As Filed with the
Commission on June 14, 1996
Registration No. 2-63713
SEC File No. 811-2910
Securities and Exchange Commission
Washington, D.C.
Form N-1A
Registration Statement Under The Securities Act Of 1933 X
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 19 X
Registration Statement Uuder The Investment Company Act
of 1940 X
Amendment No. 21
Government Investors Trust
(Exact Name of Registrant as Specified in Charter)
1655 Fort Myer Drive, Arlington, Virginia 22209
Registrant's Telephone Number: (703) 528-3600
W. Richard Mason, Assistant Secretary
Government Investors Trust
1655 Fort Myer Drive
Arlington, Virginia 22209
(Name and Address of Agent for Service)
Copy to:
John A. Dudley, Esquire
Sullivan & Worcester, LLP
1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to Rule 485(b)
_____ on ________________ pursuant to Rule 485(b)
_____ 60 days after filing pursuant to Rule 485(a)(1)
_____ on _July 31, 1996__ pursuant to Rule 485(a)(1)
_____ 75 days after filing pursuant to Rule 485(a)(2)
_____ on ________________ pursuant to Rule 485(a)(2)
The Registrant has registered an indefinite number of
its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's Notice under Rule
24f-2 for the fiscal year ended March 31, 1996 was filed on May 20, 1996
<PAGE>
Government Investors Trust
Prospectus
July 31, 1996
GIT
GIT Investment Funds
<PAGE>
Table of Contents
About Government Investors Trust 2
Expense Summary 2
Financial Highlights 3
Investment Objective 3
Investment Policies 3
Management of the Trust 5
The Trust and Its Shares 6
Dividends 6
Performance Information 6
Taxes 6
Net Asset Value 7
How to Purchase and Redeem Shares 7
Office
1700 North Moore Street
Arlington, VA 22209
Custodian
Star Bank, N.A.
Cincinnati, OH 45202
Auditors
Ernst & Young LLP
Telephone Numbers
Shareholder Services
Washington, DC area: 703-528-6500
Toll-free nationwide: 800-336-3063
24-Hour ACCESS
Toll-free nationwide: 800-448-4422
<PAGE>
Prospectus/July 31, 1996
1655 Fort Myer Drive, Arlington, Virginia 22209-3108
Government Investors Trust
Government Investors Trust is a money market mutual fund whose
goal is to obtain the highest possible current income, consistent
with investment solely in short-term debt securities issued or
guaranteed by agencies and instrumentalities of the United States
Government. Investments in the Trust are neither insured nor
guaranteed by the United States Government. The Trust is managed
for a stable $1.00 share price, although there can be no
assurance that this share price will be maintained.
Features
*No commissions or sales charges
*No "12b-1" expenses
*Dividends accrue from day of investment to day of withdrawal,
and can be paid by check or direct deposit, or reinvested
monthly
*Invest or withdraw funds by mail, wire transfer or in person
*$2,500 minimum initial investment
*Checking privileges monthly
This Prospectus is intended to be a concise statement of
information which investors should know before investing. After
reading the Prospectus, it should be retained for future
reference. A paper copy of the prospectus is available to
investors who received an electronic prospectus without charge
by calling or writing the Trust.
A Statement of Additional Information concerning the Trust,
bearing the same date as this Prospectus, has been filed with the
Securities and Exchange Commission and is incorporated herein by
reference. It is available without charge by calling or writing
the Trust.
Shares of the Trust are not deposits or obligations of, or
guaranteed or endorsed by any bank. Shares are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Bankers Finance Advisors, LLC
Investment Adviser
<PAGE>
About Government Investors Trust
Government Investors Trust (the "Trust") is a diversified open-
end management investment company, commonly known as a money
market fund. The Trust was organized as a Massachusetts business
trust under a Declaration of Trust dated February 14, 1979. The
Trust is managed by Bankers Finance Advisors, LLC
(the "Adviser") of the same address as the Trust. Only one
series of the Trust's shares is currently authorized.
Expense Summary
The purpose of this table is to assist investors in understanding
the various costs and expenses that an investor will bear
directly or indirectly (see also "Management of the Trust"
below).
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses (as a percentage of
average net assets)
Management Fee 0.50%
Other Expenses* 0.73%
Total Fund Operating Expenses* 1.23%
*Reflects custodian fees paid indirectly.
Example
1 Year 3 Years 5 Years 10 Years
You would pay the
following expenses on
a $1,000 investment,
assuming (1) a five
percent annual return
and (2) redemption
at the end of each
time period: $13 $39 $68 $150
The hypothetical example shown above is based on the expense
levels listed under the caption "Annual Fund Operating Expenses"
and is intended to provide the investor with an understanding of
the level of expenses that might be incurred in the future. The
five percent return used in the example is arbitrary and is for
illustrative purposes only. It should not be considered
representative of the Trust's past or future performance, nor
should the expenses in the example be considered representative
of future expenses, which may actually be greater or less than
those shown.
<PAGE>
Financial Highlights
The financial highlights data for a share outstanding and other
performance information for the fiscal year ended March 31, 1996
appearing below is derived from the financial statements audited
by Ernst & Young LLP, independent auditors, whose report appears
in the Annual Report to Shareholders. This report is incorporated
by reference in the Statement of Additional Information and can
be obtained by calling the Trust. The tabulation below of
information for the fiscal years ended March 31, 1987,
1988, 1989, 1990, 1991, 1992, 1993, 1994 and 1995 has also been derived
from the financial statements audited by Ernst & Young LLP. The
Trust experienced no net gains or losses on securities and
provided no distributions from capital gains or returns of
capital for the fiscal years shown below.
<TABLE>
Year ended March 31,
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset
value
beginning
of period $1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Net
investment
income $0.045 0.037 0.021 0.024 0.044 0.067 0.080 0.072 0.060 0.054
Total from
investment
operations $0.045 0.037 0.021 0.024 0.044 0.067 0.080 0.072 0.060 0.054
Distributions
from net
investment
income $(0.045)(0.037)(0.021)(0.024)(0.044)(0.067)(0.080)(0.072)(0.060)(0.054)
Total
Distributions$(0.045)(0.037)(0.021)(0.024)(0.044)(0.067)(0.080)(0.072)(0.060)(0.054)
Net asset
value end
of year $1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Total
Return 4.62% 3.80% 2.08% 2.44% 4.44% 6.96% 8.28% 7.48% 6.19% 5.57%
Net assets
at end of
period
(thousands) $57,197 64,541 78,090 88,911 117170 153206 173438 171144 184255 192953
Ratio of
expenses to
average net
assets 1.23%* 1.16% 1.11% 1.06% 1.06% 1.05% 1.04% 1.01% 1.01% 1.06%
Ratio of
net
investment
income to
average
net assets 4.52% 3.70% 2.08% 2.44% 4.41% 6.69% 7.99% 7.21% 6.01% 5.45%
* Ratio reflects custodian fees paid indirectly.
</TABLE>
Investment Objective
The investment objective of the Trust is to obtain the highest
possible current income, consistent with the relative safety of
U.S. Government securities and with providing liquidity and price
stability to shareholders' investments in the Trust.
Considerations of relative safety, liquidity and price stability
limit the Trust's investments to shorter-term U.S. Government
securities which may not yield as high a level of current income
as is normally available from longer-term or lower-rated
securities. The Trust's investment objective may be changed
without shareholder approval; however, shareholders will receive
prior written notice of any material change. There is no
assurance that the Trust's investment objective will be achieved.
Investment Policies
The Trust's fundamental investment policies, which may not be
changed without a shareholder vote, limit its investments to
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The Trust expects that a
substantial portion of its assets will be invested in repurchase
agreements collateralized by U.S. Government securities. The
Trust intends normally to hold portfolio securities to maturity;
historically, securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities have involved
little risk to principal and interest if held to maturity.
<PAGE>
The Trust will limit purchases of investments to securities
having a maximum effective maturity of 13 months or less. The
Trust will not purchase any investment which would, at the time
of purchase, cause the average effective maturity of the Trust to
exceed 90 days. As used in this Prospectus, the term "effective
maturity" means either the actual time between purchase and the
stated maturity date of the investment, the time between its
scheduled interest rate adjustment dates, or the time between its
purchase settlement and its future resale arranged at the time of
purchase under fixed terms. The Trust's Portfolio will be managed
in conformity with regulations of the Securities and Exchange
Commission applicable to funds seeking to maintain a constant
share price of $1.00. The Trust will not invest more than 10
percent of its total assets in securities which cannot be
liquidated in seven days. The Trust normally expects to hold
investments to maturity, except to the extent liquidity
requirements indicate otherwise.
U.S. Government Securities. U.S. Government securities include a
variety of securities which are issued or guaranteed by the U.S.
Treasury, various agencies of the federal government and various
instrumentalities which have been established or sponsored by the
U.S. Government, and certain interests in the foregoing types of
securities. Treasury securities include notes, bills and bonds.
Obligations of the Government National Mortgage Association, the
Federal Home Loan Banks, the Federal Farm Credit System, the
Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, the Small Business Administration and the
Student Loan Marketing Association are also considered U.S.
Government securities. Except for Treasury securities, these
obligations may or may not be backed by the "full faith and
credit" of the United States.
Some federal agencies have authority to borrow from the U.S.
Treasury while others do not. In the case of securities not
backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment, and may not
be able to assert a claim against the United States itself in the
event the agency or instrumentality does not meet its
commitments.
Specialized Investment Techniques
To achieve its investment objective, the Trust may use certain
specialized investment techniques, including investment in
specialized kinds of government agency securities, investment in
"floating rate" government securities, use of repurchase
agreement transactions, investment in matched purchase/sale
transactions and investments purchased for forward delivery.
These techniques may involve certain risks, some of which are
summarized below, and discussed further in the Statement of
Additional Information.
Certain specialized government agency securities may provide
higher yields than are available from more common types of
government-backed investments. However, such specialized
investments may be available from a few sources, in limited
amounts, or only in very large denominations; they may also
require special capabilities in portfolio servicing and in legal
matters relating to government guarantees. Such securities may
have limited marketability, which might make it difficult for the
Trust to dispose of them advantageously; accordingly, the Trust
intends normally to hold such securities to maturity or pursuant
to repurchase agreements.
"Floating rate" government agency securities pay an interest rate
which is adjusted (i.e., "floats") at regular intervals in a
fixed relationship to a published interest rate such as the
"prime" rate of a given bank. Such securities may offer higher
yields than are available from short-term securities and may be
less susceptible to market value fluctuations than securities of
longer stated maturities which do not float. The stated
maturities of floating rate securities, which could be as long as
30 years, may limit their investment flexibility. Such securities
may be available only in large denominations, may require
specialized servicing and accounting capabilities, and may have
limited marketability, which might make it difficult for the
Trust to dispose of them advantageously.
<PAGE>
Repurchase agreements involve the sale of securities to the Trust
by a financial institution or securities dealer, simultaneous
with an agreement by that institution to repurchase the same
securities at the same price, plus interest, at a later date. The
Trust will limit repurchase agreement transactions to those
financial institutions and securities dealers who are deemed
creditworthy pursuant to guidelines adopted by the Trust's Board
of Trustees. The Adviser will follow a procedure designed to
ensure that all repurchase agreements acquired by the Trust are
always at least 100 percent collateralized as to principal and
interest. When investing in repurchase agreements, the Trust
relies on the other party to complete the transaction on the
scheduled date by repurchasing the securities. Should the other
party fail to do so, the Trust would end up holding securities it
did not intend to own. Were it to sell such securities, the Trust
might incur a loss. In the event of insolvency or bankruptcy of
the other party to a repurchase agreement, the Trust could
encounter difficulties and might incur losses upon the exercise
of its rights under the repurchase agreement.
Investment Considerations
The Trust's investment policies may involve certain risks. For
example, the market value of the fixed income securities in which
the Trust invests will tend to decline as prevailing interest
rates rise and increase as prevailing interest rates fall. The
magnitude of this change increases with the maturity of portfolio
securities. The Trust may invest in "floating rate" government
agency securities, in repurchase agreements, in matched
purchase/sale transactions and in investments purchased for
forward delivery, all of which may involve certain risks; see
"Specialized Investment Techniques" above and in the Statement of
Additional Information.
Management of the Trust
The Trustees. Under the terms of the Declaration of Trust, which
is governed by the laws of the Commonwealth of Massachusetts, the
Trustees are ultimately responsible for the conduct of the
Trust's affairs. They serve indefinite terms of unlimited
duration and they appoint their own successors, provided that
always at least two-thirds of the Trustees have been elected by
shareholders. The Declaration of Trust provides that a Trustee
may be removed at any special meeting of shareholders by a vote
of two-thirds of the Trust's outstanding shares.
The Adviser. Bankers Finance Advisors, LLC is a division of Madison
Investment Advisors, Inc., 6411 Mineral Point Road, Madison,
Wisconsin ("Madison"). Bankers Finance Advisors, LLC
administers approximately $200 million in assets and manages the
GIT family of mutual funds, which includes stock, bond and money
market portfolios. Madison, a licensed investment advisory firm for
over 22 years, provides professional portfolio management services
to a number of clients, including stock and bond mutual funds, and
has approximately $2.5 billion under management.
The Adviser is responsible for the day-
to-day administration of the Trust's activities.
The Adviser is controlled by Madison. The Adviser purchased
the investment management assets of Bankers Finance Investment
Management Corp., the previous adviser to the Trust, effective
July 31, 1996. The Adviser has the same address as the Trust.
Compensation. For its services under its Investment Advisory
Agreement with the Trust, the Adviser receives a fee, payable
monthly, calculated as 1/2 percent per annum of the average daily
net assets of the Trust. The Adviser may, in turn, compensate
certain financial organizations for services resulting in
shareholder purchases of Trust shares.
Distributor. GIT Investment Services, Inc. of the same address as
the Trust acts as the Trust's Distributor. The Distributor is
wholly owned by A. Bruce Cleveland.
Services Agreement. Under a separate Services Agreement with the
Trust, the Adviser provides operational and other support
services for which it is reimbursed at cost.
Transfer and Dividend Paying Agent. The Trust acts as its own
transfer agent and dividend paying agent.
Expenses. The Trust is responsible for all of its expenses not
assumed by the Adviser, including the costs of the following:
shareholder services; legal, custodian and audit fees; trade
association memberships; accounting; certain Trustees' fees
and expenses; fees for registering the Trust's shares; the
preparation of prospectuses, proxy materials and reports to
shareholders; and the expense of holding shareholder meetings.
For the fiscal year ending March 31, 1996, the expenses
<PAGE>
paid by the Trust, including advisory fees and reimbursable
expenses paid to the Adviser, were $710,206.
The Trust and Its Shares
Under the terms of the Declaration of Trust, the Trustees may
issue an unlimited number of whole and fractional shares of
beneficial interest without par value for each series of shares
they have authorized. All shares issued will be fully paid and
nonassessable and will have no preemptive or conversion rights.
Under Massachusetts law, the shareholders, under certain
circumstances, may be held personally liable for the Trust's
obligations. The Declaration of Trust, however, provides
indemnification out of Trust property of any shareholder held
personally liable for obligations of the Trust.
Only one series of the Trust's shares is currently authorized.
Each share has one vote and fractional shares have fractional
votes. Except as otherwise required by applicable regulations,
any matter submitted to a shareholder vote will be voted upon by
all shareholders without regard to series or class. For matters
where the interests of separate series or classes are not
identical, the question will be voted on separately by each
affected series or class. Voting is not cumulative.
The Trust does not intend to have regular shareholder meetings.
Shareholder inquiries can be made to the offices of the Trust at
the address on the cover of this Prospectus.
Dividends
The Trust's net income is declared as dividends each business
day. Dividends are paid in the form of additional shares credited
to investor accounts at the end of each calendar month, unless a
shareholder elects in writing to receive a monthly dividend
payment by check or direct deposit. Any net realized capital
gains will be distributed at least annually.
Performance Information
From time to time, the Trust advertises its yield and effective
yield. Both figures are based on historical data and are not
intended to indicate future performance.
For advertising purposes, the yield is calculated according to a
standard formula prescribed by the Securities and Exchange
Commission. This formula divides the net income earned on one
share during a given seven-day period by the initial value of
that share (normally $1.00), and expresses the result as an
annualized percentage.
The Trust's "effective yield" is calculated in a similar manner,
except that the net income earned during a seven-day period is
assumed to be reinvested at the same rate over a full year. This
calculation results in a slightly higher yield figure which shows
the effect of compounding.
The Trust may also cite the ranking or performance of its
Portfolio as reported in the public media or by independent
performance measurement firms. Further information on the methods
used to calculate the Trust's yield may be found in the Trust's
Statement of Additional Information.
Taxes
For federal income tax purposes, the Trust intends to maintain
its status under Subchapter M of the Internal Revenue Code (the
"Code") as a regulated investment company by distributing to
shareholders 100% of its net income and net capital gains, if
any, by the end of its fiscal year. The Code also requires the
Trust to distribute at least 98% of undistributed net income and
capital gains realized from the sale of investments by calendar
year-end in order to avoid a 4% excise tax. The capital gain
distribution is determined as of October 31 each year. Capital
gain distributions, if any, are taxable to the shareholder. The
Trust will send shareholders an annual notice of dividends and
other distributions paid during the year.
<PAGE>
Investors who fail to provide a valid social security or tax
identification number may be subject to federal withholding at a
rate of 31% of dividends and capital gain distributions.
Investors are advised to retain all statements received from the
Trust and to maintain accurate records of their investments.
At the state and local level, dividend income and capital gains
are generally considered taxable income. Interest on certain
U.S. Government securities held by the Trust would be exempt from
state and local income taxes if held directly by the shareholder.
Because tax laws vary from state to state, shareholders should
consult their tax advisers concerning the impact of mutual fund
ownership in their own tax jurisdictions.
Net Asset Value
The net asset value per share of the Trust is calculated as of 1
p.m., Washington, DC time, each day the New York Stock Exchange
is open for trading. Net asset value per share is determined by
adding the value of all securities and other assets, subtracting
liabilities and dividing the result by the total number of the
Trust's outstanding shares. The Trust's securities are valued
according to the "amortized cost" method, which is intended to
stabilize the share price at $1.00.
How to Purchase and Redeem Shares
Account Transactions
Transactions into or out of the Trust are entered in the
investor's account and recorded in shares. The number of shares
in the account is maintained to an accuracy of 1/1000th of a
share. Unless an investor specifically requests in writing,
certificates will not be issued to represent shares in the Trust.
The Trust will provide a subaccounting report for institutions
needing to maintain separate information on accounts under their
supervision.
Telephone Transactions
The option to initiate inter-fund exchanges and redemptions and
to obtain account balance information by telephone is available
automatically to all shareholders. The Trust will employ
reasonable security procedures to confirm that instructions
communicated by telephone are genuine; if it does not, it may be
liable for losses due to unauthorized or fraudulent transactions.
These procedures can include, among other things, requiring one
or more forms of personal identification prior to acting upon
telephone instructions, providing written confirmations and
recording all telephone transactions. Certain transactions,
including account registration or address changes, must be
authorized in writing.
Purchasing Shares
Shareholder purchases are priced at the net asset value per share
next determined after the purchase order is received by the Trust
in proper form and funds are received by the Trust's Custodian.
This is normally one or two business days after an investment is
received at the Trust.
New Accounts. A minimum of $2,500 is required to open an account.
Each investor is given an account with a balance denominated in
shares. When a new account is opened by telephone for funds wired
to the Trust, the investor will be required to submit a signed
application promptly thereafter. Payment of redemption proceeds
is not permitted until a signed application is on file with the
Trust.
New accounts may be opened by completing an application and
forwarding it with a check for the initial investment to:
Government Investors Trust
1655 Fort Myer Drive, Suite 1000
Arlington, VA 22209-3108
<PAGE>
Subsequent investments. Subsequent investments may be made in any
amount, but the Trust reserves the right to return investments of
less than $50.00. See "Redeeming Shares" for an explanation of
the Trust's policies regarding the 10-day hold on invested
checks.
Subsequent investments should be sent to:
Government Investors Trust
P.O. Box 640393
Cincinnati, OH 45264-0393
Please include an investment deposit slip or an indication of the
account to be credited. Checks should be endorsed or payable to
Government Investors Trust.
In Person. Accounts may be opened and subsequent deposits made
at any office of the Trust.
By Wire. Federal Funds wires should be sent to
Star Bank, N.A., Cinti/Trust, ABA No. 0420-0001-3, for credit as
follows:
Government Investors Trust
Account No. 48038-8883
(Investor name and account number)
Please call before or shortly after funds are wired to ensure
proper credit. The Trust must be notified by 1 p.m., Washington,
DC time to credit the shareholder's account the same day. There
is a charge of $6.00 for processing incoming wires of less than
$2,500.
By Inter-Fund Exchange. Investors may redeem shares from one GIT
account and concurrently invest the proceeds in another GIT
account by telephone when the account registration and tax
identification number remain the same. There is no charge for
this service. When a new account is opened by exchange, a new
account application is required if the account registration or
tax identification number will differ from that on the
application for the original account. Exchanges may only be made
into funds that are registered or otherwise permitted to be sold
in the investor's state of residence.
By Automatic Monthly Investment. Regular monthly investments in
any fixed amount of $100 or more can be made automatically by
Electronic Funds Transfer from accounts at banks or savings and
loan associations which have the required transfer capabilities.
The investor can change the amount of this automatic investment
or discontinue the service at any time by writing to the Trust.
Redeeming Shares
Redemptions are processed on any day the New York Stock Exchange
is open and are effected at the net asset value per share next
determined after the redemption request is received in proper
form. Redemptions may be made by wire transfer, by mail, in
person or pursuant to standing instructions. The Trust does not
distribute currency or coin.
To protect your account, the Trust requires signature guarantees
before certain redemptions or registration changes are considered
in good order. Signature guarantees help the Trust ensure the
identity of the authorized account owner or owners before the
Trust releases redemption proceeds or recognizes a new person to
request redemptions. Signature guarantees are required for any
account transfers or delivery of redemption proceeds to a person
other than the shareholder of record (i) at an address other than
the shareholder's address of record or (ii) by wire to a bank
account other than the shareholder's previously designated bank
account that receives wire transfers. The Trust recognizes
signature guarantees from banks with FDIC insurance, certain
credit unions, trust companies, and members of a domestic stock
exchange. A guarantee from a notary public is not an acceptable
signature guarantee.
By Wire. Wire transfers permit funds to be credited to a
shareholder's bank account, usually the same day. Wires may only
be sent to the bank account previously designated in writing.
Other wires and wires to third parties are normally not
permitted.
<PAGE>
Redemptions of $10,000 or more will be paid by wire to U.S.
domestic banks without charge. Wires for lesser amounts will be
paid after deducting a $10 service charge. Wires to foreign banks
require a service charge of $30, or the cost of the wire if
greater.
Wire requests received after 12:30 p.m., Washington, DC time will
normally be processed the next business day. Wires can be
arranged by calling the telephone numbers on the cover of this
Prospectus.
By Mail. Upon written or telephone request, redemptions may be
sent to the shareholder of record by official check of the Trust.
Redemption requests received by mail are normally processed
within one business day.
In Person. Redemptions may be requested in person at any office
of the Trust. Payment of proceeds of same-day redemptions in
excess of $10,000 are not permitted.
By Check. An investor who has requested checkwriting privileges
and submitted a signature card may write checks in any amount
payable to any party. Checks of $500 or more are processed free
of charge. There is a charge of $0.15 for checks written for
under $500. An initial supply of preprinted checks will be sent
free of charge. The cost of check reorders and of printing
special checks will be charged to the investor's account.
A confirmation statement showing the amount and number of each
check written is sent to the investor quarterly. The Trust does
not return canceled checks, but will provide copies of
specifically requested checks. A fee of $1.00 per copy is charged
for more than one check copy per year.
Uncollected Funds. To protect shareholders against loss or
dilution resulting from deposit items that are returned unpaid,
the delivery of the proceeds of any redemption of shares may be
delayed 10 days or more until it can be determined that the check
or other deposit item (including an Automatic Monthly Investment)
used for purchase of the shares has cleared. Shares will remain
invested until that time. Such deposit items are considered
"uncollected," unless the Trust has determined that they have
been actually paid by the bank on which they were drawn.
Shares purchased by cash, federal funds wire or U.S. Treasury
check are considered collected when received. All deposit items
earn dividends from the day of credit to a shareholder's account,
even while not collected.
Stop Payments. The Trust will honor stop payment requests on
unpaid checks written by shareholders for a fee of $5.00. Oral
stop payment requests are effective for 14 calendar days, at
which time they will be canceled unless confirmed in writing.
Written stop payment orders are effective for six months and may
be extended by written request for another six months.
There is a charge of $28.00 or the cost of stop payment, if
greater, for stop payment requests on "official checks" issued by
the Trust on behalf of shareholders. Certain documents may be
needed before such a request can be processed.
Periodic Redemptions. Investors may request automatic monthly
redemptions of a fixed or readily determinable sum, or of the
actual dividends earned during the past month. Such payments will
be sent to the investor or to any other single payee authorized
in writing by the account holder, including direct deposit to the
investor's bank account. There is no charge for this service, but
the Trust reserves the right to impose a charge, or to impose a
minimum amount for periodic redemptions.
Transaction Charges
In addition to charges described elsewhere in this Prospectus, an
account will be charged (by redemption of shares) $3.00 per month
for any account whose month-end balance is below $1,000.
Investors who own shares in the Trust with an account balance
that falls below this amount should carefully consider the impact
of the $3.00 charge on their investment. The charge may be
greater than the investment return and may deplete a
shareholder's account over time. The Trust will contact each
investor prior to charging the account and inform the investor of
the option to increase the account balance or close the account
within 30 days to avoid a fee.
<PAGE>
Accounts will be charged (by redemption of shares) $10.00 for
invested items returned for any reason. The Trust charges $5.00
to process each bearer bond coupon deposited.
The Trust reserves the right to impose additional charges, upon
30 days' written notice, to cover the costs of unusual
transactions. Services for which charges could be imposed
include, but are not limited to, processing items sent for
special collection, transfers to accounts at the Trust's
custodial bank and issuance of multiple share certificates.
Retirement Plans
IRAs. Individual Retirement Accounts ("IRAs") may be opened with
a reduced minimum investment of $500. Even though they may be
nondeductible or partially deductible, IRA contributions up to
the allowable annual limits may be made, and the earnings on such
contributions will accumulate tax-free until distribution. The
Trust currently charges an annual fee of $12 for an investor's
IRA, which may be invested in an unlimited number of GIT mutual
funds. A separate application is required for IRA accounts.
Keogh Plans. The Trust also offers Keogh (or H.R. 10) plans for
self-employed individuals and their employees, which enable them
to obtain tax-sheltered retirement benefits similar to those
available to employees covered by qualified retirement plans.
Currently the Trust charges an annual maintenance fee of $15 for
Keogh accounts.
The Trust also sponsors SEP IRAs, SARSEPs, 401(k) and 403(b)
plans. Further information on the retirement plans available
through the Trust, including applicable minimum investments, may
be obtained by calling the Trust's shareholder service
department.
Closing an Account
An investor who wishes to close an account should request that
the account be closed, rather than redeeming the amount believed
to be the account balance. When an account is closed, shares will
be redeemed at the next determined net asset value.
The Trust reserves the right to involuntarily redeem accounts
with balances of less than $1,000 due to prior shareholder
redemptions. Prior to closing any such account, the investor will
be given 30 days written notice, during which time the investor
may increase his or her balance to avoid having the account
closed.
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 800/336-3063
24-Hour ACCESS
Toll-free nationwide: 800/448-4422
The GIT Family of Mutual Funds
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
Government Investors Trust
For more complete information on any GIT Investment Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money. This prospectus does not constitute an
offering by the distributor in any jurisdiction in which such
offering may not be lawfully made.
GIT
GIT Investment Funds
1655 Fort Myer Drive
Arlington Virginia 22209
http://www.gitfunds.com
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Dated July 31, 1996
For use with Prospectus dated July 31, 1996
GOVERNMENT INVESTORS TRUST
1655 Fort Myer Drive
Arlington, VA 22209-3108
(800) 336-3063
(703) 528-6500
This Statement of Additional Information is not a Prospectus.
This Statement of Additional Information should be read in
conjunction with the Prospectus of Government Investors Trust
bearing the date indicated above (the "Prospectus"). A copy of
the Prospectus may be obtained from the Trust at the address and
telephone numbers shown.
Table of Contents
Introductory Information
("About Government Investors Trust") 2
Supplemental Investment Policies
("Investment Objective" and "Investment Policies") 2
Investment Limitations
("Investment Policies") 3
The Investment Adviser
("Management of the Trust") 4
Organization of the Trust
("The Trust and Its Shares") 5
Trustees and Officers
("Management of the Trust") 6
Administrative and Other Expenses
("Management of the Trust") 7
Portfolio Transactions
("Management of the Trust") 7
Share Purchases
("How to Purchase and Redeem Shares") 8
Share Redemptions
("How to Purchase and Redeem Shares") 9
Retirement Plans
("How to Purchase and Redeem Shares") 10
Declaration of Dividends
("Dividends") 10
Determination of Net Asset Value
("Net Asset Value") 10
Additional Tax Matters
("Taxes") 11
Yield Calculations
("Performance Information") 11
Custodians and Special Custodians 12
Legal Matters and Independent Auditors
("Financial Highlights") 12
Additional Information 12
Financial Statements and Report of Independent Auditors
("Financial Highlights") 13
Note: The items appearing in parentheses above are cross
references to sections in the Prospectus which correspond to
the sections of this Statement of Additional Information.
<PAGE>
Statement of Additional Information Page 2
Government Investors Trust July 31, 1996
Introductory Information
Government Investors Trust (the "Trust") is an open-end
diversified management investment company which invests solely in
U.S. Government securities. It may use a variety of investment
techniques with the objective of providing as high a yield as is
available from U.S. Government securities and the investment
quality associated with these securities (see "Supplemental
Investment Policies").
Supplemental Investment Policies
The Trust seeks to achieve its investment objective through
investment in securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and in
participation interests in and repurchase agreements based on
such securities. The investment objective of the Trust is
described in the Prospectus (see "Investment Objective").
Reference should also be made to the Prospectus for general
information concerning the Trust's investment policies (see
"Investment Policies"). Unless described herein or in the
Prospectus, the Trust will not invest in "derivative" securities.
Specialized Investment Techniques. In order to achieve its
investment objective, the Trust may use, when the Adviser deems
appropriate, certain specialized investment techniques. Such
specialized investment techniques principally include those
identified in the Prospectus (see "Investment Policies"), which
are described more fully below:
1. Investments in Specialized Kinds of Government Agency
Securities. These agency securities often provide higher yields
than are available from more common types of Government-backed
investments. However, such specialized investments may only be
available from a few sources, in limited amounts, or only in very
large denominations; they may also require specialized capability
in portfolio servicing and in legal matters related to Government
guarantees. While frequently offering attractive yields, the
limited-activity markets of many of these securities means that
if the Trust were forced to liquidate any of them it might not be
able to do so advantageously; accordingly, the Trust intends to
normally hold such securities to maturity or pursuant to
repurchase agreements.
2. Investment in "Floating Rate" Government Agency Securities.
These Government agency securities may offer particular
advantages towards the achievement of the objectives of the Trust
by providing for an interest rate which is adjusted (i.e.,
"floats") at regular intervals according to some published
interest rate. Such securities frequently offer higher yields
than are available on short-term securities but less risk of
market value fluctuations than securities of longer maturities
which do not float. Interest rates, and thus income to the Trust,
on these securities will normally float downward when interest
rates are falling and float upward when their reference rates of
interest rise. Generally, such investments float in relation to
the "prime" interest rate of New York or other money center banks
and often are adjusted upward or downward quarterly, although
some such securities float in relationship to other published
interest rates or at more or less frequent intervals. These
floating rate securities may have stated maturities of up to 30
years, although 10-year stated maturities are more typical.
Floating rate securities may be comparable in some respects to
short-term securities, but their longer stated maturities reduce
investment flexibility, making them less attractive than short-
term securities to some investors.
3. Repurchase Agreement Transactions. A repurchase agreement
involves the acquisition of securities from a financial
institution, such as a bank or securities dealer, with the right
to resell the same securities to the financial institution on a
future date at a fixed price. Repurchase agreements are a highly
flexible medium of investment in that they may be for very short
periods, including, frequently, maturities of only one day. Under
the Investment Company Act of 1940 repurchase agreements are
considered loans and the securities involved may be viewed as
collateral. It is the Trust's policy to limit the financial
institutions with which it engages in repurchase agreements to
banks, savings and loan associations and securities dealers
meeting financial responsibility standards prescribed in
guidelines adopted by the Trustees.
When investing in repurchase agreements, the Trust could be
subject to the risk that the other party may not complete the
scheduled repurchase and the Trust would then be left holding
securities it did not expect to retain. If those securities
decline in price to a value less than the amount due at the
scheduled time of repurchase, then the Trust could suffer a loss
of principal or interest. The Adviser will follow procedures
designed to assure that repurchase agreements acquired by the
Trust are always at least 100% collateralized as to principal and
interest. It is the Trust's policy to require delivery of
repurchase agreement collateral to its Custodian or (in the case
of book-entry securities held by the Federal Reserve System) that
such collateral is registered in the Custodian's name or in
negotiable form. In the event of insolvency or bankruptcy of the
other party to a repurchase agreement, the Trust could encounter
restrictions on the exercise of its rights under the repurchase
agreement.
To the extent the Trust requires cash to meet redemption requests
and determines that it would not be advantageous to sell
portfolio securities to meet those requests, then it may sell its
portfolio securities to another investor with a simultaneous
agreement to repurchase them. Such a transaction is commonly
called a "reverse repurchase agreement." It would have the
practical effect of constituting a loan to the Trust, the
proceeds of which would be used to meet cash requirements from
redemption requests. During the period of any reverse repurchase
agreement, the Trust would recognize fluctuations in value of the
underlying securities to the same extent as if those securities
were held by the Trust outright. If the Trust engages in reverse
repurchase agreement transactions, it will maintain in a
segregated account designated Government securities which are
liquid or mature prior to the scheduled repurchase and cash
sufficient in aggregate value to provide adequate funds for
completion of the repurchase. It is the Trust's current operating
policy not to engage in reverse repurchase agreements except for
purposes of meeting redemption requests. The Trust will not enter
into any reverse repurchase agreement, if as a result, reverse
repurchase agreements in the aggregate would exceed 10% of the
Trust's total assets.
<PAGE>
Statement of Additional Information Page 3
Government Investors Trust July 31, 1996
4. Investment in Matched Purchase/Sale Transactions. The Trust
may invest by means of matched purchase/sale transactions
containing two elements: the purchase of U.S. Government
securities and a simultaneous sale of those securities by means
of a future delivery contract at a fixed price for later delivery
to a different institution (securities dealer, bank, etc.).
During the interval between the actual dates they are bought and
sold, the securities will be held by a custodian of the Trust.
The transactions are thus self-liquidating and produce a known
yield, similar to a repurchase agreement; this yield is comprised
of the interest earned on the securities while they are held plus
the price differential between the purchase and sale. The sale
price may be more or less than the price at which the securities
could otherwise be sold on the day delivery is due. These
arbitrage transactions may be attractive if market conditions
create opportunities for higher yields than on repurchase
agreements. It is contrary to the Trust's policies for it to hold
a future delivery contract for the sale of securities which it
does not own. Established markets are available for future
delivery contracts, including financial futures exchanges and the
over-the-counter market.
5. Investments Purchased for Forward Delivery. Institutional
investors such as the Trust often enter into commitments to take
delivery of securities at a future time under specified terms of
purchase. Such transactions sometimes appear advantageous because
they may provide an opportunity to acquire an investment
otherwise unavailable, or with more attractive terms than are
currently available or anticipated for the future. Such
transactions, however, can involve a risk that the yields
available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself,
and a risk that the investor's available cash may be less than
projected, possibly necessitating a disadvantageous resale of the
securities purchased or of other portfolio securities at a loss
to the Trust. Securities purchased for forward delivery do not
accrue interest until they are delivered. The Trust intends to
enter into forward delivery transactions when it deems them
advisable, but to reduce its exposure to price instability
through changes in interest rates before the transactions are
completed, it has a policy that these commitments will only be
undertaken in connection with securities having maturities of one
year or less.
U.S. Government Securities. As used in the Prospectus and in this
Statement of Additional Information, the term "U.S. Government
securities" refers to a variety of securities which are issued or
guaranteed by the United States Treasury, by various agencies of
the United States Government, and by various instrumentalities
which have been established or sponsored by the United States
Government, and to certain interests in the foregoing types of
U.S. Government securities. Except for U.S. Treasury securities,
these obligations, even those which are guaranteed by federal
agencies or instrumentalities, may or may not be backed by the
"full faith and credit" of the United States. In the case of
securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the United States itself in
the event the agency or instrumentality does not meet its
commitments.
Treasury securities include Treasury bills, Treasury notes and
Treasury bonds. Some of the Government agencies which issue or
guarantee securities are the Department of Housing and Urban
Development, the Department of Health and Human Services, the
Government National Mortgage Association, the Farmers Home
Administration, the Department of Transportation, the Department
of Energy, the Department of the Interior, the Department of
Commerce, the Department of Defense and the Small Business
Administration. Other Government agencies and instrumentalities
which issue or guarantee securities include the Export-Import
Bank, the Federal Farm Credit System, the Federal Home Loan
Banks, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation and the Student Loan Marketing
Association. International development organizations which
operate under sponsorship of the U.S. Government and which issue
or guarantee securities (although the Trust does not presently
intend to hold such securities in its portfolio) include the
Inter-American Development Bank, the Asian Development Bank and
the International Bank for Reconstruction and Development.
When used herein, the term "U.S. Government securities" includes
securities issued or guaranteed by any of the foregoing entities
or by any other agency or instrumentality established or
sponsored by the United States Government, and participation
interests (with unaffiliated persons) in and instruments
evidencing deposit or safekeeping for any of the foregoing.
Participation interests are pro-rata interests in U.S. Government
securities held by others; instruments evidencing deposit or
safekeeping are documentary receipts for such original securities
held in custody by others.
Maturities. As used in this Statement of Additional Information
and in the Prospectus, the term "effective maturity" means either
the actual stated maturity of the investment, the time between
its scheduled interest rate adjustment dates (for variable rate
securities), or the time between its purchase settlement and
scheduled future resale settlement pursuant to a resale or
optional resale under fixed terms arranged in connection with the
purchase, whichever period is shorter. A "stated maturity" means
the time scheduled for final repayment of the entire principal
amount of the investment under its terms. "Short-term" means a
maturity of one year or less, while "long-term" means a longer
maturity.
Investment Limitations
The Trust has adopted as fundamental policies the following
limitations on its investment activities, which may not be
changed without a majority vote of the Trust's shareholders as
defined in the Investment Company Act of 1940 (see "Organization
of the Trust").
1. Permissible Investments. Subject to the investment policies
from time to time adopted by the Trustees, The Trust may purchase
U.S. Treasury bills, notes, bonds, or other debt obligations
issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities (including international membership
development banks and negotiable certificates of deposit the
<PAGE>
Statement of Additional Information Page 4
Government Investors Trust July 31, 1996
principal amount of which is insured by the Federal Deposit
Insurance Corporation or participation interests (with
unaffiliated persons) therein, or instruments evidencing deposit
or safekeeping of U.S. Government securities (see "Supplemental
Investment Policies"); but any of these securities may be subject
to repurchase agreements with financial institutions or
securities dealers or may be purchased from any person, under
terms and arrangements determined by the Trust, for future
delivery. Any of these securities may have limited markets and
may be purchased with restrictions on transfer imposed by the
Government agency or instrumentality involved or for other
reasons, to the extent the Trustees permit; however, the Trust
may not invest in securities for which there is no readily
available market, if at the time of acquisition more than 15% of
the Trust's net assets would be invested in such securities.
2. Borrowing and Lending. The Trust may not obtain bank loans,
except for extraordinary or emergency purposes. The Trust may
enter into reverse repurchase agreements in amounts not exceeding
25% of its total assets (including the proceeds of the reverse
repurchase transactions) for purposes of purchasing other
securities. The Trust may not obtain loans or enter into reverse
repurchase agreements in total amounts exceeding one-third of
such total assets for any purpose, including the meeting of cash
withdrawal requests or for extraordinary purposes. The Trust may
not mortgage, pledge or hypothecate any assets to secure bank
loans, except in amounts not exceeding 15% of its net assets
taken at cost, and only for extraordinary or emergency purposes.
The Trust may loan its portfolio securities in an amount not in
excess of one-third of the value of the Trust's gross assets,
provided collateral satisfactory to the Trustees is continuously
maintained in amounts not less than the value of the securities
loaned.
3. Other Activities. The Trust may not act as an underwriter,
make short sales (or maintain a short position), or write put or
call options or combinations thereof. Nor may the Trust purchase
securities on margin (except for customary credit used in
transaction clearance), invest in commodities or in real estate,
or acquire shares of other investment companies, except that the
foregoing prohibition against investment in "commodities" by the
Trust does not preclude the use of financial futures contracts to
make purchases or sales of U.S. Government securities, provided
the transactions would otherwise be permitted under the Trust's
investment policies.
The Trust may not knowingly take any investment action which has
the effect of eliminating its tax exemption under Sub-Chapter M
of the Internal Revenue Code (see "Additional Tax Matters").
Notwithstanding the fundamental policies described above, as a
matter of operating policy, in order to comply with certain applicable
State restrictions, the Trust will not pledge,
mortgage or hypothecate in excess of 10% of its net assets at
market value. The Trust has adopted the additional restriction,
notwithstanding Paragraph 1 above, that it will not invest more
than 10% of its net assets at the time of purchase in illiquid
assets and securities for which there is no readily available
market (which include fully insured certificates of deposit,
unless the Trustees determine they are readily marketable) and in
repurchase agreements and matched purchase/sale transactions that
cannot be terminated within seven days. Matched purchase/sales
generally involve the purchase of liquid securities coupled with
a sale for future delivery. Future delivery contracts traded on
an organized exchange (such as the Chicago Board of Trade or the
International Monetary Market) are considered liquid, while such
contracts executed in the over-the-counter market may be
illiquid, if a readily available futures market has not
developed. Liquidity of a matched purchase/sale transaction
requires liquidity of both of its parts; the securities purchased
and the future delivery sale contract. The sale contract may be
liquid by the existence of a readily available market for it or
by a contractual provision permitting delivery at any time within
seven days.
The Investment Adviser
Effective July 31, 1996, Bankers Finance Advisors, LLC, 1655 Fort Myer
Drive, Arlington, Virginia 22209-3108, is the investment adviser
to the Trust and is called the "Adviser" throughout this
Statement of Additional Information and the Prospectus. The
Adviser is responsible for the investment management of the Trust
and is authorized to execute the Trust's portfolio
transactions, to select the methods and firms with which such
transactions are executed, to oversee the Trust's operations, and
otherwise to administer the affairs of the Trust as it deems
advisable. In the execution of these responsibilities, the
Adviser is subject to the investment policies and limitations of
the Trust described in the Prospectus and this Statement of
Additional Information, to the terms of the Declaration of Trust
and the Trust's By-Laws, and to written directions given from
time to time by the Trustees.
The Adviser is a division of Madison Investment Advisors, Inc.
("Madison"), 6411 Mineral Point Road, Madison, Wisconsin.
Madison is a registered investment adviser and has numerous
advisory clients of its own. Madison also serves as investment
adviser to the following investment companies: Bascom Hill
Investors, Inc., Bascom Hill BALANCED Fund, Inc. and
Madison Bond Fund, Inc. Madison was founded in 1973 and
has never been controlled or affiliated with any other business
entity or person.
This investment advisory agreement is subject to annual review
and approval by the Trustees, including a majority of those who
are not "interested persons," as defined in the Investment
Company Act of 1940. The investment advisory agreement was
approved by shareholders for an initial two year term at a special
meeting of the Trust's shareholders held in July 1996.
The Investment Advisory Agreement between the Trust and
the Adviser is subject to annual review and approval by the
Trustees, including a majority of those Trustees who
are not "interested persons," as defined in the Investment
Company Act of 1940. The Investment Advisory Agreement was
approved by shareholders at a special meeting of the Trust's
shareholders held in July 1996.
The Investment Advisory Agreement may be terminated at any time,
without penalty, by the Trustees or by the vote of a majority of
the outstanding voting securities, or by the Adviser, upon sixty
days' written notice to the other party. The Investment Advisory
Agreement may not be assigned by the Adviser, and will
automatically terminate upon any assignment.
Background of the Adviser. The Adviser was formed in 1996 by
Madison for the purpose of providing investment management
services to the GIT family of mutual funds, including the Trust.
The Adviser purchased the investment management assets of the
former adviser to the Trust, Bankers Finance Investment
Management Corp., on July 31, 1996. For periods prior to July 31,
1996, references in this Statement of Additional Information and in
the Prospectus to the "Adviser" refer to Bankers Finance Investment
Management Corp. The Adviser also serves as the investment adviser to
GIT Equity Trust, GIT Income Trust and GIT Tax-Free
Trust.
Management. Frank E. Burgess is President, Treasurer and
Director of Madison and Vice President of the Adviser.
Mr. Burgess owns a majority of the controlling interest of Madison,
which, in turn, controls the Adviser. Mr. Burgess is also a Trustee and
Vice President of the Trust. Mr. Burgess holds the same positions
with GIT Equity Trust, GIT Income Trust and
GIT Tax-Free Trust. Katherine L. Frank is President and Treasurer
of the Adviser and Vice President of Madison. Ms. Frank holds the
same positions with GIT Equity Trust, GIT Income Trust and
GIT Tax-Free Trust.
<PAGE>
Statement of Additional Information Page 5
Government Investors Trust July 31, 1996
Advisory Fee and Expense Limitations. For its services under the
Investment Advisory Agreement, the Adviser receives a fee,
payable monthly, calculated as 1/2 percent per annum of the
average daily net assets of the Trust's portfolio during the
month. Such fees do not decrease as net assets increase. The
Adviser may waive or reduce such fee during any period. The
Adviser may also reduce such fee on a permanent basis, without
any requirement for consent by the Trust or its shareholders,
under such terms as it may determine, by written notice thereof
to the Trust.
The Adviser has agreed to reimburse the Trust for all of its
expenses, excluding securities transaction commissions and
expenses, taxes, interest and extra-ordinary and non-recurring
expenses, which exceed during any fiscal year one and one-half
percent of the Trust's daily average net assets up to $40 million
and one percent of the amount, if any, by which such assets
exceed $40 million. In addition, the Adviser has also agreed to
reimburse the Trust for all of its expenses (including any
management fees paid to the Adviser), but excluding securities
transaction commissions and expenses, taxes, interest, share
distribution expenses, and other extraordinary and non-recurring
expenses, which during any fiscal year exceed the applicable
expense limitation in any State or other jurisdiction in which
the Trust, during the fiscal year, becomes subject to regulation
by qualification or sale of its shares. As of the date of this
Statement of Additional Information, the Trust believes this
applicable annual expense limitation to be equivalent to two and
one-half percent of the Trust's aggregate daily average net
assets up to $30 million; two percent of an amount of such net
assets exceeding $30 million, but not exceeding $100 million; and
one and one-half percent of the amount, if any, by which such net
assets exceed $100 million.
In addition, the Adviser has agreed, in any event, to be
responsible for the fees and expenses of the Trustees and
officers of the Trust who are affiliated with the Adviser, the
rent expenses of the Trust's principal executive office premises,
and its various promotional expenses (including the distribution
of Prospectuses to potential shareholders). Other than investment
management and the related expenses, and the foregoing items, the
Adviser is not obligated to provide or pay for any other services
to the Trust, although it may elect to do so.
The Investment Advisory Agreement permits sharing of the
Adviser's fee with other persons, subject to the prior approval
of such arrangements by the Trustees, including a majority of
those who are not interested persons of the Trust. Under
regulations of the Securities and Exchange Commission such
arrangements are permissible in connection with the distribution
of investment company shares, if the payments of the shared fee
amounts are made out of the investment adviser's own resources.
Prior to its implementation the Trustees will approve any
arrangement to share the Adviser's fees and will satisfy
themselves that such payments are made from the Adviser's own
resources. During the fiscal years ending March 31, 1994, 1995
and 1996, the Adviser received advisory fees of $410,098,
$342,725 and $291,791 respectively from the Trust.
Organization of the Trust
The Declaration of Trust, dated February 14, 1979, has been filed
with the Secretary of State of the Commonwealth of Massachusetts
and the Clerk of the City of Boston, Massachusetts. The
Prospectus contains general information concerning the Trust's
form of organization and its shares (see "The Trust and Its
Shares"), including the series of shares currently authorized.
Shares and Classes of Shares. The Trustees may authorize at any
time the creation of additional series of shares (the proceeds of
which would be invested in separate, independently managed
portfolios) and additional classes of shares within any series
(which would be used to distinguish among the rights of different
categories of shareholders, as might be required by future
regulations or other unforeseen circumstances) with such
preferences, privileges, limitations, and voting and dividend
rights as the Trustees may determine. All consideration received
by the Trust for shares of any additional series or class, and
all assets in which such consideration is invested, would belong
to that series or class (but classes may represent proportionate
undivided interests in a series), and would be subject to the
liabilities related thereto. The Investment Company Act of 1940
would require the Trust to submit for the approval of the
shareholders of any such additional series or class any adoption
of an investment advisory contract or any changes in the Trust's
fundamental investment policies related to the series or class.
The Trustees may divide or combine the shares into a greater or
lesser number of shares without thereby changing the
proportionate interests in the Trust. Upon any liquidation of the
Trust, the shareholders are entitled to share pro-rata in the
liquidation proceeds available for distribution.
Voting Rights. The voting rights of shareholders are not
cumulative, so that holders of more than 50 percent of the shares
voting can, if they choose, elect all Trustees being selected,
while the holders of the remaining shares would be unable to
elect any Trustees. As of May 20, 1996, no person was known to
the Trust to own beneficially or of record 5% or more of its
shares.
Because there is not a requirement for annual elections of
Trustees, the Trust does not anticipate having regular annual
shareholder meetings. Shareholder meetings will be called as
necessary to consider questions requiring a shareholder vote. The
selection of the Trust's independent auditors will be submitted
to a vote of ratification by the shareholders at any annual
meetings held by the Trust. Any change in the Declaration of
Trust, in the Investment Advisory Agreement (except for
reductions of the Adviser's fee) or in the fundamental
investment limitations of the Trust must be approved by a
majority of the shareholders before it can become effective.
A "majority" is constituted by either 50 percent of all shares
of the Trust or 67 percent of the shares voted at an annual
meeting or special meeting of shareholders
at which at least 50 percent of the shares are present or
represented by proxy.
The Declaration of Trust provides that two-thirds of the holders
of record of the Trust's shares may remove a Trustee from
<PAGE>
Statement of Additional Information Page 6
Government Investors Trust July 31, 1996
office by votes cast in person or by proxy at a meeting called
for the purpose. A Trustee may also be removed from office
provided two-thirds of the holders of record of the Trust's
shares file declarations in writing with the Trust's Custodian.
Shareholder Liability. Under Massachusetts law, the shareholders
of an entity such as the Trust may, under certain circumstances,
be held personally liable for its obligations. The Declaration of
Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and requires that notice of such
disclaimer be given in each agreement, obligation or instrument,
entered into or executed by the Trust or the Trustees. The
Declaration of Trust provides for indemnification out of the
Trust property of any shareholder held personally liable for the
obligations of the Trust. The Declaration of Trust also provides
that the Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of
the Trust and satisfy any judgment thereof. The risk of a
shareholder incurring financial loss on account of status as a
shareholder is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
Liability of Trustees and Others. The Declaration of Trust
provides that the officers and Trustees of the Trust will not be
liable for any neglect, wrongdoing, errors of judgment, or
mistakes of fact or law, except that they shall not be protected
from liability arising out of willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties to the
Trust. Similar protection is provided to the Adviser under the
terms of the Investment Advisory Agreement and the Services
Agreement. In addition, protection from personal liability for
the obligations of the Trust itself, similar to that provided to
shareholders, is provided to all Trustees, officers, employees
and agents of the Trust.
Trustees and Officers
As of July 31, 1996, the Trustees and executive officers of the
Trust and their principal occupations during the past five years
are shown below:
Frank E. Burgess <F1>
6411 Mineral Point Road, Madison, WI 53705
Trustee and Vice President
President and Director of Madison Investment
Advisors, Inc., the entity which controls the Adviser. Prior to
forming Madison in 1973, he was Assistant Vice President and
Trust Officer of M&I Bank of Madison, Wisconsin. Mr. Burgess
received his BS from Iowa State University and his law degree
from the University of Wisconsin. He is a member of the State
Bar of Wisconsin. b. 8/4/42.
Thomas S. Kleppe <F2>
7100 Darby Road, Bethesda, MD 20817
Trustee
Private Investor; formerly Visiting Professor at the University
of Wyoming, Secretary of the U.S. Department of the Interior,
Administrator of the U.S. Small Business Administration, U.S.
Congressman from North Dakota, Vice President and Director of
Dain, Kalman & Quail, investment bankers, and President of Gold
Seal Co., manufacturers of household cleaning products. Attended
Valley City State College of North Dakota. b. 7/1/19.
James R. Imhoff, Jr.<F2>
429 Gammon Place, Madison, WI 53719
Trustee
President of First Weber Group, Inc. of Madison, Wisconsin. b. 5/20/44.
b.
Lorence D. Wheeler<F2>
P.O. Box 431, Madison, WI 53701
Trustee
President of Credit Union Benefits Services, Inc.
b. 1/31/38.
Katherine L. Frank
6411 Mineral Point Road, Madison, WI 53705
President
President of GIT Investment Funds, Vice President
of Madison Investment Advisors, Inc. A graduate
of Macalester College, St. Paul, Minnesota.
Charles J. Tennes
1655 Fort Myer Drive, Arlington, VA 22209-3108
Vice President
Vice President of GIT Investment Funds and Executive
Vice President of GIT Investment Services, Inc.;
Director of Presidential Savings Bank, FSB and
Presidential Service Corp.; formerly Vice President
of Ferris & Company, Inc. (now Ferris, Baker Watts). A Certified
Financial Planner and graduate of the University of Washington.
Jay R. Sekelsky
6411 Mineral Point Road, Madison, WI 53705
Vice President
Vice President of GIT Investment Funds and of
Madison Investment Advisors, Inc. Formerly Vice President
of Wellington Management Group of Boston, MA.
Mr. Sekelsky holds a BBA in Accounting and an MBA in
Finance from the University of Wisconsin.
Christopher C. Berberet
6411 Mineral Point Road, Madison, WI 53705
Vice President
Vice President of GIT Investment Funds and of
Madison Investment Advisors, Inc. Formerly the
Director of Fixed Income Management for the
ELCA Board of Pensions, Minneapolis, MN. A
graduate of the University of Wisconsin.
W. Richard Mason
1655 Ft. Myer Drive, Arlington, VA 22209
Secretary
Secretary of GIT Investment Funds, GIT Investment
Services, Inc., Presidential Savings Bank, FSB and
Presidential Service Corporation. Formerly Assistant
General Counsel for the Investment Company
Institute. Mr. Mason holds a BS in Foreign Service
from Georgetown University and received his law
degree from The George Washington University. He is
a member of the District of Columbia and Texas bars.
[FN]
<F1>
Trustee deemed to be an "interested person" of the Trust as the
term is defined in the Investment Company Act of 1940. Only those
persons named in the table of Trustees and officers who are not
interested persons of the Trust are eligible to be compensated by
the Trust. The compensation of each non-interested
Trustee who may be compensated by the
Trust has been fixed at $6,000 per year, to be pro-rated
according to the number of regularly scheduled meetings each
year. Four Trustees' meetings are currently scheduled to take
place each year. In addition to such compensation, those Trustees
who may be compensated by the Trust shall be reimbursed for any
out-of-pocket expenses incurred by them in connection with the
affairs of the Trust. Mr. Kleppe will receive annual compensation
from the Trust and from the other investment companies managed
by the Adviser or Madison (see "the Investment Adviser") totalling
$15,000. Mr. Imhoff and Mr. Wheeler will receive annual
compensation from the Trust and from other investment companies
managed by the Adviser or Madison totalling $18,000.
During the last fiscal year of the Trust, the Trustees were compensated
as follows:
Total
Pension or Compensation
Retirement from
Aggregate Benefits Estimated Portfolios
Compensa- Accrued as Annual and Fund
tion part of Benefits Complex
from Portfolios Upon Paid to
Portfolios Expense Retirement Trustees(a)
Frank E. Burgess 0 0 0 0
Thomas S. Kleppe 6,000 0 0 15,000
James R. Imhoff, Jr.(b) 0 0 0 3,000
Lorence D. Wheeler(b) 0 0 0 3,000
(a) Complex is comprised of 4 trusts and three corporations with
a total of 16 funds and/or series.
(b) Messrs. Imhoff and Wheeler joined the Board of Trustees on
July 31, 1996. Their expected annual compensation is decribed
above.
<PAGE>
Statement of Additional Information Page 7
Government Investors Trust July 31, 1996
<F2>
Member of the Audit Committee of the Trust. The Audit Committee
is responsible for reviewing the results of each audit of the
Trust by its independent auditors and for recommending the
selection of independent auditors for the coming year.
Under the Declaration of Trust, the Trustees are entitled to be
indemnified by the Trust to the fullest extent permitted by law
against all liabilities and expenses reasonably incurred by them
in connection with any claim, suit or judgment or other liability
or obligation of any kind in which they become involved by virtue
of their service as Trustees of the Trust, except liabilities
incurred by reason of their willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of their office. As of May 20, 1996, the then acting Trustees
and officers of the Trust directly or indirectly owned as a group
1% of the outstanding shares of the Trust.
Administrative and Other Expenses
Except for certain expenses assumed by the Adviser (see "The
Investment Adviser"), the Trust is responsible for payment from
its assets of all of its expenses. These expenses can include any
of the business or other expenses of organizing, maintaining and
operating the Trust. Certain expense items which may represent
significant costs to the Trust include the payment of the
Adviser's fee; the expense of shareholder accounting, customer
services, and calculation of net asset value; the fees of the
Custodian, of the Trust's independent accountants, and of legal
counsel to the Trust; the expense of registering the Trust and
its shares, of printing and distributing prospectuses and
periodic financial reports to current shareholders, and of trade
association membership; the expense of preparing shareholder
reports, proxy materials and of holding shareholder meetings of
the Trust. The Trust is also responsible for any extraordinary or
non-recurring expenses it may incur.
Services Agreement. The Trust does not have any officers or
employees who are paid directly by the Trust. The Trust has
entered into a Services Agreement with the Adviser for the
provision of operational and other services required by the
Trust. Such services may include the functions of shareholder
servicing agent and transfer agent, bookkeeping and portfolio
accounting services, the handling of telephone inquiries, cash
withdrawals and other customer service functions including
monitoring wire transfers, and providing to the Trust appropriate
supplies, equipment and ancillary services necessary to the
conduct of its affairs. The Trust is registered with the
Securities and Exchange Commission as the transfer agent for its
shares and acts as its own dividend-paying agent; while transfer
agent personnel and facilities are included among those provided
to the Trust under the Services Agreement, the Trust itself is
solely responsible for its transfer agent and dividend payment
functions and for the supervision of those functions by its
officers.
All such services provided to the Trust by the Adviser are
rendered at cost. The term "cost" includes both direct
expenditures and the related overhead costs, such as
depreciation, employee supervision, rent and the like;
reimbursements to the Adviser pursuant to the Services Agreement
are in addition to and independent of payments made pursuant to
the Investment Advisory Agreement. The Trust believes that
contracting for the previously described services may permit them
to be provided on a relatively efficient basis, whereby many
separate specialized functions are performed by personnel and
equipment not required to be devoted full time to serving the
Trust. Accordingly, certain of the "costs" attributable to
services provided to the Trust may require allocation of
expenses, such as employee salaries, occupancy expense, telephone
service, computer service and equipment costs, depreciation,
interest, and supervisory expenses. To the extent that costs must
be allocated between the Trust and other activities of the
Adviser, such allocations may be made on the basis of reasonable
approximations calculated by the Adviser and periodically
reviewed by the Trustees.
Distribution Agreement. GIT Investment Services, Inc. acts as the
Trust's Distributor pursuant to a Distribution Agreement, dated
February 11, 1983, without compensation under such Agreement.
This Agreement has an initial term of two years and may
thereafter continue in effect only if approved annually by the
Trustees, including a majority of those who are not "interested
persons," as defined in the Investment Company Act of 1940. The
Agreement provides for distribution of the Trust's shares without
a sales charge to the investor. The Distributor may act as the
Trust's agent for any sales of its shares, but the Trust may also
sell its shares directly to any person. The Distributor makes the
Trust's shares continuously available to the general public in
those States where it has qualified to do so, but has assumed no
obligation to purchase any of the Trust's shares. The Distributor
is wholly owned by A. Bruce Cleveland, its President.
Portfolio Transactions
Decisions as to the purchase and sale of securities, and
decisions as to the execution of these transactions, including
selection of market, broker or dealer and the negotiation of
commissions are to be made by the Adviser, subject to review by
the officers and Trustees.
In general, in the purchase and sale of portfolio securities the
Trust seeks to obtain prompt and reliable execution of orders at
the most favorable prices or yields. In determining the best
price and execution, the Adviser may take into account a dealer's
operational and financial capabilities, the type of transaction
involved, the dealer's general relationship with the Adviser, and
any statistical, research or other services provided by the
dealer to the Adviser. To the extent such non-price factors are
taken into account the execution price paid may be increased, but
only in reasonable relation to the benefit of such non-price
factors to the Trust as determined in good faith by the Adviser.
Brokers or dealers who execute portfolio transactions for the
Trust may also sell its shares; however, any such sales will not
be either a qualifying or disqualifying factor in the selection
of brokers or dealers. During its three most recent fiscal years,
the Trust did not pay any brokerage commissions.
The Trust expects that most portfolio transactions will be made
directly with a dealer acting as a principal thus, not involving
<PAGE>
Statement of Additional Information Page 8
Government Investors Trust July 31, 1996
the payment of commissions; however, any purchases from an
underwriter or selling group could involve payments of fees and
concessions to the underwriting or selling group. The Trust also
reserves the right to purchase portfolio securities through an
affiliated broker, when deemed in the Trust's best interests by
the Adviser, provided that: (1) the transaction is in the
ordinary course of the broker's business; (2) the transaction
does not involve a purchase from another broker or dealer; (3)
compensation to the broker in connection with the transaction is
not in excess of one percent of the cost of the securities
purchased; and (4) the terms to the Trust for purchasing the
securities, including the cost of any commissions, are not less
favorable to the Trust than terms concurrently available from
other sources. Any compensation paid in connection with such a
purchase will be in addition to fees payable to the Adviser under
the Investment Advisory Agreement. The Trust does not anticipate
that any such purchases through affiliates will represent a
significant portion of its total activity; no such transactions
took place during the Trust's three most recent fiscal years.
Although the Trust intends normally to hold its investments to
maturity, the short maturities of these investments are expected
to result in a relatively high rate of portfolio turnover. The
actual turnover rate will not be a limiting factor in the Trust's
decisions as to purchases and sales of portfolio securities.
Reference should be made to the Prospectus for actual rates of
portfolio turnover (see "Financial Highlights").
Share Purchases
The Prospectus describes the basic procedures for investing in
the Trust (see "How to Purchase and Redeem Shares"). The
following information concerning other investment procedures is
presented to supplement the information contained in the
Prospectus.
Shareholder Service Policies. The Trust's policies concerning
shareholder services are subject to change from time to time. The
Trust reserves the right to change the minimum account size below
which an account is subject to a monthly service charge or to
involuntary closing by the Trust. The Trust may also institute a
minimum amount for subsequent investments, by 30 days' written
notice to its shareholders. The Trust further reserves the right,
after 30 days' written notice to shareholders, to impose special
service charges for services that are not regularly afforded to
shareholders; such service charges may include fees for stop
payment orders and returned checks. The Trust's standard service
charges are also subject to adjustment from time to time.
Those who invest through a securities broker may be charged a
commission for the handling of the transaction, if the broker so
elects; however, any investor is free to deal directly with the
Trust in any transaction.
Share Certificates. Share certificates will not be issued unless
an investor specifically requests certificates in a signed
instruction. Share certificates will never be issued until
payment for the shares has become "collected funds," as described
in the Prospectus (see "How to Purchase and Redeem Shares").
In the event share certificates are issued, the certificate must
be returned to the Trust properly endorsed before any redemption
request can be honored. The Trust may further require that the
shareholder's signature be guaranteed by a bank insured by the
Federal Deposit Insurance Corporation or by a member firm of the
New York Stock Exchange. The Trust reserves the right to decline
to open any account for which the issuance of share certificates
is or has been requested, if it deems such action would be in the
Trust's best interests.
Subaccounting Services. The Trust offers subaccounting services
to institutions. The Trustees reserve the right to determine from
time to time guidelines to govern the level of subaccounting
service that can be provided institutions in differing
circumstances. Normally, the Trust's minimum initial investment
to open an account will not apply to subaccounts; however, the
Trust reserves the right to impose the same minimum initial
investment requirement that would apply to regular accounts, if
it deems that the cost of carrying a particular subaccount or
group of subaccounts is otherwise likely to be excessive. The
Trust may provide and charge for subaccounting services which it
determines exceed those services which can be provided without
charge; the availability and cost of such additional services
will be determined in each case by negotiation between the Trust
and the parties requesting the additional services. The Trust is
not currently aware of any such services for which a charge will
be imposed.
Crediting of Investments. In order to obtain the highest yields
available within the limitations of its investment policies, the
Trust has a policy of being as fully invested as reasonably
practicable at all times (although it may retain uninvested cash
if deemed appropriate (see "Supplemental Investment Policies").
All items submitted to the Trust for investment are accepted only
when submitted in proper form. They are credited to shareholder
accounts one or two business days following receipt. Normally,
items received by the Trust prior to 1 p.m. Washington, DC time
will be converted into shares of the Trust at the net asset value
determined at the end of the business day. Items received by the
Trust after 1 p.m. Washington, DC time will be converted into
shares of the Trust at the net asset value determined at the end
of the second business day after receipt. Funds received by wire
are normally converted into shares in the Trust at the net asset
value next determined, provided the Trust is notified of the wire
by 1.pm. Washington, DC time. If the Trust is not notified by
such time, the investment by wire will be converted into shares
of the Trust at the net asset value determined at the end of the
next business day.
After investments have been converted into shares in the Trust,
they begin to accrue dividends immediately. The Trust reserves
the right to delay credit for investments if it determines to do
so for operational reasons or if local banking practice makes
earlier crediting impractical; however, no such delay will affect
the net asset value per share used to determine the number of
shares purchased.
Checks drawn on foreign banks will not be considered received in
federal funds until the Trust has actual receipt of
<PAGE>
Statement of Additional Information Page 9
Government Investors Trust July 31, 1996
payment in immediately available U.S. dollars after submission of
the check for collection; collection of such checks through the
international banking system may require 30 days or more.
The Trust reserves the right to reject any investment for any
reason and may at any time suspend all new investment in the
Trust. The Trust may also, at its discretion or at the instance
of the Adviser, decline funds wired for credit until such funds
are actually received by the Trust. Under present federal
regulatory guidelines, the Adviser may be responsible for any
losses resulting from changes in the Trust's net asset values
which are a result of failure to receive funds from an investor
to whom recognition for investment was given in advance of
receipt of payment.
If shares are purchased to be paid for by wire and the wire is
not received or if shares are purchased by check which, after
deposit, is returned unpaid or proves uncollectible, the share
purchase may be canceled immediately or the purchased shares may
be immediately redeemed. The investor who gave notice of the
intended wire or submitted the check will be held fully
responsible for any losses so incurred by the Trust, the Adviser
or the Distributor. As a condition of the Trust's public offering
(which the investor will be deemed to have agreed by submitting
an order for the purchase of the Trust's shares) the Distributor
shall have the investor's power of attorney coupled with an
interest, authorizing the Distributor to redeem sufficient shares
from any fund of the investor for which it acts as a principal
underwriter or distributor, or to liquidate sufficient other
assets held in any brokerage account of the investor with the
Distributor, and to apply the proceeds thereof to the payment of
any amounts due to the Trust from the investor arising from any
such losses. Any such redemptions or liquidations will be limited
to the amount of the actual loss incurred by the Trust at the
time the share purchase is canceled and will be preceded by
notice to the investor and an opportunity for the investor to
make restitution of the amount of the loss. The Trust will retain
any profits resulting from such cancellations or redemptions and,
if the purchase payment was by a check actually received, will
absorb any such losses unless they prove recoverable.
Share Redemptions
The value of shares redeemed to meet withdrawal requests will be
determined according to the share net asset value next calculated
after the request has been received in proper form. (See
"Determination of Net Asset Value.") Thus, any such request
received in proper form prior to 1 p.m. Washington, DC time on a
business day will reflect the net asset value calculated at that
time; later withdrawal requests will be processed to reflect the
share net asset value figure calculated on the next day the
calculation is made. Net asset value is calculated each day the
New York Stock Exchange is open for trading.
Net asset value determinations will apply as of the day the
redemption order is submitted in proper form. A withdrawal
request may not be deemed to be in proper form unless a signed
account application has been properly submitted to the Trust by
the investor or such an application is submitted with the
withdrawal request; a shareholder draft check drawn against an
account will not be considered in proper form unless sufficient
collected funds (as described above) are available in the account
on the day the check is presented for payment. The "day of
withdrawal" for share redemptions refers to the day on which
corresponding funds are paid out by the Trust, whether by wire
transfer, exchange between accounts, official check prepared, or
debit of the investor's account to cover shareholder checks
presented for payment.
Investors should be aware that it is possible, if the Trust does
not succeed in avoiding realized or unrealized losses within its
portfolio (see "Determination of Net Asset Value"), that amounts
available for withdrawal could be less than the amount originally
invested. All withdrawals will be effected by the redemption of
the appropriate number of whole and fractional shares having a
net asset value equal to the amount withdrawn.
The Trust will use its best efforts to handle withdrawals within
the times previously given. It may, however, for any reason
suspend the right of redemption or postpone payment for shares in
the Trust for any period up to seven days. The Trust's sole
responsibility with regard to withdrawals shall be to process,
within the aforementioned time period, redemption requests in
proper form. Neither the Trust, its affiliates, nor the Custodian
can accept responsibility for any act or event which has the
effect of delaying or preventing timely transfers of payment to
or from shareholders. By law, payment for shares in the Trust may
be suspended or delayed for more than seven days only during a
period when the New York Stock Exchange is closed, other than
customary weekend and holiday closings; when trading on such
Exchange is restricted, as determined by the Securities and
Exchange Commission; or during any period when the Securities and
Exchange Commission has by order permitted such suspension.
Unless the shareholder's current address is on file with the
Trust on the original account application or by subsequent
written notice signed by the authorized signers on the account,
the Trust may require signed written instructions to process
withdrawals and account closings. In response to verbal requests,
however, withdrawal proceeds will normally be mailed to the
investor at the address shown on the Trust's records, provided an
original signed application has been received. When an account is
closed, the Trust reserves the right to make payment by check of
any final dividends declared to the date of redemption to close
the account, but not yet paid, on the same day such dividends are
paid to other shareholders, rather than at the time the account
is closed.
Funds exchanged between investor accounts will earn dividends
from the account being credited, beginning with the day the
exchange is made. Same-day exchanges can only be made in
circumstances that would permit same-day wire withdrawals from
the account being debited. All exchanges will be effected at the
net asset values per share of the respective accounts next
determined after the exchange request is received in proper form.
If an exchange is to be made between investor accounts that are
not held in the same name and tax identification number or do not
have the same mailing address or signatories, the Trust may
require any transfer between them to be made by making a
withdrawal
<PAGE>
Statement of Additional Information Page 10
Government Investors Trust July 31, 1996
from one account and a corresponding investment in the
other, using the same procedures that would apply to any other
withdrawal or investment.
The Trust reserves the right, when it deems such action necessary
to protect the interests of its shareholders, to refuse to honor
withdrawal requests made by anyone or anyone purporting to act
with the authority of another person or on behalf of a
corporation or other legal entity whose identity has not been
established to the Trust's satisfaction. Each such individual
must provide a corporate resolution or other appropriate evidence
of his authority or identity satisfactory to the Trust. The Trust
reserves the right to refuse any third party redemption requests.
If, in the opinion of the Trustees, extraordinary conditions
exist which make cash payments undesirable, payments for any
shares redeemed may be made in whole or in part in securities and
other property of the Trust. The Trust has elected, however,
pursuant to rules of the Securities and Exchange Commission, to
permit any shareholder of record to make redemptions wholly in
cash to the extent the shareholder's redemptions in any 90-day
period do not exceed the lesser of 1% of the aggregate net assets
of the Trust or $250,000. Any property of the Trust distributed
to shareholders will be valued at its net asset value. In
disposing of any such property received from the Trust, an
investor might incur commission costs or other transaction costs;
there is no assurance that an investor attempting to dispose of
any such property would actually receive the full net asset value
for it. Except as described herein, however, the Trust intends to
pay for all share redemptions in cash.
Retirement Plans
General information on retirement plans offered by the Trust is
provided in the Prospectus (see "How to Purchase and Redeem
Shares"). Additional information concerning these retirement
plans is provided below.
IRAs. The minimum initial contribution for an IRA plan with the
Trust is $500. Spousal IRAs are accepted by creating two
accounts, one for each spouse. For IRAs opened in connection with
a payroll deduction or SEP plan, the Trust may waive the initial
investment minimum on a case-by-case basis.
The Trust's annual account maintenance fee is deducted from the
account at the end of each year or at the time of the account's
closing unless prepaid by the shareholder.
Other Retirement Plans or Retirement Plan Accounts. The Trust
does not intend to impose any monthly minimum balance charge with
respect to retirement plan accounts. The Trust offers prototype
Keogh, SEP IRA, SARSEP, 401(k) and 403(b) retirement plans. The
Trust may waive the initial investment minimum for prototype or
other retirement plan accounts on a case by case basis.
Declaration of Dividends
Substantially all of the Trust's accumulated net income is
declared as dividends each business day. Calculation of
accumulated net income for the Trust's portfolio is made just
prior to calculation of the portfolio's net asset value (see
"Determination of Net Asset Value"). The amount of such net
income reflects the interest income (plus any discount earned
less premium amortized), less expenses accrued through the day of
calculation, to the extent not previously reflected in declared
dividends.
In order to facilitate its objective of stabilizing the price of
its shares at $1.00, the Trust intends normally to reflect any
portfolio realized gains and losses and unrealized appreciation
and depreciation, to the extent the Trust deems the amounts
material, in daily dividends, rather than in share prices.
Dividends are payable to shareholders of record at the time they
are determined. Dividends are paid in the form of additional
shares credited to the respective investor account at the end of
each calendar month (or normally when the account is closed, if
sooner), unless the shareholder makes a written election to
receive dividends in cash.
Notice of payment of dividends will be mailed to each shareholder
quarterly; for tax purposes each shareholder will also receive an
annual summary of dividends paid by the Trust and the extent, if
any, to which they constitute capital gains dividends (see
"Additional Tax Matters"). Any investor purchasing shares in an
account of the Trust as of a particular net asset value
determination at 1 p.m. Washington, DC time on a given day will
be considered a shareholder of record for the corresponding
dividend declaration made that day; but an investor withdrawing
as of such determination will not be considered a shareholder of
record with respect to the shares withdrawn. A "business day" is
any day the New York Stock Exchange is open for trading.
Net realized capital gains, if any, will be distributed to
shareholders at least annually as capital gains dividends.
Determination of Net Asset Value
The net asset value of the Trust is calculated each day the New
York Stock Exchange is open for trading. The net asset value is
not calculated on New Year's Day, the observance of Washington's
Birthday (President's Day), Good Friday, the observance of Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
other days the New York Stock Exchange is closed for trading. The
net asset value calculation is made as of a specific time of day,
as described in the Prospectus.
The net asset value per share is determined by adding the value
of all its securities and other assets, subtracting its
liabilities and dividing the result by the total number of
outstanding shares. These calculations are performed by the Trust
and for its account, pursuant to the Services Agreement (see
"Administrative and Other Expenses"). The Trust does not charge a
"sales load", and accordingly its shares are both offered and
redeemed at net asset value.
The Trust's securities are valued at their amortized cost,
pursuant to regulations of the Securities and Exchange Commission
("SEC") intended to permit the price of the Trust's shares to be
<PAGE>
Statement of Additional Information Page 11
Government Investors Trust July 31, 1996
stabilized at $1.00. These regulations require the Trust to limit
its investments to securities that the Trustees determine
represent minimal credit risks, to limit its maturities to those
appropriate to its objective of maintaining a stable share price,
and in any event to the maturity restrictions provided in the Trust's
investment policies described in the Prospectus.
These regulations also require the Trust to periodically compute
the market values of its portfolio securities. If for any reason,
including a change in market interest rates, the market value
computation differs by more than 1/2 of 1 percent from the $1.00
per share price, the Trustees are required to meet and consider
steps to restore the market price to $1.00 per share. Such steps
could include adjusting dividends, selling portfolio securities
before maturity to realize capital gains or losses, shortening
the portfolio's maturity, or redeeming shares in kind. Such steps
could result in dilution of shareholders' interests.
In determining market values for this purpose, the Trustees may
authorize reliance upon an independent pricing service or other
valuation technique, which may price securities with reference to
market transactions in comparable securities and to historical
relationships among the prices of comparable securities; such
prices may also reflect an allowance for the impact upon prices
of the larger transactions typical of trading by institutions.
Should the SEC change its rules governing the "amortized cost"
valuation method, the Trust reserves the right to use the "penny
rounding" method of valuation pursuant to the terms of the
Trust's exemptive order issued by the SEC.
Additional Tax Matters
Federal Income Tax. To qualify as a "regulated investment
company" and avoid Trust-level federal income tax under the
Internal Revenue Code (the "Code"), the Trust must, among other
things, in each taxable year distribute 100% of its net income
and net capital gains in the fiscal year in which it is earned.
The Code also requires the distribution of at least 98% of
undistributed net income for the calendar year and capital gains
determined as of October 31 each year before the calendar year-
end. Taxable income not distributed as required is subject to a
4% excise tax. The Trust intends to distribute all taxable income
to the extent it is realized to avoid imposition of the excise
tax.
The Trust must also derive at least 90% of its gross income from
dividends, interest, gains from the sale or disposition of
securities, and certain other types of income, and derive less
than 30% of its gross income from the sale or disposition of
securities held for less than three months. Should it fail to
qualify as a "regulated investment company" under the Code, the
Trust would be taxed as a corporation with no allowable deduction
for the distribution of dividends.
Shareholders of the Trust, however, will be subject to
federal income tax on any ordinary net income and net capital
gains realized by the Trust and distributed to shareholders as
regular or capital gains dividends, whether distributed in cash
or in the form of additional shares. Generally, dividends
declared by the Trust during October, November or December of any
calendar year and paid to shareholders before February 1 of the
following year will be treated for tax purposes as received in
the year the dividend was declared. No portion of the dividends
paid by the Trust to its shareholders is expected to be subject
to the dividends received deduction for corporations (70% of
dividends received).
Shareholders who fail to comply with the interest and dividends
"back-up" withholding provisions of the Code (by filing Form
W-9 or its equivalent, when required) or who have been
determined by the Internal Revenue Service to have failed to
properly report dividend or interest income may be subject to a
31% withholding requirement on transactions with the Trust.
For tax purposes, the Trust will send shareholders an annual
notice of dividends paid during the prior year. Investors are
advised to retain all statements received from the Trust to
maintain accurate records of their investment. Shareholders of
the Trust will be subject to federal income tax on the net
capital gains, if any, realized by each portfolio and distributed
to shareholders as capital gains dividends.
The Trust reserves the right to involuntarily redeem any of its
shares if, in its judgment, ownership of the Trust's shares has
or may become concentrated as to make the Trust a personal holding
company under the Code.
Yield Calculations
For advertising and certain other purposes, the Trust's yield is
calculated according to a standard formula prescribed by the
Securities and Exchange Commission. The yield is calculated by
dividing the net income (including the benefit of any expenses
waived or reimbursed by the Adviser) earned on one share during a
given seven-day period, exclusive of any capital changes, by the
initial value of that share (normally $1.00), and expressing the
result (called the "base period return") as an annualized
percentage. The base period return is annualized by multiplying
it by 365 and dividing the product by seven.
The Trust's "effective yield" is calculated in a similar manner,
except that the net income earned during a seven-day period is
assumed to be reinvested at the same rate over a full year,
thereby generating additional earnings from compounding. The
effective yield is computed by adding one to the base period
return, raising the result to the power equal to 365 divided by
seven, and subtracting one from the result, which is then
expressed as a percentage.
The Trust's standardized yield for the seven-day period ending
May 21, 1996 was 4.19% and its annual effective yield for the
same period was 4.28%.
Performance Comparisons. From time to time, in advertisements or
in reports to shareholders and others, the Trust may compare the
performance of its portfolio to that of recognized market indices
or may cite the ranking or performance of its portfolio as
reported in recognized national periodicals, financial
newsletters, reference
<PAGE>
Statement of Additional Information Page 12
Government Investors Trust July 31, 1996
publications, radio and television news broadcasts, or by
independent performance measurement firms.
The Trust may also compare the performance of its portfolios to
that of other funds managed by the same Advisor. It may compare
its performance to that of other types of investments,
substantiated by representative indices and statistics for those
investments.
Market indices which may be used include those compiled by major
securities firms, such as Solomon Brothers, Shearson Lehman
Hutton, the First Boston Corporation, and Merrill Lynch; other
indices compiled by securities rating or valuation services, such
as Ryan Financial Corporation and Standard and Poor's
Corporation, may also be used. Periodicals which report market
averages and indices, performance information, and/or rankings
may include: The Wall Street Journal, Investors Daily, The New
York Times, The Washington Post, Barron's, Financial World
Magazine, Forbes Magazine, Money Magazine, Kiplinger's Personal
Finance, and the Bank Rate Monitor. Independent performance
measurement firms include Lipper Analytical Services, Inc., Frank
Russel Company, SCI and CDA Investment Technologies.
In addition, a variety of newsletters and reference publications
provide information on the performance of mutual funds, such as
the Donoghue's Money Fund Report, No-Load Fund Investor,
Wiesenberger Investment Companies Service, the Mutual Fund Source
Book, the Mutual Fund Directory, the Switch Fund Advisory, Mutual
Fund Investing, the Mutual Fund Observer, Morningstar, and the
Bond Fund Survey. Financial news is broadcast by the Financial
News Network, Cable News Network, Public Broadcasting System, and
the three major television networks, NBC, CBS and ABC, as well as
by numerous independent radio and television stations.
When the Trust uses Lipper Analytical Services, Inc. in making
performance comparisons in advertisements or in reports to
shareholders or others, the performance of the Trust will be
compared to mutual funds categorized as "U.S. Government Money
Market Funds". If this category should be changed by Lipper
Analytical Services, Inc., comparisons will be made thereafter
based on the revised category.
Average Maturities. The Trust also calculates average maturity
information for its portfolio. The "average maturity" of the
portfolio on any day is determined by multiplying the number of
days then remaining to the effective maturity (see "Supplemental
Investment Policies") of each investment in the portfolio by the
value of that investment, summing the results of these
calculations, and dividing the total by the aggregate value of
the portfolio that day (determined as of 1:00 p.m.). Thus, the
average maturity represents a dollar-weighted average of the
effective maturities of the portfolio investments. The "mean
average maturity" of the portfolio over some period, such as
seven days, a month or a year, represents the arithmatic mean
(i.e., simple average) of the daily average maturity figures for
the portfolio during the respective period.
It should be noted that the Trust's yield is not fixed. In fact
the yield tends to fluctuate daily and so annualized rates of
return should not be considered representations of what an
investment may earn in any future period. Actual dividends will
tend to reflect changes in money market interest rates, and will
also depend upon the level of the Trust's expenses, any realized
or unrealized investment gains and losses, and the relative
results of the Trust's investment policies. Thus, at any point in
time future yields may be either higher or lower than past yields
and there is no assurance that any historical yield level will
continue.
Custodians and Special Custodians
Star Bank, N.A., 425 Walnut Steet, Cincinnati, OH 45202, is
Custodian for the cash and securities of the Trust. The Custodian
maintains custody of the Trust's cash and securities, handles its
securities settlements and performs transaction processing for
cash receipts and disbursements in connection with the purchase
and sale of the Trust's shares.
From time to time, the Trust may appoint as Special Custodians,
certain banks, trust companies, and firms which are members of
the New York Stock Exchange and trade for their own account in
the types of securities purchased by the Trust. Such Special
Custodians will be used by the Trust only for the purpose of
providing custody and safekeeping services of relatively short
duration for designated types of securities which, in the opinion
of the Trustees or of the Adviser, would most suitably be held by
such Special Custodians rather than by the Custodian. In the
event any such Special Custodian is used, it shall serve the
Trust only in accordance with a written agreement with the Trust
meeting the requirements of the Securities and Exchange
Commission for custodians and approved and reviewed at least
annually by the Trustees, and, if a securities dealer, only if it
delivers to the Custodian its receipt for the safekeeping of each
lot of securities involved prior to payment by the Trust for such
securities.
The Trust may also maintain deposit accounts for the handling of
cash balances of relatively short duration with various banks, as
the Trustees or officers of the Trust deem appropriate, to the
extent permitted by the Investment Company Act of 1940.
Legal Matters and Independent Auditors
Sullivan & Worcester, LLP, 1025 Connecticut Avenue, NW,
Washington, DC, 20036, serves as legal counsel to the Trust.
Ernst & Young LLP, 1225 Connecticut Avenue, NW, Washington, DC
20036, serve as independent auditors to the Trust.
From time to time the Trust may be or become involved in
litigation in the ordinary conduct of its business. Material
items of litigation having consequences of possible or
unspecified damages, if any, are disclosed in the notes to the
Trust's financial statements (see "Financial Statements and
Report of Independent Auditors").
Additional Information
The Trust issues semi-annual and annual reports to its
shareholders and may issue other reports, such as quarterly
reports, as it deems appropriate; the annual reports are audited
by the Trust's independent auditors.
<PAGE>
Statement of Additional Information Page 13
Government Investors Trust July 31, 1996
Statements contained in this Statement of Additional Information
and in the Prospectus as to the contents of contracts and other
documents are not necessarily complete. Investors should refer to
the documents themselves for definitive information as to their
detailed provisions. The Trust will supply copies of its
Declaration of Trust and By-Laws to interested persons upon
request.
The Trust and shares in the Trust have been registered with the
Securities and Exchange Commission in Washington, DC, by the
filing of a Registration Statement. The Registration Statement
contains certain information not included in the Prospectus or
not included in this Statement of Additional Information and is
available for public inspection and copying at the offices of
such Commission.
Financial Statements and Report of Independent Auditors
Audited Financial Statements for the Trust, together with the
Report of Ernst & Young LLP, Independent Auditors for the fiscal
year ended March 31, 1996, appear in the Trust's Annual Report to
shareholders for the fiscal year ended March 31, 1996, which is
incorporated herein by reference. Excluded from such
incorporation by reference is the Trust's letter to shareholders
appearing in such Report. Such Report has been filed with the
Securities and Exchange Commission. Copies of such Report are
available upon request at no charge by writing or calling the
Trust at the address and telephone number shown on the cover page
above.
<PAGE>
Part C
July 31, 1996
Government Investors Trust
Cross Reference Sheet Page 1
Pursuant to Rule 495(a)
24(a) Financial Statements
Included in Part A: Financial Highlights
Included in Part B: Filed with the Securities and Exchange
Commission pursuant to Section 30 of the Investment Company
Act of 1940 on May 31, 1996, and incorporated herein by
reference is the Trust's Annual Report to Shareholders for the
fiscal year ended March 31, 1996.
Included in such Annual Report to Shareholders are: Statement
of Assets and Liabilities, Statement of Operations, Statement
of Changes in Net Assets, Financial Highlights, Portfolio of
Investments, Notes to Financial Statements and Report of Ernst
& Young LLP, Independent Auditors.
Included in Part C: Consent of Independent Auditors
24(b) Exhibits
Exhibit No. Description of Exhibit
1 Declaration of Trust*
2 By-Laws*
3 Not Applicable
4 Specimen Share Certificate*
5 Investment Advisory Agreement (Filed herewith)***
6 Distribution Agreement (Filed herewith)**
7 Not Applicable
8 Custodian Agreement with Fee Schedule (Filed herewith)**
9 Services Agreement (Filed herewith)***
10 Consent of Counsel*
11 Consent of Independent Auditors (Filed Herewith)
12 Not Applicable
13 Agreements Relating to Initial Capital*
14 Not Applicable
15 Plan of Distribution and Share Sales Agreement*
16 Computation of Performance Data*
17 Power of Attorney*
* Previously filed by GIT Equity Trust.
** Previously filed by GIT Equity Trust in hard copy.
*** Current agreement previously filed. Agreement effective July 31, 1996
filed herewith.
25. Persons Controlled by or Under Common Control with Registrant.
None
<PAGE>
26. Number of Holders of Securities.
The number of holders of record of securities of the
Registrant as of May 21, 1996 is as follows:
Title of Class Number of Holders of Record
Shares of Beneficial Interest 3,416
27. Indemnification
Previously Filed
28. Business and Other Connections of Investment Adviser effective
July 31, 1996.
Name Position with Other Business
Adviser
Frank E. Burgess Director President and Director of
Madison Investment Advisors,
Inc., 6411 Mineral Point
Road, Madison, WI 53705
Katherine L. Frank President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
Charles J. Tennes Vice President Director of Presidential
Savings Bank, FSB, and
Presidential Service
Corporation, 4600 East-West
Highway, Bethesda, MD
20814; Executive Vice
President of GIT Investment
Services, Inc. of the same
address as the Trust.
<PAGE>
Jay R. Sekelsky Vice President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
Chris Berberet Vice President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
W. Richard Mason Secretary Secretary of Presidential
Savings Bank, FSB and
Presidential Service
Corporation, 4600 East-West
Highway, Bethesda, MD
20814; Secretary of GIT
Investment Services, Inc.
of the same
address as the Trust.
Julia M. Nelson Vice President Vice President of GIT
Investment Services, Inc.,
of the same address as the
Trust
29. Principal Underwriters
(a) GIT Investment Services, Inc., the principal underwriter
of the Trust, also acts as principal underwriter to GIT Equity
Trust, GIT Tax-Free Trust and GIT Income Trust.
(b)
Name and Principal Position and Offices Position and Offices
Business Address with Underwriters with Registrant
A. Bruce Cleveland Chairman, President None
1655 Ft. Myer Dr.
Arlington, VA 22209
W. Richard Mason Secretary Asst. Secretary
1655 Ft. Myer Dr.
Arlington, VA 22209
Charles J. Tennes Executive Vice Secretary
1655 Ft. Myer Dr. President
Arlington, VA 22209
Edward J. Karpowicz Treasurer None
1655 Ft. Myer Dr.
Arlington, VA 22209
Julia W. Nelson Vice President None
1655 Ft. Myer Dr.
Arlington, VA 22209
<PAGE>
(c) Not Applicable
30. Location of Accounts and Records
The books, records and accounts of the Registrant will be
maintained at 1655 Ft. Myer Drive, Arlington, VA 22209, at
which address are located the offices of the Registrant and
of Bankers Finance Investment Management Corp. Additional
records and documents relating to the affairs of the
Registrant are maintained by the Star Bank, N.A. of
Cincinnati, OH, the Registrant's Custodian, at the
Custodian's offices located at 425 Walnut Street,
Cincinnati, OH 45202. Pursuant to the Custodian Agreement
(see Article IX, Section 12), such materials will remain the
property of the Registrant and will be available for
inspection by the Registrant's officers and other duly
authorized persons.
31. Management Services
Previously filed and discussed in Parts A and B. See item 28.
32. Undertakings
(a) Not Applicable
(b) Not Applicable
(c) The Registrant shall furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest
Annual Report to shareholders upon such person's request and
without charge.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant has
duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the County of
Arlington, Commonwealth of Virginia, on the 14 day of June,
1996.
Government Investors Trust
By: (signature)
A. Bruce Cleveland
President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement
has been signed below by the following persons in the
capacities and on the date indicated.
(Signature), Trustee, President 6/14/96
A. Bruce Cleveland and Treasurer
(Principal Executive
Officer, Principal
Financial Officer)
Trustee
John D. Reilly* (Date)
Trustee
Thomas S. Kleppe* (Date)
Trustee
Smith T. Wood* (Date)
*(Signature), Attorney-In-Fact, 6/14/96
John A. Dudley, Esquire
Investment Advisory Agreement
This Agreement is made by and between Bankers Finance
Advisors, LLC, a Wisconsin limited liability company having its
principal place of business in Arlington, Virginia (the
"Advisor"), and Government Investors Trust, a Massachusetts
business trust created pursuant to a Declaration of Trust filed
with the Clerk of the City of Boston, Massachusetts (the
"Trust").
The parties hereto, intending so to be legally bound,
agree with each other as follows:
1. Appointment and Acceptance. The Trust hereby appoints
the Advisor to manage the investment of its assets and to
administer its affairs; and the Advisor hereby accepts such
appointment. The Advisor shall employ its best efforts to
supervise the investment management of the Trust.
2. Discretion of the Advisor. In the performance of its
duties hereunder the Advisor shall have full authority to act as
it deems advisable, except that it shall be bound by the terms
of the Declaration of Trust and By-Laws of the Trust, and by any
written direction given by the Trustees of the Trust not
inconsistent with this Agreement; and it shall be guided by the
investment policies of the Trust from time to time duly in
effect. Subject only to the foregoing, the Advisor shall have
full authority to purchase and sell securities for the Trust;
the Advisor may determine the persons with whom such securities
transactions are to be made and the terms thereof.
3. Other Activities of the Advisor. The Advisor and any
of its affiliates shall be free to engage in any other lawful
activity, including the rendering to others of services similar
to those rendered to the Trust hereunder; and the Advisor or any
interested person thereof shall be free to invest in the Trust
as a shareholder, to become an officer or Trustee of the Trust
if properly elected, or to enter into any other relationship
with the Trust approved by the Trustees and in accordance with
law.
The Advisor agrees that it will not deal with itself or
with any affiliated person or promoter or principal underwriter
of the Trust (or any affiliated person of the foregoing) acting
as a principal, in effecting securities transactions for the
account of the Trust. It is further agreed that in effecting
any such transaction with such a person acting as a broker or
agent, compensation to such person shall be permitted, provided
that the transaction is in the ordinary course of such person's
business and the amount of such compensation does not exceed one
percent of the purchase or sale price of the securities
involved.
If the Advisor or any affiliate thereof provides any other
goods or services which otherwise would be paid for by the Trust
pursuant to this Agreement, then the Trust shall pay the Advisor
or such affiliate the cost reasonably allocated by the Advisor
or affiliate to such goods or services.
4. Investment by Advisor. The Advisor shall not take,
and shall not permit any of its shareholders, officers,
directors or employees to take long or short positions in the
shares of the
<PAGE>
Trust, except for the purchase of shares of the Trust for
investment purposes at the same price as that available to the
public at the time of purchase, or in connection with the
original capitalization of the Trust. In connection with
purchases or sales of portfolio securities for the account of
the Trust neither the Advisor nor any officer, director or
employee of the Advisor shall act as a principal or receive any
commission therefor.
5. Expenses of the Trust. The Trust shall pay all of its
expenses not expressly assumed by the Advisor herein. Without
limitation, the expenses of the Trust, assumed by the Trust
hereby, shall include the following:
a. Expenses related to the continued existence of the
Trust.
b. Fees and expenses of the Trustees (except those
affiliated with the Advisor), the officers and the
administrative employees of the Trust.
c. Fees paid to the Advisor hereunder.
d. Fees and expenses of preparing, printing and
distributing official filings, reports, prospectuses and
documents required pursuant to applicable state and Federal
securities law and expenses of reports to shareholders.
e. Fees and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents,
registrars, and similar agents.
f. Expenses related to the issuance, registration,
repurchase, exchange and redemption of shares and certificates
representing shares.
g. Auditing, accounting, legal, insurance, portfolio
administration, association membership, printing, postage, and
other administrative expenses.
h. Expenses relating to qualification or licensing of the
Trust, shares in the Trust, or officers, employees and agents of
the Trust under applicable state and Federal securities
law.
i. Expenses related to shareholder meetings and proxy
solicitations and materials.
j. Interest expense, taxes and franchise fees, and all
brokerage commissions and other costs related to purchase and
sales of portfolio securities.
In addition, the Trust shall assume all losses and
liabilities incurred in the administration to the Trust and of
its investment portfolio; and it shall pay such non-recurring
expenses as may arise through litigation, administrative
proceedings, claims against the Trust, the indemnification of
Trustees, officers, employees, shareholders and agents, or
otherwise.
6. Compensation to the Advisor. For its services
hereunder, the Trust shall pay to the Advisor a management fee
equal to: one-half (1/2) percent per annum of the average daily
net assets of the Trust during each respective month. Such fee
shall be payable monthly as of the last day of the month and
shall be the sum of the daily fees calculated as one-three
hundred sixty-fifth
<PAGE>
(1/365), except in leap years one-three hundred sixty-sixth
(1/366), of the annual fee based upon each portfolio's net
assets calculated for the day.
With respect to any portfolio of the Trust subsequently
authorized by the Trustees, the management fee provided herein
may be revised upward or downward by mutual agreement between
the parties at the time the additional portfolio is authorized,
provided such revision is approved by the Trustees, including
the vote of a majority of those Trustees who are not interested
persons of the Trust, cast in person at a meeting called for
that purpose. The Advisor shall have the right to waive any
portion of its management fee during any period, and it may
permanently reduce the amount of the fee under such terms as it
may determine by written notice thereof to the Trust. The
Advisor shall have the right to share its management fee with
others or make payments out of its management fee to others, as
it solely determines.
7. Limitation of Expenses of the Trust. In addition to
investment management expenses related to the Trust, the Advisor
shall pay the fees and expenses of any Trustees and officers of
the Trust affiliated with the Advisor, all promotional expenses
of the Trust to the extent not paid for by the Trust pursuant to
a Plan of Distribution, the rent expense of the Trust's
principal executive office premises, and the expenses of
formation of the Trust.
The Advisor shall further reimburse the Trust for all of
its expenses, excluding securities transaction commissions and
expenses, taxes, interest, and extra-ordinary and non-recurring
expenses, which exceed during any fiscal year one and one-half
percent (1-1/2%) of the Trust's daily average net assets up to
$40,000,000 and one percent (1%) of the amount, if any, by which
such assets exceed $40,000,000. Any such required reimbursement
shall be made within a reasonable period following the close of
the fiscal year to which it relates; and the Advisor may elect
to pay all or a portion of any such reimbursement it anticipates
will be required at any time or from time to time during the
fiscal year to which the reimbursement relates.
8. Limitation of Advisor's Liability. The Advisor shall
not be liable for any loss incurred in connection with its
duties hereunder, nor for any action taken, suffered or omitted
and believed by it to be advisable or within the scope of its
authority or discretion, except for acts or omissions involving
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties assumed by it under this Agreement.
9. Limitation of Trust's Liability. The Advisor
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its
Declaration of Trust. The Advisor agrees that the Trust's
obligations hereunder in any case shall be limited to the Trust
and to its assets and that the Advisor shall not seek
satisfaction of any such obligation from the shareholders of the
Trust nor from any Trustee, officer, employee or agent of the
Trust.
10. Term of Agreement. This Agreement shall continue in
effect for two years from the date of its execution; and it
shall continue in force thereafter (but subject to the
termination provisions below), provided that it is specifically
approved at least annually by the Trustees of the Trust or by a
majority vote of the outstanding securities of each series and
class of the Trust's shares with respect to which it is to
continue in effect, and in either case by the vote of a majority
of the Trustees who are not interested persons of the Trust,
cast in person at a meeting called for that purpose.
<PAGE>
11. Termination by Notice. Notwithstanding any provision
of this Agreement, it may be terminated at any time, without
penalty, by the Trustees of the Trust or, with respect to any
series or class of the Trust's shares, by the vote of a majority
of the outstanding voting securities of such series or class, or
by the Advisor, upon sixty days written notice to the other
party.
12. Termination Upon Assignment. This Agreement may not
be assigned by the Adviser and shall automatically terminate
immediately upon any assignment. Nothing herein shall prevent
the Advisor from employing any other persons or agents,
including Madison Investment Advisors, Inc., at its own expense,
to assist it in the performance of its duties hereunder.
13. Name of the Trust. In consideration of its formation
of the Trust and the related expenses, the Advisor has retained
the rights to the name "Government Investors Trust" (and any
similar name), which rights the Trust hereby acknowledges. The
Trust, however, shall have the exclusive right to the use of the
name "Government Investors Trust" (although its rights to the
initials "GIT" of such name shall be non-exclusive) so long as
this contract shall remain in force, except that the Advisor may
withdraw such rights from the Trust at any time, effective
immediately or at a time specified, upon written notice to the
Trust. In the event of such notice, the Trust agrees that it
will cause the question of continuation of this Agreement to be
put to a vote of the shareholders of the Trust as soon as
practicable after such notice has been given.
14. Use of Terms. The terms "affiliated person",
"interested person", "assignment", "broker", and "majority of
the outstanding voting securities" as used herein, shall have
the same meanings as in the Investment Company Act of 1940 and
any applicable regulations thereunder.
15. Control of Advisor. Bankers Finance Advisors, LLC is
controlled by Madison Investment Advisors, Inc. a registered
investment advisor located in Madison, Wisconsin. As such, it
is expected that Bankers Finance Advisors, LLC and Madison
Investment Advisors, Inc. will work closely together in the
management of the portfolios including but not limited to
portfolio management, research, securities trading, and other
investment management responsibilities.
<PAGE>
In Witness Whereof, the parties have caused this Agreement
to be signed on their behalf by their respective officers duly
authorized and their respective seals to be affixed hereto, this
day of 1996.
Bankers Finance Advisors, LLC
By
Katherine L. Frank, President
Attest:
___________________, Vice President
Government Investors Trust
By
By
By
By
Attest:
Services Agreement
This Agreement is made by and between Bankers Finance
Advisors, LLC, a Wisconsin limited liability company
having its principal place of business in Arlington, Virginia
("BFA"), and Government Investors Trust, a Massachusetts
business trust created pursuant to a Declaration of Trust filed
with the Clerk of the City of Boston, Massachusetts
(the "Trust").
The parties hereto, intending so to be legally bound, agree
with each other as follows:
1. Provision of Services. BFA hereby undertakes to provide
the Trust with such operational support services as it may
require in the conduct of its business, to extent which BFA
(or any other person), acting as the Trust's investment
adviser, has not undertaken to provide such services. Such
services may include the functions of shareholder servicing
agent and transfer agent, bookkeeping and portfolio
accounting services, the handling of telephone inquires,
cash withdrawals and other customer service functions
(including processing and monitoring wire transfers), and
providing to the Trust appropriate supplies, equipment and
ancillary services necessary to the conduct of its affairs.
Such services may also include providing or arranging for
and making reimbursable expenditures with respect to any
activities intended to be financed by the Trust pursuant to
its Plan of Distribution. The Trust hereby engages BFA to
provide it with such services.
2. Scope of Authority. BFA shall be at all times, in the
performance of its functions hereunder, subject to any
direction and control of the Trustees of the Trust and of
its officers, and to the terms of its Declaration of Trust
and By-Laws, except only that it shall have no obligation to
provide to the Trust any services that are clearly outside
the scope of those contemplated in this Agreement. In the
performance of its duties hereunder, BFA shall be authorized
to take such action not inconsistent with the express
provisions hereof as it deems advisable. It may contract
with other persons to provide to the Trust any of the
services contemplated herein under such terms as it deems
reasonable and shall have the authority to direct the
activities of such other persons in the manner it deems
appropriate.
3 Other Activities of BFA. BFA and any of its affiliates
shall be free to engage in any other lawful activity,
including the rendering to others services similar to those
to be rendered to the Trust hereunder; and BFA or any
interested person thereof shall be free to invest in the
Trust as a shareholder, to become an officer or Trustee
thereof if properly elected, or to enter into any other
relationship with the Trust approved by the Trustee and in
accordance with law.
BFA agrees that it will not deal with the Trust in any
transaction in which BFA acts as a principal, except to the
extent as may be permitted by the terms of this Agreement.
The records BFA maintains on behalf of the Trust are the
sole property of the Trust and will be surrendered promptly
to the Trust upon its request pursuant to Rule 31a-3 of the
Investment Company Act of 1940.
4. Compensation to BFA. BFA shall have no responsibility
hereunder to bear at its own expense any costs or expenses
of the Trust. The Trust shall reimburse to BFA monthly all
of BFA's costs involved in the provision of services to the
Trust hereunder, as the term "cost" is more fully described
herein. The "cost" of services provided to the Trust
hereunder shall be deemed to include both the relevant
direct expenditures by BFA (including the cost of goods and
services obtained from others) and the related overhead
costs, such as depreciation, interest, employee supervision,
rent and like cost. Where only a portion of a specific
expenditure by BFA is related to services provided to the
Trust hereunder, then BFA may allocate such amount between
the Trust and the other activities of BFA on a reasonable
basis, which may involve the use of assumptions and
approximations not subject to precise verification without
undue cost, provided that a majority of the Trustees,
including a majority of the Trustees who are not interested
persons of the Trust approve the basis upon which such
allocations are made. BFA may, in its discretion, defer
billing to and payment by the Trust of any costs which are
reimbursable to it hereunder, and no such deferment shall
affect the right of BFA to receive reimbursement from the
Trust when the cost are billed.
5. Relationship to Investment Adviser. It is understood by
the parties hereto that concurrently with the execution of
this Agreement, the Trust has entered into an Investment
Advisory Agreement with Bankers Finance Advisors, LLC,
in its separate capacity as the investment
adviser to the Trust (the "Adviser") pursuant to which the
Adviser will provide management services to the Trust and
administer its affairs. BFA has entered into this Agreement
to perform certain services at its cost in consideration of
the Trust's employment of it as the Adviser as aforesaid.
If at any time the Adviser ceases to act as investment
adviser to the Trust under terms substantially those of the
Investment Advisory Agreement or if at any time the Adviser
ceases to be a subsidiary owned at least 50% (in terms of
voting rights) under common control with BFA, then this
Agreement shall immediately terminate as of a date 30 days
from the date of such event, unless within such 30-day
period BFA gives written notice to the Trust that it waives
such termination. The Trust specifically acknowledges and
accepts the relationship between separate capacities of BFA
hereunder and as the Adviser.
6. Limitation of BFA's Liability. BFA shall not be liable
for any loss incurred in connection with any of its services
hereunder, nor for any action taken, suffered or omitted and
believed by it to be advisable or within the scope of its
authority of discretion, except for acts or omissions
involving willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties assumed by it under this
Agreement.
7. Force Majeure. It is specifically agreed by the parties
that if BFA is delayed in the performance of any of the
services to be performed by it hereunder or prevented
entirely or in part from performing such services due to
causes or events beyond its control, then such delay or non-
performance may either be excused and the reasonable time
for performance thereby extended as necessary, or if such
delay or non-performance continues for 30 days then the
Trust may cancel this Agreement immediately thereafter or at
any time prior to the cessation of delay or resumption of
performance by BFA; but BFA shall not otherwise be liable
for and the Trust shall otherwise hold it harmless from any
such delay or non-performance. "Causes or events beyond
control" shall include, without limitation, the following:
Acts of God; interruption of power or other utility,
transportation or communications services; malfunction of
computer equipment; acts of civil or military authority;
sabotage national emergencies, war, explosion, flood,
accident, earthquake, fire, or other catastrophe; strike or
other labor problem; shortage of suitable parts, material,
labor or transportation; or present or future law,
governmental order, rule, regulations or official policy.
8. Limitation of Trust's Liability. BFA acknowledges that
it has received notice of and accepts the limitations upon
the Trust's liability set forth in its Declaration of Trust.
BFA agrees that the Trust's obligations hereunder in any
case shall be limited to the Trust and to its assets and
that BFA shall not seek satisfaction of any such obligation
from the shareholders of the Trust nor from any Trustee,
officer, employee or agent of the Trust.
9. Term of Agreement. This Agreement shall continue in
effect for two years from the date of its execution; and it
shall continue in force thereafter (but subject to the
termination provisions below), provided that it is
specifically approved at least annually by the Trustees of
the Trust or a majority vote of the outstanding securities
of each series and class of the Trust's shares with respect
to which it is to continue in effect, and in either case by
either case by the vote of a majority of the Trustees who
are not interested persons of the Trust, cast in person at a
meeting called for that purpose.
10. Termination by Notice. Notwithstanding any provision of
this Agreement, it may be terminated at any time without
penalty, by the Trustees of the Trust or, with respect to
any series or class of the Trust's shares, by the vote of
the majority of the outstanding voting securities of such
series or class, or by BFA, upon thirty days written notice
to the other party.
11. Termination upon Assignment. This Agreement may not be
assigned by BFA and shall automatically terminate upon any
such assignment; except that BFA may assign or transfer its
interest herein to a wholly-owned subsidiary of BFA, or to
another entity operated substantially under common control
with BFA, provided BFA represents to the Trust that
substantial continuity of management, personnel and services
previously available to the Trust will be maintained
following such assignment or transfer and that the Trustees
of the Trust (including a majority of the Trustees who are
not interested persons of the Trust) accept such
representation. Nothing herein shall limit the right of BFA
to obtain goods and services from other persons as described
in Section 2 above.
12. Use of Terms. The terms "affiliated person," "interested
persons," "assignment," and "majority of the outstanding
voting securities," as used herein, shall have the same
meanings as in the Investment Company Act of 1940 and any
applicable regulations thereunder. In Witness Whereof, the
parties have caused this Agreement to be signed in their
behalf by their respective officers duly authorized and
their respective seals to affixed hereto, this ____ day of
___________, 1996
Bankers Finance Advisors LLC
by _________________________
Government Investors Trust
by _________________________
4
4
3
3
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Legal Matters
and Independent Auditors" and "Financial Statements and
Report of Independent Auditors" in the Statement of
Additional Information and to the incorporation by reference
in this Post-Effective Amendment Number 19 to
Registration Statement Number 2-63713 (Form N-1A) of our
report dated May 3, 1996, on the financial statements and
financial highlights of Government Investors Trust for the year
ended March 31, 1996, included in the 1996 Annual Report to
Shareholders.
(signature)
Ernst and Young, LLP
Washington, DC
June 11, 1996
Government Investors Trust
Annual Report
March 31, 1996/Audited
GIT
GIT Investment Funds
<PAGE>
Management's Discussion of Fund Performance
May 24, 1996
Dear Shareholder:
During the fiscal year covered by this report, the Federal
Reserve Board concluded that as a result of several previous
increases in the federal funds rate, inflation was under
control and the economy was moving at an acceptable pace.
The Fed thus reversed its strategy and lowered rates three
times between July 1995 and January 1996.
Government Investors Trust's seven day yield decreased from
4.88% on March 31, 1995 to 4.15% on March 29, 1996. Since
the end of March, interest rates have remained relatively
steady, reflected in the Trust's seven day yield of 4.19% as
of this writing. The Trust's short average maturity
positions it to take quick advantage of future interest rate
increases.
Government Investors Trust continues to provide investors
stability of principal and a high degree of liquidity. We
appreciate your confidence in GIT Investment Funds and
encourage you to look at all of our no load mutual funds.
Sincerely,
A. Bruce Cleveland
President
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees and Shareholders, Government
Investors Trust:
We have audited the accompanying statement of assets and
liabilities of Government Investors Trust, including the
portfolio of investments, as of March 31, 1996, and the
related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years
in the period then ended, and the financial highlights for
each of the five years in the period then ended. These
financial statements and financial highlights are the
responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of
March 31, 1996, by correspondence with the custodian. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Government Investors
Trust at March 31, 1996, the results of its operations for
the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Washington, DC
May 3, 1996
<PAGE>
Government Investors Trust
Portfolio of Investments - March 31, 1996
U.S. GOVERNMENT AGENCY OBLIGATIONS: 81.6% of Net Assets
Federal Home Loan Mortgage
Corporation Discount Notes,
5.14%, 4/1/96 $4,635,000 $4,635,000
Federal Home Loan Mortgage
Corporation Discount Notes,
5.07%, 4/8/96 5,000,000 4,995,071
Federal Home Loan Mortgage
Corporation Discount Notes,
5.12%, 4/11/96 5,000,000 4,992,889
Federal Home Loan Mortgage
Corporation Discount Notes,
5.19%, 4/22/96 5,000,000 4,984,863
Federal Home Loan Mortgage
Corporation Discount Notes,
5.27%, 4/30/96 3,000,000 2,987,264
Federal Home Loan Mortgage
Corporation Discount Notes,
5.27%, 5/13/96 5,000,000 4,969,258
Federal Home Loan Mortgage
Corporation Discount Notes,
5.16%, 5/28/96 5,000,000 4,959,150
Federal National Mortgage
Association Discount Notes,
5.30%, 4/23/96 5,000,000 4,983,806
Federal National Mortgage
Association Discount Notes,
5.14%, 4/25/96 5,000,000 4,982,867
Federal National Mortgage
Association Discount Notes,
5.16%, 5/10/96 4,210,000 4,186,465
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS (Cost $46,676,633) 46,676,633
VARIABLE RATE LOAN GUARANTEED BY A U.S. GOVERNMENT AGENCY:
0.1% of Net Assets
Farmers Mortgage Housing
Administration Loan, 9.08%*, 2/1/10
(Cost $32,539) 32,539 32,539
REPURCHASE AGREEMENT: 17.9% of Net Assets
With Donaldson, Lufkin & Jenrette
Securities Corporation issued 3/29/96
at 5.3%, due 4/1/96 collateralized
by $10,477,228 in Federal National
Mortgage Association Medium-Term Notes
due 3/19/03. Total proceeds at maturity
are $10,245,523. (Cost $10,241,000) 10,241,000
TOTAL INVESTMENTS (Cost $56,950,172)= $56,950,172
Notes to Portfolio of Investments:
* Floating interest rate - rate disclosed
is as of March 31, 1996
= Aggregate cost for federal income tax purposes
The Notes to Financial Statements are an integral part of
these statements.
<PAGE>
Government Investors Trust
Statement of Assets and Liabilities
March 31, 1996
ASSETS
Investments, at value (Notes 1 and 2) (Cost $56,950,172)
Investment securities $46,709,172
Repurchase agreement 10,241,000
Total investments 56,950,172
Cash 205
Receivables
Interest 4,802
Capital shares sold 251,551
Share subscriptions (Note 1) 252,451
Total assets 57,459,181
LIABILITIES
Payables
Shares reserved for subscription (Note 1) 252,451
Dividends 6,094
Other liabilities 3,507
Total liabilities 262,052
NET ASSETS $57,197,129
CAPITAL SHARES OUTSTANDING 57,197,217
NET ASSET VALUE PER SHARE $1.000
<PAGE>
Government Investors Trust
Statement of Operations
For the Year Ended March 31, 1996
INVESTMENT INCOME (Note 1)
Interest income $3,358,224
EXPENSES (Notes 3 and 4)
Investment advisory fee 291,791
Custodian fees 31,139
Professional fees 59,157
Salaries and related expenses 189,865
Securities registration and blue sky expense 17,704
Telephone expense 11,553
Data processing and office equipment expense 72,640
Office and miscellaneous expenses 41,898
Depreciation and amortization 5,425
Custodian fees paid indirectly (10,966)
Total expenses 710,206
NET INVESTMENT INCOME 2,648,018
NET REALIZED GAIN ON INVESTMENTS --
TOTAL INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $2,648,018
The Notes to Financial Statements are an integral part of
these statements.
<PAGE>
Government Investors Trust
Statements of Changes in Net Assets
For the Years Ended March 31
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income $2,648,018 $2,547,455
Net realized loss on investments -- (101)
Total increase in net assets
resulting from operations 2,648,018 2,547,354
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (2,648,018) (2,547,455)
CAPITAL SHARE TRANSACTIONS (Note 5) (7,343,984) (13,548,671)
TOTAL DECREASE IN NET ASSETS (7,343,984) (13,548,772)
NET ASSETS
Beginning of year 64,541,113 78,089,885
End of year $57,197,129 $64,541,113
Government Investors Trust
Financial Highlights
Selected data for a share outstanding throughout each period:
1992 1993 1994 1995 1996
Net asset value
beginning
of 31 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment
income $0.044 $0.024 $0.021 $0.037 $0.045
Total from
investment
operations $0.044 $0.024 $0.021 $0.037 $0.045
Distributions
from net
investment
income $(0.044)$(0.024)$(0.021)$(0.037)$(0.045)
Total
distributions $(0.044)$(0.024)$(0.021)$(0.037)$(0.045)
Net asset value
end of year $1.000 $1.000 $1.000 $1.000 $1.000
Total return 4.44% 2.44% 2.08% 3.80% 4.62%
Net assets end
of year
(thousands) $117,170 $88,911 $78,090 $64,541 $57,197
Ratio of expenses
to average
net assets* 1.06% 1.06% 1.11% 1.16% 1.23%
Ratio of net
investment
income to
average net
assets 4.41% 2.44% 2.08% 3.70% 4.52%
*For the year ended March 31, 1996, ratio reflects custodian
fees paid indirectly (Note 3).
The Notes to Financial Statements are an integral part of
these statements.
Government Investors Trust
Notes to Financial Statements
March 31, 1996
1. Summary of Significant Accounting Policies. Government
Investors Trust (the "Trust") is registered with the
Securities and Exchange Commission under the Investment
Company Act of 1940 as an open-end, diversified investment
management company. The Trust invests solely in securities
issued and guaranteed by the U.S. Government or any of its
agencies or instrumentalities or in repurchase agreements
backed by such securities.
Securities Valuation: The Trust uses the amortized cost
method of valuation whereby portfolio
securities are valued at acquisition cost as adjusted for
amortization of premium or accretion of discount rather than
at value based on market
<PAGE>
Notes to Financial Statements (continued)
factors. As required, the Trust monitors the difference
between market value and amortized cost to assure that this
valuation method fairly reflects market value. Investment
transactions are recorded on the trade date. The cost of
investments sold is determined on the identified cost basis
for financial statement and federal income tax purposes.
Investment Income: Interest income, net of amortization of
premium or discount, and other income (if any) are accrued
as earned.
Dividends and: Net investment income, determined
as gross investment income less expenses, is declared as a
dividend each business day. Declared dividends are
distributed to shareholders or reinvested in additional
shares as of the close of business at the end of each month.
Income Tax: In accordance with the requirement of
Subchapter M of the Internal Revenue Code applicable to
regulated investment companies, all of the taxable income of
the Trust is distributed to its shareholders, and therefore
no federal income tax provision is required. As of March
31, 1996, the Trust had available for federal income tax
purposes unused capital loss carryovers of $101 expiring
March 31, 2003.
Share Subscriptions: Shares purchased by check or otherwise
not paid for in immediately available funds are accounted
for as share subscriptions receivable and shares reserved
for subscriptions.
Use of Estimates: The preparation of the financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and reported amounts of increases and decreases
in net assets from operations during the reporting period.
Actual results could differ from those estimates.
2. Investment in Repurchase Agreements. When the Trust
purchases securities under agreements to resell, the
securities are held for safekeeping by the Trust's custodian
bank as collateral. Should the market value of the
securities purchased under such an agreement decrease below
the principal amount to be received at the termination of
the agreement plus accrued interest, the counterparty is
required to place an equivalent amount of additional
securities in safekeeping with the Trust's custodian bank.
Repurchase agreements may be terminated within seven days.
Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Trust, along with other registered
investment companies having Advisory and Services Agreements
with Bankers Finance Investment Management Corp. ("BFIMC"),
transfers uninvested cash balances into a joint trading
account. The aggregate balance in this joint trading
account is invested in one or more consolidated repurchase
agreements whose underlying securities are U.S. Treasury or
federal agency obligations.
3. Investment Advisory Fees and Other Transactions with
Affiliates. The Investment Adviser to the Trust, BFIMC,
earns an advisory fee equal to 0.5% per annum of the average
net assets of the Trust; the fees accrue daily and are
payable monthly. In order to meet the securities
registration requirements of certain states, BFIMC has
undertaken to reimburse the Trust by the amount, if any, by
which the total expenses of the Trust (less certain excepted
expenses) exceed the applicable expense limitation in any
state or other jurisdiction in which the Trust is subject to
regulation during the fiscal year. The Trust believes the
current applicable expense limitation is 2.5% per annum of
the average net assets of the Trust up to $30 million, 2% of
any amount of such net assets exceeding $30 million but not
exceeding $100 million, and 1.5% per annum of such amount in
excess of $100 million. BFIMC is responsible for the fees
and expenses of Trustees who are affiliated with BFIMC, the
rent expense of the Trust's principal executive office
premises and certain promotional expenses. For the year
ended March 31, 1996, outside Trustee fees of $18,000 were
paid by the Trust. At March 31, 1996, certain officers,
Trustees, companies and individuals affiliated with the
Trust own shares in the Trust aggregating 2.2% of the shares
outstanding.
Custodian fees are reduced under an expense offset
arrangement with the Trust's custodian. The amount of the
expense offset for the year ended March 31, 1996 was
$10,966.
4. Other Expenses. With the exception of certain expenses
of the Trust payable by it directly, all support services
are provided to the Trust under a Services Agreement between
the Trust and BFIMC, pursuant to which such services are
provided for amounts not exceeding the cost to BFIMC of the
support provided. For the year ended March 31, 1996,
operating expenses of $418,415 have been reimbursed to BFIMC
under the Services Agreement.
5. Capital Share Transactions. An unlimited number of
capital shares, without par value, are authorized.
Transactions in capital shares (in dollars and shares) for
the years ended March 31 were as follows:
Shares sold 98,828,888 210,702,717
Shares issued in reinvestment 2,540,729 2,447,951
Total shares issued 101,369,617 213,150,668
Shares redeemed (108,713,601) (226,699,339)
Net decrease (7,343,984) (13,548,671)
<PAGE>
This page was left blank intentionally.
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 800/336-3063
24-Hour ACCESS
Toll-free nationwide: 800/448-4422
The GIT Family of Mutual Funds
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
Government Investors Trust
For more complete information on any GIT Investment Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money. This prospectus does not constitute an
offering by the distributor in any jurisdiction in which such
offering may not be lawfully made.
GIT
GIT Investment Funds
1655 Fort Myer Drive
Arlington Virginia 22209
http://www.gitfunds.com
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
NSAR, THE ANNUAL REPORT AND THE PROSPECTUS OF GOVERNMENT INVESTORS TRUST
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SOURCE DOCUMENTS.
</LEGEND>
<CIK> 0000310407
<NAME> GOVERNMENT INVESTORS TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 56,950,172
<INVESTMENTS-AT-VALUE> 56,950,172
<RECEIVABLES> 508,804
<ASSETS-OTHER> 205
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 57,459,181
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 262,052
<TOTAL-LIABILITIES> 262,052
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57,197,217
<SHARES-COMMON-STOCK> 57,197,217
<SHARES-COMMON-PRIOR> 64,541,210
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (88)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 57,197,129
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,358,224
<OTHER-INCOME> 0
<EXPENSES-NET> 710,206
<NET-INVESTMENT-INCOME> 2,648,018
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,658,018
<DISTRIBUTIONS-OF-GAINS> 7,343,984
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 98,828,888
<NUMBER-OF-SHARES-REDEEMED> 108,713,601
<SHARES-REINVESTED> 2,540,729
<NET-CHANGE-IN-ASSETS> (7,343,984)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (88)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 291,797
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 710,206
<AVERAGE-NET-ASSETS> 58,559,002
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.045
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.045)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.213
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Custody Agreement
Agreement made as of the 8th day of September 1993,
between Government Investors Trust, GIT Equity Trust, GIT Income
Trust and GIT Tax-Free Trust (the "Trusts"), business trusts
organized under the laws of Massachusetts and having their office
at 1655 Fort Myer Drive, Arlington, Virginia 22209, acting for
and on behalf of all mutual fund portfolios as are currently
authorized and issued by the Trusts or may be authorized and
issued by any of the Trusts subsequent to the date of this
Agreement (the "Funds"), which are operated and maintained by
their respective Trusts for the benefit of the holders of shares
of the Funds, and Star Bank, N.A. (the "Custodian"), a national
banking association having its principal office and place of
business at Star Bank Center, 425 Walnut Street, Cincinnati, Ohio
45202, which Agreement provides for the furnishing of custodian
services to the Funds.
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter
set forth the Trusts, on behalf of the Funds, and the Custodian
agree as follows:
Article I
Definitions
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
1. "Authorized Person" shall be deemed to include the
Chairman, President, Secretary, Treasurer, and the Executive Vice
<PAGE>
President, or any other person, whether or not any such person is
an officer or employee of the Trusts, duly authorized by the
Board of Trustees of the Trusts to give Oral Instructions and
Written Instructions on behalf of the Funds and listed in the
Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to
time, subject in each case to any limitations on the authority of
such person as set forth in Appendix A or any such Certificate.
Authorized Persons shall also include the President, Executive
Vice President, Secretary and such other officers employed by
Bankers Finance Investment Management Corp. (the "Adviser") as
are designated in writing by the Adviser pursuant to the terms of
the services agreements between the Trusts and the Adviser
regarding day-to-day management of the Funds.
2. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal
agency securities, its successor or successors and its nominee or
nominees, provided the Custodian has received a certified copy of
a resolution of Board of Trustees of the Trusts specifically
approving deposits in the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian which is signed on behalf
of the Funds by an Officer of the Trusts and is actually received
by the Custodian.
4. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and
<PAGE>
Exchange Commission, its successor or successors and its nominee
or nominees. The term "Depository" shall further mean and include
any other person or clearing agency authorized to act as a
depository under the Investment Company Act of 1940, its
successor or successors and its nominee or nominees, provided
that the Custodian has received a certified copy of a resolution
of the Board of Trustees of the Trusts specifically approving
such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend
and transfer agent active, from time to time, in such capacity
pursuant to a written agreement with the Funds, changes in which
the Trusts shall immediately report to the Custodian in writing.
6. "Money Market Security" shall be deemed to include,
without limitation, debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States
or agencies or instrumentalities thereof, commercial paper,
obligations (including certificates of deposit, bankers'
acceptances, repurchase and reverse repurchase agreements with
respect to the same) and bank time deposits of domestic banks
that are members of Federal Deposit Insurance Trust, and short-
term corporate obligations where the purchase and sale of such
securities normally require settlement in federal funds or their
equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the Chairman, the
President, the Secretary, the Treasurer, and Executive Vice
President of the Trusts listed in the Certificate annexed hereto
<PAGE>
as Appendix A or such other Certificate as may be received by the
Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions
actually received by the Custodian from an Authorized Person (or
from a person which the Custodian reasonably believes in good
faith to be an Authorized Person) and confirmed by Written
Instructions from Authorized Persons in such manner so that such
Written Instructions are received by the Custodian on the next
business day.
9. "Prospectus" or "Prospectuses" shall mean the Funds'
currently effective prospectuses and statements of additional
information.
10. "Security or Securities" shall mean Money Market
Securities, common or preferred stocks, options, bonds,
debentures, corporate debt securities, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe
for the same, or evidencing or representing any other rights or
interest therein, or any property or assets.
11. "Written Instructions" shall mean communication
actually received by the Custodian from one Authorized Person or
from one person which the Custodian reasonably believes in good
faith to be an Authorized Person in writing, telex or any other
data transmission system whereby the receiver of such
communication is able to verify by codes or otherwise with a
reasonable degree of certainty the authenticity of the senders of
such communication.
<PAGE>
Article II
Appointment of Custodian
1. The Trusts, acting for and on behalf of their respective
Funds, hereby constitute and appoint the Custodian as custodian
of Securities and monies owned by the Funds during the period of
this Agreement ("Fund Assets").
2. The Custodian hereby accepts appointment as such
Custodian and agrees to perform the duties thereof as hereinafter
set forth.
Article III
Documents to be Furnished by the Trust
Each Trust hereby agrees to furnish to the Custodian the
following documents within a reasonable time after the effective
date of this Agreement:
1. A copy of its Declaration of Trust (the "Declaration of
Trust") certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. Copies of the most recent Prospectuses of the Trust.
4. A Certificate of the President and Secretary setting
forth the names and signatures of the present Officers of the
Trust.
<PAGE>
Article IV
Custody of Cash and Securities
1. Each Trust will deliver or cause to be delivered to the
Custodian Fund Assets, including cash received for the issuance
of its shares. The Custodian will not be responsible for such
Fund Assets until actually received by it. Upon such receipt, the
Custodian shall hold in safekeeping and physically segregate at
all times from the property of any other persons, firms or
corporations all Fund Assets received by it from or for the
accounts of the Funds. The Custodian will be entitled to reverse
any credits made on the Funds' behalf where such credits have
been previously made and monies are not finally collected within
90 days of the making of such credits. The Custodian is hereby
authorized by the Trusts, acting on behalf of the Funds, to
actually deposit any Fund Assets in the Book-Entry System or in a
Depository, provided, however, that the Custodian shall always be
accountable to the Trusts for the Fund Assets so deposited. Funds
Assets deposited in the Book-Entry System or the Depository will
be represented in accounts which include only assets held by the
Custodian for customers, including but not limited to accounts in
which the Custodian acts in a fiduciary or representative
capacity.
2. The Custodian shall credit to a separate account or
accounts in the name of each respective Fund all monies received
by it for the account of such Fund, and shall disburse the same
only:
<PAGE>
(a) In payment for Securities purchased for the account of such
Fund, as provided in Article V;
(b) In payment of dividends or distributions, as provided in
Article VI hereof;
(c) In payment of original issue or other taxes, as provided
in Article VII hereof;
(d) In payment for shares of such Fund redeemed by it, as
provided in Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting
forth the name and address of the person to whom the payment is
to be made, the amount of such payment and the purpose for which
payment is to be made (the Custodian not being required to
question such direction) or (ii) if reserve requirements are
established for a Fund by law or by valid regulation, directing
the Custodian to deposit a specified amount of collected funds in
the form of U. S. dollars at a specified Federal Reserve Bank and
state the purpose of such deposit; or
(f) In reimbursement of the expenses and liabilities of the
Custodian, as provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the
Funds are open and valuing their portfolios, the Custodian shall
furnish the respective Trusts with a detailed statement of monies
held for the Funds under this Agreement and with confirmations
and a summary of all transfers to or from the account of the
Funds during said day. Where Securities are transferred to the
account of the Funds without physical delivery, the Custodian
shall also identify as belonging to the Funds a quantity of
<PAGE>
Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian
shall furnish the Trusts with a detailed statement of the
Securities held for the Funds under this Agreement.
4. All Securities held for the Funds, which are issued or
issuable only in bearer form, except such Securities as are held
in the Book-Entry System, shall be held by the Custodian in that
form; all other Securities held for the Funds may be registered
in the name of the Funds, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry System
or the Depository or their successor or successors, or their
nominee or nominees. Each Trust agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry
System or the Depository, any Securities which it may hold for
the account of the Funds and which may from time to time be
registered in the name of the Funds. The Custodian shall hold all
such Securities which are not held in the Book-Entry System by
the Depository or a Sub-Custodian in a separate account or
accounts in the name of the Funds segregated at all times from
those of any other fund maintained and operated by the Trust and
from those of any other person or persons.
<PAGE>
5. Unless otherwise instructed to the contrary by a
Certificate, the Custodian shall with respect to all
Securities held for the Funds in accordance with this
Agreement:
(a) Collect all income due or payable to the Funds with
respect to each Fund's Assets;
(b) Present for payment and collect the amount payable
upon all Securities which may mature or be called, redeemed,
or retired, or otherwise become payable;
(c) Surrender Securities in temporary form for definitive
Securities;
(d) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal income tax laws
or the laws or regulations of any other taxing authority,
including any foreign taxing authority, now or hereafter in
effect; and
(e) Hold directly, or through the Book-Entry System or
the Depository with respect to Securities therein deposited,
for the account of the Funds all rights and similar
securities issued with respect to any Securities held by the
Custodian hereunder.
6. Upon receipt of Written Instructions and not
otherwise, the Custodian directly or through the use of the
Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be
designated in such Written Instructions proxies, consents,
authorizations, and any other instruments whereby the
authority of the Funds as owner of any Securities may be
exercised;
(b) Deliver any Securities held for the Funds in exchange
for other Securities or cash issued or paid in connection
<PAGE>
with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
(c) Deliver any Securities held for the account of the
Funds to any protective committee, reorganization committee
or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale
of assets of any corporation, and receive and hold under the
terms of this Agreement such certificates of deposit,
interim receipts or other instruments or documents as may be
issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the
Funds and take such other steps as shall be stated in a
Certificate to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Funds.
7. The Custodian shall promptly deliver to each
respective Trust all notices, proxy material and executed
but unvoted proxies pertaining to shareholder meetings of
Securities held by the Funds. The Custodian shall not vote
or authorize the voting of any Securities or give any
consent, waiver or approval with respect thereto unless so
directed by a Certificate or Written Instruction.
8. The Custodian shall promptly deliver to the Trusts
all material and notices received by the Custodian and
pertaining to Securities held by the Funds with respect to
tender or exchange offers, calls for redemption or purchase,
expiration of rights, <PAGE>name changes, stock splits and stock
dividends, or any other activity involving ownership rights
in such Securities.
9. The Custodian shall conduct such periodic physical
inspection of Securities held by it under this Agreement as
it deems advisable to verify the accuracy of its inventory.
The Custodian shall promptly report to the Trusts any
discrepancies or shortages revealed by such inspections and
shall make every effort promptly to remedy such
discrepancies or shortages.
Article V
Purchase and Sale of Investments of the Funds
1. Promptly after each purchase of Securities by the
Funds, the respective Trust shall deliver to the Custodian
(i) with respect to each purchase of Securities which are
not Money Market Securities, a Certificate or Written
Instructions, and (ii) with respect to each purchase of
Money Market Securities, Written Instructions, a Certificate
or Oral Instructions, specifying with respect to each such
purchase: (a) the name of the issuer and the title of the
Securities, (b) the principal amount purchased and accrued
interest, if any, (c) the date of purchase and settlement,
(d) the purchase price per unit, (e) the total amount
payable upon such purchase and (f) the name of the person
from whom or the broker through whom the purchase was made.
The Custodian shall upon receipt of Securities purchased by
or for the Funds, pay out of the monies held for the account
of the Funds the total amount payable to the person from
whom or the broker through whom the purchase was made,
provided that the same <PAGE>conforms to the total amount
payable as set forth in such Certificate, Written
Instructions or Oral Instructions.
2. Promptly after each sale of Securities by the
respective Trust for the account of the Funds, such Trust shall
deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate
or Written Instructions, and (ii) with respect to each sale of
Money Market Securities, Written Instructions, a Certificate or
Oral Instructions, specifying with respect to each such sale: (a)
the name of the issuer and the title of the Security, (b) the
principal amount sold, and accrued interest, if any, (c) the date
of sale, (d) the sale price per unit, (e) the total amount
payable to the Funds upon such sale and (f) the name of the
broker through whom or the person to whom the sale was made. The
Custodian shall deliver the Securities upon receipt of the total
amount payable to the Funds upon such sale, provided that the
same conforms to the total amount payable as set forth in such
Certificate, Written Instructions or Oral Instructions. Subject
to the foregoing, the Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing
among dealers in Securities.
3. Promptly after the time as of which a Trust, on behalf
of a Fund, either -
(a) writes an option on Securities or writes a covered put
option in respect of a Security, or
<PAGE>
(b) notifies the Custodian that its obligations in respect
of any put or call option, as described in such Trust's
Prospectus, require that the Fund deposit Securities or
additional Securities with the Custodian, specifying the type and
value of Securities required to be so deposited, or
(c) notifies the Custodian that its obligations in respect
of any other Security, as described in each Fund's respective
Prospectus, require that the Fund deposit Securities or
additional Securities with the Custodian, specifying the type and
value of Securities required to be so deposited, the Custodian
will cause to be segregated or identified as deposited, pursuant
to the Fund's obligations as set forth in such Prospectus,
Securities of such kinds and having such aggregate values as are
required to meet the Fund's obligations in respect thereof.
The Trust will provide to the Custodian, as of the end of
each trading day, the market value of each Fund's option
liability, if any, and the market value of its portfolio of
common stocks.
4. On contractual settlement date, the account of each
respective Fund will be charged for all purchases settling on
that day, regardless of whether or not delivery is made. On
contractual settlement date, sale proceeds will likewise be
credited to the account of such Fund irrespective of delivery.
In the case of "sale fails", the Custodian may request the
assistance of the Trusts in making delivery of the failed
Security.
<PAGE>
Article VI
Payment of Dividends or Distributions
1. Each Trust shall furnish to the Custodian Written
Instructions to release or otherwise apply cash insofar as
available for the payment of dividends or other distributions to
Fund shareholders entitled to payment as determined by the
Dividend and Transfer Agent of the Funds. The Custodian may rely
on any such Written Instructions so received, and shall be
indemnified by the Trust providing such instructions for such
reliance.
2. Upon the payment date specified in such Written
Instructions, the Custodian shall arrange for such payments to be
made by the Dividend and Transfer Agent out of monies held for
the accounts of the Funds.
Article VII
Sale and Redemption of Shares of the Funds
1. The Custodian shall receive and credit to the account
of each Fund such payments for shares of such Fund issued or sold
from time to time as are received from the distributor for the
Fund's shares, from the Dividend and Transfer Agent of the Fund,
or from the Trust.
2. Upon receipt of Written Instructions, the Custodian
shall arrange for payment of redemption proceeds to be made by
the Dividend and Transfer Agent out of the monies held for the
account of the respective Funds in the total amount specified in
the Written Instructions.
<PAGE>
3. Notwithstanding the above provisions regarding the
redemption of any shares of the Funds, whenever shares of the
Funds are redeemed pursuant to any check redemption privilege
which may from time to time be offered by the Funds, the
Custodian, unless otherwise subsequently instructed by Written
Instructions shall, upon receipt of any Written Instructions
setting forth that the redemption is in good form for redemption
in accordance with the check redemption procedure, or pursuant to
preauthorized Written Instructions or procedures established with
regard thereto, honor the check presented as part of such check
redemption privilege out of the money held in the account of the
Funds for such purposes.
Article VIII
Indebtedness
In connection with any borrowings, each Trust, on behalf of
its respective Funds, will cause to be delivered to the Custodian
by a bank or broker (including the Custodian, if the borrowing is
from the Custodian), requiring Securities as collateral for such
borrowings, a notice or undertaking in the form currently
employed by any such bank or broker setting forth the amount
which such bank or broker will loan to the Funds against delivery
of a stated amount of collateral. Each Trust shall promptly
deliver to the Custodian a Certificate specifying with respect to
each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly
endorsed by the Trust, acting on behalf of a Fund, or other loan
<PAGE>
agreement, (c) the date and time, if known, on which the loan is
to be entered into, (d) the date on which the loan becomes due
and payable, (e) the total amount payable to the Fund on the
borrowing date, (f) the market value of Securities
collateralizing the loan, including the name of the issuer, the
title and the number of shares or the principal amount of any
particular Securities and (g) a statement that such loan is in
conformance with the Investment Company Act of 1940 and the
Fund's then current Prospectus. The Custodian shall deliver on
the borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against
delivery by the lending bank or broker of the total amount of the
loan payable provided that the same conforms to the total amount
payable as set forth in the Certificate. The Custodian may, at
the option of the lending bank or broker, keep such collateral in
its possession, but such collateral shall be subject to all
rights therein given the lending bank or broker, by virtue of any
promissory note or loan agreement. The Custodian shall deliver in
the manner directed by the Trust from time to time such
Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in
this paragraph. Such Trust shall cause all Securities released
from collateral status to be returned directly to the Custodian
and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that a Trust
fails to specify in a Certificate the name of the issuer, the
title and number of shares or the principal amount of any
<PAGE>
particular Securities to be delivered as collateral by the
Custodian, the Custodian shall not be under any obligation to
deliver any Securities. The Custodian may require such reasonable
conditions with respect to such collateral and its dealings with
third-party lenders as it may deem appropriate.
Article IX
Concerning the Custodian
1. Except as otherwise provided herein, the Custodian
shall not be liable for any loss or damage, including counsel
fees, resulting from its action or omission to act or otherwise,
except for any such loss or damage arising out of its own
negligence or willful misconduct. Each Trust, on behalf of its
Funds and only from applicable Fund Assets (or insurance
purchased by a Trust with respect to its liabilities on behalf of
its Funds hereunder), shall defend, indemnify and hold
harmless the Custodian, its officers, employees and agents,
with respect to any loss, claim, liability or cost
(including reasonable attorneys' fees) arising or alleged to
arise from or relating to each Trust's duties with respect
to its Funds hereunder or any other action or inaction of
the respective Trust or its Trustees, Officers, employees or
agents as to the Funds, except such as may arise from the
negligent action, omission or willful misconduct of the
Custodian, its officers, employees or agents. The Custodian
shall defend, indemnify and hold harmless each Trust and its
Trustees, Officers, employees or agents with respect to any
loss, claim, liability or cost (including reasonable
attorneys' fees) arising or alleged to arise from or relating to
<PAGE>
the Custodian's duties with respect to the Funds hereunder
or any other action or inaction of the Custodian or its
Trustees, Officers, employees, agents, nominees or Sub-
Custodians as to the Funds, except such as may arise from
the negligent action, omission or willful misconduct of the
Trust, its Trustees, Officers, employees or agents. The
Custodian may, with respect to questions of law apply for
and obtain the advice and opinion of counsel to the Trusts
at the expense of the Funds, or of its own counsel at its
own expense, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity
with the advice or opinion of counsel to the Trusts, and
shall be similarly protected with respect to anything done
or omitted by it in good faith in conformity with the advice
or opinion of its counsel, unless counsel to the Funds
shall, within a reasonable time after being notified of
legal advice received by the Custodian, have a differing
interpretation of such question of law. The Custodian shall
be liable to the Trusts for any proximate loss or damage
resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence, misfeasance
or misconduct on the part of the Custodian or any of its
employees, agents, nominees or Sub-Custodians but not for
any special, incidental, consequential, or punitive damages;
provided, however, that nothing contained herein shall
preclude recovery by a Trust, on behalf of its Funds, of
principal and of interest to the date of recovery on,
Securities incorrectly omitted from or included in a Fund's
<PAGE>
accounts or penalties imposed on the Trusts, in connection
with the Funds, therefrom or for any failures to deliver
Securities.
In any case in which one party hereto may be asked to indemnify the other
or hold the other harmless, the party from
whom indemnification is sought (the "Indemnifying Party") shall
be advised of all pertinent facts concerning the situation in
question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and
notify the Indemnifying Party promptly concerning any situation
which presents or appears to present a claim for indemnification
against
the Indemnifying Party. The Indemnifying Party shall have
the option to defend the Indemnified Party against any claim
which may be the subject of the indemnification, and in the event
the Indemnifying Party so elects, such defense shall be conducted
by counsel chosen by the Indemnifying Party and satisfactory to
the Indemnified Party and the Indemnifying Party will so notify
the Indemnified Party and thereupon such Indemnifying Party shall
take over the complete defense of the claim and the Indemnifying
Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this
paragraph, except the expenses of any additional counsel retained
by the Indemnified Party. In no case shall any party claiming the
right to indemnification confess any claim or make any compromise
in any case in which the other party has been asked to indemnify
such party (unless such confession or compromise is made with such
other party's prior written consent).
<PAGE>
The Custodian acknowledges the limitation of liability
provisions of Article XI of each Trust's Declaration of Trust and
agrees that the obligations and liabilities of each Trust under
this Agreement shall be limited by and to the extent of the Trust
and its assets and that the Custodian shall not be entitled to
seek satisfaction of any such obligation or liability from the
Trusts' shareholders, Trustees, Officers, employees or agents.
The obligations of the parties hereto under this
paragraph shall survive the termination of this Agreement.
2. Without limiting the generality of the foregoing,
the Custodian, acting in the capacity of Custodian
hereunder, shall be under no obligation to inquire into, and
shall not be liable for:
(a) The validity of the issue of any Securities purchased
by or for the account of the Funds, the legality of the
purchase
thereof, or the propriety of the amount paid therefor;
(b) The legality of the sale of any Securities by or for
the account of the Funds, or the propriety of the amount for
which the same are sold;
(c) The legality of the issue or sale of any shares of the
Funds, or the sufficiency of the amount to be received
therefor;
(d) The legality of the redemption of any shares of the
Funds, or the propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any
dividend by the Trust in respect of shares of the Funds;
(f) The legality of any borrowing by the Trust, on behalf
of the Funds, using Securities as collateral;
<PAGE>
(g) The sufficiency of any deposit made pursuant to a
Certificate described in clause (ii) of paragraph 2(e) of
Article IV hereof.
3. The Custodian shall not be liable for any money or
collected funds in U.S. dollars deposited in a Federal
Reserve Bank other than the Custodian in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of
Article IV hereof, nor be liable for or considered to be the
Custodian of any money, whether or not represented by any
check, draft, or other instrument for the payment of money,
received by it on behalf of the Funds until the Custodian
actually receives and collects such money directly or by the
final crediting of the account representing the Funds'
interest at the Book-Entry System or Depository.
4. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount
due to the Funds from the Dividend and Transfer Agent of the
Funds nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Funds
of any amount paid by the Custodian to the Dividend and
Transfer Agent of the Funds in accordance with this
Agreement.
5. Income due or payable to the Funds with respect to
Funds Assets will be credited to the account of the Funds as
follows:
(a) Dividends will be credited on the first business day
following payable date irrespective of collection.
<PAGE>
(b) Interest on fixed rate municipal bonds and debt
securities issued or guaranteed as to principal and/or
interest by the government of the United States or agencies
or instrumentalities thereof (excluding securities issued by
the Government National Mortgage Association) will be
credited on payable date irrespective of collection.
(c) Interest on fixed rate corporate debt securities will
be credited on the first business day following payable date
irrespective of collection.
(d) Interest on variable and floating rate debt securities
and debt securities issued by the Government National
Mortgage Association will be credited upon the Custodian's
receipt of funds.
(e) Proceeds from options will be credited upon the
Custodian's receipt of funds.
6. Notwithstanding paragraph 5 of this Article IX, the
Custodian shall not be under any duty or obligation to take
action to effect collection of any amount, if the Securities
upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless
and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction
of reimbursement of its costs and expenses in connection
with any such action or, at the Custodian's option,
prepayment.
7. The Custodian may appoint one or more financial or
banking institutions, as Depository or Depositories or as Sub-
Custodian or Sub-Custodians, including, but not limited to,
<PAGE>
banking institutions located in foreign countries, of
Securities and monies at any time owned by the Funds, upon
terms and conditions approved in a Certificate. Current
Depository(s) and Sub-Custodian(s) are noted in Appendix B.
The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the
appointment or activities of such Depositories or Sub-
Custodians.
8. The Custodian shall not be under any duty or
obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Funds are
such as properly may be held by the Funds under the
provisions of the Declarations of Trust and the Trusts' By-
Laws.
9. The Custodian shall treat all records and other
information relating to the Trusts, the Funds and the Funds'
Assets as confidential and shall not disclose any such
records or information to any other person unless (a) the
respective Trust shall have consented thereto in writing or
(b) such disclosure is compelled by law.
10. The Custodian shall be entitled to receive and the
Trusts agree to pay to the Custodian such compensation as shall
be determined pursuant to Appendix C attached hereto, or as shall
be determined pursuant to amendments to such Appendix approved by
the Custodian and the Trust, on behalf of the Funds. The
Custodian shall be entitled to charge against any money held by
it for the account of the Funds the amount of any loss, damage,
liability or expense, including counsel fees, for which it shall
be entitled to reimbursement under the provisions of this
<PAGE>
Agreement as determined by agreement of the Custodian and
the applicable Trust or by the final order of any court or
arbitrator having jurisdiction and as to which all rights of
appeal shall have expired. The expenses which the Custodian
may charge against the accounts of the Funds include, but
are not limited to, the expenses of Sub-Custodians incurred
in settling transactions involving the purchase and sale of
Securities of the Funds.
Notwithstanding the above, to the extent such compensation
and expenses of the Custodian are paid to the Custodian by the
Adviser pursuant to the services agreements between the Trusts
and the Adviser, no charges shall be made against the accounts of
the Funds by the Custodian.
11. The Custodian shall be entitled to rely upon any
Certificate. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received
by the Custodian pursuant to Article IV or V hereof. Each Trust
agrees to forward to the Custodian Written Instructions from
Authorized Persons confirming Oral Instructions in such manner so
that such Written Instructions are received by the Custodian,
whether by hand delivery, telex or otherwise, on the first
business day following the day on which such Oral Instructions
are given to the Custodian. Each Trust agrees that the fact that
such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the
Trust. Each Trust agrees that the Custodian shall incur no
<PAGE>
liability to the Funds in acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions.
12. The Custodian will (a) set up and maintain proper
books of account and complete records of all transactions in
the accounts maintained by the Custodian hereunder in such
manner as will meet the obligations of the Funds under the
Investment Company Act of 1940, with particular attention to
Section 31 thereof and Rules 31 a-1 and 31 a-2 thereunder,
and (b) preserve for the periods prescribed by applicable
Federal statute or regulation all records required to be so
preserved. The books and records of the Custodian shall be
open to inspection and audit at reasonable times and with
prior notice by officers and auditors employed by the
Trusts.
13. The Custodian and its Sub-Custodians shall
promptly send to the Trusts, for the account of the Funds,
any report received on the systems of internal accounting
control of the Book-Entry System or the Depository and with
such reports on their own systems of internal accounting
control as the Trusts may reasonably request from time to
time.
14. The Custodian performs only the services of a
custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities
from time to time owned by the Funds. The Custodian is not a
selling agent for shares of the Funds and performance of its
duties as a custodial agent shall not be deemed to be a
recommendation to the Custodian's depositors or others of
shares of the Funds as an investment.
<PAGE>
Article X
Termination
1. The Custodian or any of the Trusts may terminate this
Agreement for any reason by giving to the other party a notice in
writing specifying the date of such termination, which shall be
not less than ninety (90) days after the date of giving of such
notice. If such notice is given by any Trust, on behalf of any of
its Funds, it shall state in writing that the Trust is electing
to terminate this Agreement and shall designate a successor
custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital,
surplus and undivided profits. In the event such notice is given
by the Custodian, the Trusts shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of their
Board of Trustees, certified by the Secretary or Assistant
Secretary, designating a successor custodian or custodians to act
on behalf of the Funds. In the absence of such designation by the
Trusts, the Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus, and undivided profits. Upon the date
set forth in such notice this Agreement shall terminate, and the
Custodian, provided that it has received a notice of acceptance
by the successor custodian, shall deliver, on that date, directly
to the successor custodian all Securities and monies then owned
by the Funds and held by it as Custodian. Upon termination of
this Agreement, the Trusts shall pay to the Custodian on behalf
of the Funds such compensation as may be due as of the date of
<PAGE>
such termination. The Trusts agree on behalf of the Funds that
the Custodian shall be reimbursed for its reasonable costs in
connection with the termination of this Agreement.
2. If a successor custodian is not designated by the
Trusts, on behalf of the Funds, or by the Custodian in accordance
with the preceding paragraph, or the designated successor cannot
or will not serve, each Trust shall upon the delivery by the
Custodian to each Trust of all Securities (other than Securities
held in the Book-Entry System which cannot be delivered to the
Trust) and monies then owned by its Funds, other than monies
deposited with a Federal Reserve Bank pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV, be
deemed to be the custodian for its Funds, and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant
to this Agreement, other than the duty with respect to Securities
held in the Book-Entry System which cannot be delivered to the
Trust to hold such Securities hereunder in accordance with this
Agreement.
Article XI
Miscellaneous
1. Appendix A sets forth the names and the signatures of
all Authorized Persons. Each Trust agrees to furnish to the
Custodian, on behalf of its Funds, a new Appendix A in form
similar to the attached Appendix A, if any present Authorized
Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until
such new Appendix A shall be received, the Custodian shall be
<PAGE>
fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as set forth in the last delivered Appendix A.
2. No recourse under any obligation of this Agreement or
for any claim based thereon shall be had against any organizer,
shareholder, Officer, Trustee, past, present or future as such,
of the Trusts or of any predecessor or successor, either directly
or through the Trusts or any such predecessor or successor,
whether by virtue of any constitution, statute or rule of law or
equity, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this
Agreement and the obligations thereunder are enforceable solely
against Fund Assets, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the organizers,
shareholders, Officers, Trustees of the Trusts or of any
predecessor or successor, or any of them as such, because of the
obligations contained in this Agreement or implied therefrom and
that any and all such liability is hereby expressly waived and
released by the Custodian as a condition of, and as a
consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having
been made by the Trusts have been made by each Trust for and on
behalf of its Funds, pursuant to the authority vested in the
Trusts under the laws of the Commonwealth of Massachusetts, the
Declarations of Trust and the By-Laws of the Trusts. This
Agreement has been executed by Officers of the Trusts as
officers, and not individually, and the obligations contained
<PAGE>
herein are not binding upon any of the Trustees, Officers, Agents
or holders of shares, personally, but bind only the Trusts and
then only to the extent of the respective Trust's Fund Assets.
4. Such provisions of the Prospectuses of the Funds and any
other documents (including advertising material) specifically
mentioning the Custodian (other than merely by name and address)
shall be reviewed with the Custodian by the Trust.
5. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or
delivered to it at its offices at Star Bank Center, 425 Walnut
Street, M. L. 5127, Cincinnati, Ohio 45202, attention Mutual
Funds Custody Department, or at such other place as the Custodian
may from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to any Trust shall be
sufficiently given if addressed to the Trust and mailed or
delivered to it at its office at 1655 Fort Myer Drive, 10th
Floor, Arlington, Virginia 22209, or at such other place as the
Trusts may from time to time designate in writing.
7. This Agreement with the exception of Appendices A & B
may not be amended or modified in any manner except by a written
agreement executed by all parties provided that no amendment
shall be in contravention of or inconsistent with any federal or
state law or regulation or the Declarations of Trust or By-Laws
of the Trusts.
<PAGE>
8. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
the Trusts or by the Custodian, and no attempted assignment by
the Trusts or the Custodian shall be effective without the
written consent of the other party hereto.
9. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
10. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
11. Where applicable and required based upon the context
used, the singular of any term used in this Agreement shall
include the plural and the plural may refer to the singular.
In Witness Whereof, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly
authorized as of the day and year first above written.
Attest: Government Investors Trust
GIT Equity Trust, GIT Income
Trust and GIT Tax-Free Trust
(signature) (signature)
W. Richard Mason By: C.J. Tennes
Attest: Star Bank, N.A.
(signature) (signature)
Stephen J. Black By: Lynette C. Gibson
Senior Trust Officer
<PAGE>
Appendix A
Authorized Persons Specimen Signatures
Fund Officers:
Charles J. Tennes (signature)
W. Richard Mason (signature)
Adviser Employees:
Julia Mailliard (signature)
John Edwards* (signature)
Jason L. Michel* (signature)
T. Daniel Gillespie* (signature)
See Signature Cards for Additional Adviser Employees Authorized To
Sign Checks on Fund Accounts
* Denotes authority restricted to securities trades.
Amendment Dated: February 13, 1995
<PAGE>
Appendix B
The following Depository(s) and Sub-Custodian(s) are employed
currently by Star Bank, N.A. for securities processing and control
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
<PAGE>
Schedule C
Star Bank, N.A. as Custodian, will receive monthly compensation
for services according to the terms of the following Schedule:
I. Portfolio Transaction Fees:
(a) For each repurchase agreement transaction $7.00
(b) For each portfolio transaction processed
through DTC or Federal Reserve $10.00
(c) For each portfolio transaction processed
through our New York custodian $25.00
(d) For each GNMA/Amortized Security purchase$40.00
(e) For each GNMA/Prin/Int Paydown, GNMA
Sales $8.00
(f) For each option/future contract written,
exercised or expired $40.00
(g) For each Cedel/Euro clear transaction $100.00
(h) For each Disbursement (Fund expenses only)$5.00
A transaction is a purchase/sale of a security, free receipt/
free delivery (excludes initial conversion), maturity, tender
or exchange:
II. Monthly Market Value Fee
Based upon Month-end at a rate of: Million
.0002 (2 Basis Points) on First $50
.0001 (1 Basis Points) on Next $25
.000075 (3/4 Basis Point) on Balance
III. Out-of-Pocket Expenses
The only out-of-pocket expenses charged to your account
will be shipping fees or transfer fees.
IV. IRA Documents
Per Shareholder/year to hold each IRA Document $8.00
V. Earnings Credits
On a monthly basis any earnings credits generated from univested
custody balances will be first applied against any cash management
service fees and then to custody transaction fees (as referenced
in item #1 above). Earnings credits are based on the average yield
on the 91 day U.S. Treasury Bill for the preceding thirteen weeks
less the 10% reserve.
<PAGE>
Amendment To Agreement
This Amendment is made effective the 15th day of November,
1993 to the Custody Agreement made as of September 8, 1993
by and between Government Investors Trust, GIT Equity Trust,
GIT Income Trust and GIT Tax-Free Trust (the "Trust") and
Star Bank, N.A. (the "Custodian") to provide custodian
services to the Funds.
The Trusts and the Custodian agree to amend the Agreement as
follows:
1. This sentence shall be added to the first paragraph:
Custodian agrees to retain custody of U.S. Government
Securities and securities issued and sold primarily in the
United States. Pursuant to Paragraph 7 of Article IX of
this Agreement, Custodian hereby appoints Bankers Trust
Company as Sub-Custodian to retain custody of foreign
securities in accordance with the terms and conditions of
the Agreement dated as November 15, 1993 between Bankers
Trust Company and Star Bank, N.A. attached hereto as
Appendix D (the "Sub-Custodian Agreement"). The Trust
hereby acknowledges such appointment and expressly agrees to
the terms and conditions set forth in the Sub-Custodian
Agreement.
2. A new Paragraph 12 shall be added to Article I,
Definitions as follows.
"Foreign Securities" include securities issued and sold
primarily outside of the United States by a foreign
government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the Government of the United States or by
any state or any political subdivision thereof or by any
agency thereof by any entity organized under the laws of the
United States or of any state thereof which have been issued
and sold primarily outside the United States.
In Witness Whereof, the parties hereby ratify and affirm the
Agreement in its entirety as amended by this Amendment.
Attest:
(signature) W. Richard Mason
Government Investors Trust,
GIT Equity Trust, GIT Income Trust
and GIT Tax-Free Trust
By: (signature) C. J. Tennes
Attest:
(signature) Stephen J Blackwell, Trust Officer
Star Bank, N.A.
By: (signature) Lynnette C. Gibson, Senior Trust Officer
<PAGE>
Appendix D
Custodian Agreement
Agreement dated as of 11/15, 1993, between Bankers Trust
Company (the "Custodian") and Star Bank, N.A. (the
"Customer"). Customer represents and Custodian acknowledges
that it is entering into this Agreement solely as Custodian
of GIT Equity Trust Worldwide Growth Portfolio, (the
"Portfolio"), its client, with whom Customer has a Custody
Agreement, and, Portfolio is a third party beneficiary of
this Agreement between Customer and Custodian.
1. Employment of Custodian. The Customer hereby employs
the Custodian as custodian of all assets of the Customer
which are delivered to and accepted by the Custodian or any
of its subcustodians (as that term is defined in Section 5)
anywhere in the world (the "Property") pursuant to the terms
and conditions set fort herein. Without limitation, such
Property shall include stocks and other equity interests of
every type, evidences of indebtedness, other instruments
representing same or rights or obligations to received,
purchase, deliver or sell same and other non-cash investment
property of the Customer ("Securities") and cash from
whatever source and in whatever currency ("Cash"). The
Custodian shall not be responsible for any property of the
Customer held or received by the Customer or others and not
delivered to the Custodian or any of its subcustodian.
2. Custody Account. The Custodian agrees to establish and
maintain a custody account in the name of the Customer (the
"Account") for any and all Property from time received and
accepted by the Custodian or nay of its subcustodians for
the account of the Customer. The Customer acknowledges its
responsibility as a principal for all of its obligations to
the Custodian arising under or in connection with this
Agreement, notwithstanding that it may be acting on behalf
of Portfolio and warrants its authority to deposit in the
Account and Property received therefor by the Custodian
shall not be subject to, nor shall its rights and
obligations under this Agreement or with respect to the
Account be affected by, any agreement between the Customer
and other person.
The Custodian shall hold, keep safe and protect as custodian
in the Account, on behalf of the Customer, all Property.
All transactions, including, but not limited to, foreign
exchange transactions, involving the Property shall be
executed or settled solely in accordance with Instructions
(as that term is defied in Section 10), except that until
the Custodian receives Instructions to the contrary, the
Custodian will:
(a) collect all interest and dividends and all other income
payments whether paid in cash or in kind, on the Property,
as the same become payable and credit the same to the
Account;
(b) present for payment all Securities held in the Account
which are called, redeemed or retired or otherwise become
payable and all coupons and other income items which call
for payment upon presentation and hold the cash received in
the Account pursuant to this Agreement;
<PAGE>
(c) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the Securities themselves);
(d) whenever notification of a rights entitlement or a
fractional interest resulting from a rights issue, stock
dividend or stock split is received for the Account and such
rights entitlement or fractional interest bears and
expiration date, if after endeavoring to obtain the
Custodian's Instructions such Instructions are not received
in time for the Custodian to take timely action, sell in the
discretion of the Custodian (which sale the Customer hereby
authorizes the Custodian to make) such rights entitlement or
fractional interest and credit the Account with the net
proceeds of such sale;
(e) executed in the Customer's name for the Account,
whenever the Custodian deems it appropriate, such ownership
and other certificates as may be required to obtain the
payment of income from the Property; and
(f) pay for the Account, any and all taxes and levies in the
nature of taxes imposed on income on the Property by any
governmental authority. In the event there is insufficient
Cash available in the Account to pay such taxes and levies,
the Custodian shall notify the Customer of the amount of the
shortfall and the Customer, at its option, may deposit
additional Cash in the Account or take steps to have
sufficient Cash available. The Customer agrees, when and if
requested by the Custodian and required in connection with
the payment of any such taxes to cooperate with the
Custodian in furnishing information, executing documents or
otherwise.
The Custodian shall deliver, subject to Section 12 below,
and all Property in the Account in accordance with
instructions and in connection therewith, the Customer will
accept delivery of Securities of the same class and
denomination in place of those contained in the Account.
Neither the Custodian nor any subcustodian shall have any
duty or responsibility to see to the application of any
Property withdrawn from the Account upon Instructions.
Except as otherwise may be agreed upon by the parties
hereto, the Custodian shall not be required to comply with
any Instructions to settle the purchase of any Securities
for the Account unless there is sufficient Cash in the
Account at the time or to settle the sale of any Securities
form the Account unless such Securities are in deliverable
form. Notwithstanding the foregoing, if the purchase price
of such Securities exceeds the amount of Cash in the Account
at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to
settle the purchase of such Securities. The amount of any
such advance shall be deemed a loan from the Custodian to
the Customer payable on demand and bearing interest accruing
from the date such loan is made to but not including the
date such loan is repaid at a rate per annum customarily
charged by the Custodian on similar loans.
3. Records, Ownership of Property and Statements. The
ownership of the Property whether Securities, Cash and/or
other property, and whether held by the Custodian or a
subcustodian or in a securities depository or clearing
agency as hereinafter authorized, shall be clearly recorded
on the
<PAGE>
Custodian's books as belonging to the Account and not for
the Custodian's own interest. The Custodian shall keep
accurate and detailed accounts of all investments, receipts,
disbursements and other transactions for the Account. All
account, books and records of the Custodian relating thereto
shall be open to inspection and audit at all reasonable
times during normal business hours by any person designated
by the Customer. The Custodian will supply to the Customer
from time to time, as mutually agreed upon, a statement in
respect to any Property in the Account held by the Custodian
or by a subcustodian. In the absence of the filing in
writing with the Custodian by the Customer of exceptions or
objections to any such statement within sixty (60) days of
the mailing thereof, the Customer shall be deemed to have
approved such statement; and in such case or upon written
approval of the Customer of any such statement, the
Custodian shall, to the extent permitted by law, be
released, relieved and discharged with respect to all
matters and things set forth in such statement as though
such statement had been settled by the decree of a court of
competent jurisdiction in any action in which the Customer
and all persons having any equity interest in the Customer
were parties.
4. Maintenance of Property Outside of the United States.
Property in the Account may be held in a country or other
jurisdiction outside of the United States; provided that (a)
with respect to Securities, such country or other
jurisdiction shall be one in which the principal trading
market for such Securities is located or the country or
other jurisdiction in which such Securities are to be
presented for payment or acquired for the Account and (b)
with respect to cash, the amount thereof to be maintained in
any country or other jurisdiction shall be an amount which
is deemed necessary to settle transactions relating to
Securities purchased for the Account in such country or
jurisdiction or which is received in connection with the
holding of such Securities in the Account.
5 Subcustodians and Securities Depositories. The Custodian
may employ, directly or in directly, one or more
subcustodians to assist in the performance of its
obligations hereunder; provided however, that the employment
of any such subcustodians (other than any such subcustodian
which is a securities depository or clearing agency) the
Custodian shall only be responsible or liable for loses
arising from such employment caused by the Custodian's own
failure to exercise reasonable care.
The Customer authorizes and instructs the Custodian to hold
the Property in the Account in custody accounts which have
been established by the Custodian with one of its branches,
a branch of another U.S. bank, a foreign bank or trust
company acting as custodian or a securities depository in
which the Custodian participants. Hereinafter, the term
"subcustodian" will refer to any third-party agent referred
to in the first sentence of this paragraph which has entered
into an agreement with the Custodian of the type
contemplated hereunder regarding Securities and/or Cash held
in or to be acquired for the Account. In addition the
Customer also authorizes the Custodian to authorize any
subcustodian to hold the Property in the Account in one or
more accounts with securities depositories or clearing
agencies in which such subcustodian participates subject to
the provisions set forth below. The Custodian shall select
in its sole discretion the entity or entities in the custody
of which any of the Securities may be so maintained or with
which any Cash may be so deposited. Furthermore, any entity
so selected in authorized to hold such Securities or Cash in
its account with any securities depository or clearing
agency in which it participates.
6. Use of Subcustodian. With respect to Securities in the
Account which are maintained by the Custodian in the custody
of a subcustodian pursuant to Section 5,
<PAGE>
(a) The Custodian will identify on its books as belonging to
the Customer any Securities held by such subcustodian.
(b) In the event that a subcustodian permits any of the
Securities placed in its care to be held in a securities
depository or clearing agency, such subcustodian will be
required by its agreement with the Custodian to identify on
its books such Securities as being held for the account of
the Custodian for its customers.
(c) Any Securities in the Account held by a subcustodian
will be subject only to the instructions of the Custodian or
its agents unless specifically otherwise authorized by the
Custodian on an exception basis; and any Securities held in
a securities depository or clearing agency for the account
of the Custodian or a subcustodian will be subject only to
the instructions of the Custodian or such subcustodian, as
the case may be.
(d) Securities deposited with a subcustodian will be
maintained in an account holding only assets for customers
of the Custodian
(e) Any agreement the Custodian shall enter into with a
subcustodian with respect to the holding of securities shall
require that (i) the Securities are not subject to any
right, charge, security interest lien or claim of any kind
in favor of such subcustodian except a claim for payment in
accordance with such agreement for their safe custody or
administration and expenses related thereto and (ii)
beneficial ownership of such Securities be freely
transferable without the payment of money or value other
than for safe custody or administration and expenses related
thereto.
(f) Upon request by the Customer, the Custodian will
identify the name, address and principal place of business
of any subcustodian and the name and address of the
governmental agency or other regulatory authority that
supervises or regulates such subcustodian.
7. Holding of Securities, Nominees, etc. Securities in the
Account which are held by the Custodian or any subcustodian
may be held by such entity in the name of the Customer, in
its own name, in the name of its nominee or in bearer form.
Securities which are held with a subcustodian or are
eligible for deposit in a securities depository as provided
above may be maintained with the subcustodian or depository,
as the case may be, in an account for the Custodian's or
subcustodian's customers. The Custodian or subcustodian, as
the case may be, may combine certificates of the same issue
held by it as fiduciary or as a custodian. In the event
that any Securities in the name of the Custodian or its
nominee or held by one of its subcustodians and registered
in the name of such subcustodian or its nominee are called
for partial redemption by the issuer or such Security, the
Custodian may, subject to the rules or regulations
pertaining to allocation of any securities depository in
which such Securities have been deposited, allot, or cause
to allotted, the called portion to the respective beneficial
holders of such class of security in any manner the
Custodian deems to fair and equitable.
<PAGE>
8. Proxies, etc. With respect to any proxies, notices,
reports other communications relative to any of the
Securities in the Account, the Custodian shall perform such
services relative thereto as may be agreed upon between the
Custodian and the Customer. Neither the Custodian nor its
nominees or agents shall vote upon or in respect of any of
the Securities in the Account, execute any form of proxy to
vote thereon, or give any consent or take any action (except
as provided in Section 2) with respect the thereto except
upon the receipt of Instructions from the Customer relative
thereto.
9. Settlement Procedures Settlement and payment for
Securities received for the Account and delivery of
Securities maintained for the Account may be effected in
accordance with the customary or established securities
trading or securities processing practices and procedures in
the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering Securities to the
purchase thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Securities
from such purchaser or dealer, and in accordance with the
standard operating procedures of the Custodian in effect
from time to time for that jurisdiction or market.
10. Instructions. The term "Instruction" means instructions
from the Customer in respect of any of the Custodian's
duties hereunder which have been received by the Custodian
at its address set forth in Section 15 below in writing or
by tested telex signed or given by such one or more person
or persons as the Customer shall have from time to time
authorized to give the particular class of Instructions in
question and whose name ad (if applicable) signature and
office address have been filed with the Custodian, or upon
receipt of such other form of instructions as the Customer
may from time to time authorized in writing and which the
Custodian agrees to accept. The Custodian shall have the
right to assume in the absence of notice to the contrary
from the Customer that any person whose name is on file with
the Custodian pursuant to this Section 10 has been
authorized by the Customer to give the Instructions in
question and that such authorization has not been revoked.
11. Standard of Care. The Custodian shall be responsible
for the performance of only such duties as are set forth
herein or contained in Instructions given to he Custodian
which are not contrary to the provisions of this Agreement.
The Custodian will use reasonable care with respect to the
safekeeping of Securities in the Account and in carrying out
its obligations under the Agreement. So long as and to the
extent that it has exercised reasonable care, the Custodian
shall not be responsible for the title, validity or
genuineness of any Property or other property or evidence or
title thereto received by it or delivered by it pursuant to
this Agreement and shall be held harmless in acting upon,
and may conclusively rely on, without liability for any loss
resulting therefrom, any notice, request, consent,
certificate or other instrument reasonably believed by it to
be genuine and to be signed or furnished by the proper party
or parties, including, without limitation, Instructions, and
shall be indemnified by the Customer for any losses,
damages, costs and expenses (including, without limitation,
the fees and expenses of counsel) incurred by the Custodian
and arising out of action take or omitted in good faith by
the Custodian hereunder or under any Instructions. The
Custodian shall be liable to the Customer for any loss which
shall occur directly as the result of the failure of a
subcustodian (other than any subcustodian which is a
securities depository or clearing agency the actions or
omissions for which the Custodian's liability and
responsibility is set forth in the last proviso of the first
paragraph of Section 5) to exercise reasonable care with
respect to the safekeeping of such Securities. In the event
of any loss to the Customer by reason of the failure of the
Custodian or its subcustodian to utilize reasonable care,
the Custodian shall be liable to the Customer to the extent
of the Customer's actual damages at the time such loss was
discovered without reference to any special conditions or
circumstances. In no event shall the
<PAGE>
Custodian be liable for any consequential or special
damages. The Custodian shall be entitled to rely, and may
act, on advice of counsel (who may be counsel for the
Customer) on all matters and shall be without liability for
any action reasonably taken or omitted pursuant to such
advice.
All collections of funds or other property paid or
distributed in respect of Securities in the Account,
including funds involved in third-party foreign exchange
transactions, shall be made at the risk of the Customer.
The Custodian shall have no liability for any loss
accessioned by delay in the actual receipt of notice by the
Custodian or by its subcustodian of any payment, reception
or other transaction regarding Securities in the Accounting
respect of which the Custodian has agreed to take action as
provided in Section 2 hereof. The Custodian shall not be
liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de
jur or de facto), including, without limitation,
nationalization, expropriation, and the imposition of
currency restrictions; acts of war, terrorism, insurrection
or revolution; strikes or work stoppages; the inability of a
local clearing and settlement system to settle transactions
for reasons beyond the control of the Custodian; hurricane,
cyclone, earthquake, volcanic eruption, nuclear fusion,
radioactivity or other acts of God.
The provisions of this Section shall survive termination of
this Agreement.
12. Fees and Expenses. The Customer agrees to pay to the
Custodian such compensation for its services pursuant to
this Agreement as may be mutually agreed upon in writing
from time to time and the Custodian's out-of-pocket or
incidental expenses, including (but not limitation) legal
fees. The Customer hereby agrees to hold the Custodian
harmless from any liability or loss resulting from any taxes
or other governmental charges, and any expense related
thereto, which may be imposed, or assessed with respect to
any Property in the Account and also agrees to hold the
Custodian, its subcustodians, and their respective nominees
harmless from any liability as a record holder of Property
in the Account. The Custodian is authorized to charge any
account of the Customer for such items. The provisions of
this Section shall survive the termination of this
Agreement.
13. Amendment, Modifications, etc. No provisions of this
Agreement may amended, modified or waived except in writing
signed by the parties hereto.
14. Termination. This Agreement may be terminated by the
Customer or the Custodian by ninety (90) days' notice to the
other; provided that notice by the Customer shall specify
the names of the persons to who the Custodian shall deliver
the Securities in the Account and to whom the Cash in the
Account shall be paid. If notice of termination is given by
the Custodian, the Customer shall, within ninety (90) days
following the giving of such notice, deliver to the
Custodian a written notice specifying the names of the
persons to whom the Custodian shall deliver the Securities
in the Account and to whom the Cash in the Account shall be
paid. In either case, the Custodian will deliver such
Securities and Cash to the persons so specified, after
deducting therefrom any amounts which the Custodian
determines to be owed to it under Section 12. In addition,
the Custodian may in its discretion withhold from such
delivery such Cash and Securities as may be necessary to
settle transactions pending at the time of such delivery.
If within ninety (90) days following the giving of a notice
of termination by the Custodian, the Custodian does not
receive from the Customer a written notice specifying the
names of the persons to whom the Cash in the Account shall
be paid, the Custodian, at its election, may deliver such
Securities and pay such Cash to a ban or trust company doing
business in the State of New York to be held and disposed of
pursuant to the provisions of this Agreement, or may
continue to hold such Securities and Cash until a written
notice as aforesaid is delivered to the Custodian.
<PAGE>
15. Notices. Expect as otherwise provided in this Agreement,
all requests, demands or other communications between the
parties or notices in connection herewith (a) shall be in
writing, had delivered or sent by telex, telegram, facsimile
or cable, addressed, if to the Customer, its address set
forth on the signature page hereof and, if to the Custodian,
to c/o BTNY Services, Inc., 34 Exchange Place, Jersey City,
New Jersey 07302, Attention: Global Securities Services.
(Telex No. 420066 Area 19 Answerback: BANTRUS) (Facsimile
No.201-860-7290), or in either case such other address as
shall have been furnished to the receiving party pursuant to
the provisions hereof and (b) shall be deemed effective when
received, or, in the case of a telex, when sent to the
proper number and acknowledged by a proper answerback.
16. Security for Payment. To secure payment of all fees and
expenses payable to Custodian hereunder, including but not
limited to amounts payable pursuant to indemnification
provisions and to the last paragraph of Section 2, the
Customer hereby grants to Custodian a continuing security
interest in and right to setoff against the Account and all
Property held therein from time to time in the full amount
of such obligations; provided that, if the Account consists
of more than one portfolio and the obligations secured
pursuant to this Section 16 can be allocated to a specific
portfolio, such security interest and right of setoff will
be limited to any amounts owned hereunder, Custodian shall
be entitled to use available Cash in the Account or such
applicable portion thereof held for a specific portfolio, as
the case may be, and to dispose of Securities in the Account
or such applicable portion thereof as is necessary. In the
event Securities in the Account or such applicable portion
thereof are insufficient to discharge such obligations, the
Customer hereby grants Custodian a continuing security
interest in and right of setoff against the balance from
time to time in any non-custodian account of the Customer
(the "Pledged Balances"), and Custodian may, at any time or
from time to time at Custodian's sole option and without
notice appropriate and apply toward the payment of such
obligations, the Pledged Balances. If at any time Property
in the Account or such applicable portion thereof and the
Pledge Balances are insufficient to fully collateralize such
obligations, Customer shall provide to Custodian additional
collateral in form and amount satisfactory to Custodian and
shall grant to Custodian a continuing security interest in
and right of setoff against such collateral. In any such
case and without limiting the foregoing, Custodian shall be
entitled to take such other action(s) or exercise such other
options, powers and rights as Custodian now or hereafter has
a secured creditor under the New York Uniform Commercial
Code or any other applicable law.
17. Governing Law and Successors and Assigns. This
Agreement shall be governed by the law of the State of New
York and shall not be assignable by either party, but shall
bind the successors in interest of the Customer and
Custodian.
18. Publicity Customer shall furnish to Custodian at its
office referred to in Section 15, above, prior to any
distribution thereof, copies of any material prepared for
distribution to any persons who not parties hereto that
refer in any way Custodian. Customer shall not distribute
or permit the distribution of such materials if Custodian
reasonable objects in writing within ten (10) business days
(or such other time as may be mutually agreed) after receipt
thereof. The provisions of this Section shall survive the
termination of this Agreement.
19. Submission to Jurisdiction. To the extent, if any, to
which the Customer or any of its respective properties may
be deemed to have or hereafter to acquire immunity, on the
ground of sovereignty or otherwise, from any judicial
process or proceeding to enforce this Agreement or to collect
<PAGE>
amounts due hereunder (including, without limitation,
attachment proceedings prior to judgment or in aid of
execution) in any jurisdiction, the Customer hereby waives
such immunity and agrees not to claim the same. Any suit,
action or proceedings arising out of this Agreement may be
instituted in any State or Federal court sitting in the City
of New York, State of New York, United States of America,
and the Customer irrevocably submits to the non-exclusive
jurisdiction of any such court in any such suit, action or
proceeding and waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to
laying of venue of such suit, action or proceeding brought
in such a court and any claim that such suit, action or
proceeding brought in an inconvenient forum. The Customer
hereby irrevocably designates, appoints and empowers, as its
authorized agent to receive, for and on behalf of actions or
proceedings may be brought in any of the aforementioned
courts, and such service of process shall be deemed complete
upon the date of delivery thereof to such agent whether or
not such agent gives notice thereof to the Customer or upon
the earliest of any other date permitted by applicable law.
The Customer further irrevocably consents to the service of
process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by
certified air mail, postage prepaid, to the Customer at its
address set forth below or in any other manner permitted by
law, such service to become effective upon the earlier of
(i) the date fifteen (15) days after such mailing or (ii)
any earlier of date permitted by applicable law. The
Customer agrees that it will at all times continuously
maintain an agent to receive service of process in the City
and State of New York on behalf of itself and its properties
with respect to this Agreement and in the event that, for
any reason, the agent named above or its successor shall no
longer serve as agent of the Customer to receive service of
process in the City and State of New York on its behalf, the
Customer shall promptly appoint a successor to so serve and
shall advise the Custodian thereof.
20. Headings. The headings of the paragraphs hereof are
included for convenience of reference only and do not form a
part of this Agreement.
Star Bank, N.A.
By: (signature)
Title:
Address:
Bankers Trust Company
By: (signature)
Title:
Distribution Agreement
This Agreement is made by and between GIT Investment
Services, Inc., a Virginia corporation having its principal
place of business in Arlington, Virginia (the
"Distributor"),and Government Investors Trust, a
Massachusetts business trust created pursuant to a
Declaration of Trust filed with the Clerk of the City of
Boston, Massachusetts (the "Trust").
In consideration of the mutual covenants contained herein
and for other good and valuable consideration, the parties
hereto, intending so to be legally bound, agree with each
other as follows:
1. Appointment of Distributor. Except as otherwise provided
herein, the Trust hereby appoints the Distributor its
exclusive agent to sell and distribute shares of the Trust
at the public offering price thereof described and set forth
in the Trust's current prospectus. The Distributor hereby
accepts such appointment. The Distributor shall have no
obligation to sell, distribute or redeem any specific amount
of the Trust's shares.
<PAGE>
2. Scope of Authority. The Distributor is authorized act as
the Trust's agent to make sales of the Trust's shares
directly to the public or distribute such shares to the
public through securities brokers, dealers or other
intermediaries. The Distributor is also authorized to act
as an agent of the Trust in connection with any redemption
of the Trust's shares, either directly or through securities
brokers, dealers or other intermediaries. In the
performance of its activities hereunder, the Distributor
shall be authorized to take such action not inconsistent
with the express provisions hereof as it deems advisable.
The Distributor agrees that in offering, selling or
redeeming shares of the Trust it will duly conform to all
applicable State and Federal laws and the rules and
regulations of any self-regulatory organization established
pursuant to Federal law to which the Distributor may belong.
The Distributor is authorized by the Trust only to give
information or make representations regarding the Trust's
shares to the extent such information or representations are
contained in the Trust's current prospectus or in its
registration statement filed with the Securities and
Exchange Commission or in supplemental information to such
prospectus approved by the Trust. The Distributor agrees
that any other such information or representations it
provides shall be given entirely without liability or
recourse to the Trust.
<PAGE>
3. Discretion of the Trust. Notwithstanding any other
provision hereof and in its sole discretion with or without
prior notice thereof to the Distributor, the Trust may
distribute its own shares directly to any person, may
suspend any or all sales of its shares, and may decline to
make any particular sale of its shares By notice thereof to
the Distributor, the Trust may appoint additional non-
exclusive agents for the sale and distribution of its
shares, but in the absence of such notice the Distributor
shall remain the Trust's exclusive agent for such sales.
4. Other Activities of the Distributor. The Distributor and
any of its affiliates shall be free to engage in any other
lawful activity, including the rendering to others of
services similar to those to be rendered to the Trust
hereunder; and the Distributor or any interested person
thereof shall be free to invest in the Trust as a
shareholder, to become an officer or Trustee thereof if
properly elected, or to enter into any other relationship
with the Trust approved by the Trustees and in accordance
with law.
5. Compensation to the Distributor. Unless a current
prospectus of the Trust provides for compensation to
underwriters or to persons who distribute its shares, the
Distributor shall receive no direct compensation in
connection with the activities authorized hereby. Except to
any extent specifically otherwise authorized by the terms of
a current prospectus of the Trust, the Distributor shall
sell and redeem shares of the Trust at their current net
asset value.
<PAGE>
The Trust shall reimburse to the Distributor monthly for any
reimbursable costs incurred by the Distributor in connection
with the affairs of the Trust. Such "reimbursable cost"
shall be limited to the reasonable costs incurred by the
Distributor in connection with services rendered to the
Trust's existing shareholders approved by the Trustees of
the Trust or in connection with registration under State or
Federal securities laws, taxes or other out-of-pocket
charges incurred by reason of sales or are redemptions of
the Trust's shares, but only to the extent the Distributor
is not otherwise directly compensated for such services,
sales or redemptions.
The "costs" which are reimbursable hereunder shall be deemed
to include both the relevant direct expenditures by the
Distributor (including the cost of goods and services
obtained from other) and the related overhead costs, such as
depreciation, interest, employee supervision, rent and like
costs. Where only a portion of a specific expenditure by
the Distributor is related to reimbursable costs hereunder,
then the Distributor may allocate such amount between the
Trust and other activities of the Distributor on a
reasonable basis, which may involve the use of assumptions
and approximations not subject to precise verification
without undue cost, provided that majority of the Trustees,
including a majority of the Trustees who are not interested
persons of the Trust, approve the basis upon which such
allocations are made. The Distributor may, in its
discretion, defer billing to and payment by the Trust of any
reimbursable costs hereunder, and no such deferment shall
affect the right of the Distributor to receive reimbursement
from the Trust when the
<PAGE>
reimbursable costs are billed.
6. Relationship to Investment Adviser. It is understood by
the parties hereto that concurrently with the execution of
Agreement or previously, the Trust has also entered into an
Investment Advisory Agreement with Bankers Finance
Investment Management Corp., as the investment adviser to
the Trust (the "Adviser"), pursuant to which the Adviser
will provide management services to the Trust and administer
its affairs. The voting securities of the Adviser and of
the Distributor has entered into this Agreement to perform
certain services partially in consideration of the Trust's
ongoing employment of the Adviser as aforesaid. If at any
time the Adviser ceases to act as investment adviser to the
Trust under terms substantially those of the Investment
Advisory Agreement or if at any time the Adviser ceases to
be an entity at least 50% (in terms of voting rights) under
common control with the Distributor, then this Agreement
shall immediately terminate as of a date 30 days from the
date of such event, unless within such 30-day period the
Distributor gives written notice to the Trust that it waives
such termination. The Trust specifically acknowledges and
accepts the relationship between the Distributor hereunder
and the Adviser.
7. Limitation of the Distributor's Liability. The
Distributor shall not be liable for any loss incurred in
connection with any of its activities hereunder, nor for any
action taken, suffered or omitted and believed by it to be
advisable or within the scope of its authority or
discretion, except for acts or omissions involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the responsibilities
<PAGE>
assumed by it under this Agreement.
8. Limitation of Trust's Liability. The Distributor
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its
Declaration of Trust. The Distributor agrees that the
Trust; obligations hereunder in any case shall be limited to
the Trust and to its assets and that the Distributor shall
not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trustee, officer,
employee or agent of the Trust.
9. Term of Agreement. This Agreement shall continue in
effect for two years from the date of its execution; and it
shall continue in force thereafter (but subject to the
termination provisions below), provided that it is
specifically approved at least annually by the Trustees of
the Trust or by a majority vote of the outstanding
securities of the Trust (without regard to series or classes
of shares), and in either case by the vote of a majority of
the Trustees who are not interested persons of the Trust,
cast in person at a meeting called for that purpose.
10. Termination by Notice. Notwithstanding any provision of
this Agreement, it may be terminated at any time, without
penalty, by the Trustees of the Trust or by the Distributor,
upon 30 day's written notice to the other party.
<PAGE>
11. Termination Upon Assignment. This Agreement may not be
assigned by the Distributor and shall automatically
terminate immediately upon any assignment. Noting herein
shall prevent the Distributor from employing any other
persons or agents, as its own expense, to assist it in the
performance of its duties hereunder.
12 Amendments. This Agreement may be amended at any time by
mutual agreement in writing by the parties hereto, provided
that such amendment is approved by Trustees of the Trust,
including a majority of the Trustees who are not interested
persons of the Trust, cast in person at a meeting called for
that purpose.
13. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth
of Virginia.
14. Use of Terms. The terms "interested person," assignment
and "majority of the outstanding voting securities," as used
herein, shall have the same meanings as in the Investment
Company Act of 1940 and any applicable regulations
thereunder.
<PAGE>
In Witness Whereof, the parties have caused this amended and
restated Agreement to be signed on their behalf by their
respective officers duly authorized and their respective
seals to be affixed hereto, this 11th day of February, 1983.
GIT Investment Services, Inc.
(Seal)(Signature)
By A. Bruce Cleveland, President
(signature)
Attest: Fredda E. Mays, Assistant Secretary
Government Investors Trust
(Seal)
(signature)
By A. Bruce Cleveland, Trustee
(signature)
By Michael D. Goth, Trustee
(signature)
By Robert W. Dudley, Trustee
(signature)
By Thomas S. Kleppe, Trustee
(signature)
By Gerald W. Nensel, Trustee
(signature)
Attest: Thomas C. Miller, Secretary
.
