AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1998
FILE NO. 333-____
ICA NO. 811-08877
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No.
Post-Effective Amendment No.
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No.
THE RAMIREZ TRUST
(Exact Name of Registrant as Specified in Charter)
61 Broadway
New York, New York 10006
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 248-0500
Alex Vermitsky
61 Broadway
New York, New York 10006
(Name and Address of Agent for Service)
Copies to:
Peter J. O'Rourke, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Approximate date of proposed public offering: As soon as practicable
after this registration statement becomes effective.
---------------------------------------------------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
THE RAMIREZ TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Ramirez Cash Management Money Market Fund
Ramirez New York Tax-Free Money Market Fund
Form N-1A
Item Number
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Part A Prospectus Caption
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1. Cover Page
2. Fund Expenses
3. *
4. Organization and Description of Shares of the Trust;
Investment Objective and Policies; Risks
5.(a)(b)(c) Management of the Trust; Investment Advisor
(d) Distribution Plans
(e) Custodian, Transfer Agent and Dividend Paying Agent
(f) Investment Advisor and Investment Advisory Agreement(s)
(g) Brokerage Allocation
5A Performance Calculation
6.(a) Organization and Description of Shares of the Trust
(b) Investment Advisor and Investment Advisory Agreement(s)
(c) Organization and Description of Shares of the Trust
(d) Purchase of Shares; Redemption of Shares
(e) Cover Page
(f)(g) Dividends and Tax Matters
7.(a)(b) Purchase of Shares
(c) Purchase of Shares
(d) Purchase of Shares
(e) *
(f) Distribution Plan
8. Redemption of Shares
9. *
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<PAGE>
Part B Statement of Additional Information Caption
- ------ -------------------------------------------
10. Cover Page
11. Table of Contents
12. *
13. Investment Objectives and Policies; Additional Information
on Portfolio Instruments; Additional Investment Limitations
Restrictions
14. Management
15. General Information
16.(a)(b) Management of the Trust; Investment Advisor and Investment
Advisory Agreements
(c) *
(d) *
(e) *
(f) Distribution Plans
(g) *
(h) See Prospectus
(i) *
17.(a) Portfolio Transactions
(b) *
(c) Portfolio Transactions
(d) *
(e) *
18. General Information
19.(a) Additional Purchase and Redemption Information
(b) Net Asset Value
(c) *
20. Tax Matters
21. Distribution Plans
22. Yield and Other Performance Calculation
23. Financial Statements
Part C Information required to be included in Part C is set forth under
- ------ the appropriate Item, so numbered, in Part C to this Registration
Statement.
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* Not Applicable
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<PAGE>
SUBJECT TO COMPLETION, DATED JULY 14, 1998
THE RAMIREZ TRUST
61 BROADWAY
NEW YORK, NEW YORK 10006
800-___-____
RAMIREZ CASH MANAGEMENT MONEY MARKET FUND
RAMIREZ NEW YORK TAX-FREE
MONEY MARKET FUND
RAMIREZ U.S. TREASURY MONEY MARKET FUND
ADVISER:
RAMIREZ ASSET MANAGEMENT, INC.
PROSPECTUS
[SEPTEMBER ___, 1998]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any state.
<PAGE>
This Prospectus offers shares of the Ramirez Cash Management Money Market Fund
(the "Cash Management Fund") the Ramirez New York Tax-Free Money Market Fund
(the "New York Tax-Free Fund") and the Ramirez U.S. Treasury Money Market Fund
("U.S. Treasury Fund") (collectively, the "Funds"). Each Fund is a series
portfolio of The Ramirez Trust (the "Trust"), an open-end investment management
company. The Cash Management Fund and U.S. Treasury Fund are diversified Funds.
The New York Tax-Free Fund is a non-diversified Fund. Ramirez Asset Management,
Inc. serves as each Fund's investment adviser.
This Prospectus provides you with information about the Trust and each Fund
which you should know before investing in shares of a Fund. A Statement of
Additional Information, dated September , 1998, has been filed with the
Securities and Exchange Commission ("SEC") and is available free of charge by
contacting the Trust at 61 Broadway, New York, New York 10006 or by calling
(800) - . The information contained in the Statement of Additional Information,
as amended from time to time, is incorporated by reference into this prospectus.
Additional information including this Prospectus and the Statement of Additional
Information, may be obtained by accessing the website maintained by SEC
(http://www.sec.gov).
INVESTORS SHOULD READ AND RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT EITHER FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE NEW YORK TAX-FREE FUND MAY INVEST A SIGNIFICANT PERCENTAGE OF ITS ASSETS IN
THE SECURITIES OF A SINGLE ISSUER; ACCORDINGLY, AN INVESTMENT IN THE NEW YORK
TAX-FREE FUND MAY INVOLVE MORE RISK THAN INVESTMENTS IN OTHER TYPES OF MONEY
MARKET FUNDS.
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<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.................................................. 1
FUND EXPENSES ...................................................... 2
INVESTMENT OBJECTIVE AND POLICIES................................... 3
COMMON INVESTMENT PRACTICES OF THE FUNDS............................ 6
RISK FACTORS........................................................ 8
INVESTMENT LIMITATIONS.............................................. 9
PURCHASE OF SHARES.................................................. 10
REDEMPTION OF SHARES................................................ 13
SHAREHOLDER SERVICES................................................ 15
DIVIDENDS AND DISTRIBUTIONS......................................... 16
MANAGEMENT OF THE TRUST............................................. 16
DISTRIBUTION PLANS.................................................. 18
SHAREHOLDER SERVICING PLAN......................................... 18
DIVIDENDS AND TAX MATTERS........................................... 20
OTHER INFORMATION................................................... 21
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<PAGE>
PROSPECTUS SUMMARY
This prospectus offers shares of the Cash Management Fund, the New York Tax-Free
Fund and U.S. Treasury Fund of the Ramirez Trust. Each Fund is a money market
fund which seeks to retain a stable net asset value per share of $1.00.
CASH MANAGEMENT FUND. The Cash Management Fund's investment objective is to
provide a high level of current income while preserving capital and maintaining
liquidity. The Cash Management Fund seeks to achieve its objective by investing
in high quality, short-term U.S.
dollar denominated money market instruments.
NEW YORK TAX-FREE FUND. The New York Tax-Free Fund's investment objective is to
provide a high level of current income exempt from federal, New York State and
New York City income taxes while preserving capital and maintaining liquidity.
The New York Tax-Free Fund seeks to achieve its investment objective by
investing primarily in short-term, fixed rate and variable rate municipal
obligations which are exempt from regular federal, New York State and New York
City income tax.
U.S. TREASURY FUND. The U.S. Treasury Fund's investment objective is to provide
a high level of current income consistent with maximum safety of principal and
maintenance of liquidity. The U.S. Treasury Fund seeks to achieve its objective
by investing in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, and repurchase agreements collateralized by these
obligations.
INVESTMENT ADVISER. Each Fund's investment adviser is Ramirez Asset Management,
Inc. (the "Adviser"), 61 Broadway, New York City 10006. See "Management of the
Trust" on page 16.
ADMINISTRATION AND DISTRIBUTION. The administrator of each Fund is Firstar Trust
Company. The statutory underwriter of each Fund is Ramirez & Co., Inc., an
affiliate of the Adviser and a registered broker-dealer. See "Management of the
Trust" on page 16.
PURCHASES AND REDEMPTIONS. Investors may purchase and redeem shares of
beneficial interest in a Fund without any sales loads or other charges any day
the New York Stock Exchange is open ("Fund Business Day") by calling the Funds'
transfer agent at 1-800-___-____. The minimum initial investment is $1,000. The
Trust and the transfer agent each reserve the right to waive this minimum
initial investment limitation. The minimum subsequent investment is $[50]. See
"Purchase of Shares" on page 10 and "Redemption of Shares" on page 13.
<PAGE>
FUND EXPENSES
The purpose of the following table is to assist an investor in understanding the
various costs and expenses that a shareholder of each Fund will bear, either
directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Maximum Deferred Sales Load None
Redemption Fees1 None
Exchange Fees None
ANNUAL FUND OPERATING EXPENSES (as a percentage of annual average net assets):
CASH MANAGEMENT FUND:
Advisory Fees............................................... 0.35%
12b-1 Fees.................................................. 0. %
Shareholder Servicing Fees2................................. 0. %
Other Expenses.............................................. 0. %
-------
Total Operating Expenses.................................... %
-------
NEW YORK TAX-FREE FUND:
Advisory Fees............................................... 0.35%
12b-1 Fees.................................................. 0. %
Shareholder Servicing Fees2................................. 0. %
Other Expenses.............................................. 0. %
-------
Total Operating Expenses.................................... %
-------
U.S. TREASURY FUND:
Advisory Fees............................................... 0.35%
12b-1 Fees.................................................. 0. %
Shareholder Servicing Fees2................................. 0. %
Other Expenses.............................................. 0. %
-------
Total Operating Expenses.................................... %
-------
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1 The Funds' transfer agent charges a $12.00 fee per wire redemption and a
$15.00 fee for an IRA distribution.
2 Shareholder servicing agents may charge fees for providing services in
connection with their clients' investments in a Fund's shares.
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<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
You would pay the following expenses
on a $10,000 investment in the relevant
Fund, assuming a 5% annual return and
redemption at the end of each period: 1 Year 3 Years 5 Years 10 Years
Cash Management Fund.............................. $ $ $ $
New York Tax-Free Fund............................
U.S. Treasury Fund................................
</TABLE>
The examples above are based on the fees listed in each table and assumes the
reinvestment of dividends. The examples should not be considered a
representation of past or future expenses or performance. Actual expenses may be
greater or less than those shown.
INVESTMENT OBJECTIVE AND POLICIES
OVERALL OBJECTIVE OF THE FUNDS. Each Fund seeks to maintain a net asset value of
$1.00 per share. The Funds invest only in U.S. dollar denominated high quality
obligations which are determined to present minimal credit risks. This credit
determination must be made in accordance with procedures established by the
Board of Trustees of the Trust (the "Board of Trustees") and in accordance with
Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act").
Securities in which the Funds invest may not earn as high a level of current
income as long-term or lower quality securities.
The Funds may purchase only instruments which have or are deemed to have
remaining maturities of 397 days or less in accordance with federal regulations.
Certain securities held by each Fund may have remaining maturities in excess of
stated limitations if the securities provide for adjustments in their interest
rates not less frequently than such time limitations. Each Fund will also
maintain a dollar-weighted average portfolio maturity of 90 days or less.
Although each Fund seeks to be fully invested, at times each Fund may hold
uninvested cash reserves, which would adversely affect its yield.
The investment objective of each Fund and related policies and activities (other
than the policy of the Cash Management Fund to invest at least 25% of its assets
in bank obligations) are not fundamental and may be changed by the Board of
Trustees without the approval of shareholders.
The descriptions that follow are designed to help you choose the Fund that best
fits your investment objectives. You are reminded that there are risks in an
investment in the Funds, and there can be no assurance that each Fund's
investment objective will be attained. An investor should not consider an
investment in any individual Fund to be a complete investment program.
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<PAGE>
RAMIREZ CASH MANAGEMENT MONEY MARKET FUND.
INVESTMENT OBJECTIVE. The Cash Management Fund's investment objective is to
provide a high level of current income while preserving capital and maintaining
liquidity.
MANAGEMENT POLICIES. In pursuing its investment objective, the Cash Management
Fund invests in a broad range of short-term U.S. dollar denominated money market
instruments. The Cash Management Fund invests in (i) high quality commercial
paper and other short-term obligations, including floating and variable rate
master demand notes of U.S. and foreign corporations; (ii) obligations of
foreign governments and supranational agencies (e.g., the International Bank for
Reconstruction and Development); (iii) obligations issued or guaranteed by U.S.
banks with total assets exceeding $1 billion (including obligations of foreign
branches of such banks) and by foreign banks with total assets exceeding $10
billion (or the equivalent in other currencies) which have branches or agencies
in the U.S. (including U.S. branches of such banks); (iv) securities issued or
guaranteed as to principal and interest by the U.S. Government or by agencies or
instrumentalities thereof; and (v) repurchase agreements related to such
securities.
The Cash Management Fund may not invest more than 5% of its total assets in the
securities of any one issuer, except for U.S. Government securities. In
addition, the Cash Management Fund may not invest more than 5% of its total
assets in eligible securities that have not received the highest rating from the
requisite Nationally Recognized Statistical Rating Organizations ("NRSROs") and
comparable unrated securities ("Second Tier Securities") and may not invest more
than 1% of its total assets in the Second Tier Securities of any one issuer. The
Cash Management Fund may invest more than 5% (but no more than 25%) of the
then-current value of the Fund's total assets in the securities of a single
issuer for a period of up to three business days, provided that (a) the
securities either are rated by the requisite NRSROs in the highest short-term
rating category or are securities of issuers that have received such rating with
respect to other short-term debt securities or ar comparable unrated securities,
and (b) the Fund does not make more than one such investment at any one time.
The Cash Management Fund may purchase obligations of issuers in the banking
industry, such as commercial paper, notes, certificates of deposit, bankers
acceptances and time deposits and U.S. dollar denominated instruments issued or
supported by the credit of the bank. The Cash Management Fund may not invest
less than 25% of the current value of its total assets in bank obligations
(including bank obligations subject to repurchase agreements), except that if at
some future date adverse economic conditions prevail in the banking industry,
the Cash Management Fund may, for defensive purposes, temporarily invest less
than 25% of its assets in bank obligations.
The Cash Management Fund may invest in commercial paper including short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank-holding companies, corporations
and financial institutions and government agencies and instrumentalities (but
only in the case of taxable securities). All
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<PAGE>
commercial paper purchased by the Cash Management Fund is, at the time of
investment, required to be rated (or issued by an issuer with a similar security
rated) in the highest short-term rating category by two or more NRSROs or the
only NRSRO rating the security. If unrated, then the Adviser must determine the
security to be of comparable credit quality subject to subsequent ratification
by the Board of Trustees.
The Cash Management Fund may also invest in non-convertible corporate debt
securities such as bonds and debentures which have 397 days or less remaining to
maturity and which are rated "A" or better by Standard & Poor's Corporation
("S&P") and "A" or better by Moody's Investors Services ("Moody's") and of
comparable high quality ratings by other NRSROs that have rated such securities.
For a description of the ratings used in this Prospectus, see Appendix A to the
Statement of Additional Information.
RAMIREZ NEW YORK TAX-FREE MONEY MARKET FUND.
INVESTMENT OBJECTIVE. The New York Tax-Free Fund's objective is to provide a
high level of current income exempt from federal, New York State and New York
City income taxes while preserving capital and maintaining liquidity.
INVESTMENT POLICIES. The New York Tax-Free Fund invests in a non-diversified
portfolio of high quality fixed rate and variable rate municipal obligations
which are exempt from regular federal, New York State and New York City income
tax.
The New York Tax-Free Fund intends to invest in municipal obligations which are
triple tax exempt. That is, municipal obligations issued by or on behalf of the
State of New York and its political subdivisions and of Puerto Rico, or other
U.S. territories and their political subdivisions, the interest on which, in the
opinion of bond counsel, is exempt from federal, New York State and New York
City personal income taxes (without regard to whether the interest thereon is
also exempt from the personal income taxes of any state or whether the interest
thereon constitutes a preference item for purposes of the federal Alternative
Minimum Tax ("AMT") ("New York Municipal Obligations").
As a matter of fundamental policy, the New York Tax-Free Fund will maintain at
least 80% of its net assets in New York Municipal Obligations. Although the New
York Tax-Free Fund will generally invest 100% of its assets in New York
Municipal Obligations, it reserves the right, under normal market circumstances,
to invest up to 20% of its total assets in AMT items or securities, the interest
on which is subject to federal income tax. For temporary purposes, the New York
Tax-Free Fund may exceed this limitation and invest in AMT items or taxable
money market securities such as those permissible for the Cash Management Fund.
Municipal obligations purchased by the New York Tax-Free Fund include municipal
bonds, notes and commercial paper. Municipal bonds generally have a maturity at
the time of issuance of more than a year, although the New York Tax-Free Fund
will purchase municipal bonds with a
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<PAGE>
remaining maturity of 397 days or less. Municipal notes generally have
maturities at the time of issuance of two years or less. Municipal commercial
paper is a debt obligation with a stated maturity of one year or less which is
issued to finance seasonal working capital needs or as a short-term financing in
anticipation of longer-term debt.
Investment in the New York Tax-Free Fund is not insured, although certain of the
municipal obligations purchased by the New York Tax-Free Fund may be insured as
to principal and interest by, among others, the Municipal Bond Insurance
Association. Insured obligations are identified in the New York Tax-Free Fund's
financial statements.
RAMIREZ U.S TREASURY MONEY MARKET FUND.
INVESTMENT OBJECTIVE. The U.S. Treasury Fund's objective is to provide maximum
current income consistent with maximum safety of principal and maintenance of
liquidity.
INVESTMENT POLICIES. The U.S. Treasury Fund seeks to achieve its objective by
investing only in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, and repurchase agreements collateralized by such
instruments. The U.S. Treasury bills, bonds and notes held by the U.S. Treasury
Fund will differ principally only in their interest rates, maturities and dates
of issuance. The U.S. Treasury Fund does not purchase securities issued or
guaranteed by agencies or instrumentalities of the U.S. Government.
COMMON INVESTMENT PRACTICES OF THE FUNDS
The Funds may also engage in the following investment practices when consistent
with their overall objectives and policies. These practices, and certain
associated risks, are more fully described in the Statement of Additional
Information.
U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest in direct obligations of the
U.S. Treasury. Each Fund other than U.S. Treasury Fund may also invest in other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (collectively, "U.S. Government Obligations"). Certain U.S.
Government Obligations, such as U.S. Treasury securities and direct pass-through
certificates of the Government National Mortgage Association, are backed by the
"full faith and credit" of the U.S. Government. Other U.S. Government
Obligations, such as obligations of Federal Home Loan Banks and the Federal Home
Loan Mortgage Corporation, are not backed by the "full faith and credit" of the
U.S. Government. In the case of securities not backed by the "full faith and
credit" of the U.S. Government, the investor must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the U.S. Government itself in the event the
agency or instrumentality does not meet its commitments.
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<PAGE>
REPURCHASE AGREEMENTS. Securities held by the Funds may be subject to repurchase
agreements. A repurchase agreement is a transaction in which the seller of a
security commits itself at the time of the sale to repurchase that security from
the buyer at a mutually agreed upon time and price. Each Fund will enter into
repurchase agreements only with dealers, domestic banks or recognized financial
institutions which, in the opinion of the adviser, present minimal credit risks.
Where the securities underlying a repurchase agreement are not U.S. Government
securities, they must be of the highest quality at the time the repurchase
agreement is entered into (e.g., a long-term debt security would be required to
be rated by S&P as "AAA" or its equivalent).
In the event of default by the seller under the repurchase agreement, a Fund may
have problems in exercising its rights to the underlying securities and may
incur costs and experience time delays in connection with the disposition of
such securities.
FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. Each Fund may
invest in floating rate securities, whose interest rates adjust automatically
whenever a specified interest rate changes, and variable rate securities, whose
interest rates are periodically adjusted. Certain of these instruments permit
the holder to demand payment of principal and accrued interest upon a specified
number of days' notice from either the issuer or a third party. The securities
in which the New York Tax-Free Fund and the Cash Management Fund may invest
include participation certificates. Participation certificates are pro rata
interests in securities held by others; certificates of indebtedness of
safekeeping are documentary receipts for such original securities held in
custody by others. As a result of the floating or variable rate nature of these
investments, a Fund's yield may decline and it may forego the opportunity for
capital appreciation during periods when interest rates decline; however, during
periods when interest rates increase, a Fund's yield may increase and it may
have reduced risk of capital depreciation. Demand features on certain floating
or variable rate securities may obligate a fund to pay a "tender fee" to a third
party. Demand features provided by foreign banks involve certain risks
associated with foreign investments.
LENDING OF FUND SECURITIES. Each Fund may lend its securities if such loans are
secured continuously by cash or equivalent collateral or by a letter of credit
in favor of the Fund at least equal at all times to 102% of the market value of
the securities loaned plus interest or dividends. While such securities are on
loan, the borrower will pay the Fund the amount of any income accruing thereon
or, in some cases, a separate fee. A Fund will not lend securities having a
value which exceeds 10% of the current value of its total assets. There may be a
risk of delay in receiving additional collateral or in recovering the securities
loaned or even a loss of rights in the collateral should the borrower of the
securities fail financially. In determining whether to lend a security to a
particular broker, dealer or financial institution, the Adviser will consider
all relevant facts and circumstances, including the creditworthiness of the
broker, dealer or financial institution and whether the income to be earned the
loan justifies the attendant risks.
FORWARD COMMITMENTS AND WHEN ISSUED SECURITIES. Each Fund may purchase
securities for delivery at a future date, which may increase its overall
investment exposure and involves a risk
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<PAGE>
of loss if the value of the securities declines prior to the settlement date.
These transactions involve some risk to a Fund if the other party should default
on its obligation and the Fund is delayed or prevented from recovering the
collateral or completing the transaction.
BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow money from
banks for temporary or short-term purposes, but will not borrow for leveraging
purposes. Each Fund may also sell and simultaneously commit to repurchase a
portfolio security at an agreed-upon price and time, to avoid selling securities
during unfavorable market conditions in order to meet redemptions. Whenever a
Fund enters into a reverse repurchase agreement, it will establish a segregated
account in which it will maintain liquid assets on a daily basis in an amount at
least equal to the repurchase price (including accrued interest). A Fund would
be required to pay interest on amounts obtained through reverse repurchase
agreements, which are considered borrowings under federal securities laws.
OTHER MUTUAL FUNDS. Each Fund other than the U.S. Treasury Fund may invest in
shares of other open-end management investment companies that are money market
funds reasonably believed to comply with Rule 2a-7 under the Investment
Company's 1940 Act, subject to the limitations of the Investment Company's 1940
Act and subject to such investment being consistent with the overall objective
and policies of the Fund, provided that any such purchases will be limited to
shares of unaffiliated investment companies. The purchase of securities of other
mutual funds results in duplication of expenses such that investors indirectly
bear a proportionate share of the expenses of such mutual funds including
operating costs and investment advisory and administrative fees.
RISK FACTORS
GENERAL. There can be no assurance that any Fund will be able to maintain a
stable net asset value. Changes in interest rates may affect the value of the
obligations held by the Funds. The value of fixed income securities varies
inversely with changes in prevailing interest rates, although money market
instruments are generally less sensitive to changes in interest rates than are
longer-term securities.
CASH MANAGEMENT FUND. The Cash Management Fund is permitted to invest any
portion of its assets in obligations of domestic banks (including their foreign
branches), and in obligations of foreign issuers. The ability to concentrate in
the banking industry may involve certain credit risks, such as defaults or
downgrades, if at some future date adverse economic conditions prevail in such
industry. U.S. banks are subject to extensive governmental regulations which may
limit both the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry is
largely dependent upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions. General
economic conditions as well as exposure to credit losses arising from possible
financial difficulties of borrowers play a important part in the operations of
this industry.
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<PAGE>
Securities issued by foreign banks, foreign branches of U.S. banks and foreign
governmental and foreign private issuers involve investment risks in addition to
those of obligations of domestic issuers. Such risks include those relating to
future political and economic developments, limited liquidity of foreign
obligations compared to domestic obligations, the possible imposition of
withholding taxes on interest income, the possible seizure or nationalization of
foreign assets, and the possible establishment of exchange controls or other
restrictions. Other risks include less publicly available information concerning
foreign issuers, difficulties in obtaining or enforcing a judgment against a
foreign issuer (including branches), and different accounting, auditing and
financial reporting standards and practices from those applicable to U.S.
issuers. In addition, foreign banks are not subject to regulations comparable to
U.S. banking regulations.
NEW YORK TAX-FREE FUND. The New York Tax-Free Fund may invest without limitation
in municipal obligations secured by letters of credit or guarantees from U.S.
banks (including their foreign branches), and may also invest in municipal
obligations backed by foreign institutions. These investments are subject to the
considerations discussed in the preceding paragraphs relating to the Cash
Management Fund. Changes in the credit quality of banks or other financial
institutions backing the Funds' municipal obligations could cause losses the
Fund and affect its share price. Credit enhancements which are supplied by
foreign or domestic banks are not subject to federal deposit insurance.
The New York Tax-Free Fund is "non-diversified," which may make the value of its
shares more susceptible to developments affecting issuers in which the Fund
invests. In addition, more than 20% of the assets of the Fund may be invested in
securities to be paid from revenue of similar projects, which may cause the Fund
to be more susceptible to similar economic, political, or regulatory
developments.
The New York Tax-Free Fund will invest primarily in obligations issued by
states, cities, public authorities and other municipal issuers. Therefore, the
New York Tax-Free Fund is susceptible to factors affecting New York State and
its political subdivisions. Investments in the New York Tax-Free Fund may be
riskier than an investment in other types of money market funds because of its
concentration of investments in New York State or entities within the State. A
number of municipal issuers, including the State of New York and New York City
have a recent history of significant financial and fiscal difficulties. See the
Statement of Additional Information for further information.
INVESTMENT LIMITATIONS
The Funds may not (1) issue senior securities, borrow money or pledge or
mortgage its assets, except that each Fund may borrow from banks up to 10% of
the current value of the total net assets of that Fund for temporary purposes
only in order to meet redemptions, and those borrowings may be secured by the
pledge of not more than 10% of the current value of the total net assets of that
Fund (but investments may not be purchased by that fund while such
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<PAGE>
borrowings exceed 5% of the Fund's net assets); (2) make loans, except that the
Funds may make loans of portfolio securities, and each Fund may purchase or make
deposits with banks and enter into repurchase agreements with respect to its
portfolio securities; or (3) invest more than 5% of the current value of its
total assets in the securities of any one issuer, other than obligations of the
United States Government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States, except that up to
25% of the value of the New York Tax-Free Fund's total assets may be invested
without regard to this limitation consistent with its investment objectives and
policies. In addition, the New York Tax-Free Fund may not invest less than 80%
of its net assets in New York Municipal Obligations except when, in the opinion
of the Adviser, it is advisable for the Fund to invest temporarily up to 100% of
its total assets in taxable securities to maintain a "defensive" posture because
of market conditions.
The Funds' diversification tests are measured at the time of an acquisition of a
security and calculated as specified in Rule 2a-7 of the Investment Company's
1940 Act, which may allow the Funds to exceed the limits specified in this
Prospectus for certain securities subject to guarantee or demand features. The
Funds will be deemed to satisfy the maturity requirements described in this
Prospectus to the extent that the Funds satisfy Rule 2a-7's maturity
requirements.
For each Fund, the foregoing investment restrictions and those described in the
Statement of Additional Information are fundamental policies which may be
changed only when permitted by law and approved by the holders of a majority of
the outstanding voting securities of that fund, as described in the Statement of
Additional Information.
PURCHASE OF SHARES
Shares of the Funds are continuously offered for sale without a sales load at
the net asset value next determined through the distributor for the Funds,
Ramirez & Co., Inc. (the "Distributor"), which is an affiliate of the Adviser or
from the Funds' transfer agent, Firstar Trust Company (the "Transfer Agent").
The Distributor is a registered broker-dealer with offices at 61 Broadway, New
York, New York, 10006.
THE MINIMUM INITIAL INVESTMENT FOR SHARES IN A FUND IS $1,000; WITH THE
EXCEPTIONS OF IRAS, WHICH HAVE A MINIMUM INITIAL INVESTMENT OF $100. The minimum
subsequent investment is $50. The minimum initial investment will be waived if
you participate in the Periodic Investment Plan.
PURCHASE ORDERS. Investors may purchase shares of the Funds through registered
representatives of organizations that have entered into distribution or
servicing agreements with the Funds ("Shareholder Servicing Agents") or directly
with the Funds' transfer agent. All checks must be drawn on a bank located
within the United States and must be payable in U.S. dollars to the particular
fund in which you intend to invest. Subsequent investments in an existing
account in a Fund may be made at any time by sending to the address below a
check or money order
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<PAGE>
payable to the Fund in which the investment is being made, along with a letter
stating the amount of the investment, the name of the Fund and the account
number in which the investment is to be made. A $20 fee will be imposed by the
Funds' transfer agent if any check used for investment in an account does not
clear, and the investor involved will be responsible for any loss incurred by a
Fund.
PURCHASE ORDERS PLACED THROUGH THE TRANSFER AGENT
<TABLE>
<CAPTION>
To Open an Account To Add to an Account
------------------ --------------------
<S> <C> <C>
BY MAIL Complete an application and mail it Make your check payable to
along with a check payable to [Name of Fund]. Please include your
[Name of Fund], P.O. Box 701, sixteen digit account number on your
Milwaukee, WI 53201-0701. check and mail it to the address on
your statement.
OVERNIGHT Complete an application and deliver it Make your check payable to
DELIVERY along with a check payable to [name of Fund]. Please include your
[Name of Fund], 615 E. Michigan sixteen digit account number on your
St., Milwaukee, WI 53202. check and deliver it to the address at
the left.
AUTOMATICALLY Accounts may not yet be opened Complete a Periodic Investment Plan
automatically. Complete a Periodic Application to automatically purchase
Investment Plan Application to more shares.
automatically purchase more shares.
BY WIRE Call _____________ prior to sending Call _____________ prior to sending
the wire in order to obtain a the wire in order to obtain a
confirmation number and to ensure confirmation number and to ensure
prompt and accurate handling of prompt and accurate handling of
funds. Ask your bank to transmit funds. Ask your bank to transmit
immediately available funds by wire immediately available funds by wire
in the amount of your purchase to: as described at the left. Please also
Firstar Bank Milwaukee, N.A., ABA include your sixteen digit account
# 0750-00022, Firstar Trust Company number. The Funds and their
Account #112-952-137 for further transfer agent are not responsible for
credit to [name of Fund] [name/title the consequences of delays resulting
on the account]. The Funds and their from the banking or Federal Reserve
transfer agent are not responsible for Wire system, or for incomplete
the consequences of delays resulting wiring instructions.
from the banking or Federal Reserve
Wire system, or from incomplete
wiring instructions.
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<PAGE>
BY TELEPHONE Call _____________ to exchange Call _____________ to exchange
EXCHANGE from another Ramirez Fund account from another Ramirez Fund account
with the same registration including with the same registration including
name, address and taxpayer ID name, address and taxpayer ID
number. number.
</TABLE>
Investors making initial investments by wire must complete a Purchase
Application prior to effecting the wire. Please call the Fund's transfer agent
at 1-800-___-____ for instructions on establishing an account by telephone.
Purchase orders for Funds that are received by the transfer agent before 12:30
p.m. Eastern Time on a business day will be executed at that time, provided the
securities dealer or financial institution placing the order undertakes to pay
for its order in immediately available funds wired to the transfer agent by the
close of regular trading hours on The New York Stock Exchange (the "Exchange")
the same day, or in the case of orders placed by other investors, payment in
such form and by such time is guaranteed by a creditworthy financial institution
at the time the order is placed. Purchase orders that are received before 12:30
p.m. Eastern Time on a business day when payment is made in any form other than
by a same day wire of immediately available funds, as well as orders received
after 12:30 p.m. Eastern Time or on non-business days, and orders for which
payment is not received by the close of regular trading hours on the Exchange,
on a business day, will be executed on the next business day after receipt of
both the order and payment in proper form by the transfer agent.
The Funds will not accept payment in cash or third party checks for the purchase
of shares. federal regulations require that each investor provide a social
security number or other certified taxpayer identification number upon opening
or reopening an account. The Funds reserve the right to reject applications
without such a number or an indication that a number has been applied for. If a
number has been applied for, the number must be provided and certified within
sixty days of the date of the application. Any accounts opened without a proper
number will be subject to backup withholding and may be liquidated and
distributed to the owner(s) of record on or after the first business day
following the sixtieth day of investment, net of the backup withholding tax.
Certificates for shares will not be issued. The Funds reserve the right to
reject any purchase order. Payment for shares of a Fund in the amount of
$1,000,000 or more may, at the discretion of the Adviser, be made in the form of
securities that are permissible investments for the respective Fund. For further
information see the SAI or contact the Fund's transfer agent, Firstar Trust
Company at 1-800-___-____.
PURCHASE ORDERS PLACED THROUGH REGISTERED REPRESENTATIVES. You may purchase
shares of the Funds through your registered representative. Any such purchase
generally will not be effective until the order is received by the Fund's
transfer agent.
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<PAGE>
REDEMPTION OF SHARES
Redemption orders for the Funds are effected at the net asset value per share
next determined after receipt of the order by the transfer agent. If a
redemption order is received by phone (as described below) before 12:30 p.m.
Eastern Time on a business day, Fund shares will be redeemed at the net asset
value at the close of business on that business day. Redemption orders which are
received after 12:30 p.m. Eastern Time, or on non-business days, will be
executed on the next business day.
REDEMPTION ORDERS PLACED THROUGH THE TRANSFER AGENT.
BY PHONE. Call the Fund's transfer agent at 1-800-___-____ with your account
name, sixteen digit account number and amount of redemption (minimum $500).
Redemption proceeds will only be sent to a shareowner's address or bank account
of a commercial bank located within the United States as shown on the transfer
agent's records. Available only if telephone redemptions have been authorized on
the account application and if there has been no change of address by telephone
within the preceding 15 days.
In order to arrange for telephone redemptions after an account has been opened
or to change the bank or account designated to receive redemption proceeds, a
written request must be sent to the Fund's transfer agent, Firstar Trust
Company, at P.O. Box 701, Milwaukee, Wisconsin 53201- 0701 or contact your
registered representative. The request must be signed by each shareowner of the
account. Further documentation may be requested from corporations, executors,
administrators, trustees and guardians.
BY MAIL, OVERNIGHT DELIVERY OR IN PERSON. Mail your instructions to the Fund's
transfer agent, Firstar Trust Company, P.O. Box 701, Milwaukee, WI 53201-0701,
or deliver them (via overnight delivery or in person) to 615 E. Michigan Street,
Milwaukee, WI 53202. Include the number of shares or the amount to be redeemed,
your sixteen digit account number and social security number or other taxpayer
identification number. Your instructions must be signed by all persons required
to sign for transactions exactly as their names appear on the account. If the
redemption amount exceeds $50,000, or if the proceeds are to be sent elsewhere
than the address of record, or the address of record has been changed within the
preceding 15 days, each signature must be guaranteed in writing by either a
commercial bank that is a member of the FDIC, a trust company, a credit union, a
savings association, a member firm of a national securities exchange or other
eligible guarantor institution.
SYSTEMATIC WITHDRAWAL. Call the Fund's transfer agent at 1-800-___-____ for a
Systematic Withdrawal Plan application ($5,000 account minimum and $50 minimum
per transaction).
Guarantees must be signed by an eligible guarantor institution and "Signature
Guaranteed' must appear with the signature. The Funds may also require
additional supporting documents for redemptions made by corporations, executors,
administrators, trustees and guardians. A redemption request will not be deemed
to be properly received until the transfer agent receives all required documents
in proper form. Purchases of additional shares concurrently with
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<PAGE>
withdrawals could be disadvantageous because of the sales charge involved in the
additional purchases.
The transfer agent charges a $12.00 fee for each payment made by wire of
redemption proceeds, which will be deducted from the shareowner's account. The
transfer agent also charges a $15.00 fee for each IRA distribution (unless it is
part of a Systematic Withdrawal Plan), which will be deducted from the
shareowner's account.
The Funds reserve the right to refuse a telephone redemption if they believe it
is advisable to do so. Procedures for redeeming shares by telephone may be
modified or terminated by the Funds at any time upon notice to shareowners.
During periods of substantial economic or market change, telephone redemptions
may be difficult to implement. If a shareowner is unable to contact the transfer
agent by telephone, shares may also be redeemed by delivering the redemption
request to the transfer agent.
In an effort to prevent unauthorized or fraudulent purchase and redemption
requests by telephone, Firstar and the transfer agent employ reasonable
procedures specified by a Fund to confirm that such instructions are genuine.
Among the procedures used to determine authenticity, investors electing to
purchase, redeem or exchange by telephone will be required to provide their
account number (unless opening a new account). All such telephone transactions
will be tape recorded. Statements of accounts shall be conclusive if not
objected to in writing within 10 days after transmitted by mail. The Funds may
also implement other procedures from time to time. If reasonable procedures are
not implemented, the Funds and/or the transfer agent may be liable for any loss
due to unauthorized or fraudulent transactions. In all other cases, the
shareowner is liable for any loss for unauthorized transactions.
CHECK WRITING PRIVILEGES. An investor may request on the purchase application or
by later written request that a Fund provide draft Checkbooks ("Checks") drawn
on the Fund in which the investor has made an investment. Checks will be sent
only to the registered owner(s) and only to the address of record. Checks may be
made payable to the order of any person in the amount of $500 or more. Dividends
are earned until the Check clears the transfer agent. When a Check is presented
to the transfer agent for payment, the transfer agent, as the investor's agent,
will cause the particular Fund involved to redeem a sufficient number of the
investor's shares to cover the amount of the Check. Checks written against
shares purchased by check during the previous 12 days will be returned unpaid
due to uncollected funds. Checks will not be returned to shareowners after
clearance. There is no charge to the investor for the use of the Checks;
however, the transfer agent will impose a $20 charge for stopping payment of a
Check upon the request of the investor, or if the transfer agent cannot honor a
Check due to insufficient funds or other valid reason. Because dividends on each
Fund accrue daily, Checks may not be used to close an account, as a small
balance is likely to result.
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<PAGE>
REDEMPTION ORDERS PLACED THROUGH REGISTERED REPRESENTATIVES. You may redeem
shares of the Funds through your registered representative. Any such redemption
generally will not be effective until the request is received by the Fund's
transfer agent.
OTHER REDEMPTION INFORMATION. The Fund will make payment for redeemed shares
typically within one or two business days, but no later than the seventh day
after receipt by the transfer agent of a request in proper form, except as
provided by SEC rules. HOWEVER, IF ANY PORTION OF THE SHARES TO BE REDEEMED
REPRESENTS AN INVESTMENT MADE BY CHECK, THE FUNDS MAY DELAY THE PAYMENT OF THE
REDEMPTION PROCEEDS UNTIL THE TRANSFER AGENT IS REASONABLY SATISFIED THAT THE
CHECK HAS BEEN COLLECTED, WHICH MAY TAKE UP TO TWELVE DAYS FROM THE PURCHASE
DATE. During the period prior to the time the shares are redeemed, dividends on
such shares will accrue and be payable, and an investor will be entitled to
exercise all other rights of beneficiary ownership. An investor must have filed
a purchase application before any redemption requests can be paid.
Questions concerning the proper form for redemption requests should be directed
to the Fund's transfer agent at 1-800-___-____.
SHAREHOLDER SERVICES
The services and privileges described below are available to shareholders of the
Funds. These may be modified or terminated at any time upon notice to
shareholders.
SHAREHOLDER REPORTS. Shareholders will be provided with a report showing
portfolio investments and other information at least semiannually; and after the
close of the Fund's fiscal year, which ends [August 31], with an annual report
containing audited financial statements. To eliminate unnecessary duplication,
only one copy of shareholder reports will be sent to shareholders with the same
mailing address. Shareholders who desire a duplicate copy of shareholder reports
to be mailed to their residence should call the Fund's transfer agent at
1-800-___-____, or write to the address listed above.
Account statements will be mailed to shareholders monthly, summarizing all
transactions including purchases, reinvestment of dividends and redemptions.
AUTOMATED TELERESPONSE SERVICE. Shareholders using a touch-tone telephone can
access information on the Funds twenty-four hours a day, seven days a week. When
calling the Fund's Customer Service Center at 1-800-___-____, shareholders may
choose to use the automated information feature or, during regular business
hours (7:00 a.m. to 6:00 p.m. Eastern Time, Monday through Friday), speak with a
Fund representative. To speak with a Fund representative any time during an
automated teleresponse session (during regular business hours), shareowners may
press "0."
- 15 -
<PAGE>
The Funds reserve the right to reject any exchange request with prior notice to
a shareholder and the exchange privilege may be modified or terminated at any
time. At least sixty days' notice will be given to shareholders of any material
modification or termination except where notice is not required under SEC
regulations. The responsibility of the Funds and their transfer agent for the
authenticity of telephone exchange instructions is limited as described above
under "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
The net investment income of each class of shares of each Fund is declared as a
dividend to the shareholders each Fund Business Day. Dividends are declared as
of the time of day which corresponds to the latest time on that day that a
Fund's net asset value is determined. Shares begin accruing dividends on the day
they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by Automated Clearing House ("ACH")
transfer to a pre-established bank account, dividends are distributed in the
form of additional shares. Dividends that are otherwise taxable are still
taxable to you whether received in cash or additional shares. Net realized
short-term capital gains, if any, will be distributed at least annually. The
Funds do not expect to realize net long-term capital gains.
Net investment income for each Fund consists of all interest accrued and
discounts earned, less amortization of any market premium on the portfolio
assets of the Fund and the accrued expenses of the Fund.
MANAGEMENT OF THE TRUST
The property, affairs and business of the Trust is managed by the Board of
Trustees. The Board of Trustees elect officers who are charged with the
responsibility for the day-to-day operations of the Trust and the execution of
policies formulated by the Board of Trustees. Information about the Board of
Trustees, as well as the Trust's executive officers may be found in the
Statement of Additional Information under the heading "Management-Trustees and
Officers".
ADVISORY SERVICES. The Trust has retained Ramirez Asset Management, Inc. (the
"Adviser") to act as the investment adviser for each of the Funds. The Adviser
is an affiliate of the Fund's distributor, Ramirez & Co., Inc., and is located
at 61 Broadway, New York, New York 10006. The Adviser is a newly-registered
investment Adviser and therefore does not have an operating history as an
investment manager of mutual funds, but the Adviser's officers and employees are
persons with extensive experience in managing investment portfolios and
investment companies.
For its services, the Adviser receives a fee at an annual rate equal to 0.35% of
each Fund's average daily net assets. The Adviser is responsible for payment of
salaries of its portfolio manager and staff as well as other expenses necessary
to the performance of its duties under the
- 16 -
<PAGE>
Investment Advisory Agreement. The Adviser may, at its own expense and from its
own resources, compensate certain persons who provide services in connection
with the sale or expected sale of shares of the Fund without reimbursement from
the Trust. The Trust, on behalf of the Fund, is responsible for all expenses
other than those expressly borne by the Adviser under the Investment Advisory
Agreement. The expenses borne by the Trust include, but are not limited to, the
Investment Advisory fee, administration fee, transfer agent fee, and custodian
fee, costs of preparing, printing and delivering to shareholders the Trust's
prospectuses, statements of additional information, and shareholder reports,
legal fees, auditing and tax fees, taxes, blue sky fees, SEC fees, compliance
expenses, insurance expenses, and compensation of certain of the Trust's Board
of Trustees, officers and employees and other personnel performing services for
the Trust.
The Adviser may enter into separate agreements with third parties that provide
various services to those shareholders of the Trust who purchase shares of a
Fund. For these services, the Adviser, at its own expense and from its own
resources, may pay a fee which would not increase the amount of any advisory
fees paid to the Adviser by the Fund.
ADMINISTRATIVE SERVICES. Firstar Trust Company is each Fund's Administrator. The
Administrator has agreed to provide the following administrative services for
the Funds: (1) assist in maintaining office facilities for the Funds; (2)
furnish clerical and certain other services required by the Funds; (3) compile
data for and prepare notices to the SEC; (4) prepare semiannual reports to the
SEC and current shareowners and filings with state securities commissions; (5)
coordinate federal and state tax returns; (6) monitor the arrangements
pertaining to the Funds' agreements with shareowner organizations; monitor the
Funds' expense accruals; monitor compliance with the Funds' investment policies
and limitations; and (7) generally assist the Funds' operations. The
Administrator is entitled to receive a fee for their administrative services,
computed daily and payable monthly, at the annual rate of [ _____% of each Funds
average aggregate daily net assets].
DISTRIBUTOR. Ramirez & Co., Inc. (the "Distributor") serves as distributor of
each Fund's shares pursuant to a Distribution Agreement with the Trust, and as
the agent of the Trust in connection with the offering of shares of the Funds.
The Distributor is an affiliate of the Investment Adviser.
The Distributor is reimbursed for all costs and expenses incurred in this
capacity but receives no further compensation for its services under the
Distribution Agreement. The Distributor may enter into arrangements with banks,
broker-dealers or other financial institutions ("Selected Dealers") through
which investors may purchase or redeem shares. The Distributor may compensate
certain persons who provide services in connection with the sale or expected
sale of shares of the Funds. INVESTORS PURCHASING SHARES OF THE FUND THROUGH
ANOTHER FINANCIAL INSTITUTION SHOULD READ ANY MATERIALS AND INFORMATION PROVIDED
BY THE FINANCIAL INSTITUTION TO ACQUAINT THEMSELVES WITH ITS PROCEDURES AND ANY
FEES THAT IT MAY CHARGE.
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<PAGE>
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND ACCOUNTING SERVICES
AGENT. Firstar Trust Company provides transfer agency and dividend disbursing
agency services for the Funds and custodial and accounting services for the
Funds. Additional information regarding the fees payable by the Funds to Firstar
Trust Company for these services is provided in the Statement of Additional
Information. Inquires to the transfer agent may be sent to the following
address: Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
DISTRIBUTION PLANS
The Funds' distributor is Ramirez & Co., Inc. Each Fund has adopted a Rule 12b-1
distribution plan which provides that such Fund will pay distribution fees at
annual rates of up to [___]% of the average daily net assets attributable to its
shares. Payments under the distribution plan shall be used to compensate or
reimburse the Funds' distributor for services provided and expenses incurred in
connection with the sale of shares, and are not tied to the amount of actual
expenses incurred. Some activities intended to promote the sale of shares will
be conducted generally by Ramirez Family of Funds, and activities intended to
promote Fund's shares may also benefit other Ramirez Funds.
SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan on behalf of each Fund. In
accordance with the Shareholder Servicing Plan, the Fund or the Distributor may
enter into Shareholder Servicing Agreements from time to time with certain
shareholder servicing agents, including affiliates of the Adviser, providing for
certain support and/or distribution services to their customers who are the
beneficial owners of shares of the Funds.
Under the Shareholder Servicing Agreements, shareholder servicing agents agree
to provide certain support services to their customers, including (1) assisting
investors in processing purchase, exchange and redemption requests; (2)
processing dividend and distribution payments from the Funds; (3) providing
information periodically to customers showing their positions in Fund shares;
and (4) furnishing customer statements, transmitting shareholder reports and
communication to customers and (5) other similar shareholder liaison services.
For their services, shareholder servicing agents are entitled to receive fees
from a Fund at annual rates of up to [.__]% of the average daily net asset value
of the shares covered by their agreements. Under the terms of their agreements
with the Fund's distributor, shareholder servicing agents are required to
provide a schedule of any fees that they charge to their customers relating to
the investment of their assets in shares covered by the agreement. Investors
should read this Prospectus in light of such fee schedules and under the terms
of their shareholder servicing agents' Agreement. In addition, investors should
contact their shareholder servicing agent with respect to the availability of
shareholder services and the particular shareholder servicing agent's procedures
for purchasing and redeeming shares. It is the responsibility of shareholder
servicing
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<PAGE>
agent to transmit purchase and redemption orders and record those orders in
customers' accounts on a timely basis in accordance with their agreements with
customers. At the request of a shareholder servicing agent, the transfer agent's
charge of $12.00 for each payment made by wire of redemption proceeds may be
billed directly to the shareholder servicing agent.
The Glass-Steagall Act and other applicable laws, among other things, prohibit
banks from engaging in the business of underwriting securities. Accordingly,
banks will be engaged only to perform the administrative and investor servicing
functions above, and will represent that in no event will the services provided
by them under the agreements be primarily intended to result in the sale of Fund
shares.
Conflict-of-interest restrictions may apply to the receipt of compensation by a
shareholder servicing agent in connection with the investment of fiduciary funds
in Fund shares. Institutions, including banks regulated by the Comptroller of
the Currency and investment advisors and other money managers subject to the
jurisdiction of the SEC, the Department of Labor or state securities
commissions, are urged to consult legal counsel before entering into agreements
with the Fund's distributor.
SERVICING AGREEMENTS. Under separate agreements, the Adviser (not the funds) may
make supplementary payments from its own revenues to a shareholder servicing
agent that handles recordkeeping and provides certain administrative services
for its customers who invest in the Funds through Omnibus accounts maintained by
that shareholder servicing agent. These services include maintaining account
records, processing orders to purchase, redeeming or exchanging Fund shares,
responding to customer inquiries, and, if required by law, distributing the
Fund's shareholder reports and proxy statements. The payments may be more or
less than the fees payable to Firstar Trust Company for the services it provides
pursuant to the Transfer Agency Agreement for similar services. Firstar Trust
Company will not receive any compensation as transfer or dividend disbursing
agent with respect to the subaccounts maintained by shareholder servicing
agents.
Investors who purchase and redeem shares of the Funds through a customer account
maintained at a shareholder servicing agent may be charged one or more of the
following types of fees, as agreed upon by the shareholder servicing agent and
the investor, with respect to the customer services provided by the shareholder
servicing agent: account fees (a fixed amount per month or per year);
transaction fees (a fixed amount per transaction processed); compensating
balance requirements (a minimum dollar amount a customer must maintain in order
to obtain the services offered); or account maintenance fees (a periodic charge
based upon a percentage of the assets in the account or of the dividend paid on
those assets).
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<PAGE>
DIVIDENDS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS.
DIVIDENDS. Dividends are declared daily and paid monthly, following the close of
the last Fund Business Day of the month. Shares purchased by wire before 12:30
p.m. (Eastern Time) begin earning dividends that day. Dividends are
automatically reinvested on payment dates in additional shares of the Fund
unless cash payments are requested by an investor. The election to reinvest
dividends and distributions or receive them in cash may be changed at any time
upon written notice to the transfer agent. All dividends and other distributions
are treated in the same manner for federal income tax purposes whether received
in cash or reinvested in shares of the Fund. If no election is made, all
dividends and distributions will be reinvested.
CAPITAL GAINS DISTRIBUTIONS. Net realized short-term capital gains, if any, will
be distributed whenever the Board of Trustees determine that such distributions
would be in the best interest of the shareholders, which would be at least once
per year. The Trust does not anticipate that any Fund would realize any
long-term capital gains, but should they occur, they also will be distributed at
least once every 12 months.
TAX MATTERS.
TAX STATUS OF THE FUNDS. Each Fund intends to qualify and continue to qualify to
be taxed as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986 (the "Code"). If so qualified, each Fund will not be liable
for federal income taxes on the net investment income and capital gains
distributed to its shareholders. The Funds intend to distribute all of their
respective net investment income and net capital gains each year in accordance
with the timing requirements of the Code. Therefore, each Fund should avoid
federal excise taxes.
DISTRIBUTIONS. Dividends paid by a Fund out of its net investment income
(including realized net short-term capital gains) are taxable to the
shareholders of the Fund as ordinary income. Distributions of net long-term
capital gains, if any, realized by the Fund are taxable to the shareholders as
long-term capital gains, regardless of the length of time the shareholder may
have held shares in the Fund at the time of distribution. Distributions are
subject to federal income tax when they are paid, whether received in cash or
reinvested in shares of the Fund. Distributions declared in December and paid in
January, however, are taxable as if paid on December 31st.
Each Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other tax identification number provided is correct and that
the shareholder is not subject to backup withholding for prior underreporting to
the Internal Revenue Service.
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<PAGE>
Reports containing appropriate information with respect to the federal income
tax status of dividends, distributions and redemptions, including the
proportions attributable to capital gains and interest on U.S. Treasury
obligations, paid during the year by a Fund will be mailed to shareholders
shortly after the close of each calendar year.
The foregoing is only a summary of some of the tax considerations generally
affecting the Funds and their shareholders. The Statement of Additional
Information contains a further discussion. Investors are urged to consult their
tax advisors before investing in the Funds.
Interest in certain municipal obligations (including certain industrial
development bonds), while exempt from federal income tax, is a preference item
for the purpose of the alternative minimum tax. Where a mutual fund receives
such interest, a proportionate share of any exempt-interest dividend paid by the
mutual fund may be treated as such a preference item to shareholders. federal
tax legislation enacted over the past few years has limited the types and volume
of bonds which are not AMT items and the interest on which is not subject to
federal income tax. This legislation may affect the availability of municipal
obligations for investment by the New York Tax-Free Fund.
OTHER INFORMATION
PERFORMANCE. Each Fund may advertise its yield, which is based on historical
results and is not intended to indicate future performance. Yield shows the rate
of income the Fund has earned on its investments as a percentage of the Fund's
share price. To calculate yield, the Fund takes the interest income it earned
from its portfolio of investments for a seven-day period (net of expenses),
divides it by the average number of shares entitled to receive dividends, and
expresses the result as an annualized percentage rate based on the Fund's share
price at the end of the seven-day period. The Fund's compounded annualized yield
assumes the reinvestment of dividends paid by the Fund, and therefore will be
somewhat higher than the annualized yield for the same period.
Each Fund's advertisements may refer to ratings and rankings among similar funds
by independent evaluators such as Morningstar, Lipper Analytical Services, Inc.
or IBC/Donoghue, Inc. In addition, the performance of a Fund may be compared to
recognized indices of market performance. The comparative material found in a
Fund's advertisements, sales literature, or reports to shareholders may contain
performance ratings. This material is not to be considered representative or
indicative of future performance.
DETERMINATION OF NET ASSET VALUE. The net asset value per share of each Fund is
determined at the close of trading on the Exchange on each Fund Business Day.
The net asset value is determined by subtracting total liabilities from total
assets and dividing the remainder by the number of shares outstanding. Each
Fund's securities are valued at their amortized cost which does not take into
account unrealized gains or losses on securities. This method involves initially
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<PAGE>
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any premium paid or accreting discount received. The
amortized cost method minimizes changes in the market value of the securities
held by the Fund and helps it maintain a stable price of $1.00 per share.
LEGAL COUNSEL. Legal counsel to the Trust is provided by Kramer, Levin, Naftalis
& Frankel, New York, New York.
INDEPENDENT PUBLIC ACCOUNTANT. The independent public accountant for the Trust
is [ ].
THE TRUST, ITS SHARES AND CLASSES. The Trust [is registered] with the SEC as an
open-end management investment company and was organized as a business trust
under the laws of the State of Delaware on June 30, 1998. The Board has the
authority to issue an unlimited number of shares of beneficial interest of
separate series with no par value per share and to create classes of shares
within each series. If shares of separate series are issued, each share of each
series would be entitled to participate equally in dividends and other
distributions and the proceeds of any liquidation of that series. Voting rights
would not be cumulative and the shares of each series of the Trust would be
voted separately except when an aggregate vote is required by law.
Each Fund of the Trust currently offers only one class of shares. The Board of
Trustees may authorize the Trust to issue additional classes of shares in the
future. To the extent one class bears expenses different from the other classes,
the amount of dividends and other distributions it receives, and its
performance, will differ. Shareholders of one class will have the same voting
rights as shareholders of the other classes, except that separate votes are
taken by each class of the Fund if the interests of one class differ from the
interests of the others.
Delaware law does not require a registered investment company to hold annual
meetings of shareholders, and it is anticipated that shareholder meetings will
be held only when specifically required by federal or state law. Shareholders
have available procedures for requiring the Board of Board of Trustees to call a
meeting and for removing Board of Trustees. Shares issued by the Trust have no
conversion, subscription or preemptive rights. See "OTHER INFORMATION The Trust
and its Shareholders" in the Statement of Additional Information.
As of [___________, 1998], the Board of Trustees and officers of the Trust in
the aggregate owned less than one percent of the outstanding shares of the
Trust.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, the Statement of
Additional Information and each Fund's official sales literature in connection
with the offering of the Fund's shares, and if given or made, such information
or representations must not be relied upon as having been authorized by the
Trust. This Prospectus does not constitute an offer in any state in which, or to
any person to whom, such offer may not lawfully be made.
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<PAGE>
THE RAMIREZ TRUST
ADVISER
RAMIREZ ASSET MANAGEMENT, INC.
61 Broadway
New York, NY 10006
ADMINISTRATOR/CUSTODIAN/TRANSFER AGENT
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
DISTRIBUTOR
Ramirez & Co., Inc.
61 Broadway
New York, NY 10006
LEGAL COUNSEL
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022
INDEPENDENT PUBLIC ACCOUNTANT
[TO COME]
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 14, 1998
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Statement of Additional Information does not constitute a
prospectus.
THE RAMIREZ TRUST
61 Broadway
New York, New York 10006
(212) 248-0500
STATEMENT OF ADDITIONAL INFORMATION
For the
RAMIREZ CASH MANAGEMENT MONEY MARKET FUND
RAMIREZ NEW YORK TAX-FREE MONEY MARKET FUND
RAMIREZ U.S. TREASURY MONEY MARKET FUND
SEPTEMBER ___, 1998
This Statement of Additional Information ("SAI") is meant to be read in
conjunction with The Ramirez Trust's prospectus ("Prospectus") dated September
__, 1998 for the Ramirez Cash Management Money Market Fund, the Ramirez New York
Tax-Free Money Market Fund and Ramirez U.S. Treasury Money Market Fund
(collectively referred to as the "Funds"), and is incorporated by reference in
its entirety into the Prospectus. Because this SAI is not itself a prospectus,
no investment in shares of these Funds should be made solely upon the
information contained herein. Copies of the Prospectus for the Funds may be
obtained from your account representative or by writing to the Fund's
Administrator, Firstar Trust Company at 615 East Michigan Street, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701 or by calling 1- 800-___-____. Capitalized terms
used but not defined herein have the same meanings as in the Prospectus.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER BANK, OR OTHER GOVERNMENTAL AGENCY. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
<PAGE>
TABLE OF CONTENTS
PAGE
THE RAMIREZ TRUST ......................................................... 2
INVESTMENT OBJECTIVES AND POLICIES.......................................... 3
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS............................. 5
ADDITIONAL INVESTMENT LIMITATIONS........................................... 16
NET ASSET VALUE............................................................. 19
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION.............................. 20
DESCRIPTION OF SHARES....................................................... 23
ADDITIONAL INFORMATION CONCERNING TAXES..................................... 24
MANAGEMENT OF THE TRUST..................................................... 27
PORTFOLIO TRANSACTIONS...................................................... 30
INDEPENDENT ACCOUNTANTS..................................................... 35
COUNSEL..................................................................... 35
YIELD AND OTHER PERFORMANCE INFORMATION..................................... 35
OTHER INFORMATION........................................................... 37
APPENDIX A
DESCRIPTION OF RATINGS........................................ App. A-1
APPENDIX B
ADDITIONAL INFORMATION CONCERNING NEW
YORK ISSUERS................................................ App. B-1
THE RAMIREZ TRUST
The Ramirez Trust (the "Trust") is a Delaware business trust which was
incorporated on June 30, 1988 as a management investment company. The Trust is
authorized to issue separate classes of shares of Common Stock representing
interests in separate investment portfolios. This SAI pertains to three
portfolios, the Ramirez Cash Management Money Market Fund (the "Cash Management
Fund"), the Ramirez New York Tax-Free Money Market Fund (the "New York Tax-Free
Fund") and the Ramirez U.S. Treasury Fund (the "U.S. Treasury Fund")
(collectively, the "Funds"). The Funds commenced operations on September __,
1998. For information concerning these portfolios, contact your account
representative or the Funds' transfer agent, Firstar Trust Company at 615 East
Michigan Street, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 or by calling
1-800-___-____.
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<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
CASH MANAGEMENT FUND. The Cash Management Fund's investment objective is to
provide a high level of current income while preserving capital and maintaining
liquidity. The Cash Management Fund seeks to achieve its objective by investing
in high quality, short-term U.S.
dollar denominated money market instruments.
NEW YORK TAX-FREE FUND. The New York Tax-Free Fund's investment objective is to
provide a high level of current income exempt from federal, New York State and
New York City income taxes while preserving capital and maintaining liquidity.
The New York Tax-Free Fund seeks to achieve its investment objective by
investing primarily in short-term, fixed rate and variable rate municipal
obligations which are exempt from regular federal, New York State and New York
City income tax.
U.S. TREASURY FUND. The U.S. Treasury Fund's investment objective is to provide
a high level of current income consistent with maximum safety of principal and
maintenance of liquidity. The U.S. Treasury Fund seeks to achieve its objective
by investing in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, and repurchase agreements collateralized by these
obligations.
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board of Trustees, the Adviser is
responsible for, makes decisions with respect to, and places orders for all
purchases and sales of portfolio securities for each Fund.
Securities purchased and sold by each Fund are generally traded in the
over-the-counter market on a net basis (i.e., without commission) through
dealers, or otherwise involve transactions directly with the issuer of an
instrument. The cost of securities purchased from underwriters includes an
underwriting commission or concession, and the prices at which securities are
purchased from and sold to dealers include a dealer's mark-up or mark-down. With
respect to over-the-counter transactions, the Adviser will normally deal
directly with dealers who make a market in the instruments involved except in
those circumstances where more favorable prices and execution are available
elsewhere.
The Funds may participate, if and when practicable, in bidding for the purchase
of portfolio securities directly from an issuer in order to take advantage of
the lower purchase price available to members of a bidding group. The Funds will
engage in this practice, however, only when the Adviser, in its sole discretion,
believes such practice to be in the Funds' interests.
The Investment Advisory Agreement between the Trust and the Adviser provides
that, in executing portfolio transactions and selecting brokers or dealers, the
Adviser will seek to obtain
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the best overall terms available. In assessing the best overall terms available
for any transaction, the Adviser shall consider factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In addition, the Agreement authorizes the Adviser to
cause the Funds to pay a broker-dealer which furnishes brokerage and research
services a higher commission than that which might be charged by another
broker-dealer for effecting the same transaction, provided that the Adviser
determines in good faith that such commission is reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either the particular transaction or the overall
responsibilities of the Adviser to the Funds. Such brokerage and research
services might consist of reports and statistics relating to specific companies
or industries, general summaries of groups of stocks or bonds and their
comparative earnings and yields, or broad overviews of the stock, bond and
government securities markets and the economy.
Supplementary research information so received is in addition to, and not in
lieu of, services required to be performed by the Adviser and does not reduce
the advisory fees payable to it by the Funds. The Trustees will periodically
review the commissions paid by the Funds to consider whether the commissions
paid over representative periods of time appear to be reasonable in relation to
the benefits inuring to the Funds. It is possible that certain of the
supplementary research or other services received will primarily benefit one or
more other investment companies or other accounts for which investment
discretion is exercised. Conversely, a Fund may be the primary beneficiary of
the research or services received as a result of portfolio transactions effected
for such other account or investment company.
Portfolio securities will not be purchased from or sold to (and savings deposits
will not be made in and repurchase and reverse repurchase agreements will not be
entered into with) the Adviser, the Distributor or an affiliated person of
either of them (as such term is defined in the 1940 Act) acting as principal. In
addition, the Funds will not purchase securities during the existence of any
underwriting or selling group relating thereto of which the Distributor or the
Adviser, or an affiliated person of either of them, is a member, except to the
extent permitted by the Securities and Exchange Commission ("SEC").
Investment decisions for the Funds are made independently from those for other
investment companies and accounts advised or managed by the Adviser. Such other
investment companies and accounts may also invest in the same securities as the
Funds. When a purchase or sale of the same security is made at substantially the
same time on behalf of a Fund and another investment company or account, the
transaction will be averaged as to price and available investments allocated as
to amount, in a manner which the Adviser believes to be equitable to the Fund
and such other investment company or account. In some instances, this investment
procedure may adversely affect the price paid or received by a Fund or the size
of the position obtained or sold by the Fund. To the extent permitted by law,
the Adviser may aggregate the securities to be sold or purchased for a Fund with
those to be sold or purchased for other
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<PAGE>
investment companies or accounts in executing transactions.
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS
RATINGS. Subsequent to its purchase by a Fund, a rated security may cease to be
rated or its rating may be reduced below the minimum rating required for
purchase by a Fund. The Board of Trustees or the Adviser, pursuant to guidelines
adopted by the Board, will, in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"), consider such an event in
determining whether the Fund involved should continue to hold the security. In
addition, it is possible that unregistered securities purchased by a Fund in
reliance upon Rule 144A under the Securities Act of 1933 could have the effect
of increasing the level of the Fund's illiquidity to the extent that qualified
institutional buyers become, for a period, uninterested in purchasing these
securities.
VARIABLE AND FLOATING RATE INSTRUMENTS. With respect to the variable and
floating rate instruments that may be acquired by the Funds, the Adviser will
consider the earning power, cash flows and other liquidity ratios of the issuers
and guarantors of such instruments and, if the instrument is subject to a demand
feature, will monitor their financial status to meet payment on demand. In
determining average weighted portfolio maturity, an instrument will usually be
deemed to have a maturity equal to the longer of the period remaining to the
next interest rate adjustment or the time the Fund involved can recover payment
of principal as specified in the instrument. Variable U.S. Government
obligations held by a Fund, however, will be deemed to have maturities equal to
the period remaining until the next interest rate adjustment.
The variable and floating rate demand instruments that the New York Tax-Free
Fund may purchase include participations in municipal obligations purchased from
and owned by financial institutions, primarily banks. Participation interests
provide the Fund with a specified undivided interest (up to 100%) in the
underlying obligation and the right to demand payment of the unpaid principal
balance plus accrued interest on the participation interest from the institution
upon a specified number of days' notice, not to exceed thirty days. Each
participation interest is backed by an irrevocable letter of credit or guarantee
of a bank that the Adviser has determined meets the prescribed quality standards
for the Fund. The bank typically retains fees out of the interest paid on the
obligation for servicing the obligation, providing the letter of credit and
issuing the repurchase commitment.
U.S. GOVERNMENT OBLIGATIONS. Examples of the types of U.S. government
obligations that may be acquired by the Funds include U.S. Treasury bonds, notes
and bills. The Cash Management Fund and the New York Tax Free Fund may also
invest in the obligations of Federal Home Loan Banks, Federal Farm Credit Banks,
Federal Land Banks, the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association, Federal National
Mortgage Association, General Services Administration, Central Bank for
Cooperatives, Federal
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<PAGE>
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Maritime
Administration, and Resolution Trust Corp.
STRIPPED U.S. GOVERNMENT OBLIGATIONS AND GOVERNMENT-BACKED TRUSTS. Each Fund
other than the U.S. Treasury Fund may acquire U.S. government obligations and
their unmatured interest coupons which have been separated ("stripped") by their
holder, typically a custodian bank or investment brokerage firm. Having
separated the interest coupons from the underlying principal of the U.S.
government obligations, the holder will resell the stripped securities in
custodial receipt programs with a number of different names, including Treasury
Income Growth Receipts ("TIGRs") and Certificate of Accrual on Treasury
Securities ("CATs"). The stripped coupons are sold separately from the
underlying principal, which is sold at a deep discount because the buyer
receives only the right to receive a future fixed payment on the security and
does not receive any rights to periodic interest (cash) payments. Purchasers of
stripped securities acquire, in effect, discount obligations that are
economically identical to the zero coupon securities that the Treasury
Department sells itself. The underlying U.S. Treasury bonds and notes themselves
are held in book-entry form at the Federal Reserve Bank or, in the case of
bearer securities (i.e., unregistered securities which are owned ostensibly by
the bearer or holder), in trust on behalf of the owners. Counsel to the
underwriters of these certificates or other evidences of ownership of the U.S.
Treasury securities have stated that, in their opinion, purchasers of the
stripped securities, such as the Funds, most likely will be deemed the
beneficial holders of the underlying U.S. government obligations for federal tax
and security purposes. The SEC staff believes that participations in CATs and
TIGRs and other similar trusts are not U.S. government securities.
The Treasury Department has also facilitated transfers of ownership of zero
coupon securities by accounting separately for the beneficial ownership of
particular interest coupon and principal payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the Treasury Department is known as "STRIPS" or
"Separate Trading of Registered Interest and Principal of Securities." Under the
STRIPS program, a Fund will be able to have its beneficial ownership of zero
coupon securities recorded directly in the book-entry record-keeping system in
lieu of having to hold certificates or other evidences of ownership of the
underlying U.S. Treasury securities.
The Cash Management Fund may also invest in certificates issued by
government-backed trusts. Such certificates represent an undivided fractional
interest in the respective government-backed trust's assets. The assets of each
government-backed trust consist of (i) a promissory note issued by a foreign
government (the "Note"), (ii) a guaranty by the U.S. Government, acting through
the Defense Security Assistance Agency of the Department of Defense, of the due
and punctual payment of 90% of all principal and interest due on such Note and
(iii) a beneficial interest in a government securities trust holding U.S.
Treasury bills, notes and other direct obligations of the U.S. Treasury
sufficient to provide the Trust with funds in an amount equal to at least 10% of
all principal and interest payments due on the Note. No more than 35% of the
value of a Fund's total assets will be invested in stripped securities not
purchased through the Federal Reserve's STRIPS program and government-backed
trusts.
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<PAGE>
INVESTMENT COMPANIES. Each Fund other than the U.S Treasury Fund currently may
invest in securities issued by other investment companies. Each such Fund
intends to limit its investments in securities issued by other investment
companies so that, as determined immediately after a purchase of such securities
is made: (i) not more than 5% of the value of the Fund's total assets will be
invested in the securities of any one investment company; (ii) not more than 10%
of the value of its total assets will be invested in the aggregate in securities
of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the Fund
or by the Trust as a whole.
REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from financial
institutions subject to the seller's agreement to repurchase them at an agreed
upon time and price ("Repurchase Agreements"). During the term of the agreement,
the Adviser will continue to monitor the creditworthiness of the seller and will
require the seller to maintain the value of the securities subject to the
agreement at not less than 102% of the repurchase price. Default or bankruptcy
of the seller would, however, expose the Fund to possible loss because of
adverse market action or delay in connection with the disposition of the
underlying securities. The securities held subject to a repurchase agreement may
have stated maturities exceeding thirteen months, provided the repurchase
agreement itself matures in less than one year.
The repurchase price under the repurchase agreements described in the Prospectus
generally equals the price paid by a Fund plus interest negotiated on the basis
of current short-term rates (which may be more or less than the rate on the
securities underlying the repurchase agreement). Securities subject to
repurchase agreements will be held by the Funds' custodian (or sub-custodian) or
in the Federal Reserve/Treasury book-entry system or other authorized securities
depository. Repurchase agreements are considered to be loans under the 1940 Act.
While the maturity of the underlying securities in a repurchase agreement
transaction may be more than one year, the term of the repurchase agreement is
always less than thirteen months. The maturities of the underlying securities
will have to be taken into account in calculating the Fund's dollar weighted
average portfolio maturities if the seller of the repurchase agreement fails to
perform under such agreement. In these transactions, the securities acquired by
each Fund are held by the Fund's custodian bank until they are repurchased. The
Adviser will continually monitor the value of the underlying securities to
ensure that their value always equals or exceeds the repurchase price plus
accrued interest. Repurchase agreements are considered to be loans
collateralized by the underlying securities under the 1940 Act.
Repurchase agreements may involve certain risks. If the seller in the
transaction becomes insolvent and subject to liquidation or reorganization under
the Bankruptcy Code, recent amendments to the Code permit the Funds to exercise
a contractual right to liquidate the underlying securities. However, if the
seller is a stockbroker or other entity not afforded protection under the Code,
an agency having jurisdiction over the insolvent entity may determine that a
Fund does not have the immediate right to liquidate the underlying securities.
If the seller defaults, a Fund might incur a loss if the value of the underlying
securities declines. A Fund
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<PAGE>
may also incur disposition costs in connection with the liquidation of the
securities. While the Funds' management acknowledges these risks, it is expected
that they can be controlled through selection criteria established by the Board
of Trustees and careful monitoring procedures.
Income from repurchase agreements is taxable.
REVERSE REPURCHASE AGREEMENTS. Reverse repurchase agreements are considered to
be borrowings under the 1940 Act. At the time a Fund enters into a reverse
repurchase agreement (an agreement under which a Fund sells portfolio securities
and agrees to repurchase them at an agreed-upon date and price), it will place
in a segregated custodial account U.S. government securities or other liquid
high-grade debt securities having a value equal to or greater than the
repurchase price (including accrued interest), and will subsequently monitor the
account to insure that such value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by a Fund may
decline below the price of the securities it is obligated to repurchase.
SECURITIES LENDING. To increase return on portfolio securities, the Funds may
lend their portfolio securities to broker/dealers and other institutional
investors pursuant to agreements requiring that the loans be secured by
collateral equal in value to at least the market value of the securities loaned.
Collateral for such loans may include cash, securities of the U.S. Government,
its agencies or instrumentalities, or an irrevocable letter of credit issued by
a bank which meets the investment standards of the Fund or any combination
thereof. Such loans will not be made, if, as a result, the aggregate of all
outstanding loans of the Fund exceeds 30% of the value of its total assets.
There may be risks of delay in receiving additional collateral or in recovering
the securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially. However, loans will be made only to
borrowers deemed by the Adviser to be of good standing and when, in the
Adviser's judgment, the income to be earned from the loan justifies the
attendant risks. When a Fund lends its securities, it continues to receive
interest or dividends on the securities loaned and may simultaneously earn
interest on the investment of the cash collateral which will be invested in
readily marketable, high-quality, short-term obligations. Although voting
rights, or rights to consent, attendant to securities on loan pass to the
borrower, such loans may be called at any time and will be called so that the
securities may be voted by a Fund if a material event affecting the investment
is to occur.
Securities lending arrangements with broker/dealers require that the loans be
secured by collateral equal in value to at least the market value of the
securities loaned. During the term of such arrangements, a Fund will maintain
such value by the daily marking-to-market of the collateral.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS. Each Fund may, without
restriction, purchase securities on a when-issued basis or forward commitment,
in which case delivery and payment normally take place 15 to 45 days after the
date of the commitment to purchase. A Fund will make commitments only to
purchase securities on a when-issued basis with the intention of actually
acquiring the securities but may sell them before the settlement date if it is
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deemed advisable. The when-issued securities are subject to market fluctuation
and no interest accrues to the purchaser during this period. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. Purchasing
securities on a when-issued basis is a form of leveraging and can involve a risk
that the yields available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself, in which case
there could be an unrealized loss at the time of delivery.
A Fund will maintain liquid assets in segregated accounts in an amount at least
equal in value to the fund's commitments to purchase when-issued securities. If
the value of these assets declines, the Fund will place additional liquid assets
in the account on a daily basis so that the value of the assets in the account
is equal to the amount of such commitments.
OTHER INVESTMENT CONSIDERATIONS - CASH MANAGEMENT FUND
BANK OBLIGATIONS -- Investments by the Cash Management Fund in short-term debt
securities include investments in obligations (including certificates of
deposits and bankers' acceptances) of those U.S. banks which have total assets
at the time of purchase in excess of $1 billion and the deposits of which are
insured by either the Bank Insurance Fund or the Savings and Loan Insurance Fund
of the Federal Deposit Insurance Corporation.
The Cash Management Fund may also make interest-bearing savings deposits in
commercial and savings bank in amounts not in excess of 5% of its total assets
in any one institution. Bank obligations include certificates of deposit, time
deposits and bankers' acceptances issued or guaranteed by a U.S. bank (including
their foreign branches) and foreign banks (including their U.S. branches). These
obligations may be general obligations of the parent bank or may be limited to
the issuing branch by the terms of the specific obligations or by government
regulation.
The Cash Management Fund limits its investments in United States bank
obligations to obligations of United States banks (including foreign branches)
which have more than $1 billion in total assets at the time of investment and
are members of the federal Reserve System or are examined by the Comptroller of
the currency or whose deposits are insured by the Federal Deposit Insurance
Corporation. The Cash Management Fund limits its investment in foreign bank
obligations to United States dollars denominated obligations of foreign banks
(including United States branches) which at the time of investment (i) have more
than $10 billion, or the equivalent in other currencies, in total assets; (ii)
have branches or agencies in the United States; and (iii) in the opinion of the
Fund's investment adviser, are of an investment quality comparable to
obligations of the United States banks which may be purchased by the Fund and
present minimal credit risk.
The Cash Management Fund may not invest in fixed time deposits subject to
withdrawal penalties maturing in more than seven calendar days. Fixed time
deposits may be withdrawn
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<PAGE>
on demand by the investor, but may be subject to early withdrawal penalties
which vary depending upon market conditions and the remaining maturity of the
obligation. ; investments in fixed time deposits subject to withdrawal penalties
maturing from two business days through seven calendar days may not exceed 10%
of the value of the total assets of the Fund.
Obligations of foreign banks involve somewhat different investment risks than
those affecting obligations of United States banks, including the possibilities
that their liquidity could be impaired because of future political and economic
developments, that the obligations may be less marketable than comparable
obligations of United States banks, that a foreign jurisdiction might impose
withholding taxes on interest income payable on those obligations, that foreign
deposits may be seized or nationalized, that foreign governmental restrictions
like exchange controls may be adopted which might adversely affect the payment
of principal and interest on those obligations and that the selection of those
obligations may be more difficult because there may be less publicly available
information concerning foreign banks or the accounting, auditing and financial
reporting standards, practices and requirements applicable to foreign banks may
differ from those applicable to United States banks. In that connection, foreign
banks are not subject to examination by any United States Government agency or
instrumentalities. There is no limitation on the amount Cash Management Fund
assets which may be invested in obligations of foreign banks which meet the
conditions set forth above.
SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES. The Fund intends
to invest from time to time in securities of foreign governments and
supranational agencies. Obligations of supranational agencies, such as the
International Bank for Reconstructions and Development (also known as the World
Bank) are supported by subscribed, but unpaid, commitments of member countries.
There is no assurance that these commitments will be undertaken or complied with
in the future, and therefore foreign and supranational securities are subject to
certain risks associated with foreign investing.
OTHER INVESTMENT CONSIDERATIONS - NEW YORK TAX-FREE FUND.
Municipal obligations which may be acquired by the New York Tax-Free Fund
include debt obligations issued by governmental entities to obtain funds for
various public purposes, including the construction of a wide range of public
facilities, the refunding of outstanding obligations, the payment of general
operating expenses and the extension of loans to public institutions and
facilities.
The two principal classifications of municipal obligations which may be held by
the New York Tax-Free Fund are general obligation securities and revenue
securities. The Fund may also acquire Moral Obligation securities.
Municipal obligations purchased by the New York Tax-Free Fund are debt
obligations issued by or on behalf of states, cities, municipalities and other
public authorities and include:
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MUNICIPAL BONDS. Municipal bonds generally have a maturity at the time of
issuance of more than a year. Investments in municipal bonds are limited to
bonds with a remaining maturity of thirteen months or 397 days or less and which
are rated at the date of purchase "A" or better by S&P and "A" or better by
Moody's or have comparably high quality ratings by other NRSROs that have rated
such bonds, or which if not rated, are, in the opinion of the Adviser, of
comparable investment quality.
The two highest ratings for municipal bonds under the Moody's classification are
"Aaa" and "Aa". Bonds rated "Aaa" are judged to be the "Best Quality" and carry
the smallest amount of investment risk. Bonds rated "Aa" are of "high quality by
all standards", but margins of protection or other elements make long-term risks
appear somewhat greater than "Aaa" rated bonds. Bonds rated A by Moody's are
judged to posses many favorable investment attributed and are to be considered
as "upper medium grade obligations."
The two highest ratings for municipal bonds under the S&P classification are
"AAA" and "AA". Bonds rated "AAA" have the highest rating assigned by S&P with
extremely strong capacity to pay interest and repay principal. Bonds rated "AA"
differ "from the highest rated issues only in small degree." Bonds rated A by
S&P are regarded as upper medium grade, having a strong capacity to pay interest
and repay principal, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in higher
rated categories.
MUNICIPAL NOTES. Municipal notes generally have maturities at the time of
issuance of thirteen months or less. Investments in municipal notes are limited
to notes which are rated at the date of purchase "MIG 1" or "VMIG.1" or "MIG2"
or "VMIG2" by Moody's and/or (if only rated by one agency) "SP-1" or "SP-2" by
S&P or "FIN-1" or "FIN-2" by Fitch or of comparable high quality as determined
by ICBA or Duff & Phelps Credit rating Co., or, if not rated, are, in the
opinion of the Adviser, of comparable investment quality.
The ratings set forth above generally are the highest rating categories
established by the respective rating agencies described above. Notes rated "MIG
1" or "VMIG 1" are judged to be of the "best quality" and notes rated "MIG 2" or
"VMIG 2" are of "high quality, with margins of protection ample, although not as
large as the preceding group". Notes rated "FIN- 1" represent the "strongest"
securities available and notes rated "FIN-2" reflect "a lesser margin of safety"
with respect to the "degree of assurance of timely payment than those rated
"FIN-1." Notes rated "SP-1" show a "very strong capacity to pay principal and
interest" and notes rated "SP-2" show a "satisfactory capacity" to do so.
MUNICIPAL COMMERCIAL PAPER. Municipal commercial paper is a debt obligation with
a stated maturity of thirteen months or less which is issued to finance seasonal
working capital needs or as a short-term financing in anticipation of
longer-term debt. Investments in municipal commercial paper are limited to
commercial paper which is at the time of purchase rated (or issued by an issuer
with a similar security rated) in the highest short-term rating category by two
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or more NRSROs, or the only NRSRO rating the security, or if unrated, determined
to be of comparable credit quality by the Adviser.
The highest ratings for both municipal commercial paper and taxable commercial
paper under the Moody's classification is "P-1" (Prime-1). Issuers rated "P-1"
have a "superior capacity for repayment of short-term promissory obligations."
The "A-1" rating for commercial paper under the S&P classification indicates
that the "degree of safety regarding timely payment is either overwhelming or
very strong." Commercial paper with "overwhelming safety characteristics" will
be rated "A-1+."
After purchase by the Fund, a security may cease to be rated or its rating may
be reduced below the minimum required for purchase by the Fund. Neither event
will require a sale of such security by the Fund. However, if the security is
downgraded to a level below that permitted for money market funds under Rule
2a-7 of the 1940 Act, the Fund's Adviser must report such event to the Board of
Trustee as soon as possible to permit the board to reassess the security
promptly to determine whether it may be retained as an eligible investment for
the Fund. To the extent the ratings given by a NRSRO may change as a result of
changes in such organizations or their rating systems, the Fund will attempt to
use comparable ratings as standards for investments in accordance with the
investment policies contained in this Prospectus and in the SAI.
FLOATING RATE INSTRUMENTS. Certain of the municipal obligations which the New
York Tax-Free Fund may purchase have a floating or variable rate of interest.
Such obligations bear interest at rates which are not fixed, but which vary with
changes in specified market rates or indices, such as a Federal Reserve
composite index. Certain of such obligations may carry a demand or "put" feature
which would permit the holder to tender them back to the issuer (or to a third
party) at par value prior to maturity. The New York Tax-Free Fund may invest in
floating and variable rate Municipal Obligations even if they carry stated
maturities in excess of thirteen months, upon certain conditions contained in
Rule 2a-7 of the 1940 Act. It is the present position of the SEC that the
maturity of a short term (the principal amount must unconditionally be paid in
397 days or less) floating rate security is [one day] and the maturity of a long
term (the principal amount is scheduled to be paid in more than 397 days)
floating rate security that is subject to a demand feature shall be deemed to
have a maturity equal to the period remaining until the principal amount can be
recovered through demand. The New York Tax-Free Fund will limit its purchases of
floating and variable rate Municipal obligations to those meeting the quality
standards set forth above. The adviser will monitor on an ongoing basis the
earning power, cash flow and other liquidity ratios of the issuers of such
obligations, and will similarly monitor the ability of an issuer of a demand
instrument to pay principal and interest on demand. The New York Tax-Free Fund's
right to obtain payment at par on a demand instrument could be affected by
events occurring between the date of the Fund elects to demand payment and the
date payment is due, which may affect the ability of the issuer of the
instrument to make payment when due.
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TAXABLE SECURITIES. The New York Tax-Free Fund may invest up to 20% of the
current value of its total assets in securities subject to the Federal
alternative minimum tax. In addition, the New York Tax-Free fund may invest up
to 100% of its total assets in these and other taxable securities to maintain a
temporary "defensive" posture when, in the opinion of the Adviser, it is prudent
to do so. The conditions for which such a posture would be undertaken include
adverse market conditions or the unavailability of suitable tax-exempt
securities. During these times when the New York Tax-Free fund is maintaining a
temporary "defensive" posture, it may be unable to fully achieve its investment
objective.
The types of taxable securities (in addition to "alternative minimum tax"
securities) in which the New York Tax-Free fund may invest are limited to the
following money market instruments which have remaining maturities not exceeding
397 days: (i) obligations of the United States Government, its agencies or
instrumentalities; (ii) negotiable certificates of deposit, bankers'
acceptances, time deposits and other obligations issued or supported by United
States banks which have more than $1 billion in total assets at the time of
investment and are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the Federal Deposit
Insurance Corporation; (iii) domestic and foreign commercial paper rated in
accordance with the standards set forth above under "Cash Management
Fund-Commercial Paper" and (iv) repurchase agreements. The New York Tax-Free
Fund also has the right to hold cash reserves of up to 100% of their total
assets when the Adviser deems it necessary for temporary defensive purposes.
SECURITIES WITH PUT RIGHTS. The New York Tax-Free Fund may, without restriction,
enter into put transactions, sometimes referred to as stand-by commitments, with
respect to municipal obligations held in their portfolios. The amount payable to
the Fund by the seller upon its exercise of a put will normally be (i) the
Fund's acquisition cost of the securities (excluding any accrued interest which
the Fund paid on their acquisition), less any amortized market premium or plus
any amortized market or original issue discount during the period the Fund owned
the securities, plus (ii) all interest accrued on the securities since the last
interest payment date during the period the securities were owned by the Fund.
Absent unusual circumstances, the Fund values the underlying securities at their
amortized cost. Accordingly, the amount payable by a broker-dealer or bank
during the time a put is exercisable will be substantially the same as the value
of the underlying securities.
If necessary and advisable, the New York Tax-Free Fund may pay for certain puts
either separately in cash or by paying a higher price for portfolio securities
which are acquired subject to such a put (thus reducing the yield to maturity
otherwise available for the same securities).
The Fund's ability to exercise a put will depend on the ability of the
broker-dealer or bank to pay for the underlying securities at the time the put
is exercised. In the event that a broker-dealer or bank should default on its
obligation to repurchase an underlying security, the Fund might be unable to
recover all or a portion of any loss sustained form having to seal the security
elsewhere.
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There are, of course, variations in the quality of Municipal Obligations both
within a particular classification and between classifications, and the yields
on Municipal Obligations depend upon a variety of factors, including general
money market conditions, the financial condition of the issuer, general
conditions of the municipal bond market, the size of a particular offering, the
maturity of the obligation and the rating of the issue. The ratings of NRSROs
represent their opinions as to the quality of Municipal Obligations. It should
be emphasized, however, that ratings are general and are not absolute standards
of quality, and Municipal Obligations with the same maturity, interest rate and
rating may have different yields while Municipal Obligations of the same
maturity and interest rate with different ratings may have the same yield.
The payment of principal and interest on most securities purchased by the New
York Tax-Free Fund will depend upon the ability of the issuers to meet their
obligations. An issuer's obligations under its Municipal Obligations are subject
to the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the Federal Bankruptcy Code, and laws, if
any, which may be enacted by federal or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on, and principal of, its Municipal Obligations may be
materially adversely affected by litigation or other conditions.
Certain of the Municipal Obligations held by the New York Tax-Free Fund may be
insured at the time of issuance as to the timely payment of principal and
interest. The insurance policies will usually be obtained by the issuer of the
Municipal Obligation at the time of its original issuance. In the event that the
issuer defaults on interest or principal payment, the insurer will be notified
and will be required to make payment to the bondholders. There is, however, no
guarantee that the insurer will meet its obligations. In addition, such
insurance will not protect against market fluctuations caused by changes in
interest rates and other factors. The New York Tax-Free Fund may, from time to
time, invest more than 25% of its assets in Municipal Obligations covered by
insurance policies.
Municipal Obligations acquired by the New York Tax-Free Fund may include
short-term General Obligation Notes, Tax Anticipation Notes, Bond Anticipation
Notes, Revenue Anticipation Notes, Tax-Exempt Commercial Paper, Construction
Loan Notes and other forms of short-term tax-exempt loans. Such instruments are
issued with a short-term maturity in anticipation of the receipt of tax funds,
the proceeds of bond placements or other revenues. In addition, the Fund may
invest in bonds and other types of tax-exempt instruments provided they have
remaining maturities of thirteen months or less at the time of purchase.
Certain types of Municipal Obligations (private activity bonds) have been or are
issued to obtain funds to provide privately operated housing facilities,
pollution control facilities, convention or trade show facilities, mass transit,
airport, port or parking facilities and certain local facilities for water
supply, gas, electricity or sewage or solid waste disposal. Private activity
bonds are
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also issued on behalf of privately held or publicly owned corporations in the
financing of commercial or industrial facilities. State and local governments
are authorized in most states to issue private activity bonds for such purposes
in order to encourage corporations to locate within their communities. The
principal and interest on these obligations may be payable from the general
revenues of the users of such facilities.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Obligations. For example, under the Tax Reform Act of
1986, interest on certain private activity bonds must be included in an
investor's alternative minimum taxable income, and corporate investors must
include all tax-exempt interest in their federal alternative minimum taxable
income. The Trust cannot predict what legislation, if any, may be proposed in
the future as regards the income tax status of interest on Municipal
Obligations, or which proposals, if any, might be enacted. Such proposals, while
pending or if enacted, might materially and adversely affect the availability of
Municipal Obligations for investment by the New York Tax-Free Fund and the
liquidity and value of the Fund's portfolio. In such an event, the Trust would
reevaluate the Fund's investment objective and policies and consider possible
changes in its structure or possible dissolution.
STAND-BY COMMITMENTS. The New York Tax-Free Fund may acquire "stand-by
commitments" with respect to Municipal Obligations held in its portfolio. Under
a stand-by commitment, a dealer or bank agrees to purchase at the Fund's option
specified Municipal Obligations at a specified price. Stand-by commitments may
be exercisable by the Fund at any time before the maturity of the underlying
Municipal Obligations and may be sold, transferred or assigned only with the
instruments involved.
The amount payable to the Fund upon its exercise of a stand-by commitment is
normally (i) the Fund's acquisition cost of the Municipal Obligations (excluding
any accrued interest which the Fund paid on their acquisition), less any
amortized market premium or plus any amortized market or original issue discount
during the period the Fund owned the securities, plus (ii) all interest accrued
on the securities since the last interest payment date during that period. A
"stand-by commitment" may be sold, transferred or assigned by the Fund only with
the instrument involved.
The Fund expects that stand-by commitments will generally be available without
the payment of any direct or indirect consideration. However, if necessary or
advisable, the Fund may pay for a stand-by commitment either separately in cash
or by paying a higher price for portfolio securities which are acquired subject
to the commitment (thus reducing the yield to maturity otherwise available for
the same securities). Where the Fund has paid any consideration directly or
indirectly for a stand-by commitment, its cost would be reflected as unrealized
loss for the period during which the commitment was held by the Fund and will be
reflected in realized gain or loss when the commitment is exercised or expires.
The total amount paid in either manner
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<PAGE>
for outstanding stand-by commitments held by the Fund will not exceed 1/2 of 1%
of the value of its total assets calculated immediately after each stand-by
commitment is acquired.
The Fund intends to enter into stand-by commitments only with dealers, banks and
broker-dealers which, in the Adviser's opinion, present minimal credit risks.
The Fund's reliance upon the credit of those dealers, banks and broker/dealers
is secured by the value of the underlying Municipal Obligations that are subject
to a commitment.
The Fund would acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights thereunder for trading
purposes. The acquisition of a stand-by commitment will not affect the valuation
or assumed maturity of the underlying Municipal Obligations which will continue
to be valued in accordance with the ordinary method of valuation employed by the
Fund. Stand-by commitments acquired by the Fund would be valued at zero in
determining net asset value where the Fund paid any consideration directly or
indirectly for a stand-by commitment; its cost would be reflected as unrealized
depreciation for the period in which the commitment was held by the Fund.
ADDITIONAL INVESTMENT LIMITATIONS
The following fundamental policies and investment restrictions have been adopted
by the Fund and except as noted, such policies and restrictions cannot be
changed without approval by the vote of a majority of the outstanding voting
shares of the Fund which, as defined by the Investment Company Act of 1940, as
amended (the "1940 Act"), means the affirmative vote of the lesser of (a) 67% or
more of the shares of the Fund present at a meeting at which the holders of more
than 50% of the outstanding shares of the Fund are represented in person or by
proxy, or (b) more than 50% of the outstanding shares of the Fund.
Each Fund may not:
1. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments but this shall not prevent a Fund
from (i) purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities or (ii)
engaging in forward purchases of sales of foreign currencies or securities.
2. Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent a Fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business). Investments by a Fund in
securities backed by mortgages on real estate or in marketable securities of
companies engaged in such activities are not hereby precluded.
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<PAGE>
3. Issue any senior security (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")), except that (a) a Fund may engage in transactions
that may result in the issuance of senior securities to the extent permitted
under applicable regulations and interpretations of the 1940 Act or an exemptive
order; (b) a Fund may acquire other securities, the acquisition of which may
result in the issuance of a senior security, to the extent permitted under
applicable regulations or interpretations of the 1940 Act; (c) subject to the
restrictions set forth below, the Fund may borrow money as authorized by the
1940 Act. For purposes of this restriction, collateral arrangements with respect
to a Fund's permissible options and futures transactions, including deposits of
initial and variation margin, are not considered to be the issuance of a senior
security.
4. Borrow money, except that a Fund may borrow money for temporary or emergency
purposes or by engaging in reverse repurchase agreements in an amount not
exceeding 10% of the value of its total assets at the time when the loan is made
and may pledge mortgage, or hypothecate no more than 10% of its assets to secure
such borrowings. Any borrowing representing more than 5% of a Fund's total
assets must be repaid before a Fund may make additional investments.
5. Make loans, except that each Fund may: (i) purchase and hold debt instruments
(including without limitation, bonds, notes, debentures or other obligations and
certificates of deposit, bankers' acceptances and fixed time deposits) in
accordance with its investment objectives and policies; (ii) enter into
repurchase agreements with respect to portfolio securities; and (iii) lend
portfolio securities with a value not in excess of one-third of the value of its
total assets.
6. Underwrite securities issued by others, except to the extent that a Fund may
be considered an underwriter within the meaning of the Securities Act of 1933,
as amended (the "1933 Act") in the disposition of portfolio securities.
7. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities,
or repurchase agreements secured thereby) if, as a result, more than 25% of the
Fund's total assets would be invested in the securities of companies whose
principal business activities are in the same industry. Notwithstanding the
foregoing, (i) with respect to a Fund's permissible futures and options
transactions in U.S. Government securities, positions in options and futures
shall not be subject to this restriction; (ii) the Funds may invest more than
25% of their total assets in obligations issued by banks, including U.S. banks;
and (iii) the New York Tax Free Fund, may invest more than 25% of its assets in
municipal obligations secured by bank letters of credit or guarantees, including
participation certificates.
For purposes of investment restriction (2) above, real estate includes
Real Estate Limited Partnerships. For purposes of investment restriction (7)
above, industrial development bonds, where the payment of principal and interest
is the ultimate responsibility of companies within
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the same industry, are grouped together as an "industry." Investment restriction
(7) above, however, is not applicable to investments by a fund in municipal
obligations where the issuer is regarded as a state, city, municipality or other
public authority since such entities are not members of any "industry."
Supranational organizations are collectively considered to be members of a
single "industry" for purposes of restriction (7) above.
The following restrictions are non-fundamental and may be changed by the Fund's
Board of Trustees. Pursuant to such restrictions, each Fund will not:
1. Make short sales of securities, other than short sales "against the box," or
purchase securities on margin except for short-term credits necessary for
clearance of portfolio transactions, provided that this restriction will not be
applied to limit the use of options, futures contracts and related options, in
the manner otherwise permitted by the investment restrictions, policies and
investment program of the Fund;
2. Purchase the securities of any other investment company, if the Fund,
immediately after such purchase or acquisition, owns in the aggregate, (i) more
than 3% of the total outstanding voting stock of such investment company, (ii)
securities issued by such investment company having an aggregate value in excess
of 5% of the value of the total assets of the Fund, or (iii) securities issued
by such investment company and all other investment companies having an
aggregate value in excess of 10% of the value of the total assets of the Fund;
3. Invest more than 10% of its net assets in illiquid securities. Illiquid
securities are securities that are not readily marketable or cannot be disposed
of promptly within seven days and in the usual course of business without taking
a materially reduced price. Such securities include, but are not limited to,
time deposits and repurchase agreements with maturities longer than seven days.
Securities that may be resold under Rule 144A or securities offered pursuant to
Section 4(2) of the Securities Act of 1933, as amended, shall not be deemed
illiquid solely by reason of being unregistered. The Investment Adviser shall
determine whether a particular security is deemed to be liquid based on the
trading markets for the specific security and other factors.
4. The Cash Management Fund may not, with respect to 75% of its assets, hold
more than 10% of the outstanding voting securities of any issuer or invest more
than 5% of its assets in the securities of any one issuer (other than
obligations of the U.S. Government, its agencies and instrumentalities); the New
York Tax-Free Fund may not, with respect to 50% of its assets, hold more than
10% of the outstanding voting securities of any issuer.
5. Each Fund may not purchase or sell interest in oil, gas or mineral leases.
6. Each fund may not write, purchase or sell any put or call option or any
combination thereof, provided that this shall not prevent (i) the writing,
purchasing or selling of puts, calls or combinations thereof with respect to
portfolio securities or (ii) with respect to a fund's
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permissible futures and options transactions, the writing, purchasing,
ownership, holding or selling of futures and options positions or of puts, call
or combinations thereof with expect to futures.
It is the Trust's position that proprietary strips, such as CATS and TIGRS, are
United States Government securities. However, the Trust has been advised that
the staff of the Securities and Exchange Commission's Division of Investment
Management does not consider these to be United states Government securities, as
defined under the 1940 Act.
For purposes of the Funds' investment restrictions, the issuer of a tax-exempt
security is deemed to be the entity (public or private) ultimately responsible
for the payment of the principal of and interest on the security.
GENERAL. The policies and limitations listed above supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Fund's assets that may be invested
in any security or other asset, or sets forth a policy regarding quality
standards, such standard or percentage limitation will be determined immediately
after and as a result of the Fund's acquisition of such security or other asset
except in the case of borrowing (or other activities that may be deemed to
result in the issuance of a "senior security" under the 1940 Act). Accordingly,
any subsequent change in values, net assets, or other circumstances will not be
considered when determining whether the investment complies with the Fund's
investment policies and limitations. If the value of the Fund's holdings of
illiquid securities at any time exceeds the percentage limitation applicable at
the time of acquisition due to subsequent fluctuations in value or other
reasons, the Trustees will consider what actions, if any, are appropriate to
maintain adequate liquidity.
Each Fund is subject to the investment limitations enumerated in this subsection
which may be changed with respect to a particular Fund only by a vote of the
holders of a majority of such Fund's outstanding shares (as defined under
"Miscellaneous" below).
Although the foregoing investment limitations would permit the Funds to invest
in options, futures contracts and options on future contracts, the Funds, during
the current fiscal year, do not intend to trade in such instruments. Prior to
making any such investments, the Funds would notify their shareholders and add
appropriate descriptions concerning the instruments to the Prospectus and this
SAI.
NET ASSET VALUE
The net asset value per share of each Fund described in this SAI is calculated
separately by adding the value of all portfolio securities and other assets
belonging to the particular Fund, subtracting the liabilities charged to the
Fund, and dividing the result by the number of outstanding shares of that Fund.
Assets belonging to a Fund consist of the consideration received
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upon the issuance of shares of the particular Fund together with all net
investment income, realized gains/losses and proceeds derived from the
investment thereof, including any proceeds from the sale of such investments,
any funds or payments derived from any reinvestment of such proceeds, and a
portion of any general assets of the Trust not belonging to a particular
investment portfolio. Assets belonging to a particular Fund are charged with the
direct liabilities of that Fund and with a share of the general liabilities of
the Trust which are normally allocated in proportion to the relative net asset
values of all of the Trust's investment portfolios at the time of allocation.
Subject to the provisions of the Articles of Incorporation, determinations by
the Board of Trustees as to the direct and allocable liabilities, and the
allocable portion of any general assets, with respect to a particular Fund are
conclusive.
The Trust uses the amortized cost method of valuation to value each Fund's
portfolio securities, pursuant to which an instrument is valued at its cost
initially and thereafter a constant amortization to maturity of any discount or
premium is assumed, regardless of the impact of fluctuating interest rates on
the market value of the instrument. This method may result in periods during
which value, as determined by amortized cost, is higher or lower than the price
a Fund would receive if it sold the instrument. The market value of portfolio
securities held by a Fund can be expected to vary inversely with changes in
prevailing interest rates.
Each Fund attempts to maintain a dollar-weighted average portfolio maturity
appropriate to its objective of maintaining a stable net asset value per share.
In this regard, except for securities subject to repurchase agreements, each
Fund will neither purchase a security deemed to have a remaining maturity of
more than thirteen months within the meaning of the 1940 Act nor maintain a
dollar-weighted average maturity which exceeds 90 days. The Board of Trustees
has also established procedures that are intended to stabilize the net asset
value per share of each Fund for purposes of sales and redemptions at $1.00.
These procedures include the weekly determination of the extent, if any, to
which the net asset value per share of each Fund calculated by using available
market quotations deviates from $1.00 per share. In the event such deviation
exceeds one-half of one percent, the Board will promptly consider what action,
if any, should be initiated. If the Board believes that the extent of any
deviation from a $1.00 amortized cost price per share may result in material
dilution or other unfair results to new or existing investors, it has agreed to
take such steps as it considers appropriate to eliminate or reduce to the extent
reasonably practicable any such dilution or unfair results. These steps may
include selling portfolio instruments prior to maturity; shortening the average
portfolio maturity; withholding or reducing dividends; redeeming shares in kind;
reducing the number of outstanding shares without monetary consideration; or
utilizing a net asset value per share determined by using available market
quotations.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares of each Fund described in this SAI are sold without a sales charge
imposed by the Trust, although Shareholder Organizations may be paid by the
Trust for advertising, distribution, or
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<PAGE>
shareholder services. Depending on the terms of the particular account,
Shareholder Organizations also may charge their customers fees for automatic
investment, redemption and other services provided. Such fees may include, for
example, account maintenance fees, compensating balance requirements or fees
based upon account transactions, assets or income. Shareholder Organizations are
responsible for providing information concerning these services and any charges
to any customer who must authorize the purchase of Fund shares prior to such
purchase.
Investors redeeming shares by check generally will be subject to the same rules
and regulations that the transfer agent applies to checking accounts, although
the election of this privilege creates only a shareholder-transfer agent
relationship with the transfer agent. Because dividends on each Fund accrue
daily, checks may not be used to close an account, as a small balance is likely
to result.
Under the 1940 Act, the Funds may suspend the right of redemption or postpone
the date of payment for shares during any period when (a) trading on the
Exchange is restricted by applicable rules and regulations of the SEC; (b) the
Exchange is closed for other than customary weekend and holiday closings; (c)
the SEC has by order permitted such suspension; or (d) an emergency exists as
determined by the SEC. (The Funds may also suspend or postpone the recording of
the transfer of their shares upon the occurrence of any of the foregoing
conditions.)
The Trust's Declaration of Trust permit a Fund to redeem an account
involuntarily, upon sixty days' notice, if redemptions cause the account's net
asset value to remain at less than $1000.
In addition to the situations described in the Funds' Prospectus under
"Redemption of Shares" and in the SAI under "Net Asset Value," the Trust may
redeem shares involuntarily to reimburse the Funds for any loss sustained by
reason of the failure of a shareholder to make full payment for shares purchased
by the shareholder or to collect any charge relating to a transaction effected
for the benefit of a shareholder which is applicable to Fund shares as provided
in the Prospectus from time to time.
EXCHANGE PRIVILEGE
By use of the exchange privilege, shareholders of the Cash Management Fund and
the New York Tax-Free Fund authorize the transfer agent to act on telephonic or
written exchange instructions from any person representing himself to be the
shareholder or in some cases, the shareholder's registered representative or
account representative of record, and believed by the transfer agent to be
genuine. The transfer agent's records of such instructions are binding. The
exchange privilege may be modified or terminated at any time upon notice to
shareholders.
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<PAGE>
Exchange transactions involving shares of the Cash Management Fund or the New
York Tax-Free Fund will be made on the basis of the relative net asset values
per share of the funds involved in the transactions.
Shares of the new fund into which the shareholder is investing will be purchased
at the net asset value per share next determined (plus any applicable sales
charge) after acceptance of the request by the Trust in accordance with the
Trust's customary policies for accepting investments. Exchanges of shares will
be available only in states where they may legally be made.
For federal income tax purposes, share exchanges are treated as sales on which
the shareholder may realize a gain or loss, depending upon whether the value of
the shares to be given up in exchange is more or less than the basis in such
shares at the time of the exchange. Investors exercising the exchange privilege
should request and review the prospectus for the shares to be acquired in the
exchange prior to making an exchange.
SPECIAL PROCEDURES FOR IN-KIND PAYMENTS
Payment for shares of a Fund may, in the discretion of the Fund, be made in the
form of securities that are permissible investments for the Fund as described in
the Prospectus. For further information about this form of payment, contact the
Funds' transfer agent at 414-___-____. In connection with an in-kind securities
payment, a Fund will require, among other things, that the securities be valued
on the day of purchase in accordance with the pricing methods used by the Fund;
that the Fund receives satisfactory assurances that it will have good and
marketable title to the securities received by it; that the securities be in
proper form for transfer to the Fund; that adequate information be provided to
the Fund concerning the basis and other tax matters relating to the securities;
and that the amount of the purchase be at least $1,000,000.
PERIODIC INVESTMENT PLAN
The Funds offer a Periodic Investment Plan whereby a shareholder may
automatically make purchases of shares of a Fund on a regular, monthly basis
($50 minimum per transaction). Under the Periodic Investment Plan, a
shareholder's designated bank or other financial institution debits a
preauthorized amount on the shareholder's account each month and applies the
amount to the purchase of Fund shares. The Periodic Investment Plan must be
implemented with a financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by a Fund for participation
in the Periodic Investment Plan. A $20 fee will be imposed by the transfer agent
if sufficient funds are not available in the shareholder's account or the
shareholder's account has been closed at the time of the automatic transaction.
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<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
The Funds offer shareholders a Systematic Withdrawal Plan, which allows a
shareholder who owns shares of a Fund worth at least $5,000 at current net asset
value at the time the shareholder initiates the Systematic Withdrawal Plan to
designate that a fixed sum ($50 minimum per transaction) be distributed to the
shareholder or as otherwise directed at regular intervals.
DESCRIPTION OF SHARES
The Trust's Articles of Incorporation authorize the Board of Trustees to issue
up to ____________full and fractional shares of common stock__________par value
per share that shall be divided into two classes (each a designated "Class" or
"Fund"). Each fund consists of shares set forth next to its name in the table
below:
Fund in Which Stock Represents Number of authorized Shares in
Interest Each Initial Series
Cash Management Fund
New York Tax-Free Fund
U.S. Treasury Fund
In the event of a liquidation or dissolution of the Trust or an individual Fund,
shareholders of a particular Fund would be entitled to receive the assets
available for distribution belonging to such Fund, and a proportionate
distribution, based upon the relative assets of the Trust's respective
investment portfolios, of any general assets not belonging to any particular
portfolio which are available for distribution. Subject to the allocation of
certain costs, expenses, charges and reserves attributable to the operation of a
particular series, shareholders of a Fund are entitled to participate equally in
the net distributable assets of the particular Fund involved on liquidation,
based on the number of shares of the Fund that are held by each shareholder.
Shareholders of the Funds, as well as those of any other investment portfolio
offered by the Trust, will vote together in the aggregate and not separately on
a fund-by-fund basis, except as otherwise required by law or when the Board of
Trustees determines that the matter to be voted upon affects only the interests
of the shareholders of a particular series. Rule 18f-2 under the 1940 Act
provides that any matter required to be submitted to the holders of the
outstanding voting securities of an investment company such as the Trust shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each fund affected by the matter. A
fund is affected by a matter unless it is clear that the
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<PAGE>
interests of each fund in the matter are substantially identical or that the
matter does not affect any interest of the fund. Under the Rule, the approval of
an investment advisory agreement or any change in a fundamental investment
policy would be effectively acted upon with respect to a fund only if approved
by a majority of the outstanding shares of such fund. However, the Rule also
provides that the ratification of the appointment of independent accountants,
the approval of principal underwriting contracts and the election of Trustees
may be effectively acted upon by shareholders of the Trust voting together in
the aggregate without regard to particular fund.
When issued for payment as described in the Funds' Prospectus and this SAI,
shares of the Funds will be fully paid and non-assessable by the Trust.
The Articles of Incorporation authorize the Board of Trustees, without
shareholder approval (unless otherwise required by applicable law), to: (a) sell
and convey the assets belonging to a series of shares to another management
investment company for consideration which may include securities issued by the
purchaser and, in connection therewith, to cause all outstanding shares of such
series to be redeemed at a price which is equal to their net asset value and
which may be paid in cash or by distribution of the securities or other
consideration received from the sale and conveyance; (b) sell and convert the
assets belonging to a series of shares into money and, in connection therewith,
to cause all outstanding shares of such series to be redeemed at their net asset
value; or (c) combine the assets belonging to a series of shares with the assets
belonging to one or more other series of shares if the Board of Trustees
reasonably determines that such combination will not have a material adverse
effect on the shareholders of any series participating in such combination and,
in connection therewith, to cause all outstanding shares of any such series to
be redeemed or converted into shares of another series of shares at their net
asset value.
ADDITIONAL INFORMATION CONCERNING TAXES
[TO BE REVIEWED BY KLN&F TAX DEPARTMENT]
[The following is only a summary of certain additional tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' Prospectus. No attempt is made to present a detailed explanation of
the tax treatment of the Funds or their shareholders, and the discussion here
and in the Prospectus is not intended as a substitute for careful tax planning.
Investors are advised to consult their tax advisers with specific reference to
their own tax situations.
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<PAGE>
NEW YORK TAX-FREE FUND
As described above and in the Prospectus, the New York Tax-Free Fund is designed
to provide investors with current tax-exempt interest income. This Fund is not
intended to constitute a balanced investment program and is not designed for
investors seeking capital appreciation or maximum tax-exempt income irrespective
of fluctuations in principal. Shares of the Fund may not be suitable for
tax-exempt institutions, or for retirement plans qualified under Section 401 of
the Internal Revenue Code of 1986 (the "Code"), H.R. 10 plans and individual
retirement accounts since such plans and accounts are generally tax- exempt and,
therefore, not only would not gain any additional benefit from the Fund's
dividends being tax-exempt, but such dividends would be ultimately taxable to
the beneficiaries when distributed to them. In addition, the Fund may not be an
appropriate investment for entities which are "substantial users" of facilities
financed by private activity bonds or "related persons" thereof. "Substantial
user" is defined under U.S. Treasury Regulations to include a non- exempt person
who regularly uses a part of such facilities in his trade or business and whose
gross revenues derived with respect to the facilities financed by the issuance
of bonds are more than 5% of the total revenues derived by all users of such
facilities, who occupies more than 5% of the usable area of such facilities or
for whom such facilities or a part thereof were specifically constructed,
reconstructed or acquired. "Related persons" include certain related natural
persons, affiliated corporations, a partnership and its partners and an S
Corporation and its shareholders.
The percentage of total dividends paid by the New York Tax-Free Fund with
respect to any taxable year which qualifies as federal exempt-interest dividends
will be the same for all shareholders receiving dividends for such year. In
order for this Fund to pay exempt-interest dividends during any taxable year, at
the close of each taxable quarter at least 50% of the aggregate value of the
Fund's portfolio must consist of tax-exempt obligations. Within 60 days of the
close of its taxable year, the Fund will notify shareholders of the portion of
the dividends paid by the Fund which constitutes an exempt-interest dividend
with respect to such taxable year. However, the aggregate amount of dividends so
designated cannot exceed the excess of the amount of interest exempt from tax
under Section 103 of the Code received by the Fund during the taxable year over
any amounts disallowed as deductions under Sections 265 and 171(a)(2) of the
Code.
Interest on indebtedness incurred by a shareholder to purchase or carry shares
of the New York Tax-Free Fund generally is not deductible for federal income tax
purposes if the Fund distributes exempt-interest dividends during the
shareholder's taxable year. If a shareholder holds shares of the New York
Tax-Free Fund for six months or less, any loss on the sale or exchange of those
shares will be disallowed to the extent of the amount of exempt-interest
dividends received with respect to the shares. The Treasury Department, however,
is authorized to issue regulations reducing the six-month holding requirement to
a period of not less than the greater of 31 days or the period between regular
distributions for investment companies that regularly distribute at least 90% of
their net tax-exempt interest. No such regulations had been issued as of the
date of this SAI.
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<PAGE>
ALL FUNDS
Each Fund is treated as a separate tax entity under the Code. Although each Fund
expects to qualify as a "regulated investment company" (by satisfying certain
distribution and income requirements in accordance with the code) and to be
relieved of all or substantially all federal income taxes, depending upon the
extent of the Trust's activities in states and localities, the Funds may be
subject to the tax laws of such states or localities. In addition, in those
states and localities which have income tax laws, the treatment of the Funds and
their shareholders under such laws may differ from their treatment under federal
income tax laws.
Investment company taxable income earned by the Money Market Fund, the
Institutional Money Market Fund, the U.S. Treasury Money Market Fund, the U.S.
Government Money Market Fund or the New York Tax-Free Fund will be distributed
by the Funds to their shareholders, and will be taxable to shareholders as
ordinary income whether paid in cash or additional shares. In general,
investment company taxable income will be a Fund's taxable income, subject to
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year.
Similarly, while the Funds do not expect to realize long-term capital gains, any
net realized long-term capital gains will be distributed at least annually. The
Funds will generally have no tax liability with respect to such gains and the
distributions (whether paid in cash or additional shares) will be taxable to
shareholders as mid-term or other long-term capital gains, regardless of how
long a shareholder has held Fund shares. Such long-term capital gain will be 20%
or 28% rate gain, depending upon the funds holding period for the assets the
sale of which generated the capital gain. The tax status of such distributions
will be designated as a capital gain dividend in a written notice mailed by the
Trust to shareholders after the close of the Trust's taxable year.
A 4% non-deductible excise tax is imposed on regulated investment companies that
fail to distribute specified percentages of their ordinary taxable income and
capital gain net income (excess of capital gains over capital losses) with
respect to each calendar year. The Funds intend to make sufficient distributions
or deemed distributions out of their ordinary taxable income and any capital
gain net income with respect to each calendar year to avoid liability for this
excise tax.
If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders). In such event, dividend
distributions (including amounts derived from interest on Municipal Obligations)
would be taxable as ordinary income to shareholders to the extent of the Fund's
current and accumulated earnings and profits, and would be eligible for the
dividends received deduction in the case of corporate shareholders.
- 26 -
<PAGE>
The foregoing discussion is based on federal tax laws and regulations which are
in effect on the date of this SAI; such laws and regulations may be changed by
legislative or administrative action.]
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The Trustees and Officers of the Trust, their addresses, principal occupations
during the past five years and other affiliations are as follows:
<TABLE>
<CAPTION>
POSITION WITH THE PRINCIPAL OCCUPATIONS DURING PAST 5
NAME, ADDRESS & AGE TRUST YEARS AND OTHER AFFILIATIONS
- ------------------- ----- ----------------------------
<S> <C> <C>
Wayne Wong* President, Chief Chief Investment Officer, Ramirez Asset
Financial Officer Management, Inc.
and Trustee
Peter J. O'Rourke Associate, Kramer Levin, Naftalis &
Kramer, Levin, Naftalis Trustee Frankel (law firm) 1994-present; formerly
& Frankel associate Reid & Priest (1990-1994)
919 Third Avenue
New York, N.Y. 10022
Debra Nachlis
Kramer, Levin, Naftalis Associate, Kramer, Levin, Naftalis &
& Frankel Trustee Frankel (1997-present); formerly student,
919 Third Avenue New York University School of Law
New York, N. Y. 10022 (1994-1997)
</TABLE>
* Interested Person as defined in the 1940 Act.
- 27 -
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED TRUSTEE COMPENSATION
(FOR CALENDAR YEAR 1999)
PENSION OR TOTAL
RETIREMENT COMPENSATION
AGGREGATE BENEFITS ACCRUED ESTIMATED FROM TRUST AND
NAME OF PERSON/ COMPENSATION AS PART OF FUND ANNUAL BENEFITS FUND COMPLEX*
POSITION FROM THE TRUST EXPENSES UPON RETIREMENT PAID TO TRUSTEES
-------- -------------- -------- --------------- ----------------
<S> <C>
Peter J. O'Rourke, [to come]
Trustee
Debra Nachlis, [to come]
Trustee
===========================================================================================================================
</TABLE>
*The "Fund Complex" includes only the Trust.
Each Trustee receives an annual fee of _______, a _______per meeting attendance
fee and reimbursement of expenses incurred as a Director. The Chairman of the
Board is entitled to receive an additional ________per annum for services in
such capacity. As of the date of this SAI, the Trustees and Officers of the
Trust, as a group, owned less than 1% of the outstanding shares of each Fund.
ADVISORY SERVICES
Ramirez Asset Management, Inc. is the Investment adviser to the Funds pursuant
to an Investment Advisory Agreement dated September __, 1998. The Advisor is the
investment affiliate of Ramirez & Co., Inc. Ramirez & Co., Inc. has guaranteed
all obligations incurred by Ramirez Asset Management, Inc. in connection with
its Investment Advisory Agreement with the Funds. In its Investment Advisory
Agreement, the Adviser has agreed to pay all expenses incurred by it in
connection with its advisory activities, other than the cost of securities and
other investments, including brokerage commissions and other transaction
charges, if any, purchased or sold for the Funds.
Under its Investment Advisory Agreement, the Adviser is not liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of such Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
its reckless disregard of its duties and obligations under the Agreement.
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<PAGE>
Unless sooner terminated, the Advisory Agreement provides that it will continue
in effect until __________, 2000 and for consecutive one year terms thereafter,
provided such continuance is approved at least annually by the Trust's Board of
Trustees or by a vote of a majority of the outstanding shares of the Fund (as
defined in the 1940 Act), and, in either case, by a majority of the Trustees who
are not parties to the contract or "interested persons" (as defined in the 1940
Act) of any party by votes cast in person at a meeting called for such purpose.
The Advisory Agreement may be terminated by the Trust or the Adviser on 60 days'
written notice, and will terminate immediately in the event of its assignment.
Ramirez & Co., Inc., an affiliate of the Adviser, serves as distributor for
shares of the Funds under a Distribution Agreement with the Trust which is
subject to annual approval by a majority of the Fund's Board of Trustees,
including a majority of directors who are not "interested persons".
ADMINISTRATION, CUSTODY AND TRANSFER AGENT SERVICES
Firstar Trust Company is the Trust's Administrator. Under the Administration
Agreement, the Administrator has agreed to provide the following administrative
services: (1) assist in maintaining office facilities for the Funds, furnish
clerical and certain other services required by the Funds; (2) compile data for
and prepare notices to the SEC; (3) prepare semiannual reports to the SEC and
current shareholders and filings with state securities commissions; (4)
coordinate federal and state tax returns; (5) monitor the arrangements
pertaining to the Funds agreements with shareholder organizations; (6) monitor
the Funds' expense accruals; (7) monitor compliance with the Funds investment
policies and limitations; and (8) generally assist the Funds' operations.
Trust's arrangements with respect to services provided by Shareholder
Organizations; and generally assist in the Funds' operations.
The Administration Agreement continues in effect until ___________, 1999 and
from year to year thereafter if such continuance is approved at least annually
by the Trust's Board of Trustees and by a majority of the Trustees who are not
parties to such Agreement or "interested persons" (as defined in the 1940 Act).
As compensation for its administrative services, the Administrator receives a
monthly fee, based on an annual rate of [. % of aggregate average daily net
assets of each Fund].
Firstar Trust Company serves as the Trust's Transfer Agent and Dividend
Disbursing Agent pursuant to a transfer agency agreement (the "Transfer Agency
Agreement") with the Trust. Under the Transfer Agency Agreement, Firstar has
agreed, among other things, to: (i) issue and redeem shares of the Funds; (ii)
transmit all communications by a Fund to its shareholders of record, including
reports to shareholders, dividend and distribution notices and proxy materials
for meetings of shareholders; (iii) respond to correspondence by shareholders
and others relating to its duties; (iv) maintain shareholder accounts; and (v)
make periodic reports to the Board of Trustees concerning each Fund's
operations. The Fund pays Firstar such compensation as may
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<PAGE>
be agreed upon from time to time. The Transfer Agency Agreement continues in
effect until __________, 2000 and from year to year thereafter if such
continuance is approved at least annually by the Trust's Board of Trustees and
by a majority of the Trustees who are not "interested persons" (as defined in
the 1940 Act) of any party, and such Agreement may be terminated by either party
on 60 days' written notice.
Firstar Trust Company (the "Custodian") serves as the Trust's custodian pursuant
to a custodian agreement (the "Custodian Agreement") with the Trust. The
Custodian is located at 615 East Michigan Street, Milwaukee, Wisconsin 53202.
Under the Custodian Agreement, the Custodian has agreed to (i) maintain a
segregated account or accounts in the name of each Fund; (ii) hold and disburse
portfolio securities on account of each Fund; (iii) collect and receive all
income and other payments and distributions on account of each Fund's portfolio
securities; (iv) respond to correspondence relating to its duties; and (v) make
periodic reports to the Trust's Board of Trustees concerning each Fund's
operations. The Custodian is authorized under the Custodian Agreement to select
one or more banks or trust companies to serve as sub-custodian on behalf of a
Fund, provided that the Custodian remains responsible for the performance of all
of its duties under the Custodian Agreement. The Custodian is entitled to
receive such compensation from the Fund as may be agreed upon from time to time.
OTHER INFORMATION CONCERNING FEES AND EXPENSES. All or part of the fees payable
by any or all of the Funds to the organizations retained to provide services for
the Funds may be waived from time to time in order to increase such Funds' net
investment income available for distribution to shareholders.
Except as otherwise noted, the Adviser and the Administrator pay all expenses in
connection with the performance of their advisory and administrative services
respectively. The Trust bears the expenses incurred in its operations,
including: taxes; interest; fees (including fees paid to its Trustees who are
not affiliated with the Trust); fees payable to the SEC; costs of preparing
prospectuses for regulatory purposes and for distribution; advisory and
administration fees; charges of its custodian and transfer agent; certain
insurance costs; auditing and legal expenses; fees of independent pricing
services; costs of shareholders' reports and shareholder meetings, including
proxy statements and related materials; and any extraordinary expenses. Each
Fund also pays for brokerage fees and commissions, if any, in connection with
the purchase of portfolio securities.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policy established
by the Trust's Board of Trustees, the Adviser is primarily responsible for the
Trust's portfolio decisions and the placing of the Trust's portfolio
transactions. It is the Fund's policy to seek execution of its purchases and
sales at the most favorable prices through responsible broker-dealers and in
agency
- 30 -
<PAGE>
transactions, at competitive commission rates. When considering broker-dealers,
the Fund will take into account such factors as the price of the security, the
size and difficulty of the order, the rate of commission, if any, the
reliability, financial condition, integrity and general execution and
operational capabilities of competing broker-dealers, and the brokerage and
research services which they provide to the Fund's management.
Portfolio securities normally will be purchased or sold from or to dealers
serving as market makers for the securities at a net price, which may include
dealer spreads and underwriting commissions. Purchases and sales of securities
on a stock exchange are effected through brokers who charge a commission. In the
over-the-counter market securities are generally traded on a "net" basis with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security usually includes a profit to the dealer.
Newly issued securities are usually purchased from the issuer or an underwriter,
at prices including underwriting fees; other purchases and sales are usually
placed with those dealers from whom it appears that the best price or execution
will be obtained.
The Funds may sell portfolio securities prior to their maturity if market
conditions and other considerations indicate, in the opinion of the Adviser,
that such sale would be advisable. In addition, the Adviser may engage in
short-term trading when it believes it is consistent with the Fund's investment
objective. Also, a security may be sold and another of comparable quality may be
simultaneously purchased to take advantage of what the Adviser believes to be a
temporary disparity in the normal yield relationships of two securities. The
frequency of portfolio transactions -- the Fund's turnover rates -- will vary
from year to year depending upon market conditions. Because a high turnover rate
increases transaction costs and the possibility of taxable short-term gains (see
"Dividends and Tax Status" in the Fund's Prospectus), the Adviser weighs the
added costs of short-term investment against anticipated gains. The Adviser is
generally responsible for the implementation, or supervision of the
implementation, of investment decisions, including the allocation of principal
business and portfolio brokerage, and the negotiation of commissions.
Under the 1940 Act, persons affiliated with the Trust are prohibited from
dealing with the Trust as a principal in the purchase and sale of securities
unless the transaction is conducted in accordance with procedures established by
the Trust's Board of Trustees and complies in all other respects with certain
criteria or an exemptive order allowing such transactions is obtained from the
SEC. Affiliated persons of the Trust, or affiliated persons of such persons, may
from time to time be selected to execute portfolio transactions for the Trust as
agent. Subject to the considerations discussed above and in accordance with
procedures expected to be adopted by the Board of Trustees, in order for such an
affiliated person to be permitted to effect any portfolio transactions for the
Trust, the commissions, fees or other remuneration received by such affiliated
person must be reasonable and fair compared to the commissions, fees and other
remuneration received by other brokers in connection with comparable
transactions. This standard would allow such an affiliated person to receive no
more than the remuneration which
- 31 -
<PAGE>
would be expected to be received by an unaffiliated broker in a commensurate
arm's-length agency transaction.
Investment decisions for the Trust are made independently from those for other
funds and accounts advised or managed by the Adviser. Such other funds and
accounts may also invest in the same securities as the Trust. If those funds or
accounts are prepared to invest in, or desire to dispose of, the same security
at the same time as the Trust, however, transactions in such securities will be
made, insofar as feasible, for the respective funds and accounts in a manner
deemed equitable to all. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Trust or the price paid
or received by the Trust. In addition, because of different investment
objectives, a particular security may be purchased for one or more funds or
accounts when one or more funds or accounts are selling the same security. To
the extent permitted by law, the Adviser may aggregate the securities to be sold
or purchased for the Trust with those to be sold or purchased for other funds or
accounts in order to obtain best execution.
The Trust reserves the right, in its sole discretion, to (i) suspend the
offering of shares of its Funds, and (ii) reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interest of
the Trust.
Furthermore, if the Board of Trustees determines that it is in the best
interests of the remaining shareholders of the Fund, such Fund may pay the
redemption price, in whole or in part, by a distribution in kind.
DISTRIBUTION PLANS
The Funds' distributor is Ramirez & Co., Inc. Each Fund has adopted a Rule 12b-1
distribution plan which provides that such Fund will pay distribution fees at
annual rates of up to [ ]% of the average daily net assets attributable to its
shares. Payments under the distribution plan shall be used to compensate or
reimburse the Funds' distributor and broker-dealer for services provided and
expenses incurred in connection with the sale of shares, and are not tied to the
amount of actual expenses that are incurred. Some activities intended to promote
the sale of shares will be conducted generally by Ramirez Family of Funds, and
activities intended to promote Funds shares may also benefit the Funds other
shares and other Ramirez Funds.
Ramirez & Co., Inc. may provide promotional incentives to broker dealers that
meet specified sales targets for one or more Ramirez funds. These incentives may
include gifts of up to $100 per person annually; an occasional meal, ticket to a
sporting event or theater for entertainment for broker-dealers and their guests;
and payment for reimbursements for travel expenses, including lodging and meals
in connection with attendance at training and educational meetings within and
outside of the U.S.
- 32 -
<PAGE>
SHAREHOLDER ORGANIZATIONS
As stated in the Funds' Prospectus, the Funds intend to enter into agreements
from time to time with Shareholder Organizations providing for support and/or
distribution services to customers of the Shareholder Organizations who are the
beneficial owners of Fund shares. Under the agreements, the Funds may pay
Shareholder Organizations up to 0.__% (on an annualized basis) of the average
daily net asset value of the shares beneficially owned by their customers.
Support services provided by Shareholder Organizations under their Service
Agreements or Distribution and Service Agreements may include: (i) processing
dividend and distribution payments from a Fund; (ii) providing information
periodically to customers showing their share positions; (iii) arranging for
bank wires; (iv) responding to customer inquiries; (v) providing sub-accounting
with respect to shares beneficially owned by customers or the information
necessary for sub-accounting; (vi) forwarding shareholder communications; (vii)
assisting in processing share purchase, exchange and redemption requests from
customers; (viii) assisting customers in changing dividend options, account
designations and addresses; and (ix) other similar services requested by the
Funds. In addition, under the Distribution and Service Plan, Shareholder
Organizations may provide assistance (such as the forwarding of sales literature
and advertising to their customers) in connection with the distribution of Fund
shares.
The Funds' arrangements with Shareholder Organizations under the agreements are
governed by two Plans (a Service Plan and a Distribution and Service Plan),
which have been adopted by the Board of Trustees. Because the Distribution and
Service Plan contemplates the provision of services related to the distribution
of Fund shares (in addition to support services), that Plan has been adopted in
accordance with Rule 12b-1 under the 1940 Act. In accordance with the Plans, the
Board of Trustees reviews, at least quarterly, a written report of the amounts
expended in connection with the Funds' arrangements with Shareholder
Organizations and the purposes for which the expenditures were made. In
addition, the Funds' arrangements with Shareholder Organizations must be
approved annually by a majority of the Trustees, including a majority of the
Trustees who are not "interested persons" of the Funds as defined in the 1940
Act and have no direct or indirect financial interest in such arrangements (the
"Disinterested Trustees").
The Funds believe that there is a reasonable likelihood that their arrangements
with Shareholder Organizations have benefited each Fund and its shareholders as
a way of allowing Shareholders Organizations to participate with the Funds in
the provision of support and distribution services to customers of the
Shareholder Organizations who own Fund shares. Any material amendment to the
arrangements with Shareholder Organizations under the agreements must be
approved by a majority of the Board of Trustees (including a majority of the
Disinterested Trustees), and any amendment to increase materially the costs
under the Distribution and Service Plan with respect to a Fund must be approved
by the holders of a majority of the outstanding shares of the Fund involved. So
long as the Distribution and Service Plan is in effect, the selection and
nomination of the members of the Board of Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Funds will be committed to the
discretion of such Disinterested Trustees.
- 33 -
<PAGE>
SERVICING AGREEMENTS. The funds may enter into agreements (the "Servicing
Agreement") with certain financial institutions, banks and corporations (the
"Participating Organizations") so that each Participating organization handles
record keeping and provides certain administrative services for its customers
who invest in the Funds through accounts maintained at that participating
organization. In such cases, the participating organization or one of its
nominees will be the shareholder of record as nominee for its customers and will
maintain subaccounts for its customers. In addition, the Participating
Organization will credit cash distributions to each customer account, process
purchase and redemption requests, mail statements of all transactions with
respect to each customer and if required by law, distribute the Trust's
shareholder reports and proxy statements. However, any customer of a
Participating Organization may become the shareholder of record upon written
request to its Participating Organization or transfer agent. Each Participating
Organization will receive monthly payments which in some cases may be based upon
expenses that the participating organization has incurred in the performance of
its services under the Servicing Agreement. The payments will not exceed, on an
annualized basis, an amount equal to 0.35% of the average daily net asset value
during the month of Fund shares in the subaccount of which the Participating
Organization is record owner as nominee for its customers. Such payments will be
separately negotiated with each Participating Organization and will vary
depending upon such factors as the services provided and the costs incurred by
each participating Organization. The payments may be more or less than the fees
payable to Firstar Trust company for the services it provides pursuant to the
Transfer Agency Agreement for similar services.
The payments will be made by the Fund to the participating Organizations
pursuant to the Servicing Agreements. Firstar Trust company will not receive any
compensation as transfer or dividend disbursing agent with respect to the
subaccounts maintained by participating Organizations. The Board of Trustees
will review, at least quarterly, the amounts paid and the purposes for which
such expenditures were made pursuant to the Servicing Agreements.
Under separate agreements, the Adviser (not the funds) may make supplementary
payments from its own revenues to a Participating Organization that agrees to
perform services such as advising customers about the status of their
subaccounts, the current yield and dividends declared to date and providing
related services a shareholder may request. Such payments will vary depending
upon such factors as the services provided and the costs incurred by each
Participating Organization.
Investors who purchase and redeem shares of the Funds through a customer account
maintained at a participating Organization may be charged one or more of the
following types of fees, as agreed upon by the Participating Organization and
the investor, with respect to the customer services provided by the
Participating Organization: account fees (a fixed amount per month or per year);
transaction fees (a fixed amount per transaction processed); compensating
balance requirements (a minimum dollar amount a customer must maintain in order
to obtain the services offered); or account maintenance fees (a periodic charge
based upon a percentage of the assets in the account or of the dividend paid on
those assets).
- 34 -
<PAGE>
INDEPENDENT ACCOUNTANTS
[ ]
COUNSEL
Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New York, New York, 10022
serves as counsel to the Trust and will pass upon the legality of the shares
offered by the Funds' Prospectus.
YIELD AND OTHER PERFORMANCE INFORMATION
From time to time each Fund may quote its "yield" and "effective yield," and the
New York Tax-Free Fund may also quote its "tax-equivalent yield," in
advertisements or in communications to shareholders. Each yield figure is based
on historical earnings and is not intended to indicate future performance. The
"yield" of a Fund refers to the income generated by an investment in the Fund
over a seven-day period identified in the advertisement. This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment. The
"yield" and "effective yield" of each Fund are calculated according to formulas
prescribed by the SEC. The standardized seven-day yield for each Fund is
computed separately by determining the net change, exclusive of capital changes
and income other than investment income, in the value of a hypothetical pre-
existing account in the particular Fund involved having a balance of one share
at the beginning of the period, dividing the net change in account value by the
value of the account at the beginning of the base period to obtain the base
period return, and multiplying the base period return by (365/7). The net change
in the value of an account in a Fund includes the value of additional shares
purchased with dividends from the original share, and dividends declared on both
the original share and any such additional shares and all fees, other than
nonrecurring account sales charges, that are charged to all shareholder accounts
in proportion to the length of the base period and the Fund's average account
size. The capital changes to be excluded from the calculation of the net change
in account value are realized gains and losses from the sale of securities and
unrealized appreciation and depreciation. The effective annualized yield for
each Fund is computed by compounding a particular Fund's unannualized base
period return (calculated as above) by adding 1 to the base period return,
raising the sum to a power equal to 365 divided by 7, and subtracting one from
the result. The fees which may be imposed by financial intermediaries directly
on their customers for cash management services are not reflected in the Trust's
calculations of yields for the Funds.
- 35 -
<PAGE>
The "tax-equivalent yield" of the New York Tax-Free Fund shows the level of
taxable yield needed to produce an after-tax equivalent to the Fund's tax- free
yield. This is done by increasing the Fund's yield (calculated as above) by the
amount necessary to reflect the payment of federal income tax at a stated tax
rate. The Fund's standardized "tax-equivalent yield" is computed by: (a)
dividing the portion of the Fund's yield (as calculated above) that is exempt
from federal income tax by one minus a stated federal income tax rate; and (b)
adding the figure resulting from (a) above to that portion, if any, of the
Fund's yield that is not exempt from federal income tax. The "tax-equivalent
yield" will always be higher than the "yield" of the New York Tax-Free Fund.
Each Fund may compute "average annual total return." Average annual total return
reflects the average annual percentage change in value of an investment in
shares of a series over the measuring period. Each Fund may compute aggregate
total return, which reflects the total percentage change in value over the
measuring period.
Additionally, the total return and yields of the Funds may be compared in such
advertisements or reports to shareholders to those of other mutual funds with
similar investment objectives and to other relevant indices or to rankings
prepared by independent services or other financial or industry publications
that monitor the performance of mutual funds. For example, the yields of the
Money Market Fund and the Institutional Money Market Fund may be compared to the
Donoghue's Money Fund Average, the yields of the U.S. Treasury Money Market Fund
and the U.S. Government Money Market Fund may be compared to the Donoghue's
Government Money Fund Average, and the yields of the New York Tax-Free Fund may
be compared to the Donoghue's Tax-Free Money Fund Average, which are averages
compiled by IBC/Donoghue's Money Fund Report, a widely recognized independent
publication that monitors the performance of money market funds. In addition,
the yields of the Money Market, Institutional Money Market, U.S. Treasury Money
Market and the U.S. Government Money Market Funds may be compared to the average
yields reported by the Bank Rate Monitor for money market deposit accounts
offered by the 50 leading banks and thrift institutions in the top five standard
metropolitan statistical areas.
Yield data and total return as reported in national financial publications
including Forbes, Barron's, Morningstar Mutual Funds, The Wall Street Journal
and The New York Times, or in publications of a local or regional nature, may
also be used in comparing the yields of the Funds.
Since performance fluctuates, performance data cannot necessarily be used to
compare an investment in a Fund's shares with bank deposits, savings accounts
and similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Investors should remember that
performance and yield are generally functions of the kind and quality of the
instruments held in a portfolio, portfolio maturity, operating expenses, and
market conditions. Any fees charged by Shareholder Organizations directly to
their customer accounts
- 36 -
<PAGE>
in connection with investments in shares of the Funds will not be included in
the Funds' calculations of yield and total return.
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not contain all
the information included in the Registration Statement filed with the SEC under
the Securities Act of 1933 with respect to the securities offered by the
Prospectus. Certain portions of the Registration Statement have been omitted
from the Prospectus and this Statement of Additional Information pursuant to the
rules and regulations of the SEC. The Registration Statement including the
exhibits filed therewith may be examined at the office of the SEC in Washington,
D.C.
Statements contained in the Prospectus or in this Statement of Additional
Information as to the contents of any contract or other document referred to are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.
- 37 -
<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS
COMMERCIAL PAPER RATINGS
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. The following summarizes the rating categories used by Standard and
Poor's for commercial paper.
"A-1" - Issue's degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics are denoted
"A-1+."
"A-2" - Issue's capacity for timely payment is satisfactory. However, the
relative degree of safety is not as high as for issues designated "A-1."
"A-3" - Issue has an adequate capacity for timely payment. It is however,
somewhat more vulnerable to the adverse effects of changes and circumstances
than an obligation carrying a higher designation.
"B"- Issue has only a speculative capacity for timely payment.
"C" - Issue has a doubtful capacity for payment.
"D" - Issue is in payment default.
Moody's commercial paper ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of 9
months. The following summarizes the rating categories used by Moody's for
commercial paper:
"Prime-1" - Issuer or related supporting institutions are considered to have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structures with moderate reliance on
debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
"Prime-2" - Issuer or related supporting institutions are considered to have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still
Appendix A-1
<PAGE>
appropriate, may be more affected by external conditions. Ample alternative
liquidity is maintained.
"Prime-3" - Issuer or related supporting institutions have an acceptable
capacity for repayment of short-term promissory obligations. The effects of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuer does not fall within any of the Prime rating categories.
The three rating categories of Duff & Phelps for investment grade commercial
paper and short-term debt are "D- 1," "D- 2" and "D- 3." Duff & Phelps employs
three designations, "D- 1+," " D- 1" and "D- 1-," within the highest rating
category. The following summarizes the rating categories used by Duff & Phelps
for commercial paper:
"D-1+" - Debt possesses highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental protection factors. Risk factors
are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors. Risk factors are
very small.
"D-2" - Debt possesses good certainty for timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
"D-3" - Debt possesses satisfactory liquidity, and other protection factors
qualify issue as investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.
"D-4" - Debt possesses speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service. Operating factors and
market access may be subject to a high degree of variation.
"D-5" - Issuer failed to meet scheduled principal and/or interest payments.
Fitch IBCA short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years. The following
summarizes the rating categories used by Fitch IBCA for short-term obligations:
Appendix A-2
<PAGE>
"F-1+" - Securities possess exceptionally strong credit quality. Issues assigned
this rating are regarded as having the strongest degree of assurance for timely
payment.
"F-1" - Securities possess highest credit quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in degree than issues
rated "F-1+."
"F-2" - Securities possess good credit quality. Issues assigned this rating have
a satisfactory degree of assurance for timely payment, but the margin of safety
is not as great as the "F-1+" and "F-1" categories.
"F-3" - Securities possess fair credit quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for timely payment is
adequate; however, near-term adverse changes could cause these securities to be
rated below investment grade.
"B" - Securities are speculative. Issues assigned this rating have
characteristics suggesting a minimal degree of assurance for timely payment and
are vulnerable to near-term adverse changes in financial and economic
conditions.
"C" - Default is a real possibility for these securities. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.
"D" - Securities are in actual or imminent payment default.
Fitch IBCA may also use the symbol "LOC" with its short-term ratings to indicate
that the rating is based upon a letter of credit issued by a commercial bank.
Thomson BankWatch short-term ratings assess the likelihood of an untimely
payment of principal or interest of unsubordinated instruments having a maturity
of one year or less which is issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the ratings used by Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's highest rating
category and indicates a very high likelihood that principal and interest will
be paid on a timely basis.
"TBW-2" - This designation indicates that 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" - This designation represents the lowest investment grade category and
indicates that while the debt is more susceptible to adverse developments (both
internal and external) than
Appendix A-3
<PAGE>
obligations with higher ratings, the capacity to service principal and interest
in a timely fashion is considered adequate.
"TBW-4" - This designation indicates that the debt is regarded as non-
investment grade and therefore speculative. Corporate and Municipal Long-Term
Debt Ratings
The following summarizes the ratings used by Standard & Poor's for corporate and
municipal debt:
"AAA" - This designation represents the highest rating assigned by Standard &
Poor's to a debt obligation and indicates an extremely strong capacity to pay
interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to pay interest and
repay principal and differs from AAA issues only in small degree.
"A" - Debt is considered to have a strong capacity to pay interest and repay
principal although such issues are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay interest and
repay principal. Whereas such issues normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
"BB," "B," "CCC," "CC," and "C" - Debt is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. "BB" indicates the lowest degree of
speculation and "C" the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
"CI" - This rating is reserved for income bonds on which no interest is being
paid.
"D" - Debt is in payment default. This rating is used when interest payments or
principal payments are not made on the date due, even if the applicable grace
period has not expired, unless S&P believes such payments will be made during
such grace period. Rating is also used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
"r" - This rating is attached to highlight derivative, hybrid, and certain other
obligations that S & P believes may experience high volatility or high
variability in expected returns due to
Appendix A-4
<PAGE>
non-credit risks. Examples of such obligations are: securities whose principal
or interest return is indexed to equities, commodities, or currencies; certain
swaps and options; and interest only and principal only mortgage securities.
The following summarizes the ratings used by Moody's for corporate and municipal
long-term debt:
"Aaa" - Bonds 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 are judged to be of high quality by all standards. Together with
the "Aaa" group they comprise what are generally known as high- grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they are neither highly
protected nor poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these ratings
provide questionable protection of interest and principal ("Ba" indicates some
speculative elements; "B" indicates a general lack of characteristics of
desirable investment; "Caa" represents a poor standing; "Ca" represents
obligations which are speculative in a high degree; and "C" represents the
lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Con. ( ) - Bonds for which the security depends upon the completion of some act
or the fulfillment of some condition are rated conditionally. These are bonds
secured by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operation experience, (c) rentals which begin when facilities are
completed, or (d) payments to which some other limiting condition attaches.
Parenthetical rating denotes the probable credit stature upon completion of
construction or elimination of basis of condition.
Appendix A-5
<PAGE>
(P) - When applied to forward delivery bonds, indicates that the rating is
provisional pending delivery of the bonds. The ratings may be revised prior to
delivery if changes occur in the legal documents or the underlying credit
quality of the bonds.
Moody's applies numerical modifiers 1, 2 and 3 in each generic classification
from "Aa" to "B" in its bond rating system. The modifier 1 indicates that the
issuer ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issuer
ranks at the lower end of its generic rating category.
The following summarizes the long-term debt ratings used by Duff & Phelps for
corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The risk factors
are negligible, being only slightly more than for risk-free U.S. Treasury debt.
"AA" - Debt is considered of high quality. Protection factors are strong. Risk
is modest but may vary slightly from time to time because of economic
conditions.
"A" - Debt possesses protection factors which are average but adequate. However,
risk factors are more variable and greater in periods of economic stress.
"BBB" - Debt possesses below average protection factors but such protection
factors are still considered sufficient for prudent investment. Considerable
variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these ratings is
considered to be below investment grade. Although below investment grade, debt
rated "BB" is deemed likely to meet obligations when due. Debt rated "B"
possesses the risk that obligations will not be met when due. Debt rated "CCC"
is well below investment grade and has considerable uncertainty as to timely
payment of principal, interest or preferred dividends. Debt rated "DD" is a
defaulted debt obligation, and the rating "DP" represents preferred stock with
dividend arrearages.
To provide more detailed indications of credit quality, the "AA," "A," "BBB,"
"BB" and "B" ratings may be modified by the addition of a plus (+) or minus (-)
sign to show relative standing within these major categories.
The following summarizes the highest four ratings used by Fitch IBCA for
corporate and municipal bonds:
"AAA" - bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
Appendix A-6
<PAGE>
"AA" - Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA." Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+."
"A" - Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of good credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have an adverse impact on these bonds, and therefore, impair
timely payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
To provide more detailed indications of credit quality, the Fitch IBCA ratings
from and including "AA" to "BBB" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within these major rating
categories.
Thomson BankWatch assesses the likelihood of an untimely repayment of principal
or interest over the term to maturity of long-term debt and preferred stock
which are issued by United States commercial banks, thrifts and non-bank banks;
non-United States banks; and broker-dealers. The following summarizes the rating
categories used by Thomson BankWatch for long-term debt ratings:
"AAA" - This designation represents the highest category assigned by Thomson
BankWatch to long-term debt and indicates that the ability to repay principal
and interest on a timely basis is very high.
"AA" - This designation indicates a very strong ability to repay principal and
interest on a timely basis with limited incremental risk versus issues rated in
the highest category.
"A" - This designation indicates that 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.
"BBB" - This designation represents Thomson BankWatch's lowest investment grade
category and indicates an acceptable capacity to repay principal and interest.
Issues rated "BBB" are, however, more vulnerable to adverse developments (both
internal and external) than obligations with higher ratings.
Appendix A-7
<PAGE>
"BB," "B," "CCC," and "CC" - These designations are assigned by Thomson
BankWatch to non-investment grade long-term debt. Such issues are regarded as
having speculative characteristics regarding the likelihood of timely payment of
principal and interest. "BB" indicates the lowest degree of speculation and "CC"
the highest degree of speculation.
"D" - this designation indicates that the long-term debt is in default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include a plus
or minus sign designation which indicates where within the respective category
the issue is placed.
MUNICIPAL NOTE RATINGS
A Standard and Poor's rating reflects the liquidity concerns and market access
risks unique to notes due in three years or less. The following summarizes the
ratings used by Standard & Poor's Rating Group for municipal notes:
"SP-1" - The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
"SP-3" - The issuers of these municipal notes exhibit speculative capacity to
pay principal and interest.
Moody's ratings for state and municipal notes and other short-term loans are
designated Moody's Investment Grade ("MIG") and variable rate demand obligations
are designated Variable Moody's Investment Grade ("VMIG"). Such ratings
recognize the differences between short-term credit risk and long-term risk. The
following summarizes the ratings by Moody's Investors Service, Inc. for
short-term notes:
"MIG-1" / "VMIG-1" - Loans bearing this designation are of the best quality,
enjoying strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
"MIG-2" / ""VMIG-2" - Loans bearing this designation are of high quality, with
margins of protection ample although not so large as in the preceding group.
"MIG-3" / "VMIG-3" - Loans bearing this designation are of favorable quality,
with all security elements accounted for but lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
Appendix A-8
<PAGE>
"MIG-4" / "VMIG-4" - Loans bearing this designation are of adequate quality,
carrying specific risk but having protection commonly regarded as required of an
investment security and not distinctly or predominantly speculative.
"SG" - Loans bearing this designation are of speculative quality and lack
margins of protection.
Duff & Phelps and Fitch IBCA use the short-term ratings described under
commercial Paper Ratings for Municipal notes.
Appendix A-9
<PAGE>
APPENDIX B
ADDITIONAL INFORMATION CONCERNING NEW YORK ISSUERS
The Fund will invest substantially all of its assets in New York municipal
securities. In addition, the specific New York municipal securities in which the
Fund will invest will change from time to time. The Fund is therefore
susceptible to political, economic, regulatory or other factors affecting
issuers of New York municipal securities. The following information constitutes
only a brief summary of a number of the complex factors which may affect issuers
of New York municipal securities and does not purport to be a complete or
exhaustive description of all adverse conditions to which issuers of New York
municipal securities may be subject. Such information is derived from official
statements utilized in connection with the issuance of New York municipal
securities, as well as from other publicly available documents. Such information
has not been independently verified by the Fund, and the Fund assumes no
responsibility for the completeness or accuracy of such information.
Additionally, many factors, including national, economic, social and
environmental policies and conditions, which are not within the control of such
issuers, could have a material adverse impact on the financial condition of such
issuers. The Fund cannot predict whether or to what extent such factors or other
factors may affect the issuers of New York municipal securities, the market
value or marketability of such securities or the ability of the respective
issuers of such securities acquired by the Fund to pay interest on or principal
of such securities. The creditworthiness of obligations issued by local New York
issuers may be unrelated to the creditworthiness of obligations issued by the
State of New York, and there is no responsibility on the part of the State of
New York to make payments on such local obligations. There may be specific
factors that are applicable in connection with investment in the obligations of
particular issuers located within New York, and it is possible the Fund will
invest in obligations of particular issuers as to which such specific factors
are applicable. However, the information set forth below is intended only as a
general summary and not as a discussion of any specific factors that may affect
any particular issuer of New York municipal securities.
[To Come]
Appendix B-1
<PAGE>
PART C. OTHER INFORMATION
- --------------------------
ITEM 24. Financial Statements and Exhibits
List all financial statements and exhibits filed as part of the
Registration Statement.
(a) Financial statements:
In Part A: None.
In Part B: To be filed by amendment.
In Part C: None.
(b) Exhibits
1.(a) Certificate of Trust. (1)
1.(b) Trust Instrument.(1)
2. By-laws.(1)
3. None.
4. None.
5. Investment Advisory Agreement between Registrant on
behalf of the Ramirez Cash Management Money Market
Fund, the Ramirez New York Tax-Free Money Market
Fund, and Ramirez Asset Management, Inc.
6. Distribution Agreement between the Registrant on
behalf of the Ramirez Cash Management Money Market
Fund, the Ramirez New York Tax-Free Money Market
Fund, and Ramirez & Co., Inc.
7. None.
8. Custodian and Transfer Agency Agreements between
Registrant on behalf of the Ramirez Cash Management
Money Market Fund, the Ramirez New York Tax-Free
Money Market Fund and Firstar Trust Company.
- --------------------
1. Filed herewith.
2. To be filed by amendment.
<PAGE>
9. Administration Agreement between Registrant on
behalf of the Ramirez Cash Management Money Market
Fund, the Ramirez New York Tax-Free Money Market
Fund and Firstar Trust Company.
10. Opinion of Kramer, Levin, Naftalis & Frankel.(2)
11.(a) Consent of Kramer, Levin, Naftalis & Frankel,
Counsel for the Registrant.(1)
11.(b) Consent of o, independent accountants for the
Registrant.(2)
12. None.
13. Investment letter re: initial $100,000 capital.(2)
14. None.
15. Rule 12b-1 Plan for the Ramirez Cash Management
Money Market Fund and the Ramirez New York Tax-Free
Money Market Fund.(2)
16. Schedule for computation of performance
quotation.(2)
17. Not applicable.
18. None.
- --------------------
1. Filed herewith.
2. To be filed by amendment.
ITEM 25. Persons Controlled By or Under Common Control with Registrant
None.
ITEM 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of July 1, 1998
- ------- ------ ------------------
Shares of beneficial interest ($.001 par value):
Ramirez Cash Management Money Market Fund 0
Ramirez New York Tax-Free Money Market Fund 0
- 5 -
<PAGE>
ITEM 27. Indemnification
Section 10.02 of the Registrant's Trust Instrument provides as
follows:
(a) Subject to the exceptions and limitations contained in Subsection 10.02(b):
(i) every person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred
by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A) by the court or other
body approving the settlement; (B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or (C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
be a Covered Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein shall affect
any rights to indemnification to which Trust personnel, other than Covered
Persons, and other persons may be entitled by contract or otherwise under
law.
- 6 -
<PAGE>
(d) Expenses in connection with the preparation and presentation of a defense
to any claim, action, suit or proceeding of the character described in
Subsection (a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or Series if it is ultimately determined that
he is not entitled to indemnification under this Section 10.02; provided,
however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured
against losses arising out of any such advance payments or (iii) either a
majority of the Trustees who are neither Interested Persons of the Trust
nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available
facts (as opposed to a trial-type inquiry or full investigation), that
there is reason to believe that such Covered Person will be found entitled
to indemnification under this Section 10.02
ITEM 28. Business and Other Connections of Investment Adviser
Registrant is fulfilling the requirement of this Item 28 to
provide a list of the officers and directors of Ramirez Asset Management, Inc.
("RAM"), the investment adviser of the Registrant, together with information as
to any other business, profession, vocation or employment of a substantial
nature engaged in by RAM or those of its officers and directors during the past
two years, by incorporating by reference the information contained in the Form
ADV filed with the SEC pursuant to the Investment Advisers Act of 1940 by RAM
(SEC File No. 801-55483).
ITEM 29. Principal Underwriters
(a) None.
(b) The following information is furnished with respect to the
officers and partners of Ramirez & Co., Inc., the Registrant's principal
underwriter. The business address for all persons listed below is 61 Broadway,
New York, New York 10006.
Name and Principal Positions and Offices with Positions and Offices
Business Address Principal Underwriter with Registrant
- ---------------- --------------------- ---------------
Samuel A. Ramirez CEO/President None
John V. Kick Senior Vice President None
Alexander Vermitsky, Jr. Vice President, Compliance None
(c) Not Applicable. The Registrant's principal underwriter is an
affiliated person of the Registrant.
- 7 -
<PAGE>
ITEM 30. Location of Accounts and Records
As required by Section 31(a) of the Investment Company Act of
1940, the accounts, books or other documents relating to the Ramirez Cash
Management Money Market Fund and the Ramirez New York Tax-Free Money Market Fund
budget and accruals will be kept by Firstar Trust Company, 615 East Michigan
Street, Milwaukee, Wisconsin 53202. The accounts, books or other documents of
the Fund relating to shareholder accounts and records and dividend disbursements
will also be kept by Firstar Trust Company at the above address.
ITEM 31. Management Services
There are no management-related service contracts not discussed
in Parts A and B.
ITEM 32. Undertakings
(1) Registrant undertakes to call a meeting of shareholders for
the purpose of voting upon the question of removal of a director or directors if
requested to do so by the holders of at least 10% of the Registrant's
outstanding voting securities, and to assist in communications with other
shareholders as required by Section 16(c) of the 1940 Act.
- 8 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city New York, and the State of New York on this 14th
day of July, 1998.
THE RAMIREZ TRUST
By:/s/ Wayne Wong
-----------------
Wayne Wong
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on the 14th day of July, 1998.
/s/Wayne Wong Chairman and Chief Financial Officer
- -------------
Wayne Wong
/s/Peter J. O'Rourke Trustee
- --------------------
Peter J. O'Rourke
/s/Debra Nachlis Trustee
- ----------------
Debra Nachlis
<PAGE>
INDEX TO EXHIBITS
Exhibit Caption
EX-99.B1(a) Certificate of Trust
EX-99.B(b) Trust Instrument
EX-99.B2 Bylaws
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel, counsel for
Registrant.
CERTIFICATE OF TRUST
OF
THE RAMIREZ TRUST
This Certificate of Trust is being executed as of June 25,
1998 for the purpose of organizing a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. ss.ss. 3801 et seq.
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is The Ramirez Trust
("Trust").
2. Registered Investment Company. The Trust is or will become
a registered investment company under the Investment Company Act of 1940, as
amended.
3. Registered Office and Registered Agent. The registered
office of the Trust in the State of Delaware is located at 1013 Centre Road,
Wilmington, Delaware 19805-1297. The name of the registered agent of the Trust
for service of process at such location is Corporation Service Company.
4. Notice of Limitation of Liabilities of Series. Notice is
hereby given that the Trust is or may hereafter be constituted a series trust.
The debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to any particular series shall be enforceable
against the assets of such series only, and not against the assets of the Trust
generally.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all the trustees of
the Trust, have duly executed this Certificate of Trust as of the day and year
first above written.
Trustees
/s/ Peter J. O'Rourke
---------------------
Peter J. O'Rourke
/s/ Debra Jacob Nachlis
-----------------------
Debra Jacob Nachlis
- 2 -
THE RAMIREZ TRUST
TRUST INSTRUMENT
DATED JUNE 30, 1998
<PAGE>
THE RAMIREZ TRUST
TABLE OF CONTENTS
Page
ARTICLE I - NAME AND DEFINITION............................................. 1
Section 1.01 Name................................................. 1
Section 1.02 Definitions.......................................... 1
ARTICLE II - BENEFICIAL INTEREST............................................ 2
Section 2.01 Shares of Beneficial Interest........................ 2
Section 2.02 Issuance of Shares................................... 2
Section 2.03 Register of Shares and Share Certificates............ 3
Section 2.04 Transfer of Shares................................... 3
Section 2.05 Treasury Shares...................................... 3
Section 2.06 Establishment of Series.............................. 3
Section 2.07 Investment in the Trust.............................. 4
Section 2.08 Assets and Liabilities of Series..................... 4
Section 2.09 No Preemptive Rights................................. 5
Section 2.10 No Personal Liability of Shareholder................. 5
Section 2.11 Assent to Trust Instrument........................... 5
ARTICLE III - THE TRUSTEES.................................................. 6
Section 3.01 Management of the Trust.............................. 6
Section 3.02 Initial Trustees..................................... 6
Section 3.03 Term of Office....................................... 6
Section 3.04 Vacancies and Appointments........................... 7
Section 3.05 Temporary Absence.................................... 7
Section 3.06 Number of Trustees................................... 7
Section 3.07 Effect of Ending of a Trustee's Service.............. 7
Section 3.08 Ownership of Assets of the Trust..................... 7
ARTICLE IV - POWERS OF THE TRUSTEES......................................... 8
Section 4.01 Powers............................................... 8
Section 4.02 Issuance and Repurchase of Shares.................... 11
Section 4.03 Trustees and Officers as Shareholders................ 11
Section 4.04 Action by the Trustees............................... 11
Section 4.05 Chairman of the Trustees............................. 11
Section 4.06 Principal Transactions............................... 11
ARTICLE V - EXPENSES OF THE TRUST........................................... 12
ARTICLE VI - INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT................................... 12
Section 6.01 Investment Adviser................................... 12
Section 6.02 Principal Underwriter................................ 13
i
<PAGE>
Section 6.03 Administration....................................... 13
Section 6.04 Transfer Agent....................................... 13
Section 6.05 Parties to Contract.................................. 13
Section 6.06 Provisions and Amendments............................ 14
ARTICLE VII - SHAREHOLDERS' VOTING POWERS AND MEETINGS...................... 14
Section 7.01 Voting Powers........................................ 14
Section 7.02 Meetings............................................. 15
Section 7.03 Quorum and Required Vote............................. 15
ARTICLE VIII - CUSTODIAN.................................................... 16
Section 8.01 Appointment and Duties............................... 16
Section 8.02 Central Certificate System........................... 16
ARTICLE IX - DISTRIBUTIONS AND REDEMPTIONS.................................. 17
Section 9.01 Distributions........................................ 17
Section 9.02 Redemptions.......................................... 17
Section 9.03 Determination of Net Asset Value and Valuation
of Portfolio Assets.................................. 17
Section 9.04 Suspension of the Right of Redemption................ 18
Section 9.05 Redemption of Shares in Order to Qualify
as Regulated Investment Company...................... 18
Section 9.06 Redemption of Small Accounts......................... 19
ARTICLE X - LIMITATION OF LIABILITY AND INDEMNIFICATION..................... 19
Section 10.01 Limitation of Liability............................. 19
Section 10.02 Indemnification..................................... 19
Section 10.03 Shareholders........................................ 20
ARTICLE XI - MISCELLANEOUS.................................................. 21
Section 11.01 Trust Not A Partnership............................. 21
Section 11.02 Trustee's Good Faith Action, Expert Advice,
No Bond or Surety........................................ 21
Section 11.03 Establishment of Record Dates....................... 21
Section 11.04 Termination of Trust................................ 22
Section 11.05 Reorganization...................................... 23
Section 11.06 Filing of Copies, References, Headings.............. 23
Section 11.07 Applicable Law...................................... 24
Section 11.08 Amendments.......................................... 24
Section 11.09 Fiscal Year......................................... 24
Section 11.10 Name Reservation.................................... 24
Section 11.11 Provisions in Conflict With Law..................... 25
ii
<PAGE>
THE RAMIREZ TRUST
JUNE 30, 1998
TRUST INSTRUMENT, made by Peter J. O'Rourke and Debra Jacob Nachlis
(the "Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust under this
Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITION
SECTION 1.01 NAME. The name of the trust created hereby is "The Ramirez
Trust."
SECTION 1.02 DEFINITIONS. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time. Whenever reference is made hereunder to the 1940 Act, such
references shall be interpreted as including any applicable order or orders of
the Commission or any rules or regulations adopted by the Commission thereunder
or interpretive releases of the Commission staff;
(b) "Bylaws" means the Bylaws of the Trust as adopted by the Trustee,
as amended from time to time;
(c) "Commission" has the meaning given it in the 1940 Act. In addition,
"Affiliated Person," "Interested Person" and "Principal Underwriter" shall have
the respective meanings given them in the 1940 Act;
(d) "Delaware Act" means the Delaware Business Trust Act, to Chapter 38
of Title 12 of the Delaware Code, as amended from time to time;
(e) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.03 hereof;
(f) "Outstanding Shares" means those Shares shown from time to time in
the books of the Trust or its transfer agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust;
1
<PAGE>
(g) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.06 hereof;
(h) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(i) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares as
well as whole Shares;
(j) The "Trust" means The Ramirez Trust, a Delaware business trust, and
reference to the Trust when applicable to one or more Series of the Trust, shall
refer to any such Series;
(k) The "Trustees" means the person or persons who has or have signed
this Trust Instrument so long as he or they shall continue in office in
accordance with the terms hereof and all other persons who may from time to time
be duly qualified and serving as Trustees in accordance with the provisions of
Article III hereof, and reference herein to a Trustee or to the Trustees shall
refer to the individual Trustees in their respective capacity as Trustees
hereunder;
(l) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
ARTICLE II
BENEFICIAL INTEREST
SECTION 2.01 SHARES OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall be divided into such Shares of one or more separate and distinct
Series or classes of a Series as set forth in Section 2.06 or as the Trustees
shall otherwise from time to time create and establish as provided in Section
2.06. The number of Shares of each Series and class thereof authorized hereunder
is unlimited. Except as otherwise determined by the Trustees, each Share shall
have a par value of $.001. All Shares issued hereunder, including without
limitation Shares issued in connection with a dividend paid in Shares or a split
or reverse split of Shares, shall be fully paid and nonassessable.
SECTION 2.02 ISSUANCE OF SHARES. The Trustees in their discretion may,
from time to time, without a vote of the Shareholders, issue Shares, in addition
to the then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/1000th of a Share or
2
<PAGE>
integral multiples thereof. The Trustees or any person the Trustees may
authorize for the purpose may, in their discretion, reject any application for
the issuance of shares.
SECTION 2.03 REGISTER OF SHARES AND SHARE CERTIFICATES. A register
shall be kept at the principal office of the Trust or an office of the Trust's
transfer agent which shall contain the names and addresses of the Shareholders
of each Series, the number of Shares of that Series (or any class or classes
thereof) held by them respectively and a record of all transfers thereof. No
share certificates shall be issued by the Trust except as the Trustees may
otherwise authorize, and the persons indicated as shareholders in such register
shall be entitled to receive dividends or other distributions or otherwise to
exercise or enjoy the rights of Shareholders. No Shareholder shall be entitled
to receive payment of any dividend or other distribution, nor to have notice
given to him as herein or in the Bylaws provided, until he has given his address
to the transfer agent or such officer or other agent of the Trustees as shall
keep the said register for entry thereon.
SECTION 2.04 TRANSFER OF SHARES. Except as otherwise provided by the
Trustees, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer and such evidence of the genuineness of such execution
and authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
the Trust, nor any transfer agent or registrar nor any officer, employee or
agent of the Trust shall be affected by any notice of the proposed transfer.
SECTION 2.05 TREASURY SHARES. Shares held in the treasury shall, until
reissued pursuant to Section 2.02 hereof, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
SECTION 2.06 ESTABLISHMENT OF SERIES AND CLASSES. The Trust created
hereby shall consist initially of one Series which is specified by name on
Schedule A attached hereto, and such Series shall initially consist of such
classes of Shares as are designated on Schedule A. Such initial Series (or class
thereof, as applicable) shall have the investment objectives, purposes and
policies, and such relative rights, powers, duties and other attributes, as are
specified in the Registration Statement and related prospectus and statement of
additional information approved by the Trustees in connection with the
registration and offer of Shares of such Series (or class thereof). Distinct
records shall be maintained by the Trust for each Series and the assets and
liabilities associated with the Series shall be held and accounted for
separately from the assets and liabilities of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining any prior authorization or vote of the Shareholders of any
Series, to establish and designate and to change in any manner any Series or any
classes of initial or additional Series and to fix such preferences, voting
powers, rights and privileges of such Series or classes thereof as the Trustees
may from time to time determine, to divide or combine the Shares or any Series
or classes thereof into a greater or lesser number, to classify or reclassify
any issued Shares or any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect to the Shares as
the Trustees may deem
3
<PAGE>
desirable. The establishment and designation of any Series (other than those
established pursuant to the first sentence of this Section 2.06) shall be
effective upon the adoption of a resolution by a majority of the Trustees
setting forth such establishment and designation and the relative rights and
preferences of the Shares of such Series. A Series may issue any number of
Shares, but need not issue Shares. At any time that there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may by a majority vote abolish that Series and the establishment and
designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his proportionate share of all distributions made
with respect to such Series, based upon the number of full and fractional Shares
of the Series held. Upon redemption of his Shares, such Shareholder shall be
paid solely out of the funds and property of such Series of the Trust.
SECTION 2.07 INVESTMENT IN THE TRUST. The Trustees shall accept
investments in any Series from such persons and on such terms as they may from
time to time authorize. At the Trustees' discretion, such investments, subject
to applicable law, may be in the form of cash or securities in which the
affected Series is authorized to invest, valued as provided in Article IX
Section 9.03 hereof. Investments in a Series shall be credited to each
Shareholder's account in the form of full and fractional Shares at the net asset
value per Share next determined after the investment is received or accepted as
may be determined by the Trustees; provided, however, that the Trustees may, in
their sole discretion, (a) fix minimum amounts for initial and subsequent
investments or (b) impose a sales charge upon investments in such manner and at
such time determined by the Trustees.
SECTION 2.08 ASSETS AND LIABILITIES OF SERIES. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof including any proceeds
derived from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall be held and accounted for separately from the other assets of
the Trust and of every other Series and may be referred to herein as "assets
belonging to" that Series. The assets belonging to a particular Series shall
belong to that Series for all purposes, and to no other Series, and shall be
subject only to the rights of creditors of that Series. In addition, any assets,
income, earnings, profits or funds, or payments and proceeds with respect
thereto, which are not readily identifiable as belonging to any particular
Series shall be allocated by the Trustees between and among one or more of the
Series in such manner as the Trustees, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, income, earnings,
profits or funds, or payments and proceeds with respect thereto shall be assets
belonging to that Series. The assets belonging to a particular Series shall be
so recorded upon the books of the Trust, and
4
<PAGE>
shall be held by the Trustees in trust for the benefit of the holders of Shares
of that Series. The assets belonging to each particular Series shall be charged
with the liabilities of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the Trustees between
or among any one or more of the Series in such manner as the Trustees in their
sole discretion deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all purposes.
Without limitation of the foregoing provisions of this Section 2.08, but subject
to the right of the Trustees in their discretion to allocate general
liabilities, expenses, costs, changes or reserves as herein provided, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Series shall be enforceable against the
assets of such Series only, and not against the assets of the Trust generally.
Notice of this contractual limitation on inter-Series liabilities may, in the
Trustee's sole discretion, be set forth in the certificate of trust of the Trust
(whether originally or by amendment) as filed or to be filed in the Office of
the Secretary of State of the State of Delaware pursuant to the Delaware Act,
and upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations on
inter-Series liabilities (and the statutory effect under Section 3804 of setting
forth such notice in the certificate of trust) shall become applicable to the
Trust and each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets of that Series
to satisfy or enforce any debt, with respect to that Series. No Shareholder or
former Shareholder of any Series shall have a claim on or any right to any
assets allocated or belonging to any other Series.
SECTION 2.09 NO PREEMPTIVE RIGHTS. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or the Trustees, whether of the same or other
Series.
SECTION 2.10 NO PERSONAL LIABILITY OF SHAREHOLDER. No Shareholder shall
be personally liable for the debts, liabilities, obligation and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
by or on behalf of any Series. The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of any
sum of money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other understanding issued by or on
behalf of the Trust or the Trustees relating to the Trust or to a Series shall
include a recitation limiting the obligation represented thereby to the Trust or
to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
SECTION 2.11 ASSENT TO TRUST INSTRUMENT. Every Shareholder, by virtue
of having purchased a Share shall become a Shareholder and shall be held to have
expressly assented and agreed to be bound by the terms hereof.
5
<PAGE>
ARTICLE III
THE TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Trust Instrument, the presumption shall be
in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III and except as otherwise provided in
Section 3.02 of this Article III, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at a meeting of
Shareholders. Any Shareholder meeting held for such purpose shall be held on a
date fixed by the Trustees. In the event that less than a majority of the
Trustees holding office have been elected by Shareholders, the Trustees then in
office will call a Shareholders' meeting for the election of Trustees in
accordance with the provisions of the 1940 Act.
SECTION 3.02 INITIAL TRUSTEES. The initial Trustees shall be the person
named herein. The initial Trustees shall appoint additional or substitute
Trustees at an organizational meeting of Trustees. Thereafter, Trustees shall be
appointed or elected as provided in Sections 3.01 and 3.04 of this Article III.
SECTION 3.03 TERM OF OFFICE. The Trustees shall hold office during the
lifetime of this Trust, and until its termination as herein provided; except (a)
that any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who has died, become physically or mentally incapacitated by reason
of illness or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of
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the Trust by a vote of Shareholders owning at least two-thirds of the
Outstanding Shares of the Trust.
SECTION 3.04 VACANCIES AND APPOINTMENTS. In case of a Trustee's
declination to serve, death, resignation, retirement, removal, physical or
mental incapacity by reason of illness, disease or otherwise, or if a Trustee is
otherwise unable to serve, or if there is an increase in the number of Trustees,
a vacancy shall occur. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy shall be
conclusive. In the case of a vacancy, the remaining Trustees shall fill such
vacancy by appointing such other person as they in their discretion see fit, to
the extent consistent with the limitations provided under the 1940 Act. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office or by resolution of the Trustees, duly adopted, which
shall be recorded in the minutes of a meeting of the Trustees, whereupon the
appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any person
appointed as a Trustee pursuant to this Section 3.04 shall have accepted this
Trust, the trust estate shall vest in the new Trustee or Trustees, together with
the continuing Trustees, without any further act or conveyance, and such person
shall be deemed a Trustee.
SECTION 3.05 TEMPORARY ABSENCE. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any time to any
other Trustee or Trustees, provided that in no case shall fewer than two
Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
SECTION 3.06 NUMBER OF TRUSTEES. From and after the date of appointment
of Trustees by the initial Trustees named herein, the number of Trustees shall
be at least three (3), and thereafter shall be such number as shall be fixed
from time to time by a majority of the Trustees, provided, however, that the
number of Trustees shall in no event be more than twelve (12).
SECTION 3.07 EFFECT OF ENDING OF A TRUSTEE'S SERVICE. The declination
to serve, death, resignation, retirement, removal, incapacity, or inability of
the Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of this Trust
Instrument.
SECTION 3.08 OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust
and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in all of the assets of the Trust and the
right to conduct any business shall at all times be considered as vested in the
Trustees on behalf of the Trust, except that the Trustees may cause legal title
to any Trust Property to be held by, or in the name of, the Trust or in the name
of any person as nominee. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or of any Series or any right of
partition or possession thereof but each Shareholder
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shall have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or Series based upon the number of Shares
owned. The Shares shall be personal property giving only the rights specifically
set forth in this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.01 POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. The
Trustees shall not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority and power
to make any and all investments which they, in their sole discretion, shall deem
proper to accomplish the purpose of this Trust without recourse to any court or
other authority. Subject to any applicable limitation in this Trust Instrument
or the Bylaws of the Trust, the Trustees shall have the power and authority:
(a) To invest and reinvest cash and other property (including
investment, notwithstanding any other provision hereof, of all of the assets of
any Series in a single open-end investment company, including investment by
means of transfer of such assets in exchange for an interest or interests in
such investment company), and to hold cash or other property of the Trust
uninvested, without in any event being bound or limited by any present or future
law or custom in regard to investments by trustees, and to sell, exchange, lend,
pledge, mortgage, hypothecate, write options on and lease any or all of the
assets of the Trust:
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both, or otherwise pursuant to a plan of distribution of any
kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders; such
Bylaws shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
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(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable (with power
of subdelegation) to any officers or employees of the Trust and to any
investment adviser, manager, custodian, underwriter or other agent or
independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article XI, subsection 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form; or
either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish classes of
such Series having relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series or
to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
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(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner provided herein;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any Shareholders whose investment is less than such
minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers
of the Trustees to said committees and to adopt a committee charter providing
for such responsibilities, membership (including Trustees, officers or other
agents of the Trust therein) and any other characteristics of said committees as
the Trustees may deem proper. Notwithstanding the provisions of this Article IV,
and in addition to such provisions or any other provision of this Trust
Instrument or of the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees and the Trust, as if
the acts of such committee were the acts of all the Trustees then in office,
with respect to the institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be pending or
threatened to be brought before any court, administrative agency or other
adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Series;
(w) To establish a registered office and have a registered agent in the
state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers of the Trustees. Any action by one or more of
the Trustees in their capacity as such hereunder shall be deemed an action on
behalf of the Trust or the applicable Series, and not an action in an individual
capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see the application
of any payments made or property transferred to the Trustees or upon their
order.
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SECTION 4.02 ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares and, subject to the
provisions set forth in Article II and Article IX, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Series of the Trust, with
respect to which such Shares are issued.
SECTION 4.03 TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of Shares to
the same extent as if he were not a Trustee, officer or agent; and the Trustees
may issue and sell or cause to be issued and sold Shares to and buy such Shares
from any such person or any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and purchase of
such Shares; and all subject to any restrictions which may be contained in the
Bylaws.
SECTION 4.04 ACTION BY THE TRUSTEES. In any action taken by the
Trustees hereunder, unless otherwise specified, the Trustees shall act by
majority vote at a meeting duly called or by unanimous written consent without a
meeting or by telephone meeting provided a quorum of Trustees participate in any
such telephone meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting at which the Trustees are present in person. At any
meeting of the Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by the Chairman of
the Board of Trustees or by any two other Trustees. Notice of the time, date and
place of all meetings of the Trustees shall be given by the person calling the
meeting to each Trustee by telephone, facsimile or other electronic mechanism
sent to his home or business address at least twenty-four hours in advance of
the meeting or by written notice mailed to his home or business address at least
seventy-two hours in advance of the meeting. Notice need not be given to any
Trustee who attends the meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting. Any meeting
conducted by telephone shall be deemed to take place at the principal office of
the Trust, as determined by the Bylaws or by the Trustees. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one or more of their number their authority to approve particular matters or
take particular actions on behalf of the Trust. Written consents or waivers of
the Trustees may be executed in one or more counterparts. Execution of a written
consent or waiver and delivery thereof to the Trust may be accomplished by
facsimile or other similar electronic mechanism.
SECTION 4.05 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint one
of their number to be Chairman of the Board of Trustees. The Chairman shall
preside at all meetings of the Trustees, shall be responsible for the execution
of policies established by the Trustees and the administration of the Trust, and
may be (but is not required to be) the chief executive, financial and/or
accounting officer of the Trust.
SECTION 4.06 PRINCIPAL TRANSACTIONS. Except to the extent prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any Trustee
or officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser, administrator, distributor or transfer agent for the Trust or with any
Interested Person of
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such person; and the Trust may employ any such person, or firm or company in
which such person is an Interested Person, as broker, legal counsel, registrar,
investment adviser, administrator, distributor, transfer agent, dividend
disbursing agent, custodian or in any other capacity upon customary terms.
ARTICLE V
EXPENSES OF THE TRUST
Subject to the provisions of Article II, Section 2.08 hereof, the
Trustees are authorized to pay or cause to be paid from the Trust estate or the
assets belonging to the appropriate Series, expenses and disbursements,
including, without limitation, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodian, transfer agent and fund accountant; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and
maintaining its existence; costs of preparing and printing the Trust's
prospectuses, statements of additional information and shareholder reports and
delivering them to existing Shareholders; expenses of meetings of Shareholders
and proxy solicitations therefor; costs of maintaining books and accounts; costs
of reproduction, stationery and supplies; fees and expenses of the Trust's
trustees; compensation of the Trust's officers and employees and costs of other
personnel performing services for the Trust; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign securities
laws registration fees and related expenses and for such non-recurring items as
may arise, including litigation to which the Trust (or a Trustee acting as such)
is a party, and for all losses and liabilities by them incurred in administering
the Trust, and for the payment of such expenses, disbursements, losses and
liabilities the Trustees shall have a lien on the assets belonging to the
appropriate Series, or in the case of an expense allocable to more than one
Series, on the assets of each such Series, prior to any rights or interests of
the Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
ADMINISTRATOR AND TRANSFER AGENT
SECTION 6.01 INVESTMENT ADVISER. (a) The Trustees may in their
discretion, from time to time, enter into an investment advisory contract or
contracts with respect to the Trust or any Series whereby the other party or
parties to such contract or contracts shall undertake to furnish the Trustees
with such investment advisory, statistical and research facilities and services
and such other facilities and services, if any, all upon such terms and
conditions (including any Shareholder vote) that may be required under the 1940
Act, as may be prescribed in the Bylaws, or as the Trustees may in their
discretion determine (such terms and conditions not to be inconsistent with the
provisions of this Trust Instrument or of the Bylaws). Notwithstanding any other
provision
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of this Trust Instrument, the Trustees may authorize any investment adviser
(subject to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales or exchanges of portfolio securities,
other investment instruments of the Trust, or other Trust Property on behalf of
the Trustees, or may authorize any officer, agent, or Trustee to effect such
purchases, sales or exchanges pursuant to recommendations of the investment
adviser (and all without further action by the Trustees). Any such purchases,
sales and exchanges shall be deemed to have been authorized by all of the
Trustees.
(b) The Trustees may authorize the investment adviser to employ, from
time to time, one or more sub-advisers to perform such of the acts and services
of the investment adviser, and upon such terms and conditions, as may be agreed
upon between the investment adviser and sub- adviser (such terms and conditions
not to be inconsistent with the provisions of this Trust Instrument or of the
Bylaws). Any reference in this Trust Instrument to the investment adviser shall
be deemed to include such sub-advisers, unless the context otherwise requires;
provided that no Shareholder approval shall be required with respect to any
sub-adviser unless required under the 1940 Act or other law, contract or order
applicable to the Trust.
SECTION 6.02 PRINCIPAL UNDERWRITER. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
underwriting contract or contracts providing for the sale of Shares, whereby the
Trust may either agree to sell Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as may be prescribed in the
Bylaws and as the Trustees may in their discretion determine (such terms and
conditions not to be inconsistent with the provisions of this Trust Instrument
or of the Bylaws); and such contract may also provide for the repurchase or sale
of Shares by such other party as principal or as agent of the Trust.
SECTION 6.03 ADMINISTRATION. The Trustees may in their discretion from
time to time enter into one or more management or administrative contracts
whereby the other party or parties shall undertake to furnish the Trustees with
management or administrative services. The contract or contracts shall be on
such terms and conditions as may be prescribed in the Bylaws and as the Trustees
may in their discretion determine (such terms and conditions not to be
inconsistent with the provisions of this Trust Instrument or of the Bylaws).
SECTION 6.04 TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into one or more transfer agency and shareholder service
contracts whereby the other party or parties shall undertake to furnish the
Trustees with transfer agency and shareholder services. The contract or
contracts shall be on such terms and conditions as may be prescribed in the
Bylaws and as the Trustees may in their discretion determine (such terms and
conditions not to be inconsistent with the provisions of this Trust Instrument
or of the Bylaws).
SECTION 6.05 PARTIES TO CONTRACT. Any contract of the character
described in Sections 6.01, 6.02, 6.03 and 6.04 of this Article VI or any
contract of the character described in Article VIII hereof may be entered into
with any corporation, firm, partnership, trust or association, although one or
more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, and no such
contract shall be invalidated or rendered void or voidable by reason of the
existence of any relationship, nor shall
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any person holding such relationship be disqualified from voting on or executing
the same in his capacity as Shareholder and/or Trustee, nor shall any person
holding such relationship be liable merely by reason of such relationship for
any loss or expense to the Trust under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom, provided
that the contract when entered into was not inconsistent with the provisions of
this Article VI or Article VIII hereof or of the Bylaws. The same person
(including a corporation, firm, partnership, trust, or association) may be the
other party to contracts entered into pursuant to Sections 6.01, 6.02, 6.03 and
6.04 of this Article VI or pursuant to Article VIII hereof and any individual
may be financially interested or otherwise affiliated with persons who are
parties to any or all of the contracts mentioned in this Section 6.05.
SECTION 6.06 PROVISIONS AND AMENDMENTS. Any contract entered into
pursuant to Section 6.01 or 6.02 of this Article VI shall be consistent with and
subject to the requirements of Section 15 of the 1940 Act, if applicable, or
other applicable Act of Congress hereafter enacted with respect to its
continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal thereof, and no amendment to any contract
entered into pursuant to Section 6.01 of this Article VI shall be effective
unless assented to in a manner consistent with the requirements of said Section
15, as modified by any applicable rule, regulation or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.01 VOTING POWERS. (a) The Shareholders shall have power to
vote only (a) for the election of Trustees to the extent provided in Article
III, Section 3.01 hereof, (b) for the removal of Trustees to the extent provided
in Article III, Section 3.03(d) hereof, (c) with respect to any investment
advisory contract to the extent provided in Article VI, Section 6.01 hereof, (d)
with respect to an amendment of this Trust Instrument, to the extent provided in
Article XI, Section 11.08, and (e) with respect to such additional matters
relating to the Trust as may be required by law, by this Trust Instrument, or
any registration of the Trust with the Commission or any State, or as the
Trustees may consider desirable.
(b) Notwithstanding paragraph (a) of this Section 7.01 or any other
provision of this Trust Instrument (including the Bylaws) which would by its
terms provide for or require a vote of Shareholders, the Trustees may take
action without a Shareholder vote if (i) the Trustees shall have obtained an
opinion of counsel that a vote or approval of such action by Shareholders is not
required under (A) the 1940 Act or any other applicable laws, or (B) any
registrations, undertakings or agreements of the Trust known to such counsel,
and the Trustees determine in good faith that the taking of such action without
a Shareholder vote would be consistent with the best interests of the
Shareholders.
(c) On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, and whenever the Trustees
determine that the matter affects only certain Series, may be submitted for a
vote by only such Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
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Trustees have determined that the matter affects the interests of more than one
Series and that voting by shareholders of all Series would be consistent with
the 1940 Act, then the Shareholders of all such Series shall be entitled to vote
thereon (either by individual Series or by Shares voted in the aggregate, as the
Trustees in their discretion may determine). The Trustees may also determine
that a matter affects only the interests of one or more classes of a Series, in
which case (or if required under the 1940 Act) such matter shall be voted on by
such class or classes. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the Bylaws. A proxy may be given in writing. The Bylaws
may provide that proxies may also, or may instead, be given by any electronic or
telecommunications device or in any other manner. Notwithstanding anything else
herein or in the Bylaws, in the event a proposal by anyone other than the
officers or Trustees of the Trust is submitted to a vote of the Shareholders, or
in the event of any proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees of the Trust, Shares may
be voted only in person or by written proxy. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Trust Instrument or any of the Bylaws of the
Trust to be taken by Shareholders.
SECTION 7.02 MEETINGS. Meetings of Shareholders may be held within or
without the State of Delaware. Special meetings of the Shareholders of any
Series for the purpose of voting upon the removal of a Trustee or Trustees may
be called by the Trustees and shall be called by the Trustees upon the written
request of Shareholders owning at least one tenth of the Outstanding Shares of
the Trust entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, as the same may be
amended from time to time, seek the opportunity of furnishing materials to the
other Shareholders with a view to obtaining signatures on such a request for a
meeting, the Trustees shall comply with the provisions of said Section 16(c)
with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials to such
Shareholders of record, subject to any rights provided to the Trust or any
Trustees provided by said Section 16(c). Notice shall be sent, by First Class
Mail or such other means determined by the Trustees, at least 10 days prior to
any such meeting. Notwithstanding anything to the contrary in this Section 7.02,
the Trustees shall not be required to call a special meeting of the Shareholders
of any Series or to provide Shareholders seeking the opportunity of furnishing
the materials to other Shareholders with a view to obtaining signatures on a
request for a meeting except to the extent required under the 1940 Act.
SECTION 7.03 QUORUM AND REQUIRED VOTE. One-third of Shares outstanding
and entitled to vote in person or by proxy as of the record date for a
Shareholders' meeting shall be a quorum for the transaction of business at such
Shareholders' meeting, except that where any provision of law or of this Trust
Instrument permits or requires that holders of any Series shall vote as a Series
(or that holders of a class shall vote as a class), then one-third of the
aggregate number of Shares of that Series (or that class) entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
Series (or that class). Any meeting of Shareholders may be adjourned from time
to time by a majority of the votes properly cast upon the question of adjourning
a meeting to another date and time, whether or not a quorum is present. Any
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adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by law or by any provision of this Trust
Instrument or the Bylaws, a majority of the Shares voted in person or by proxy
at a meeting at which a quorum is present shall decide any questions and a
plurality shall elect a Trustee, provided that where any provision of law or of
this Trust Instrument permits or requires that the holders of any Series shall
vote as a Series (or that the holders of any class shall vote as a class), then
a majority of the Shares voted in person or by proxy at a meeting of that Series
(or class), at which a quorum is present shall decide that matter insofar as
that Series (or class) is concerned. Shareholders may act by unanimous written
consent, to the extent not inconsistent with the 1940 Act, and any such actions
taken by a Series (or class) may be consented to unanimously in writing by
Shareholders of that Series (or class).
ARTICLE VIII
CUSTODIAN
SECTION 8.01 APPOINTMENT AND DUTIES. The Trustees shall employ a bank,
a company that is a member of a national securities exchange, or a trust
company, that in each case shall have capital, surplus and undivided profits of
at least twenty million dollars ($20,000,000) and that is a member of the
Depository Trust Company (or such other person or entity as may be permitted to
act as custodian of the Trust's assets under the 1940 Act) as custodian with
authority as its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the Trust: (a) to
hold the securities owned by the Trust and deliver the same upon written order
or oral order confirmed in writing; (b) to receive and receipt for any moneys
due to the Trust and deposit the same in its own banking department or elsewhere
as the Trustees may direct; and (c) to disburse such funds upon orders or
vouchers.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least twenty million dollars ($20,000,000) and that is a
member of the Depository Trust Company or such other person or entity as may be
permitted by the Commission or is otherwise able to act as custodian of the
Trust's assets in accordance with the 1940 Act.
SECTION 8.02 CENTRAL CERTIFICATE SYSTEM. Subject to the 1940 Act and
such other rules, regulations and orders as the Commission may adopt, the
Trustees may direct the custodian to deposit all or any part of the securities
owned by the Trust in a system for the central handling of securities
established by a national securities exchange or a national securities
association registered with the Commission under the Securities Exchange Act of
1934, as amended, or such other person as may be permitted by the Commission, or
otherwise in accordance with the 1940 Act, pursuant to which system all
securities of any particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of such securities, provided that all such
deposits
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shall be subject to withdrawal only upon the order of the Trust or its
custodians, sub-custodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
SECTION 9.01 DISTRIBUTIONS.
(a) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series and/or class of a Series. The
amount of such dividends or distributions and the payment of them and whether
they are in cash or any other Trust Property shall be wholly in the discretion
of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other distribution
or among the Shareholders of record at such other date or time or dates or times
as the Trustees shall determine, which dividends or distributions, at the
election of the Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a share dividend to the
Shareholders of a particular Series, or class thereof, as of the record date of
that Series fixed as provided in Subsection 9.01(b) hereof.
SECTION 9.02 REDEMPTIONS. In case any holder of record of Shares of a
particular Series desires to dispose of his Shares or any portion thereof he may
deposit at the office of the transfer agent or other authorized agent of that
Series a written request or such other form of request as the Trustees may from
time to time authorize, requesting that the Series purchase the Shares in
accordance with this Section 9.02; and, subject to Section 9.04 hereof, the
Shareholder so requesting shall be entitled to require the Series to purchase,
and the Series or the principal underwriter of the Series shall purchase his
said Shares, but only at the Net Asset Value thereof (as described in Section
9.03 of this Article IX). The Series shall make payment for any such Shares to
be redeemed, as aforesaid, in cash or property from the assets of that Series
and, subject to Section 9.04 hereof, payment for such Shares shall be made by
the Series or the principal underwriter of the Series to the Shareholder of
record within seven (7) days after the date upon which the request is effective.
Upon redemption and unless otherwise determined by the Trustees shares shall
become Treasury shares and may be re-issued from time to time.
SECTION 9.03 DETERMINATION OF NET ASSET VALUE AND VALUATION OF
PORTFOLIO ASSETS. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. The Trustees may delegate
any of their powers and duties under this Section 9.03 with respect to valuation
of assets and liabilities. Such value shall be determined separately for each
Series and shall be determined on such days and at such times as the Trustees
may determine. Such determination
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shall be made with respect to securities for which market quotations are readily
available, at the market value of such securities; and with respect to other
securities and assets, at the fair value as determined in good faith by the
Trustees; provided, however, that the Trustees, without Shareholder approval,
may alter the method of valuing portfolio securities insofar as permitted under
the 1940 Act. The resulting amount, which shall represent the total Net Asset
Value of the particular Series, shall be divided by the total number of shares
of that Series outstanding at the time and the quotient so obtained shall be the
Net Asset Value per Share of that Series. At any time the Trustees may cause the
Net Asset Value per Share last determined to be determined again in similar
manner and may fix the time when such redetermined value shall become effective.
The Trustees shall not be required to adopt, but may at any time adopt,
discontinue or amend a practice of seeking to maintain the Net Asset Value per
Share of the Series at a constant amount. If, for any reason, the net income of
any Series, determined at any time, is a negative amount, the Trustees shall
have the power with respect to that Series (a) to offset each Shareholder's pro
rata share of such negative amount from the accrued dividend account of such
Shareholder, (b) to reduce the number of Outstanding Shares of such Series by
reducing the number of Shares in the account of each Shareholder by a pro rata
portion of that number of full and fractional Shares which represents the amount
of such excess negative net income, (c) to cause to be recorded on the books of
such Series an asset account in the amount of such negative net income (provided
that the same shall thereupon become the property of such Series with respect to
such Series and shall not be paid to any Shareholder), which account may be
reduced by the amount of dividends declared thereafter upon the Outstanding
Shares of such Series on the day such negative net income is experienced, until
such asset account is reduced to zero; (d) to combine the methods described in
clauses (a) and (b) and (c) of this sentence; or (e) to take any other action
they deem appropriate, in order to cause (or in order to assist in causing) the
Net Asset Value per Share of such Series to remain at a constant amount per
Outstanding Share immediately after each such determination and declaration. The
Trustees shall also have the power not to declare a dividend out of net income
for the purpose of causing the Net Asset Value per Share to be increased.
In the event that any Series is divided into classes, the provisions of
this Section 9.03, to the extent applicable as determined in the discretion of
the Trustees and consistent with the 1940 Act and other applicable law, may be
equally applied to each such class.
SECTION 9.04 SUSPENSION OF THE RIGHT OF REDEMPTION. The Trustees may
declare a suspension of the right of redemption or postpone the date of payment
if permitted under the 1940 Act. Such suspension shall take effect at such time
as the Trustees shall specify but not later than the close of business on the
business day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the Net Asset Value per Share next determined after the termination of
the suspension.
SECTION 9.05 REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED
INVESTMENT COMPANY. If the Trustees shall, at any time and in good faith, be of
the opinion that direct or indirect ownership of Shares of any Series has or may
become concentrated in any Person to an
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extent which would disqualify any Series as a regulated investment company under
the Internal Revenue Code, then the Trustees shall have the power (but not the
obligation) by lot or other means deemed equitable by them (a) to call for
redemption by any such person of a number, or principal amount, of Shares
sufficient to maintain or bring the direct or indirect ownership of Shares into
conformity with the requirements for such qualification and (b) to refuse to
transfer or issue Shares to any person whose acquisition of Shares in question
would result in such disqualification. The redemption shall be effected at the
redemption price and in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the requirements of any taxing
authority or this Section 9.05.
SECTION 9.06 REDEMPTION OF SMALL ACCOUNTS. Subject to the
requirements of the 1940 Act, the Trustees may cause the Trust to redeem, at the
price and in the manner provided in this Article IX, Shares of any Series or
class of a Series held by any Shareholder (i) if such Shareholder is no longer
qualified to hold such Shares in accordance with such qualifications as may be
established by the Trustees, (ii) if the net asset value of such Shares is below
$500 or such other amount as determined by the Trustees or (iii) if otherwise
deemed by the Trustees to be in the best interest of the Trust or that
particular Series (or class) as a whole.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 10.01 LIMITATION OF LIABILITY. Neither a Trustee nor an officer
of the Trust, when acting in such capacity, shall be personally liable to any
person other than the Trust or the Shareholders for any act, omission or
obligation of the Trust, any Trustee or any officer of the Trust. Neither a
Trustee nor an officer of the Trust shall be liable for any act or omission or
any conduct whatsoever in his capacity as Trustee or as an officer of the Trust,
provided that nothing contained herein or in the Delaware Act shall protect any
Trustee or any officer of the Trust against any liability to the Trust or to
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee or officer of the Trust
hereunder.
SECTION 10.02 INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred
by him in the settlement thereof;
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(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A) by the court or other
body approving the settlement; (B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or (C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a person who has ceased to be a
Covered Person and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
Subsection (a) of this Section 10.02 may be paid by the Trust or Series from
time to time prior to final disposition thereof upon receipt of an undertaking
by or on behalf of such Covered Person that such amount will be paid over by him
to the Trust or Series if it is ultimately determined that he is not entitled to
indemnification under this Section 10.02; provided, however, that either (i)
such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any such
advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Section 10.02.
SECTION 10.03 SHAREHOLDERS. In case any Shareholder of any Series shall
be held to be personally liable solely by reason of his being or having been a
Shareholder of such Series and
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not because of his acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his heirs, executors, administrators or other legal
representatives, or, in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of the Series and satisfy
any judgment thereon from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TRUST NOT A PARTNERSHIP. It is hereby expressly declared
that a trust and not a partnership is created hereby. No Trustee hereunder shall
have any power to bind personally either the Trust officers or any Shareholder.
All persons extending credit to, contracting with or having any claim against
the Trust or the Trustees shall look only to the assets of the appropriate
Series or (if the Trustees shall have yet to have established Series) of the
Trust for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past, present or
future, shall be personally liable therefor. Nothing in this Trust Instrument
shall protect a Trustee against any liability to the Trust or a Shareholder to
which the Trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
SECTION 11.02 TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees or the officers of the Trust of their
powers and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article X hereof and to Section 11.01 of this Article XI,
the Trustees and the officers of the Trust shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees and the officers of the Trust
may take advice of counsel or other experts with respect to the meaning and
operation of this Trust Instrument, and subject to the provisions of Article X
hereof and Section 11.01 of this Article XI, shall be under no liability for any
act or omission in accordance with such advice or for failing to follow such
advice. The Trustees and the officers of the Trust shall not be required to give
any bond as such, nor any surety if a bond is obtained.
SECTION 11.03 ESTABLISHMENT OF RECORD DATES. The Trustees may close the
Share transfer books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for the payment
of any dividends or other distributions, or the date for the allotment of
rights, or the date when any change or conversion or exchange of Shares shall go
into effect; or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date, not exceeding sixty (60) days preceding the
date of any meeting of Shareholders, or the date for payment of any dividend or
other distribution, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend
or other distribution,
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or to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or other distribution, or to
receive such allotment or rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed as aforesaid.
SECTION 11.04 TERMINATION OF TRUST.
(a) This Trust shall continue without limitation of time but subject to
the provisions of Subsection 11.04(b).
(b) The Trustees may, subject to any necessary Shareholder, Trustee,
and regulatory approvals:
(i) sell and convey all or substantially all of the assets of
the Trust or any affected Series to another trust, partnership,
association or corporation, or to a separate series of shares thereof,
organized under the laws of any state which trust, partnership,
association or corporation is an open-end management investment company
as defined in the 1940 Act, or is a series thereof, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the
Trust or any affected Series, and which may include shares of
beneficial interest, stock or other ownership interests of such trust,
partnership, association or corporation or of a series thereof;
(ii) enter into a plan of liquidation in order to terminate
and liquidate any Series (or class) of the Trust, or the Trust; or
(iii) at any time sell and convert into money all of the
assets of the Trust or any affected Series.
Upon making reasonable provision, in the determination of the Trustees, for the
payment of all liabilities by assumption or otherwise, the Trustees shall
distribute the remaining proceeds or assets (as the case may be) of each Series
(or class) ratably among the holders of Shares of the affected Series, based
upon the ratio that each Shareholder's Shares bears to the number of Shares of
such Series (or class) then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in Subsection 11.04(b), the Trust or any
affected Series shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties hereunder and the
right, title and interest of all parties with respect to the Trust or Series
shall be cancelled and discharged.
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in
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accordance with the Delaware Act, which certificate of cancellation may be
signed by any one Trustee.
SECTION 11.05 REORGANIZATION.
(a) Notwithstanding anything else herein, the Trustees, in order to
change the form or jurisdiction of organization of the Trust, may (i) cause the
Trust to merge or consolidate with or into one or more trusts, partnerships
(general or limited), associations or corporations so long as the surviving or
resulting entity is an open-end management investment company under the 1940
Act, or is a series thereof, that will succeed to or assume the Trust's
registration under that Act and which is formed, organized or existing under the
laws of a state, commonwealth, possession or colony of the United States or (ii)
cause the Trust to incorporate under the laws of Delaware.
(b) The Trustees may, subject to a vote of a majority of the Trustees
and any shareholder vote required under the 1940 Act, if any, cause the Trust to
merge or consolidate with or into one or more Trusts, partnerships (general or
limited), associations, limited liability companies or corporations formed,
organized or existing under the laws of a state, commonwealth, possession or
colony of the United States.
(c) Any agreement of merger or consolidation or certificate of merger
or consolidation may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be valid.
(d) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the contrary
contained in this Trust Instrument, an agreement of merger or consolidation
approved by the Trustees in accordance with paragraph (a) or (b) this Section
11.05 may effect any amendment to the Trust Instrument or effect the adoption of
a new trust instrument of the Trust if it is the surviving or resulting trust in
the merger or consolidation.
SECTION 11.06 FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Trust Instrument and of each amendment hereof or Trust Instrument
supplemental hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether or not any such
amendments or supplements have been made and as to any matters in connection
with the Trust hereunder, and with the same effect as if it were the original,
may rely on a copy certified by an officer or Trustee of the Trust to be a copy
of this Trust Instrument or of any such amendment or supplemental Trust
Instrument. In this Trust Instrument or in any such amendment or supplemental
Trust Instrument, references to this Trust Instrument, and all expressions such
as "herein," "hereof" and "hereunder," shall be deemed to refer to this Trust
Instrument as amended or affected by any such supplemental Trust Instrument. All
expressions such as "his," "he" and "him," shall be deemed to include the
feminine and neuter, as well as masculine, genders. Headings are placed herein
for convenience of reference only and in case of any conflict, the text of this
Trust Instrument, rather than the headings, shall control. This Trust Instrument
may be executed in any number of counterparts each of which shall be deemed an
original.
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SECTION 11.07 APPLICABLE LAW. The trust set forth in this instrument is
made in the State of Delaware, and the Trust and this Trust Instrument, and the
rights and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
laws of said State; provided, however, that there shall not be applicable to the
Trust, the Trustees or this Trust Instrument (a) the provisions of Section 3540
of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Trust Instrument. The Trust shall be of the type commonly called a
"business trust," and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
SECTION 11.08 AMENDMENTS. Except as specifically provided herein, the
Trustees may, without shareholder vote, amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto or an
amended and restated trust instrument. Shareholders shall have the right to vote
(a) on any amendment which would affect their rights to vote granted in Section
7.01 of Article VII hereof, (b) on any amendment to this Section 11.08, (c) on
any amendment as may be required by law or by the Trust's registration statement
filed with the Commission and (d) on any amendment submitted to them by the
Trustees. Any amendment required or permitted to be submitted to Shareholders
which, as the Trustees determine, shall affect the Shareholders of one or more
Series shall be authorized by vote of the Shareholders of each Series affected
and no vote of shareholders of a Series not affected shall be required.
Notwithstanding any other provision of this Trust Instrument, any amendment to
Article X hereof shall not limit the rights to indemnification or insurance
provided therein with respect to action or omission of Covered Persons prior to
such amendment.
SECTION 11.09 FISCAL YEAR. The fiscal year of the Trust shall end on a
specified date as set forth in the Bylaws, provided, however, that the Trustees
may change the fiscal year of the Trust.
SECTION 11.10 NAME RESERVATION. The Trustees on behalf of the Trust
acknowledge that Ramirez & Co., Inc. has licensed to the Trust the non-exclusive
right to use the word "Ramirez" as part of the name of the Trust, and has
reserved the right to grant the non-exclusive use of the
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word "Ramirez" or any derivative thereof to any other party. In addition,
Ramirez & Co., Inc. reserves the right to grant the non-exclusive use of the
word "Ramirez" to, and to withdraw such right from, any other business or other
enterprise. Ramirez & Co., Inc. reserves the right to withdraw from the Trust
the right to use said word "Ramirez" and will withdraw such right if the Trust
ceases to employ, for any reason, Ramirez & Co., Inc., an affiliate or any
successor as adviser of the Trust.
SECTION 11.11 PROVISIONS IN CONFLICT WITH LAW. The provisions of this
Trust Instrument are severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Trust Instrument; provided, however,
that such determination shall not affect any of the remaining provisions of this
Trust Instrument or render invalid or improper any action taken or omitted prior
to such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any matter affect such provision in any other jurisdiction or any
other provision of this Trust Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being the initial Trustees of the
Trust, have executed this instrument as of date first written above.
/s/ Peter J. O'Rourke
---------------------
Peter J. O'Rourke, as Trustee
and not individually
/s/ Debra Jacob Nachlis
-----------------------
Debra Jacob Nachlis, as Trustee
and not individually
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SCHEDULE A
Ramirez Cash Money Market Fund
Ramirez New York Tax-Free Money Market Fund
26
THE RAMIREZ TRUST
BYLAWS
June 30, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I
PRINCIPAL OFFICE............................................................. 1
ARTICLE II
OFFICERS AND THEIR ELECTION.................................................. 1
Section 2.01 Officers............................................... 1
Section 2.02 Election of Officers................................... 1
Section 2.03 Resignations........................................... 1
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES................................... 1
Section 3.01 Management of the Trust................................ 1
Section 3.02 Executive And Other Committees......................... 2
Section 3.03 Compensation........................................... 2
Section 3.04 Chairman Of The Trustees............................... 2
Section 3.05 President.............................................. 2
Section 3.06 Treasurer.............................................. 2
Section 3.07 Secretary.............................................. 3
Section 3.08 Vice President......................................... 3
Section 3.09 Assistant Treasurer.................................... 3
Section 3.10 Assistant Secretary.................................... 3
Section 3.11 Subordinate Officers................................... 3
Section 3.12 Surety Bonds........................................... 3
Section 3.13 Removal................................................ 3
Section 3.14 Remuneration........................................... 4
ARTICLE IV
SHAREHOLDERS' MEETINGS....................................................... 4
Section 4.01 Special Meetings....................................... 4
Section 4.02 Notices................................................ 4
Section 4.03 Voting-Proxies......................................... 4
Section 4.04 Place of Meeting....................................... 5
Section 4.05 Action Without a Meeting............................... 5
ARTICLE V
TRUSTEES' MEETINGS........................................................... 5
Section 5.01 Special Meetings....................................... 5
Section 5.02 Regular Meetings....................................... 5
Section 5.03 Quorum................................................. 5
Section 5.04 Notice................................................. 5
Section 5.05 Place of Meeting....................................... 5
Section 5.06 Special Action......................................... 6
Section 5.07 Action by Consent...................................... 6
Section 5.08 Participation in Meetings By Conference Telephone...... 6
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ARTICLE VI
FISCAL YEAR; REGISTERED OFFICE AND REGISTERED AGENT.......................... 6
Section 6.01 Fiscal Year............................................ 6
Section 6.02 Registered Office and Registered Agent................. 6
ARTICLE VII
INSPECTION OF BOOKS.......................................................... 6
ARTICLE VIII
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES............................... 7
ARTICLE IX
SEAL......................................................................... 7
ARTICLE X
AMENDMENTS................................................................... 7
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THE RAMIREZ TRUST
BYLAWS
These Bylaws of The Ramirez Trust (the "Trust"), a Delaware
business trust, are subject to the Trust Instrument of the Trust, dated June 30,
1998, as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein which are defined in the Trust
Instrument are used as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in New
York, New York or such other location as the Trustees may, from time to time,
determine. The Trust may establish and maintain such other offices and places of
business as the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
SECTION 2.01 OFFICERS. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers as the Trustees may
from time to time elect. The Trustees may delegate to any officer or committee
the power to appoint any subordinate officers or agents. It shall not be
necessary for any Trustee or other officer to be a holder of Shares in the
Trust.
SECTION 2.02 ELECTION OF OFFICERS. The Treasurer and Secretary
shall be chosen by the Trustees. The President shall be chosen by and from the
Trustees. Two or more offices may be held by a single person except the offices
of President and Secretary. Subject to the provisions of Section 3.13 hereof the
President, the Treasurer and the Secretary shall each hold office until their
successors are chosen and qualified and all other officers shall hold office at
the pleasure of the Trustees.
SECTION 2.03 RESIGNATIONS. Any officer of the Trust may
resign, notwithstanding Section 2.02 hereof, by filing a written resignation
with the President, the Trustees or the Secretary, which resignation shall take
effect on being so filed or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The business and affairs
of the Trust shall be managed by, or under the direction of the Trustees, and
they shall have all
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powers necessary and desirable to carry out their responsibilities, so far as
such powers are not inconsistent with the laws of the State of Delaware, the
Trust Instrument or with these Bylaws.
SECTION 3.02 EXECUTIVE AND OTHER COMMITTEES. The Trustees may
elect from their own number an executive committee, which shall have any or all
of the powers of the Board of Trustees while the Board of Trustees is not in
session. The Trustees may also elect from their own number other committees from
time to time. The number composing such committees and the powers conferred upon
the same are to be determined by vote of a majority of the Trustees. All members
of such committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
SECTION 3.03 COMPENSATION. Each Trustee and each committee
member may receive such compensation for his services and reimbursement for his
expenses as may be fixed from time to time by resolution of the Trustees.
SECTION 3.04 CHAIRMAN OF THE TRUSTEES. The Trustees may
appoint from among their number a Chairman who shall serve as such at the
pleasure of the Trustees. When present, he shall preside at all meetings of the
Shareholders and the Trustees, and he may, subject to the approval of the
Trustees, appoint a Trustee to preside at such meetings in his absence. He shall
perform such other duties as the Trustees may from time to time designate.
SECTION 3.05 PRESIDENT. The President shall be the chief
executive officer of the Trust and, subject to the direction of the Trustees,
shall have general administration of the business and policies of the Trust.
Except as the Trustees may otherwise order, the President shall have the power
to grant, issue, execute or sign such powers of attorney, process, agreements or
other documents as may be deemed advisable or necessary in the furtherance of
the interests of the Trust or any Series thereof. He shall also have the power
to employ attorneys, accountants and other advisors and agents and counsel for
the Trust. The President shall perform such duties additional to all of the
foregoing as the Trustees may from time to time designate.
SECTION 3.06 TREASURER. The Treasurer shall be the principal
financial and accounting officer of the Trust. He shall deliver all funds and
securities of the Trust which may come into his hands to such company as the
Trustees shall employ as Custodian in accordance with the Trust Instrument and
applicable provisions of law. He shall make annual reports regarding the
business and condition of the Trust, which reports shall be preserved in Trust
records, and he shall furnish such other reports regarding the business and
condition of the Trust as the Trustees may from time to time require. The
Treasurer shall perform such additional duties as the Trustees may from time to
time designate.
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SECTION 3.07 SECRETARY. The Secretary shall record in books
kept for the purpose all votes and proceedings of the Trustees and the
Shareholders at their respective meetings. He shall have the custody of the seal
of the Trust. The Secretary shall perform such additional duties as the Trustees
may from time to time designate.
SECTION 3.08 VICE PRESIDENT. Any Vice President of the Trust
shall perform such duties as the Trustees or the President may from time to time
designate. At the request or in the absence or disability of the President, the
Vice President (or, if there are two or more Vice Presidents, then the senior of
the Vice Presidents) present and able to act may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 3.09 ASSISTANT TREASURER. Any Assistant Treasurer of
the Trust shall perform such duties as the Trustees or the Treasurer may from
time to time designate, and, in the absence of the Treasurer, the senior
Assistant Treasurer, present and able to act, may perform all the duties of the
Treasurer and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the Treasurer.
SECTION 3.10 ASSISTANT SECRETARY. Any Assistant Secretary of
the Trust shall perform such duties as the Trustees or the Secretary may from
time to time designate, and, in the absence of the Secretary, the senior
Assistant Secretary, present and able to act, may perform all the duties of the
Secretary and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the Secretary.
SECTION 3.11 SUBORDINATE OFFICERS. The Trustees from time to
time may appoint such officers or agents as they may deem advisable, each of
whom shall have such title, hold office for such period, have such authority and
perform such duties as the Trustees may determine. The Trustees from time to
time may delegate to one or more officers or committees of Trustees the power to
appoint any such subordinate officers or agents and to prescribe their
respective terms of office, authorities and duties.
SECTION 3.12 SURETY BONDS. The Trustees may require any
officer or agent of the Trust to execute a bond (including without limitation,
any bond required by the 1940 Act and the rules and regulations of the
Commission) to the Trust in such sum and with such surety or sureties as the
Trustees may determine, conditioned upon the faithful performance of his duties
to the Trust including responsibility for negligence and for the accounting of
any of the Trust's property, funds or securities that may come into his hands.
SECTION 3.13 REMOVAL. Any officer may be removed from office,
with or without cause, whenever in the judgment of the Trustees the best
interest of the Trust will be served thereby, by the vote of a majority of the
Trustees given at any regular meeting or any special meeting of the Trustees. In
addition, any officer or agent appointed in accordance with the provisions of
Section 3.11 hereof may be removed, either with or without cause, by any officer
upon whom such power of removal shall have been conferred by the Trustees.
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SECTION 3.14 REMUNERATION. The salaries or other compensation,
if any, of the officers of the Trust shall be fixed from time to time by
resolution of the Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
SECTION 4.01 SPECIAL MEETINGS. A special meeting of the
shareholders shall be called by the Secretary whenever (a) ordered by the
Trustees or (b) requested in writing by the holder or holders of at least 10% of
the Outstanding Shares entitled to vote for the purpose of voting upon the
question of removal of Trustees. If the meeting is a meeting of the Shareholders
of one or more Series or classes of Shares, but not a meeting of all
Shareholders of the Trust, then only special meetings of the Shareholders of
such one or more Series or classes shall be called and only the shareholders of
such one or more Series or classes shall be entitled to notice of and to vote at
such meeting.
SECTION 4.02 NOTICES. Except as provided in Section 4.01,
notices of any meeting of the Shareholders shall be given by the Secretary by
delivering or mailing, postage prepaid, to each Shareholder entitled to vote at
said meeting, written or printed notification of such meeting at least ten (10)
days before the meeting, to such address as may be registered with the Trust by
the Shareholder. Notice of any Shareholder meeting need not be given to any
Shareholder if a written waiver of notice, executed before or after such
meeting, is filed with the records of such meeting, or to any Shareholder who
shall attend such meeting in person or by proxy. Notice of adjournment of a
Shareholder's meeting to another time or place need not be given, if such time
and place are announced at the meeting or reasonable notice is given to persons
present at the meeting and the adjourned meeting is held within a reasonable
time after the date set for the original meeting.
SECTION 4.03 VOTING-PROXIES. Subject to the provisions of the
Trust Instrument, shareholders entitled to vote may vote either in person or by
proxy, provided that either (a) an instrument authorizing such proxy to act is
executed by the Shareholder in writing and dated not more than eleven (11)
months before the meeting, unless the instrument specifically provides for a
longer period or (b) the Trustees adopt by resolution an electronic, telephonic,
computerized or other alternative to execution of a written instrument
authorizing the proxy to act, which authorization is received not more than
eleven (11) months before the meeting. Proxies shall be delivered to the
Secretary of the Trust or other person responsible for recording the proceedings
before being voted. A proxy with respect to shares held in the name of two or
more persons shall be valid if executed by one of them unless at or prior to
exercise of such proxy the Trust receives a specific written notice from any one
of them. Unless otherwise specifically limited by their terms, proxies shall
entitle the holder thereof to vote at any adjournment of a meeting. A proxy
purporting to be exercised by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. At all meetings of the Shareholders,
unless the voting is conducted by inspectors, all questions relating to the
qualifications of voters, the validity of proxies, and the acceptance or
rejection of votes shall be decided by the Chairman of the meeting. Except as
otherwise provided
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herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may
be amended or supplemented from time to time, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Shareholders were shareholders of a Delaware corporation.
SECTION 4.04 PLACE OF MEETING. All special meetings of the
Shareholders shall be held at the principal place of business of the Trust or at
such other place in the United States as the Trustees may designate.
SECTION 4.05 ACTION WITHOUT A MEETING. Any action to be taken
by Shareholders may be taken without a meeting if all Shareholders entitled to
vote on the matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such consent
shall be treated for all purposes as a vote at a meeting of the Shareholders
held at the principal place of business of the Trust.
ARTICLE V
TRUSTEES' MEETINGS
SECTION 5.01 SPECIAL MEETINGS. Special meetings of the
Trustees may be called orally or in writing by the Chairman of the Board of
Trustees or any two other Trustees.
SECTION 5.02 REGULAR MEETINGS. Regular meetings of the
Trustees may be held at such places and at such times as the Trustees may from
time to time determine; each Trustee present at such determination shall be
deemed a party calling the meeting and no call or notice will be required to
such Trustee provided that any Trustee who is absent when such determination is
made shall be given notice of the determination by the Chairman or any two other
Trustees, as provided for in Section 4.04 of the Trust Instrument.
SECTION 5.03 QUORUM. A majority of the Trustees shall
constitute a quorum for the transaction of business at any meeting and an action
of a majority of the Trustees in attendance constituting a quorum shall
constitute action of the Trustees.
SECTION 5.04 NOTICE. Except as otherwise provided, notice of
any special meeting of the Trustees shall be given by the party calling the
meeting to each of the Trustees, as provided for in Section 4.04 of the Trust
Instrument. A written notice may be mailed, postage prepaid, addressed to him at
his address as registered on the books of the Trust or, if not so registered, at
his last known address.
SECTION 5.05 PLACE OF MEETING. All special meetings of the
Trustees shall be held at the principal place of business of the Trust or such
other place as the Trustees may designate. Any meeting may adjourn to any place.
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SECTION 5.06 SPECIAL ACTION. When all the Trustees shall be
present at any meeting however called or wherever held, or shall assent to the
holding of the meeting without notice, or shall sign a written assent thereto
filed with the records of such meeting, the acts of such meeting shall be valid
as if such meeting had been regularly held.
SECTION 5.07 ACTION BY CONSENT. Any action by the Trustees may
be taken without a meeting if a written consent thereto is signed by all the
Trustees and filed with the records of the Trustees' meeting. Such consent shall
be treated, for all purposes, as a vote at a meeting of the Trustees held at the
principal place of business of the Trustees.
SECTION 5.08 PARTICIPATION IN MEETINGS BY CONFERENCE
TELEPHONE. Except when presence in person is required at a meeting under the
1940 Act or other applicable laws, Trustees may participate in a meeting of
Trustees by conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting. Any meeting
conducted by telephone shall be deemed to take place at and from the principal
office of the Trust.
ARTICLE VI
FISCAL YEAR; REGISTERED OFFICE AND REGISTERED AGENT
SECTION 6.01 FISCAL YEAR. The fiscal year of the Trust and of
each Series of the Trust shall end on August 31 of each year; provided that the
last fiscal year of the Trust and each Series shall end on the date on which the
Trust or each such Series is terminated, as applicable; and further provided
that the Trustees by resolution and without a Shareholder vote may at any time
change the fiscal year of the Trust and of any or all Series (and the Trust and
each Series may have different fiscal years as determined by the Trustees).
SECTION 6.02 REGISTERED OFFICE AND REGISTERED AGENT. The
initial registered office of the Trust in the State of Delaware shall be located
at 1201 North Market Street, P.O. Box 1347, Wilmington, Delaware 19899-1347. The
registered agent of the Trust at such location shall be Delaware Corporation
Organizers, Inc.; provided that the Trustees by resolution and without a
Shareholder vote may at any time change the Trust's registered office or its
registered agent, or both.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to
what extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them shall be open to
the inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
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ARTICLE VIII
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any
Covered Person (as defined in Section 10.02 of the Trust Instrument) or employee
of the Trust, including any Covered Person or employee of the Trust who is or
was serving at the request of the Trust as a Trustee, officer or employee of a
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and claimed by him in any such capacity or
arising out of his status as such, whether or not the Trustees would have the
power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance
that protects or purports to protect any Trustee or officer of the Trust against
any liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
ARTICLE IX
SEAL
The seal of the Trust shall be circular in form bearing the
inscription:
"THE RAMIREZ TRUST, JUNE 30, 1998
THE STATE OF DELAWARE"
ARTICLE X
AMENDMENTS
These Bylaws may be amended from time to time by action of the
Trustees, without requirement for the vote or approval of shareholders.
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[LETTERHEAD OF KRAMER, LEVIN, NAFTALIS & FRANKEL]
July 14, 1998
The Ramirez Trust
61 Broadway
New York, New York 10002
Re: The Ramirez Trust
Registration Statement on Form N-1A
ICA #: 811-08877
----------------
Dear Gentlemen/Ladies:
We hereby consent to the reference of our firm as Counsel in
this Registration Statement on Form N-1A.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel