As filed with the Securities and Exchange Commission
on December 21, 1999.
Securities Act File No. 333-________
Investment Company Act File No. 811-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __
Post-Effective Amendment No. __
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. __
___________________________
LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
(Exact Name of Registrant as Specified in Its Charter)
c/o ASB Capital Management, Inc.
1101 Pennsylvania Avenue, N.W.
Suite 300
Washington, D.C. 20004
(Address of Registrant's Principal Executive Offices)
(800) 544-8850
(Registrant's Telephone Number, including Area Code)
Walter R. Fatzinger, Jr.
Leland Real Estate Collective Investment Trust
c/o ASB Capital Management, Inc.
1101 Pennsylvania Avenue, N.W.
Suite 300
Washington, D.C. 20004
(Name and Address of Agent for Service)
Copies to:
Thomas H. McCormick, Esq.
Cecelia A. Calaby, Esq.
Shaw Pittman
2300 N Street, N.W.
Washington, D.C. 20037
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as possible
after the effective date of this registration statement.
If any of the securities being registered on this form will be offered
on a delayed or continuous basis in reliance on Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), other than
securities offered only in connection with a dividend reinvestment
plan, check the following box.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. _______________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective
registration statement for the same offering. _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
Title of Amount Proposed Proposed Amount of
Securities Being Maximum Maximum Registrati
Being Registered Aggregate Price Aggregate on Fee
Registered Per Unit (1) Offering Price
(1)
Units 1,000,000 $10.00 $10,000,000 $2,640
Units
(1) Estimated solely for the purpose of calculating the
registration fee.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
CROSS REFERENCE SHEET
PARTS A AND B OF PROSPECTUS*
ITEM CAPTION PROSPECTUS CAPTION
NUMBER
1. Outside Front Cover Front Cover Page
2. Cover Pages; Other Offering Front Cover Page
Information
3. Fee Table and Synopsis Prospectus
Summary; Trust
Expenses
4. Financial Highlights Not Applicable
5. Plan of Distribution Prospectus
Summary;
Investment in the
Trust; Valuation
of the Units
6. Selling Shareholders Not Applicable
7. Use of Proceeds Investment
Objectives,
Policies and
Restrictions
8. General Description of the Registrant Front Cover Page;
Prospectus
Summary; The
Trust; Investment
Objectives,
Policies and
Restrictions; Risk
Factors
9. Management Front Cover Page;
Prospectus
Summary;
Management and
Administration of
the Trust; Other
Information
10. Capital Stock, Long-Term Debt, and Front Cover Page;
Other Securities Prospectus
Summary;
Withdrawal from
the Trust;
Dividends and
Distributions;
Other Information
- Description of
the Units
11. Defaults and Arrears on Senior Not Applicable
Securities
12. Legal Proceedings Not Applicable
13. Table of Contents of the Statement of
Additional Not Applicable
Information
14. Cover Page Not Applicable
15. Table of Contents Not Applicable
16. General Information and History Not Applicable
17. Investment Objective and Policies Front Cover Page;
Prospectus
Summary;
Investment
Objectives,
Policies and
Restrictions
18. Management Management and
Administration of
the Trust
19. Control Persons and Principal Holders Not Applicable
of Securities
20. Investment Advisory and Other Management and
Services Administration of
the Trust; Other
Information
21. Brokerage Allocation and Other Investment
Practices Objectives,
Polices and
Restrictions;
Management and
Administration of
the Trust
22. Tax Status Income Tax
Information
23. Financial Statements Not Applicable
* Pursuant to the General Instructions to Form N-2, all information
required to be set forth in Part B: Statement of Additional
Information has been included in Part A: The Prospectus. Information
required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this registration statement.
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES,
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 21, 1999
PROSPECTUS
LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
1,000,000 Units
The Leland Real Estate Collective Investment Trust (the "Trust")
is registered with the Securities and Exchange Commission as a non-
diversified collective investment trust. ASB Capital Management, Inc.
("ASBCM") is the Trustee and acts as the Trust's Investment Adviser
and administrator. The Trust was established to provide certain tax-
qualified employee benefit plans, for which ASBCM serves in a
fiduciary capacity, with a vehicle for the collective investment of
their assets.
The primary investment objective of the Trust is to enable
participating employee benefit plans to enhance their long-term
performance and stability through investments in high-quality, income-
producing real estate projects constructed with union labor. The
Trust seeks to achieve this objective by investing in a diverse
portfolio of union-built properties which the Investment Adviser
believes will provide income and appreciation to participating plans.
The Trust intends to invest in equity or debt interests in real
property. The Trust may also make investments which are related to
real property, including investments in mortgages, installment sales
contracts, sales and leasebacks, leases, rental agreements and
interests in limited partnerships or in collective investment trusts
which invest in real property. There can be no assurance that the
investment objective of the Trust will be realized.
The Trust is offering ownership interests in the form of units of
participation (the "Units") of the Trust. Units, which are sold
without a sales load, are available only to retirement, pension,
profit sharing or other employee benefit plans for which ASBCM serves
as either the trustee, co-trustee or agent for investment management
to the plan's fiduciary. To purchase Units, such a plan must meet the
Trust's eligibility requirements, and the Trustee must consent to the
plan's participation in the Trust. The Trustee may consent to the
participation of a plan at any time, but plans are admitted to the
Trust only on monthly valuation dates (the date as of which the
Trustee determines the Trust's value). Any participating plan which
seeks to withdraw from the Trust must provide the Trustee with twelve
(12) months' notice unless the Trustee waives this requirement.
A plan will be credited at the time of its admission to the Trust
the number of Units that it can purchase with the cash or other
property it has deposited in the Trust. The purchase price for a Unit
is the net asset value of the Trust per Unit at the time of a plan's
admission to the Trust. The Trustee determines the net asset value of
the Trust and the Units on a monthly basis.
This prospectus sets forth concisely the information about the
Trust that a prospective investor should know before investing.
Please read this prospectus and retain it for future reference.
____________________
INVESTING IN THE UNITS INVOLVES CERTAIN RISKS AND SPECIAL
CONSIDERATIONS. UNITS ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") OR
ANY OTHER GOVERNMENT AGENCY. NO MARKET PRESENTLY EXISTS FOR THE
UNITS, AND THE UNITS WILL NOT BE LISTED FOR TRADING ON ANY NATIONAL
SECURITIES EXCHANGE. THE UNITS MAY NOT BE CONSIDERED READILY
MARKETABLE. SEE "RISK FACTORS AND SPECIAL CONSIDERATIONS" BEGINNING
ON PAGE 7 OF THIS PROSPECTUS.
____________________
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is ___________ __, 1999
TABLE OF CONTENTS
PROSPECTUS SUMMARY 1
The Trust 1
Management and Administration of the Trust 1
Eligible Participants in the Trust 1
Investment Objectives and Policies 1
Investment in the Trust 2
Withdrawal from the Trust 2
Valuation of the Units 2
Dividends and Distributions 2
Risk Factors and Special Considerations 3
TRUST EXPENSES 4
Participant Transaction Expenses 4
Annual Expenses 4
Example of Expenses 4
THE TRUST 5
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS 5
Investment Objectives 5
Investment Policies 5
Types of Investments 5
Other Investment Policies 6
Investment Restrictions 6
RISK FACTORS AND SPECIAL CONSIDERATIONS 7
Risks Specific to the Trust 7
Risks Specific to the Units 7
General Real Estate Investment Risks 7
Other Risks 8
INVESTMENT IN THE TRUST 9
Eligible Participants in the Trust 9
Procedure for Admission to the Trust 9
Admission to the Trust and Purchase of Units 9
WITHDRAWAL FROM THE TRUST 1
0
VALUATION OF THE UNITS 1
0
MANAGEMENT AND ADMINISTRATION OF THE TRUST 1
The Trustee 1
Restrictions on the Trustee 1
Fees and Expenses of the Trust 1
1
2
1
2
DIVIDENDS AND DISTRIBUTIONS 1
3
INCOME TAX INFORMATION 1
3
OTHER INFORMATION 1
Description of the Units 3
Termination of the Trust 1
Custodian 3
Transfer Agent and Dividend-Paying Agent 1
Legal Counsel 3
Independent Public Accountants 1
Additional Information about the Trust 3
1
4
1
4
1
4
1
4
PROSPECTUS SUMMARY
This summary highlights important information about the Trust.
It is not intended to be complete and should be read with the more
detailed information contained elsewhere in this prospectus.
The Trust The Leland Real Estate Collective
Investment Trust (the "Trust") is
a newly formed, non-diversified
collective investment trust that
is registered as such under the
Investment Company Act of 1940, as
amended (the "1940 Act"). See
"THE TRUST."
Management and Administration of ASB Capital Management, Inc.
the Trust ("ASBCM") is the Trustee and acts
as the Trust's Investment Adviser
and administrator. ASBCM also
provides account services to
holders of Units. The Trust does
not pay ASBCM any fees for its
investment advisory,
administrative and account
servicing functions. See
"MANAGEMENT AND ADMINISTRATION OF
THE TRUST."
Eligible Participants in the Trust Investment in the Trust is
available only to retirement,
pension, profit sharing or other
employee benefit plans for which
ASBCM serves as either the
trustee, co-trustee or agent for
investment management to the
plan's fiduciary. To participate
in the Trust, such a plan must
meet the all of the Trust's
eligibility requirements and
obtain the consent of the Trustee
to participate in the Trust (an
"Eligible Plan"). An Eligible
Plan may purchase units
representing ownership interests
in the Trust (the "Units"). An
Eligible Plan which purchases
Units will become a "Participant"
in the Trust and is sometimes
referred to in this prospectus as
a "Participating Plan." See
"INVESTMENT IN THE TRUST."
Investment Objectives and Policies The primary investment objective
of the Trust is to enable
Participating Plans to enhance
their long-term performance and
stability through investments in
high-quality, income-producing
real estate projects constructed
with union labor. The Trust's
investment objectives also include
creating new jobs for union
members in the building and
construction industries and
achieving returns that compete
with or outperform the National
Council of Real Estate Investment
Fiduciaries Property Index (the
"NCREIF Property Index"). Current
income is not a Trust investment
objective.
The Trust seeks to achieve its
objectives by investing in a
diverse portfolio of union-built
properties across the United
States which the Investment
Adviser believes will provide
income and appreciation to
Participants.
The Trust intends to invest in
equity or debt interests in real
property. The Trust may also make
investments which are related to
real property, including
investments in mortgages,
installment sales contracts, sales
and leasebacks, leases, rental
agreements and interests in
limited partnerships or in
collective investment trusts which
invest in real property. Cash
awaiting investment may be
invested in money market or
similar funds.
There can be no assurance that the
Trust will achieve its investment
objectives. See "INVESTMENT
OBJECTIVES, POLICIES AND
RESTRICTIONS."
Investment in the Trust An Eligible Plan seeking to
purchase Units must file with the
Trustee a notice of its intention
to invest in the Trust (an
"Investment Notice"). The Trustee
must approve the Investment Notice
for an Eligible Plan to purchase
Units and become a Participant in
the Trust. The Trustee may
approve Investment Notices at any
time, but Eligible Plans receiving
such approval will be admitted to
the Trust only on monthly
valuation dates designated by the
Trustee.
On the valuation date that a
Participating Plan is admitted to
the Trust, Units are credited to
the plan based on the amount it
wishes to invest in the Trust.
The purchase price for the Units
is the per Unit net asset value of
the Trust as of that valuation
date. No sales load is charged
for the Units. See "INVESTMENT IN
THE TRUST."
Withdrawal from the Trust A Participating Plan may
completely or partially withdraw
from the Trust. A Participating
Plan seeking to withdraw from the
Trust must file with the Trustee a
notice of its intention to
withdraw from the Trust (a
"Withdrawal Notice"). The Trustee
must receive the Withdrawal Notice
at least one year prior to the
valuation date when the withdrawal
is to be made. The Trustee must
approve the Withdrawal Notice on
or before that valuation date.
The Trustee, however, in its
discretion, may permit withdrawal
from the Trust at an earlier date.
Withdrawal is made without a
charge at the per Unit net asset
value of the Trust on the
valuation date that Units are
withdrawn. The Trustee, in its
discretion, may pay cash or other
consideration for withdrawn Units.
See "WITHDRAWAL FROM THE TRUST."
Valuation of the Units The Trustee revalues the Units
monthly on a designated valuation
date. Within ten (10) days of a
valuation date, the Trustee
computes the new Unit value by
determining the net asset value of
the Trust at the close of business
on the valuation date and then
dividing that value by the total
number of Units outstanding on
that date. The Trustee
calculates the net asset value of
the Trust based on the guidelines
set forth in the Declaration of
Trust. See "VALUATION OF THE
UNITS."
Dividends and Distributions The Trust's policy is to reinvest
all of its income for further
accumulation of assets.
Accordingly, the Trust does not
intend to declare or pay dividends
from its net investment income or
to make distributions of any gains
realized from sales of portfolio
securities. If the Trust were to
generate any such income or gains,
Participating Plans would receive
a benefit in the form of an
increase in the net asset value
per Unit rather in the form of
cash or reinvestment through the
purchase of additional Units. See
"DIVIDENDS AND DISTRIBUTIONS."
Risk Factors and Special An investment in the Units
Considerations involves substantial risks. These
risks include the following:
* The Trust is subject to real
estate investment risks.
* The liquidity of the Units is
limited by the requirement that
the Trustee receive a Withdrawal
Notice at least one year in
advance.
* The Units will not be
publicly traded and will be
subject to restrictions on
transfer.
* The Trustee will have broad
and exclusive powers in making
investment decisions on behalf of
the Trust and in changing the
Trust's investment objectives,
policies and restrictions.
* An investment in the Units is
not a bank deposit and is not
insured or guaranteed by the FDIC
or any other government agency.
An Eligible Plan should carefully
consider its ability to assume the
foregoing risks before
participating in the Trust. See
"RISK FACTORS AND SPECIAL
CONSIDERATIONS."
TRUST EXPENSES
The following table illustrates all expenses that a Participant
in the Trust will incur. The purpose of this table is to assist
Participants in the Trust in understanding the various costs and
expenses that a Participant will bear directly or indirectly. See
"MANAGEMENT AND ADMINISTRATION OF THE TRUST."
Participant Transaction Expenses:
Maximum Sales Load (as a percentage of offering price) None
Dividend Reinvestment and Cash Purchase Plan Fees None
Annual Expenses (as a percentage of net assets):
Management Fees 0%
Other Expenses /1/ [ ]%
Total Annual Expenses [ ]%
/1/ "Other Expenses" are based on estimated amounts for the
current fiscal year.
Example of Expenses:
You would pay the following 1 Year 3 Years 5 Years 10 Years
expenses on a $1,000 $[ ] $[ ] $[ ] $[ ]
investment, assuming a
5% annual return:
The Example set forth above assumes that all dividends and other
distributions are reinvested at net asset value and that the
percentage amounts listed under "Annual Expenses" remain the same in
the years shown. The Example uses a 5% annual rate of return as
mandated by the regulations of the Securities and Exchange Commission
("SEC").
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR ANNUAL RATES OF RETURN, AND ACTUAL EXPENSES OR
ANNUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE ASSUMED FOR
PURPOSES OF THE EXAMPLE.
THE TRUST
The Trust is a newly organized collective investment trust that
was formed under the laws of the District of Columbia on [ ],
pursuant to a Declaration of Trust, dated as of [ ]. The Trust has
registered as a non-diversified collective investment trust under the
1940 Act. The Trust's address is c/o ASB Capital Management, Inc.,
1101 Pennsylvania Avenue, N.W., Suite 300, Washington, D.C. 20004, and
its telephone number is (800) 544-8850.
As discussed above, investments in the Trust are restricted to
Eligible Plans. See "INVESTMENT IN THE TRUST - Eligible Participants
in the Trust."
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Investment Objectives
The primary investment objective of the Trust is to enable
Participating Plans to enhance their long-term performance and
stability through investments in high-quality, income-producing real
estate projects constructed with union labor. Through its real estate
investment program, the Trust seeks to provide each Participant with a
competitive market rate of return, stable and reasonably predictable
income, increasing cash flows, the potential for appreciation in
value, a hedge against inflation and favorable portfolio
diversification.
The Trust's investment objectives also include creating new jobs
for union members in the building and construction industries,
producing long-term returns which are competitive with the National
Council of Real Estate Investment Fiduciaries Property Index (the
"NCREIF Property Index") and producing short-term returns during real
estate down cycles which outperform the NCREIF Property Index.
Current income is not an investment objective of the Trust.
There can be no assurance that the Trust will achieve its investment
objectives.
Investment Policies
The Trust seeks to achieve its objectives by investing in an
actively managed, broadly diversified portfolio of union-built
properties which the Investment Adviser believes will provide income
and appreciation to Participants. The Trust's investment activity is
limited to general purpose, union-constructed properties located in
the United States, primarily office buildings, shopping centers, multi-
family housing and industrial facilities. The Trust selects for
investment real estate that the Investment Adviser determines is
properly designed, well-located and built by skilled union workers.
The Trust also invests in partnership with and lends to real estate
developers that the Investment Adviser believes have demonstrated
success and expertise in a particular geographic region.
The Trust expects to maintain a diversified portfolio by
investing in different areas across the United States and in different
property types, ranging from office, research and development,
residential, industrial, warehouse/distribution and retail properties.
The Trust attempts to structure each investment to produce yields that
are appropriate for the level of risk anticipated with a given
investment. The Trust will usually invest a portion of its portfolio
in loans in order to limit its downside risk. During periods of
growth in the real estate market, the Trust looks to sell a portion of
its portfolio for a profit and to invest the cash proceeds in new
construction, which creates more union jobs.
Types of Investments
Because of the types of investments that the Trust intends to
make, the Trust will be considered to be concentrated in real estate
and real estate-related investments. The Trust intends to invest in
the following:
(1) Equity interests or equity participation in improved or
unimproved real property, either in the form of direct
ownership, with or without leaseback provisions of such real
property, or in the form of stock, closely held or publicly
traded, stock purchase warrants, or other forms of interest in
the entity owning or developing such real property;
(2) Loans or debt obligations secured by mortgages on, or other
interests in real property, whether for the purpose of
acquiring, improving or otherwise developing such real
property;
(3) Mortgages on the fee, leasehold or other interest in real
property, installment sales contracts, sale and leasebacks or
any combinations of the foregoing, for the purpose of
providing long-term or intermediate-term financing of improved
or unimproved real property;
(4) Leases or rental agreements providing income or profits from
real property; and
(5) Interests in limited partnerships or in collective investment
funds which invest in real property.
In making the investments above, the Trustee will not be limited
by any statute or rule of law defining authorized investments by
trustees and will be under no duty to diversify investments and may
make such investments, irrespective of whether they would be normally
considered appropriate investments for a trustee or are productive of
income. Any of the investments above may be made by the Trustee
without being limited by (i) the size or nature of any investment;
(ii) the size or nature of the enterprise in which any investment is
made; (iii) the lack of ready marketability; (iv) the presence or
absence of certainty or regularity of return; or (v) the volatile
nature of the market value of any investment. The investments above
may be made by the Trustee in private placements.
Other Investment Policies
The Trust has adopted certain other investment policies as set
forth below:
Money Market Instruments and Temporary Instruments
Any cash awaiting investment may be invested by the Trustee in
money market or similar funds. In addition, the Trustee may, in its
discretion, invest such cash in any instruments or securities with
maturities that still allow the Trust to meet any commitments it has
made involving the investments described above.
Borrowings
The Trustee is authorized under the Declaration of Trust to
borrow money, with or without giving security, on behalf of the Trust
and to issue its promissory notes as trustee. Any such borrowings
will be made by the Trustee in accordance with the restrictions
imposed by the 1940 Act and the rules and regulations thereunder.
Investment Restrictions
The Trust has no fundamental policies as defined under the 1940
Act. In addition, the Declaration of Trust does not provide for any
voting rights for Participants. Consequently, all investment
objectives, policies and restrictions referred to in this prospectus
are not fundamental policies of the Trust, and they may be changed by
the Trustee in its sole discretion.
Notwithstanding the Trust's lack of fundamental policies, the
Trust will still observe the following investment restrictions:
(1) The Trust may not issue senior securities, except as permitted
by the 1940 Act;
(2) The Trust may not make short sales or purchase securities on
margin;
(3) The Trust may not write put or call options;
(4) The Trust may not borrow money, except as permitted by the
1940 Act;
(5) The Trust may not act as an underwriter of another issuer's
securities, except to the extent that, in connection with the
purchase and sale of portfolio securities, it may be deemed to
be an underwriter within the meaning of the Securities Act of
1933, as amended;
(6) The Trust may not purchase or sell physical commodities or
contracts for the purchase or sale of physical commodities.
Physical commodities do not include futures contracts with
respect to securities, securities indices or other financial
instruments.
RISK FACTORS AND SPECIAL CONSIDERATIONS
The purchase of Units involves a number of significant risks. As
a result, there can be no assurance that the Trust will achieve its
investment objectives. In addition to the other information in this
prospectus, a prospective Participant should consider the following
risk factors in evaluating an investment in the Units.
Risks Specific to the Trust
No Control Over Investment Decisions or Policies by Participants
Because Participants have no voting rights and the Trust has no
fundamental investment policies, the Trustee's power to make
investment decisions on behalf of the Trust is both exclusive and
broad. In addition, the Trustee, in its sole discretion, can change
the investment objectives, policies and restrictions of the Trust.
The Trustee may take actions with which a Participant or Participants
disagree. See "INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS;
DESCRIPTION OF THE UNITS."
Non-Diversified Status of Trust
The Trust is classified as "non-diversified" under the 1940 Act,
which means that the Trust may invest a greater portion of its assets
in a limited number of issuers than would be the case were the Trust
classified as "diversified." Relative to a "diversified" management
company, changes in the financial results and/or condition or market
valuation of a single issuer may cause greater fluctuations in the net
asset value per Unit. See "INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS."
Risks Specific to the Units
Not Insured Bank Deposits
An investment in the Units is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.
Limited Liquidity of Units
The Trust is designed primarily for long-term investors and
should not be considered a vehicle for trading purposes. The Trust
does not intend to list the Units for trading on any national
securities exchange. As a result, there is no secondary trading
market for the Units, and no secondary market will develop. The
Declaration of Trust prohibits the assignment and/or transfer of the
Units. To provide liquidity, the Declaration of Trust authorizes the
Trust to permit withdrawal from the Trust by Participating Plans, but
only if a Participant provides the Trustee with a Withdrawal Notice at
least one year in advance (unless the Trustee waives this
requirement). The Units are therefore not readily marketable, and a
prospective Participant must be prepared to bear the economic risks of
investing in the Units for a longer term. See "WITHDRAWAL FROM THE
TRUST; DESCRIPTION OF THE UNITS."
General Real Estate Investment Risks
General Risks
An investment in the Units will be subject to the risks incident
to the ownership and operation of commercial real estate. These
include the risks normally associated with changes in general or local
market conditions, competition for tenants, changes in market rental
rates, inability to collect rent due to bankruptcy or insolvency of
tenants or otherwise, and the need to periodically renovate, repair
and release space and to pay the related costs.
Limited Liquidity of Real Estate Investments
Because real estate investments are relatively illiquid, the
Trust may not be able to vary its portfolio promptly in response to
changes in economic or other conditions. In addition, economic
factors that might cause the income from the Trust's real estate
portfolio to decrease generally will not reduce significant
expenditures, such as debt service, if any, real estate taxes and
operating and maintenance costs. The Trust's inability, for these or
other reasons, to respond quickly to adverse changes in the
performance of its investments could have an adverse effect on the
value of a Participant's investment in the Trust.
Risks of Real Estate Development
The Trust intends to engage in property development. Real estate
development generally involves significant risks in addition to those
involved in the ownership and operation of established properties,
including the risks that financing may not be available on favorable
terms, that construction may not be completed on schedule, resulting
in increased debt service expense and construction costs, that long-
term financing may not be available on completion of construction and
that properties may not be leased on profitable terms. The Trust's
returns could be adversely affected if it engages in real estate
development and if any of the above occurs.
Investments in Mortgages
The Trust may invest in mortgages. If the Trust were to invest
in mortgages, it would be subject to the risks of such investment,
which include the risk that borrowers may not be able to make debt
service or principal payments when due, that the value of mortgaged
property may be less than the amount owed, and that interest rates
payable on the mortgages may be lower than the Trust's cost of funds.
The Trust's returns could be adversely affected if it invests in
mortgages and if any of the above occurs.
Changes in Laws
Costs resulting from changes in real estate taxes generally may
be passed through to tenants and, to such extent, will not affect the
Trust. Increases in income, service or transfer taxes, however,
generally are not passed through to tenants under the leases of the
Trust's portfolio and may adversely affect its operating cash flow.
Similarly, changes in laws increasing the potential liability for
environmental conditions existing on properties or increasing the
restrictions on discharges or other conditions may result in
significant unanticipated expenditures, which would adversely affect
the Trust's returns.
Environmental Problems
Under various federal, state and local laws, ordinances and
regulations, the Trust may be required to investigate and clean up
certain hazardous or toxic substances released on or in properties it
owns or operates, and it also may be required to pay other costs
relating to hazardous or toxic substances. This liability may be
imposed without regard to whether the Trust knew about the release of
these types of substances or was responsible for their release. The
presence of contamination or the failure to remediate properly
contaminations at any of the Trust's properties may adversely affect
its ability to sell or lease the properties or to borrow using the
properties as collateral. The costs or liabilities could exceed the
value of the affected real estate. If the Trust were subject to
environmental liability, the liability could adversely affect the
value of a Participant's investment in the Trust.
Uninsured Losses
The Trust may carry comprehensive liability, fire, flood,
extended coverage and rental loss insurance with respect to its
portfolio properties, with policy specification and insured limits
customarily carried for similar properties. There are, however,
certain types of losses, such as from wars or earthquakes, that may be
either uninsurable or not economically insurable. Should an uninsured
loss occur, the Trust could lose both its capital invested in, and
anticipated profits from, any affected portfolio property.
Other Risks
Year 2000 Issues
Many computer systems were designed using only two digits to
designate years. These systems may not be able to distinguish the Year
2000 from the Year 1900 (commonly known as the "Year 2000 Problem").
The Trust could be adversely affected if the computer systems used by
the Trustee or other Trust service providers do not properly address
this problem prior to January 1, 2000. The Trustee expects to have
addressed this problem before then, and does not anticipate that the
service it provides will be adversely affected. The Trust's other
service providers have told the Trustee that they also expect to
resolve the Year 2000 Problem, and the Trustee will continue to
monitor the situation as Year 2000 approaches. However, if the problem
has not been fully addressed, the Trust could be negatively affected.
The Year 2000 Problem could also have a negative impact on the issuers
of securities in which the Trust invests, and this could hurt the
Trust's investment returns.
INVESTMENT IN THE TRUST
Eligible Participants in the Trust
Investments in the Trust are available only to retirement,
pension, profit sharing or other employee benefit plans for which
ASBCM serves as either the trustee, co-trustee or agent for investment
management to the plan's fiduciary. Only those plans which meet all
of the following requirements will be eligible to participate in the
Trust:
(1) The plan, with its related trust, is a tax-exempt pension
trust or profit sharing trust or other type of employee
benefit trust part of a plan qualified under the provisions of
Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and exempt from taxation under Section
501(a) of the Code; OR
The plan, with its related trust (if applicable), is a plan
established and maintained for its employees by the government
of the United States, by the government of any state or
political subdivision thereof, or by any agency or
instrumentality of any of the foregoing (a "governmental
plan"). If the assets of a governmental plan are not held in
a formal trust arrangement, the nonexistence of such a trust
must result from local law restraints. Such governmental plan
must have obtained tax-exempt status by meeting the
requirements of the Code regarding qualified, governmental
employee benefit plans or must be appropriately relying on the
exclusion from taxes allowed through intergovernmental
constitutional immunity.
(2) The document governing the related trust of a plan (or
governing the plan itself in the case of a non-trusteed
governmental plan) specifically authorizes the investment of
assets thereof and the commingling of its assets with assets
of other plans through the medium of this Trust.
(3) The document governing the related trust of a plan (or
governing the plan itself in the case of a non-trusteed
governmental plan) expressly provides that, to the extent of
the participation of such plan in this Trust, the Declaration
of Trust will constitute a part of the plan (and its related
trust, if applicable) pursuant to which such plan is
administered.
(4) The provisions of the plan designate the Trustee, or any
affiliate of the Trustee, as either the trustee, co-trustee,
or agent for investment management of the plan's fiduciary.
Any plan meeting all of the eligibility requirements above (an
"Eligible Plan") must also follow the procedure for admission as
described below and obtain the Trustee's consent before participating
in the Trust.
Procedure for Admission to the Trust
At the request of any Eligible Plan interested in investing in
the Trust, the Trustee will furnish a copy of the Declaration of
Trust, without charge. If an Eligible Plan wishes to participate in
the Trust, the plan must file with the Trustee a notice of its
intention to invest in the Trust (an "Investment Notice"). For an
Eligible Plan to be permitted to invest in the Trust, the Trustee must
approve the Investment Notice and make a record of the notice in its
books.
Admission to the Trust and Purchase of Units
The Trustee may approve Investment Notices at any time, but
Eligible Plans receiving such approval will be admitted to the Trust
only on monthly "Valuation Dates" designated by the Trustee. A
"Valuation Date" is that date each month as of which the Trustee
determines the value of the Trust's assets and the Units. On a
Valuation Date, an Eligible Plan, which has received the Trustee's
consent to participate, may deposit in the Trust the amount it wishes
to invest, either in the form of cash or other property acceptable to
the Trustee. The plan will be credited the number of Units that can
be purchased on that Valuation Date with the cash or other property it
has deposited in the Trust. For non-cash property deposited in the
Trust, the property's fair market value as of the relevant Valuation
Date will be used to determine the number of Units the plan should be
credited. Once an Eligible Plan has been admitted to the Trust and
has purchased Units, it becomes a "Participating Plan."
The purchase price for Units is the per Unit net asset value of
the Trust as of the Valuation Date that a plan is admitted to the
Trust. The Trustee determines the net asset value of the Trust as of
a particular Valuation Date based on the guidelines set forth in the
Declaration of Trust. No sales load is charged on the Units. See
"VALUATION OF THE UNITS."
Because the Units are neither assignable nor transferable,
certificates representing Units will not be issued. The records of
each Participating Plan and the records of the Trustee will at all
times reflect the number of Units outstanding to the credit of each
Participating Plan.
WITHDRAWAL FROM THE TRUST
A Participating Plan may completely or partially withdraw from
the Trust. A Participating Plan seeking to withdraw from the Trust
must file with the Trustee a notice of its intention to withdraw from
the Trust (a "Withdrawal Notice"). The Trustee must receive the
Withdrawal Notice at least one year prior to the Valuation Date when
the withdrawal is to be made. The purpose of this one-year, advance
notice requirement for withdrawal is to recognize the long-term,
illiquid nature of the investments made by the Trust and to permit the
Trust to remain fully invested in accordance with its investment
objectives without having to maintain a substantial liquidity reserve
to meet withdrawal requests.
The Trustee must approve the Withdrawal Notice on or before that
Valuation Date and make a record of the notice in its books. The
Trustee, however, in its discretion, may make payment for the
withdrawn Units at an earlier Valuation Date. Withdrawal is made
without a charge at the per Unit net asset value of the Trust on the
Valuation Date that Units are withdrawn. The Trustee, in its
discretion, may pay cash or other consideration for withdrawn Units so
long as the manner of payment is consistent with the laws governing
the Trust.
VALUATION OF THE UNITS
The Trustee revalues the Units as of each monthly Valuation Date.
Within ten (10) days of a Valuation Date, the Trustee computes the new
Unit value by determining the net asset value of the Trust at the
close of business on the Valuation Date and then dividing that value
by the total number of Units outstanding on that date. An Eligible
Plan admitted to the Trust may acquire Units on a Valuation Date at
the new Unit value.
The Trustee calculates the net asset value of the Trust based on
the guidelines set forth in the Declaration of Trust. The net asset
value of the Trust, as of any Valuation Date, is the market value of
the assets of the Trust, less all expenses, liabilities, taxes,
reserves, and other amounts, due, accrued, or anticipated, which the
Trustee determines are properly and equitably chargeable against the
Trust.
In determining the valuation of any asset of the Trust (other
than cash temporarily invested in a cash management vehicle, which is
stated at cost, and securities held by the Trust, which are described
further below), the Declaration of Trust provides that the following
shall apply:
(1) With respect to mortgages, deeds of trust and notes secured by
real property, such assets shall be valued at the market value
thereof. The market value shall be determined by the Trustee
using such factors as maturity dates, interest rates,
creditworthiness and such other factors as it determines, in
good faith, to be appropriate.
(2) With respect to investments in real estate and real estate-
related investments, including limited partnership interests,
which investments shall be valued at market, the Trustee may,
in its discretion, base such method of valuation on current
appraisals of such properties, recent transactions involving
similarly located properties or such other method as it shall
determine, provided, however, that said valuation must be
based on an appraisal not older than one year. Any real
estate or real estate-related investment which is in the
process of being constructed, and not fully paid for, shall be
valued at cost. Since properties are stated at current market
value, the Trust does not record depreciation on its real
estate investments.
(3) Notwithstanding anything herein to the contrary, if no
reliable data are available, or if the available data, in the
Trustee's judgment, are not sufficiently complete to warrant
unqualified reliance thereon, or would tend, in the Trustee's
opinion, to distort the value of any assets, then the Trustee
may use, as a basis of valuation, such other sources of
information as it deems reliable, or such other method of
valuation as it deems fair and equitable.
In determining the valuation of securities held by the Trust, the
following shall apply:
(1) Securities listed or traded on any securities exchange shall
be valued at their last reported sales prices on said
exchanges on the Valuation Date. If no sale has been reported
for that day, the last reported sale price or the most recent
closing bid price, whichever is later, shall be used.
(2) Where a security is listed or traded on more than one
securities exchange, the Trustee may select the exchange to be
used for the basis of valuation.
(3) Securities not listed or traded on any securities exchange
shall be valued by taking the bid price obtained from a
recognized published source, from up to three reputable
brokers or investment bankers as of the close of business on
the Valuation Date, or through such other information as it
may find useful or necessary in determining value.
For the purpose of determining the valuation of securities held
by the Trust, sales and bid prices reported in newspapers of general
circulation published in New York, New York, Washington, D.C. or
Baltimore, Maryland, or in any standard financial periodical or in the
records of any exchange, any one or more of which may be selected by
the Trustee and noted in its records, shall be accepted as evidence
thereof.
MANAGEMENT AND ADMINISTRATION OF THE TRUST
The Trustee
ASB Capital Management, Inc. ("ASBCM") is the Trustee of the
Trust. ASBCM is a wholly owned subsidiary of Chevy Chase Bank,
F.S.B., a federal savings bank with branches in Maryland, Virginia,
Delaware and the District of Columbia. ASBCM is a Maryland
corporation, an investment adviser registered under the Investment
Advisers Act of 1940, as amended, and is authorized to act as a
fiduciary by the Office of Thrift Supervision. ASBCM's principal
offices are located at 1101 Pennsylvania Avenue, N.W., Suite 300,
Washington, D.C. 20004.
The business and affairs of the Trust are managed under the
direction of the Trustee. As the Trustee, ASBCM performs the duties
and undertakes the responsibilities of a board of directors of an
investment company. Under the Declaration of Trust, the Trustee
provides investment advisory and administrative services to the Trust
as well as account services to holders of Units.
The following table sets forth the principal occupation or
employment of the members of the Board of Directors and principal
officers of the Trustee.
Name (Age) and Position(s) Held Principal Occupation(s)
Address with the Trust During Past 5 Years
Walter R. Fatzinger, Director of the 1999 - Present:
Jr., (57)* Trustee President, ASB Capital
Leland Real Estate Management, Inc.
Collective
Investment Trust 1994 - 1999:
c/o ASB Capital President - Greater
Management, Inc. Washington Region, First
1101 Pennsylvania National Bank of
Avenue, N.W. Maryland; Executive Vice
Suite 300 President - Institutional
Washington, D.C. Bank, First National Bank
20004 of Maryland
Leslie A. Nicholson, Director of the 1996 - Present:
(59)* Trustee Executive Vice President
Leland Real Estate and General Counsel,
Collective Chevy Chase Bank
Investment Trust
c/o ASB Capital 1994 - 1996:
Management, Inc. Partner, Shaw Pittman law
1101 Pennsylvania firm
Avenue, N.W.
Suite 300
Washington, D.C.
20004
* An "interested person" of the Trust as defined in the 1940 Act.
The Trust makes no payments to any of its officers for services.
However, each of the Trustee's Directors who are not "interested
persons" (the "Disinterested Directors") are paid by the Trust an
annual fee of $[ ] and fees of $[ ] for each meeting they attend
(other than those held by telephone conference call). Each Director
is reimbursed by the Trust for any expenses incurred by reason of
attending such meetings or in connection with services performed for
the Trust.
The following table sets forth information regarding compensation
of Directors by the Trust and by all registered investment companies
advised by ASBCM ("ASBCM Advised Funds"). In the column headed "Total
Compensation from Trust and ABSCM Advised Funds Paid to Directors,"
the number in parentheses indicates the total number of boards in the
fund complex on which the Director served as of [ ].
Compensation Table
Total
Aggregate Pension or Estimated Compensation
Name of Compensatio Retirement Annual from Trust and
Person n Benefits Benefits ASBCM Advised
(Position) from Trust* Accrued as Upon Funds Paid to
Part of Trust Retirement* Directors of
Expenses* Trustee*
Walter R. $0 $0 $0 $0 (0)
Fatzinger,
Jr.
(Director of
the Trustee)
Leslie A. $0 $0 $0 $0 (0)
Nicholson
(Director of
the Trustee)
* Based on estimated amounts for the current fiscal year.
Restrictions on the Trustee
Under the terms of the Declaration of Trust, the Trustee may not
purchase for the Trust any property owned by any Participating Plan,
unless it first secures a ruling from the Internal Revenue Service
and/or the Department of Labor that such investment will not adversely
affect the status of the Trust.
The Declaration of Trust also prohibits the Trustee from
investing any of its own funds through the medium of the Trust and
from having any beneficial interest in the assets of the Trust. The
Trustee, however, may make such an investment on behalf of a plan
created by the Trustee for the benefit of the employees of the Trustee
or any of its affiliates.
The Declaration of Trust provides that no assets of the Trust may
be invested in stock or obligations, including time or savings
deposits, of the Trustee or any of its affiliates, provided, however,
that investments may be made in such time and savings deposits for
funds awaiting investment or distribution. The Trustee will not be
deemed to have an interest in the assets held in the Trust merely
because of the fact that it owns in its own right other stocks and
bonds or other obligations of a person or entity the stocks or bonds
or other obligations of which are among the assets of the Trust or
that it is designated or acting as trustee, depository, or in any
other capacity under any deed of trust, mortgage indenture, deposit
agreement or other instrument under which any of the assets of the
Trust have been issued or are being held.
Under the Declaration of Trust, if the Trustee or any of its
affiliates, because of a creditor relationship or for any other
reason, should acquire any interest in a participation in the Trust,
it must liquidate such interest on the first Valuation Date coincident
with or immediately following such acquisition.
Fees and Expenses of the Trust
The Trustee charges the account of each Participating Plan an
annual trustee's fee, which is deducted quarterly. This fee is
charged to the account of each Participating Plan. The Trustee does
not charge a separate fee for its management of the Trust nor does it
receive from the Trust any additional fees, commissions or
compensation.
The Trustee pays the administrative expenses of organizing and
operating the Trust, including fees and expenses for the registration
and qualification of the Trust and the Units under federal and state
law, the salaries and benefits of its employees, costs for office
space and equipment and other expenses incurred in carrying out its
duties as Trustee, legal fees, the custodian's fees, the expenses of
valuing the assets of the Trust and the cost for an annual independent
audit of the Trust.
The Trustee pays all expenses incurred by it in connection with
acting as Investment Adviser, other than costs (including taxes and
brokerage commissions, if any) of buying and selling securities for
the Trust. Expenses incurred by the Trustee in connection with acting
as Investment Adviser include the cost of computer programs, data
processing, statistical and research data, internal auditing services
and other costs associated with providing continuous management to the
Trust.
DIVIDENDS AND DISTRIBUTIONS
The Trust's policy is to reinvest all of its income for further
accumulation of assets. Accordingly, the Trust does not intend to
declare or pay dividends from its net investment income or to make
distributions of any gains realized from the sale of portfolio
securities. Any income or gains in value of portfolio securities will
be added to the total asset value of the Trust's assets. If the Trust
were to generate such income or gains, Participating Plans would
receive a benefit in the form of an increase in the net asset value
per Unit rather than in the form of cash or reinvestment though the
purchase of additional Units.
INCOME TAX INFORMATION
As a collective investment trust, the Trust intends to attain tax-
exempt status through compliance with Revenue Ruling 81-100 issued by
the Internal Revenue Service. The basis for recognizing tax-exempt
status for collective investment trusts under Revenue Ruling 81-100 is
that a collective investment trust must be limited solely to tax-
exempt plans and trusts that are themselves exempt from taxation and
satisfy the requirements of Section 401(a) or Section 408 of the Code.
Since participation in the collective investment trust is limited to
entities that are themselves tax-exempt, the collective investment
trust itself is considered to be a tax-exempt entity under Section
501(a) of the Code.
OTHER INFORMATION
Description of the Units
The Units constitute units of beneficial interest in the Trust.
Each Unit represents an equal right to share in the Trust and in its
net earnings and losses, and no Unit will have priority or preference
over any other Unit. All of the Trust's assets will be owned
exclusively by the Trustee, and no Participating Plan will have any
individual ownership of the Trust's assets.
Under the Declaration of Trust, the Units have no voting rights.
No certificate will be issued evidencing any interest in the Trust. A
Participating Plan may not sell, assign or transfer any Unit or all or
any part of its equity or interest in the Trust or use it as a
security for a loan. No dividends will be paid on the Units.
The Declaration of Trust permits the Trustee, from time to time,
to divide the Trust into a greater number of Units of lesser value or
combine them into a smaller number of Units of greater value. The
proportionate interest of each Participating Plan in the Trust will
not be changed by such division or combination of Units except that
resulting fractional Units may be redeemed by the Trust if,
afterwards, only whole Units of the Trust are to be issued or
redeemed. In the discretion of the Trustee, fractional Units may be
issued and redeemed.
Termination of the Trust
While the Trust has been established to continue for such time as
may be necessary to accomplish the purposes for which it was created,
the Trustee, by action of its Officer Trust Committee or Board of
Directors, may at any time, without advance notice to any person,
terminate the Trust and transfer all Trust assets to a liquidation
account. The Trustee may sell and convert into cash the Trust assets
in the liquidation account and distribute the proceeds remaining after
the payment of liabilities ratably among the Participating Plans.
Upon completion of the distribution of the remaining proceeds or
remaining assets of the Trust, the Trust will terminate and the
Trustee will be discharged of any and all further liabilities and
duties as trustee, and the right, title and interest of all parties
will be cancelled and discharged.
Custodian
The Trustee has employed [ ] as the custodian of the Trust
(the "Custodian"). The Custodian holds the assets of the Trust and
maintains records pertaining to the account of each Participating
Plan. The rights and responsibilities of [ ] as the Custodian
are set forth in a Custody Agreement, dated as of [ ]. Fees
charged by the Custodian are paid by the Trustee. The Trustee charges
an annual fee to the account of each Participant to cover its
expenses, including the Custodian's fee. See "MANAGEMENT AND
ADMINISTRATION OF THE TRUST - Fees and Expenses of the Trust."
Transfer Agent and Dividend-Paying Agent
The Trust has no transfer agent or dividend-paying agent. If the
Trust requires these or similar services, they will be provided by
ASBCM.
Legal Counsel
Certain legal matters in connection with the Units offered hereby
will be passed upon for the Trust by Shaw Pittman, 2300 N Street,
N.W., Washington, D.C. 20037-1128.
Independent Public Accountants
[ ], [address], have been selected as the independent public
accountants for the Trust. The independent public accountants audit
and report on the Trust's financial statements.
Additional Information about the Trust
The Trust has filed a registration statement for the Units with
the SEC. Information about the Units and the Trust may be found in
that registration statement. You may read and copy the registration
statement at the public reference facilities of the SEC in Washington,
D.C., Chicago, Illinois and New York, New York. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference
rooms. The registration statement is also available to the public
from the SEC's web site at http://www.sec.gov.
LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
_________________________
1,000,000 Units
_________________________
PROSPECTUS
_________________________
____________ __, 1999
_________________________
You should rely only on the information contained in this prospectus.
The Trust has not authorized anyone to provide you with different
information.
This prospectus should be retained for future reference.
Investing in the Units involves certain risks and special
considerations. Units are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
1. FINANCIAL STATEMENTS.
Not applicable.
2. Exhibits.
EXHIBIT
NUMBER DESCRIPTION
(a) -- Form of Declaration of Trust, dated as of
________________, ______.
(b) -- Not applicable.
(c) -- Not applicable.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
(g) -- Not applicable.
(h) -- Not applicable.
(i) -- Not applicable.
(j) -- Form of Custody Agreement between the Registrant
and [ ]*
(k) -- Not applicable.
(l) -- Opinion and Consent of Shaw Pittman, Counsel to
Registrant*
(m) -- Not applicable.
(n) -- Consent of [ ], Independent Public Accountants
for Registrant*
(o) -- Not applicable.
(p) -- Not applicable.
(q) -- Not applicable.
(r) -- Not applicable.
/*/ To be filed by amendment.
Item 25. Marketing Arrangements.
Not applicable.
Item 26. Other Expenses of Issuance and Distribution.
The following sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement.
Registration fees $_____*
Printing costs _____*
Accounting fees and expenses _____*
Legal fees and expenses _____*
Fees and expenses of qualification under state
securities laws (including fees of counsel) _____*
Miscellaneous _____*
Total $_____*
/*/ To be provided by amendment.
Item 27. Persons Controlled by or under Common Control with
Registrant.
Not applicable.
Item 28. Number of Holders of Securities.
Not applicable.
Item 29. Indemnification.
Section 17(h) of the Investment Company Act of 1940, as amended
(the "1940 Act"), prohibits the Registrant's Declaration of Trust from
containing any provision which protects or purports to protect any
director or officer of the Registrant against any liability to the
Registrant or its Unitholders 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 Registrant's Declaration of Trust will comply with such
provisions of the 1940 Act.
Item 30. Business and Other Connections of Investment Adviser.
Information required by this item relative to ASB Capital Management,
Inc., the Trustee and Investment Adviser to the Registrant, to be
added by amendment.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained
by Section 31(a) of the 1940 Act and the rules thereunder will be
maintained at the offices of the Registrant and the offices of the
Registrant's Trustee, c/o ASB Capital Management, Inc., 1101
Pennsylvania Avenue, N.W., Suite 300, Washington, D.C. 20004.
Item 32. Management Services.
Not applicable.
Item 33. Undertakings.
Not applicable.
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, duly authorized, in the City of Washington, the District
of Columbia, on the 21st day of December, 1999.
LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
(Registrant)
By: /s/ WALTER R. FATZINGER, JR.
Name: Walter R. Fatzinger, Jr.
Title: Director of the Trustee
By: /s/ LESLIE A. NICHOLSON
Name: Leslie A. Nicholson
Title: Director of the Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person
in the capacities and on the date indicated.
SIGNATURE: TITLE: DATE:
/s/ WALTER R. FATZINGER, Director of the Trustee December 21, 1999
JR.
Walter R. Fatzinger, Jr.
/s/ LESLIE A. NICHOLSON Director of the Trustee December 21, 1999
Leslie A. Nicholson
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
(a) -- Form of Declaration of Trust, dated as of
________________, ______.
EXHIBIT (a)
FORM OF DECLARATION OF TRUST
DECLARATION OF TRUST FOR
THE LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST,
DATED AS OF _____________________, ______
TABLE OF CONTENTS
Paragraph Page
1. Requirements of Eligibility 1
2. Investments 2
3. Powers of Trustee 4
4. Notices Required 6
5. Units of Participation 6
6. Valuation of the Trust 7
7. Admissions and Withdrawals 9
8. Liquidating Funds 10
9. Trustee's Records 11
10. Audits Required 11
11. Trustee's Fees 12
12. Termination of the Trust 12
13. Representation in Judicial Proceedings 12
14. Reserve Accounts 12
15. Discretion of Trustee 13
16. Advice of Counsel 13
17. Merger of Trustee 13
18. Merger of the Trust 13
19. Trust Instrument and Applicable Law to Control 13
20. Individual Trustees 14
21. Amendments 14
22. Miscellaneous 14
DECLARATION OF TRUST FOR
THE LELAND REAL ESTATE COLLECTIVE INVESTMENT TRUST
Name and Purpose
This Declaration of Trust, adopted ____________ __, 1999, governs the
Leland Real Estate Collective Investment Trust (the "Trust") for the
collective investment of assets held in a fiduciary capacity by ASB
Capital Management, Inc. (the "Trustee") or any of its affiliates that
are now, or may in the future be, authorized to carry on a trust
business. The purpose of the Trust is to provide a vehicle for the
collective investment of money held by the Trustee or any of its
affiliates that are authorized to carry on a trust business, as
Trustee, Co-Trustee, or Agent for Investment Management of
participating trusts. This Trust shall be administered in accordance
with the rules and regulations of the Comptroller of the Currency of
the United States relating to the collective investment of trust funds
by national banking associations and the applicable laws relating to
common trust funds of any state or the District of Columbia where the
Trustee is located.
Requirements of Eligibility
1. Only retirement, pension, profit sharing and other employee
benefit plans which meet all of the following requirements shall be
eligible to participate in this Trust:
a. (1) The Plan and the trust in connection therewith is a tax
exempt pension trust or profit sharing trust or other type of employee
benefit trust part of a plan qualified under the provisions of Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), and exempt from taxation under Section 501(a) of the
Internal Revenue Code; or
(2) The Plan and the trust (if applicable) in connection therewith is
a plan established and maintained for its employees by the government
of the United States, by the government of any state or political
subdivision thereof, or by any agency or instrumentality of any of the
foregoing (hereinafter referred to as "Governmental Plan"). If the
assets of the Governmental Plan are not held in a formal trust
arrangement, such nonexistence of a trust must result from local law
restraints. Such Governmental Plan must have obtained tax exempt
status by meeting the requirements of the Internal Revenue Code
regarding qualified Governmental Plans or must be appropriately
relying on the exclusion from taxes allowed through intergovernmental
constitutional immunity.
b. The document governing the trust in connection with the Plan (or
the Plan in the case of a non-trusteed Governmental Plan) specifically
authorizes the investment of assets thereof and the commingling of its
assets with assets of other Plans through the medium of this Trust.
c. The document governing the trust in connection with the Plan (or
the Plan in the case of a non-trusteed Governmental Plan) expressly
provides that, to the extent of the participation of such Plan in this
Trust, this Declaration of Trust shall constitute a part of the Plan
(and trust, if applicable) pursuant to which such Plan is
administered.
d. Under the provisions of the Plan, the Trustee, or any affiliate
of the Trustee, is either the Trustee, Co-Trustee, or Agent for
Investment Management of the fiduciary of the Plan.
No Plan shall participate in this Trust, however, until the Trustee
consents thereto. Also, by the incorporation of this Declaration of
Trust as a part of the Plan (and trust, if applicable), it shall be
understood and agreed that it shall be impossible, at any time prior
to the satisfaction of all liabilities with respect to the employees
and their beneficiaries entitled to benefits under said Plan, or the
Trustee hereunder, to use or divert any part of the principal or
income allocable hereunder to such Plan for or to purposes other than
for the exclusive benefit of such employees or their beneficiaries.
Nothing herein, however, shall preclude the investment of other
collective investment funds in the Trust, whether managed by the
Trustee or any affiliate thereof, which meets the aforementioned
requirements.
Investments
2. In acquiring, investing, reinvesting, exchanging, retaining,
selling, and managing property for the Investments, the Trustee shall
act consistent with the fiduciary requirements of Federal law and the
law of any state in which the Trustee is located. Within the
limitations of the foregoing standard, the Trustee is authorized to
acquire and retain every kind of property, real, personal, or mixed,
and every kind of investment. The general policy of the Trust and its
investment parameters shall be as follows:
a. The Trust is an actively managed portfolio which provides
Participating Plans with an opportunity to participate in the
development of new income-producing properties, constructed with union
labor.
(1) In investing and reinvesting money in the Trust, it is intended
that the Trustee shall give primary consideration to, and shall
normally invest all or substantially all thereof in either or both
debt or equity interests of any kind in real property or investments
of any kind relating to real property as the Trustee may in its
discretion select, including, but not limited to, investments which
may incur income, property, and other tax liability. Such investments
may include, but shall not be limited to, the following: (i) equity
interests or equity participation in improved or unimproved real
property, either in the form of direct ownership, with or without
leaseback provisions of such real property, or in the form of stock,
closely held or publicly traded, stock purchase warrants, or other
forms of interest in the entity owning or developing such real
property; (ii) loans or debt obligations secured by mortgages on, or
other interests in real property, whether for the purpose of
acquiring, improving or otherwise developing such real property; (iii)
mortgages on the fee, leasehold or other interest in real property,
installment sales contracts, sale and leasebacks or any combinations
of the foregoing, for the purpose of providing long-term or
intermediate-term financing of improved or unimproved real property;
(iv) leases or rental agreements providing income or profits from real
property; and (v) interests in limited partnerships or in collective
investment funds which invest in real property. In making such
investments, the Trustee shall not be limited by any statute or rule
of law defining authorized investments by trustees and shall be under
no duty to diversify investments and may make such investments,
irrespective of whether they would be normally considered appropriate
investments for a trustee or are productive of income. Investments
pursuant hereto may be made by the Trustee without limitation because
of (i) the size or nature of any investment; (ii) the size or nature
of the enterprise in which any investment is made; (iii) the lack of
ready marketability; (iv) the presence or absence of certainty or
regularity of return; or (v) the volatile nature of the market value
of any investment. Investments pursuant hereto may be made by the
Trustee in private placements.
(2) The investment objectives of the Trust are to provide a
competitive market rate of return, stable and reasonably predictable
income, increasing cash flows, potential for appreciation in value, a
hedge against inflation, and a favorable portfolio diversification.
The Trust maintains diversification by geographic location and by
property type (office, research and development, residential
industrial warehouse/distribution, and retail).
(3) Cash not invested in real estate or debt secured by real estate
will be invested at the Trustee's discretion in a money market fund or
in any other fund, bond instrument or other instrument or security
with a maturity or maturities which allow the Trust to meet any
commitments made pursuant to paragraph 2(a)(1) above. Temporary
investments are stated at cost, which approximates market value. Any
losses of the Trust shall be charged to the principal of the Trust.
Current income is not a Trust objective.
b. The Trustee shall not purchase for the Trust any property owned
by any Participating Plan, unless it first secures a ruling from the
Internal Revenue Service and/or the Department of Labor that such
investment will not adversely affect the status of the Trust.
c. Pending the selection and purchase of suitable investments, or
the payment of expenses or other anticipated distributions, the
Trustee may retain in cash equivalents of its choice such portion of
the Trust as it shall deem reasonable under the circumstances.
d. All income and profits of the Trust shall be added to the
principal of the Trust and invested, reinvested, and valued as a part
thereof; any losses of the Trust shall be charged to the principal of
the Trust.
e. The Trustee shall not invest any of its own funds through the
medium of this Trust and shall have no beneficial interest in the
assets of the Trust; provided that nothing contained herein shall be
construed to prohibit such investment on behalf of a Plan created by
the Trustee for the benefit of the employees of the Trustee or any of
its affiliates. No assets of the Trust may be invested in stock or
obligations, including time or savings deposits, of the Trustee or any
of its affiliates; provided, that investments may be made in such time
and savings deposits for funds awaiting investment or distribution.
The Trustee shall not be deemed to have an interest in the assets held
in this Trust merely because of the fact that it owns in its own right
other stocks and bonds or other obligations of a person or entity the
stocks or bonds or other obligations of which are among the assets of
the Trust or that it is designated or acting as trustee, depository,
or in any other capacity under any deed of trust, mortgage indenture,
deposit agreement or other instrument under which any of the assets of
the Trust have been issued or are being held.
f. If the Trustee or any of its affiliates, because of a creditor
relationship or for any other reason, should acquire any interest in a
participation in this Trust, it shall liquidate such interest on the
first Valuation Date coincident with or immediately following such
acquisition.
Powers of Trustee
3. In exercising its exclusive right to manage and control the
Trust, the Trustee shall have all of the powers granted by statute,
common laws or rule of court, including the following rights and
powers:
a. The Trustee shall have full right to retain for so long a period
as it shall think proper and in its discretion to manage, convert,
exchange, transfer and dispose of the assets comprising the Trust and
shall have and may exercise every right and privilege pertaining to
trust management which is granted to a trustee under the applicable
state law of any state or the District of Columbia in which the
Trustee is located.
b. To retain, invest in, sell, exchange, transfer, partition,
mortgage, lease, manage, subdivide, develop, build, alter, repair,
improve, raze, abandon and otherwise dispose of any of such assets in
such manner, at such time or times, on such terms and conditions, and
for such consideration, cash or otherwise, as the Trustee deems
advisable; and for such purpose, to execute and deliver such
assignments, transfers and other instruments as the Trustee deems
appropriate. Without limitation, such assets include options, option
funds, mutual funds, liquidity cash reserve or other short-term
investment funds, and other investments, whether or not they are
traditional trust investments.
c. To consent to, and participate in, any plan for the
reorganization, consolidation or merger of any corporation, any
security of which is held by the Trustee, and to pay any and all costs
and assessments imposed upon the owners of such securities as a
condition of their participating therein; and to consent to any
contract, lease, mortgage, purchase or sale to which any such
corporation is a party.
d. To exercise or dispose of any rights of subscription or
conversion which in any manner arise out of the ownership of the
securities held by the Trustee.
e. To deposit any security with any protective or reorganization
committee, and to delegate to such committee such power and authority
with relation thereto as the Trustee may deem proper, and to agree to
pay, and to pay, out of the Trust such portion of the expenses and
compensation of such committee as the Trustee may deem proper.
f. To execute and deliver such proxies and powers of attorney to
such person or persons, granting such power and authority with
relation to any property or securities held by the Trustee as it may
deem proper.
g. To extend the time of payment of, or to renew, any obligation.
h. To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trustee, including claims for taxes, and to accept any
property, either in total or partial satisfaction of any indebtedness
or other obligation, and to hold such property for such period of time
as the Trustee may deem appropriate.
i. To acquire real and personal property, or any interest therein,
in those instances in which the same secures, or is taken to secure,
notes, bonds, and other obligations held by the Trust; to foreclose
mortgages, deeds of trust, and other liens on any real or personal
property in which the Trust is interested, or, in lieu of foreclosure,
to accept conveyance of such property, paying therefor such sum as it
may deem advisable, not exceeding the approximate cost of foreclosure
(in addition to releasing any obligations thereby secured); to manage,
sell, lease for such period (which may extend beyond the probable
duration of this Trust or of any Participating Plan), and grant
options to buy or lease said property, upon such terms and conditions
as the Trustee deems advisable; to repair, alter, improve or demolish
any building thereon; to subdivide, partition, grant easements,
release and dedicate any interest in real property; to construct new
buildings and improvements on said property; to insure said property
against damage by fire or other casualties; to employ agents and
counsel and confer upon them such authority with respect to the
management of said property as the Trustee deems appropriate; to
convey, or cause to be conveyed, any such property to a corporation,
in exchange for its capital stock or other securities, or both; and to
execute and deliver such contracts, deeds and other instruments as the
Trustee deems proper in order to effectuate any of the aforesaid
purposes.
j. To register and carry any securities or property in the name of a
nominee or nominees without designation of trust, but the Trustee's
records shall clearly show its ownership of such assets, and the
Trustee shall be individually liable for any loss occasioned by the
act of such nominee or nominees.
k. No person dealing with the Trustee shall be under any obligation
to make any inquiry concerning the propriety of the action of the
Trustee on behalf of the Trust or be concerned with the application of
any payments made to the Trustee for the Trust so that no lender or
assignee, grantee or other transferee of any securities or other
property standing in the name of the Trustee or its nominee, nor any
corporation, transfer agent or other person effectuating the transfer,
shall be chargeable with any duties in respect to the Trust or the
Plans participating therein or the beneficiaries thereof, but may
conclusively presume that the Trustee has the absolute right to borrow
or to make the tendered assignment, grant or other transfer.
l. To borrow money, with or without giving security, on behalf of
the Trust and to issue its promissory notes as trustee.
m. To lend trust securities under such conditions according to such
terms, and collateralized as it deems appropriate.
Notices Required
4. a. At or prior to the first investment by a Plan in this Trust,
the Trustee upon request of the Plan shall furnish to the Plan a copy
of this Declaration of Trust, without charge. The Trustee shall
provide to any person a copy of this Declaration of Trust upon
request. The Trustee shall also make a copy of this Declaration of
Trust available for public inspection at its main office during all
business hours.
b. No investment shall be made after the effective date hereof by a
Plan in the Trust unless on or before a Valuation Date notice of
intention to make such investment shall have been approved by and
noted in the records of the Trustee. No withdrawal of a Participating
Plan or any part thereof shall be made after the effective date hereof
from the Trust unless on or before a Valuation Date notice of
intention to make such withdrawal shall have been approved by and
noted in the records of the Trustee. Where a Participating Plan in
the Trust is held by the Trustee in conjunction with one or more other
persons in any fiduciary capacity, such Participating Plan shall be
withdrawn, subject to the notice required by this Section, upon the
written request of any such other person acting in such fiduciary
capacity with the Trustee.
c. Notices, accountings, and reports required to be given or
furnished by the Trustee may be by actual delivery or by mailing,
postage prepaid, to the most recent address known to the Trustee of
the person entitled thereto. The date of such actual delivery or of
such mailing, as the case may be, for all purposes hereunder, shall be
deemed to be the date as of which such notice, accounting, or report
was given or furnished.
Units of Participation
5. a. The Trustee shall credit to the account of each
Participating Plan which deposits money in the Trust, that number of
"Units" which its deposit will purchase at the then fair value of each
Unit, and shall charge the account of each such Participating Plan
which withdraws Units with the number of Units it withdraws. The
records of the Trustee and the records of the Participating Plan shall
at all times reflect the number of Units standing to the credit of
each Participating Plan, and the Trustee shall not issue certificates
in representation thereof. The interests of the several Participating
Plans in the Trust and the net earnings, profits, and losses of the
Trust shall be proportionate to the number of Units then standing to
their respective credits. The Trustee may from time to time divide
the Trust into a greater number of Units of lesser value or combine
them into a smaller number of Units of greater value. The
proportionate interest of each Participating Plan in the Trust shall
not be changed by such division or combination of Units except that
resulting fractional Units may be redeemed from the Trust if
thereafter only whole Units of the Trust are to be issued or redeemed.
b. Each Unit shall be nonassignable and shall represent an equal
right to share in the Trust and in its net earnings, and losses, and
no Unit shall have priority or preference over any other Unit of the
Trust. However, all assets of the Trust shall be owned exclusively by
the Trustee, and no Participating Plan shall have any individual
ownership thereof.
c. The interests of the Participating Plans in the Trust and in the
net earnings, profits, and losses thereof shall not be subject to
garnishment, attachment, levy, or execution of any kind for the debts
or defaults of the trustees of Participating Plans, or of any person,
natural or legal, having an interest in any Participating Plan.
d. For convenience of reference, other than in this Declaration of
Trust, the Trustee may use an appropriate name to identify the Units
of the Trust.
e. In the discretion of the Trustee, fractional Units may be issued
and redeemed. Each provision of this Declaration of Trust pertaining
to Units of the Trust shall be equally applicable to fractional Units
of the Trust, if any, issued or redeemed by the Trustee, except that
the value thereof for purchase or withdrawal shall be the same
fraction of the then value of a whole Unit, and the interest in the
Trust represented thereby shall be that of the same fraction of a
whole Unit. Any fraction of a cent per Unit of participation
resulting from any computation hereunder may be disregarded or may be
adjusted in such reasonable manner as the Trustee may determine.
Valuation of the Trust
6. a. The Trustee may designate the last day of any month as a
Valuation Date, as of which the value of the assets held in the Trust
shall be determined and the Trustee may change any such designation of
a Valuation Date from time to time. The Trustee shall be required to
designate a Valuation Date for the Trust not less frequently than once
during each period of twelve (12) months. The Trustee shall determine
the value of the Trust and of the participation therein, within 10
days after each valuation date (or such other period of time as the
Comptroller of the Currency may prescribe).
b. At the inception of the Trust, the value of each Unit shall be
determined by the Trustee in the exercise of its discretion. As of
each Valuation Date after the inception of the Trust, the Trustee
shall determine the then fair value of each Unit of the Trust by
dividing the then fair value of the Trust by the number of Units of
the Trust then allocated to Participating Plans.
c. The fair value of the Trust as of any Valuation Date after the
inception of the Trust shall be the market value of the assets of the
Trust, less all expenses, liabilities, taxes, reserves, and other
amounts, due, accrued, or anticipated, which the Trustee determines
are properly and equitably chargeable against the Trust.
d. In determining the market value of the Trust, the following
method shall be used:
(1) Securities listed or traded on any securities exchange shall be
valued at their last reported sales prices on said exchanges on the
Valuation Date. If no sale has been reported for that day, the last
reported sale price or the most recent closing bid price, whichever is
later, shall be used. Where a security is listed or traded on more
than one securities exchange, the Trustee may select the exchange to
be used for the basis of valuation. Securities not listed or traded
on any securities exchange shall be valued by taking the bid price
obtained from a recognized published source, from up to three
reputable brokers or investment bankers as of the close of business on
the Valuation Date, or through such other information as it may find
useful or necessary in determining value. For the purpose of this
subparagraph (d), sales and bid prices reported in newspapers of
general circulation published in New York, New York, Washington, D.C.
or Baltimore, Maryland, or in any standard financial periodical or in
the records of any exchange, any one or more of which may be selected
by the Trustee and noted in its records, shall be accepted as evidence
thereof.
(2) An investment purchased, and awaiting payment against delivery,
shall be included for valuation purposes as an asset held, and the
cash account shall be adjusted by the deduction of the purchase price,
including broker's commissions or other expenses of the purchase.
(3) An investment sold but not delivered pending receipt of proceeds
shall be valued at the net sales price.
(4) For the purpose of valuation of an investment except an
investment sold but not delivered, it shall be unnecessary to deduct
from the value ascertained as above indicated brokers' commissions or
other expenses which would be incurred upon a sale thereof.
(5) The amount of any current interest accrued but unpaid on any
bonds or other obligations shall be included for valuation purposes.
(6) The value of any rights, warrants or dividends (whether payable
in cash or property and including liquidating dividends) which may
have been declared but unpaid as of the Valuation Date in respect of
any security which has been valued ex-rights, ex-warrants or ex-
dividends shall be included for valuation purposes, unless such
security shall have been purchased or acquired on or after the date as
of which it sold ex-rights, ex-warrants or ex-dividends.
(7) The balance of cash in hand (including income collected) shall be
included for valuation purposes.
(8) All other assets shall be valued on the basis of each such
asset's fair value from the best information reasonably available.
From the total sum so obtained, there shall be deducted, to
the extent applicable to the Trust, all accrued interest on
bonds purchased or acquired to the date of such purchase or
acquisition, all charges, expenses, and other liabilities
due, and, in the discretion of the Trustee, such
proportionate part as it deems proper of all charges,
expenses or other liabilities accrued or anticipated,
applicable to any period prior to the time such valuation is
made, the amount of which, so far as unliquidated, shall be
fixed by the Trustee. The net amount remaining shall be
deemed to be the value of the Trust.
e. In determining the valuation of any asset of the Trust, other
than cash which is temporarily invested in a cash management vehicle,
which is stated at cost, and securities listed or traded on an
exchange, which are covered under subparagraph 6(d), the following
shall apply:
(1) With respect to mortgages, deeds of trust and notes secured by
real property, such assets shall be valued at the market value
thereof. The market value shall be determined by the Trustee using
such factors as maturity dates, interest rates, creditworthiness and
such other factors as it determines, in good faith, to be appropriate.
(2) With respect to investments in real estate and real estate
related investments, including limited partnership interests, which
investments shall be valued at market, the Trustee may, in its
discretion, base such method of valuation on current appraisals of
such properties, recent transactions involving similarly located
properties or such other method as it shall determine, provided,
however, that said valuation must be based on an appraisal not older
than one year. Any real estate or real estate related investment
which is in the process of being constructed, and not fully paid for,
shall be valued at cost. Since properties are stated at current
market value, the Trust does not record depreciation on its real
estate investments.
(3) Notwithstanding anything herein to the contrary, if no reliable
data are available, or if the available data, in the Trustee's
judgment, are not sufficiently complete to warrant unqualified
reliance thereon, or would tend, in the Trustee's opinion, to distort
the value of any assets, then the Trustee may use, as a basis of
valuation, such other sources of information as it deems reliable, or
such other method of valuation as it deems fair and equitable.
Admissions and Withdrawals
7. a. To the extent permitted by the rulings and regulations of
the Comptroller of the Currency, money and other property acceptable
to the Trustee of qualifying Plans may be deposited in the Trust, and
Units owned by a Participating Plan may be withdrawn from the Trust,
only as of a Valuation Date and only with the authorization of the
person or persons, natural or legal, having the right to control the
investment of the funds of the Trust. Should types of property other
than cash be received from a Participating Plan in exchange for Units
hereunder, such Participating Plan shall be credited with the
property's then fair market value determined as of the Valuation Date
on which such property is deposited with the Trustee. An
authorization to deposit in or withdraw from the Trust may not be
countermanded or canceled subsequent to the Valuation Date as of which
such deposit or withdrawal is made.
b. Deposits of money or other property acceptable to the Trustee in
the Trust as of any Valuation Date may be made only with the consent
of the Trustee.
c. Upon the complete or partial withdrawal of a Participating Plan
from the Trust, the Trust shall pay to the Participating Plan the
amount equal to the value of the withdrawn participation on the
Valuation Date as of which it is effective. In the discretion of the
Trustee, payment may be made in cash, ratably in-kind, a combination
of cash and ratably in-kind, or in any other manner consistent with
applicable law in the state in which the Trustee maintains the Trust.
d. The Trustee shall have a reasonable period not to exceed ten (10)
business days following each Valuation Date to make the computations
necessary to value the Units and to make payment for Units withdrawn
from the Trust.
e. Any request for withdrawal from the Trust must be received by the
Trustee not later than one year prior to the Valuation Date as of
which such withdrawal is to be made; provided, however, that the
Trustee, in its sole discretion, reserves the right to pay such
withdrawal as of any earlier Valuation Date subsequent to receipt of
such request. All withdrawals from the Trust will be based on the
value of the Trust on the Valuation Date as of which such payment is
made.
f. Any provision herein to the contrary notwithstanding, when the
Trustee receives notice that a Participating Plan has ceased to be
exempt from income taxes under the Internal Revenue Code, or that the
document governing such Participating Plan no longer incorporates this
Declaration of Trust, as a part thereof, or that the Trustee is no
longer acting as a trustee, or as a co-trustee, or as the investment
agent or co-investment agent for the Participating Plan or the trustee
or trustees, of such Participating Plan, then the receipt of such
notice shall be deemed to be an automatic-request for withdrawal of
Units and subject to the requirements of this Paragraph 7.
g. The Trustee shall have the right to charge back to and collect
from each Participating Plan that part of the amount paid to such
Participating Plan upon the withdrawal of Units which represented a
payment of accrued income that was not subsequently collected by the
Trustee at the time fixed for its payment.
h. If a mistake in the administration of the Trust is made and is
subsequently discovered, the Trustee may make such adjustments and
take such action to remedy the mistake as may be practicable and
equitable.
Liquidating Funds
8. a. The Trustee shall promptly segregate and place in a
Liquidating Fund, to be held and liquidated for the benefit of the
then Participating Plans, any property of the Trust which the Trustee
deems advisable to liquidate in order to prevent any Participating
Plan from suffering loss or prejudice by reason of subsequent deposits
to or withdrawals from the Trust. The Trustee shall have, with
respect to each Liquidating Fund, all rights, powers and duties which
it has with respect to the Trust, except that the Trustee shall not
reinvest the cash thereof. Participating Plans may not withdraw their
interests in any Liquidating Fund. However, the Trustee, as promptly
after the creation of any Liquidating Fund as it deems reasonable
under the circumstances, may sell the assets of such Liquidating Fund
and distribute all net cash assets, or distribute assets in-kind, or
partly in cash and partly in-kind, thereof pro rata to those
Participating Plans having an interest therein.
b. The Trustee, in its individual corporate capacity, may purchase
from the Trust any defaulted investment held by the Trust if the
Officers Trust Committee determines that the expense of segregating
the defaulted investment in a Liquidating Fund and administering the
Liquidating Fund is excessive in light of the market value of the
investment. Such purchase, if made, shall be at the then market value
of such investment, or at the sum of the cost and accrued unpaid
interest, whichever is greater.
Trustee's Records
9. a. The Trustee shall keep complete and accurate records of
account in which all transactions relating to the Trust shall be
recorded. Records shall be maintained for the Trust which shall show
with respect to each Participating Plan: the date of each admission
to Participation; the number of Units allotted and the amount paid
therefor; the date of each withdrawal; the number of units redeemed,
the amount paid on redemption to the Participating Plan and whether
payment was made in cash, ratably in-kind, partly in cash and partly
ratably in-kind or in any other manner consistent with applicable law
in the state in which the Trustee maintains the Trust; the number of
Units currently outstanding; and the share in any Liquidating Fund.
b. The Trustee shall determine the form in which its records shall
be kept. The account year of the Trust shall be determined by the
Trustee and except with respect to each Liquidating Fund or otherwise
as the regulation of the Comptroller of the Currency permit, the Trust
shall follow the accrual method of accounting.
Audits Required
10. a. At least once during each accounting year, an audit shall be
made of the Trust and Liquidating Fund by competent auditors and a
financial report prepared thereon within ninety (90) days of the end
of the Trust's fiscal year. Such auditors may be either independent
public accountants or the Trustee's own auditors; provided, however,
that in either case they shall be responsible only to the Board of
Directors of the Trustee who by proper resolution formally appoints
them to perform such audit. The compensation and reasonable expenses
of any such independent public accountants shall be charged to the
Trust which they audit. The Trustee shall not charge any compensation
or expense for any audit made by its own auditors.
b. The Trustee may file at its discretion, or, if required by any
applicable Federal or state law, shall file in any Federal or state
court having jurisdiction, at the expense of the Trust, accounts of
its administration of the Trust, and any Liquidating Fund. The
confirmation of said accounts, upon such prior notice of audit to
parties in interest as may be prescribed by statute, regulations, or
rule of court, shall operate as a full and complete discharge of the
Trustee's liability, responsibility and accountability hereunder, in
respect of the transactions set forth in such accounts.
c. The financial report prepared pursuant to subparagraph (a) of
this Paragraph 10 shall contain a list of investments in this Trust,
their cost and current market value, a statement for the period after
the previous report showing purchases and their respective costs;
sales, including profit or loss and any other investment charges;
income and disbursements; the Trust's fees and expenses; and a
notation as to any investments which are then in default. The Trustee
shall send a copy of its financial report, or a notice that the report
is available, to each administrator of each Participating Plan
annually. Within 90 days from the date of sending the report, the
administrator may file with the Trustee its written approval of the
report, or its written disapproval with reasons. If a written
disapproval of the Trustee's report has not been received by the
Trustee within 90 days after it has sent the report to the
administrator, then the report shall be considered approved and the
Trustee shall be relieved from liability or accountability for any
action or inaction disclosed in the report.
Trustee's Fees
11. Subject to the rules and regulations of the Comptroller of the
Currency and any other applicable state or Federal law, the Trustee
may charge a fee for the management of the Trust or of any Liquidating
Fund, and shall be entitled to reimburse itself therefrom for all
reasonable expenses incurred by it in the administration and
management thereof. In addition, the Trustee shall be entitled to
charge to and receive from or with respect to each Participating Plan
such reasonable fees as it is otherwise entitled to receive with
respect to such Participating Plan.
Termination of the Trust
12. The Trustee, by action of its Officer Trust Committee, may at any
time, without advance notice to any person, natural or legal,
terminate the Trust and thereupon all assets of the Trust shall be
transferred to a Liquidating Fund and held and distributed as provided
in Paragraph 8 above.
Representation in Judicial Proceedings
13. The Trustee shall be deemed to represent all persons, natural or
legal, having an interest in the Trust for the purposes of all
judicial proceedings affecting the Trust or any asset thereof, and
only the Trustee need be made a party to any such action.
Reserve Accounts
14. If any mortgages or notes secured by deeds of trust of real
property are held in the Trust or in any Liquidating Fund, the
reasonable expenses incurred in servicing such investments shall be
charged against the Trust or Liquidating Fund in which the same is
held, and paid to servicing agents, including the Trustee. Also in
the case of mortgages and notes secured by deeds of trust of real
property, the Trustee may (but shall not be required to) transfer up
to five percent (5%) of the net income derived by the Trust or
Liquidating Fund from such source held by the Trust during any regular
accounting period to a reserve account; provided that no such
transfers shall be made which would cause the amount in such reserve
account to exceed one percent (1%) of the outstanding principal amount
of all such investments held in the Trust. The amount of such reserve
account, if established, shall be deducted from the assets of the
Trust in determining the fair market value of the Trust on a Valuation
Date. At the end of each accounting period, all interest payments
which are due but unpaid with respect to such investments in the Trust
shall be charged against such reserve account to the extent available
and credited to income distributed to the Trust. In the event of
subsequent recovery of such interest payments the reserve account
shall be credited with the amount so recovered.
Discretion of Trustee
15. Discretions, powers, and duties of the Trustee shall be exercised
by the officers, employees, and committees designated by the Board of
Directors of the Trustee. The exercise or nonexercise of any
discretion, power, or duty in good faith and with reasonable care
shall be binding upon all interested persons.
Advice of Counsel
16. The Trustee shall be fully protected in relying upon the advice
of the general counsel of the Trustee or competent outside counsel
appointed by the Trustee or its officers or committees with respect to
the meaning of this Declaration of Trust or of any amendment thereof,
or of any powers, duties, or discretions thereunder.
Merger of Trustee
17. In the event that the Trustee shall at any time merge or
consolidate with, or shall sell or transfer substantially all of its
assets to another corporation, state or Federal, the corporation
resulting from such merger or consolidation, or the corporation into
which it is converted, or to which such sale or transfer shall be
made, shall thereupon become and be substituted hereunder in the place
of the Trustee, and shall become the Trustee hereunder with the same
effect as though originally so named. This instrument, as amended
from time to time, is binding upon and inures to the benefit of the
Trustee and any of its affiliates with trust powers and its or their
successors, the fiduciaries of each Participating Plan and their
successors, and each person having or claiming an interest in a
Participating Plan, an investment fund, or a liquidating fund, as well
as the personal representatives, successors and assigns of any of
them.
Merger of the Trust
18. Any collective investment fund under another trust instrument of
which the Trustee or any of its affiliates is then the Trustee and
which is used exclusively as an investment medium for tax-exempt
Employee Benefit Plans, in the discretion of the Trustee, may be
merged with this Trust if after such merger the then total value of
the Units of the merged collective investment funds belonging to each
Participating Plan will be the same as the total value of the Units
belonging to such Participating Plan in the separate collective
investment funds prior to the merger, and provided that each asset of
each of the collective investment funds being merged would then be a
proper investment for the other of the merged collective investment
funds.
Trust Instrument and Applicable Law to Control
19. All deposits and withdrawals from the Trust, all interests in the
Trust, and all aspects of the administration, management, and
investment of the Trust shall be governed by this Declaration of Trust
and the requirements of law. To the extent that this Declaration of
Trust is ever in conflict with, or is silent with respect to, the
requirements of law, the provisions of such law shall govern. In the
administration, management, and investment of the Trust hereunder, the
Trustee may avail itself of any permissive provision of law which is
not contrary to this Declaration of Trust. As used in this paragraph,
the term "law" means the provisions (both required and permissive
except where otherwise indicated) from time to time in effect and
applicable to this Declaration of Trust, or to the Trust consisting
solely of assets of retirement, pension, profit sharing, or other
trusts which are exempt from federal income taxes under the Internal
Revenue Code, of laws, regulations, rulings, orders, judgments, and
decrees of governmental authorities, including but not limited to the
laws of the United States of America and the state in which the
Trustee is located, the regulations of the Comptroller of the Currency
or other duly constituted supervisory authorities, and the judgments,
orders, and decrees of courts having jurisdiction over this Trust or
the Trustee.
Individual Trustees
20. a. The Trustee, at any time, may by resolution of its Officer
Trust Committee provide that there shall be, in addition to the
Trustee, an Individual Trustee and appoint an individual (who may be
an officer or employee of the Trustee) to fill such office. Such
appointment shall become effective when a copy of the resolution of
the Officer Trust Committee of the Trustee making such appointment
certified by any officer of the Trustee, and the acceptance of such
appointment signed by the Individual Trustee, is delivered to the
Trustee.
b. Subject to the limitations and provisions of subparagraph (a) of
this Paragraph 20, each provision of this Declaration of Trust
applicable to the Trustee or to its rights, powers, discretions,
immunities, appointment, resignation and removal shall be applicable
to the Individual Trustee to the extent and manner it would be if the
words "Individual Trustee" were substituted for the word "Trustee."
Amendments
21. This Declaration of Trust may be amended from time to time by
either a resolution of the Board of Directors of the Trustee or by a
resolution of the Officer Trust Committee, if a majority of its
members approve the amendment, and it is approved by competent legal
counsel. The Board of Directors of the Trustee or the Officer Trust
Committee shall establish the effective date of any amendment. All
amendments shall be filed with the original trust instrument, together
with a certified copy of the resolution of the board of directors or
the Officer Trust Committee.
Miscellaneous
22. a. This Trust is created and organized in the United States of
America and will at all times be maintained as a domestic trust in the
United States of America.
b. As used herein, the "Plan" shall mean any retirement, pension,
profit sharing or other employee benefit plan qualified under the
provisions of Section 401(a) of the Internal Revenue Code and exempt
from taxation under Section 501(a) of the Internal Revenue Code, or a
Governmental Plan and the words "Participating Plan" shall mean any
Plan whose trust (or the Plan in the case of a non-trusteed
Governmental Plan) in connection therewith has adopted this Trust as
its investment vehicle and meets the requirements of Paragraph 1 of
this Declaration of Trust.
c. If any provision of this Declaration of Trust shall be held
invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision hereof, and this Declaration of Trust
shall be construed and enforced as if such provision had not been
included.
d. Titles and subtitles of the articles and sections are placed
herein for convenience of reference only, and in case of any conflict,
the text of this Declaration of Trust, other than such titles or
subtitles, shall be controlling.
e. Unless the context otherwise requires, words denoting the
singular number may, and where necessary shall, be construed as
denoting the plural number, and words of the plural number may, and
where necessary shall, be construed as denoting the singular number.
In Witness of this Declaration of Trust, ASB Capital Management, Inc.
caused its name to be hereunto signed by its proper officers this ____
day of ____________________, 1999.
ASB CAPITAL MANAGEMENT, INC.
By: ________________________________
Name:
Title:
ATTEST:
_______________________
