As filed with the Securities and Exchange Commission on May 21, 1999
1933 Act File No. 333-75181
1940 Act File No. 811-09263
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [x]
PRE-EFFECTIVE AMENDMENT NO. 1 [x]
POST-EFFECTIVE AMENDMENT NO. __ [ ]
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 1 [x]
The Wright Asset Allocation Trust
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(Exact Name of Registrant as Specified in Charter)
255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Office)
617--482-8260
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(Registrant's Telephone Number)
Alan R. Dynner
255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of the Registration Statement under the Securities Act of
1933.
<PAGE>
The Wright Asset Allocation Trust
PROSPECTUS
MAY [ ], 1999
o Wright Managed Growth with Income Fund
Advisor Shares
Individual Shares
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined whether the information
in this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.
An investment in a mutual fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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TABLE OF CONTENTS
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The Wright Asset Allocation Trust: Overview of Principal Strategies.......1
Information About the Fund
Wright Managed Growth with Income Fund...........................2
Information About Your Account ..........................................4
How the Fund Values its Shares...................................4
Purchasing Shares................................................4
Distribution and Service Plans...................................5
Selling Shares...................................................5
Exchanging Shares................................................5
Dividends and Taxes ...................................................6
Managing the Funds ....................................................7
Wright Investors' Service, the Investment Adviser................7
Master Feeder Fund Structure.....................................8
Year 2000 Readiness..............................................9
The Euro.........................................................9
Financial Highlights .................................................10
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HOW TO USE THIS PROSPECTUS:
Reading this prospectus will help you decide if investing in the fund is right
for you. Please keep this prospectus for future reference. Included in this
prospectus are descriptions telling you about the fund's:
(Graphic - Ship's Wheel)
OBJECTIVE: what the fund seeks to achieve.
(Graphic - Compass)
PRINCIPAL INVESTMENT STRATEGIES: how the fund intends to achieve its investment
objective and the strategy used by Wright Investors'Service, the fund's
investment adviser.
(Graphic - Life Preserver)
PRINCIPAL RISKS: the risks associated with the fund's primary investments.
(Graphic - Assorted Nautical Flags)
Who May Want to Invest: determine if the fund is a suitable investment for you.
(Graphic - Ship's Log)
PAST PERFORMANCE: the total return on your investment, including income from
dividends and capital gain distributions, as well as appreciation or
depreciation in price over various time periods.
(Graphic - Two Crossed Anchors with a $ in the center)
FEES AND EXPENSES: what overall costs you bear by investing in the fund.
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THE WRIGHT ASSET ALLOCATION TRUST:
OVERVIEW OF PRINCIPAL STRATEGIES
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The Wright Asset Allocation Trust was created to offer a variety of funds to
meet differing investment objectives. Each fund is a fund of funds. This means
that a fund invests in other mutual funds managed by Wright Investors Service.
Only Wright Managed Growth with Income Fund is currently offered. Depending on
Wrights model asset allocation for the fund, the fund may invest in some or all
of the following Wright Blue Chip Funds.
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Blue Chip
Financial dictionaries define Blue Chip as a common stock of a company that has
a long record of profit growth and dividend payment and a reputation for quality
management, products and services. Wright further refines this to include only
securities issued by companies that meet its qualitative standards.
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o WRIGHT SELECTED BLUE CHIP EQUITIES PORTFOLIO (WSBC) seeks long-term total
return by investing in equity securities of well-established quality
companies whose current operations reflect characteristics likely to
provide comparatively superior total investment return.
o WRIGHT JUNIOR BLUE CHIP EQUITIES PORTFOLIO (WJBC) seeks long-term total
return by investing in equity securities of smaller companies. Wright
selects companies that have strong balance sheets and strong recent
earnings and price momentum. Selected companies generally have both growth
and value characteristics and some companies may not currently pay
dividends on their shares.
o WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) seeks total return by investing
in the equity securities of larger companies. The market capitalizations of
these companies are similar to that of the Standard and Poor's 500 Index.
o WRIGHT INTERNATIONAL BLUE CHIP EQUITIES PORTFOLIo (WIBC) seeks total return
by investing in equity securities of well-established non-U.S. companies.
Wright focuses on individual stock selection instead of trying to predict
which country or industry will perform best. No more than 20% of assets
will be invested in any one country.
o WRIGHT U.S. GOVERNMENT NEAR TERM PORTFOLIO (WNTB) seeks a higher level of
income than is normally above that available from short-term money market
instruments by investing in U.S. Government obligations of all types and
maintaining an average weighted maturity of less than five years.
o WRIGHT U.S. TREASURY PORTFOLIO (WUSTB) seeks a high total return with a
high level of income by investing in U.S. Treasury bills, notes and bonds.
o WRIGHT TOTAL RETURN BOND FUND (WTRB) seeks a superior rate of total return
by investing in U.S. Government and high grade (rated "AA" or higher)
corporate debt securities of companies meeting Wright quality standards.
Wright allocates assets among different market sectors with different
maturities based on its view of the relative value of each sector or
maturity.
o WRIGHT CURRENT INCOME PORTFOLIO (WCIF) seeks a high level of current income
with moderate fluctuations of principal by investing in debt obligations
issued or guaranteed by the US. Government or any of its agencies, and
corporate debt securities. Since inception, this portfolio has invested
almost exclusively in mortgage-backed securities of the Government National
Mortgage Association.
You should understand that, when investing in a fund of funds, you will bear the
operating expenses of the underlying funds as well as your share of the funds
operating expenses. For example, you will pay a management or asset allocation
fee for the fund and management fees for the underlying fund.
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WRIGHT MANAGED GROWTH WITH INCOME FUND
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CUSIP: Advisor Shares nnnnnnnn Ticker Symbol:Advisor Shares WGIAY (Unofficial)
Individual Shares nnnnnnnn Individual Shares WGIIY (Unofficial)
(Graphic - Ship's Wheel)
OBJECTIVE
High total return (consisting of price appreciation and high income) with
reduced risk. This objective may be changed without shareholder approval.
(Graphic - Compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund is a balanced fund investing its assets in various Wright managed
equity and income funds. Wright allocates the fund's assets based on a
fundamental analysis of the economy and investment markets in the U.S. and
foreign countries. Over the long-term, the fund expects to have an asset mix of
65 percent equity (10 percent is international equity) and 35 percent fixed
income. This mix will vary over short-term periods as Wright follows a dynamic
process of monitoring the asset allocation model and making adjustments.
Purchases and sales of funds are made when necessary to adjust the asset
allocation model, when new investments become available to the fund, or when
necessary to accomodate redemption activity. The equity allocation may range
from 0 to 80 percent with up to 20 percent being international equities. The
U.S. equities may be allocated among large, medium and small companies. The
fixed income allocation may range from 25 to 100 percent. Fixed income funds
selected could include those investing in U.S. government issues, high quality
corporate issues and mortgage backed securities issued and guaranteed as to
timely payment of principal and interest by the Government National Mortgage
Association. Up to 50 percent of the fixed income allocation could be in money
market securities.
At the end of 1998 the asset allocation model for growth with income called for
a mix of 55% equities and 45% fixed income. This was further allocated as
follows:
o Wright Major Blue Chip Equities Fund 12%
o Wright Selected Blue Chip Equities Portfolio 25%
o Wright Junior Blue Chip Equities Portfolio 3%
o Wright International Blue Chip Equities Portfolio 15%
o Wright Total Return Bond Fund 35%
The remaining 10% of the fund's assets were invested in U.S. Treasury bills and
similar money market securities.
(Graphic - Life Preserver)
PRINCIPAL RISKS
In addition to normal market and management risks, the fund may invest in equity
funds that have specific risks. These risks are:
o WRIGHT MAJOR BLUE CHIP EQUITIES FUND. Performance could be adversely
affected if large capitalization or value stocks fall out of favor an
returns trail the overall stock market.
o WRIGHT SELECTED BLUE CHIP EQUITIES PORTFOLIO. Performance could be
adversely affected if mid-cap or value stocks fall out of favor with the
market and returns trail the overall market. Also, if selected companies
remain undervalued or experience an adverse event such as an unfavorable
earnings report.
o WRIGHT JUNIOR BLUE CHIP EQUITIES PORTFOLIO. Performance could be
adversely affected if small company securities fall out of favor with
the market and returns trail the overall market. The price of small
company securities may reflect greater risk due to narrow product lines,
limited financial resources, less depth in management or a limited
trading market.
o WRIGHT INTERNATIONAL BLUE CHIP EQUITIES PORTFOLIO. Foreign investments
are subject to special risks including currency risk (changes in foreign
currency rates reducing the value of the fund's assets), seizure,
expropriation or nationalization of a company, lack of public
information, and the impact of political, social, or diplomatic events.
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A Word About Risk
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o MARKET RISK: when the prices of stocks fall, the value of the fund's
investments may fall and you could lose money on your investment.
o MANAGEMENT RISK: Wright's strategy may not produce the expected results,
causing losses.
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In addition, fixed income funds may be subject to special risks such as:
o CREDIT OR DEFAULT RISK: An issuer's credit rating may be downgraded as
the issuer may be unable to pay principal and interest obligations.
o INTEREST RATE RISK: Bond prices fall when interest rates rise and vice
versa. The longer the maturity of the bonds, the greater the change in
price.
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o PREPAYMENT RISK: When interest rates decline, the issuer of a
mortgage-backed or other debt security may exercise an option to prepay
the principal. This forces reinvestment in lower yielding securities.
o EXTENSION RISK: When interest rates rise, the life of a mortgage-backed
security is extended beyond the expected prepayment time, reducing the
value of the security.
Also, the fund's income may decline during times of falling interest rates.
When the market is unfavorable, the fund's assets may be held temporarily in
cash or invested in short-term obligations without limit. Although the fund
would do this to reduce losses, defensive investments may hurt the fund's
efforts to achieve its investment objective. Likewise, Wright's efforts to
maximize returns while minimizing risk may not be successful.
(Graphic - Assorted Nautical Flags)
WHO MAY WANT TO INVEST
You may be interested in the fund if you are seeking an actively managed
well-diversified balanced investment portfolio with the fund's objective of
growth with a high level of income. The fund will be of particular interest to
individuals wishing to have a professional investment adviser make the decision
when to enter or exit different markets.
Advisor Shares have been created for use in 401(k) and similar retirement plans.
Individual Shares were created for individuals who wish to invest directly or
through their bank or other financial institution. The fund is intended for
those seeking a long-term investment commitment.
(Graphic - Ship's Log)
PAST PERFORMANCE
The fund has no prior operating history and no past performance record. Wright
manages certain private balanced investment accounts which have investment
objectives and strategies that are identical to the fund's and invest in the
same Blue Chip Funds. The performance of these accounts for the years ended
December 31, 1998 is on page 8.
(Graphic - Two Crossed Anchors with a $ in the center)
FEES AND EXPENSES
The table describes the estimated fees and expenses you may pay if you buy and
hold shares of the fund.
Individual Advisor
Shares Shares
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SHAREHOLDER FEES
(paid directly from Maximum deferred sales charge(load) 1.00%(1) none
your investment) (% of offering price)
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ANNUAL FUND OPERATING
EXPENSES Management fee 0.75% 0.75%
(deducted directly Distribution and service (12b-1) fees 1.00% 0.50%
from fund assets) Other expenses 0.25% 0.25%
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Total Operating Expenses 2.00% 1.50%
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(1)Shares redeemed during the first year after purchase are subject to a
deferred sales charge of 1.00% deducted from redemption proceeds.
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Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
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Example
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period. Your actual costs may be higher or lower, so use this example
for comparison only. Based on these assumptions your costs at the end of each
period would be:
1 Year 3 Years
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Individual Shares with redemption $303 $627
Individual Shares without redemption $203 $627
Advisor Shares $153 $474
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INFORMATION ABOUT YOUR ACCOUNT
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HOW THE FUND VALUES ITS SHARES
The price at which you buy, sell or exchange fund shares is the net asset value
per share or NAV. The NAV is calculated at the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. New York time) each day the Exchange
is open. It is not calculated on days the Exchange is closed. The value of the
fund's assets may change on days when the Exchange is not open. You will not be
able to purchase, redeem or exchange the fund's shares on those days. The price
for a purchase, redemption or exchange of fund shares is the next NAV calculated
after your request is received.
When the fund calculates its NAV, it values the underlying funds at their asset
values. Other portfolio securities are valued at the last current sales price on
the market where the security is normally traded. Securities that can not be
valued at these closing prices are valued by Wright at fair value in accordance
with procedures adopted by the trustees. This could happen if an event after the
close of the market seemed likely to have a major impact on the price of
securities traded on the market. Although the fund calculates its value each day
the Exchange is open, the NAV reported to NASDAQ for distribution to news
agencies will be delayed by one day.
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Determining NAV
Share price is determined by adding the value of a fund's investments, cash and
other assets attributable to the class, deducting liabilities, and then dividing
that amount by the total number of shares outstanding for that class.
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PURCHASING SHARES
Purchasing Shares for Cash
Shares of the fund are sold without an up-front sales charge at NAV. The minimum
initial investment is $1,000 for either Advisor Shares or Individual Shares.
There are no minimums for subsequent investments.
Waiver of the Minimum Initial Investment: The minimums may be waived for
investments by bank trust departments, 401(k) or similar tax-sheltered
retirement plans and automatic investment program accounts. The minimum initial
investment will be reduced to $500 for shares purchased through certain
investment advisers, financial planners, brokers or other intermediaries that
charge a fee for their services. The fund has the right to reject any purchase
order, or limit or suspend the offering of its shares.
Authorized dealers, including investment dealers, banks or other institutions,
may impose investment minimums higher than those imposed by the fund. They may
also charge for their services. There are no charges if you purchase your shares
directly from the fund.
Buying Fund Shares
o If you are buying shares directly from the fund, please refer to your
Shareholder Manual for instructions on how to buy fund shares.
o If you buy shares through bank trust departments or other fiduciary
institutions, please consult your trust or investment officer.
o If you buy shares through a broker, please consult your broker for
purchase instructions.
o If you buy shares through an account with a registered investment
adviser or financial planner, please contact your investment adviser or
planner.
o If you buy shares of the fund through a retirement plan, please consult
your plan documents or speak with your plan administrator.
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Paying for Shares
You may pay for shares by wire, check, Federal Reserve draft, or other
negotiable bank draft, payable in U.S. dollars and drawn on U.S banks. Third
party checks will not be accepted. A charge is imposed on any returned checks.
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DISTRIBUTION AND SERVICE PLANS
The fund has adopted a 12b-1 plan permitting it to pay a fee in connection with
the distribution of its shares. Wright Investors' Service Distributors, Inc.
(WISDI), the principal underwriter and distributor of the fund's shares,
receives a distribution fee of up to 0.75% of the average daily net assets of
the Individual Share class and up to 0.25% of the average daily net assets of
the Advisor Share class. Because this fee is paid on an ongoing basis, this may
cost you more than other types of sales charges over time.
The fund has also adopted a service plan. This plan allows WISDI to be
reimbursed for payments to intermediaries for providing account administration
and personal and account maintenance services to fund shareholders. The annual
service fee may not exceed 0.25% of the average daily net assets of each class
of shares.
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Signature Guarantees
Signature guarantees are used to protect you and the fund from possible
fraudulent requests for redeemed shares. They are required on all requests to
change account application information and for certain redemption requests
including any that direct that redemption proceeds be sent to other than the
address of record. See the Shareholders Manual for more information.
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SELLING SHARES
You may redeem or sell shares of the fund on any business day. NO REDEMPTION
REQUEST WILL BE PAID UNTIL YOUR SHARES HAVE BEEN PAID FOR IN FULL. IF THE SHARES
TO BE REDEEMED REPRESENT AN INVESTMENT MADE BY CHECK, THE REDEMPTION PAYMENT
WILL BE DELAYED UNTIL THE CHECK HAS BEEN COLLECTED, WHICH MAKE TAKE UP TO
FIFTEEN DAYS FROM THE DATE OF PURCHASE. Telephone and internet redemption
procedures are described in the Shareholder Manual. Individual Shares are
subject to a 1% contingent deferred sales charge if sold within one year of
purchase.
Redemption requests received in "proper form" before 4:00 p.m. New York time
will be processed at that day's NAV. "Proper form" means that the fund has
received your request, all shares are paid for, and all documentation, along
with any required signature guarantees, are included. The fund normally pays
redemption proceeds by check on the next business day to the address of record.
Payment will be by wire if you specified this option on your account
application.
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Redemption Proviso
In times of drastic economic or market conditions, you may have difficulty
selling shares by telephone or the internet, so you should send your request by
mail or overnight delivery. These redemption options may be modified or
terminated without notice to shareholders.
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Individual shares redeemed within 12 months of purchase are subject to a
contingent deferred sales charge of one percent of purchase price.
For more information about selling your shares, please refer to your Shareholder
Manual or consult your trust officer, adviser or plan administrator.
Involuntary Redemption
If your account falls below $500 the fund may redeem your shares. You will
receive notice 60 days before this happens. Your account will not be redeemed if
the balance is below the minimum due to investment losses.
EXCHANGING SHARES
Individual Shares may be exchanged for Individual Shares of Catholic Values
Investment Trust Equity Fund. Advisor Shares may be exchanged for Standard
Shares of the Wright Managed Blue Chip Investment Funds. See the Shareholder
Manual for detailed instructions.
You are limited to four "round-trip" exchanges each year. A round-trip exchange
is an exchange of one fund into another Wright fund, and then back into the
original fund. You will receive notice 60 days before the fund materially amends
or terminates the exchange privilege.
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Market-Timers
The fund believes that use of the exchange privilege by investors utilizing
market-timing strategies adversely affects other fund shareholders. Therefore,
the fund generally will not honor requests for exchanges by shareholders who
identify themselves or are identified as "market-timers." Market-timers are
identified as those investors who repeatedly (more than once) make exchanges
within a short period. The fund does not automatically redeem shares that are
the subject of a rejected exchange request.
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DIVIDENDS AND TAXES
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Unless you tell us that you want to receive your distributions in cash, they are
reinvested automatically in fund shares. The fund generally makes two different
kinds of distributions:
o Capital gains from the sale of investments or other transactions. The
fund will distribute any net realized capital gains annually, normally
in December. Capital gains are the main source of distributions paid by
the fund.
o Net investment income from interest or dividends. The fund generally will
distribute its net investment income quarterly.
TAX CONSEQUENCES
Selling, redeeming, or exchanging mutual fund shares may result in a gain or a
loss and is a taxable event. Distributions, whether received in cash or
reinvested in additional shares of the fund, are subject to federal income tax.
Transaction Tax Status
Income dividends Ordinary income
Short-term capital gains distribution Ordinary income
Long-term capital gains distribution Long-term capital gains
The international fund may be subject to foreign withholding taxes or other
foreign taxes on some of its foreign investments. This will reduce the yield or
total return on those investments and may affect the return of the fund if it
invests in the international fund.
Your investment in the fund could have additional tax consequences. Please
consult your tax advisor on federal, state, local or other applicable tax laws.
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Tax Considerations
Unless your investment is in a tax-deferred account you may want to avoid:
o Investing in the fund near the end of its fiscal year; if the fund makes a
distribution of net investment income or capital gains you will receive some
of your investment back as a taxable distribution.
o Selling shares at a loss for tax purposes and making an investment in the
fund within 30 days before or after the sale. This results in a "wash sale"
and you will not be allowed to claim a tax loss.
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MANAGING THE FUNDS
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WRIGHT INVESTORS SERVICE, THE INVESTMENT ADVISER
Wright Investors' Service, Inc. manages the fund and its investments. Wright is
located at 1000 Lafayette Boulevard, Bridgeport, CT 06604. Wright receives a
monthly advisory fee for its services in the amount of 0.20% annually of the
fund's average annual net assets. It also receives advisory fees from the
underlying funds.
Wright is a leading independent international investment management and advisory
firm with more than 35 years experience. Wright manages about $4.5 billion of
assets in portfolios of all sizes and styles as well as a family of mutual
funds. The Wright Asset Allocation Trust may invest in as many as nine of these
funds.
Wright developed Worldscope(R), one of the world's largest and most complete
databases of financial information, which currently includes more than 19,000
companies in 49 nations. Using a bottom-up fundamental approach, Wright
systematically identifies those companies in the Worldscope(R) database that
meet minimum standards of prudence and thus are suitable for consideration by
fiduciary investors. These companies are then subjected to extensive analysis
and evaluation to identify those that meet Wright's standards of investment
quality. These standards focus on liquidity, financial strength, stability of
profits and growth.
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Fundamental Analysis
The analysis of company financial statements to forecast future price movements
using past records of assets, earnings, sales, products, management and markets.
It differs from technical analysis which relies on price and volume movements of
stocks and does not concern itself with financial statistics.
"Bottom-Up" Approach to Investing
The analysis of company information before considering the impact of industry
and economic trends. It differs from the "top-down" approach which looks first
at the economy, then the industry and last the company.
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Only those companies meeting or exceeding these standards are eligible for
selection by the Wright investment committee for inclusion on an Approved Wright
Investment List (AWIL). There are separate AWILs for U.S. companies, non-U.S.
companies, small companies and fixed income securities. Different standards may
apply to each list. For example, smaller companies may have a lower market
capital requirement but a higher standard of profitability and growth. All the
companies on the lists are considered by Wright to be "Blue Chips." This means
that the companies have established records of earnings profitability and equity
growth. All have established investment acceptance and active, liquid markets.
Investment Committee
An investment committee of senior officers controls the investment selections,
policies and procedures of the fund. These officers are experienced analysts
with different areas of expertise, and have over 195 years of combined service
with Wright. The committee makes all decisions for the asset allocation model
for the fund of funds and for the selection, purchase and sale of all securities
for the Blue Chip Funds. The investment committee consists of the following
members:
<TABLE>
<CAPTION>
Committee Member Title Joined Wright in
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter M. Donovan, CFA President and Chief Executive Officer 1966
Judith R. Corchard Chairman of the investment committee 1960
Executive Vice President - Investment Management
Jatin J. Mehta, CFA Chief Investment Officer - U.S. Equities 1969
Harivadan K. Kapadia, CFA Senior Vice President - Investment Analysis and Information 1969
Michael F. Flament, CFA Senior Vice President - Investment and Economic Analysis 1972
James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982
Amit S. Khandwala Senior Vice President - International Investments 1986
Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985
Patricia J. Pierce, CFA Senior Vice President - Equities 1999
</TABLE>
<PAGE>
Wrights Balanced Investment Accounts
The chart shows the performance of fee paying balanced investment accounts
under Wright's discretionary management invested in Wright managed mutual funds.
These accounts have objectives, policies and strategies identical to those of
the fund.
Year by Year Total Return of Wright's Balanced investment Accounts
as of December 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------------------------------------
30% 22.10%
- -------------------------------------------------------------------------------------------------------------------------
20% 16.59% 18.04%
- -------------------------------------------------------------------------------------------------------------------------
10% 9.29% 14.52% 15.81%
- -------------------------------------------------------------------------------------------------------------------------
0% 3.08% 3.07% 3.07%
- -------------------------------------------------------------------------------------------------------------------------
(10%) -5.38%
- -------------------------------------------------------------------------------------------------------------------------
Best quarter: 9.84% (4th quarter 1998) Worst quarter: -10.13% (3rd quarter 1998)
</TABLE>
Average Annual Returns of Wright's Balanced Investment Accounts
as of December 31, 1998
1 Year 5 Years 10 Years
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Average Annual Returns
as of December 31, 1998 3.07% 9.58% 9.71%
The performance of these accounts is not that of the fund, is not a substitute
for the fund's performance and does not predict the fund's performance results,
which may differ from the private accounts' results. Performance data in the
chart are net of the expenses of the Wright managed mutual funds in which the
accounts invest and of the management fee paid by the accounts.
The management fees and expenses of the private accounts are similar to the
estimated fees/expenses of the fund. Private accounts are not subject to certain
investment limitations and other restrictions imposed by the Investment Company
Act of 1940. If applicable, these limitations and restrictions could lower the
performance results of private accounts. However, Wright believes that all of
these limitations and restrictions were met by the accounts. Performance has
been calculated using the Association of Investment Management and Research
(AIMR) performance method, which may differ from the SEC method.
Master/Feeder Fund Structure
Six of the Blue Chip Funds in which the fund may invest are organized as
"master" funds. These include:
o Wright Selected Blue Chip Equities Portfolio
o Wright Junior Blue Chip Equities Portfolio
o Wright International Blue Chip Equities Portfolio
o Wright U.S. Treasury Portfolio
o Wright U.S. Government Near Term Portfolio
o Wright Current Income Portfolio
<PAGE>
These portfolios are organized as trusts and are treated as partnerships for
federal tax purposes. Partnerships are "pass-through-entities" which means that
they do not pay federal taxes; instead, all of their realized gains or losses,
other income, and expenses are allocated to, and taken into account for tax
purposes by, the fund and the other investors in the portfolios.
YEAR 2000 READINESS
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. Wright is addressing this issue and is getting reasonable assurances
from the fund's other major service providers that they too are addressing these
issues to preserve smooth functioning of the fund's trading, pricing,
shareholder account, custodial and other operations. Wright is also considering
the vulnerability to Year 2000 problems of companies in which the funds or
portfolios invest.
Improperly functioning computers may disrupt securities markets or result in
overall economic uncertainty. Individual companies may also be adversely
affected by the cost of fixing their computers, which could be substantial.
There is no guarantee that all problems will be avoided.
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Administrator
Eaton Vance Management serves as the fund's administrator and is responsible for
managing its daily business affairs. Eaton Vance's services include operating
the fund's order room, recordkeeping, preparing and filing documents required to
comply with federal and state securities laws, supervising activities of the
fund's custodian and transfer agent, providing assistance in connection with the
trustees' and shareholders' meetings and other administrative services.
- -----End Side Bar Text-----
The Euro
The European countries have adopted the Euro as their common currency. Existing
national currencies of these countries will be sub-currencies of the Euro until
July 1, 2002, when the old currencies will disappear entirely. The introduction
of the Euro presents some possible risks, which could adversely affect the value
of securities held by the fund, as well as possible adverse tax consequences.
There could be unpredictable effects on trade and commerce, resulting in
increased volatility for all financial markets.
<PAGE>
Financial Highlights
- -------------------------------------------------------------------------------
The fund has no operating history and no financial highlights are available for
the fund.
<PAGE>
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard, Bridgeport, CT 06604
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
Additional information about the fund's investments will be available in the
fund's semi-annual and annual reports to shareholders. The fund's annual report
will contain a discussion of the market conditions and investment strategies
that affected the fund's performance over the first year of its operations.
You may wish to read the Statement of Additional Information (SAI) for more
information on the fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the SAI,
request other information or get answers to your questions about the fund by
writing or calling:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
(800) 888-9471
E-mail: [email protected]
Copies of documents and application forms can be viewed and downloaded from
Wright Investors' Service website: www.wrightinvestors.com.
Text-only versions of fund documents can be viewed online or downloaded from the
SEC's web site at www.sec.gov. You can also obtain copies by visiting the SEC's
Public Reference Room in Washington DC. For information on the operation of the
Public Reference Room, call (800) SEC-0330. Copies of documents may also be
obtained by sending your request and the appropriate fee to the SEC's Public
Reference Section, Washington, DC 20549-6009.
Investment Company Act File Number............................811-09263
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ADVISOR SHARES
INDIVIDUAL SHARES
_________, 1999
THE WRIGHT ASSET ALLOCATION TRUST
- -------------------------------------------------------------------------------
Wright Managed Growth with Income Fund
255 State Street
Boston, Massachusetts 02109
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
The Wright Asset Allocation Trust......................................2
The Fund and its Investment Objective and Policies.....................2
Investment Policies and Other Information
About the Underlying Blue Chip Funds..................................2
Investment Restrictions................................................7
Officers and Trustees..................................................8
Control Persons and Principal Holders of Shares.......................10
Investment Advisory and Administrative Services.......................10
Custodian and Transfer Agent..........................................11
Independent Certified Public Accountants..............................11
Brokerage Allocation..................................................12
Pricing of Shares.....................................................12
Taxes.................................................................12
Calculation of Performance and Yield Quotations.......................14
Financial Statements..................................................15
APPENDIX..............................................................17
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Fund's prospectus dated ________, 1999, which is
incorporated by reference herein. The information in this Statement of
Additional Information expands on information contained in the prospectus. The
prospectus can be obtained without charge by contacting the Distributor at the
phone number or address below.
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
PRINCIPAL DISTRIBUTORS
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
1-(800)-888-9471
<PAGE>
THE WRIGHT ASSET ALLOCATION TRUST
The Wright Asset Allocation Trust is an open-end management company
registered under the Investment Company Act of 1940. The Trust was organized as
a Massachusetts trust on June 17, 1997. The fund is a diversified series of the
Trust.
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if only the interests
of the fund are affected, a majority of the fund's outstanding shares. The
trustees are authorized to make amendments to the Declaration of Trust without
shareholder approval that do not have a material adverse effect on the interests
of shareholders. The Trust may be terminated (i) upon the sale of the Trust's
assets to another investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the Trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its Trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Trust's Declaration of Trust further provides that the Trustees will
not be liable for errors of judgment or mistakes of fact or law; however,
nothing in the Declaration of Trust protects a Trustee against any liability 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.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Trust's Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The Trust has been advised by counsel that the risk of any
shareholder incurring any liability for the obligations of a Trust is extremely
remote. Wright does not consider this risk to be material.
THE FUND AND ITS INVESTMENT OBJECTIVE AND POLICIES
The fund's objective is high total return (consisting of price appreciation
and high income) with reduced risk. The fund seeks to meet its investment
objective by allocating its assets among the Blue Chip Funds described in the
Prospectus. Capitalized terms used in the Statement of Additional Information
have the same meaning as in the Prospectus.
INVESTMENT POLICIES AND OTHER INFORMATION ABOUT THE UNDERLYING BLUE CHIPS
The fund will concentrate its investments in the underlying Blue Chip Funds
which are mutual funds. Mutual funds pool the investments of many investors and
use professional management to select and purchase securities of different
issuers for their portfolios. Any investment in a mutual fund involves risk.
Even though the fund may invest in a number of the underlying Blue Chip Funds,
this investment strategy cannot eliminate investment risk. Investing in mutual
funds through a fund involves additional and duplicative expenses that would not
be present if an investor were to make a direct investment in the underlying
funds.
Under certain circumstances an underlying Blue Chip Fund may determine to
make payment of a redemption by the fund (wholly or in part) by a distribution
in kind of securities from its portfolio, instead of in cash. As a result, the
fund may hold securities distributed by an underlying Blue Chip Fund until such
time as Wright determines it appropriate to dispose of such securities. Such
disposition will impose additional costs on the fund.
The types of securities that may be acquired by the underlying Blue Chip
Funds and the various investment techniques which they may employ, including the
risks associated with these investments, are described below. References to
"fund" and "funds" in this section only refer to the underlying Blue Chip Funds.
<PAGE>
EQUITY SECURITIES
Common Stocks. Common stocks are shares of a corporation or other entity
that entitle the holder to a pro rata share of the profits of the corporation,
if any, without preference over any other shareholder or class of shareholders,
including holders of the entity's preferred stock and other senior equity.
Common stock usually carries with it the right to vote and frequently an
exclusive right to do so.
Preferred Stocks and Convertible Securities. Convertible debt securities
and preferred stock entitle the holder to acquire the issuer's stock by exchange
or purchase for a predetermined rate. Convertible securities are subject both to
the credit and interest rate risks associated with fixed income securities and
to the stock market risk associated with equity securities. Convertible debt
securities in which the fund invests generally are rated at the time of
investment in one of the top two rating categories by a nationally recognized
rating organization or their unrated equivalent.
Foreign Securities. Wright International Blue Chip Equities Fund may invest
in foreign securities. Investing in securities of foreign governments or
securities issued by companies whose principal business activities are outside
the United States may involve significant risks not associated with domestic
investments. It is anticipated that in most cases, the best available market for
foreign securities will be on exchanges or in over-the-counter markets located
outside the U.S. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the U.S. Securities
of some foreign issuers (particularly those located in developing countries) may
be less liquid and more volatile than securities of comparable U.S. companies.
In addition, foreign brokerage commissions are generally higher than commissions
on securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of securities exchanges,
brokers and listed companies than in the U.S.
The limited liquidity of certain foreign markets may affect the fund's
ability to accurately value its assets invested in such market. In addition, the
settlement systems of certain foreign countries are less developed than the
U.S., which may impede the fund's ability to effect portfolio transactions.
There is generally less publicly available information about foreign companies,
particularly those not subject to the disclosure and reporting requirements of
the U.S. securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to domestic issuers. Investments in foreign securities also involve
the risk of possible adverse changes in exchange control regulations,
expropriation or confiscatory taxation, limitation on removal of funds or other
assets of the fund, political or financial instability or diplomatic and other
developments which could affect such investments. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the U.S.
Foreign Currency Exchange Transactions. Investments in securities of
foreign governments and companies whose principal business activities are
located outside of the United States will frequently involve currencies of
foreign countries. In addition, assets of the fund may temporarily be held in
bank deposits in foreign currencies during the completion of investment
programs. Therefore, the value of the fund's assets, as measured in U.S.
dollars, may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. Although the fund values its
assets daily in U.S. dollars, the fund does not intend to convert its holdings
of foreign currencies into U.S. dollars on a daily basis. The fund may conduct
its foreign currency exchange transactions on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market. The fund will
convert currency on a spot basis from time to time and will incur costs in
connection with such currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the fund at one rate, while offering a lesser rate of exchange should the
fund desire to resell that currency to the dealer. The funds do not intend to
speculate in foreign currency exchange rates.
As an alternative to spot transactions, the fund may enter into contracts
to purchase or sell foreign currencies at a future date ("forward" contracts) or
purchase currency call or put options. A forward contract involves an obligation
to purchase or sell a specific currency at a future date and price fixed by
agreement between the parties at the time of entering into the contract. These
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally involves no deposit requirement and no commissions are charged at any
stage for trades. The funds intend to enter into such contracts only on net
terms. The purchase of a put or call option is an alternative to the purchase or
sale of forward contracts and will be used if the option premiums are less then
those in the forward contract market.
The funds may enter into forward contracts only under two circumstances.
First, when a fund enters into a contract for the purchase or sale of a security
quoted or dominated in a foreign currency, it may desire to "lock in" the U.S.
dollar price of the security. This is accomplished by entering into a forward
contract for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying security transaction
("transaction hedging"). Such forward contract transactions will enable the fund
to protect itself against a possible loss resulting from an adverse change in
<PAGE>
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date of
payment for the security.
Second, when Wright believes that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, the fund may
enter into a forward contract to sell, for a fixed amount of U.S. dollars, the
amount of foreign currency approximating the value of some or all of the
securities quoted or denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved will
not generally be possible. The future value of such securities in foreign
currencies will change as a consequence of fluctuations in the market value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of currency exchange rates and the
implementation of a short-term hedging strategy are highly uncertain. As an
operating policy, the fund does not intend to enter into forward contracts for
such hedging purposes on a regular or continuous basis, and will not do so if,
as a result, more than 50% of the value of the fund's total assets would be
committed to the consummation of such contracts. The fund will also not enter
into such forward contracts or maintain a net exposure to such contracts if the
contracts would obligate the fund to deliver an amount of foreign currency in
excess of the value of the fund's securities or other assets denominated in that
currency.
The fund's custodian will place cash or liquid securities in a segregated
account. The amount of such segregated assets will be at least equal to the
value of the fund's total assets committed to the consummation of forward
contracts involving the purchase of forward currency. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the fund's commitments with respect to such
contracts.
The fund generally will not enter into a forward contract with a term of
greater than one year. At the maturity of a forward contract, the fund may elect
to sell the portfolio security and make delivery of the foreign currency.
Alternatively, the fund may retain the security and terminate its contractual
obligation to deliver the foreign currency by purchasing an identical offsetting
contract from the same currency trader.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a forward contract. Accordingly, it may be
necessary for the fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the fund intends to sell the
security and the market value of the security is less than the amount of foreign
currency that the fund is obligated to deliver. Conversely, it may be necessary
to sell on the spot market some of the foreign currency received upon the sale
of the portfolio security if its market value exceeds the amount of foreign
currency that the fund is obligated to deliver.
If the fund retains the portfolio security and engages in an offsetting
transaction, the fund will incur a gain or a loss (as described below) to the
extent that there has been a change in forward contract prices. If the fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward contract prices
decline during the period between the date the fund enters into a forward
contract for the sale of the foreign currency and the date it enters into an
offsetting contract for the purchase of the foreign currency, the fund will
realize a gain to the extent that the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
contract prices increase, the fund will suffer a loss to the extent that the
price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
The fund will not speculate in forward contracts and will limit its use of
such contracts to the transactions described above. Of course, the fund is not
required to enter into such transactions with respect to its portfolio
securities and will not do so unless deemed appropriate by its investment
adviser. This method of protecting the value of the fund's securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
which the fund can achieve at some future time. Additionally, although such
contracts tend to minimize the risk of loss due to a decline in the value of the
hedged currency, they also tend to limit any potential gain which might be
realized if the value of such currency increases.
FIXED INCOME SECURITIES
Generally. Investments in fixed income securities may subject the fund to
risks, including the following.
Interest Rate Risk. When interest rates decline, the market value of fixed
income securities tends to increase. Conversely, when interest rates increase,
the market value of fixed income securities tends to decline. The volatility of
a security's market value will differ depending upon the security's duration,
the issuer and the type of instrument.
<PAGE>
Default Risk/Credit Risk. Investments in fixed income securities are
subject to the risk that the issuer of the security could default on its
obligations, causing a fund to sustain losses on such investments. A default
could impact both interest and principal payments.
Call Risk and Extension Risk. Fixed income securities may be subject to
both call risk and extension risk. Call risk exists when the issuer may exercise
its right to pay principal on an obligation earlier than scheduled, which would
cause cash flows to be returned earlier than expected. This typically results
when interest rates have declined and a fund will suffer from having to reinvest
in lower yielding securities. Extension risk exists when the issuer may exercise
its right to pay principal on an obligation later than scheduled, which would
cause cash flows to be returned later than expected. This typically results when
interest rates have increased, and a fund will suffer from the inability to
invest in higher yield securities.
Corporate Debt Obligations. Corporate debt obligations are subject to the
risk of an issuer's inability to meet principal and interest payments on the
obligations and may also be subject to price volatility due to such factors as
market interest rates, market perception of the creditworthiness of the issuer
and general market liquidity.
U.S. Government Securities. U.S. Government securities include: bills,
certificates of indebtedness, and notes and bonds issued by the U.S. Treasury or
by agencies or instrumentalities of the U.S. Government. Some U.S. Government
securities, such as U.S. Treasury bills and bonds, are supported by the full
faith and credit of the U.S. Treasury; others are supported by the right of the
issuer to borrow from the U.S. Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such as
those of the Student Loan Marketing Association and the Federal Home Loan
Mortgage Corporation ("FHLMC"), are supported only by the credit of the
instrumentality. Mortgage participation certificates issued by the FHLMC
generally represent ownership interests in a pool of fixed-rate conventional
mortgages. Timely payment of principal and interest on these certificates is
guaranteed solely by the issuer of the certificates. Other investments will
include Government National Mortgage Association Certificates ("GNMA
Certificates"), which are mortgage-backed securities representing part ownership
of a pool of mortgage loans on which timely payment of interest and principal is
guaranteed by the full faith and credit of the U.S. Government. While the U.S.
Government guarantees the payment of principal and interest on GNMA
Certificates, the market value of the securities is not guaranteed and will
fluctuate.
Mortgage-Related Securities. Wright Total Return Bond Fund and Wright
Current Income Fund may invest in mortgage-related securities, including
collateralized mortgage obligations ("CMOs") and other derivative
mortgage-related securities. These securities will either be issued by the U.S.
Government or one of its agencies or instrumentalities or, if privately issued,
supported by mortgage collateral that is insured, guaranteed or otherwise backed
by the U.S. Government or its agencies or instrumentalities. THE FUNDS DO NO
INVEST IN THE RESIDUAL CLASSES OF CMOS, STRIPPED MORTGAGE-RELATED SECURITIES,
LEVERAGED FLOATING RATE INSTRUMENTS OR INDEXED SECURITIES.
Mortgage-related securities represent participation interests in pools of
adjustable and fixed mortgage loans. Unlike conventional debt obligations,
mortgage-related securities provide monthly payments derived from the monthly
interest and principal payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans. The mortgage loans underlying
mortgage-related securities are generally subject to a greater rate of principal
prepayments in a declining interest rate environment and to a lesser rate of
principal prepayments in an increasing interest rate environment. Under certain
interest and prepayment rate scenarios, a fund may fail to recover the full
amount of its investment in mortgage-related securities purchased at a premium,
notwithstanding any direct or indirect governmental or agency guarantee. The
fund may realize a gain on mortgage-related securities purchased at a discount.
Since faster than expected prepayments must usually be invested in lower
yielding securities, mortgage-related securities are less effective than
conventional bonds in "locking in" a specified interest rate. Conversely, in a
rising interest rate environment, a declining prepayment rate will extend the
average life of many mortgage-related securities. Extending the average life of
a mortgage related security increases the risk of depreciation due to future
increases in market interest rates.
A fund's investments in mortgage-related securities may include
conventional mortgage pass-through securities and certain classes of multiple
class CMOs. Senior CMO classes will typically have priority over residual CMO
classes as to the receipt of principal and/or interest payments on the
underlying mortgages. The CMO classes in which a fund may invest include
sequential and parallel pay CMOs, including planned amortization class ("PAC")
and target amortization class ("TAC") securities.
Different types of mortgage-related securities are subject to different
combinations of prepayment, extension, interest rate and/or other market risks.
Conventional mortgage pass-through securities and sequential pay CMOs are
subject to all of these risks, but are typically not leveraged. PACs, TACs and
other senior classes of sequential and parallel pay CMOs involve less exposure
<PAGE>
to prepayment, extension and interest rate risk than other mortgage-related
securities, provided that prepayment rates remain within expected prepayment
ranges or "collars."
MONEY MARKET INSTRUMENTS
CERTIFICATES OF DEPOSIT - are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
BANKERS' ACCEPTANCEs - are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
COMMERCIAL PAPER - refers to promissory notes issued by corporations in
order to finance their short-term credit needs.
FINANCE COMPANY PAPER - refers to promissory notes issued by finance
companies in order to finance their short-term credit needs.
CORPORATE OBLIGATIONS - include bonds and notes issued by corporations in
order to finance longer-term credit needs.
Forward Commitments and When-Issued Securities. A fund may purchase
when-issued securities and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Alternatively, a
fund may enter into offsetting contracts for the forward sale of other
securities that it owns. Securities purchased or sold on a when-issued or
forward commitment basis involve a risk of loss if the value of the security to
be purchased declines prior to the settlement date or if the value of the
security to be sold increases prior to the settlement date.
Securities are frequently offered on a "when-issued" basis. When so
offered, the price, which is generally expressed in terms of yield to maturity,
is fixed at the time the commitment to purchase is made, but delivery and
payment for the when-issued securities may take place at a later date. Normally,
the settlement date occurs 15 to 90 days after the date of the transaction. The
payment obligation and the interest rate that will be received on the securities
are fixed at the time a fund enters into the purchase commitment. During the
period between purchase and settlement, no payment is made by the fund to the
issuer and no interest accrues to the fund. To the extent that assets of a fund
are held in cash pending the settlement of a purchase of securities, the fund
would earn no income; however, it is intended that the funds will be fully
invested to the extent practicable and subject to the policies stated above.
While forward commitments and when-issued securities may be sold prior to the
settlement date, it is intended that such securities will be purchased for a
fund with the purpose of actually acquiring them unless a sale appears to be
desirable for investment reasons. At the time a commitment to purchase
securities on a when-issued basis is made for a fund, the transaction will be
recorded and the value of the security reflected in determining the fund's net
asset value. A fund will establish a segregated account in which a fund that
purchases securities on a when-issued basis will maintain cash and liquid
securities equal in value to commitments for when-issued securities. If the
value of the securities placed in the separate account declines, additional cash
or securities will be placed in the account on a daily basis so that the value
of the account will at least equal the amount of a fund's when-issued
commitments. Such segregated securities either will mature or, if necessary, be
sold on or before the settlement date. Securities purchased on a when-issued
basis and the securities held by a fund are subject to changes in value based
upon the public's perception of the credit worthiness of the issuer and changes
in the level of interest rates (which will generally result in both changing in
value in the same way, i.e., both experiencing appreciation when interest rates
decline and depreciation when interest rates rise). Therefore, to the extent
that a fund remains substantially fully invested at the same time that it has
purchased securities on a when-issued basis, there will be greater fluctuations
in the market value of the fund's net assets than if cash were solely set aside
to pay for when-issued securities.
Lending Portfolio Securities. A fund may seek to increase income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Securities and Exchange Commission, such
loans are required to be secured continuously by collateral in cash or liquid
assets held by the fund's custodian and maintained on a current basis at an
amount at least equal to the market value of the securities loaned, which will
be marked to market daily. Cash equivalents include certificates of deposit,
commercial paper and other short-term money market instruments. The fund would
have the right to call a loan and obtain the securities loaned at any time on up
to five business days' notice. The fund would not have the right to vote any
securities having voting rights during the existence of a loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or the giving or withholding of their consent on a material matter
affecting the investment.
During the existence of a loan, a fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned and will also receive a fee, or all or a portion of the interest, if any,
on investment of the collateral.
<PAGE>
However, the fund may at the same time pay a transection fee to such
borrowers and administrative expenses, such as finders' fees to third parties.
As with other extensions of credit there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities fails
financially. However, the loans will be made only to organizations deemed by the
Investment Adviser to be of good standing and when, in the judgment of the
Investment Adviser, the consideration which can be earned from securities loans
of this type justifies the attendant risk. The financial condition of the
borrower will be monitored by the Investment Adviser on an ongoing basis and
collateral values will be continuously maintained at no less than 100% by
"marking to market" daily. If the Investment Adviser decides to make securities
loans, it is intended that the value of the securities loaned would no exceed
30% of the fund's total assets.
Repurchase Agreements. A fund may enter into repurchase agreements only
with large, well-capitalized banks or government securities dealers that meet
Wright's credit standards. Repurchase agreements involve the purchase of U.S.
Government securities or of other high-quality, short-term debt obligations. At
the same time a fund purchases the security, it resells it to the vendor (a
member bank of the Federal Reserve System or recognized securities dealer), and
is obligated to redeliver the security to the vendor on an agreed-upon date in
the future. The resale price is in excess of the purchase price and reflects an
agreed-upon market rate unrelated to the coupon rate on the purchased security.
These transactions, which are like short-term loans, afford an opportunity for a
fund to earn a return on cash which is only temporarily available. A fund's risk
is the ability of the vendor to pay an agreed-upon sum upon the delivery date,
and each fund believes the risk is limited to the difference between the market
value of the security and the repurchase price provided for in the repurchase
agreement. However, bankruptcy or insolvency proceedings affecting the vendor of
the security which is subject to the repurchase agreement, prior to the
repurchase, may result in a delay in a fund being able to resell the security.
In all cases when entering into repurchase agreements with other than FDIC
insured depository institutions, the funds will take physical possession of the
underlying collateral security, or will receive written confirmation of the
purchase of the collateral security and a custodial or safekeeping receipt from
a third party under a written bailment for hire contract, or will be the
recorded owner of the collateral security through the Federal Reserve Book-Entry
System.
Defensive Investments. During periods of unusual market conditions, when
Wright believes that investing for temporary defensive purposes is appropriate,
all or a portion of a fund's assets may be held in cash or invested in
short-term obligations. Short-term obligations include but are not limited to
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collateralized by such securities); commercial paper which at the
date of investment is rated A-1 by S&P or P-1 by Moody's, or, if not rated by
such rating organizations, is deemed by Wright pursuant to procedures
established by the Trustees to be of comparable quality; short-term corporate
obligations and other debt instruments which at the date of investment are rated
AA or better by S&P or Aa or better by Moody's or, if unrated by such rating
organizations, are deemed by Wright pursuant to procedures established by the
Trustees to be of comparable quality; and certificates of deposit, bankers'
acceptances and time deposits of domestic banks which are determined to be of
high quality by Wright pursuant to procedures established by the Trustees. A
fund may invest in instruments and obligations of banks that have other
relationships with the fund, Wright or Eaton Vance Management, the administrator
("Eaton Vance" or "Administrator"). No preference will be shown towards
investing in banks which have such relationships.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the fund and may
be changed only by the vote of a majority of the fund's outstanding voting
securities, which as used in this Statement of Additional Information means the
lesser of (a) 67% of the shares of the fund if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the fund. Accordingly, the fund may not:
(1) With respect to 75% of the total assets of the fund, purchase the
securities of any issuer if such purchase at the time thereof would
cause more than 5% of its total assets (taken at market value) to
be invested in the securities of such issuer, or purchase
securities of any issuer if such purchase at the time thereof would
cause more than 10% of the total voting securities of such issuer
to be held by the fund, except that this restriction does not apply
to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and securities of other investment
companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940. In addition, the fund may not issue
bonds, debentures or senior equity securities, other than shares of
beneficial interest;
(3) Purchase securities on margin (but the fund may obtain such short-
term credits as may be necessary for the clearance of purchases
and sales of securities);
<PAGE>
(4) Underwrite or participate in the marketing of securities of others;
(5) Make an investment in any one industry if such investment would
cause investments in such industry to equal or exceed 25% of the
fund's total assets taken at market value at the time of such
investment (other than (i) securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities) and (ii)
securities of other investment companies;
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of
companies which invest or deal in real estate;
(7) Purchase or sell commodities or commodity contracts for the
purchase or sale of physical commodities, except that the fund may
purchase and sell financial futures contracts, options on financial
futures contracts and all types of currency contracts; or
(8) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments (b) entering into
repurchase agreements or (c) lending portfolio securities.
The fund has adopted the following investment policy which may be changed
without approval by the fund's shareholders. As a matter of nonfundamental
policy, the fund will not invest more than 15% of net assets in illiquid
investments. If the fund's holdings of illiquid securities exceed 15% of its net
assets, the fund will take steps necessary to reduce these holdings in its
ordinary course of business. In addition, the fund will not purchase securities
when bank borrowing exceeds 5% of total assets.
Except for the fund's investment policies with respect to borrowing money
and investing in illiquid securities, if a percentage restriction contained in
the fund's investment policies is adhered to at the time of investment, a later
increase or decrease in the percentage resulting from a change in the value of
portfolio securities or the fund's net assets will not be considered a violation
of such restriction.
OFFICERS AND TRUSTEES
The officers and trustees of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those trustees who are "interested
persons" (as defined in the Investment Company Act of 1940 (the "1940 Act")) of
the Trust, Wright, The Winthrop Corporation ("Winthrop"), Eaton Vance, Eaton
Vance's wholly owned subsidiary, Boston Management and Research ("BMR"), Eaton
Vance's parent company, Eaton Vance Corp. ("EVC"), or Eaton Vance's and BMR's
trustee, Eaton Vance, Inc. ("EV") by virtue of their affiliation with either the
Trust, Wright, Winthrop, Eaton Vance, BMR, EVC or EV, are indicated by an
asterisk (*).
PETER M. DONOVAN (56), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, JR. (72), Vice President, Secretary and Trustee*
Retired, Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, BMR, EVC and EV and Director of EV and EVC; Director of
Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
JUDITH R. CORCHARD (60), Vice President and Trustee*
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director of Wright and Winthrop. Ms.
Corchard was appointed a Trustee of the Trust on December 10, 1997.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
A.M. MOODY, III (62), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
<PAGE>
DORCAS R HARDY (52), Trustee
President, Dorcas R. Hardy & Associates (a public policy and government
relations firm), Spotsylvania, VA; Director, The Options Clearing Corporation
and First Coast Service Options, Jacksonville, FL (FL Blue Cross Blue Shield
subsidiary); 1996-1998 - Chairman and CEO of Work Recovery, Inc. (an advanced
rehabilitation technology firm), Tucson AZ; 19861989 - U.S. Commissioner of
Social Security. Ms. Hardy was elected a Trustee on December 9, 1998.
Address: 11407 Stonewall Jackson Drive, Spotsylvania, VA 22553
LELAND F. MILES (75), Trustee
President Emeritus, University of Bridgeport (1987-present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company.
Address: 332 North Cedar Road, Fairfield, CT 06430
LLOYD F. PIERCE (80), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE (a software company).
Address: 140 Snow Goose Court, Daytona Beach, FL 32119
RICHARD E. TABER (50), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed a Trustee of the Trust on
March 18, 1997.
Address: 117 Prospect Street, Stamford, CT 06904
RAYMOND VAN HOUTTE (74), Trustee
President Emeritus and Counselor of The Tompkins County Trust Company,
Ithaca, NY (since January 1989); President and Chief Executive Officer, The
Tompkins County Trust Company (1973-1988); President, New York State Bankers
Association (1987-1988); Trustee Emeritus Paleontological Institution (since
May, 1995).
Address: One Strawberry Lane, Ithaca, NY 14850
JAMES L. O'CONNOR (54), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
JANET E. SANDERS (63), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
A. JOHN MURPHY (36), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
ERIC G. WOODBURY (41), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993. Officer o
various investment companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
WILLIAM J. AUSTIN, JR. (47), Assistant Treasurer
Assistant Vice President of Eaton Vance, BMR and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
All of the trustees and officers hold identical positions with The Wright
Managed Equity Trust, The Wright Managed Income Trust, The Wright EquiFund
Equity Trust, The Wright Blue Chip Master Portfolio Trust and Catholic Values
Investment Trust. Each trustee who is not an employee of Wright, Winthrop, Eaton
Vance, its parents or subsidiaries, including Mr. Brigham, receives annual
compensation from the Trust. The trustees who are employees of Wright receive no
compensation from the Trust. Non-affiliated trustees, including Mr. Brigham,
also receive additional payments from other investment companies for which
Wright provides investment advisory services. The Trust does not have a
retirement plan for the trustees. See the following "Compensation Table."
<PAGE>
The Board of Trustees has established an Independent Trustees' Committee
consisting of all of the Independent Trustees, who are Messrs. Miles, Pierce
(Chairman), Taber and Van Houtte and Ms. Hardy. The responsibilities of the
Independent Trustees' Committee include those of an audit committee for the
financial governance of the Trust, a nominating committee for additional or
replacement trustees of the Trust and a contract review committee for
consideration of renewals or changes in the investment advisory agreements,
distribution agreements and distribution plans and other agreements as
appropriate.
COMPENSATION TABLE
Estimated Total
Compensation Compensation from
from the Fund(1) Fund and Funds Complex(1)(2)
- -------------------------------------------------------------------------------
H. Day Brigham, Jr. $ 1,125 $ 11,625
Dorcas Hardy 1,125 11,625
Leland Miles 1,125 11,625
Lloyd F. Pierce 1,125 11,625
Richard E. Taber 1,125 11,625
Raymond Van Houtte 1,125 11,625
- -------------------------------------------------------------------------------
(1) Estimated for the fiscal year ended December 31, 1999.
(2) Includes service on other boards in the Wright fund complex for a total
of 24 Funds.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of the date of this Statement of Additional Information, all of the
outstanding shares of the fund are owned by Wright.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
The fund has engaged Wright to act as the fund's investment adviser
pursuant to an Investment Advisory Contract (the "Investment Advisory
Contract"). Wright, acting under the general supervision of the trustees,
furnishes the fund with investment advice and management services, as described
below. The School for Ethical Education, 1000 Lafayette Boulevard, Bridgeport,
CT 06604, may be considered a controlling person of Wright's parent, Winthrop,
and Wright by reason of its ownership of more than 25% of the outstanding shares
of Winthrop.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the fund, will furnish continuously
an investment program with respect to the fund, will determine which securities
should be purchased, sold or exchanged and will implement such determinations.
Wright will be solely responsible for evaluating the investment merits of the
fund's portfolio investments. Wright will furnish to the fund investment advice
and management services, office space, equipment and clerical personnel, and
investment advisory, statistical and research facilities. In addition, Wright
has arranged for certain members of the Eaton Vance and Wright organizations to
serve without salary as officers or trustees of the Trust. In return for these
services, the fund is obligated to pay a monthly advisory fee calculated at the
rate set forth in the fund's current Prospectus.
The fund has engaged Eaton Vance to act as its administrator pursuant to an
Administration Agreement. For its services under the Administration Agreement,
Eaton Vance receives monthly administration fees at the annual rate of 0.02% of
the fund's average net assets.
<PAGE>
Eaton Vance is a business trust organized under Massachusetts law. Eaton
Vance, Inc. ("EV") serves as trustee of Eaton Vance. Eaton Vance and EV are
wholly owned subsidiaries of Eaton Vance Corporation ("EVC"), a Maryland
corporation and publicly held holding company. EVC through its subsidiaries and
affiliates engages primarily in investment management, administration and
marketing activities. The Directors of EVC are James B. Hawkes, Benjamin A.
Rowland, Jr. , John G.L. Cabot, John M. Nelson, Vincent M. O'Reilly and Ralph Z.
Sorenson. All of the issued and outstanding shares of Eaton Vance are owned by
EVC. All shares of the outstanding Voting Common Stock of EVC are deposited in a
Voting Trust, the Voting Trustees of which are Messrs. Hawkes and Rowland, Alan
R. Dynner, Thomas E. Faust, Jr., Thomas J. Fetter, Duncan W. Richardson, William
M. Steul and Wharton P. Whitaker. The Voting Trustees have unrestricted voting
rights for the election of Directors of EVC. All of the outstanding voting trust
receipts issued under said Voting Trust are owned by certain of the officers of
Eaton Vance who are also officers, or officers and Directors of EVC and EV.
The fund will be responsible for all of its expenses not expressly stated
to be payable by Wright under its Investment Advisory Contract, including,
without limitation, the fees and expenses of its custodian and transfer agent,
including those incurred for determining the fund's net asset value and keeping
the fund's books; the cost of share certificates; membership dues to investment
company organizations; brokerage commissions and fees; fees and expenses of
registering its shares; expenses of reports to shareholders, proxy statements,
and other expenses of shareholders' meetings; insurance premiums; printing and
mailing expenses; interest, taxes and corporate fees; legal and accounting
expenses; expenses of trustees not affiliated with Eaton Vance or Wright; and
investment advisory and administration fees. The fund will also bear expenses
incurred in connection with litigation in which the fund is a party and the
legal obligation the fund may have to indemnify the officers and trustees of the
Trust with respect thereto.
The fund's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 2001. The Investment Advisory Contract may
be continued from year to year thereafter so long as such continuance after
February 28, 2001 is approved at least annually (i) by the vote of a majority of
the trustees who are not "interested persons" of the Trust, Eaton Vance or
Wright cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the board of trustees or by vote of a majority of
the outstanding shares of the fund. The fund's Administration Agreement may be
continued from year to year after February 28, 2001 so long as such continuance
is approved annually by the vote of a majority of the trustees. Each agreement
may be terminated at any time without penalty on sixty (60) days written notice
by the board of trustees or directors of either party, or by vote of the
majority of the outstanding shares of the fund. Each agreement will terminate
automatically in the event of its assignment. Each agreement provides that, in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties to the fund under such agreement on the
part of Eaton Vance or Wright, neither Eaton Vance nor Wright, as the case may
be, will be liable to the fund for any loss incurred.
CUSTODIAN AND TRANSFER AGENT
IBT, 200 Clarendon Street, Boston, MA 02116, acts as custodian for the
fund. IBT has the custody of all cash and securities of the fund, maintains the
fund's general ledgers and computes the daily net asset value per share. In such
capacity it attends to details in connection with the sale, exchange,
substitution, transfer or other dealings with the fund's investments, receives
and disburses all funds and performs various other ministerial duties upon
receipt of proper instructions from the fund.
First Data Investor Services Group, P.O. Box 5156, Westborough, MA
01581-9686 is the fund's transfer agent.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, Boston, Massachusetts, is the Trust's independent
certified public accountant, providing audit services, tax return preparation,
and assistance and consultation with respect to the preparation of filings with
the Securities and Exchange Commission.
<PAGE>
BROKERAGE ALLOCATION
Wright places the portfolio security transactions for the fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments and other investment advisory accounts. Wright seeks to execute
portfolio security transactions on the most favorable terms and in the most
effective manner possible. In seeking best execution, Wright will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the size and type of
the transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the value and quality of service rendered by the broker-dealer
in other transactions, and the reasonableness of the brokerage commission or
markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, Wright may give consideration to those firms which
supply brokerage and research services, quotations and statistical and other
information to Wright for its use in servicing its advisory accounts. Wright may
include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to Wright in servicing all or less than all of its accounts and the
services and information furnished by a particular firm may not necessarily be
used in connection with the account which paid brokerage commissions to such
firm. The advisory fee paid by the fund to Wright is not reduced as a
consequence of Wright's receipt of such services and information. While such
services and information are not expected to reduce Wright's normal research
activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if it should
attempt to develop comparable services and information through its own staff.
Under the fund's Investment Advisory Contract, Wright has the authority to
pay commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met. This authority will not be exercised, however, until the
Prospectus or this Statement of Additional Information has been supplemented or
amended to disclose the conditions under which Wright proposes to do so.
The Investment Advisory Contract expressly recognizes the practices which
are provided for in Section 28(e) of the Securities Exchange Act of 1934 by
authorizing the selection of a broker or dealer which charges the fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
PRICING OF SHARES
For a description of how the fund values its shares, see "Information About
Your Account -- How the Fund Values its Shares" in the fund's current
Prospectus. The fund values securities with a remaining maturity of 60 days or
less by the amortized cost method. The amortized cost method involves initially
valuing a security at its cost (or its fair market value on the sixty-first day
prior to maturity) and thereafter assuming a constant amortization to maturity
of any discount or premium, without regard to unrealized appreciation or
depreciation in the market value of the security. Foreign securities in which an
underlying fund may invest may be listed primarily on foreign stock exchanges
that my trade on days when the fund is not open for business. For this reason,
the net asset value of an underlying fund's portfolio may be significantly
affected by trading on days when an investor does not have access to the fund.
The fund will not price its securities on the following national holidays:
New Year's Day; Martin Luther King, Jr. Day; Presidents' Day; Good Friday;
Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.
TAXES
In order to qualify as a regulated investment company as described in the
Prospectus, the fund must, among other things, (1) derive at least 90% of its
gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or foreign currencies, or other income (including but not limited
<PAGE>
to gains from options and forward contracts) derived with respect to its
business of investing in such stocks or securities and (2) diversify its
holdings in compliance with the diversification requirements of Subchapter M of
the Code so that, at the end of each quarter of the fund's taxable year, (a) at
least 50% of the market value of the fund's total assets is represented by cash,
U.S. Government securities and other securities limited in respect of any one
issuer to not more than 5% of the value of the fund's total (gross) assets and
to not more than 10% of the voting securities of such issuer, and (b) not more
than 25% of the value of its total (gross) assets is invested in securities of
any one issuer (other than U.S. Government securities) or certain other issuers
controlled by the fund.
As a regulated investment company, the fund will not be subject to federal
income tax on net investment income and net capital gains (short and long-term),
if any, that it distributes to its shareholders if at least 90% of its
investment company taxable income (i.e., all of its net taxable income other
than the excess, if any, of net long-term capital gain over net short-term
capital loss ("net capital gain"), for the taxable year is distributed in
accordance with applicable timing requirements, but will be subject to tax at
regular corporate rates on any investment company taxable income or net capital
gain that is not so distributed. In general, dividends will be treated as paid
when actually distributed, except that dividends declared in October, November
or December and made payable to shareholders of record in such a month will be
treated as having been received by shareholders on December 31, if the dividend
is paid in the following January. The fund intends to satisfy the distribution
requirement in each taxable year. The fund's distributions from investment
company taxable income and net capital gain are generally treated as ordinary
income and long-term capital gain, respectively, under the Code. Insurance
companies should consult their own tax advisers regarding the tax rules
governing their treatment upon receipt of these distributions and the proceeds
of share redemptions (including exchanges).
The fund will not be subject to federal excise tax or the related
distribution requirements for any taxable year in which all of its shares are
held by segregated asset accounts of life insurance companies held in connection
with variable contracts or are attributable to certain "seed money" in
accordance with Section 4982(f) of the Code.
Investment by the fund in the stock of a "passive foreign investment
company" may cause the fund to recognize income prior to the receipt of
distributions from such a company or to become subject to tax upon the receipt
of certain excess distributions from, or upon disposition of its stock of, such
a company, although an election may generally be available that would ameliorate
some of these adverse tax consequences.
The fund intends to comply with the diversification requirements imposed by
Section 817(h) of the Code and the regulations thereunder. These requirements,
which are in addition to the diversification requirements imposed on the fund by
the 1940 Act and Subchapter M of the Code, place certain limitations on the
assets of each separate account and, because Section 817(h) and those
regulations treat the assets of the fund as assets of the related separate
account, the assets of the fund, that may be represented by any one, two, three
and four investments. Specifically, the regulations provide that, except as
permitted by the "safe harbor" described below, as of the end of each calendar
quarter or within 30 days thereafter no more than 55% of the total assets of the
fund may be represented by any one investment, no more than 70% by any two
investments, no more than 80% by any three investments and no more than 90% by
any four investments. For this purpose, all securities of the same issuer are
considered a single investment, and each U.S. Government agency and
instrumentality is considered a separate issuer. Section 817(h) provides, as a
safe harbor, that a separate account will be treated as being adequately
diversified if the diversification requirements under Subchapter M are satisfied
and no more than 55% of the value of the account's total assets are cash and
cash items (including receivables), U.S. Government securities and securities of
other regulated investment companies. Failure by the fund to both qualify as a
regulated investment company and satisfy the Section 817(h) requirements would
generally result in treatment of the variable contract holders other than as
described in the applicable variable contract prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current and all
prior taxable years. Any such failure may also result in adverse tax
consequences for the insurance company issuing the contracts.
The Trust may therefore find it necessary to take action to seek to ensure
that a Contract continues to qualify as a Contract under federal tax laws,
although the insurance company that maintains each segregated asset account is
responsible for ensuring that the assets held in that account satisfy the
diversification requirements of Section 817(h) of the Code and the applicable
regulations and the Trust itself can control only the assets held within the
fund. The Trust, for example, may be required to alter the investment objectives
of the fund or substitute the shares of one fund for those of another. No such
change of investment objectives or substitution of securities will take place
without notice to the shareholders of the affected fund. Failure by the fund to
qualify as a regulated investment company would also subject the fund to federal
and possibly state taxation of its income and gains, whether or not distributed
to shareholders, and distributions would generally be treated as ordinary income
to the extent of the fund's current or accumulated earnings and profits.
The fund is not subject to Massachusetts corporate excise or franchise tax.
Provided that the fund qualifies as a regulated investment company under the
Code, it will also not be required to pay any Massachusetts income tax.
<PAGE>
CALCULATION OF PERFORMANCE AND YIELD QUOTATIONS
The average annual total return of the fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period.
The yield of the fund is computed by dividing its net investment income per
share earned during a recent 30-day period by the maximum offering price (i.e.
net asset value) per share on the last day of the period and analyzing the
resulting figure. Net investment income per share is equal to the fund's
dividends and interest earned during the period, with the resulting number being
divided by the average daily number of shares outstanding and entitled to
receive dividends during the period.
The fund's yield is calculated according to the following formula:
6
Yield = 2 [(a-b + 1)- 1]
---
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of shares outstanding during the period.
d = the net asset value per share on the last day of the period.
Yield and effective yield will be based on historical earnings and are not
intended to indicate future performance. Yield and effective yield will vary
based on changes in market conditions and the level of expenses. The fund's
yield or total return may be compared to the Consumer Price Index and various
domestic securities indices. The fund's yield or total return and comparisons
with these indices may be used in advertisements and in information furnished to
present or prospective shareholders.
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. In addition, the performance of the fund may
be compared to alternative investment or savings vehicles and/or to indexes or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumers Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Smart Money, USA
Today, U.S. News and World Report, The Wall Street Journal and Worth may also be
cited (if the fund is listed in any such publication) or used for comparison, as
well as performance listings and rankings from various other sources including
Bloomberg Financial Markets, CDA/Wiesenberger, Donoghue's Mutual fund Almanac,
Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co.,
Lipper Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the fund. The performance of the
fund will not be presented in advertisements or sales literature without also
presenting the performance of the separate account.
<PAGE>
FINANCIAL STATEMENTS
Wright Managed Growth with Income Fund
Statement of Assets and Liabilities
May 19, 1999
Assets:
Cash................................................ $ 100,000
Deferred offering costs (Note 2).................... 43,000
----------
Total Assets...................................... $ 143,000
Liabilities:
Accrued offering costs.............................. $ 43,000
----------
Net assets (applicable to 10,000 shares of beneficial
interest issued and outstanding)........................ $ 100,000
Net asset value, offering price, and repurchase
price per share......................................... $ 10.00
============
Statement of Operations
Period Ended May 19, 1999
Investment income $ -
----------
Expenses -
Incorporation fees................................. $ 500
Legal.............................................. 27,630
Audit.............................................. 2,000
----------
Total expenses ......................................... $ 30,130
----------
Deduct -
Allocation of expenses to the investment adviser.. 30,130
----------
Net expenses ........................................... $ -
----------
Net investment income .................................. -
----------
See notes to financial statements.
Notes:
(1) Wright Managed Growth with Income Fund is a separate series of The Wright
Asset Allocation Trust. A purchase of interests therein at a price of $10
per share was made by Wright Investors' Service (the "initial interests").
(2) Offering costs are being deferred and will be amortized on a straight line
basis over a period not to exceed twelve months, commencing on the
effective date of the Fund's initial offering of its shares. The amount
paid by the Fund on any withdrawal by the holders of the initial interests
of any of the respective initial interests will be reduced by a portion of
any unamortized offering costs, determined by the proportion of the amount
of the initial interests withdrawn to the initial interests then
outstanding.
<PAGE>
Independent Auditors' Report
To the Trustees and Shareholder of
The Wright Asset Allocation Trust:
We have audited the accompanying statement of assets and liabilities of Wright
Managed Growth with Income Fund (one of the series of The Wright Asset
Allocation Trust) (the Trust) as of May 19, 1999, and the related statement of
operations for the period then ended. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Wright Managed Growth with Income Fund as of
May 19, 1999, and the results of its operations for the period then ended in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 20, 1999
<PAGE>
APPENDIX
- ------------------------------------------------------------------------------
WRIGHT QUALITY RATINGS
Wright Quality Ratings provide the means by which the fundamental criteria
for the measurement of quality of an issuer's securities for investment by an
underlying Blue Chip Fund can be objectively evaluated.
Each rating is based on 32 individual measures of quality grouped into four
components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability
and Stability, and (4) Growth. The total rating is three letters and a numeral.
The three letters measure (1) Investment Acceptance, (2) Financial Strength, and
(3) Profitability and Stability. Each letter reflects a composite measurement of
eight individual standards which are summarized as A: Outstanding, B: Excellent,
C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects
Growth and is a composite of eight individual standards ranging from 0 to 20.
EQUITY SECURITIES
INVESTMENT ACCEPTANCE reflects the acceptability of a security by and its
marketability among investors, and the adequacy of the floating supply of its
common shares for the investment of substantial funds.
FINANCIAL STRENGTH represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
PROFITABILITY AND STABILITY measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
GROWTH per common share of the corporation's equity capital, earnings, and
dividends - rather than the corporation's overall growth of dollar sales and
income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
DEBT SECURITIES
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are most applicable to fixed income and reserve investments. The
first, Financial Strength, represents the amount, the adequacy and the liquidity
of the corporation's resources in relation to current and potential
requirements. Its principal components are aggregate equity and total capital,
the ratios of (a) invested equity capital, and (b) long-term debt, total of
corporate capital, the adequacy of net working capital, fixed charges coverage
ratio and other appropriate criteria. The second letter represents Profitability
and Stability and measures the record of a corporation's management in terms of:
(a) the rate and consistency of the net return on shareholders' equity capital
investment at corporate book value, and (b) the profits and losses of the
corporation during generally adverse economic periods, and its ability to
withstand adverse financial developments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed-income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 AND P-1 COMMERCIAL PAPER RATINGS BY S&P AND MOODY'S
An S&P Commercial Paper Rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
<PAGE>
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to S&P by the
issuer or obtained from other sources it considers reliable. The ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-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 earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
BOND RATINGS
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and S&P. Moody's uses a nine-symbol system with Aaa being the highest
rating and C the lowest. S&P uses a 10-symbol system that ranges from AAA to D.
Bonds within the top four categories of Moody's (Aaa, Aa, A and Baa) and of S&P
(AAA, AA, A and BBB) are considered to be of investment-grade quality. Bonds in
the lowest investment grade category (BBB) may have speculative characteristics.
Note that both S&P and Moody's currently give their highest rating to issuers
insured by the American Municipal Bond Assurance Corporation (AMBAC) or by the
Municipal Bond Investors Assurance Corporation (MBIA).
Bonds rated A by S&P have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher-rated categories. The
rating of AA is accorded to issues where the capacity to pay principal and
interest is very strong and they differ from AAA issues only in small degree.
The AAA rating indicates an extremely strong capacity to pay principal and
interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's 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 Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. 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 issuers.
NOTE RATINGS
In addition to Wright quality ratings, municipal notes and other short-term
loans may be assigned ratings by Moody's or S&P.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group.
S&P's top ratings for municipal notes issued after July 29, 1984 are SP-1
and SP-2. the designation SP-1 indicates a very strong capacity to pay principal
and interest. A "+" is added for those issues determined to possess overwhelming
safety characteristics.
An "SP-2" designation indicates a satisfactory capacity to pay principal and
interest.
<PAGE>
PART C
----------------------
Other Information
Item 23. Exhibits
(a) (1) Declaration of Trust dated June 17, 1997 filed with the
Trust's registration statement on Form N-1A, March 26, 1999.
(2) Amended and Restated Establishment and Designation of Series
and Classes dated March 18, 1999, filed herewith.
(b) By-laws dated June 17, 1997 filed with the Trust's registration
statement on Form N-1A, March 26, 1999.
(c) Not applicable.
(d) (1) Investment Advisory Contract between the Registrant and
Wright Investors' Service,dated May 19, 1999 filed herewith.
(2) Administration Agreement between the Registrant and Eaton
Vance Management, dated May 19, 1999 filed herewith.
(e) Distribution Contract between the Registrant and Wright
Investors' Service Distributors, Inc.,dated May 19, 1999
filed herewith.
(f) Not applicable.
(g) (1) Master Custodian Agreement between Wright Managed
Investment Funds and Investors Bank & Trust Company,
dated December 19, 1990 filed herewith.
(2) Amendment to Master Custodian Agreement dated September 20,
1995 filed herewith.
(3) Letter Agreement to Master Custodian Agreement dated
May 19, 1999 filed herewith.
(h) (1) Form of Transfer Agency Agreement between the Registrant
and First Data Investor Services Group to be filed by
Amendment.
(2) Service Plan for Advisor and Individual Shares, dated
May 19, 1999 filed herewith.
(i) Opinion of Counsel dated May 19, 1999 filed herewith.
(j) Consent of Independent Certified Public Accountants filed herewith.
(k) Not applicable.
(l) Share Purchase Agreement dated May 19, 1999 filed herewith.
(m) Distribution Plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940, with respect to Individual and Advisor Shares,
dated May 19, 1999 filed herewith.
(n) Not applicable.
(o) Multiple Class Plan Pursuant to Rule 18f-3 under the Investment
Company Act of 1940 filed herewith.
(p) Power of Attorney dated March 18, 1999 filed herewith.
Item 24. Persons Controlled by or under Common Control with Registrant
All of the following investment companies have Investment Advisory
Contracts with Wright:
The Wright Asset Allocation Trust
The Wright Managed Equity Trust
The Wright Managed Income Trust
The Wright Managed Blue Chip Series Trust
The Wright EquiFund Equity Trust
The Wright Master Blue Chip Portfolio Trust
Catholic Values Investment Trust
Each of the above investment companies is organized as a Massachusetts
business trust.
Item 25. Indemnification
The Registrant's By-Laws filed as Exhibit (b) to the Trust's registration
statement on Form N-1A contains provisions limiting the liability, and providing
for indemnification, of the Trustees and officers under certain circumstances.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the mater has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the captions "Officers and
Trustees" and "Investment Advisory and Administrative Services" in the Statement
of Additional Information, which information is incorporated herein by
reference.
Item 27. Principal Underwriter
(a) Wright Investors' Service Distributors, Inc. (a wholly-owned
subsidiary of The Winthrop Corporation) acts as principal
underwriter for each of the investment companies named below.
The Wright Asset Allocation Trust
The Wright Managed Equity Trust
The Wright Managed Income Trust
The Wright Managed Blue Chip Series Trust
The Wright EquiFund Equity Trust
Catholic Values Investment Trust
<PAGE>
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Officers Positions and Offices
Business Address with Principal Underwriter with Registrant
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A.M. Moody III* President Vice President and Trustee
Peter M. Donovan* Vice President and Treasurer President and Trustee
Vincent M. Simko* Vice President and Secretary None
--------------------------------------------------------------------------------------------------------------------
*Address is 1000 Lafayette Boulevard, Bridgeport, Connecticut 06604
</TABLE>
(c) Not applicable.
Item 28. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the registrant's
custodian, Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA
02116, and its transfer agent, First Data Investor Services Group, 4400 Computer
Drive, Westborough, MA 01581-5120, with the exception of certain corporate
documents and portfolio trading documents which are either in the possession and
custody of the Registrant's administrator, Eaton Vance Management, 255 State
Street, Boston, MA 02109 or of the investment adviser, Wright Investors'
Service, Inc., 1000 Lafayette Boulevard, Bridgeport, CT 06604. Registrant is
informed that all applicable accounts, books and documents required to be
maintained by registered investment advisers are in the custody and possession
of Registrant's administrator, Eaton Vance Management, or of the investment
adviser, Wright Investors' Service, Inc.
Item 29. Management Services
Not Applicable.
Item 30. Undertakings
None.
<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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, and the Commonwealth of Massachusetts on the
20th day of May, 1999.
THE WRIGHT ASSET ALLOCATION TRUST
By: Peter M. Donovan*
------------------------------------
Peter M. Donovan, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated and on the 20th day of May, 1999.
Signature Title
- -------------------------------------------------------------------------------
Peter M. Donovan* President, Principal
- -------------------- Executive Officer & Trustee
Peter M. Donovan
James L. O'Connor* Treasurer, Principal
- --------------------- Financial and Accounting Officer
James L. O'Connor
H. Day Brigham, Jr.* Trustee
- ----------------------
H. Day Brigham, Jr.
Judith R. Corchard* Trustee
- ---------------------
Judith R. Corchard
Dorcas R. Hardy* Trustee
- ---------------------
Dorcas R. Hardy
Leland Miles* Trustee
- ---------------------
Leland Miles
/s/ A. M. Moody III Trustee
- ----------------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- ----------------------
Lloyd F. Pierce
Richard E. Taber* Trustee
- ----------------------
Richard E. Taber
Raymond Van Houtte* Trustee
- -----------------------
Raymond Van Houtte
* By /s/ A. M. Moody III
- --------------------------
A. M. Moody III
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this Registration Statement
pursuant to General Instructions E of form N-1A.
Exhibit No. Description
(a) (2) Amended and Restated Estalishment and Designation of
Series and Classes
(d) (1) Investment Advisory Contract
(d) (2) Administration Agreement
(e) Distribution Contract
(g) (1) Master Custodian Agreement
(g) (2) Amendment to Master Custodian Agreement dated
September 20, 1995
(g) (3) Letter Agreement to Master Custodian Agreement
(h) (2) Service Plan
(i) Opinion of Counsel
(j) Consent of Independent Auditors
(l) Share Purchase Agreement
(m) Distribution Plan
(o) Multiple Class Plan
(p) Power of Attorney dated March 18, 1999
THE WRIGHT ASSET ALLOCATION TRUST
Amended and Restated
Establishment and Designation of Series
and Classes
WHEREAS, pursuant to the Declaration of Trust of The Wright Asset
Allocation Trust dated June 17, 1997 (the "Declaration of Trust"), the Trustees
of The Wright Asset Allocation Trust (the "Trust"), designated seven separate
Series with Classes; and
WHEREAS, the Trustees now desire to delete one Series (i.e. Wright
International Asset Allocation Fund), and to redesignate the Classes of the
remaining Series, pursuant to Section 5.5 (viii) of Article V of the Declaration
of Trust.
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust hereby divide
the shares of beneficial interest of the Trust into six separate Series of the
Trust, each Series and Classes thereof to have the special and relative rights
as set forth in the Declaration of Trust as from time to time amended:
1. The Series shall be designated as follows:
Wright Managed Growth Fund
Wright Managed Growth with Income Fund
Wright Managed Income with Growth Fund
Wright Total Return Income Fund
Wright High Income Fund
Wright Current Income Fund
(the "Existing Series")
The Declaration of Trust authorizes the Trustees to divide each Series into
two or more classes and to fix and determine the relative rights and preferences
as between, and all provisions applicable to, each of the different classes so
established and designated by the Trustees. The Existing Series shall have
classes of shares established and designated as Individual Shares and Advisor
Shares, and the Trustees may designate additional classes in the future.
/s/ H. Day Brigham, Jr. /s/ Leland Miles
- ---------------------------- ---------------------------
H. Day Brigham, Jr. Leland Miles
/s/ Judith R. Corchard /s/ A.M. Moody, III
- ---------------------------- ---------------------------
Judith R. Corchard A.M. Moody, III
/s/ Peter M. Donovan /s/ Lloyd F. Pierce
- ---------------------------- ---------------------------
Peter M. Donovan Lloyd F. Pierce
/s/ Dorcas R. Hardy /s/ Richard E. Taber
- ---------------------------- ---------------------------
Dorcas R. Hardy Richard E. Taber
March 18, 1999
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 23rd day of September 1998, between each of THE
WRIGHT MANAGED EQUITY TRUST, THE WRIGHT MANAGED INCOME TRUST, THE WRIGHT
EQUIFUND EQUITY TRUST, CATHOLIC VALUES INVESTMENT TRUST and THE WRIGHT MANAGED
BLUE CHIP SERIES TRUST, each a Massachusetts business trust (the "Trusts"), on
behalf of each series of the Trusts which the Adviser (defined below) and the
Trusts shall agree from time to time are subject to this Contract, as set forth
on Schedule A (collectively, the "Funds" and individually, the "Fund"), and
WRIGHT INVESTORS' SERVICE, INC., a Connecticut corporation (the "Adviser"):
1. DUTIES OF THE ADVISER. Each Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Funds and, except as otherwise provided in an administration
agreement, to administer the Trust's affairs, subject to the supervision of the
Trustees of the Trust, for the period and on the terms set forth in this
Contract.
The Adviser hereby accepts such employment, and undertakes to afford to
each Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Fund and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Funds
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are employees of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent any Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide each Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its funds. As investment adviser to the Funds, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of each
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Trust's Declaration of Trust, By-Laws and registration
statement under the Securities Act of 1933 and the Investment Company Act of
1940, all as from time to time amended. The Adviser is authorized, in its
discretion and without prior consultation with the Trust, but subject to each
Fund's investment objective, policies and restrictions, to buy, sell, lend and
otherwise trade in any stocks, bonds, options and other securities and
investment instruments on behalf of the Funds, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Funds, to
enter into commodities contracts on behalf of the Funds, including contracts for
the future delivery of securities or currency and futures contracts on
securities or other indices, and to execute any and all agreements and
instruments and to do any and all things incidental thereto in connection with
the management of the Funds. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Funds
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Funds, all actions which it deems necessary or desirable
to implement the investment policies of the Trust and of each Fund.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of a Fund with brokers or dealers selected by the
Adviser, and to that end the Adviser is authorized as the agent of the Fund to
give instructions to the custodian of the Fund as to deliveries of securities
and payments of cash for the account of a Fund or the Trust. In connection with
the selection of such brokers or dealers and the placing of such orders, the
Adviser shall use its best efforts to seek to execute portfolio security
transactions at prices which are advantageous to the Funds and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
selecting brokers or dealers qualified to
<PAGE>
execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services and products (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser.
The Adviser is expressly authorized to cause the Funds to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which exceeds the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the selection
of any broker or dealer with whom purchase or sale orders may be placed, the
fact that such broker or dealer has sold or is selling shares of the applicable
Fund or Trust or of other investment companies sponsored by the Adviser.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, each Trust on behalf of each Fund
shall pay to the Adviser on the last day of each month a fee equal (annually) to
the percentage or percentages specified in Schedule B of the average daily net
assets of such Fund throughout the month, computed in accordance with the
Trust's Declaration of Trust, registration statement and any applicable votes of
the Trustees of the Trust.
If the Contract is initiated or terminated during any month with respect
to any Fund, each Fund's fee for that month shall be reduced proportionately on
the basis of the number of calendar days during which the Contract is in effect
and the fee shall be computed upon the average net assets for the business days
the Contract is so in effect for that month.
The Adviser may, from time to time, agree not to impose all or a part of
the above compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. Each Trust will pay all of its expenses
other than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Trust shall include, without limitation (i) expenses of
maintaining the Trust and continuing its existence, (ii) registration of the
Trust under the Investment Company Act of 1940, (iii) commissions, fees and
other expenses connected with the purchase or sale of securities, (iv) auditing,
accounting and legal expenses, (v) taxes and interest, (vi) governmental fees,
(vii) expenses of issue, repurchase and redemption of shares, (viii) expenses of
registering and qualifying the Trust and its shares under federal and state
securities laws and of preparing and printing prospectuses for those purposes
and for distributing them to shareholders and investors, and fees and expenses
of registering and maintaining registration of the Trust and of the Trust's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Trust (including without
limitation safekeeping of funds and securities, keeping of books and accounts
and determination of net asset value), (xiv) fees, expenses and disbursements of
transfer agents and registrars for all services to the Trust, (xv) expenses for
servicing shareholder accounts, (xvi) any direct charges to shareholders
approved by the Trustees of the Trust, (xvii) compensation of and any expenses
of Trustees of the Trust, (xviii) the administration fee payable to the Trust's
administrator, (xix) the charges and expenses of the independent auditors, (xx)
the charges and expenses of legal counsel to the Trust and the Trustees, (xxi)
distribution fees, if any, paid by a Fund in accordance with Rule 12b-1 under
the 1940 Act, and (xxii) such nonrecurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and shareholders of
each Trust are or may
<PAGE>
be or become interested in the Adviser or any of its affiliates as
directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser or any of its affiliates are
or may be or become similarly interested in the Trust, and that the Adviser or
any of its affiliates may be or become interested in the Trust as a shareholder
or otherwise. It is also understood that directors, officers, employees and
stockholders of the Adviser or any of its affiliates are or may be or become
interested (as directors, trustees, officers, employees, stockholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser or any of its affiliates may organize,
sponsor or acquire, or with which it may merge or consolidate, and which may
include the words "Wright" or "Wright Investors" or any combination thereof as
part of their names, and that the Adviser or any of its affiliates may enter
into advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
each Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to any Trust or to any shareholder of
the Trust for any act or omission in the course of or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of the
Adviser, including the selection of brokers or dealers to execute any Trust's
portfolio security transactions, and upon those terms and conditions as may be
agreed upon between the Adviser and the sub-investment adviser; provided,
however, that any subadvisory agreement shall be subject to approval by the
Trustees and by shareholders, if shareholder approval is then required by the
1940 Act, as now in effect or as hereafter amended, subject, however, to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation, order or interpretive position.
7. DURATION AND TERMINATION OF THIS CONTRACT. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect as to each Fund up to and
including February 28, 2000 and shall continue in full force and effect as to
each Fund indefinitely thereafter, but only so long as such continuance after
February 28, 2000 is specifically approved at least annually (i) by the vote of
a majority of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of that Fund and (ii) by the vote of a majority of
those Trustees of the Trust who are not interested persons of the Adviser or the
Trust, in accordance with the requirements of the Investment Company Act of 1940
as now in effect or as hereafter amended, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission by any rule,
regulation, order or interpretive position.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Fund, without the payment
of any penalty, by action of its Board of Directors or Trustees, as the case may
be, and a Trust may, at any time upon such written notice to the Adviser,
terminate this Contract as to any Fund by vote of a majority of the outstanding
voting securities of that Fund. This Contract shall terminate automatically in
the event of its assignment.
8. AMENDMENTS OF THE CONTRACT. This Contract may be amended as to any Fund by a
writing signed by both parties hereto, provided that no material amendment to
this Contract shall be effective as to that Fund until approved (i) by the vote
of a majority of those Trustees of the affected Trust who are not interested
persons of the Adviser or the Trust and (ii) by vote of a majority of the
outstanding voting securities of that Fund in accordance with the requirements
of the Investment Company Act of 1940, as now in effect or as hereafter amended,
subject, however, to such exemptions as may be granted by the
<PAGE>
Securities and Exchange Commission by any rule, regulation, order or
interpretive position.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the provision in
the Declaration of Trust of each Trust limiting the personal liability of
shareholders of the Trust, and the Adviser hereby agrees that it shall have
recourse only to the applicable Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the shareholders or any shareholder of the Trust. No Trust or
Fund shall be liable for the obligations of any other Trust or Fund hereunder.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons" when
used herein shall have the respective meanings specified in the Investment
Company Act of 1940, as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Fund" shall mean the vote of the lesser of
(a) 67 per cent or more of the shares of the particular Fund present or
represented by proxy at a meeting of shareholders of the Fund if the holders of
more than 50 per cent of the outstanding shares of the particular Fund are
present or represented by proxy at the meeting, or (b) more than 50 per cent of
the outstanding interests of the particular Fund, or such other vote as may be
required from time to time by the Investment Company Act of 1940.
11. USE OF THE NAME "WRIGHT". The Adviser hereby consents to the use by each
Trust of the name "Wright" as part of the Trust's name and the name of each Fund
should the Trust desire to adopt such name in the future; provided, however,
that such consent shall be conditioned upon the employment of the Adviser or one
of its affiliates as the investment adviser of the Trust. The name "Wright" or
any variation thereof may be used from time to time in other connections and for
other purposes by the Adviser and its affiliates and other investment companies
that have obtained consent to use the name "Wright." The Adviser shall have the
right to require a Trust to cease using the name "Wright" as part of the Trust's
name and the name of its Funds if the Trust ceases, for any reasons, to employ
the Adviser or one of its affiliates as the Trust's investment adviser. Future
names adopted by a Trust for itself and its Funds, insofar as such names include
identifying words requiring the consent of the Adviser, shall be the property of
the Adviser and shall be subject to the same terms and conditions.
THE WRIGHT MANAGED EQUITY TRUST WRIGHT INVESTORS' SERVICE, INC.
By: /s/Peter M. Donovan By: /s/Peter M. Donovan
Authorized Officer Authorized Officer
THE WRIGHT MANAGED INCOME TRUST
By: /s/Peter M. Donovan
Authorized Officer
THE WRIGHT EQUIFUND EQUITY TRUST
By: /s/Peter M. Donovan
Authorized Officer
CATHOLIC VALUES INVESTMENT TRUST
By: /s/Peter M. Donovan
Authorized Officer
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: /s/Peter M. Donovan
Authorized Officer
<PAGE>
SCHEDULE A - March 18, 1999
TRUSTS AND FUNDS
The Wright Managed Equity Trust
Wright Selected Blue Chip Equities Fund
Wright Junior Blue Chip Equities Fund
Wright Major Blue Chip Equities Fund
Wright International Blue Chip Equities Fund
The Wright Managed Income Trust
Wright U.S. Treasury Fund
Wright U.S. Government Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg
Wright EquiFund -- Hong Kong/China
Wright EquiFund -- Japan
Wright EquiFund -- Mexico
Wright EquiFund -- Netherlands
Wright EquiFund -- Nordic
Catholic Values Investment Trust
Catholic Values Investment Trust Equity Fund
The Wright Blue Chip Series Trust
Wright International Blue Chip Portfolio
Wright Selected Blue Chip Portfolio
The Wright Asset Allocation Trust
Wright Managed Growth with Income Fund
<PAGE>
SCHEDULE B - March 18, 1999
ANNUAL ADVISORY FEE RATES
---------------------------
<TABLE>
<CAPTION>
ANNUAL % ADVISORY FEE RATES
-----------------------------
Under $100 Mil. $250 Mil. $500 Mil. Over
$100 Mil. to to to $1 Bil.
$250 Mil. $500 Mil. $1 Bil.
- ---------------------------------------------------------------------------------------------
The Wright Managed Equity Trust
<S> <C> <C> <C> <C> <C>
Wright Selected Blue Chip Equities
Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Junior Blue Chip Equities Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Major Blue Chip Equities Fund 0.45% 0.59% 0.57% 0.53% 0.48%
Wright International Blue Chip Equities
Fund 0.75% 0.79% 0.77% 0.73% 0.68%
The Wright Managed Income Trust
Wright U.S. Treasury Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Government Near Term Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Total Return Bond Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Current Income Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Treasury Money Market
Fund 0.35% 0.32% 0.32% 0.30% 0.30%
</TABLE>
ANNUAL % ADVISORY FEE RATES
-------------------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- --------------------------------------------------------------------------------
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg 0.75% 0.73% 0.68%
Wright EquiFund -- Hong Kong/China 0.75% 0.73% 0.68%
Wright EquiFund -- Japan 0.75% 0.73% 0.68%
Wright EquiFund -- Mexico 0.75% 0.73% 0.68%
Wright EquiFund -- Netherlands 0.75% 0.73% 0.68%
Wright EquiFund -- Nordic 0.75% 0.73% 0.68%
Catholic Values Investment Trust
Catholic Values Investment Trust
Equity Fund 0.75% 0.73% 0.68%
ANNUAL % ADVISORY FEE RATES
--------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- -------------------------------------------------------------------------------
The Wright Managed Blue Chip Series Trust
Wright Selected Blue Chip Portfolio 0.65% 0.60% 0.55%
Wright International Blue Chip Portfolio 0.80% 0.75% 0.70%
ANNUAL % ADVISORY FEE RATES
--------------------------------
Under $500 Mil.
$500 Mil. to
$1 Bil.
- -------------------------------------------------------------------------------
The Wright Asset Allocation Trust
Wright Managed Growth with Income Fund 0.20% 0.18%
<PAGE>
May 19, 1999
The Wright Asset Allocation Trust hereby adopts and agrees to become a party to
the attached Investment Advisory Contract, dated as of September 23, 1998
between the Wright Managed Investment Funds and Wright Investors' Service, Inc.
THE WRIGHT ASSET ALLOCATION TRUST
By: /s/Peter M. Donovan
--------------------
Peter M. Donovan
President
Accepted and agreed to:
WRIGHT INVESTORS' SERVICE, INC.
By: /s/A. M. Moody III
--------------------
A.M. Moody III
Authorized Officer
THE WRIGHT ASSET ALLOCATION TRUST
ADMINISTRATION AGREEMENT
AGREEMENT made this 19th day of May, 1999, by and between The Wright Asset
Allocation Trust, a Massachusetts business trust (the "Trust"), on behalf of the
series of the Trust listed on Schedule A attached hereto, which may be updated
from time to time, and Eaton Vance Management, a Massachusetts business trust
(the "Administrator"):
1. DUTIES OF THE ADMINISTRATOR. The Trust hereby employs the Administrator
to administer the affairs of the Trust, subject to the supervision of the
Trustees of the Trust for the period and on the terms set forth in this
Agreement. The Administrator shall perform these duties with respect to any and
all series of shares ("Funds") which may be established by the Trustees pursuant
to the Declaration of Trust of the Trust and listed on Schedule A. Funds may be
terminated and additional Funds established from time to time by action of the
Trustees of the Trust.
The Administrator hereby accepts such employment, and agrees to administer
the Trust's business affairs and, in connection therewith, to furnish for the
use of the Trust office space and all necessary office facilities, equipment and
personnel for administering the affairs of the Trust, and to pay the salaries
and fees of all officers and Trustees of the Trust who are members of the
Administrator's organization and all personnel of the Administrator performing
management and administrative services for the Trust. The Administrator shall
for all purposes herein be deemed to be an independent contractor and shall,
except as otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed an agent of the
Trust.
2. COMPENSATION OF THE ADMINISTRATOR. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Trust shall pay
to the Administrator on the last day of each month a fee equal (annually) to a
percentage of the average daily net assets of each Fund of the Trust throughout
the month, computed in accordance with the Declaration of Trust of the Trust and
any applicable votes of the Trustees of the Trust, as shown in Schedule B to
this Agreement.
In case of initiation or termination of the Agreement during any month with
respect to any Fund, the fee for that month shall be reduced proportionately on
the basis of the number of calendar days during which it is in effect and the
fee shall be computed upon the average net assets for the business days it is so
in effect for that month.
The Administrator may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Trust shall include,
without implied limitation, (i) expenses of maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the Investment Company Act
of 1940, (iii) commissions, fees and other expenses connected with the purchase
or sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes
and interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase
and redemption of shares, (viii) expenses of registering and qualifying the
Trust and its shares under federal and state securities laws and of preparing
and printing prospectuses for such purposes and for distributing the same to
<PAGE>
-2-
shareholders and investors, and fees and expenses of registering and maintaining
registrations of the Trust and of the Trust's principal underwriter, if any, as
a broker-dealer or agent under state securities laws, (ix) expenses of reports
and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Trust (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, shareholder servicing agents and registrars for all services to the
Trust, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation of and any expenses of Trustees of the Trust, (xviii) all payments
to be made and expenses to be assumed by the Trust pursuant to any one or more
distribution plans adopted by the Trust pursuant to Rule 12b-1 under the
Investment Company Act of 1940, (xix) the investment advisory fee payable to the
Trust's investment adviser, and (xx) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the
Administrator as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Administrator are or
may be or become similarly interested in the Trust, and that the Administrator
may be or become interested in the Trust as a shareholder or otherwise. It is
also understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Trust are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Trust or to any shareholder of the Trust for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses which may
be sustained in the purchase, holding or sale of any security or other
instrument, including options and futures contracts.
6. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect as to each Fund to and including
February 28, 2001 and shall continue in full force and effect as to each Fund
indefinitely thereafter, but only so long as such continuance after February 28,
2001 is specifically approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement as to any Fund, without the
payment of any penalty, by action of the Trustees of the Trust or the trustees
of the Administrator, as the case may be, and the Trust may, at any time upon
such written notice to the Administrator, terminate this Agreement as to any
Fund by vote of a majority of the outstanding voting securities of that Fund.
This Agreement shall terminate automatically in the event of its assignment.
<PAGE>
-3-
7. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended as to any
Fund by a writing signed by both parties hereto, provided that no amendment to
this Agreement shall be effective until approved by the vote of a majority of
the Trustees of the Trust.
8. LIMITATION OF LIABILITY. The Administrator expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Trust, and the Administrator hereby agrees that
it shall have recourse to the Trust for payment of claims or obligations as
between the Trust and the Administrator arising out of this Agreement and shall
not seek satisfaction from the shareholders or any shareholder of the Trust. No
Fund shall be liable for the obligations of any other Fund hereunder.
9. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the particular Fund present or
represented by proxy at the meeting of the holders of more than 50 per centum of
the outstanding shares of the particular Fund are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the outstanding shares
of the particular Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
THE WRIGHT ASSET ALLOCATION TRUST EATON VANCE MANAGEMENT
By: /s/ Peter M. Donovan By: /s/ Benjamin A. Rowland, Jr.
----------------------------- -----------------------------
President Vice President,
and not individually
<PAGE>
-4-
THE WRIGHT ASSET ALLOCATION TRUST
SCHEDULE A
May 19, 1999
Wright Managed Growth with Income Fund
<PAGE>
-5-
THE WRIGHT ASSET ALLOCATION TRUST
SCHEDULE B
May 19, 1999
FEE STRUCTURE
FUND
Under Over
$100 MILLION $100 MILLION
------------ ------------
Wright Managed Growth with Income Fund 0.02% 0.01%
DISTRIBUTION CONTRACT
Distribution Contract dated May 19, 1999, between THE WRIGHT ASSET
ALLOCATION TRUST, a Massachusetts business trust (the "Trust"), and WRIGHT
INVESTORS' SERVICE DISTRIBUTORS, INC., a Delaware corporation (the
"Distributor").
In consideration of the mutual promises and undertakings herein
contained, the parties hereto agree as follows:
1. Appointment as Distributor. The Trust hereby appoints the
Distributor as a general distributor of shares of beneficial interest of each
series (the "Funds") of shares (the "shares") which may be established by the
Trustees pursuant to the Declaration of Trust of the Trust.
2. Distributions by Distributor. The Distributor will have the right to
obtain subscriptions for and to sell shares as agent of the Trust. The
Distributor shall be under no obligation to effectuate any particular amount of
sales of shares or to promote or make sales except to the extent the Distributor
deems advisable. Nothing herein shall be deemed to obligate the Distributor to
register or qualify as a broker or dealer in any state, territory or other
jurisdiction in which it is not now registered or qualified or to maintain its
registration or qualification in any state, territory or other jurisdiction in
which it is now registered or qualified. The right granted to obtain
subscriptions for and sell shares of the Funds shall be exclusive, except that
said exclusive right shall not apply to shares issued to (1) employee benefit
plans having 50 or more eligible employees; (2) charitable organizations; (as
defined in Section 501(c)(3) of the Internal Revenue Code); (3) current or
retired officers, directors, or full-time employees of The Winthrop Corporation
(or its direct or indirect subsidiaries) or current or former Trustees or
officers of a Wright managed mutual fund; (4) spouses of individuals described
in (3); (5) guardians or trustees of a trust for the sole benefit of the minor
child or other dependent of an individual described in (3); (6) charitable
remainder trusts or life income pools established for the benefit of a
charitable organization (as defined in Section 501(c)(3) of the Internal Revenue
Code); or (7) bank trust departments purchasing shares either for their own
account or for the account of their clients, or (8) individual clients of Wright
Investors' Service, Inc.. Such exclusive right also shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with a Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Trust; or shares, if any, issued by a Fund in
distribution of net investment income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
3. Public Offering Price. All subscriptions and sales of shares by the
Distributor hereunder shall be at the public offering price. The public offering
price shall be (1) the applicable net asset value of the shares in accordance
with the provisions of the then current Prospectus of the applicable Fund (2)
plus any purchase adjustment as described in the current Prospectus of the
applicable Fund and (3) the applicable sales charge, if any.
4. Repurchase of Shares. The Distributor may act as agent for the Trust
in connection with the repurchase of shares by the Trust upon the terms and
conditions set forth in the then current Prospectus of the applicable Fund. The
Trust will reimburse the Distributor for any reasonable expenses incurred by the
Distributor in connection with any such repurchase of shares for the account of
the Trust.
5. Cooperation by the Trust. The Trust agrees to execute such papers
and to do such acts and things as shall from time to time be reasonably
requested by the Distributor for the purpose of qualifying and maintaining
qualification of the shares for sale under the so-called "Blue Sky" laws of any
state or territory or for maintaining the registration of the Trust and of the
shares under the Securities Act of 1933, as amended, (the "1933 Act") and the
Investment Company Act of 1940, as amended (the "1940 Act"), to the end that
there will be available for sale from time to time such number of shares as the
Distributor may reasonably be expected to sell. The Trust will advise the
Distributor promptly of (i) any action of the Securities and Exchange Commission
or any authorities of any state or territory, of which it may be advised,
affecting registration or qualification of the Trust or the shares, or rights to
offer the shares for sale, and (ii) the happening of any event which makes
untrue any statement in the registration statement or Prospectus or which
requires the making of any change in the registration statement or Prospectus in
order to make the statements therein not misleading. The Trust shall make
available to the Distributor such copies of each Fund's currently effective
Prospectus and of all information, financial statements and other papers as the
Distributor shall reasonably request in connection with the distribution of
shares of the Funds.
6. The Distributor as Independent Contractor. The Distributor shall be
an independent contractor and neither the Distributor nor any of its officers or
employees as such is or shall be an employee of the Trust. The Distributor is
responsible for its own conduct and the employment, control and conduct of its
agents and employees and for injury to such agents or employees or to others
through its agents or employees. The Distributor assumes full responsibility for
its agents and employees under applicable statutes and agrees to pay all
employer taxes thereunder.
7. Representations. The Distributor is not authorized by the Trust to
give any information or to make any representations other than those contained
in the registration statement or Prospectuses filed with the Securities and
Exchange Commission under the 1933 Act (as said registration statement and
Prospectuses may be amended from time to time) or contained in shareholder
reports or other material that may be prepared by or on behalf of the Funds for
the Distributor's use. Nothing herein shall be construed to prevent the
Distributor from preparing and distributing sales literature or other material
as it may deem appropriate.
8. Compensation. The compensation for the services of the Distributor
under this Agreement shall be (i) the retention of any sales charges applicable
to the subject shares, and (ii) those amounts payable to the Distributor as
reimbursement of expenses pursuant to any distribution plan for the Trust which
may be in effect. Nothing contained herein shall relieve the Trust of any
obligations under its management contract or any other contract with any
affiliate of the Distributor.
9. Expenses Payable by the Fund. The Trust, on behalf of each Fund,
shall pay for and affix any stock issue stamps (or in the case of treasury
shares transfer stamps) required for the issue (or transfer) of shares of the
Funds. The Trust, on behalf of each Fund, shall pay all fees and expenses in
connection with (a) the preparation and filing of any registration statement and
Prospectus under the 1933 Act or the 1940 Act and amendments thereto, (b) the
registration or qualification of shares for sale in the various states,
territories or other jurisdictions (including without limitation the registering
or qualifying the Trust as a broker or dealer or any officer of the Trust as
agent or salesman in any state, territory or other jurisdiction), (c) the
preparation and distribution of any report or other communication to
shareholders of each Fund in their capacity as such, and (d) the preparation and
distribution of any Prospectuses sent to existing shareholders of the Funds. The
Trust, on behalf of each Fund, shall also make all payments (including but not
limited to expenses) pursuant to any written plan or agreement relating to the
implementation of such plan approved in accordance with Rule 12b-1 under the
1940 Act in connection with the distribution of each Fund's shares.
10. Expenses Payable by the Distributor. The Distributor or its parent
will defray expenses of (a) printing and distributing any Prospectuses or
reports prepared for its use in connection with the offering of the shares for
sale to the public (other than to existing shareholders of the Funds), (b) any
other literature used by the Distributor in connection with such offering, and
(c) any advertising in connection with such offering, unless any of the expenses
listed in subparagraphs (a), (b) or (c) of this paragraph 10 are to be paid by
the Trust, on behalf of each Fund, under a Rule 12b-1 plan or agreement relating
to the implementation of such plan as described in paragraph 9 hereof.
11. Indemnification of the Distributor. The Trust, on behalf of each
Fund, agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the Distributor
within the meaning of Section 15 of the 1933 Act against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares, based upon the ground that the registration statement,
Prospectus, shareholder reports or other information filed or made public by the
Trust, with respect to each Fund, as from time to time amended and supplemented,
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading and arising under the 1933 Act, or any other statute or
the common law, provided, however, that the Trust does not agree to so indemnify
the Distributor or hold it harmless to the extent that such statement or
omission was made on reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on behalf of the
Distributor; and provided, further, that in no case (i) is the indemnity of the
Trust in favor of the Distributor or any person indemnified to be deemed to
protect the Distributor or any such person against any liability to the Trust or
its security holders to which the Distributor or any controlling person would
otherwise be subject by reason of wilful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Contract, or (ii) is the
Trust, on behalf of a Fund, to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against the Distributor or any
person indemnified hereunder unless the Distributor or such person, as the case
may be, shall have notified the Trust in writing of such claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such person (or after the Distributor or such person shall have
received notice of such service on any designated agent), but failure to notify
the Trust of any such claim shall not relieve it from any liability which it may
have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such claim, but if the Trust elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or such person or persons, defendant or defendants in the suit. In
the event the Trust elects to assume the defense of any such suit and retain
such counsel, the Distributor, such officers or directors or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not elect
to assume the defense of any such suit, it will reimburse the Distributor, such
officers or directors or such controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it, any of its Funds, or
any of its officers or Trustees in connection with the issuance or sale of any
of the shares.
12. Indemnification of the Trust. The Distributor agrees that it will
indemnify and hold harmless the Trust, the Funds and each of the Trust's
Trustees and officers and each person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law, alleging
any wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, shareholder reports or other information
filed or made public by the Trust, as from time to time amended, included an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, insofar as any such statement or omission was made in reliance upon,
and in conformity with information furnished to the Trust by or on behalf of the
Distributor, provided, however, that in no case (i) is the indemnity of the
Distributor in favor of the Trust, Fund or any person indemnified to be deemed
to protect the Trust, Fund or any such person against any liability to which the
Trust, Fund or any such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Contract, or (ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Trust,
Fund or any person indemnified unless the Trust, Fund or such person, as the
case may be, shall have notified the Distributor in writing of such claim within
a reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the Trust,
Fund or upon such person (or after the Trust, Fund or such person shall have
received notice of such service on any designated agent), but failure to notify
the Distributor of any such claim shall not relieve it from any liability which
it may have to the Trust, Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any such notice to the Distributor, the Distributor
shall be entitled to participate, at its own expense, in the defense or, if it
so elects, to assume the defense of any suit brought to enforce any such claim,
but if the Distributor elects to assume the defense, such defense shall be
conducted by counsel chosen by the Distributor and satisfactory to the Trust, to
its officers and Trustees and to any controlling person or persons, defendant or
defendants in the suit. In the event that the Distributor elects to assume the
defense of any such suit and retain such counsel, the Trust or such controlling
persons, defendant or defendants in the suit, shall bear the fees and expense of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any such suit, it will reimburse the Trust, such officers
and Trustees or controlling person or persons, defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained by them. The
Distributor agrees promptly to notify the Trust of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any of the shares.
13. Effective Date, Termination and Amendment. This Contract shall
become effective on the date of its execution and (unless terminated as herein
provided) shall remain in full force and effect through and including February
28, 2000 and shall continue in full force and effect as to each Fund
indefinitely thereafter, but only so long as such continuance after February 28,
2000 is specifically approved at least annually (a) by vote of a majority of the
outstanding voting securities of that Fund or by the Trustees of the Trust, and
(b) by the vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Distributor cast in person at a
meeting called for the purpose of voting on such approval. This Contract shall
at any time be terminated with respect to any Fund without the payment of any
penalty (1) by vote of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of that Fund, on 60 days' written notice to the
Distributor, (2) automatically in the event of its assignment, and (3) by the
Distributor on 60 days' written notice to the Trust. Any notice under this
Contract shall be given in writing, addressed and delivered, or mailed postpaid,
to the other party at the principal office of such party.
This Contract may be amended as to any Fund at any time by a writing
signed by both parties hereto, provided that no amendment of this Contract shall
be effective as to that Fund until approved (a) by vote of a majority of the
outstanding voting securities of that Fund or by vote of the Trustees of the
Trust, and (b) by the vote of a majority of the Trustees of the Trust who are
not interested persons of the Trust or of the Distributor cast in person at a
meeting called for the purpose of voting on such approval.
14. Limitation of Liability. The Distributor expressly acknowledges the
provision in the Declaration of Trust of the Trust (Article IV, Section 4.1)
limiting the personal liability of shareholders and Trustees of the Trust, and
the Distributor hereby agrees that is shall have recourse only to the Trust for
payment of claims or obligations as between the Trust and the Distributor
arising out of this Contract and shall not seek satisfaction from the
shareholders, the Trustees, any shareholder or any Trustee of the Trust. No Fund
shall be liable for the obligations of any other Fund hereunder.
15. Certain Definitions. The terms "interested person", "vote of a
majority of the outstanding voting securities" and "assignment" when used in
this Contract shall have the respective meanings specified in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission by any rule, regulation or order.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Distribution Contract to be executed in its name and on its behalf by one of its
officers thereunto duly authorized, all as of the day and year first above
written.
THE WRIGHT ASSET ALLOCATION TRUST
By: /s/ Peter M. Donovan
------------------------
Peter M. Donovan
President
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
By: /s/ A.M. Moody III
------------------------
A.M. Moody III
President
Exhibit (g)(1)
MASTER CUSTODIAN AGREEMENT
between
WRIGHT MANAGED INVESTMENT FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions................................................1-2
2. Employment of Custodian and Property to be held by it...... 3
3. Duties of the Custodian with Respect to
Property of the Fund....................................... 3
A. Safekeeping and Holding of Property.................... 3
B. Delivery of Securities.................................3-6
C. Registration of Securities............................. 6
D. Bank Accounts.......................................... 6
E. Payments for Shares of the Fund........................ 7
F. Investment and Availability of Federal Funds........... 7
G. Collections............................................7-8
H. Payment of Fund Moneys.................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased........................9-10
J. Payments for Repurchases of Redemptions
of Shares of the Fund.................................. 10
K. Appointment of Agents by the Custodian................. 10
L. Deposit of Fund Portfolio Securities in Securities Systems.10-12
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper............................12-14
N. Segregated Account..................................... 14
O. Ownership Certificates for Tax Purposes................ 14
P. Proxies................................................ 14
Q. Communications Relating to Fund Portfolio Securities... 15
<PAGE>
R. Exercise of Rights; Tender Offers..................... 15
S. Depository Receipts...................................5-16
T. Interest Bearing Call or Time Deposits................ 16
U. Options, Futures Contracts and Foreign Currency Transactions.16-17
V. Actions Permitted Without Express Authority..........17-18
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value................... 18
5. Records and Miscellaneous Duties..........................8-19
6. Opinion of Fund`s Independent Public Accountants.......... 19
7. Compensation and Expenses of Bank......................... 19
8. Responsibility of Bank...................................19-20
9. Persons Having Access to Assets of the Fund.............. 20
10. Effective Period,Termination and Amendment; Successor Custodian..20-21
11. Interpretive and Additional Provisions................... 21
12. Notices.................................................. 21
13. Massachusetts Law to Apply............................... 21
14. Adoption of the Agreement by the Fund.................... 22
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by
Wright Investors' Service which has adopted this Agreement in the manner
provided herein and Investors Bank & Trust Company (hereinafter called "Bank",
"Custodian" and "Agent"), a trust company established under the laws of
Massachusetts with a principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing
general partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository but
only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
-1-
<PAGE>
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but only
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Wright Investors'
Service to the Custodian through the Wright trading system shall be deemed to be
proper instructions; the Fund shall cause all such instructions to be confirmed
in writing. Different persons may be authorized to give instructions for
different purposes. A certified copy of a vote of the Board may be received and
accepted by the Custodian as conclusive evidence of the authority of any such
person to act and may be considered as in full force and effect until receipt of
written notice to the contrary. Such instructions may be general or specific in
terms and, where appropriate, may be standing instructions. Unless the vote
delegating authority to any person or persons to give a particular class of
instructions specifically requires that the approval of any person, persons or
committee shall first have been obtained before the Custodian may act on
instructions of that class, the Custodian shall be under no obligation to
question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the Custodian
reasonably believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. The Fund authorizes the Custodian
to tape record any and all telephonic or other oral instructions given to the
Custodian. Upon receipt of a certificate signed by two officers of the Fund as
to the authorization by the President and the Treasurer of the Fund accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Fund, "proper instructions" may also include
communications effected directly between electromechanical or electronic devices
provided that the President and Treasurer of the Fund and the Custodian are
satisfied that such procedures afford adequate safeguards for the Fund's assets.
In performing its duties generally, and more particularly in connection with the
purchase, sale and exchange of securities made by or for the Fund, the Custodian
may take cognizance of the provisions of the governing documents and
registration statement of the Fund as the same may from time to time be in
effect (and votes, resolutions or proceedings of the shareholders or the Board),
but, nevertheless, except as otherwise expressly provided herein, the Custodian
may assume unless and until notified in writing to the contrary that so-called
proper instructions received by it are not in conflict with or in any way
contrary to any provisions of such governing documents and registration
statement, or votes, resolutions or proceedings of the shareholders or the
Board.
-2-
<PAGE>
2. Employment of Custodian and Property to be Held by It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
A. Safekeeping and Holding of Property. The Custodian shall keep
safely all property of the Fund and on behalf of the Fund
shall from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate
on its books and records for the account of the Fund all
property of the Fund,including all securities, participation
interests and other assets of the Fund (1) physically held
by the Custodian, (2) held by any subcustodian referred to
in Section 2 hereof or by any agent referred to in Paragraph
K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved
Clearing Agency or in the Federal Book-Entry System or in an
Approved Foreign Securities Depository, each of which from
time to time is referred to herein as a "Securities System",
and (4) held by the Custodian or by any subcustodian
referred to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.
B. Delivery of Securities.The Custodian shall release and deliver
securities or participation interests owned by the Fund held
(or deemed to be held) by the Custodian or maintained in a
Securities System account or in an Approved Book-Entry System
for Commercial Paper account only upon receipt of proper
instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
-3-
<PAGE>
1) Upon sale of such securities or participation
interests for the account of the Fund, but
only against receipt of payment therefor; if
delivery is made in Boston or New York City,
payment therefor shall be made in accordance
with generally accepted clearing house
procedures or by use of Federal Reserve Wire
System procedures; if delivery is made
elsewhere payment therefor shall be in
accordance with the then current "street
delivery" custom or in accordance with such
procedures agreed to in writing from time to
time by the parties hereto; if the sale is
effected through a Securities System,
delivery and payment therefor shall be made
in accordance with the provisions of
Paragraph L hereof; if the sale of commercial
paper is to be effected through an Approved
Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made
in accordance with the provisions of
Paragraph M hereof; if the securities are to
be sold outside the United States, delivery
may be made in accordance with procedures
agreed to in writing from time to time by the
parties hereto; for the purposes of this
subparagraph, the term "sale" shall include
the disposition of a portfolio security (i)
upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to
make a successful bid with respect to a
portfolio security, the continued holding of
which is contingent upon the making of such a
bid;
2) Upon the receipt of payment in connection
with any repurchase agreement or reverse
repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with
tender or other similar offers for portfolio
securities of the Fund;
4) To the issuer thereof or its agent when such
securities or participation interests are
called, redeemed, retired or otherwise
become payable; provided that, in any such
case, the cash or other consideration is to
be delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for
transfer into the name of the Fund or into
the name of any nominee of the Custodian or
into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or
into the name or nominee name of any
subcustodian employed pursuant to Section 2
hereof; or for exchange for a different
number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units; provided that,
in any such case, the new securities or
participation interests are to be delivered
to the Custodian or any subcustodian employed
pursuant to Section 2 hereof;
-4-
<PAGE>
6) To the broker selling the same for
examination in accordance with the "street
delivery" custom; provided that the
Custodian shall adopt such procedures as the
Fund from time to time shall approve to
ensure their prompt return to the Custodian
by the broker in the event the broker elects
not to accept them;
7) For exchange or conversion pursuant to any
plan of merger, consolidation,
recapitalization, reorganization or
readjustment of the securities of the Issuer
of such securities, or pursuant to provisions
for conversion of such securities, or
pursuant to any deposit agreement; provided
that, in any such case, the new securities
and cash, if any, are to be delivered to the
Custodian or any subcustodian employed
pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar
securities, the surrender thereof in
connection with the exercise of such
warrants, rights or similar securities, or
the surrender of interim receipts or
temporary securities for definitive
securities; provided that, in any such case,
the new securities and cash, if any, are to
be delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of
securities made by the Fund (such loans to be
made pursuant to the terms of the Fund's
current registration statement), but only
against receipt of adequate collateral as
agreed upon from time to time by the
Custodian and the Fund, which may be in the
form of cash or obligations issued by the
United States government, its agencies or
instrumentalities; except that in connection
with any securities loans for which
collateral is to be credited to the
Custodian's account in the book-entry system
authorized by the U.S.Department of Treasury,
the Custodian will not be held liable or
responsible for the delivery of securities
loaned by the Fund prior to the receipt of
such collateral;
10) For delivery as security in connection with
any borrowings by the Fund requiring a pledge
or hypothecation of assets by the Fund (if
then permitted under circumstances described
in the current registration statement of the
Fund), provided, that the securities shall be
released only upon payment to the Custodian
of the monies borrowed, except that in cases
where additional collateral is required to
secure a borrowing already made, further
securities may be released for that purpose;
upon receipt of proper instructions, the
Custodian may pay any such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
11) When required for delivery in connection with
any redemption or repurchase of Shares of the
Fund in accordance with the provisions of
Paragraph J hereof;
-5-
<PAGE>
12) For delivery in accordance with the
provisions of any agreement between the
Custodian(or a subcustodian employed pursuant
to Section 2 hereof) and a broker-dealer
registered under the Securities Exchange Act
of 1934 and, if necessary, the Fund, relating
to compliance with the rules of The Options
Clearing Corporation or of any registered
national securities exchange, or of any
similar organization or organizations,
regarding deposit or escrow or other
arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the
provisions of any agreement among the Fund,
the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance
with the rules of the Commodity Futures
Trading Commission and/or of any contract
market or commodities exchange or similar
organization,regarding futures margin account
deposits or payments in connection with
futures transactions by the Fund;
14) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board specifying the securities to be
delivered, setting forth the purpose for
which such delivery is to be made, declaring
such purpose to be proper corporate purpose,
and naming the person or persons to whom
delivery of such securities shall be made.
C. Registration of Securities. Securities held by the Custodian
(other than bearer securities) for the account of the Fund
shall be registered in the name of the Fund or in the name
of any nominee of the Fund or of any nominee of the Custodian,
or in the name or nominee name of any agent appointed pursuant
to Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the
name or nominee name of The Depository Trust Company or
Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for
Commercial Paper; provided, that securities are held in an
account of the Custodian or of such agent or of such
subcustodian containing only assets of the Fund or only assets
held by the Custodian or such agent or such subcustodian as
a custodian or subcustodian or in a fiduciary capacity for
customers. All certificates for securities accepted by the
Custodian or any such agent or subcustodian on behalf of the
Fund shall be in "street" or other good delivery form or
shall be returned to the selling broker or dealer who shall
be advised of the reason thereof.
D. Bank Accounts.The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only
to draft or order by the Custodian acting in pursuant to the
terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Fund other than cash
maintained by the Fund in a bank account established and used
in accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Fund may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as the Custodian may in its discretion deem
necessary or desirable; provided, however, that
-6-
<PAGE>
every such bank or trust company shall be qualified to act as
a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved in
writing by two officers of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and
shall be subject to withdrawal only by the Custodian in that
capacity.
E. Payment for Shares of the Fund. The Custodian shall make
appropriate arrangements with the Transfer Agent and the
principal underwriter of the Fund to enable the Custodian to
make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares
as may be issued or sold from time to time by the Fund, in
accordance with the governing documents and offering
prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
F. Investment and Availability of Federal Funds. Upon agreement
between the Fund and the Custodian, the Custodian shall, upon
the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such securities and instruments as
may be set forth in such instructions on the
same day as received all federal funds
received after a time agreed upon between
the Custodian and the Fund; and
2) make federal funds available to the Fund as
of specified times agreed upon from time to
time by the Fund and the Custodian in the
amount of checks received in payment for
Shares of the Fund which are deposited into
the Fund's account.
G. Collections. The Custodian shall promptly collect all income
and other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall
promptly collect all income and other payments with respect to
bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or agent thereof and
shall credit such income, as collected, to the Fund's
custodian account. The Custodian shall do all things necessary
and proper in connection with such prompt collections and,
without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other
income items requiring presentations;
2) Present for payment all securities which may
mature or be called, redeemed, retired or
otherwise become payable;
3) Endorse and deposit for collection, in the
name of the Fund, checks, drafts or other
negotiable instruments;
-7-
<PAGE>
4) Credit income from securities maintained in
a Securities System or in an Approved
Book-Entry System for Commercial Paper at
the time funds become available to the
Custodian; in the case of securities
maintained in The Depository Trust Company
funds shall be deemed available to the Fund
not later than the opening of business on
the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably
practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does
not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in
writing, enclosing copies of any demand letter, any written
response thereto, and memoranda of all oral responses thereto
and to telephonic demands, and await instructions from the
Fund; the Custodian shall in no case have any liability for
any nonpayment of such income provided the Custodian meets the
standard of care set forth in Section 8 hereof. The Custodian
shall not be obligated to take legal action for collection
unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal
with the same pursuant to proper instructions relative
thereto.
H. Payment of Fund Moneys. Upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of the Fund
in the following cases only:
1) Upon the purchase of securities,participation
interests, options,futures contracts, forward
contracts and options on futures contracts
purchased for the account of the Fund but
only (a) against the receipt of
(i) such securities registered as provided
in Paragraph C hereof or in proper form
for transfer or
(ii) detailed instructions signed by an
officer of the Fund regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase
by the Fund of the options, futures
contracts, forward contracts or options on
futures contracts
by the Custodian (or by a subcustodian
employed pursuant to Section 2 hereof or by
a clearing corporation of a national
securities exchange of which the Custodian
is a member or by any bank, banking
institution or trust company doing business
in the United States or abroad which is
qualified under the Investment Company Act
of 1940 to act as a custodian and which has
been designated by the Custodian as its
agent for this purpose or by the agent
specifically designated in such instructions
as representing the purchasers of a new
issue of privately placed securities); (b)
in the case of a purchase effected through a
Securities System, upon receipt of the
securities by the Securities System
-8-
<PAGE>
in accordance with the conditions set forth
in Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected
through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper
by the Custodian or subcustodian in
accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of
repurchase agreements entered into between
the Fund and another bank or a
broker-dealer, against receipt by the
Custodian of the securities underlying the
repurchase agreement either in certificate
form or through an entry crediting the
Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of
Boston with such securities along with
written evidence of the agreement by the
bank or broker-dealer to repurchase such
securities from the Fund; or (e) with
respect to securities purchased outside of
the United States, in accordance with
written procedures agreed to from time to
time in writing by the parties hereto;
2) When required in connection with the
conversion, exchange or surrender of
securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or
repurchase of Shares of the Fund in
accordance with the provisions of Paragraph
J hereof;
4) For the payment of any expense or liability
incurred by the Fund, including but not
limited to the following payments for the
account of the Fund: advisory fees,
distribution plan payments, interest, taxes,
management compensation and expenses,
accounting, transfer agent and legal fees,
and other operating expenses of the Fund
whether or not such expenses are to be in
whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends or other
distributions to holders of Shares declared
or authorized by the Board; and
6) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board, specifying the amount of such
payment, setting forth the purpose for which
such payment is to be made, declaring such
purpose to be a proper corporate purpose,
and naming the person or persons to whom
such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase
of securities for the account of the Fund is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions signed by two
officers of the Fund to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of (i) the
securities in certificate form subject to such repurchase
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<PAGE>
agreement or (ii) written evidence that the securities subject
to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston
or (iii) the safekeeping receipt, provided that such
securities have in fact been so transfered by book-entry and
the written repurchase agreement is received by the Custodian
in due course; and except that if the securities are to be
purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to
time by the parties hereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund.
From such funds as may be available for the purpose, but
subject to any applicable votes of the Board and the current
redemption and repurchase procedures of the Fund, the
Custodian shall, upon receipt of written instructions from the
Fund or from the Fund's transfer agent or from the principal
underwriter, make funds and/or portfolio securities available
for payment to holders of Shares who have caused their Shares
to be redeemed or repurchased by the Fund or for the Fund`s
account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon
which special checks may be drawn by shareholders of the Fund
holding Shares for which certificates have not been issued.
Such checking account and such special checks shall be subject
to such rules and regulations as the Custodian and the Fund
may from time to time adopt. The Custodian or the Fund may
suspend or terminate use of such checking account or such
special checks (either generally or for one or more
shareholders) at any time. The Custodian and the Fund shall
notify the other immediately of any such suspension or
termination.
K. Appointment of Agents by the Custodian. The Custodian may at
any time or times in its discretion appoint (and may at any
time remove) any other bank or trust company (provided such
bank or trust company is itself qualified under the Investment
Company Act of 1940 to act as a custodian or is itself an
eligible foreign custodian within the meaning of Rule 17f-5
under said Act) as the agent of the Custodian to carry out
such of the duties and functions of the Custodian described in
this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent
shall not relieve the Custodian of any of its responsibilities
or liabilities hereunder, and as between the Fund and the
Custodian the Custodian shall be fully responsible for the
acts and omissions of any such agent. For the purposes of this
Agreement, any property of the Fund held by any such agent
shall be deemed to be held by the Custodian hereunder.
L. Deposit of Fund Portfolio Securities in Securities Systems.The
Custodian may deposit and/or maintain securities owned by the
Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
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<PAGE>
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2 keep
securities of the Fund in a Securities System provided that
such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the
Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund, and the Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings
maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased
in book-entry form for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
such securities have been transferred to the Account, and (ii)
the making of any entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account
of the Fund only upon (i) receipt of notice or advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all notices or
advices from the Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be promptly
provided to the Fund at its request. The Custodian shall
promptly send to the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice
or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to the Securities System's accounting
system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities
System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities
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<PAGE>
deposited in any Securities System. The Custodian's books and
records relating to the Fund's participation in each
Securities System will at all times during regular business
hours be open to the inspection of the Fund's authorized
officers, employees or agents.
(e) The Custodian shall not act under this Paragraph
L in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Securities System; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has
annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of the
Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the
Securities System or any other person; at the election of the
Fund, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Fund has not been made whole for any such loss or
damage.
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper. Upon receipt of proper
instructions with respect to each issue of direct issue
commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by
the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the
following provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry System
for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of
an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such
paper is maintained in a non-proprietary account ("Account")
of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include
any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to
commercial paper of the Fund which is maintained in an
Approved Book-Entry System for Commercial Paper shall identify
by book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the
Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping
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<PAGE>
system capable of accurately and currently stating the Fund's
holdings of commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper
purchased in book-entry form for the account of the Fund only
upon contemporaneous (i) receipt of notice or advice from the
issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such purchase, payment and
transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund
only upon contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and payment
for the account of the Fund. Copies of all notices, advices
and confirmations of transfers of commercial paper for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to each System's accounting system, system
of internal accounting controls or procedures for safeguarding
commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication
relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in any
Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph
M in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the Custodian
shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for
Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such System
as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved
Book-Entry System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund or in
the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper
by book-entry.
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<PAGE>
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of any
Approved Book-Entry System for Commercial Paper by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it
may have against the System, the issuer of the commercial
paper or any other person; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the System, the
issuer of the commercial paper or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for
any such loss or damage.
N. Segregated Account. The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant
to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and any
registered broker-dealer (or any futures commission merchant),
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of the Commodity Futures Trading Commission or of any
contract market or commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or
written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to proper instructions, a certificate signed
by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.
O. Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt
of income or other payments with respect to securities of the
Fund held by it and in connection with transfers of
securities.
P. Proxies. The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly delivered to the
Fund all forms of proxies and all notices of meetings and any
other notices or announcements or other written information
affecting or relating to the securities, and upon receipt of
proper instructions shall execute and deliver or cause its
nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute
any proxy to vote thereon or give any consent or take any
other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
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<PAGE>
Q. Communications Relating to Fund Portfolio Securities. The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call
and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons
relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange offers,
the Custodian shall deliver promptly to the Fund all written
information received by the Custodian from issuers and other
persons relating to the securities and participation interests
whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
R. Exercise of Rights; Tender Offers. In the case of tender
offers, similar offers to purchase or exercise rights
(including, without limitation, pendency of calls and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and
participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for
promptly notifying the Fund of all such offers in accordance
with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall
have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of
proper instructions, the Custodian shall timely deliver to the
issuer or trustee thereof, or to the agent of either,warrants,
puts, calls, rights or similar securities for the purpose of
being exercised or sold upon proper receipt therefor and upon
receipt of assurances satisfactory to the Custodian that the
new securities and cash, if any, acquired by such action are
to be delivered to the Custodian or any subcustodian employed
pursuant to Section 2 hereof. Upon receipt of proper
instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the
Custodian that the consideration to be paid or delivered or
the tendered securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership, and shall thereafter promptly
notify the Fund in writing of such action.
S. Depository Receipts. The Custodian shall, upon receipt of
proper instructions, surrender or cause to be surrendered
foreign securities to the depository used by an issuer of
American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs") for
such securities, against a written receipt therefor adequately
describing such securities and written evidence satisfactory
to the Custodian that the depository has acknowledged receipt
of instructions to issue with respect to such securities ADRs
in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section
2 hereof, for delivery to the Custodian or such subcustodian
at such place as the Custodian or such subcustodian may from
time to time designate. The Custodian shall, upon receipt of
proper instructions, surrender ADRs to the issuer thereof
against a written receipt therefor adequately
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<PAGE>
describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository
to deliver the securities underlying such ADRs to the
Custodian or to a subcustodian employed pursuant to Section 2
hereof.
T. Interest Bearing Call or Time Deposits. The Custodian shall,
upon receipt of proper instructions, place interest bearing
fixed term and call deposits with the banking department of
such banking institution (other than the Custodian) and in
such amounts as the Fund may designate. Deposits may be
denominated in U.S. Dollars or other currencies. The Custodian
shall include in its records with respect to the assets of the
Fund appropriate notation as to the amount and currency of
each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to
the Custodian by the banking institution. Such deposits shall
be deemed portfolio securities of the applicable Fund for the
purposes of this Agreement, and the Custodian shall be
responsible for the collection of income from such accounts
and the transmission of cash to and from such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of
proper instructions and in accordance with the
provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, the
Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered
national securities exchange or similar organization
or organizations, receive and retain confirmations or
other documents, if any, evidencing the purchase or
writing of an option on a security or securities
index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account
for each Fund separately, either physically or by
book-entry in a Securities System, securities subject
to a covered call option written by the Fund; and
release and/or transfer such securities or other
assets only in accordance with a notice or other
communication evidencing the expiration, termination
or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or
options exchange on which such covered option is
traded or such other organization as may be
responsible for handling such options transactions.
The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in
each Fund's segregated account in compliance with
applicable margin maintenance requirements.
2. Futures Contracts. The Custodian shall, upon
receipt of proper instructions, receive and retain
confirmations and other documents, if any, evidencing
the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and
maintain in a segregated account, for the benefit of
any futures commission merchant, assets designated by
the Fund as initial, maintenance or variation
"margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its
obligations under any futures contracts purchased or
sold or any options on futures contracts written by
Fund, in accordance with the provisions of any
agreement or agreements among
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<PAGE>
the Fund, the Custodian and such futures commission
merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization regarding such margin deposits or
payments; and release and/or transfer assets in such
margin accounts only in accordance with any such
agreements or rules. The Custodian and the futures
commission merchant shall be responsible for the
sufficiency of assets held in the segregated account
in compliance with the applicable margin maintenance
and mark-to-market payment requirements.
3. Foreign Exchange Transactions.The Custodian shall,
pursuant to proper instructions, enter into or cause
a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be
portfolio securities of the Fund; and accordingly,
the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's
responsibility in respect of other portfolio
securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of
cash from the currency broker or banking or financial
institution with which the contract or option is
made, the maintenance of proper records with respect
to the transaction and the maintenance of any
segregated account required in connection with the
transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or
banking or financial institutions with which the Fund
deals or for their failure to comply with the terms
of any contract or option. Without limiting the
foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available
to the Custodian for the purpose, the Custodian may
(if determined necessary by the Custodian to
consummate a particular transaction on behalf and for
the account of the Fund) make free outgoing payments
of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign
exchange contract or confirmation that the
countervalue currency completing the foreign exchange
contact has been delivered or received. The Custodian
shall not be responsible for any costs and interest
charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of
third parties to deliver foreign exchange; provided
that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to
the Fund in accordance with, the provisions of
Section 8.
V. Actions Permitted Without Express Authority.
The Custodian may
in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor
expenses of handling securities or other
similar items relating to its duties under
this Agreement, provided, that all such
payments shall be accounted for by the
Custodian to the Treasurer of the Fund;
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<PAGE>
2) surrender securities in temporary form for
securities in definitive form;
3) endorse for collection, in the name of the
Fund, checks, drafts and other negotiable
instruments; and
4) in general, attend to all nondiscretionary
details in connection with the sale,
exchange, substitution, purchase, transfer
and other dealings with the securities and
property of the Fund except as otherwise
directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue
sky"authorities and to others, audits of accounts, and other ministerial matters
of like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with
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<PAGE>
appropriate information as to securities in transit or in the process of
purchase or sale and with such other information as said auditors may from time
to time request. The Custodian shall also maintain records of all receipts,
deliveries and locations of such securities, together with a current inventory
thereof, and shall conduct periodic verifications (including sampling counts at
the Custodian) of certificates representing bonds and other securities for which
it is responsible under this Agreement in such manner as the Custodian shall
determine from time to time to be advisable in order to verify the accuracy of
such inventory. The Bank shall not disclose or use any books or records it has
prepared or maintained by reason of this Agreement in any manner except as
expressly authorized herein or directed by the Fund, and the Bank shall keep
confidential any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost,
-19-
<PAGE>
expense, liability or claim resulting from, or caused by, the direction of or
authorization by the Fund to maintain custody of any securities or cash of the
Fund in a foreign county including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, acts of war, civil war or
terrorism, insurrection, revolution, military or usurped powers, nuclear
fission, fusion or radiation, earthquake, storm or other disturbance of nature
or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund
vote to have the securities, funds and other properties held hereunder delivered
and paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits,
-20-
<PAGE>
as shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110,
shall be deemed to have been properly delivered or given hereunder to the
respective addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
-21-
<PAGE>
14. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-22-
December 19, 1990
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
BY: /s/ Henry M. Joyce
- ------------------------
Title: Vice President
Exhibit(g)(2)
AMENDMENT TO
MASTER CUSTODIAN AGREEMENT
BETWEEN
WRIGHT MANAGED INVESTMENT FUNDS
AND
INVESTORS BANK & TRUST COMPANY
This Amendment, dated as of September 20, 1995, is made to the MASTER
CUSTODIAN AGREEMENT (the "Agreement") between each investment company advised by
Wright Investors' Service which has adopted the Agreement (the "Funds") and
Investors Bank & Trust Company (the "Custodian") pursuant to Section 10 of the
Agreement.
The Funds and the Custodian agree that Section 10 of the Agreement shall,
as of September 20, 1995, be amended to read as follows:
Unless otherwise defined herein, terms which are defined in the Agreement
and used herein are so used as so defined.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; provided, that the Fund may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the Funds
determines that the performance of the Custodian has been unsatisfactory or
adverse to the interests of shareholders of any Fund or Funds or that the terms
of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.
<PAGE>
The Board of the Fund shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
Except as expressly provided herein, the Agreement shall remain unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
THE WRIGHT EQUIFUND EQUITY TRUST
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By:/s/ James L. O'Connor
---------------------
Treasurer
INVESTORS BANK & TRUST COMPANY
By:/s/ Michael F. Rogers
----------------------
EXHIBIT (g)(3)
May 19, 1999
The Wright Asset Allocation Trust hereby adopts and agrees to become a party to
the attached Master Custodian Agreement between the Wright Managed Investment
Funds and Investors Bank & Trust Company.
THE WRIGHT ASSET ALLOCATION TRUST
By: /s/ Peter M. Donovan
-----------------------
Peter M. Donovan
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /s/ Michael F. Rogers
------------------------
Michael F. Rogers
Executive Managing Director
Exhibit (h)(2)
SERVICE PLAN
OF
THE WRIGHT ASSET ALLOCATION TRUST
WHEREAS, The Wright Asset Allocation Trust (the "Trust") engages in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, Wright Investors Service Distributors, Inc. (the "Distributor")
provides, or arranges for others ("Intermediaries") to provide, account
administration and personal and account maintenance services to shareholders of
Managed Growth and Income Fund (the "Fund");
WHEREAS, the Trust, on behalf of each class of the Fund, intends to
reimburse the Distributor for its expenses in providing, or arranging for
Intermediaries to provide, these services; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Service Plan will benefit each class
of the Fund and its respective shareholders.
NOW, THEREFORE, the Trust hereby adopts this Service Plan (this "Plan")
on behalf of each class of the Fund containing the following terms and
conditions:
1. The Trust, on behalf of each class of the Fund, is authorized to
reimburse the Distributor for expenses incurred in providing, or arranging for
Intermediaries to provide, account administration and personal and account
maintenance services to beneficial owners of the shares of that class and the
Fund. The amount of such reimbursements paid during any one year with respect to
each class of the Fund shall not exceed .25% of the average daily net assets of
that class. Such compensation shall be calculated and accrued daily and paid
monthly.
2. Account administration and personal and account maintenance services
and expenses for which the Distributor may be reimbursed pursuant to this Plan
include, without limitation, (a) acting, or arranging for Intermediaries to act,
as the record holder and nominee of all shares of each class of the Fund
beneficially owned by customers of the Intermediaries ("Customers"); (b)
establishing and maintaining individual accounts and records with respect to
shares owned by Customers; (c) providing facilities to answer questions and
respond to correspondence with Customers and other investors about the status of
their accounts or about other aspects of the Fund; (d) processing and issuing
confirmations concerning Customer orders to purchase, redeem and exchange shares
promptly and in accordance with the then effective prospectus for shares of the
Fund; (e) receiving and transmitting funds representing the purchase price or
redemption proceeds of such shares; (f) responding to investor requests for
prospectuses and statements of additional information; (g) displaying and making
prospectuses available on the Intermediary's premises; (h) assisting Customers
in completing application forms, selecting dividend and other account options
and opening custody accounts with the Intermediary; (i) acting as liaison
between Customers and the Fund, including obtaining information about the Fund,
assisting the Fund in correcting errors and resolving problems; and (j)
providing such statistical and other information as may be reasonably requested
by the Fund or necessary for the Fund to comply with applicable federal or state
laws.
3. This Plan shall not take effect until after it has been approved by
both a majority of (a) those Trustees of the Trust who are not "interested
persons" of the Trust (as defined in the Act) and have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Independent Trustees"), and (b) all of the Trustees then in office, cast
in person at a meeting (or meetings) called for the purpose of voting on this
Plan.
4. Any agreements related to this Plan shall not take effect until
approved in the manner provided for approval of this Plan in paragraph 3.
5. This Plan shall continue in effect until February 28, 2000 and from
year to year thereafter for so long as such continuance after February 28, 2000
is specifically approved at least annually in the manner provided for approval
of this Plan in paragraph 3.
6. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement shall be the
President or any Vice President of the Trust. Such persons shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
7. This Plan may be terminated as to the Fund or with respect to any
class of shares of the Fund at any time by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding voting securities of the
particular class. If the Plan is terminated with respect to a particular class
or is not continued by the Trustees and no successor plan is adopted, such class
shall cease to make service payments to the Distributor.
The term "vote of a majority of the outstanding voting securities of
the particular class" shall mean the vote of the lesser (a) 67 per cent or more
of the shares of that class present or represented by proxy at the meeting if
the holders of more than 50 per cent of the outstanding shares of that class are
present or represented by proxy at the meeting, or (b) more than 50 per cent of
the outstanding shares of the class.
8. No material amendment to the Plan shall be made unless approved in
the manner provided for approval and annual continuance in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of the
Independent Trustees shall be committed to the discretion of the Independent
Trustees.
10. The Trust shall preserve copies of this Plan, any related
agreements and all reports made pursuant to paragraph 6 hereof for a period of
not less than six years from the date of this Plan, the agreements or such
reports, as the case may be, the first two years in an easily accessible place.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this Service Plan on May 19,
1999.
THE WRIGHT ASSET ALLOCATION TRUST
By: /s/Peter M. Donovan
-----------------------
Peter M. Donovan
President
Attest:
/s/Janet E. Sanders
- ---------------------
Janet E. Sanders
Assistant Secretary
Exhibit (i)
HALE AND DORR LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o fax 617-526-5000
May 19, 1999
The Wright Asset Allocation Trust
24 Federal Street
Boston, Massachusetts 02110
Ladies and Gentlemen:
The Wright Asset Allocation Trust (the "Trust") is a Massachusetts
business trust created under a Declaration of Trust dated, executed and
delivered in Boston, Massachusetts on June 17, 1997, and filed with the
Massachusetts's Secretary of State on March 12, 1999 (the "Declaration of
Trust"). The beneficial interests thereunder are represented by transferable
shares of beneficial interest without par value.
The Trustees have the powers set forth in the Declaration of Trust,
subject to the terms, provisions and conditions therein provided. Pursuant to
Article V, Section 5.1 of the Declaration of Trust, the number of shares of
beneficial interest authorized to be issued under the Declaration of Trust is
unlimited and the Trustees are authorized to divide the shares into one or more
series of shares and one or more classes thereof as they deem necessary or
desirable. Pursuant to Article V, Section 5.4 of the Declaration of Trust, the
Trustees are empowered in their discretion to issue shares of any series for
such consideration, whether cash or other property, and on such terms as the
Trustees may deem appropriate or desirable, all without action or approval of
the shareholders. Pursuant to Article V, Section 5.5 of the Declaration of
Trust, the Trustees have established the series of shares designated "Wright
Managed Growth with Income Fund" (the "Series").
The Trustees have voted to authorize the officers of the Trust to
determine the appropriate number of shares to be registered, to register with
the Securities and Exchange Commission, and to issue and sell to the public,
shares of the Series.
We have examined the Declaration of Trust and By-Laws of the Trust,
resolutions of the Board of Trustees relating to the authorization and issuance
of shares of beneficial interest of the Series, and such other documents as we
have deemed necessary or appropriate for the purposes of this opinion,
including, but not limited to, originals, or copies certified or otherwise
identified to our satisfaction, of such documents, Trust records and other
instruments. In our examination of the above documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to original documents of all documents submitted
to us as certified or photostatic copies.
For purposes of this opinion letter, we have not made an independent
review of the laws of any state or jurisdiction other than The Commonwealth of
Massachusetts and express no opinion with respect to the laws of any
jurisdiction other than the laws of The Commonwealth of Massachusetts. Further,
we express no opinion as to compliance with any state or federal securities
laws, including the securities laws of The Commonwealth of Massachusetts.
Our opinion below, as it relates to the non-assessability of the shares
of the Series, is qualified to the extent that under Massachusetts law,
shareholders of a Massachusetts business trust may be held personally liable for
the obligations of the Trust. In this regard, however, please be advised that
the Declaration of Trust disclaims shareholder liability for acts or obligations
of the Series or the Trust and permits notice of such disclaimer to be given in
each written obligation, contract, instrument, certificate, share, other
security of the Trust or a series thereof or undertaking made or issued by the
Trustees of the Trust. Also, the Trust's By-laws provide for indemnification out
of Trust property for all loss and expense of any shareholder held personally
liable for the obligations of the Series or the Trust.
We are of the opinion that all necessary Trust action precedent to the
issuance of the shares of beneficial interest of the Series has been duly taken,
and that all such shares may legally and validly be issued for among other
things, cash, and when sold will be fully paid and non-assessable by the Series
upon receipt by the Series or its agent of consideration therefor in accordance
with terms described in the Declaration of Trust, subject to compliance with the
Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, and the applicable state laws regulating the sale of securities.
We consent to your filing this opinion with the Securities and Exchange
Commission as an exhibit to any amendment to the Trust's registration statement.
Except as provided in this paragraph, this opinion may not be relied upon by, or
filed with, any other parties or for any other purpose.
Very truly yours,
/s/Hale and Dorr LLP
Hale and Dorr LLP
<PAGE>
Exhibit (j)
Independent Auditors' Consent
We consent to the inclusion in this Pre-Effective Amendment No. 1 to the
Registration Statement of The Wright Asset Allocation Trust (1933 Act File No.
333-75181) of our report dated May 20, 1999, relating to the financial
statements of Wright Managed Growth with Income Fund as of May 19, 1999 and for
the period then ended appearing in the Statement of Additional Information which
is part of such Registration Statement.
We also consent to the reference to our Firm under the heading "Independent
Certified Public Accountants" in the Statement of Additional Information.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 20, 1999
Exhibit (l)
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 19th day of May, 1999, between Wright
Investors' Service, Inc. ("Wright") and the Wright Managed Growth with Income
Fund (the "Fund"), a series of the Wright Asset Allocation Trust (the "Trust").
The Trust is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
WHEREAS, the Fund wishes to sell to Wright and Wright wishes to
purchase from the Fund $100,000 of shares of beneficial interest of the Fund
(10,000 shares) at a purchase price of $10.00 per share (collectively, the
"Shares"); and
WHEREAS, Wright is purchasing the Shares for the purpose of providing
the initial capitalization of the Trust as required by the 1940 Act;
NOW, THEREFORE, the parties hereto agree as follows:
1.Simultaneously with the execution of this Agreement, Wright is
delivering to the fund $100,000 in full payment for the Shares.
2.Wright agrees that it is purchasing the Shares for investment and
has no present intention of redeeming or reselling the Shares.
Executed as of the date set forth above.
WRIGHT INVESTORS' SERVICE, INC.
/s/ Peter M. Donovan
-------------------------
By: Peter M. Donovan
Its: President
WRIGHT ASSET ALLOCATION TRUST
(on behalf of the Wright Managed Growth with Income Fund)
/s/ A.M. Moody III
-----------------
By: A.M. Moody III
Its: Vice President
Exhibit (m)
Distribution Plan
of
THE WRIGHT ASSET ALLOCATION TRUST
WHEREAS, The Wright Asset Allocation Trust (the "Trust") engages in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, Wright Investors Service Distributors, Inc. (the "Distributor")
acts as distributor of the shares of beneficial interest of the Trust's series -
Wright Managed Growth and Income Fund (the "Fund");
WHEREAS, the Trust, on behalf of the Fund, intends to pay distribution
expenses with respect to two classes of it shares; Individual Shares and Advisor
Shares;
WHEREAS, the Trust has entered into a distribution contract with the
Distributor, whereby the Distributor renders services to the Trust in connection
with the offering and distribution of Individual Fund Shares;
WHEREAS, the Trust recognizes and agrees that the Distributor may
impose certain deferred sales charges in connection with the repurchase of
Individual Shares by the Trust, and the Distributor may retain (or receive from
the Trust, as the case may be) all such deferred sales charges; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and the holders of its Individual Shares and Advisor Shares.
NOW, THEREFORE, the Trust hereby adopts this Distribution Plan (the
"Plan") on behalf of the Fund, the Individual Shares and the Advisor Shares in
accordance with Rule 12b-1 under the Act and containing the following terms and
conditions:
1. (a) The Trust, on behalf of the Fund, is authorized to reimburse the
Distributor for distribution services performed and expenses incurred by the
Distributor in connection with the Fund's Individual Shares. The amount of such
compensation paid during any one year for distribution services shall not exceed
0.75% of the average daily net assets of the Fund attributable to the Individual
Shares. Such compensation shall be calculated and accrued daily and paid
monthly.
(b) The Trust, on behalf of the Fund, is authorized to reimburse the
Distributor for distribution services performed and expenses incurred by the
Distributor in connection with the Fund's Advisor Shares. The amount of such
compensation paid during any one year shall not exceed .25% of the average daily
net assets of the Fund attributable to the Advisor Shares. Such compensation
shall be calculated and accrued daily and paid monthly.
2. (a) Distribution services and expenses for which the Distributor may
be reimbursed by the Fund's Individual Shares and Advisor Shares pursuant to
this Plan include, without limitation: compensation to and expenses incurred by
dealers or wholesalers retained by the Distributor (collectively, the
"Authorized Dealers") and the officers, employees and sales representatives of
Authorized Dealers and of the Distributor; allocable overhead, travel and
telephone expenses; the printing of prospectuses and reports for other than
existing shareholders; the preparation and distribution of sales literature and
advertising; and all other expenses (other than personal and account maintenance
services as defined in the Trust's Service Plan) incurred in connection with
activities primarily intended to result in the sale of the Fund's Individual
Shares and Advisor Shares.
(b) The Distributor may impose certain deferred sales charges in
connection with the repurchase of Individual Shares by the Trust and the
Distributor may retain (or receive from the Trust, as the case may be) all such
deferred sales charges.
3. This Plan shall not take effect with respect to the Fund until after
it has been approved by both (a) a majority of (i) those Trustees of the Trust
who are not "interested persons" of the Trust (as defined in the Act) and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan.
4. Any agreements related to this Plan shall not take effect until
approved in the manner provided for approval of this Plan in paragraph 3.
5. This Plan shall continue in effect until February 28, 2000 and from
year to year thereafter for so long as such continuance is specifically approved
at least annually in the manner provided for approval of this Plan in paragraph
3.
6. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement shall be the
President or any Vice President of the Trust. Such persons shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
7. This Plan may be terminated at any time as to either class of shares
by vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority of
the outstanding voting securities of that class.
The term "vote of a majority of the outstanding voting securities of
that class shall mean the vote of the lesser (a) 67 per centum or more of the
shares of the particular class present or represented by proxy at the meeting if
the holders of more than 50 per centum of the outstanding shares of that class
are present or represented by proxy at the meeting, or (b) more than 50 per
centum of the outstanding shares of that class or such other definition as may
be required from time to time pursuant to the Act.
8. This Plan may not be amended to increase materially the limit upon
distribution expenses provided in paragraph 1 or to change the nature of such
expenses provided in paragraph 2 hereof unless such amendment is approved in the
manner provided for approval in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
10. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a period of
not less than six years from the date of this Plan, or of the agreements of such
reports, as the case may be, the first two years in an easily accessible place.
11 It is the opinion of the Trust's Trustees and officers that the
following are not expenses primarily intended to result in the sale of the
Fund's shares: fees and expenses of registering the shares under federal or
state laws regulating the sale of securities; and fees and expenses of
registering the Trust as a broker-dealer or of registering an agent of the Trust
under federal or state laws regulating the sale of securities; and fees and
expenses of preparing and setting in type the Trust's registration statement
under the Securities Act of 1933. Should such expenses be deemed by a court or
agency having jurisdiction to be expenses primarily intended to result in the
sale of the Fund's Individual Shares, they shall be considered to be expenses
contemplated by and included in this Distribution Plan but not subject to the
limitation prescribed in paragraphs 1 and 2 hereof.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this Distribution Plan on
May 19, 1999.
THE WRIGHT ASSET ALLOCATION TRUST
By: /s/Peter M. Donovan
----------------------
Peter M. Donovan
President
Attest:
/s/Janet E. Sanders
- --------------------
Janet E. Sanders
Secretary
Exhibit (o)
The Wright Asset Allocation Trust
Multiple Class Plan Pursuant to Rule 18f-3
Individual Shares and Advisor Shares
May 19, 1999
Each class of shares of Wright Managed Growth with Income Fund (the
"Fund"), a series of The Wright Asset Allocation Trust (the "Trust"), a
Massachusetts business trust, will have the same relative rights and privileges,
including the right to receive distributions, if any, that are calculated in the
same manner and at the same time as for each other class, and be subject to the
same fees and expenses, except as set forth below. Further, expenses allocated
with respect to the Fund's shares shall be allocated to a class that bears such
expenses at the same time they are allocated to any other class that bears such
expenses. The Board of Trustees may determine in the future that other
distribution arrangements, allocations of expenses (whether ordinary or
extraordinary) or services to be provided to a class of shares are appropriate
and amend this Plan accordingly without the approval of shareholders of any
class. Shares of one class may not be exchanged for shares of any other class
except as specifically provided in the Fund's prospectus and shares of each
class may be exchanged for shares of the same class of other funds as set forth
in the Fund's prospectus
Article I. Individual Shares
Individual Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Individual Shares redeemed
within one year of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Individual Shares are sold subject to the minimum purchase
requirements set forth in the Fund's prospectus. Individual Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
Shareholder Manual with respect to Individual Shares. Individual Shares are
subject to fees calculated as a stated percentage of the net assets attributable
to Individual Shares under the Fund's Rule 12b-1 Distribution Plan and the
Fund's Service Plan as set forth in the respective Plans. The Individual
Shareholders of the Fund have exclusive voting rights, if any, with respect to
the Fund's Rule 12b-1 Distribution Plan and Service Plan as each affects the
Individual Shares. Transfer agency fees are allocated to Individual Shares on a
per account basis. Individual Shares shall bear the costs and expenses
associated with conducting a shareholder meeting for matters relating to
Individual Shares.
The initial purchase date for Individual Shares acquired through (i)
reinvestment of dividends on Individual Shares or (ii) exchange from another
Wright Group of Funds mutual fund will be deemed to be the date on which the
original Individual Shares were purchased.
Article II. Advisor Shares
Advisor Shares are sold at net asset value without a sales charge and
with minimum purchase requirements as set forth in the Fund's prospectus.
Advisor Shares shall be entitled to the shareholder services set forth from time
to time in the Fund's Shareholder Manual with respect to Advisor Shares. Advisor
Shares are subject to fees calculated as a stated percentage of the net assets
attributable to Advisor Shares under the Fund's Rule 12B-1 Distribution Plan and
the Fund's Service Plan as set forth in the respective Plans. The Advisor
Shareholders have exclusive voting rights, if any, with respect to the Fund's
Rule 12b-1 Distribution Plan and Service Plan as each affects the Advisor
Shares. Transfer agency fees are allocated to Advisor Shares on a per account
basis. Advisor Shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Advisor Shares.
Article III. Approval of Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Trust, and (b) those of the
Trustees who are not "interested persons" of the Trust or the Fund, as such term
may be from time to time defined under the Act.
Article IV. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article III.
Exhibit (p)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of The Wright Asset Allocation
Trust, a Massachusetts business trust, do hereby severally constitute and
appoint H. Day Brigham, Jr., Peter M. Donovan, Alan R. Dynner and A.M. Moody,
III, or any of them, to be true, sufficient and lawful attorneys, or attorney
for each of us, to sign for each of us, in the name of each of us in the
capacities indicated below, and any and all amendments (including post-effective
amendments) to the Registration Statement on Form N-1A filed by The Wright Asset
Allocation Trust with the Securities and Exchange Commission in respect of
shares of beneficial interest and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
NAME CAPACITY DATE
---- -------- ----
President, Principal
Executive Officer and
/s/ Peter M. Donovan Trustee March 18, 1999
- ------------------------------
Peter M. Donovan
Treasurer and Principal
Financial and Accounting
/s/ James L. O'Connor Officer March 18, 1999
- ------------------------------
James L. O'Connor
/s/ H. Day Brigham, Jr. Trustee March 18, 1999
- ------------------------------
H. Day Brigham, Jr.
/s/ Judith R. Corchard Trustee March 18, 1999
- ------------------------------
Judith R. Corchard
/s/ Dorcas R. Hardy Trustee March 18, 1999
- ------------------------------
Dorcas R. Hardy
/s/ Leland Miles Trustee March 18, 1999
- ------------------------------
Leland Miles
/s/ A.M. Moody, III Trustee March 18, 1999
- ------------------------------
A.M. Moody, III
/s/ Lloyd F. Pierce Trustee March 18, 1999
- ------------------------------
Lloyd F. Pierce
/s/ Richard E. Taber Trustee March 18, 1999
- ------------------------------
Richard E. Taber
/s/ Raymond Van Houtte Trustee March 18, 1999
- ------------------------------
Raymond Van Houtte
