeem the ECNs on the
Initial Redemption Date (the equivalent of a commercial paper maturity). The
extension feature substitutes for bank back-up. Investors receive a premium
for giving the issuer the option to extend the maturity. However, investors
receive a sizeable additional premium if the maturity is extended. ECNs carry
the same credit rating(s) as the issuer's commercial paper.
3
<PAGE>
FUNDING AGREEMENTS. The Cash Portfolio may invest in funding agreements. A
funding agreement is, in substance, an obligation of indebtedness negotiated
privately between an investor and an insurance company. Funding agreements
often have maturity-shortening features, such as an unconditional put, that
permit the investor to require the insurance company to return the principal
amount of the funding agreement, together with accrued interest, within one
year or less. Most funding agreements are not transferable by the investor
and, therefore, are illiquid, except to the extent the funding agreement is
subject to a demand feature of seven days or less. An insurance company may
be subject to special protections under state insurance laws, which
protections may impair the ability of the investor to require prompt
performance by the insurance company of its payment obligations under the
funding agreement.
MUNICIPAL SECURITIES. The Municipal Portfolio may invest in municipal
securities. Municipal securities consist of (i) debt obligations issued by or
on behalf of public authorities to obtain funds to be used for various public
facilities, for refunding outstanding obligations, for general operating
expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development
bonds issued by or on behalf of public authorities to obtain funds to provide
for the construction, equipment, repair, or improvement of privately operated
facilities. General obligation bonds are backed by the taxing power of the
issuing municipality. Revenue bonds are backed by the revenues of a project
or facility; tolls from a toll bridge for example. The payment of principal
and interest on private activity and industrial development bonds generally
is dependent solely on the ability of the facility's user to meet its
financial obligations and the pledge, if any, of real and personal property
so financed as security for such payment. Municipal securities include both
municipal notes and municipal bonds. Municipal notes include general
obligation notes, tax anticipation notes, revenue anticipation notes, bond
anticipation notes, certificates of indebtedness, demand notes, and
construction loan notes.
MUNICIPAL BONDS. The Municipal Portfolio may invest in Municipal bonds.
Municipal bonds include general obligation bonds, revenue or special
obligation bonds, private activity and industrial development bonds. A Fund's
investments in any of the notes described above is limited to those
obligations (i) rated in the highest two rating categories by an NRSRO or
(ii) if not rated, of equivalent quality in the Advisor's judgment. Municipal
bonds must be rated in the highest four rating categories by an NRSRO at the
time of investment or, if unrated, must be deemed by the Sub-adviser of the
Municipal Portfolio to have essentially the same characteristics and quality
as bonds rated in the above rating categories. The Portfolio may purchase
industrial development and pollution control bonds. These bonds are issued by
or on behalf of public authorities to raise money to finance various
privately-operated facilities for business and manufacturing, housing,
sports, and pollution control. These bonds are also used to finance public
facilities such as airports, mass transit systems, ports and parking
facilities. The payment of the principal and interest on such bonds is
dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property so financed
as security for such payment.
REPURCHASE AGREEMENTS. Each Portfolio except the Treasury Portfolio and the
Municipal Portfolio may invest in repurchase agreements. A repurchase
agreement is an agreement under which a Portfolio acquires money market
instruments (generally U.S. Government Securities) from a commercial bank,
broker or dealer, subject to resale to the seller at an agreed-upon price and
date (normally the next business day). The resale price reflects an
agreed-upon interest rate effective for the period the instruments are held
by a Portfolio and is unrelated to the interest rate on the instruments. The
instruments acquired by a Portfolio (including accrued interest) must have an
aggregate market value in excess of the resale price and will be held by the
custodian bank for the Portfolio until they are repurchased. The Board of
Trustees of the Portfolio Trust will monitor the standards that the
investment adviser or sub-adviser will use in reviewing the creditworthiness
of any
4
<PAGE>
party to a repurchase agreement with a Portfolio. See "Investment Advisory
Services" for information regarding the investment adviser and sub-adviser.
The use of repurchase agreements involves certain risks. For example, if the
seller defaults on its obligation to repurchase the instruments acquired by a
Portfolio at a time when their market value has declined, a Portfolio may
incur a loss. If the seller becomes insolvent or subject to liquidation or
reorganization under bankruptcy or other laws, a court may determine that the
instruments acquired by a Portfolio are collateral for a loan by a Portfolio
and therefore are subject to sale by the trustee in bankruptcy. Finally, it
is possible that a Portfolio may not be able to substantiate its interest in
the instruments it acquires. It is expected that these risks can be
controlled through careful documentation and monitoring.
SECURITIES LENDING. Each Portfolio may lend up to 33 1/3% of its portfolio of
securities pursuant to agreements requiring that the loan be continuously
secured by cash or equivalent collateral or by a letter of credit or bank
guarantee in favor of the Portfolio at least equal at all times to 100% of
the market value plus accrued interest on the securities lent. The Portfolio
will continue to receive interest on the securities lent while simultaneously
seeking to earn interest on the investment of cash collateral. Collateral is
marked to market daily. Loans are subject to termination by the Portfolio or
the borrower at any time and are, therefore, not considered to be illiquid
investments.
U.S. GOVERNMENT SECURITIES. Each Portfolio may invest in U.S. Government
Securities. U.S. Government Securities include securities which are direct
obligations of the U.S. Government backed by the full faith and credit of the
United States, and securities issued by agencies and instrumentalities of the
U.S. Government, which may be guaranteed by the U.S. Treasury or supported by
the issuer's right to borrow from the U.S. Treasury or may be backed by the
credit of the federal agency or instrumentality itself. Agencies and
instrumentalities of the U.S. Government include, but are not limited to,
Federal Land Banks, the Federal Farm Credit Bank, the Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Home Loan Banks and
the Federal National Mortgage Association ("FNMA").
"WHEN-ISSUED" AND "DELAYED DELIVERY" SECURITIES. Each Portfolio may invest in
securities purchased on a "when-issued" or "delayed delivery" basis. Delivery
and payment for securities purchased on a when-issued or delayed delivery
basis will normally take place 15 to 45 days after the date of the
transaction. The payment obligation and interest rate on the securities are
fixed at the time that a Portfolio enters into the commitment, but interest
will not accrue to a Portfolio until delivery of and payment for the
securities. Although each such Portfolio will only make commitments to
purchase "when-issued" and "delayed delivery" securities with the intention
of actually acquiring the securities, each such Portfolio may sell the
securities before the settlement date if deemed advisable by their investment
adviser or sub-adviser. The Cash, Treasury, Treasury Plus and U.S. Government
Portfolios may, with respect to up to 25% of their total assets, enter into
contracts to purchase securities for a fixed price at a future date beyond
customary settlement time.
Unless the Portfolios have entered into an offsetting agreement to sell the
securities purchased on a "when-issued" or "forward commitment" basis, cash
or liquid obligations with a market value equal to the amount of a
Portfolio's commitment will be segregated with a Portfolio's custodian bank.
If the market value of these securities declines, additional cash or
securities will be segregated daily so that the aggregate market value of the
segregated securities equals the amount of a Portfolio's commitment.
Securities purchased on a "when-issued" and "delayed delivery" basis may have
a market value on delivery which is less than the amount paid by a Portfolio.
Changes in market value may be based upon
5
<PAGE>
the public's perception of the creditworthiness of the issuer or changes in
the level of interest rates. Generally, the value of "when-issued," "delayed
delivery" and "forward commitment" securities will fluctuate inversely to
changes in interest rates, i.e., they will appreciate in value when interest
rates fall and will decline in value when interest rates rise.
FUND POLICIES
The Funds and the Portfolios have adopted the following fundamental policies.
Each of the Fund's and Portfolio's fundamental policies cannot be changed
unless the change is approved by a "vote of the outstanding voting
securities" of a Fund or a Portfolio, as the case may be, which phrase as
used herein means the lesser of (i) 67% or more of the voting securities of a
Fund or Portfolio present at a meeting, if the holders of more than 50% of
the outstanding voting securities of a Fund or Portfolio are present or
represented by proxy, or (ii) more than 50% of the outstanding voting
securities of a Fund or Portfolio.
As a matter of fundamental policy, each Portfolio (Fund), may not:
(1) purchase any securities that would cause more than 25% of the total
assets of the Portfolio at the time of such purchase to be invested in
securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation
with respect to U.S. Government Securities or (for the Cash Portfolio
(Series), the Treasury Plus Portfolio (Series) and the U.S. Government
Portfolio (Series) bank obligations or repurchase agreements
collateralized by any of such obligations as applicable; and for the
Municipal Portfolio (Series) there is no investment limitation with
respect to (i) U.S. Government Securities or its agencies and
instrumentalities or in repurchase agreements involving such
securities; (ii) obligations issued by domestic branches of U.S. banks
or U.S. branches of foreign banks subject to the same regulations as
U.S. banks; or (iii) tax-exempt securities issued by government or
political subdivisions of governments.;
(2) borrow money, except as a temporary measure for extraordinary or
emergency purposes or to facilitate redemptions, provided that
borrowing does not exceed an amount equal to 33 1/3% of the current
value of the Portfolio's assets taken at market value, less
liabilities, other than borrowings;
(3) purchase securities on margin (except for delayed delivery or
when-issued transactions or such short-term credits as are necessary
for the clearance of transactions);
(4) make loans to any person or firm; provided, however, that the
making of a loan shall not include entering into repurchase agreements,
and provided further that a Portfolio may lend its portfolio securities
to broker-dealers or other institutional investors if the aggregate
value of all securities loaned does not exceed 33 1/3% of the value of
a Portfolio's total assets;
(5) engage in the business of underwriting the securities issued by
others, except that a Portfolio will not be deemed to be engaging in
the business of underwriting with respect to the purchase or sale of
securities subject to legal or contractual restrictions on disposition;
(6) issue senior securities, except as permitted by its investment
objective, policies and restrictions, and except as permitted by the
1940 Act; and
6
<PAGE>
(7) purchase or sell real estate, commodities, or commodity contracts
unless acquired as a result of ownership of securities, and provided
further that a Portfolio may invest in securities backed by real estate
and in financial futures contracts and options thereon.
If any percentage restriction described above for the relevant Portfolio (Fund),
is adhered to at the time of investment, a subsequent increase or decrease in
the percentage resulting from a change in the net assets of the Portfolios
(Fund) will not constitute a violation of the restriction. The above
restrictions also apply to each Fund, with the exception that a Fund may invest
all of its investable assets without limitation in its respective Portfolio.
MANAGEMENT OF THE TRUSTS
BOARD OF TRUSTEES
Overall responsibility for management and supervision of the Trust and the
Funds rests with the Board of Trustees. The Trustees approve all significant
agreements between the Trust and the persons and companies that furnish
services to the Trust or the Funds, including agreements with its
distributor, custodian, transfer agent, investment adviser, sub-adviser and
administrator. The day-to-day operations of the Funds are delegated to their
Sub-Adviser. The SAI contains background information regarding each of the
Trustees and executive officers of the Trust.
TRUSTEES AND OFFICERS. The names, addresses, dates of birth and principal
occupation(s) during the last five years of the Trustees and officers of the
Trust and the Portfolio Trust are listed below. The business address of the
Trustees and officers of the Trust and the Portfolio Trust is 200 Clarendon
Street, Boston, Massachusetts 02116.
TRUSTEES AND OFFICERS OF THE TRUST
KEVIN J. SHEEHAN, TRUSTEE*, 6/22/51, Director 1990 - present, President June
1992 - present, Chairman and Chief Executive Officer June 1995 - present,
Investors Bank & Trust Company, Chairman and Chief Executive Officer June
1995 -present, Investors Financial Services Corp.
FRANCIS J. GAUL, JR., TRUSTEE, 9/25/43, Private Investor July 1998 - present,
Director and Principal, Triad Investment Management Company June 1997 - June
1998, Vice President, Triad Investment Management Company (Registered
Investment Adviser) July 1996 - May 1997, Vice President & Resident Manager,
Goldman Sachs & Co. (Investment Banking & Institutional Sales) June 1993 -
January 1995.
EDWARD F. HINES, JR., TRUSTEE, 9/5/45, Partner 1977 - present, Choate, Hall &
Stewart.
THOMAS E. SINTON, TRUSTEE, 8/26/32, Retired, Managing Director, Corporate
Accounting Policy, April 1993 - October 1996 and Consultant, January 1993
-March 1996, Bankers Trust Company.
GEORGE A. RIO, PRESIDENT, 1/2/55, Executive Vice President, Client Service
Director of Funds Distributor, Inc., April 1998 - present; Senior Vice
President, Senior Key Account Manager for Putnam Mutual Funds, June 1995 -
March 1998; Director of Business Development for First Data Corporation, May
1994 -June 1995; Senior Vice President, Manager of Client Services and
Director of Internal Audit at The Boston Company, September 1983 - May 1994.
7
<PAGE>
PAUL J. JASINSKI, TREASURER AND CHIEF FINANCIAL OFFICER, 2/17/47, Managing
Director, Investors Bank & Trust Company, 1990 - present.
JOHN F. PYNE, VICE PRESIDENT AND ASSISTANT TREASURER, 7/22/68, Manager,
Investors Bank & Trust Company 2000 - present. Assistant Treasurer, State
Street Bank 1992 - 2000.
SUSAN C. MOSHER, SECRETARY, 1/29/55, Director, Mutual Fund Administration
-Legal Administration, Investors Bank & Trust Company, 1995 - present.
SANDRA I. MADDEN, ASSISTANT SECRETARY, 8/29/66, Associate Counsel, Mutual
Fund Administration - Legal Administration, Investors Bank & Trust Company,
1999 -present; Associate at Scudder Kemper Investments, Inc. in the Mutual
Fund Administration Group of the Legal Department, 1996-1999.
TRUSTEES AND OFFICERS OF THE PORTFOLIO TRUST
KEVIN J. SHEEHAN, TRUSTEE**, 6/22/51, Director since 1990, President June
1992 -present, Chairman and Chief Executive Officer June 1995 - present,
Investors Bank & Trust Company, Chairman and Chief Executive Officer June
1995 - present, Investors Financial Services Corp.
FRANCIS J. GAUL, JR., TRUSTEE, 9/25/43, Private Investor July 1998 - present,
Director and Principal, Triad Investment Management Company June 1997 - June
1998, Vice President, Triad Investment Management Company (Registered
Investment Adviser) July 1996 - May 1997, Vice President & Resident Manager,
Goldman Sachs & Co. (Investment Banking & Institutional Sales) June 1993 -
January 1995.
EDWARD F. HINES, JR., TRUSTEE, 9/5/45, Partner 1977 - present, Choate, Hall &
Stewart.
THOMAS E. SINTON, TRUSTEE, 8/26/32, Retired, Managing Director, Corporate
Accounting Policy, April 1993 - October 1996 and Consultant, January 1993
-March 1996, Bankers Trust Company.
PAUL J. JASINSKI, PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER, 2/17/47,
Managing Director, Investors Bank & Trust Company, 1990 - present.
JOHN F. PYNE, VICE PRESIDENT AND ASSISTANT TREASURER, 7/22/68, Manager,
Investors Bank & Trust Company 2000 - present. Assistant Treasurer, State
Street Bank 1992 - 2000.
SUSAN C. MOSHER, SECRETARY, 1/29/55, Director, Mutual Fund Administration
-Legal Administration, Investors Bank & Trust Company, 1995.
SANDRA I. MADDEN, ASSISTANT SECRETARY, 8/29/66, Associate Counsel, Mutual
Fund Administration - Legal Administration, Investors Bank & Trust Company,
1999 -present; Associate Counsel at Scudder Kemper Investments, Inc. in the
Mutual Fund Administration Group of the Legal Department, 1996-1999.
* Indicates that the Trustee is an "interested person" of the Trust as
defined in the 1940 Act.
** Indicates that the Trustee is an "interested person" of the Portfolio
Trust as defined in the 1940 Act.
8
<PAGE>
COMPENSATION OF THE TRUSTEES AND OFFICERS. Neither the Trust nor the
Portfolio Trust compensates the Trustees or officers of the Trust and the
Portfolio Trust who are affiliated with Investors Bank or Funds Distributor,
Inc. None of the Trustees or officers of the Trust or the Portfolio Trust
have engaged in any financial transactions with the Trust or the Portfolio
Trust, respectively, during the fiscal year ended December 31, 2000.
The Trustees of the Portfolio Trust are paid an annual retainer of $10,000,
payable in equal quarterly installments, and a $2,500 meeting fee for each
quarterly meeting attended. Each Fund bears its pro rata allocation of
Trustees' fees paid by its corresponding Portfolio to the Trustees of the
Portfolio Trust. The Trustees of the Trust are paid a $1,500 meeting fee for
each quarterly meeting attended. The following table reflects the
compensation paid by the Trust, by the Portfolio Trust and by another related
open-end investment company, to each Trustee for the fiscal period ended
December 31, 2000.
To Be Updated
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation
Compensation Benefits Accrued as From Trust and Fund
Name of Trustee From the Trust Part of Fund's Expenses Complex *
--------------- -------------- ----------------------- ---------
<S> <C> <C> <C>
Kevin J. Sheehan $0 $0 $0
Francis J. Gaul, Jr. $ $0 $
Edward F. Hines, Jr. $ $0 $
Thomas E. Sinton $ $0 $
</TABLE>
*Fund Complex consists of the Trust, the Portfolio Trust, the Merrimac Global
Cash Fund and the Merrimac Funds, comprising [twelve] series as of December 31,
2000.
CONTROL PERSONS
Control is defined by the 1940 Act as the beneficial ownership, either
directly or through one or more controlled companies, of more than 25 percent
of the voting securities of the company. As controlling persons, the Merrimac
Cash Fund, the Merrimac Treasury Series, Merrimac Treasury Plus Series and
the Merrimac U.S. Government Series each may be able to take actions
regarding their corresponding Portfolio without the consent or approval of
other interest holders.
To Be Updated
As of February 1, 2000, the Merrimac Cash Fund beneficially owned
approximately % of the outstanding interests of the Cash Portfolio and
therefore, was deemed to control the Cash Portfolio and the Merrimac Cash
Series beneficially owned approximately % of the outstanding interests of the
Cash Portfolio.
As of February 1, 2000, the Merrimac Treasury Series owned 100% of the
outstanding interests of the Treasury Portfolio and, therefore, was deemed to
control the Treasury Portfolio.
As of February 1, 2000, the Merrimac Treasury Plus Series owned 100% of the
outstanding interests of the Treasury Plus Portfolio and, therefore, was
deemed to control the Treasury Plus Portfolio.
As of February 1, 2000, the Merrimac U.S. Government Series owned 100% of the
outstanding interests of the U.S. Government Portfolio and, therefore, was
deemed to control the U.S. Government Portfolio.
9
<PAGE>
As of February 1, 2000 the Merrimac Municipal Series had not yet commenced
operations.
As of February 1, 2000, Trustees and officers of the Trust owned in the
aggregate less than 1% of any of the Portfolios.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISERS AND SUB-ADVISERS
The Portfolios each retain Investors Bank & Trust Company ("Investors Bank"
or the "Adviser") as their investment adviser. The Investment Adviser
Agreements (the "Adviser Agreements") between Investors Bank and each of the
Portfolios provides that Investors Bank will manage the operations of the
Portfolios, subject to the policies established by the Board of Trustees of
the Trust. Investors Bank also provides office space, facilities, equipment
and personnel necessary to supervise the Portfolios' operations and pays the
compensation of each such Portfolio's officers, employees and directors who
are affiliated with Investors Bank. The Portfolios, each pay Investors Bank a
unitary fee the services provided as Investment Adviser, Administrator,
Custodian, Fund Accountant and Transfer Agent. For a description of the rate
of compensation that the Portfolios pay Investors Bank under the Adviser
Agreements, see "Administrator, Transfer Agent and Fund Accountant" below.
Each Portfolio pays Investors Bank a fee for its services. The fee paid to
Investors Bank by the each of the Portfolios for the fiscal years ending
December 31 are as follows:
<TABLE>
<CAPTION>
---------------------------------- --------------------- ------------------------ ----------------------
PORTFOLIO 1998 1999 2000
---------------------------------- --------------------- ------------------------ ----------------------
<S> <C> <C> <C>
Cash Portfolio $1,760,305* $2,117,982
---------------------------------- --------------------- ------------------------ ----------------------
Treasury Portfolio $98,068 $302,524
---------------------------------- --------------------- ------------------------ ----------------------
Treasury Plus Portfolio N/A $397,835**
---------------------------------- --------------------- ------------------------ ----------------------
U.S. Government Portfolio N/A $123,332
---------------------------------- --------------------- ------------------------ ----------------------
Municipal Portfolio N/A N/A
---------------------------------- --------------------- ------------------------ ----------------------
</TABLE>
* Investors Bank waived $384,213 in fees during the fiscal year ended December
31, 1998.
** For the period January 22, 1999 (commencement of operations) to December
31, 1999
***For the period June 29, 1999 (commencement of operations) to December 31,
1999
Pursuant to Investment Sub-Adviser Agreements, Investors Bank has retained
Allmerica Asset Management, Inc. ("AAM") as sub-adviser to the Cash Portfolio
and the U.S. Government Portfolio. AAM is compensated by Investors Bank at no
additional cost to the Cash Portfolio and the U.S. Government Portfolio.
Subject to the supervision of Investors Bank and of the Portfolio Trust's
Board of Trustees, AAM furnishes to the Cash Portfolio and the U.S.
Government Portfolio investment research, advice and supervision and
determines what securities will be purchased, held or sold by the Cash
Portfolio and the U.S. Government Portfolio. AAM is rendered an annual fee,
computed and paid monthly, based on the average net assets ("ANA") of each of
the Cash Portfolio and the U.S. Government Portfolio according to the
following schedule: 0.09% on the first $500 million in assets; 0.07% on the
next $500 million in assets, and 0.06% on assets exceeding $1 billion.
Prior to September 1, 1998, the Cash Portfolio was advised by The Bank of New
York ("BNY") and was paid an annual fee, computed and paid monthly, based on
0.08% of the ANA of the Cash Portfolio. The amount paid by Investors Bank to
BNY for the period January 1, 1998 to August 31, 1998 was $429,014. The
amount paid by Investors Bank to AAM as sub-adviser to the Cash Portfolio for
the period September
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1, 1998 to December 31, 1998 was $233,588 and for the fiscal years ended
December 31, 1999 and December 31, 2000 was $947,094 and $ , respectively.
The amount paid by Investors Bank to AAM as sub-adviser to the U.S.
Government Portfolio for the period June 29, 1999 (commencement of
operations) to December 31, 1999 and for the fiscal year ended December 31,
2000 was $65,311 and $ , respectively.
Pursuant to Investment Sub-Adviser Agreements, Investors Bank has retained
M&I Investment Management Corp. ("M&I") as sub-adviser to the Treasury
Portfolio and the Treasury Plus Portfolio. M&I is compensated by Investors
Bank at no additional cost to the Treasury Portfolio and the Treasury Plus
Portfolio. Subject to the supervision of Investors Bank and of the Portfolio
Trust's Board of Trustees, M&I furnishes to the Treasury Portfolio and the
Treasury Plus Portfolio investment research, advice and supervision and
determines what securities will be purchased, held or sold by the Treasury
Portfolio and the Treasury Plus Portfolio. M&I is rendered an annual fee,
computed and paid monthly, based on 0.08% of the ANA of each of the Treasury
Portfolio and the Treasury Plus Portfolio. Until January 4, 1999, the
Treasury Portfolio was advised by Aeltus Investment Management, Inc.
("Aeltus") who received fees at the same rate as M&I currently receives. The
amount accrued and paid by Investors Bank to Aeltus for fiscal year ended
1998 was $46,158 and for 1999 was $755. The amount paid by Investors Bank to
M&I as sub-adviser to the Treasury Portfolio for the fiscal year ended
December 31, 1999 and December 31, 2000 was $145,788 and $ , respectively.
The amount paid by Investors Bank to M&I as sub-adviser to the Treasury Plus
Portfolio for the period beginning January 22, 1999 (commencement of
operations) to December 31, 1999 and for the fiscal year ended December 31,
2000 was $183,100 and $ , respectively.
Pursuant to Investment Sub-Adviser Agreements, Investors Bank has retained
ABN AMRO Asset Management (USA) LLC (ABN AMRO) as sub-adviser to the
Municipal Portfolio. ABN AMRO is compensated by Investors Bank at no
additional cost to the Municipal Portfolio. Subject to the supervision of
Investors Bank and of the Portfolio Trust's Board of Trustees, ABN AMRO
furnishes to the Municipal Portfolio investment research, advice and
supervision and determines what securities will be purchased, held or sold by
the Municipal Portfolio. ABN AMRO is rendered an annual fee, computed and
paid monthly, based on the average net assets ("ANA") of the Municipal
Portfolio according to the following schedule: 0.xx% on the first $xx million
in assets.
The Portfolios bear the expenses of their operations other than those
incurred by AAM, M&I or ABN AMRO, respectively. Among the other expenses, the
Portfolios pay share pricing and shareholder servicing fees and expenses;
custodian fees and expenses; legal and auditing fees and expenses; expenses
of shareholder reports; registration and reporting fees and expenses; and the
Portfolio Trust's Trustee fees and expenses.
The Investment Adviser acts as a "manager of managers" for the Portfolios,
and supervises adherence by the Sub-advisers of each Fund's investment
policies and guidelines. The Investment Adviser also recommends the
appointment of additional or replacement Sub-advisers to the Portfolios'
Board of Trustees. The Investment Adviser, the Portfolios' and the Funds'
have jointly requested exemptive relief from the Securities and Exchange
Commission (the "SEC") to permit the Investment Adviser and the Portfolios to
add or terminate Sub-advisers without shareholder approval.
DISTRIBUTOR
Shares of the Funds are continuously distributed by Funds Distributor, Inc.
(the "Distributor") pursuant to a Distribution Agreement with the Trust dated
June 1, 1998. The Distributor makes itself available to receive purchase
orders for the Funds' shares. Pursuant to the Distribution Agreement, the
Distributor has agreed to use its best efforts to obtain orders for the
continuous offering of the Funds' shares. The
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Distributor receives no commissions or other compensation from the Funds for
its services, but receives compensation from Investors Bank for services it
performs in acting as the Funds' Distributor.
The Distributor is registered with the SEC as a broker-dealer and is a member
of the National Association of Securities Dealers. The Distributor is located
at 60 State Street, Suite 1300, Boston, Massachusetts 02109 and is an
indirect wholly-owned subsidiary of Boston Institutional Group, Inc., a
holding company all of whose outstanding shares are owned by key employees.
DISTRIBUTION AND SHAREHOLDER SERVICING PLANS
The Board of Trustees of the Trust has adopted a Plan of Distribution (the
"Distribution Plan") under Rule 12b-1 of the 1940 Act with respect to the
Investment Class of shares of each Fund after having concluded that there is
a reasonable likelihood that the Distribution Plan will benefit the Funds and
their shareholders. The Distribution Plan provides that the Distribution
Agent (defined therein) shall receive a fee from each Fund at an annual rate
not to exceed 0.25% of the average daily net assets of such Fund attributable
to shareholders who are clients of the Distribution Agent, plus reimbursement
of direct out of pocket expenditures incurred in connection with the offer or
sale or shares, including expenses relating to the preparation, printing and
distribution of sales literature and reports.
The Distribution Plan will continue in effect only if such continuance is
specifically approved at least annually by a vote of both a majority of the
Board of Trustees of the Trust and a majority of the Trustees of the Trust
who are not "interested persons" of the Trust (the "Disinterested Trustees").
The Distribution Plan may be terminated with respect to a Fund at any time by
a vote of a majority of the Disinterested Trustees, or by a vote of a
majority of the outstanding voting shares of such Fund.
The Board of Trustees of the Trust have also adopted a Shareholder Servicing
Plan (the "Servicing Plan") with respect to the Institutional Class and the
Investment Class of each Fund after having concluded that there is a
reasonable likelihood that the Servicing Plan will benefit the Funds and
their shareholders. The Servicing Plan provides that the Shareholder
Servicing Agent shall receive a fee from each Fund at an annual rate not to
exceed 0.25% of the average daily net assets of such Fund.
The Servicing Plan will continue in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Board of Trustees of the Trust and a majority of the Qualified Trustees. The
Servicing Plan requires that at least quarterly, the Treasurer of the Trust
provide to the Trustees of the Trust and that the Trustees review a written
report of the amounts expended pursuant to the Servicing Plan and the
purposes for which such expenditures were made. The Servicing Plan further
provides that the selection and nomination of the Trust's Qualified Trustees
is committed to the discretion of the Trust's disinterested Trustees then in
office. The Servicing Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees, or by a vote of a majority of the
outstanding voting shares of such Fund. The Plan may not be amended to
increase materially the amount of a Fund's permitted expenses thereunder
without the approval of a majority of the outstanding voting securities of
the affected Class of such Fund and may not be materially amended in any case
without a vote of the majority of both the Trust's Trustees and the Trust's
Qualified Trustees.
ADMINISTRATOR, TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT
Investors Bank serves as Administrator to the Funds and IBT Trust & Custodial
Services (Ireland) LMTD ("IBT Ireland"), a subsidiary of Investors Bank,
serves as Administrator to the Portfolios. The services provided by Investors
Bank and IBT Ireland include certain accounting, clerical and
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bookkeeping services, Blue Sky (for the Funds only), corporate secretarial
services and assistance in the preparation and filing of tax returns and
reports to shareholders and the SEC.
Investors Bank also serves as transfer and dividend paying agent for the
Funds and IBT Fund Services (Canada) Inc., ("IBT Canada") a subsidiary of
Investors Bank, serves as transfer and dividend paying agent for the
Portfolios. As transfer agent, Investors Bank is responsible for the
issuance, transfer and redemption of interests, the establishment and
maintenance of accounts and the payment of distributions for each Fund and
IBT Canada is responsible for maintaining records of holders in interest and
for the payment of distributions for each Portfolio.
Investors Bank also acts as custodian for the Funds and for the Portfolios.
As custodian, Investors Bank holds cash, securities and other assets of the
Funds and the Portfolios as required by the 1940 Act. IBT Canada also serves
as fund accounting agent for the Funds and the Portfolios. As fund accounting
agent, IBT Canada performs certain accounting, clerical and bookkeeping
services, and the daily calculation of net asset value for each Fund and
Portfolio.
For its services as Investment Adviser, Administrator, Transfer Agent,
Custodian and Fund Accounting Agent, the Cash Portfolio, the Treasury
Portfolio, the Treasury Plus Portfolio and the U.S. Government Portfolio each
pay Investors Bank an aggregate fee, which is calculated daily and paid
monthly, at an annual rate of 0.17% of the ANA of such Portfolio, and the
Municipal Portfolio pays an aggregate fee, which is calculated daily and paid
monthly, at an annual rate of 0.XX% of its ANA. For its services as
Administrator, Transfer Agent, Custodian and Fund Accounting Agent, the Funds
each pay Investors Bank an aggregate fee, which is calculated daily and paid
monthly, at an annual rate of 0.01% of ANA of such Fund.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Purchases and sales of securities for the Portfolios usually are principal
transactions. Securities are normally purchased directly from the issuer or
from an underwriter or market maker for the securities. There usually are no
brokerage commissions paid for such purchases. The Portfolios do not
anticipate paying brokerage commissions. Any transaction for which the
Portfolios pay a brokerage commission will be effected at the best price and
execution available. Purchases from underwriters of securities 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 price.
Allocations of transactions, including their frequency, to various dealers is
determined by the respective Sub-Advisers in their best judgment and in a
manner deemed to be in the best interest of each of the Funds and the other
investors in the Portfolios rather than by any formula. The primary
consideration is prompt execution of orders in an effective manner at the
most favorable price.
Investment decisions for the Portfolios will be made independently from those
for any other account or investment company that is or may in the future
become managed by the Sub-Advisers. If, however, the Portfolios and other
accounts managed by its Sub-Adviser are contemporaneously engaged in the
purchase or sale of the same security, the transactions may be averaged as to
price and allocated equitably to each account. In some cases, this policy
might adversely affect the price paid or received by a Portfolio or the size
of the position obtainable for that Portfolio. In addition, when purchases or
sales of the same security for a Portfolio and for other accounts managed by
their Sub-Adviser occur contemporaneously, the purchase or sale orders may be
aggregated in order to obtain any price advantages available to large
denomination purchases or sales.
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CAPITAL STOCK
Under the Master Trust Agreement, the Trustees of the Trust have authority to
issue an unlimited number of shares of beneficial interest, par value $0.001
per share, of each Fund. The Master Trust Agreement authorizes the Board of
Trustees to divide the shares into any number of classes or series, each
class or series having such designations, powers, preferences, rights,
qualifications, limitations and restrictions, as shall be determined by the
Board subject to the 1940 Act and other applicable law. The shares of any
such additional classes or series might therefore differ from the shares of
the present class and series of capital stock and from each other as to
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of
redemption, subject to applicable law, and might thus be superior or inferior
to the other classes or series in various characteristics.
The Trust generally is not required to hold meetings of its shareholders.
Under the Master Trust Agreement, however, shareholder meetings will be held
in connection with the following matters: (1) the election or removal of
Trustees if a meeting is called for such purpose; (2) the adoption of any
investment advisory contract; (3) any amendment of the Master Trust Agreement
(other than amendments changing the name of the Trust, supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision thereof); and (4) such additional matters
as may be required by law, the Master Trust Agreement, the By-laws of the
Trust or any registration of the Trust with the SEC or any state, or as the
Trust's 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 or is removed by
a vote of two-thirds of the shares entitled to vote, or a majority of the
Trustees. In accordance with the 1940 Act (i) the Trust 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 (ii) 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. A shareholders' meeting shall be held for
the purpose of voting upon the removal of a Trustee 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 a 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 Trust has undertaken
to disseminate appropriate materials at the expense of the requesting
shareholders.
The Master Trust Agreement 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
Trust 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 Master
Trust Agreement, such as termination or reorganization of the Trust and
certain amendments of the Master Trust Agreement, 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.
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The Master Trust Agreement specifically authorizes the Board of Trustees to
terminate the Trust (or any series Fund thereof) by notice to the
shareholders without shareholder approval. The Board of Trustees may by
amendment to the Master Trust Agreement add to, delete, replace or otherwise
modify any provisions relating to any series or class, provided that before
adopting any such amendment without shareholder approval, the Board of
Trustees determined that it was consistent with the fair and equitable
treatment of all shareholders and, if shares have been issued, shareholder
approval shall be required to adopt any amendments which would adversely
affect to a material degree the rights and preferences of the shares of any
series or class.
Each share of a Fund has equal voting rights with every other share of a
Fund, and all shares of a Fund vote as a single group except where a separate
vote of any class is required by the 1940 Act, the laws of the State of
Delaware, the Master Trust Agreement or the By-Laws, or as the Board may
determine in its sole discretion. Where a separate vote is required with
respect to one or more classes, then the shares of all other classes vote as
a single class, provided that, as to any matter which does not affect the
interest of a particular class, only the holders of shares of the one or more
affected classes is entitled to vote.
Interests in each Portfolio have no preemptive or conversion rights, and are
fully paid and non-assessable, except as set forth in the Prospectus. The
Portfolio Trust normally will not hold meetings of holders of such interests
except as required under the 1940 Act. The Portfolio Trust would be required
to hold a meeting of holders in the event that at any time less than a
majority of its Trustees holding office had been elected by holders. The
Trustees of the Portfolio Trust continue to hold office until their
successors are elected and have qualified. Holders holding a specified
percentage of interests in a Portfolio may call a meeting of holders in such
Portfolio for the purpose of removing any Trustee. A Trustee of the Portfolio
Trust may be removed upon a majority vote of the interests held by holders in
the Portfolio Trust qualified to vote in the election. The 1940 Act requires
the Portfolio Trust to assist its holders in calling such a meeting. Upon
liquidation of a Portfolio, holders in a Portfolio would be entitled to share
pro rata in the net assets of the Portfolio available for distribution to
holders. Each holder in a Portfolio is entitled to a vote in proportion to
its percentage interest in such Portfolio
If at any time a Fund receives notice of a meeting of shareholders of a
Portfolio in which the Fund invests, the Fund will seek instructions from its
shareholders with regard to the voting of the Fund's interests in the
Portfolio and will vote such interests in accordance with such instructions.
Alternatively, the Fund may elect to vote its interests in the Portfolio in
the same proportion as the vote of all other holders of interests in the
Portfolio.
PURCHASE, REDEMPTION AND VALUATION OF SHARES
PURCHASE AND REDEMPTION OF SHARES
Information on how to purchase and redeem shares and the time at which net
asset value of each share is determined is included in the Prospectus.
The Trust may suspend the right to redeem Fund shares or postpone the date of
payment upon redemption for more than seven days (i) for any period during
which the New York Stock Exchange ("NYSE") and the Federal Reserve Bank
("Fed") are closed (other than customary weekend or holiday closings) or
trading on the exchange is restricted; (ii) for any period during which an
emergency exists as a result of which disposal by the Fund of securities
owned by it or determination by the Fund of the value of its net assets is
not reasonably practicable; or (iii) for such other periods as the SEC may
permit for the protection of shareholders of the Fund.
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The Trust intends to pay redemption proceeds in cash for all Fund shares
redeemed. Portfolio securities paid upon redemption of Fund shares will be
valued at their then current market value. An investor may incur brokerage
costs in converting portfolio securities received upon redemption to cash.
The Portfolios have advised the Trust that the Portfolios will not redeem
in-kind except in circumstances in which a Fund is permitted to redeem
in-kind or except in the event a Fund completely withdraws its interest from
a Portfolio.
VALUATION OF SHARES
The following is a description of the procedures used by the Funds in valuing
their assets.
The investment securities in the Portfolios are valued based upon the
amortized cost method which involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides consistency in
valuation, it may result in periods during which the stated value of a
security is higher or lower than the price a Portfolio would receive if the
security were sold. This method of valuation is used in order to stabilize
the NAV of shares of each Fund at $1.00; however, there can be no assurance
that each Fund's NAV will always remain at $1.00 per share.
TAXATION OF THE TRUST
Each Fund is treated as a separate entity for accounting and tax purposes.
Each Fund will elect (when it files its initial federal tax return) to be
treated and to qualify as a "regulated investment company" ("RIC") under
Subchapter M of the Code and intends to continue to so qualify in the future.
As such and by complying with the applicable provisions of the Code regarding
the sources of its income, the timing of its distributions, and the
diversification of its assets, each Fund will not be subject to Federal
income tax on its investment company taxable income (i.e., all taxable
income, after reduction by deductible expenses, other than its "net capital
gain," which is the excess, if any, of its net long-term capital gain over
its net short-term capital loss) and net capital gain which are distributed
to shareholders in accordance with the timing and other requirements of the
Code.
Each Portfolio is treated as a partnership for federal income tax purposes.
As such, a Portfolio is not subject to federal income taxation. Instead, a
Fund must take into account, in computing its federal income tax liability
(if any), its share of the Portfolio's income, gains, losses, deductions,
credits and tax preference items, without regard to whether it has received
any cash distributions from its corresponding Portfolio. Because a Fund
invests its assets in its corresponding Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
in order for its corresponding Fund to satisfy them. Each Portfolio will
allocate at least annually among its investors, each investor's distributive
share of the Portfolio's net investment income, net realized capital gains,
and any other items of income, gain, loss, deduction or credit. A Portfolio
will make allocations to its corresponding Fund in a manner intended to
comply with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Fund to satisfy the tax distribution requirements that apply to
the Fund and that must be satisfied in order to avoid Federal income and/or
excise tax on the Fund. For purposes of applying the requirements of the Code
regarding qualification as a RIC, each Fund will be deemed (i) to own its
proportionate share of each of the assets of its corresponding Portfolio and
(ii) to be entitled to the gross income of the Portfolio attributable to such
share.
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Each Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed)
on a timely basis in accordance with annual minimum distribution
requirements. Each Fund intends under normal circumstances to seek to avoid
liability for such tax by satisfying such distribution requirements. Certain
distributions made in order to satisfy the Code's distribution requirements
may be declared by a Fund during October, November or December but paid
during the following January. Such distributions will be taxable to taxable
shareholders as if received on December 31 of the year the distributions are
declared, rather than the year in which the distributions are received.
At the discretion of the officers of a Fund, each Fund will distribute net
realized capital gains. For federal income tax purposes, a Fund is permitted
to carry forward a net capital loss in any year to offset its own net capital
gains, if any, during the eight years following the year of the loss. To the
extent subsequent net capital gains are offset by such losses, they would not
result in federal income tax liability to a Fund and, as noted above, would
not be distributed as such to shareholders.
If a Portfolio invests in zero coupon securities, certain increasing rate or
deferred interest securities or, in general, other securities with an
original issue discount (or with market discount if an election is in effect
to include market discount in income currently), the Portfolio must accrue
income on such investments prior to the receipt of the corresponding cash
payments. However, the Fund must distribute, at least annually, all or
substantially all of its net income, including its distributive share of such
income accrued by the Portfolio, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, the Portfolio may have to dispose of its portfolio securities
under disadvantageous circumstances to generate cash, or may have to leverage
itself by borrowing the cash, to enable the Fund to satisfy the distribution
requirements.
Distributions from a Fund's current or accumulated earnings and profits
("E&P"), as computed for Federal income tax purposes, will be taxable as
described in the Prospectus whether taken in shares or in cash.
Distributions, if any, in excess of E&P will constitute a return of capital,
which will first reduce an investor's tax basis in Fund shares and thereafter
(after such basis is reduced to zero) will generally give rise to capital
gains. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in
each share so received equal to the amount of cash they would have received
had they elected to receive the distributions in cash, divided by the number
of shares received. As a result of the enactment of the Taxpayer Relief Act
of 1997 (the "1997 TRA") on August 5, 1997, gain recognized after May 6, 1997
from the sale of a capital asset is taxable to individual (noncorporate)
investors at different maximum federal income tax rates, depending generally
upon the tax holding period for the asset, the federal income tax bracket of
the taxpayer, and the dates the asset was acquired and/or sold. The Treasury
Department has issued guidance under the 1997 TRA that (subject to possible
modification by any "technical corrections" that may be enacted) will enable
the Funds to pass through to their shareholders the benefits of the capital
gains tax rates contained in the 1997 TRA. Shareholders should consult their
own tax advisers on the correct application of these new rules in their
particular circumstances.
It is anticipated that, due to the nature of each Portfolio's investments, no
portion of any Fund's distributions will generally qualify for the dividends
received deduction. A Fund's distributions to its corporate shareholders
would potentially qualify in their hands for the corporate dividends received
deduction, subject to certain holding period requirements and limitations on
debt financing under the Code, only to the extent the Fund was allocated
dividend income of its corresponding Portfolio from stock investments in U.S.
domestic corporations.
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Dividends and certain other distributions may be subject to "backup
withholding" of federal income tax at a 31% rate for shareholders who fail to
provide required taxpayer identification numbers or related certifications,
provide incorrect information, or are otherwise subject to such withholding.
Different tax treatment, including penalties on certain excess contributions
and deferrals, certain pre-retirement and post-retirement distributions and
certain prohibited transactions, is accorded to accounts maintained as
qualified retirement plans. Shareholders should consult their tax adviser for
more information.
The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates) subject to tax under
such law. The discussion does not address special tax rules applicable to any
foreign investors (who may be subject to withholding or other taxes) or
certain other classes of investors, such as tax-exempt entities, insurance
companies, and financial institutions. Dividends, capital gain distributions,
and ownership of or gains realized on the redemption (including an exchange)
of Fund shares may also be subject to state and local taxes. A state income
(and possibly local income and/or intangible property) tax exemption is
generally available to the extent, if any, the Fund's distributions are
derived from interest on (or, in the case of intangible property taxes, the
value of its assets is attributable to) investments in certain U.S.
Government Securities, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied.
Shareholders should consult their tax advisers regarding the applicable
requirements in their particular states, including the effect, if any, of the
Fund's indirect ownership (through the Portfolio) of any such obligations,
the Federal, and any other state or local, tax consequences of ownership of
shares of, and receipt of distributions from, the Fund in their particular
circumstances.
Municipal Series intends to qualify to pay "exempt interest dividends" by
satisfying the Code's requirement that at the close of each quarter of its
taxable year at least 50 percent of the value of its total assets consists of
obligations, the interest on which is exempt from Federal income tax. So long
as this and certain other requirements are met, dividends consisting of such
Fund's net tax-exempt interest income will be exempt interest dividends,
which are exempt from federal income tax in the hands of the shareholders of
the Fund, but may have alternative minimum tax consequences.
A Fund may sell securities short "against the box." Under certain
circumstances, these transactions may be treated as constructive sales,
resulting in the recognition of gain to the Fund. The Municipal Series'
interest on indebtedness incurred by a shareholder in order to purchase or
carry shares in the Municipal Series is generally not deductible for federal
income tax purposes to the extent that the Fund distributes exempt-interest
dividends during the taxable year. If a shareholder receives exempt-interest
dividends with respect to the Municipal Series and if such share is held by
the shareholder for six months or less, then any loss on the sale or exchange
of such share will be disallowed to the extent of the amount of
exempt-interest dividends. In addition, the Code may require a shareholder
who receives exempt- interest dividends to treat as taxable income a portion
of certain social security and railroad retirement benefit payments.
Furthermore, entities or persons who are "substantial users" (or persons
related to "substantial users") of facilities financed by "private activity
bonds" or certain industrial development bonds should 59 consult their tax
advisers before purchasing shares in the Municipal Series. For these
purposes, the term "substantial user" is defined generally to include a
"non-exempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of such bonds. Moreover, some or all of
dividends received from the Municipal Series may be a specific preference
item, or a component of an adjustment item, for purposes of the federal
individual and corporate alternative minimum taxes. The receipt of these
exempt-interest dividends and distributions also may affect a foreign
corporate shareholder's federal "branch profits" tax liability, and an S
corporation shareholder's federal excess
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"passive investment income." Shareholders of the Municipal Series should
consult their tax advisers to determine whether any portion of the income
dividends received from the Municipal Series is considered tax exempt in
their particular states. Issuers of bonds purchased by the Municipal Series
(or the beneficiary of such bonds) may have made certain representations or
covenants in connection with the issuance of such bonds to satisfy certain
requirements of the Code that must be satisfied subsequent to the issuance of
such bonds. Shareholders should be aware that exempt-interest dividends may
become subject to federal income taxation retroactively to the date of
issuance of the bonds to which such dividends are attributable if such
representations are determined to have been inaccurate or if the issuers (or
the beneficiary) of the bonds fail to comply with certain covenants made at
that time. Current federal income tax laws limit the types and volume of
bonds qualifying for the federal income tax exemption of interest, which may
have an effect on the ability of the Municipal Series to purchase sufficient
amounts of tax-exempt securities to satisfy the Code's requirements for the
payment of "exempt interest dividends."
CALCULATION OF PERFORMANCE DATA
From time to time, each of the Funds may quote their "yield" and "effective
yield" information in advertisements, reports and other communications to
shareholders and compare their performance figures to those of other funds or
accounts with similar objectives and to relevant indices. Such performance
information will be calculated as described below. Yield quotations are
expressed in annualized terms and may be quoted on a compounded basis.
YIELD
The current yield for the Funds is computed by (a) determining the net change
in the value of a hypothetical pre-existing account in the Fund having a
balance of one share at the beginning of a seven calendar day period for
which yield is to be quoted; (b) dividing the net change by the value of the
account at the beginning of the period to obtain the base period return; and
(c) annualizing the results (i.e., multiplying the base period return by
365/7).
The Funds' 7-day yield for the period ended December 31, 2000, was as follows:
<TABLE>
<CAPTION>
CLASS CASH SERIES TREASURY SERIES TREASURY PLUS SERIES U.S. GOVERNMENT SERIES MUNICIPAL SERIES*
<S> <C> <C> <C> <C> <C>
Premium NA
Institutional NA
Investment NA NA NA NA NA
</TABLE>
* The Municipal Series had not commenced operations as of December 31, 2000.
EFFECTIVE YIELD
In addition, the Funds may calculate a compound effective annualized yield by
determining the net change in the value of a hypothetical pre-existing
account in the Fund having a balance of one share at the beginning of a seven
calendar day period for which yield is to be quoted according to the
following formula:
19
<PAGE>
Effective Yield = [( Base Period return +1 ) (365/7 exponentional power)] -
1 (i.e. adding 1 to the base period return (calculated as described above),
raising the sum to a power equal to 365/7 and subtracting 1.)
The net change in the value of the account reflects the value of additional
shares, but does not include realized gains and losses or unrealized
appreciation and depreciation.
The Funds' 7-day effective yield for the period ended December 31, 2000, was
as follows:
<TABLE>
<CAPTION>
CLASS CASH SERIES TREASURY SERIES TREASURY PLUS SERIES U.S. GOVERNMENT SERIES MUNICIPAL SERIES*
<S> <C> <C> <C> <C> <C>
Premium NA
Institutional NA
Investment NA NA NA NA NA
</TABLE>
* The Municipal Series had not commenced operations as of December 31, 2000.
TAX EQUIVALENT YIELDS
Tax Equivalent yields are computed by dividing that portion of a Fund's yield
which is tax-exempt by one minus a federal and/or state income tax rate and
adding the product to that portion, if any, of the Fund's yield that is not
tax-exempt. Yield = 2[((a-b)/(cd) + 1)/6/ - 1] where a = dividends and
interest earned during the period; b = expenses accrued for the period (net
of reimbursement); c = the current daily number of shares outstanding during
the period that were entitled to receive dividends; and d = the maximum
offering price per share on the last day of the period. The yield of these
Funds fluctuates, and the annualization of a week's dividend is not a
representation by the Trust as to what an investment in the Fund will
actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund
invests in, changes in interest rates on money market instruments, changes in
the expenses of the Fund and other factors.
TOTAL RETURN
The Funds may advertise performance in terms of average annual total return
for 1-, 5-, and 10 year periods, or for such lesser periods as any of such
Funds have been in existence. Average annual total return is computed by
finding the average annual compounded rates of return over the periods that
would equate the initial amount invested to the ending redeemable value,
according the following formula: subtracting the NAV per share at the
beginning of the period from the NAV per share at the end of the period
(after adjusting for the reinvestment of any income dividends and capital
gain distributions), and dividing the result by the NAV per share at the
beginning of the period. In particular, the Funds' average annual total
return ("T") is computed by using the redeemable value at the end of a
specified period of time ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of time ("n") according to the formula P(1+T)n=ERV.
Past performance quotations should not be considered as representative of any
Fund's performance for any specified period in the future. The Funds'
performance may be compared in sales literature to the performance of other
mutual funds having similar objectives or to standardized indices or other
measures of investment performance.
To Be Filed by Amendment
20
<PAGE>
The following are the average annual total returns for the fiscal year ended
December 31, 2000 and since the inception for each Class of the Cash Series
(which is a separate feeder fund that invests all of its assets in the Cash
Portfolio).
<TABLE>
<CAPTION>
------------------------- -------------------------- ----------------------- -----------------------
COMMENCEMENT OF
CASH SERIES DECEMBER 31, 2000 SINCE INCEPTION OPERATIONS
------------------------- -------------------------- ----------------------- -----------------------
<S> <C> <C> <C>
PREMIUM CLASS June 25, 1998
------------------------- -------------------------- ----------------------- -----------------------
INSTITUTIONAL CLASS June 25, 1998
------------------------- -------------------------- ----------------------- -----------------------
INVESTMENT CLASS December xx, 2000
------------------------- -------------------------- ----------------------- -----------------------
</TABLE>
The following are the average annual total returns for the fiscal year ended
December 31, 2000 and since the inception for each Class of the Treasury Series
(which is a separate feeder fund that invests all of its assets in the Treasury
Portfolio).
<TABLE>
<CAPTION>
------------------------- -------------------------- ----------------------- -----------------------
COMMENCEMENT OF
TREASURY SERIES DECEMBER 31, 2000 SINCE INCEPTION OPERATIONS
------------------------- -------------------------- ----------------------- -----------------------
<S> <C> <C> <C>
PREMIUM CLASS February 19, 1999
------------------------- -------------------------- ----------------------- -----------------------
INSTITUTIONAL CLASS June 25, 1998
------------------------- -------------------------- ----------------------- -----------------------
INVESTMENT CLASS December xx, 2000
------------------------- -------------------------- ----------------------- -----------------------
</TABLE>
The following are the average annual total returns for the fiscal year ended
December 31, 2000 and since the inception for each Class of the Treasury Plus
Series (which is a separate feeder fund that invests all of its assets in the
Treasury Plus Portfolio).
<TABLE>
<CAPTION>
------------------------- -------------------------- ----------------------- -----------------------
COMMENCEMENT OF
TREASURY PLUS SERIES DECEMBER 31, 2000 SINCE INCEPTION OPERATIONS
------------------------- -------------------------- ----------------------- -----------------------
<S> <C> <C> <C>
PREMIUM CLASS May 1, 2000
------------------------- -------------------------- ----------------------- -----------------------
INSTITUTIONAL CLASS January 22, 1999
------------------------- -------------------------- ----------------------- -----------------------
INVESTMENT CLASS December xx, 2000
------------------------- -------------------------- ----------------------- -----------------------
</TABLE>
The following are the average annual total returns for the fiscal year ended
December 31, 2000 and since the inception for each Class of the U.S. Government
Series (which is a separate feeder fund that invests all of its assets in the
U.S. Government Portfolio).
<TABLE>
<CAPTION>
------------------------- -------------------------- ----------------------- -----------------------
COMMENCEMENT OF
U.S. GOVERNMENT SERIES DECEMBER 31, 2000 SINCE INCEPTION OPERATIONS
------------------------- -------------------------- ----------------------- -----------------------
<S> <C> <C> <C>
PREMIUM CLASS May 1, 2000
------------------------- -------------------------- ----------------------- -----------------------
INSTITUTIONAL CLASS June 29, 1999
------------------------- -------------------------- ----------------------- -----------------------
INVESTMENT CLASS December xx, 2000
------------------------- -------------------------- ----------------------- -----------------------
</TABLE>
The Municipal Series had not commenced operations as of December 31, 2000.
21
<PAGE>
Each Fund's performance will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and its operating
expenses. As described above, total return is based on historical earnings
and is not intended to indicate future performance. Consequently, any given
performance quotation should not be considered as representative of a Fund's
performance for any specified period in the future. Performance information
may be useful as a basis for comparison with other investment alternatives.
However, a Fund's performance will fluctuate, unlike certain bank deposits or
other investments which pay a fixed yield for a stated period of time.
INDEPENDENT AUDITORS
Ernst & Young LLP serves as the independent auditors to the Trust and the
Portfolio Trust.
COUNSEL
Goodwin, Procter & Hoar LLP serves as counsel to the Trust and the Portfolio
Trust.
FINANCIAL STATEMENTS
The Cash Series, Treasury Series, Treaury Plus Series and U.S. Government
Series financial statements contained in the 2000 Annual Reports of the
Merrimac Series' have been audited by Ernst & Young LLP, independent
auditors, and are incorporated by reference into this SAI. Copies of the
Merrimac Series 2000 Annual Report may be obtained by calling 1-888-MERRMAC.
22
<PAGE>
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of short-term debt ratings have been published by
Standard & Poor's Ratings Service ("Standard & Poor's"), Moody's Investors
Service ("Moody's"), Fitch's IBCA Investors Service ("Fitch"), and Duff and
Phelps ("Duff"), respectively. These obligations have an original maturity
not exceeding thirteen months, unless explicitly noted.
A -- Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market. Commercial paper issues rated A-1 by Standard & Poor's reflect a very
strong degree of safety of timely payment. Commercial paper issues rated A-2
reflect a strong degree of safety of timely payment but not as strong as for
issues designated A-1.
Commercial paper issues rated Prime-1 by Moody's are judged by Moody's to be
of the "highest" quality on the basis of relative repayment capacity with a
superior ability for repayment of senior short-term debt obligations.
Commercial paper issues rated Prime-2 are judged by Moody's to be of the
"second highest" quality with a strong ability for repayment of senior
short-term debt obligations.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned
by Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. Commercial paper issues rated Fitch-2 are
regarded as having only a slightly less assurance of timely payment than
those issues rated Fitch-1.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
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. The rating Duff-2 is regarded as having
good certainty of timely payment with sound liquidity factors supported by
good asset protection. Risk factors are small.
DESCRIPTION OF LONG-TERM DEBT RATINGS
The following is a description of Moody's debt instrument (corporate and
municipal debt) ratings:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification. The modifier 1 indicates that the obligation ranks in the
higher end of its generic rating category; the modifier 2 indicates
23
<PAGE>
a midrange ranking; and the modifier 3 indicates a ranking in the lower end
of that generic rating category.
The following is a description of Standard & Poor's debt instrument
(corporate and municipal debt) ratings:
Standard & Poor's ratings are based, in varying degrees, on the following
considerations: (i) the likelihood of default -- capacity and willingness of
the obligor as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligations; (ii) the nature of and
provisions of the obligation; and (iii) the protection afforded by, and
relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other
laws affecting creditors' rights.
AAA -- Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
Plus (+) or minus (-): The ratings may be modified by the addition of a plus
or minus sign to show relative standing within the major rating categories.
BANK WATCH LONG-TERM DEBT RATINGS
The following is a description of Thomson Bank Watch's debt instrument
ratings:
Long-Term Debt Ratings assigned by THOMSON BANK WATCH ALSO WEIGH HEAVILY
GOVERNMENT OWNERSHIP AND SUPPORT. The quality of both the company's
management and franchise are of even greater importance in the Long-Term Debt
Rating decisions. Long-Term Debt Ratings look out over a cycle and are not
adjusted frequently for what is believed to be short-term performance
aberrations.
Long-Term Debt Ratings can be restricted to local currency debt - ratings
will be identified by the designation LC. In addition, Long-Term Debt Ratings
may include a plus (+) or minus (-) to indicate where within the category the
issue is placed. BANK WATCH Long-Term Debt Ratings are based on the following
scale:
INVESTMENT GRADE
AAA LC-AAA
Indicates that the ability to repay principal and interest on a timely
basis is extremely high.
AA LC-AA
Indicates a very strong ability to repay principal and interest on a
timely basis, within limited incremental risk compared to issues rated
in the highest category.
A LC-A
Indicates the ability to repay principal and interest is strong. Issues
rated A could be more vulnerable to adverse developments (both internal
and external) than obligations with higher ratings.
24
<PAGE>
BBB LC-BBB
The lowest investment-grade category; indicates an acceptable capacity
to repay principal and interest. BBB issues are more vulnerable to
adverse developments (both internal and external) than obligations with
higher ratings.
NON-INVESTMENT GRADE - MAY BE SPECULATIVE IN THE LIKELIHOOD OF TIMELY
REPAYMENT OF PRINCIPAL AND INTEREST.
BB LC-BB
While not investment grade, the BB rating suggests that the likelihood
of default is considerably less than for lower-rated issues. However,
there are significant uncertainties that could affect the ability to
adequately service debt obligations.
B LC-B
Issues rated B show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues. Adverse
developments could negatively affect the payment of interest and
principal on a timely basis.
CCC LC-CCC
Issues rated CCC clearly have a high likelihood of default, with little
capacity to address further adverse changes in financial circumstances.
CC LC-CC
CC is applied to issues that are subordinate to other obligations rated
CCC and are afforded less protection in the event of bankruptcy or
reorganization.
D LC-D
Default
SHORT TERM MUNICIPAL LOANS.
S&P's highest rating for short-term municipal loans is SP-1. S&P states that
short-term municipal securities bearing the SP-1 designation have a strong
capacity to pay principal and interest. Those issues rated SP-1 which are
determined to possess a very strong capacity to pay debt service will be
given a plus (+) designation. Issues rated SP-2 have satisfactory capacity to
pay principal and interest with some vulnerability to adverse financial and
economic changes over the term of the notes.
Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1 are of
the best quality, enjoying strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2 designation
are of high quality, with margins of protection ample although not so large
as in the MIG/VMIG-1 group.
BANK WATCH SHORT-TERM DEBT RATINGS
The following is a description of Thomson Bank Watch's debt instrument
ratings:
25
<PAGE>
THOMSON BANK WATCH ratings represent an assessment of the likelihood of an
untimely payment of principal and interest. Important factors that may
influence this assessment are the overall financial health of the particular
company, and the probability that the government will come to the aid of a
troubled institution in order to avoid a default or failure. The probability
of government intervention stems from four primary factors:
- Government Guarantees
- Government Or Quasi-Government Ownership Or Control
- The Degree Of Concentration In The Banking System
- Government Precedent
As with the Issuer Ratings, the Short-Term Debt Ratings incorporate both
qualitative and quantitative factors. The ratings are not meant to be
"pass/fail" but rather to provide a relative indication of creditworthiness.
Therefore, obligations rated TBW-3 are still considered investment-grade.
These Short-Term Debt Ratings can also be restricted to local currency
instruments. In such cases, the ratings will be preceded by the designation
LC for Local Currency. Short-Term Debt Ratings are based on the following
scale and the definitions are:
TBW-1 LC-1
The highest category; indicates a very high likelihood that principal
and interest will be paid on a timely basis.
TBW-2 LC-2
The second-highest category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated TBW-1.
TBW-3 LC-3
The lowest investment-grade category; indicates that while the
obligation is more susceptible to adverse developments (both internal
and external) than those with higher ratings, the capacity to service
principal and interest in a timely fashion is considered adequate.
TBW-4 LC-4
The lowest rating category; this rating is regarded as non-investment
grade and therefore speculative.
26
<PAGE>
27
<PAGE>
PART C
ITEM 23. EXHIBITS:
(a) (1) Master Trust Agreement, effective as of March 30, 1998 (1)
(2) Amendment No. 1 to the Master Trust Agreement (3)
(3) Amendment No. 2 to the Master Trust Agreement (5)
(b) By-Laws (1)
(c) Not Applicable
(d) (1) Investment Adviser Agreement between Merrimac Master Portfolio and
Investors Bank & Trust Company ("Investors Bank")(Cash Portfolio) (1)
(2) Investment Adviser Agreement between Standish, Ayer & Wood Master
Portfolio and Standish, Ayer and Wood, Inc. ("Standish")(STAR
Portfolio) (1)
(3) Investment Adviser Agreement between Merrimac Master Portfolio and
Investors Bank (Treasury Portfolio) (3)
(4) Investment Adviser Agreement between Merrimac Master Portfolio and
Investors Bank (Treasury Plus Portfolio) (4)
(5) Investment Adviser Agreement between Merrimac Master Portfolio and
Investors Bank (U.S. Government Portfolio) (6)
(6) Form of Investment Adviser Agreement between Merrimac Master Portfolio
and Investors Bank (Municipal Portfolio) is filed herein.
(7) Investment Sub-Adviser Agreement between Investors Bank and Allmerica
Asset Management, Inc. (Cash Portfolio) (3)
(8) Investment Sub-Adviser Agreement between Investors Bank and M&I
Investment Management Corp. (Treasury Portfolio) (4)
(9) Investment Sub-Adviser Agreement between Investors Bank and M&I
Investment Management Corp. (Treasury Plus Portfolio) (4)
(10) Investment Sub-Adviser Agreement between Investors Bank and Allmerica
Asset Management, Inc. (U.S. Government Portfolio) (6)
(11) Form of Investment Sub-Adviser Agreement between Investors Bank and ABN
AMRO Asset Management (USA), Inc. (Municipal Portfolio) is filed
herein.
(e) Distribution Agreement between Registrant and Funds Distributor Inc.
("Funds Distributor") (3)
(f) Not Applicable
(g) Custodian Agreement between Registrant and Investors Bank (3)
(h) (1) Administration Agreement between Registrant and Investors Bank (3)
(2) Transfer Agency and Service Agreement between Registrant and Investors
Bank (2)
<PAGE>
(3) Third Party Feeder Fund Agreement among Registrant, Standish, Ayer &
Wood Master Portfolio, Investors Bank and Standish (4)
(4) Agreement between Funds Distributor and Investors Bank (2)
(i) (1) Opinion of Counsel to be filed by amendment.
(j) (1) Consent of Independent Auditors, Ernst & Young LLP to be filed by
amendment.
(2) Consent of Independent Auditors, PricewaterhouseCoopers LLP to be filed
by amendment.
(k) Not Applicable
(l) Purchase Agreement (2)
(m) (1) Shareholder Servicing Plan with respect to Institutional Class Shares
(2)
(2) Shareholder Servicing Plan with respect to Investment Class Shares (2)
(3) Shareholder Servicing Agreement with respect to Institutional Class
Shares (2)
(4) Form of Shareholder Servicing Agreement with respect to Investment
Class Shares (1)
(5) Distribution Plan with respect to Investment Class Shares (2)
(n) None
(o) Multiple Class Expense Allocation Plan (Rule 18f-3) (2)
(1) Incorporated herein by reference to the Registrant's Registration
Statement on Form N-1A filed April 8, 1998 (Accession No.
0001029869-98-000483).
(2) Incorporated herein by reference to the Registrant's Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A filed June
18,1998 (Accession No. 0001029869-98-000820).
(3) Incorporated herein by reference to the Registrant's Post-Effective
Amendment No. 1 to the Registration Statement on Form N-1A filed
October 30, 1998 (Accession No. 0001029869-98-001219).
(4) Incorporated herein by reference to the Registrant's Post-Effective
Amendment No. 2 to the Registration Statement on Form N-1A filed
February 25, 1999 (Accession No. 0000897436-99-000033).
(5) Incorporated herein by reference to the Registrant's Post-Effective
Amendment No. 3 to the Registration Statement on Form N-1A filed March
19, 1999 (Accession No. 0000897436-99-000061).
(6) Incorporated herein by reference to the Registrant's Post-Effective
Amendment No. 4 to the Registration Statement on Form N-1A filed on
April 19, 2000 (Accession No. 0000897436-00-000160).
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST.
As of December 8, 2000, the following shareholders were deemed to be a
"control person" of the Trust as such term is defined in the 1940 Act.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OF PORTFOLIO
-------------- ---------------- OWNERSHIP ------------
---------
<S> <C> <C> <C>
Cash Series - Saturn & Co Direct Ownership
Institutional Class c/o Investors Bank & Trust Co. 95.10%
PO Box 9130 FPG90
Boston, MA 02117
U.S. Government Funds Distributors Inc.
Series - Premium Class 60 State Street Direct Ownership 100%
Suite 1300
Boston, MA 02109
U.S. Government Saturn & Co.
Series - c/o Investors Bank & Trust Co. Direct Ownership 100%
Institutional Class PO Box 9130 FPG90
Boston, MA 02117
Treasury Series - M&I National Trust Company Direct Ownership 56.99%
Premium Class PO Box 1980
West Bend, WI 53095
Treasury Series - Maril & Co. Direct Ownership 41.39%
Premium Class 1000 N. Water Street 14th Flr.
Milwaukee, WI 53202
Treasury Series - Saturn & Co. Direct Ownership 100%
Institutional Class c/o Investors Bank & Trust Co.
PO Box 9130 FPG90
Boston, MA 02117
Treasury Plus Series Miaz & Co. Direct Ownership 70.63%
- Premium Class 1000 N. Water Street 14th Flr.
Milwaukee, WI 53202
Treasury Plus Series Maril & Co. Direct Ownership 29.37%
- Premium Class 1000 N. Water Street 14th Flr.
Milwaukee, WI 53202
Treasury Plus Series - Saturn & Co. Direct Ownership 99.96%
Institutional Class c/o Investors Bank & Trust Co.
PO Box 9130 FPG90
Boston, MA 02117
</TABLE>
ITEM 25. INDEMNIFICATION.
Under Article VI, Section 6.4 of the Registrant's Master Trust Agreement to the
fullest extent permitted by law, the Trust shall indemnify (from the assets of
the Sub-Trust or Sub-Trusts in question) each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise [hereinafter referred to as a "Covered
Person"]) against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be
<PAGE>
or may have been threatened, while in office or thereafter, by reason of being
or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such Covered
Person had acted with willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office (such conduct referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to indemnification may be made
by (i) a final decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the Covered Person was not liable by reason of Disabling
Conduct by (a) a vote of a majority of a quorum of Trustees who are neither
"interested persons" of the Trust as defined in Section 2(a)(19) of the 1940 Act
nor parties to the proceeding, or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time from funds
attributable to the Sub-Trust in question in advance of the final disposition of
any such action, suit or proceeding, provided that the Covered Person shall have
undertaken to repay the amounts so paid to the Sub-Trust in question if it is
ultimately determined that indemnification of such expenses is not authorized
under this Article VI and (i) the Covered Person shall have provided security
for such undertaking, (ii) the Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of a quorum of the
disinterested Trustees who are not a party to the proceeding, or an independent
legal counsel in a written opinion, shall have determined, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Covered Person ultimately will be found entitled to
indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act"), may be permitted to Trustees, officers and
controlling persons of the Trust pursuant to the foregoing provisions, or
otherwise, the Trust has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Trust of expenses incurred or
paid by a Trustee, officer or controlling person of the Trust 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
Trust will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Investors Bank serves as investment adviser to the Merrimac Cash Portfolio, the
Merrimac Treasury Portfolio and the Merrimac Treasury Plus Portfolio. Investors
Bank was organized in 1969 as a Massachusetts-chartered trust company and
provides domestic and global custody, multi-currency accounting, institutional
transfer agency, performance measurement, foreign exchange, securities lending,
mutual fund administration and investment advisory services to a variety of
financial asset managers, including mutual fund complexes, investment advisers,
banks and insurance companies. The business, profession, vocation or employment
of a substantial nature that each director or officer of Investors Bank is or
has been, at any time during the past two fiscal years, engaged in for his own
account or in the capacity of director, officer, employee, partner or trustee,
is as follows:
Business and Other
<TABLE>
<CAPTION>
Positions Within
Name Position with Adviser Last Two Years
---- --------------------- --------------
<S> <C> <C>
Kevin J. Sheehan President & Chief President since June
Executive Officer 1992;Chief Executive
Officer since June 1995
Michael F. Rogers Executive Vice since September 1993
<PAGE>
President
Karen C. Keenan Senior Vice President & Treasurer since
Chief Financial Officer September 1997; and
Treasurer, Senior Vice
President and Chief
Financial Officer since
June 1995
Edmund J. Maroney Senior Vice President -- since July 1991
Technology
Robert D. Mancuso Senior Vice President -- since September 1993
Marketing and Client
Services
David F. Flynn Senior Vice President -- since April 1992
Lending
John E. Henry General Counsel & since January 1997;
Secretary General Counsel &
Assistant Secretary
since February 1996
James M. Oates Director Chairman of IBEX
Capital Markets, LLC
since 1996; Managing
Director of The Wydown
Group 1994-1996
Thomas P. McDermott Director Managing Director of
TPM Associates since
1994
Frank B. Condon Director Chief Executive
Officer & Chairman of
The Woodstock
Corporation from 1993
to April 1997
Phyllis S. Swersky Director President of the
Meltech Group since
1995; President &
Chief Executive
Officer of The NET
Collaborative from
1996 to 1997
Donald G. Friedl Director President of All
Seasons Services from
1986 to January 1997
Robert B. Fraser Director Retired, Formerly,
Chairman of Goodwin,
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.
<PAGE>
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
CDC MPT+ Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Global Funds, Inc.
Dresdner RCM Investment Funds Inc.
GMO Trust
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Nomura Pacific Basin Fund, Inc.
Orbitex Group of Funds
The Saratoga Advantage Trust
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
The Skyline Funds
St. Clair Funds, Inc.
TD Waterhouse Family of Funds, Inc.
TD Waterhouse Trust
Funds Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National Association of
Securities Dealers. Funds Distributor is located at 60 State Street, Suite 1300,
Boston, Massachusetts 02109. Funds Distributor is an indirect wholly-owned
subsidiary of Boston Institutional Group, Inc., a holding company all of whose
outstanding shares are owned by key employees.
(b) The following is a list of the executive officers, directors and
partners of Funds Distributor, Inc.
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Director, President and Chief Executive Officer - Marie E. Connolly
<PAGE>
Director and Executive Vice President - George A. Rio
Executive Vice President and Chief Administrative - Gary S. MacDonald
Officer
Executive Vice President - William S. Nichols
Executive Vice President - Charles W. Carr
Senior Vice President, General Counsel, Chief - Margaret W. Chambers
Compliance Officer, Secretary and Clerk
Senior Vice President and Treasurer - Joseph F. Tower III
Senior Vice President and Chief Financial Officer - William J. Stetter
Senior Vice President, Deputy General Counsel - Christopher J. Kelley
Senior Vice President - Mary A. Nelson
Senior Vice President - Eric A. Liik
Senior Vice President - John Lehning
Senior Vice President - John Prosperi
Chairman and Director - William J. Nutt
</TABLE>
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts and records of the Registrant are located, in whole or in part, at
the office of the Registrant and the locations set forth below. (The Merrimac
Cash Series, the Merrimac Treasury Series, the Merrimac Treasury Plus Series and
the Merrimac U.S. Government Series are collectively referred to as the "Funds"
and the Merrimac Cash Portfolio, the Merrimac Treasury Portfolio, the Merrimac
Treasury Plus Portfolio and the Merrimac U.S. Government Portfolio are
collectively referred to as the "Portfolios").
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
(Investment Adviser to the Merrimac Cash Portfolio, the Merrimac Treasury
Portfolio, the Merrimac Treasury Plus Portfolio and the Merrimac U.S. Government
Portfolio; Administrator and Transfer Agent for the Funds; Custodian for the
Funds and the Portfolios).
Allmerica Asset Management, Inc.
40 Lincoln Street
Worcester, Massachusetts 01653
(Investment Sub-Adviser to the Merrimac Cash Portfolio and the Merrimac U.S.
Government Portfolio)
M&I Investment Management Corp.
1000 North Water Street
Milwaukee, Wisconsin 53202-6629
(Investment Sub-Adviser to the Merrimac Treasury Portfolio and the Merrimac
Treasury Plus Portfolio)
IBT Trust & Custodial Services (Ireland) LMTD
Deloitte & Touche House
29 Earlsfort Terrace
Dublin 2, Ireland
(Administrator to the Portfolios)
IBT Fund Services (Canada) Inc.
1 First Canadian, King Street West
Suite 2800
P.O. Box 231
<PAGE>
Toronto, CA M5X1C8
(Transfer Agent for the Portfolios and Fund Accountant for the Portfolios and
the Funds)
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Not Applicable.
<PAGE>
SIGNATURES
Merrimac Master Portfolio (the "Portfolio Trust") has duly caused this
Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A of
Merrimac Series to be signed on behalf of the Portfolio Trust by the
undersigned, thereto duly authorized on the 15th day of December, 2000.
MERRIMAC MASTER PORTFOLIO
By /s/Paul J. Jasinski
---------------------------------------
Paul J. Jasinski
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 5 to the Registration Statement on Form N-1A of
Merrimac Series has been signed below by the following persons in the capacities
indicated on the 15th day of December, 2000.
/s/Paul J. Jasinski
------------------------------------
Paul J. Jasinski
President, Treasurer and Chief Financial Officer
of the Portfolio Trust
/s/Kevin J. Sheehan
------------------------------------
Kevin J. Sheehan*
Trustee of the Portfolio Trust
/s/Thomas E. Sinton
------------------------------------
Thomas E. Sinton*
Trustee of the Portfolio Trust
/s/Francis J. Gaul, Jr.
------------------------------------
Francis J. Gaul, Jr.*
Trustee of the Portfolio Trust
/s/Edward F. Hines, Jr.
------------------------------------
Edward F. Hines, Jr.*
Trustee of the Portfolio Trust
*By /s/Susan C. Mosher
-------------------------------
Susan C. Mosher
as attorney-in-fact
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, Merrimac Series (the "Trust") has
duly caused this Post-Effective Amendment No. 5 to the Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereto duly authorized
in the City of Boston and Commonwealth of Massachusetts on the 15th day of
December, 2000.
MERRIMAC SERIES
By /s/George A. Rio
---------------------------------------
George A. Rio
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 5 to the Registration Statement on Form N-1A of
Merrimac Series has been signed below by the following persons in the capacities
indicated on the 15th day of December, 2000.
/s/George A. Rio
------------------------------------
George A. Rio
President of the Trust
/s/Paul J. Jasinski
------------------------------------
Paul J. Jasinski
Treasurer and Chief Financial Officer of the Trust
/s/Kevin J. Sheehan
------------------------------------
Kevin J. Sheehan*
Trustee of the Trust
/s/Francis J. Gaul, Jr.
-------------------------------------
Francis J. Gaul, Jr.*
Trustee of the Trust
/s/Edward F. Hines, Jr.
------------------------------------
Edward F. Hines, Jr.*
Trustee of the Trust
/s/Thomas E. Sinton
------------------------------------
Thomas E. Sinton*
Trustee of the Trust
*By /s/Susan C. Mosher
-------------------------------
Susan C. Mosher
as attorney-in-fact
<PAGE>
MERRIMAC SERIES
EXHIBIT INDEX
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<CAPTION>
Exhibit No. Exhibit
<S> <C>
1.d(6) Investment Adviser Agreement
1.d(11) Investment Sub-Adviser Agreement
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