<PAGE>
1933 Act Registration No. 2-65182
1940 Act Registration No. 811-02943
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 1, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
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Post-Effective Amendment No. 26
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AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No.
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(Check appropriate box or boxes)
FORTIS MONEY PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Address of Principal Executive Offices, Zip Code)
(651) 738-4000
(Registrant's Telephone Number, including Area Code)
Scott R. Plummer, Esq.
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Name and Address of Agent for Service)
COPY TO:
Kathleen L. Prudhomme, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
It is proposed that this filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b) of Rule 485
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X on February 1, 1999 pursuant to paragraph (b) of Rule 485
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75 days after filing pursuant to paragraph (a) of Rule 485
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on (specify date) pursuant to paragraph (a) of Rule 485
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60 days after filing pursuant to paragraph (a) of Rule 485
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<PAGE>
[LOGO]
FORTIS
Solid partners, flexible solutions-SM-
Fortis Money Fund Prospectus
Dated February 1, 1999
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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MAILING ADDRESS:
P.O. Box 64284
St. Paul, Minnesota 55164-0284
STREET ADDRESS:
500 Bielenberg Drive
Woodbury, Minnesota 55125-1400
TELEPHONE: (651) 738-4000
TOLL FREE: (800) 800-2000, extension 3012
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
The Fund................................................................................................ 1
Shareholder Information
Choosing a Share Class................................................................................ 4
Determining Your Purchase Price....................................................................... 5
How to Buy Shares..................................................................................... 6
How to Sell Shares.................................................................................... 7
Dividend Distributions................................................................................ 10
Tax Considerations.................................................................................... 11
Shareholder Inquiries................................................................................. 11
Fund Management......................................................................................... 11
More Information on the Fund............................................................................ 12
Investment Strategies................................................................................. 12
Year 2000 Issues...................................................................................... 12
Financial Highlights.................................................................................... 13
</TABLE>
<PAGE>
THE FUND
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This section briefly describes the objective, principal investment strategies
and principal risks of Money Fund (the "Fund"). The Fund is a money market fund
which seeks to maintain a net asset value of $1.00 per share. This section also
provides you with information on Fund expenses and on how the Fund has
performed. For further information, please read the section entitled "More
Information on the Fund."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
MONEY FUND
OBJECTIVE
Money Fund's objective is to maximize current income to the extent consistent
with stability of principal.
PRINCIPAL INVESTMENT STRATEGIES
Money Fund pursues its objective by investing in high quality, short-term debt
obligations including:
- commercial paper;
- obligations of United States, Canadian-chartered and foreign banks having
total assets in excess of one billion dollars, all of which are U.S.
dollar denominated (including certificates of deposits, letters of credit
and bankers' acceptances);
- obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities;
- other corporate debt obligations; and
- repurchase agreements in connection with the above obligations.
PRINCIPAL RISKS
Money Fund's yield will change daily because of changes in interest rates and
other factors. The principal risks of investing in Money Fund include:
- INTEREST RATE RISK. Although the Fund attempts to maintain the value of
your investment at $1.00 per share, a major rise in interest rates could
cause the value of your investment to decline.
- CREDIT OR DEFAULT RISK. If a bond issuer's credit quality declines or its
credit agency ratings are downgraded, there may be a resulting decline in
the bond's price. If credit quality deteriorates to the point of possible or
actual default (inability to pay interest or repay principal on a timely
basis), the bond's market value could decline precipitously. Either of these
events could cause the value of your investment to decline below $1.00 per
share.
- INCOME RISK. Income risk is the potential for a decline in the Fund's
income due to falling interest rates.
- MANAGEMENT RISK. The Fund is actively managed by professionals with
extensive money management experience and expertise. The performance of the
Fund will reflect in part the ability of Advisers to select securities which
are suited to achieving the Fund's investment objective. Due to its active
management, the Fund could underperform other mutual funds with similar
investment objectives or the market generally.
- FOREIGN INVESTMENT RISKS. The Fund's investment in foreign securities
involves risks not typically associated with U.S. investing. Risks of
foreign investing include limited liquidity and volatile prices of non-U.S.
securities, limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions, and foreign taxation.
1
<PAGE>
FUND PERFORMANCE
The bar chart and table below provide you with information on Money Fund's
volatility and performance. The bar charts show you how performance of the
Fund's Class A shares has varied from year to year. The performance of other
classes of shares will differ due to differences in expenses. Remember, how the
Fund has performed in the past is not necessarily an indication of how it will
perform in the future.
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C>
1989 8.59%
1990 7.71%
1991 5.59%
1992 3.06%
1993 2.29%
1994 3.45%
1995 5.17%
1996 4.68%
1997 4.78%
1998 4.82%
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER: 2.19% (Quarter ending June 30, 1989)
WORST QUARTER: 0.54% (Quarter ending September 30, 1993)
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
<TABLE>
<CAPTION>
TEN YEARS
OR SINCE
ONE YEAR FIVE YEARS INCEPTION*
----------- ------------- -------------
<S> <C> <C> <C>
Class A Shares.................................................................. 4.82% 4.58% 5.00%
Class B Shares**................................................................ 0.38% N/A 3.75%
Class H Shares**................................................................ 0.39% N/A 3.76%
Class C Shares**................................................................ 3.06% N/A 4.49%
</TABLE>
* Ten years for Class A shares; since inception on October 9, 1995 for
Class B shares; on June 14, 1995 for Class C shares; and on March 16,
1995 for Class H shares.
** With CDSC. Assumes redemption on December 31, 1998.
SEVEN-DAY YIELD FOR PERIOD ENDING 12/31/98: 4.32%
You can obtain the Fund's current yield by calling 1-800-800-2000,
extension 3012.
2
<PAGE>
FEES AND EXPENSES
As an investor, you pay certain fees and expenses if you buy and hold shares of
Money Fund. Shareholder fees are fees paid directly from your investment. Annual
fund operating expenses are deducted from Fund assets. The figures below are
based on expenses during the fiscal year ended September 30, 1998.
<TABLE>
<CAPTION>
CLASS B
CLASS A AND H CLASS C
SHARES SHARES SHARES
----------- ------------ ------------
<S> <C> <C> <C>
SHAREHOLDER FEES
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price)... None None None
Maximum Deferred Sales Charge
(Load) (as a percentage of
original purchase price or
redemption proceeds, whichever
is less)........................ None 4.00 % 1.00 %
ANNUAL FUND OPERATING EXPENSES
(as a % of average net assets)
Management Fees.................. 0.40 % 0.40 % 0.40 %
Distribution and/or Service
(12b-1) Fees.................... 0.20 % 1.00 % 1.00 %
Other Expenses................... 0.26 % 0.26 % 0.26 %
Total Annual Fund Operating
Expenses........................ 0.86 % 1.66 % 1.66 %
</TABLE>
EXAMPLE. This example is intended to help you compare the cost of investing in
the different share classes of Money Fund with the cost of investing in other
mutual funds. It assumes that you invest $10,000 in the Fund for the time
periods indicated, that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
CLASS B/H CLASS C
SHARES SHARES
ASSUMING CLASS B/H ASSUMING CLASS C
REDEMPTION SHARES REDEMPTION SHARES
CLASS A AT END OF ASSUMING NO AT END OF ASSUMING NO
SHARES EACH PERIOD REDEMPTION EACH PERIOD REDEMPTION
--------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1 year............................. $ 88 $ 529 $ 169 $ 269 $ 169
3 years............................ 274 793 523 523 523
5 years............................ 477 1,082 902 902 902
10 years........................... 1,061 1,752 1,752 1,965 1,965
</TABLE>
3
<PAGE>
SHAREHOLDER INFORMATION
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CHOOSING A SHARE CLASS
The Fund offers you a choice among multiple classes of shares with different
sales charges and expenses. Any new purchases you make must be made into Class
A. Class B, Class H and Class C shares are available only in exchange for the
same class of shares of another Fortis Fund. Here is a brief summary of the
different share classes offered by the Fund:
CLASS A SHARES
- Your purchase of shares in Money Fund must be made into Class A.
- There is no sales charge when you purchase or redeem your shares.
- Shares are subject to an annual Rule 12b-1 fee equal to .20% of the Fund's
average daily net assets.
- Because Rule 12b-1 fees for Class A shares are lower than the Rule 12b-1
fees for the other classes, Class A shares have lower expenses and pay
higher dividends than Class B, Class H or Class C shares.
CLASS B AND CLASS H SHARES--EXCHANGES FROM OTHER FORTIS FUNDS' CLASS B OR H
SHARES
- You do not pay a sales charge at the time of the exchange from another
Fortis Fund.
- Shares are subject to a contingent deferred sales charge (CDSC) if
redeemed within six years of the date you purchased the original Fortis
Fund shares. The CDSC is 4% during the first two years after purchase, and
declines thereafter to as low as 1% during the sixth year after purchase.
Shares are not subject to a CDSC after the sixth year.
- Shares are subject to an annual Rule 12b-1 fee equal to 1.00% of average
daily net assets.
- Eight years after your purchase of the original Fortis Fund shares, Money
Fund shares automatically convert to Class A shares at no charge to you,
resulting in a lower Rule 12b-1 fee thereafter.
- Shares in these classes have a higher expense ratio and pay lower
dividends than Class A shares due to the higher Rule 12b-1 fee.
- The only difference between Class B and Class H shares is the amount of
the concession paid to dealers. This difference does not affect you in any
way.
CLASS C SHARES--EXCHANGES FROM OTHER FORTIS FUNDS' CLASS C SHARES
- You do not pay any sales charge at the time of the exchange from another
Fortis Fund.
- Shares are subject to a contingent deferred sales charge of 1.00% if
redeemed within one year of the date you purchased the original Fortis
Fund shares.
- Shares are subject to an annual Rule 12b-1 fee of 1.00% of average daily
net assets.
- Shares do not convert to Class A shares. However, the shares are subject
to a lower contingent deferred sales charge than Class B or Class H shares
and do not have to be held for as long a time (one year vs. six years) to
avoid paying a contingent deferred sales charge.
- Shares in this class have a higher expense ratio and pay lower dividends
than Class A shares due to the higher Rule 12b-1 fee.
4
<PAGE>
DETERMINING YOUR PURCHASE PRICE
NET ASSET VALUE OF FUND SHARES
Your purchase price is equal to the Fund's net asset value per share. The Fund's
net asset value per share is determined as of the primary closing time for
business on the New York Stock Exchange (the "Exchange") on each day the
Exchange is open.
Your purchase price will be the next net asset value per share of the Fund
calculated after your purchase order is accepted by Fortis Investors
("Investors' ), the Fund's underwriter. Orders generally must be received by
Investors prior to the close of the Exchange to receive that day's price. If you
purchase Fund shares through a broker-dealer other than Investors, your order
must be received by your broker-dealer prior to the close of the Exchange.
Investors will apply that day's price to the order if the broker-dealer places
the order with Investors by the end of Investors' business day.
The Fund's net asset value per share is determined by dividing the value of the
securities and other assets owned by the Fund, less all liabilities, by the
number of the Fund's shares outstanding. The Fund expects that the net asset
value per share will ordinarily be $1.00. The Fund's total assets are determined
by valuing the portfolio securities at amortized cost. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold its portfolio.
CLASS A SHARES--NEW PURCHASES OR EXCHANGES FROM OTHER FORTIS FUNDS' CLASS A
SHARES
The purchase price of Class A shares is equal to the next net asset value per
share calculated after receipt of your purchase order.
CLASS B AND H SHARES--EXCHANGES FROM OTHER FORTIS FUNDS' CLASS B OR H SHARES
Class B and Class H shares are available only in exchange for Class B or Class H
shares of another Fortis Fund. As with Class A shares, the purchase price of
Class B and Class H shares is their net asset value. If you redeem shares within
six years of the date you purchased the original Fortis Fund shares, a
contingent deferred sales charge will be imposed at the following rates. For
additional information, see "How to Sell Shares--Contingent Deferred Sales
Charge."
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE OF
ORIGINAL FORTIS FUND CONTINGENT DEFERRED
SHARES SALES CHARGE
- ----------------------- -----------------------
<S> <C>
First.................. 4.00%
Second................. 4.00%
Third.................. 3.00%
Fourth................. 3.00%
Fifth.................. 2.00%
Sixth.................. 1.00%
Seventh................ None
Eighth................. None
</TABLE>
Investors receives the CDSC, in part to defray expenses incurred in selling
Class B and Class H shares. Investors pays broker-dealers who sell Class B
shares a concession equal to 4.00% of the amount invested and an annual fee of
.25% of the average daily net assets of the Fund attributable to such shares.
Broker-dealers who sell Class H shares are paid a concession of between 5.25%
and 5.50% of the amount invested.
CONVERSION TO CLASS A SHARES. Class B and Class H shares (except for those
purchased by reinvestment of dividends and other distributions) will
automatically convert to Class A shares eight years after your purchase of the
original Fortis Fund shares. When these shares convert to Class A, a
proportionate amount of Class B and H shares in your account that were purchased
through the reinvestment of dividends and other distributions will also convert
to Class A.
5
<PAGE>
CLASS C SHARES--EXCHANGES FROM OTHER FORTIS FUNDS' CLASS C SHARES
Class C shares are available only in exchange for Class C shares of another
Fortis Fund. The purchase price of Class C shares is their net asset value. A
CDSC of 1% will be imposed if you redeem your shares within one year of the date
you purchased the original Fortis Fund shares. For additional information, see
"How to Sell Shares--Contingent Deferred Sales Charge."
Investors receives the CDSC, in part to defray expenses incurred by Investors in
selling Class C shares. Investors pays broker-dealers who sell Class C shares a
concession equal to 1.00% of the amount invested and an annual fee of 1.00% of
the amount invested that begins to accrue one year after the shares are sold.
RULE 12B-1 FEES
The Fund pays Investors Rule 12b-1 fees for the distribution and sale of its
shares and for services provided to shareholders. These fees differ by class, as
follows:
<TABLE>
<CAPTION>
RULE 12b-1 FEE
SHARE CLASS (AS A % OF AVERAGE NET ASSETS)
- ------------------------------ ---------------------------------
<S> <C>
Class A....................... 0.20%
Class B and Class H........... 1.00%
Class C....................... 1.00%
</TABLE>
These fees are paid out of the Fund's assets on an ongoing basis. Rule 12b-1
fees will increase the cost of your investment and over time may cost you more
than paying other types of sales charges.
HOW TO BUY SHARES
You may become a shareholder in the Fund with an initial investment of $500 or
more. If you invest under the "Systematic Investment Plan," the minimum initial
investment is $25 for the "Pre-Authorized Check Plan" and $50 for any other
Systematic Investment Plan (except for telephone or wire orders).
The minimum subsequent investment is $50 for investments by mail ($25 for the
Pre-Authorized Check Plan) and $500 for investments by wire.
The Fund may reject any purchase order or restrict purchases at any time.
INVESTING BY WIRE
If you have an account with a commercial bank that is a member of the Federal
Reserve System, you may purchase shares ($500 minimum) by requesting your bank
to transmit immediately available funds (Federal Funds) by wire to:
U.S. Bank National Association
ABA #091000022, credit account no: 1-702-2514-1341
Fortis Funds Purchase Account
For further credit to: (your name)
Fortis Account NBR (your account number)
Before making an initial investment by wire, your broker-dealer must telephone
Investors at the number on the cover page of this Prospectus to open your
account and obtain your account number. You must promptly send your Account
Application which accompanies this Prospectus to Investors at "CM-9614, St.
Paul, MN 55170-9614." You may make additional investments by wire at any time
even if your initial investment was by mail. Your bank should transmit Federal
Funds using the instructions above.
6
<PAGE>
INVESTING BY MAIL
You should complete and sign the Account Application which accompanies this
Prospectus. Please make your check or other negotiable bank draft payable to
Fortis Funds and mail it with your Application to "CM-9614, St. Paul, MN
55170-9614."
You may make additional purchases at any time by mailing a check or other
negotiable bank draft along with your confirmation stub. Be sure to identify the
account to which any such purchase is to be credited by specifying the name(s)
of the registered owner(s) and the account number.
SPECIAL PURCHASE PLANS
TAX SHELTERED RETIREMENT PLANS. Individual Retirement Accounts ("IRAs"),
Self-Employed, Pension, Profit Sharing, and 403(b) accounts are available.
GIFTS OR TRANSFERS TO MINOR CHILDREN. Adults can make an irrevocable gift or
transfer of Fund shares in an account established for a minor.
SYSTEMATIC INVESTMENT PLAN. You may have $25 or more automatically withdrawn
each month from your checking account (see the Systematic Investment Plan
Authorization Agreement in the Account Application). Advisers may elect to send
confirmations for purchases made under a Systematic Investment Plan quarterly,
rather than following each transaction.
EXCHANGE PRIVILEGE
Class A shares of the Fund may be exchanged for shares of any class of another
Fortis Fund, unless your Class A Fund shares were originally issued in exchange
for shares of a Fortis Fund that were subject to a sales charge. In that case,
your Fund shares may be exchanged only for Class A shares of the other Fortis
Fund, and the exchange will not be subject to a sales charge. In all other
cases, if you exchange your Class A Fund shares for Class A shares of another
Fortis Fund, that fund's sales charge must be paid. If you exchange your Class A
Fund shares for another class of another Fortis Fund, the shares cannot later be
exchanged back into Class A shares of the Fund. Class B, H and C Fund shares may
be exchanged for shares of the same class of other Fortis Funds. Shareholders of
other Fortis Funds may transfer their shares for Fund shares of the same class.
However, the shares of the Fund will remain subject to any contingent deferred
sales charge that applied to the shares of the original Fortis Fund.
You may initiate an exchange by writing to or telephoning your broker-dealer,
sales representative or the Fund. You may also use the automated Fortis
Information Line for exchanges of $100 - $100,000. You may make a telephone
exchange only if you have completed and returned the Telephone Exchange section
of the Account Application. During times of chaotic economic or market
circumstances, you may have difficulty reaching your broker-dealer, sales
representative or the Fund by telephone. A telephone exchange may be difficult
to implement at those times. (See "How to Sell Shares--By Phone").
Advisers has the right to change, terminate, impose charges on or restrict the
frequency of exchanges. You will receive at least 30 days notice before any such
change is made.
HOW TO SELL SHARES
You may sell your shares on any day when the Exchange is open. Your redemption
price will be the net asset value of your shares, less any contingent deferred
sales charge.
Employees of certain Texas public educational institutions who direct investment
in Fund shares under their State of Texas Optional Retirement Plan generally
must obtain the prior written consent of their authorized employer
representative in order to redeem.
7
<PAGE>
REDEEMING BY MAIL
If your redeem by mail, your redemption price will be based on the next net
asset value of your shares which is determined after the Fund receives your
written redemption request in proper form (and a properly endorsed stock
certificate if one has been issued).
To redeem by mail, send a written request to Fortis Funds, P.O. Box 64284, St.
Paul, MN 55164-0284.
Your request should include the following information:
- name of Fund
- account number
- dollar amount or number of shares to be redeemed
- name on the account
- signatures of all registered account owners
If you hold certificates for your shares, they must be included with your
request. You should send your certificates by certified mail. These certificates
(and any stock powers included with your redemption request) must be endorsed
and executed exactly as the Fund shares are registered.
No signature guarantee is required if you are the registered holder and the
redemption proceeds are sent to your address on the Fund's records. A written
redemption request requires a signature guarantee if:
- the Fund does not have the signature of the registered holder on file and
the redemption proceeds are greater than $25,000,
- the redemption proceeds are paid to someone other than the registered
holder, or
- the redemption proceeds are sent to an address other than the address on
the Fund's records.
You may obtain a signature guarantee from a bank, broker-dealer, credit union,
national securities exchange, registered securities association, clearing
agency, or savings association. A signature guarantee assures that a signature
is genuine and protects you from unauthorized account transfers.
REDEEMING BY TELEPHONE
Your broker-dealer may place a redemption order by phone if it has a selling
agreement with Investors. The proceeds will be released after the Fund receives
appropriate written materials. If your broker-dealer receives your order prior
to the close of the Exchange and places the order with Investors by the end of
the business day, you will receive that day's price on the order. Some
broker-dealers may charge a fee to process redemptions.
You may also redeem up to $25,000 by calling the Fund at (800) 800-2000, ext.
3012, provided that:
- your account is not a tax-qualified plan,
- the check is sent to the address on the Fund's records, and
- you have not changed your address on the Fund's records for at least 30
days.
In addition, you may use the automated Fortis Information Line for redemptions
of $500 - $25,000 on non-tax qualified accounts.
The telephone redemption procedure is automatically available. The Fund will
employ reasonable procedures to confirm that telephone instructions are genuine.
The Fund will not be responsible for any losses that may result from acting on
telephone instructions that it reasonably believes to be genuine. The Fund's
procedures will verify your address and social security number, tape record the
telephone call and provide written confirmation of the transaction. The security
measures for automated telephone redemptions using the Fortis Information Line
involve use of a personal identification number and providing written
confirmation of the transaction.
8
<PAGE>
You may have difficulty reaching your broker-dealer, sales representative or the
Fund by telephone during times of chaotic economic or market circumstances. If
you are unable to reach the Fund or its agents by telephone, written
instructions should be sent.
Advisers has the right to change, terminate or impose charges on the telephone
redemption privilege. You will receive at least 30 days notice before any such
change is made.
PAYMENT OF REDEMPTION PROCEEDS
Your redemption proceeds generally will be paid as soon as possible, but not
later than three business days after receipt of a proper redemption request. If
you redeem by wire and your redemption request is received before 3:00 p.m.
Central Time, the redemption proceeds will be wired on the next business day.
Otherwise the proceeds will be wired on the second business day following
receipt of your redemption request. If you request that the redemption proceeds
be wired to a bank that is not a member of the Federal Reserve System, be aware
that this will cause a delay in your bank's receipt of the proceeds. Similarly
if you redeem by telephone and your redemption request is received before 3:00
p.m. Central Time, a check will be mailed on the next business day. Otherwise a
check will be mailed on the second business day following the telephone
redemption.
If your shares were recently purchased with non-guaranteed funds, such as a
personal check, the mailing or wiring of your redemption check may be delayed by
up to fifteen days. If you wish to avoid this delay, you should consider the
wire purchase method described under "How to Buy Shares."
You may request that the redemption proceeds be wired to the bank designated on
your account application if:
- your account is not a tax-qualified plan,
- you redeem at least $1,000, and
- you have completed the appropriate withdrawal information on the Account
Application.
There is currently no charge to you for the wiring of redemption proceeds.
CHECK WITHDRAWAL OPTION
If your Money Fund account is not a tax-qualified plan, you may appoint the
Fund, Advisers and U.S. Bank, National Association ("the Bank") as your agents,
and may request on your Account Application that the Fund provide you with
checks payable through the Bank. These checks may be made payable to the order
of any person in any amount of $100 or more. You must sign each check as
designated on the Account Application signature card. When a check is presented
to the Bank for payment, the number of full and fractional shares required to
cover the amount of the check will be redeemed from your account. You are
entitled to distributions paid on your shares up to the time the check is
presented to the Bank for payment.
If you recently purchased your shares with non-guaranteed funds (e.g., personal
check), the processing of your check drawn on your Fund account may be delayed
by up to fifteen days. You may not write a check for the entire value of your
account or close your account by writing a check.
If the amount of the check is greater than the value of your Fund account,
Advisers will return your check for insufficient funds and your account will be
charged a $20 service fee.
INVOLUNTARY REDEMPTIONS
The Fund has the right to redeem accounts that fall below $500 as a result of
selling or exchanging shares. If you actively participate in the Fund's
Systematic Investment Plan your account will not be redeemed. Before redeeming
your account, the Fund will mail you a notice of its intention to redeem and
give you an opportunity to make an additional investment. If you do not make an
additional investment within 60 days from the date the notice was mailed, your
account will be redeemed.
9
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
The Fund has a Systematic Withdrawal Plan, which provides for voluntary
automatic withdrawals of at least $50 monthly, quarterly, semiannually or
annually. Deferred sales charges may apply to monthly redemptions. Confirmations
for redemptions made under the Systematic Withdrawal Plan may be sent to you
quarterly, rather than after each transaction. For further information about the
Systematic Withdrawal Plan, contact your broker-dealer or sales representative.
REINVESTMENT PRIVILEGE
If you redeem your shares, you may reinvest the proceeds within 60 days without
payment of an additional sales charge. If the shares you redeemed were subject
to a CDSC, that charge will be credited to your account. The reinvested shares
will be subject to the same CDSC that would have applied to the original shares.
For further information, contact your broker-dealer or sales representative.
CONTINGENT DEFERRED SALES CHARGES
If you redeem shares subject to a CDSC, your CDSC will be based on the value of
your original Fortis Fund shares when they were purchased or on the value of
your Fund at the time of sale, whichever is less. The CDSC does not apply to
shares acquired by reinvesting income dividends or capital gain distributions.
Unless instructed otherwise, the Fund will redeem shares in the following order:
- Shares not subject to a CDSC and having a higher Rule 12b-1 fee will be
redeemed first.
- Shares not subject to a CDSC and having a lower Rule 12b-1 fee will be
redeemed next.
- Shares subject to a CDSC then will be redeemed in the order purchased.
A CDSC is not imposed:
- When the Fund exercises its right to liquidate accounts which are less
than the minimum account size,
- When shares are redeemed because of a shareholder's death or disability,
as defined in Section 72(m)(7) of the Internal Revenue Code (if
satisfactory evidence is provided to the Fund),
- With respect to Class B and H shares only, to an amount that represents,
on an annual (non-cumulative) basis, up to 10% of the amount (at the time
of the investment) of the shareholder's purchases, or
- With respect to Class B, H, and C shares, to qualified plan benefit
distributions due to the participant's separation from service, loans or
financial hardship (excluding IRAs, SEPs, and 403(b), 457, and Fortis KEY
plans) upon the Fund's receipt from the plan's administrator or trustee of
written instructions detailing the reason for the distribution.
If a you exchange shares subject to a CDSC for shares of a different Fortis
Fund, the transaction is not be subject to a CDSC. However, when you redeem the
shares acquired through the exchange, you will be treated as if no exchange took
place for the purpose of determining the CDSC.
DIVIDEND DISTRIBUTIONS
On each day the Exchange is open, the Fund declares a dividend of all its net
income to shareholders of record as of 3:00 p.m., Central Time, the preceding
business day. Dividends will be reinvested in additional Fund shares of the same
class. However, you may request that dividends be sent to you in cash or
reinvested (at net asset value) in shares of the same class of another Fortis
Fund.
Dividends begin to accrue the next business day after you become a shareholder.
Dividends are reinvested monthly on the last business day of each month. If your
dividends are reinvested in another Fortis Fund, processing normally takes one
business day. If you elect cash payment, a check will be mailed within three
business days after the end of the month. If you withdraw your entire account,
all dividends accrued will be paid at that time.
10
<PAGE>
If you receive dividends in cash, you will receive a monthly confirmation
statement. If your dividends are reinvested, you will receive a quarterly
confirmation statement.
TAX CONSIDERATIONS
Dividends generally are taxable to you as ordinary income, whether you are paid
in cash or reinvest the dividends. However, because everyone's tax situation is
unique, be sure to consult with your tax adviser.
Information about the tax status of each year's distributions will be mailed
annually.
SHAREHOLDER INQUIRIES
You should direct your inquiries to your broker-dealer or sales representative
or to the Fund at the telephone number or mailing address listed on the cover of
this Prospectus. A $10 fee will be charged for copies of Annual Account
Summaries older than the preceding year.
FUND MANAGEMENT
- -------------------------------------------------------------------
INVESTMENT ADVISER
Fortis Advisers, Inc. ("Advisers") is the investment adviser for the Fund.
Advisers also serves as the Fund's transfer agent and dividend agent. Advisers
has been managing investment company portfolios since 1949. In addition to
providing investment advice, Advisers is responsible for managing the Fund's
business affairs, subject to the overall authority of the Board of Directors.
Advisers' address is that of the Fund.
The Fund pays Advisers a monthly fee for providing investment advisory services.
During its most recent fiscal year, the Fund paid Advisers a monthly fee at an
annual rate of .40% of average daily net assets.
11
<PAGE>
MORE INFORMATION ON THE FUND
- -------------------------------------------------------------------
INVESTMENT STRATEGIES
The principal investment strategies of the Fund are described above under "The
Fund." These are the strategies that Advisers believes are most likely to be
important in trying to achieve the Fund's objective. Of course, there is no
guarantee that the Fund will achieve its objective. You should be aware that the
Fund may also use strategies and invest in securities that are not described
below, but are described in the Statement of Additional Information.
The Fund complies with Securities and Exchange Commission regulations that apply
to money market funds. These regulations require that the Fund's investments
mature within 397 days from the date of purchase, and that the average maturity
of the Fund's investments (on a dollar-weighted basis) be 90 days or less. The
Fund may invest in securities with variable or floating interest rates and
securities with demand features. The maturities of these securities are
determined according to regulations which allow the Fund to consider some of
these securities as having maturities shorter than their stated maturity dates.
All of the Fund's investments must be in U.S. dollar-denominated high-quality
securities which have been determined by Advisers to present minimal credit
risks.
YEAR 2000 ISSUES
Like other mutual funds and financial and business organizations around the
world, the Fund could be adversely affected if the computer systems used by the
Fund, Advisers and other service providers and entities with computer systems
that are linked to the Fund's records do not properly process and calculate
date-related information and data from and after January 1, 2000. The Fund and
Advisers and its affiliates are taking steps that they believe are reasonably
designed to address year 2000 issues with respect to the computer systems they
use and to obtain satisfactory assurances that comparable steps are being taken
by the Fund's other major service providers. However, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Fund. In
addition, the prices of securities in which the Fund invests could be adversely
affected by Year 2000 problems experienced by the issuers of those securities.
12
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------
The tables that follow present performance information about each class of
shares of the Fund. This information is intended to help you understand the
Fund's financial performance for the past five years or, if shorter, the period
of the Fund's operations. Some of this information reflects financial results
for a single Fund share. The total returns in the tables represent the rate that
you would have earned or lost on an investment in a class of the Fund, assuming
you reinvested all of your dividends and distributions.
This information has been audited by KPMG Peat Marwick LLP, independent
auditors, whose report, along with the Fund's financial statements, is included
in the Fund's annual report, which is available upon request.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------ -----------------------
YEAR ENDED SEPTEMBER 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------
1998 1997 1996 1995 1994 1998 1997 1996+++
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net......................... .05 .05 .05 .05 .03 .04 .04 .04
- -----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................... (.05) (.05) (.05) (.05) (.03) (.04) (.04) (.04)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period.................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total return @.................................... 4.88% 4.74% 4.74% 5.03% 2.92% 4.06% 3.97% 4.11%
Net assets end of period (000s omitted)........... $156,623 $126,547 $120,375 $105,472 $105,659 $ 305 $ 55 $ 28
Ratio of expenses to average daily net assets..... .86% .88% .91% .91% .88% 1.66% 1.68% 1.71%*
Ratio of net investment income to average daily
net assets....................................... 4.77% 4.64% 4.67% 4.91% 2.92% 4.00% 3.94% 3.99%*
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
CLASS C CLASS H
--------------------------------- -------------------------------
YEAR ENDED SEPTEMBER 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------
1998 1997 1996 1995++ 1998 1997 1996 1995+
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net......................... .04 .04 .05 .01 .04 .04 .04 .02
- -----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................... (.04) (.04) (.05) (.01) (.04) (.04) (.04) (.02)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------
Total return @.................................... 4.12% 4.45% 4.97% 1.33% 4.07% 4.06% 4.04% 2.52%
Net assets end of period (000s omitted)........... $ 714 $ 10 $ 1 $ 9 $ 550 $ 627 $ 60 $ 122
Ratio of expenses to average daily net assets..... 1.66% 1.68% 1.46 (a) 1.71%* 1.66% 1.68% 1.71% 1.71%*
Ratio of net investment income to average daily
net assets....................................... 4.08% 3.98% 4.33 (a) 4.46%* 3.96% 4.02% 4.03% 4.43%*
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ For the period from March 16, 1995 (date of first investment) to September
30, 1995.
++ For the period from June 14, 1995 (date of first investment) to September
30, 1995.
+++ For the perod from October 9, 1995 (date of first investment) to September
30, 1996.
@ These are the total returns during the periods, including reinvestment of all
distributions.
(a) Advisers has reimbured expenses for 12b-1 fees charged in excess of
National Association of Securities Dealers limitations. For the year ending
September 30, 1996, had the reimbursement not been made, ratios of expenses
and net investment income to average daily net assets would have been 1.71%
and 4.08% respectively, for Class C.
13
<PAGE>
<TABLE>
<S> <C> <C>
FORTIS BENEFITS INSURANCE COMPANY Mail to: FORTIS-SM-
Fortis Advisers, Inc. (fund management since 1949) FORTIS MUTUAL FUNDS
Fortis Investors, Inc. (principal underwriter; member NASD, CM-9614
SIPC) St. Paul, MN 55170-9614
Fortis Benefits Insurance Company & Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284, St. Paul, MN 55164-0284 (800) 800-2000
http://www.ffg.us.fortis.com
</TABLE>
FORTIS MONEY FUND ACCOUNT APPLICATION
DO NOT USE TO OPEN A FORTIS IRA, SEP, 403(B).
Complete this application to open a new Fortis Money Fund account or to add
services to an existing Fortis account. For personal service, please call your
investment professional or Fortis customer service at 1-800-800-2000, extension
3012.
NEW DEPOSITS ARE AVAILABLE FOR CLASS A SHARES ONLY.
1. ACCOUNT INFORMATION
Please provide the information requested below:
/ /INDIVIDUAL: Please print your name, social security number, U.S. citizen
status.
/ /JOINT TENANT: List all names, one social security number, one U.S. citizen
status.
/ /UNIFORM GIFT/TRANSFER TO MINORS: Provide name of custodian (only one) and
minor (only one), minor's social security number, minor's U.S. citizen status
and date of birth of minor.
/ /TRUST: List trustee and trust title, including trust date, trust's taxpayer
ID number. Also, include first and last page of trust document.
/ /CORPORATION, ASSOCIATION, PARTNERSHIP: Include full name, taxpayer ID number.
Also include a photocopy of articles of incorporation, partnership agreement,
etc.
/ /FORTIS KEY PLAN: Include social security number.
/ /QUALIFIED PLAN: Include name of plan and trustee, plan's taxpayer ID number.
/ /OTHER: ______________________________________________________________________
- --------------------------------------------------------------
Owner (individual, first joint tenant, custodian, trustee) Please print.
- -----------------------------------------------------------------------
Owner (second joint tenant, minor, trust name) Please print.
- -----------------------------------------------------------------------
Additional information, if needed
- -----------------------------------------------------------------------
Street address
- -----------------------------------------------------------------------
City State Zip
- -----------------------------------------------------------------------
Social security number (taxpayer ID)
Date of Trust (if applicable) __________________________________________________
<TABLE>
<CAPTION>
- ---------------------------------- ----------------------------------
<S> <C>
Daytime phone Date of birth
(Uniform gift/transfer to minors)
</TABLE>
Are you a U.S. citizen? / / Yes / / No
If no, country of permanent residence __________________________________________
2. TRANSFER ON DEATH
Please indicate the Primary Beneficiary with "PB" after the beneficiary(ies)
name(s). Indicate Contingent Beneficiary with "CB." Indicate Lineal Descendant
Per Stirpes with "LDPS" if you want ownership to pass to the legal heirs of the
primary beneficiary in the event a designated beneficiary dies before the
account owner.
TOD IS ONLY AVAILABLE FOR INDIVIDUAL AND JOINT TENANT (JTWROS) ACCOUNTS.
BENEFICIARY(IES):
<TABLE>
<S> <C>
- --------------------------------------------- ----------------------
Name Social security number
- --------------------------------------------- ----------------------
Name Social security number
- --------------------------------------------- ----------------------
Name Social security number
</TABLE>
3. INVESTMENT ACCOUNT
/ /By mail. Enclosed is a check for $ payable to "Fortis Funds."
/ /By wire. An initial purchase of $ was wired
on
----------------------------------------------------------
Date
by
----------------------------------------------------------
Name of your bank
to
-----------------------------------------------------------
Fortis account number
Before making an initial investment by wire, you must be assigned an account
number by calling the telephone number on the cover page of this Prospectus.
Then, have your local bank wire your funds to: US Bank National Association/ABA
#091000022, credit account no: 1-702-2514-1341 Fortis Funds Purchase Account,
for further credit to (your name), Fortis account number (your account number).
97841N -C- Fortis, 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
4. SIGNATURE & CERTIFICATION
I HAVE RECEIVED AND READ THE FORTIS MONEY FUND PROSPECTUS AND UNDERSTAND THAT
ITS TERMS ARE INCORPORATED BY REFERENCE INTO THIS APPLICATION. I AM OF LEGAL AGE
AND LEGAL CAPACITY.
I understand that this application is subject to acceptance by Fortis Investors,
Inc.
I certify, under penalties of perjury, that:
(1) The social security number or taxpayer ID number provided is correct; and
(cross out the following if not true)
(2) that the IRS has never notified me that I am subject to 31% backup
withholding, or has notified me that I am no longer subject to such backup
withholding.
Each person signing on behalf of any entity represents that his or her actions
are authorized. It is agreed that all Fortis Funds, Fortis Investors, Fortis
Advisers and their officers, directors, agents and employees will not be liable
for any loss, liability, damage or expense for relying upon this application or
any instruction believed genuine.
IF YOU ARE NOT SIGNING AS AN INDIVIDUAL, STATE YOUR TITLE OR CAPACITY (INCLUDE
APPROPRIATE DOCUMENTS VERIFYING YOUR CAPACITY).
AUTHORIZED SIGNATURE(S)
X
- --------------------------------------------------------------
Owner, custodian, trustee Date
X
- --------------------------------------------------------------
Joint owner, trustee Date
5. DEALER/REPRESENTATIVE INFORMATION
- --------------------------------------------------------------
Representative's name (please print)
- -----------------------------------------------------------------------
Name of broker/dealer
- -----------------------------------------------------------------------
Branch office address
- -----------------------------------------------------------------------
Representative's signature
- -----------------------------------------------------------------------
Representative's number Representative's Phone Number
- -----------------------------------------------------------------------
AUTHORIZED SIGNATURE OF BROKER/DEALER
6. DISTRIBUTION OPTIONS
If no option is selected, all distributions will be reinvested in the Fortis
Money Fund.
/ /Dividends reinvested
/ /Dividends in cash (See section 8 for payment options.)
/ /Distributions into ANOTHER FORTIS FUND. (CLASS A SHARES ONLY)
________________________________________________________________________________
Name of fund Fund/Account # (if existing account)
7. CHECK WITHDRAWAL OPTIONS
/ /I (we) hereby elect redemption by special check drawn against my (our) Fortis
Money Fund Account. Please send forms of checks (minimum check: $100). Note:
WHEN ELECTING CHECK WITHDRAWAL, BE SURE TO SIGN THE MONEY FUND SIGNATURE
CARD. Checks are not available for non-corporate tax qualified plans.
CHECKING ACCOUNT SIGNATURE CARD
Please complete and sign -----------------------------
for redemption. Date
- -----------------------------------------------------------------------
NAME(S) OF REGISTERED OWNER(S) OF SHARES OF FORTIS MONEY FUND.
- -----------------------------------------------------------------------
All registered owner(s) of Fortis Money Fund shares named above must sign below.
By signing this card the signatory(s) agree(s) to all of the terms and
conditions set forth below.
<TABLE>
<CAPTION>
- -------------------------------------- -------------------------------
Signature Social security or tax ID number
<S> <C>
- -------------------------------------- -------------------------------
- -------------------------------------- -------------------------------
</TABLE>
/ /Check here if only one signature is required on checks.
TERMS AND CONDITIONS OF SIGNATURE CARD
1. REDEMPTION AUTHORIZATION: The signatory(s) whose signature(s) appear above,
intending to be legally bound, hereby agree each with the other and with Fortis
Money Fund, Inc. ("the Fund"), Fortis Advisers, Inc. ("Advisers"), and US Bank,
National Association ("the Bank") that the Fund, Advisers, and the Bank are
appointed agents for such person(s) and, as such agents, are directed to redeem
shares of the Fund, registered in the name of such Signatory(s) upon receipt of,
and in the amount of, checks drawn. The Fund or Advisers shall deposit the
proceeds of such redemptions in said account or otherwise arrange for
application of such proceeds to payments of said checks. Advisers is expressly
authorized to commingle such proceeds in this account with the proceeds of the
redemption of the shares of other stockholders of the Fund. The Signatory(s)
understand that Advisers must also act as an agent for the Fund.
The Fund is expressly authorized to honor checks as redemption instructions
hereunder without requiring signature guarantees, and Advisers, the Fund, and
the Bank shall not be liable for any loss or liability resulting from the
absence of any such guarantee, or from forgery and/or fraud. In this regard, I
(we) understand and agree that Advisers, the Fund, and the Bank can take only
reasonable steps to prevent losses to me (us) due to forgery and/or any form of
fraud and in no event will Advisers, the Fund, and/or the Bank incur any
liability for
TERMS AND CONDITIONS OF SIGNATURE CARD, CONTINUED ON NEXT PAGE
97841N -C- Fortis, 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
honoring or effecting redemptions reasonably believed to be genuine, or for
returning or not paying checks which have not been accepted for any reason.
2. CHECK PAYMENT: The Signatory(s) authorizes and directs the Bank to pay each
check presented hereunder, subject to all laws and relevant rules and
regulations pertaining to
97841N -C- Fortis, 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
checking accounts, including those of the Bank, the Fund, and/ or Advisers. In
addition the Signatory(s) agree(s) that:
(a) No check shall be issued or honored, or any redemption
effected, in an amount less than $100.
(b) No check shall be issued or honored, or redemption
effected, for any amounts represented by shares for which certificates have
been issued.
(c) No check shall be issued or honored, or redemption
effected, if the amount of the check is greater than the value of the shares
held in the shareholder's account. Also, if shares in the account were
recently purchased with non-guaranteed funds (e.g., personal check), the
processing of the check may be delayed by fifteen days.
(d) No check shall be honored unless the Fund has provided
the Bank from the proceeds of redemption or otherwise, collected funds for
the payment of such check.
(e) Checks issued hereunder cannot be cashed over the
counter at the Bank; and
(f) Checks shall be subject to any further limitations set forth in
the Prospectus issued by the Fund including without limitation any
additions, amendments and supplements thereto.
3. DUAL OWNERSHIP: If more than one person is indicated as a registered owner of
the shares of the Fund, as by joint ownership, ownership in common, or tenants
by the entireties, then (a) each registered owner must sign this signature card,
(b) each registered owner must sign each check issued hereunder unless the
parties have indicated on the face of this card that only one need sign, in
which case the Bank is authorized to act upon such signature, and (c) each
Signatory guarantees to Bank the genuineness and accuracy of the signature of
the other Signatory(s).
4. CHARGES: Bank is authorized to redeem sufficient Fund shares from time to
time, to cover the prevailing applicable charges on this account.
5. TERMINATION: The Bank, the Fund, and/or Advisers may at any time terminate
this account, related share redemption service and Bank's agency for the
Signatory(s) hereto without prior notice by Bank to any of the Signatory(s).
6. HEIRS AND ASSIGNS: These terms and conditions shall bind the respective
heirs, executors, administrators and assigns of the Signatory(s).
7. CHANGES AND MODIFICATIONS: The above rules and regulations may be changed,
modified, or terminated at any time upon notification mailed to the
shareholder's address contained in the Fund's records.
8. WITHDRAWAL OPTIONS
A. CASH DIVIDENDS
PLEASE SEND THE PAYMENT TO:
/ /My bank. (Please complete bank information, section D, this page.)
/ /My address of record.
B. SYSTEMATIC WITHDRAWAL PLAN
Please consult your financial or tax adviser before electing a systematic
withdrawal plan.
Please redeem shares from my Fortis ______________________________________ Fund,
account number _______________________ in the amount of $______________________.
Effective payment date ____________________________ ____________________________
Month Day
<TABLE>
<S> <C> <C> <C>
FREQUENCY: / / Monthly / / Semi-Annually
/ / Quarterly / / Annually
</TABLE>
PLEASE SEND THE PAYMENT TO:
/ /My Bank. (Please complete Bank Information in Section D.)
/ /My address of record. (IF BANK OPTION IS NOT CHOSEN, CHECK WILL BE PROCESSED
ON THE FIFTEENTH OF EVERY MONTH.)
8. WITHDRAWAL OPTIONS, continued
C. TELEPHONE OPTIONS
/ /TELEPHONE EXCHANGE. All exchanges must be into accounts having the identical
registration-ownership. All authorized signatures listed in section 4 (or
your registered representative with shareholder consent) can make telephone
transfers.
/ /TELEPHONE REDEMPTION (NOT AVAILABLE FOR QUALIFIED PLANS) This option allows
all authorized signatures in section 4 (or your registered representative
with shareholder consent) to redeem.
PLEASE SEND THE PAYMENT TO:
/ /My bank. (Please complete bank information in section D below.)
/ /My address of record.
D. BANK INFORMATION
I request Fortis Financial Group (FFG) to pay sums due me by crediting my bank
account in the form of electronic entries. This authorization will remain in
effect until I notify FFG.
TYPE OF ACCOUNT: / / Checking / / Savings
Bank name ______________________________________________________________________
Address ________________________________________________________________________
City, State, Zip _______________________________________________________________
Name of bank account ___________________________________________________________
Bank account number ____________________________________________________________
Bank transit number ____________________________________________________________
Bank phone number ______________________________________________________________
ENCLOSE A VOIDED CHECK FROM YOUR BANK CHECKING ACCOUNT
9. SYSTEMATIC INVESTMENT PLAN
Complete the automated clearing house (ACH) authorization agreement form in the
prospectus and attach a voided check from your bank checking account. These
plans may be established for as little as $25.
OTHER SPECIAL INSTRUCTIONS
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
97841N -C- Fortis, 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
- --------------------------------------------------------------
97841N -C- Fortis, 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
<TABLE>
<S> <C>
FORTIS BENEFITS INSURANCE COMPANY FORTIS-SM-
Fortis Advisers, Inc. (fund management since 1949)
Fortis Investors, Inc. (principal underwriter; member NASD, SIPC)
Fortis Benefits Insurance Company & Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284, St. Paul, MN 55164-0284 (800) 800-2000
http://www.ffg.us.fortis.com
</TABLE>
FORTIS MUTUAL FUND AUTOMATED CLEARING
HOUSE (ACH) AUTHORIZATION AGREEMENT
Please complete each section below to establish ACH capability to your Fortis
mutual fund account. For personal service, please call your investment
professional or Fortis at (800) 800-2000, extension 3012. For investment
options, complete sections 1, 2, 3, 5. For withdrawal, complete sections 1, 2,
4, 5.
1. FORTIS ACCOUNT INFORMATION
Account registration:
- --------------------------------------------------------------
Owner (individual, first joint tenant, custodian, trustee)
- -----------------------------------------------------------------------
Owner (second joint tenant, minor, trust name)
- -----------------------------------------------------------------------
Additional information, if needed
- -----------------------------------------------------------------------
Street address
- -----------------------------------------------------------------------
City State Zip
<TABLE>
<S> <C>
- ---------------------------------------------- -----------------------
Social security number (taxpayer I.D.) Daytime phone
</TABLE>
2. BANK/FINANCIAL INSTITUTION INFORMATION
<TABLE>
<S> <C> <C>
PLAN TYPE: / / New plan / / Bank change
ACCOUNT TYPE: / / Savings / / Checking
(must attach a voided (must attach a deposit
check) slip)
</TABLE>
- --------------------------------------------------------------------------------
Transit number
- -----------------------------------------------------------------------
Bank account number
- -----------------------------------------------------------------------
Account owner(s) (please print)
- -----------------------------------------------------------------------
Depositor's daytime phone number
CLEARLY PRINT THE BANK/FINANCIAL INSTITUTION'S NAME AND ADDRESS BELOW:
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
Signature of depositor Date
- -----------------------------------------------------------------------
Signature of joint-depositor Date
3. INVESTMENT OPTION(S)
I request Fortis Financial Group (FFG) to obtain payment of sums becoming due
the company by charging my account in the form of electronic debit entries. I
request and authorize the financial institution named to accept, honor and
charge those entries to my account. Please allow days for collected funds to be
available in your Fortis account.
<TABLE>
<S> <C> <C>
A. / / Invest via Fortis Information Line by phone
(minimum $100, maximum $25,000)
Please allow up to four business days for deposits into Fortis
funds. Transactions after 3:00 p.m. (CST) will be processed the
following business day.
*Not available on tax qualified accounts such as IRA, SEP, SARSEP
and KEY Plans.
B. / / Systematic investment plan: / / New plan / / Change plan
C. / / Beginning draft date: -----------------------------------
D. / / Account number: -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Fund
Class Amount
A B C H $25.00 per fund minimum
-----------
<S> <C> <C>
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
</TABLE>
4. WITHDRAWAL OPTION(S)
I request Fortis Financial Group (FFG) to pay sums due me by crediting my bank
account in the form of electronic entries. I request and authorize the financial
institution to accept, honor and credit those entries to my account. Withdrawal
from Fortis Fund(s) requires account owner(s) signature(s) - see section 5
(Please consult your financial or tax adviser before electing a systematic
withdrawal plan. For tax-qualified accounts, additional forms are required for
distribution.)
<TABLE>
<S> <C> <C>
A. / / Cash dividends
B. / / Redeem via Fortis Information Line by phone
(minimum $100, maximum $25,000)
Please allow up to four business days for withdrawal to
credit your bank account. Transactions after 3:00 p.m.
(CST) will be processed the following business day.
*Not available on tax qualified accounts such as IRA,
SEP, SARSEP and Key plans.
C. / / Systematic withdrawal plan: / / New plan / / Change plan
D. / / Beginning withdrawal date:
E. / / Account number: -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Fund
Class Amount
A B C H $25.00 per fund minimum
-----------
<S> <C> <C>
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
/ / / / / / / /
- ------------------------ ------------------------
</TABLE>
5. SIGNATURES
Each person signing on behalf of any entity represents that his or her actions
are authorized. It is agreed that all Fortis Funds, Fortis Investors, Fortis
Advisers and their officers, directors, agents and employees will not be liable
for any loss, liability, damage or expense for relying upon this application or
any instruction believed genuine.
This authorization will remain in effect until I notify FFG. I hereby terminate
any prior authorization of FFG to initiate charges to this account. I understand
that any returned item or redemption of the entire account may result in
termination of my automated clearing house agreement. This authorization will
become effective upon acceptance by FFG at its home office.
Authorized signature(s)
X
- ------------------------------------------------------------
Owner, custodian, trustee Date
X
- ------------------------------------------------------------
Joint owner, trustee Date
98049 -C- Fortis, Inc. 1/99 The Fortis logo and Fortis-SM- are servicemarks of
Fortis (NL) N.V. and Fortis (B).
<PAGE>
[LOGO] BULK RATE
FORTIS-SM- U.S. POSTAGE
PAID
FORTIS FINANCIAL GROUP: Permit No, 3794
P.O. Box 64284 Minneapolis, MN
St. Paul, Minnesota 55164-0284
Prospectus
Dated February 1, 1999
More information about the Fund is available in the Fund's Statement of
Additional Information (SAI) and annual and semiannual reports.
- - STATEMENT OF ADDITIONAL INFORMATION. The SAI provides more details about the
Fund and its policies. A current SAI is on file with the Securities and
Exchange Commission (SEC) and is incorporated into this Prospectus by
reference, which means that it is legally considered part of this Prospectus.
- - ANNUAL AND SEMIANNUAL REPORTS. Additional information about Fund's
investments is available in the Fund's annual and semiannual reports to
shareholders.
You can obtain a free copy of the Fund's SAI and/or free copies of the Fund's
most recent annual or semiannual reports by calling (800) 800-2000, extension
3012. The material you request will be sent by first-class mail, or other means
designed to ensure equally prompt delivery, within three business days of
receipt of request.
You can also obtain copies by visiting the SEC's public reference room in
Washington DC, or by sending your request and a duplicating fee to the SEC's
Public Reference Section, Washington DC 20549-6009. For more information, call
(800) SEC-0330.
Information about the Fund is available on the Internet. Text-only versions of
the Fund documents can be viewed online or downloaded from the SEC's Internet
site at http://www.sec.gov.
SEC file numbers: 811-02943
[LOGO] FORTIS-SM-
FORTIS FINANCIAL GROUP
Fortis Advisers, Inc. (fund management since 1949)
Fortis Investors, Inc. (principal underwriter; member NASD, SIPC)
Fortis Benefits Insurance Company & Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284 - St. Paul, MN 55164-0284 - (800) 800-2000
http://www.ffg.us.fortis.com
98301 -C-Fortis 11/98 The Fortis logo and Fortis-SM- are servicemarks of
Fortis AMEV and Fortis AG.
<PAGE>
FORTIS MONEY FUND
A SERIES OF FORTIS MONEY PORTFOLIOS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED FEBRUARY 1, 1999
This Statement of Additional Information is NOT a prospectus.
Information from the Prospectus of Fortis Money Fund (the "Fund") dated
February 1, 1999 is incorporated by reference into this Statement of
Additional Information. A copy of that prospectus may be obtained from your
broker-dealer or sales representative. The address of Fortis Investors, Inc.
("Investors") is P.O. Box 64284, St. Paul, Minnesota 55164. Telephone: (651)
738-4000. Toll Free (800) 800-2000 (x3012).
No broker-dealer, sales representative, or other person has been
authorized to give any information or to make any representations other than
those contained in this Statement of Additional Information, and if given or
made, such information or representations must not be relied upon as having
been authorized by the Fund or Investors. This Statement of Additional
Information does not constitute an offer or solicitation by anyone in any
state in which such offer or solicitation is not authorized, or in which the
person making such offer or solicitation is not qualified to do so, or to any
person to whom it is unlawful to make such offer or solicitation.
<PAGE>
TABLE OF CONTENTS
Page
Fund History 3
Description of the Fund 3
Investment Policies and Restrictions 3
Investment Practices and Risk Considerations 6
Management of the Fund 10
Principal Holders of Securities 14
Investment Advisory and Other Services 15
Brokerage Allocation and Other Practices 18
Capital Stock 21
Pricing of Shares 21
Purchase of Shares 23
Redemption of Shares 24
Taxation 25
Underwriter and Distribution of Shares 26
Yield Information 26
Financial Statements 27
Other Service Providers 27
Limitation of Director Liability 27
Additional Information 28
Appendix A
Glossary of Terms 29
Appendix B
Commercial Paper and Corporate Bond Ratings 30
<PAGE>
FUND HISTORY
Fortis Money Fund is currently the only series (portfolio) of Fortis
Money Portfolios, Inc. ("Fortis Money") which was incorporated in Minnesota
in 1979. The Fund commenced operations on November 2, 1979.
DESCRIPTION OF THE FUND
Fortis Money is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940 (the "1940 Act") as an open-end
diversified management investment company. Fortis Money currently consists
of one investment portfolio. As a fundamental policy, the Fund operates as a
"diversified" investment company as defined under the 1940 Act, which means
that it must meet the following requirements:
At least 75% of the value of the Fund's total assets will be
represented by cash and cash items (including receivables), Government
securities, securities of other investment companies, and other securities
for the purposes of this calculation limited in respect of any one issuer
to an amount not greater in value than 5% of the value of the total assets
of the Fund and to not more than 10% of the outstanding voting securities
of such issuer.
Fortis Money may establish other portfolios, each corresponding to a
distinct investment portfolio and a distinct series of their common stock.
INVESTMENT POLICIES AND RESTRICTIONS
The Fund has adopted certain investment restrictions together with its
investment objective and policies, which cannot be changed without the
approval of a majority of the Fund's shareholders. In this situation,
majority means the lesser of (i) 67% of the Fund's outstanding shares present
at a meeting of the holders if more than 50% of the outstanding shares are
present in person or by proxy or (ii) more than 50% of the Fund's outstanding
shares.
Any investment policy or restriction in the Prospectus or this Statement
of Additional Information which involves a maximum percentage of securities
or assets except those dealing with borrowing and illiquid securities, shall
not be considered to be violated unless an excess over the percentage occurs
immediately after an acquisition of securities or utilization of assets and
results therefrom.
INVESTMENT POLICIES
As a fundamental policy, the Fund pursues its objective of maximum current
income to the extent consistent with stability of principal by investing
exclusively in the following types of money market instruments which mature in
397 days or less:
(1) Obligations of, or guaranteed by, the U.S. Government, its agencies
or instrumentalities.
<PAGE>
(2) Obligations of: (a) domestic or Canadian chartered banks having total
assets in excess of one billion dollars; and (b) foreign branches of
domestic banks, and domestic branches of foreign banks, where the parent
bank has total assets in excess of $1,000,000,000, or in foreign banks (or
foreign branches of foreign banks) where such banks have total assets in
excess of $1,000,000,000, or in other foreign issuers; provided, that no
more than 49% of the Fund's total assets may be invested in foreign
branches of domestic banks and domestic branches of foreign banks, foreign
banks, foreign branches of foreign banks, and other foreign issuers,
collectively. Such obligations may include, but are not limited to,
certificates of deposit, letters of credit, and bankers' acceptances. For
this purpose, "bank" includes commercial banks, savings banks, and savings
and loan associations.
(3) Obligations of other domestic issuers (which include, for example,
commercial paper and other debt obligations) which meet the quality and
other standards of Rule 2a-7 (or successors thereto) under the 1940 Act.
(4) Repurchase agreements in connection with obligations which are
suitable for investment under the categories set forth above.
(5) The Fund may purchase obligations other than those listed above if the
obligation is accompanied by a guarantee of principal and interest provided
that the guarantee is that of a bank or other issuer whose certificates of
deposit or debt obligations may be otherwise purchased by the Fund; such
obligations and guarantees must be due within 397 days or less from the
date of purchase.
As a fundamental policy, the Fund will have at least 25% of its total
assets invested collectively in U.S. dollar-denominated obligations of foreign
branches of domestic banks, domestic branches of foreign banks, foreign banks,
foreign branches of foreign banks, and other foreign issuers, except when a more
defensive position is deemed warranted. No more than 49% of the Fund's total
assets will be invested in these obligations.
The Fund may attempt to maximize the total return on its portfolio by
trading to take advantage of changing money market conditions and trends. The
Fund may also trade to take advantage of what are believed to be disparities in
yield relationships between different money market instruments. This procedure
may increase or decrease the portfolio yield, depending upon management's
ability to correctly time and execute such transactions. Since the Fund's
assets will be invested in securities with short maturities and the Fund will
manage its portfolio as described above, the Fund's portfolio of money market
instruments will turn over several times a year. However, this does not
generally increase the Fund's brokerage costs because brokerage commissions are
not usually paid in connection with the purchase or sale of the instruments in
which the Fund invests. Securities with maturities of less than one year are
excluded from required portfolio turnover rate calculations so the Fund's
portfolio turnover rate for reporting purposes will be zero. There are risks
associated with investing in instruments in which the Fund will invest,
including but not limited to, the possibility of price fluctuations due to
changes in interest rates, credit-worthiness, domestic and foreign economic and
political conditions.
INVESTMENT RESTRICTIONS
<PAGE>
The following investment restrictions are fundamental and may be changed
only by the approval of shareholders. The Fund will not:
(1) Purchase common stocks, preferred stocks, warrants, other equity
securities, state bonds, municipal bonds or industrial revenue bonds
(except through the purchase of debt obligations).
(2) Concentrate more than 25% of the value of its assets in any one
industry; provided, however, that there is no limitation with respect
to investments in obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities, or obligations of
domestic commercial banks. As to utility companies, gas, electric,
water and telephone companies will be considered as separate
industries. As to finance companies, the following categories will be
considered as separate industries: (a) captive automobile finance,
such as General Motors Acceptance Corp. and Ford Motor Credit Corp.;
(b) captive equipment finance companies, such as Honeywell Finance
Corporation and General Electric Credit Corp.; (c) captive retail
finance companies, such as Macy Credit Corp. and Sears Roebuck
Acceptance Corp.; (d) consumer loan companies, such as Beneficial
Finance Corporation and Household Finance Corporation; (e) diversified
finance companies, such as CIT Financial Corp., Commercial Credit
Corporation, and Borg Warner Acceptance Corp.; and (f) captive oil
finance companies, such as Shell Credit Inc., Mobil Oil Credit Corp.,
and Texaco Financial Services, Inc.
(3) Invest more than 5% of the Fund's total assets in securities of
issuers which with their predecessors have a record of less than three
years continuous operation. (Securities of such issuers will not be
deemed to fall within this limitation if they are guaranteed by an
entity in continuous operation for more than three years.)
(4) Make loans to others (except through the purchase of money market
instruments referred to under "Investment Objectives and Policies").
(5) Borrow money, except as a temporary measure for extraordinary or
emergency purposes, and then only in an amount up to one-third of the
value of its total assets, in order to meet redemption requests
without immediately selling any money market instruments (any such
borrowings under this section will not be collateralized). If, for
any reason, the current value of the Fund's total assets falls below
an amount equal to three times the amount of its indebtedness from
money borrowed, the Fund will, within three business days, reduce its
indebtedness to the extent necessary. To do this the Fund may have to
sell a portion of its investments at a time when it may be
disadvantageous to do so. Interest paid on borrowed funds would
decrease the net earnings of the Fund. The Fund will not borrow for
leverage purposes.
(6) Make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the
clearance of transactions.
(7) Write, purchase or sell puts, calls or combinations thereof.
(8) Purchase or retain the securities of any issuer if any of the officers
or directors of
<PAGE>
the Fund or its investment adviser owns beneficially more than 1/2 of
1% of the securities of such issuer and together own more than 5% of
the securities of such issuer.
(9) Invest for the purpose of exercising control or management of another
issuer.
(10) Invest in commodities or commodity futures contracts or in real
estate, although it may invest in securities which are secured by real
estate and securities of issuers which invest or deal in real estate.
(11) Invest in interest in oil, gas or other mineral exploration or
development programs, although it may invest in the securities of
issuers which invest in or sponsor such programs.
(12) Invest more than 5% of the value of its total assets in securities of
other investment companies, except in connection with a merger,
consolidation, acquisition or reorganization.
(13) Underwrite securities issued by others, except to the extent the Fund
may be deemed to be an underwriter, under the federal securities laws,
in connection with the disposition of portfolio securities.
An investment restriction which may be changed without shareholder approval
is that the Fund will not invest more than 10% of its net assets in illiquid
securities.
INVESTMENT PRACTICES AND RISK CONSIDERATIONS
RULE 2a-7
The Fund is subject to the requirements of Rule 2a-7 under the 1940 Act.
Rule 2a-7 requires that all investments by the Fund be limited to U.S.
dollar-denominated investments that: (1) present "minimal credit risks," and (2)
are at the time of acquisition "Eligible Securities." Eligible Securities
include, among others, securities that are rated by two Nationally Recognized
Statistical Rating Organizations ("NRSROs") in one of the two highest categories
for short-term debt obligations, such as A-1 or A-2 by Standard & Poor's Ratings
Services ("Standard & Poor's") or P-1 or P-2 by Moody's Investors Service, Inc.
("Moody's"). It is the responsibility of Advisers to determine that the Fund's
investments present only minimal credit risks and are Eligible Securities. The
Fund's Board of Directors has established written guidelines and procedures for
Advisers and oversees Advisers' determination that the Fund's portfolio
securities present only minimal credit risks and are Eligible Securities. Under
Rule 2a-7, 95% of the assets of the Fund must be invested in Eligible Securities
that are deemed First Tier Securities, which include, among others, securities
rated by two NRSROs in the highest category (such as A-1 and P-1). Rule 2a-7
requires that (1) a fund may not invest more than 5% of its total assets in
Second Tier Securities (i.e., Eligible Securities that are not First Tier
Securities) and (2) a fund's investment in Second Tier Securities of a single
issuer may not exceed the greater of 1% of the fund's total assets or
$1,000,000.
Pursuant to Rule 2a-7, the Board of Directors has adopted certain
"Investment Procedures and Standards." These impose certain additional
limitations on permissible Fund investments, including, among others: (a) no
obligations of banks will be purchased unless such banks have
<PAGE>
capital, surplus and undivided profits over $100 million, unless the Board
expressly allows such investments; (b) no more than 10% of the Fund's total
assets may be invested in obligations of Canadian chartered banks; (c) no more
than 5% and 10% of the Fund's total assets may be invested in savings banks and
savings and loan associations, respectively; (d) bank repurchase agreements will
only be entered into with banks meeting certain criteria. These additional
limitations may be modified at any time by the Board of Directors or its
Executive Committee, when suitable investments are available which are
considered to be consistent with the Fund's investment objective and policies
and the conditions of Rule 2a-7 referred to above.
ILLIQUID SECURITIES
The Fund may invest in illiquid securities, including "restricted"
securities. For this purpose illiquid securities include, among others, (i)
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale and (ii) repurchase
agreements not terminable within seven days. Commercial paper issued pursuant
to the private placement exemption of Section 4(2) of the Securities Act of 1933
(the "1933 Act") and securities that are eligible for resale under Rule 144A
under the 1933 Act that have legal or contractual restrictions on resale but
have a readily available market are not deemed illiquid securities for this
purpose. A restricted security is one which was originally sold in a private
placement and was not registered with the Commission under the Securities Act of
1933 (the "1933 Act") and which is not free to be resold unless it is registered
with the Commission or its sale is exempt from registration.
The staff of the Securities and Exchange Commission has taken the position
that the liquidity of securities in the portfolio of a fund offering redeemable
securities is a question of fact for a board of directors of such a fund to
determine, based upon a consideration by such board of the readily available
trading markets and a review of any contractual restrictions. The SEC staff also
acknowledges that, while such a board retains ultimate responsibility, it may
delegate this function to the fund's investment adviser. Securities that have
been determined to be liquid by the Board of Directors of Fortis Money, or by
Advisers subject to the oversight of such Board of Directors, will not be
subject to this limitation.
The Board of Directors of Fortis Money has adopted procedures to determine
the liquidity of certain securities, including commercial paper issued pursuant
to the private placement exemption of Section 4(2) of the 1933 Act and
securities that are eligible for resale to qualified institutional buyers
pursuant to Rule 144A under the 1933 Act. Under these procedures, factors taken
into account in determining the liquidity of a security include (a) the
frequency of trades and quotes for the security, (b) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers, (c) dealer undertakings to make a market in the security, and (d)
the nature of the security and the nature of the marketplace trades (E.G., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer).
Section 4(2) commercial paper or a Rule 144A security that when purchased
enjoyed a fair degree of marketability may subsequently become illiquid, thereby
adversely affecting the
<PAGE>
liquidity of the Fund. With respect to Rule 144A securities, investing in such
securities could have the effect of increasing the level of Fund illiquidity to
the extent that qualified institutional buyers become, for a time, uninterested
in purchasing these securities.
Illiquid securities may offer a higher yield than securities that are more
readily marketable. The sale of illiquid securities, however, often requires
more time and results in higher brokerage charges or dealer discounts or other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. The Fund may
also be restricted in its ability to sell such securities at a time when it is
advisable to do so. Illiquid securities often sell at a price lower than
similar securities that are not subject to restrictions on resale.
REPURCHASE AGREEMENTS
The Fund may invest in repurchase agreements. A repurchase agreement is an
instrument under which securities are purchased from a bank or securities dealer
with an agreement by the seller to repurchase the securities at a mutually
agreed upon date, interest rate, and price. Generally, repurchase agreements
are of short duration usually less than a week, but on occasion for longer
periods.
In investing in repurchase agreements, the Fund's risk is limited to the
ability of such bank or securities dealer to pay the agreed upon amount at the
maturity of the repurchase agreement. In the opinion of management, such risk
is not material; if the other party defaults, the underlying security
constitutes collateral for the obligation to pay although the Fund may incur
certain delays in obtaining direct ownership of the collateral, plus costs in
liquidating the collateral. In the event a bank or securities dealer defaults
on the repurchase agreement, management believes that, barring extraordinary
circumstances, the Fund will be entitled to sell the underlying securities or
otherwise receive adequate protection (as defined in the federal Bankruptcy
Code) for its interest in such securities. To the extent that proceeds from any
sale upon a default were less than the repurchase price, however, the Fund could
suffer a loss. If the Fund owns underlying securities following a default on
the repurchase agreement, the Fund will be subject to risk associated with
changes in the market value of such securities. The Fund's custodian will hold
the securities underlying any repurchase agreement or such securities may be
part of the Federal Reserve Book Entry System. The market value of the
collateral underlying the repurchase agreement will be determined on each
business day. If at any time the market value of the collateral falls below the
repurchase price of the repurchase agreement (including any accrued interest),
the Fund will promptly receive additional collateral (so the total collateral is
in an amount at least equal to the repurchase price plus accrued interest)
VARIABLE AMOUNT MASTER DEMAND NOTES
The Fund may invest in variable amount master demand notes. These
instruments are short-term, unsecured promissory notes issued by corporations to
finance short-term credit needs. Variable amount master demand notes allow the
investment of fluctuating amounts by the Fund at varying market rates of
interest pursuant to arrangements between the Fund and a financial
<PAGE>
institution which has lent money to a borrower. Variable amount master demand
notes permit a series of short-term borrowings under a single note. Both the
lender and the borrower have the right to reduce the amount of outstanding
indebtedness at any time. Such notes provide that the interest rate on the
amount outstanding varies on a daily basis depending upon a stated short-term
interest rate barometer. Advisers will monitor the creditworthiness of the
borrower throughout the term of the variable master demand note. It is not
generally contemplated that such instruments will be traded and there is no
secondary market for the notes. Typically, agreements relating to such notes
provide that the lender shall not sell or otherwise transfer the note without
the borrower's consent. Thus, variable amount master demand notes may under
certain circumstances be deemed illiquid assets. However, such notes will not
be considered illiquid where the Fund has a "same day withdrawal option," I.E.,
where it has the unconditional right to demand and receive payment in full of
the principal amount then outstanding together with interest to the date of
payment.
FOREIGN SECURITIES
The Fund's portfolio may contain securities issued by foreign governments,
or any of their political subdivisions, agencies, or instrumentalities, and by
foreign branches of domestic banks, foreign subsidiaries of domestic banks,
domestic and foreign branches of foreign banks, and commercial paper and other
obligations issued by foreign issuers. As a result, the Fund will be subject to
additional investment risks with respect to such securities. The Fund will give
appropriate consideration to the following factors, among others.
Foreign securities markets generally are not as developed or efficient
as those in the United States. Volume and liquidity in foreign securities
markets can be less than in the United States and, at times, volatility of
price can be greater than in the United States. The issuers of some of these
securities, such as bank obligations, may be subject to less stringent or
different regulation than are U.S. issuers. In addition, there may be less
publicly available information about a non-U.S. issuer, and non-U.S. issuers
generally are not subject to uniform accounting and financial reporting
standards, practices, and requirements comparable to those applicable to U.S.
issuers.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks which
include possible adverse political and economic developments, possible
seizure or nationalization of foreign deposits, and possible adoption of
governmental restrictions which might adversely affect the payment of
principal and interest on the foreign securities or might restrict the
payment of principal and interest to investors located outside the country of
the issuer, whether from currency blockage or otherwise.
Furthermore, some of these securities are subject to brokerage taxes
levied by foreign governments, which have the effect of increasing the cost
of such investment. Income earned or received by the Fund from sources within
foreign countries may be reduced by withholding and other taxes imposed by
such countries. Advisers will attempt to minimize such taxes by timing of
transactions and other strategies, but there can be no assurance that such
efforts will be successful. All such taxes paid by the Fund will reduce its
net income available for distribution to shareholders. Advisers will consider
available yields, net of any required taxes, in selecting
<PAGE>
foreign securities.
MANAGEMENT OF THE FUND
Under Minnesota law, the Board of Directors of Fortis Money has overall
responsibility for managing it in good faith, in a manner reasonably believed
to be in the best interests of the company and with the care an ordinarily
prudent person would exercise in similar circumstances. This management may
not be delegated. The Articles of Incorporation limit the liability of
directors to the fullest extent permitted by law.
The names, addresses, principal occupations and other affiliations of
directors and executive officers of Fortis Money are listed below. Unless
stated otherwise, all positions have been held at least five years. Each
director and officer also serves as a director or officer of all investment
companies managed by Advisers (the "Fund Complex"), with the exception of Mr.
Jaffray and Ms. Shadko who are not directors of Fortis Series Fund, Inc. The
Fund Complex currently consists of one closed-end and eight open-end
investment companies.
<TABLE>
<CAPTION>
POSITION
WITH
NAME AND ADDRESS AGE THE FUNDS PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------- ---- --------- -----------------------------------------
<S> <C> <C> <C>
Richard W. Cutting 67 Director Certified public accountant and financial
137 Chapin Parkway consultant.
Buffalo, New York
Allen R. Freedman* 58 Director Chairman, Chief Executive Officer and
One Chase Manhattan Plaza President of Fortis, Inc.; a Managing
New York, New York Director of Fortis International, N. V.
Dr. Robert M. Gavin 58 Director President, Cranbrook Education Community,
380 Lone Pine Road Prior to July 1996, President Macalester
Bloomfield Hills, College, St. Paul, MN.
Michigan
Benjamin S. Jaffray 68 Director Chairman of the Sheffield Group, Ltd., a
4040 IDS Center financial consulting group, Minneapolis,
Minneapolis, Minnesota MN.
Jean L. King 54 Director President, Communi-King, a communications
12 Evergreen Lane consulting firm, St. Paul, MN.
St. Paul, Minnesota
Dean C. Kopperud * 46 President Chief Executive Officer and a Director of
500 Bielenberg Drive and Advisors, President and a Director of
Woodbury, Minnesota Director Investors, President of Fortis Financial
Group, a Director of Fortis Benefits
Insurance Company and a Senior Vice
President of Time Insurance Company.
Edward M. Mahoney 68 Director Retired; prior to December, 1994, Chairman
2760 Pheasant Road and Chief Executive Officer and a Director
Excelsior, Minnesota of Advisers and Investors, Senior Vice
President and a Director of Fortis
Benefits Insurance Company, and Senior
Vice President of Time Insurance Company.
Robb L. Prince 57 Director Financial and Employee Benefit Consultant;
5108 Duggan Plaza prior to July, 1995, Vice President and
Edina, Minnesota Treasurer, Jostens, Inc., a producer of
products and services for the youth,
education, sports award, and recognition
markets, Minneapolis, MN.
Leonard J. Santow 62 Director Principal, Griggs & Santow, Incorporated,
75 Wall Street economic and financial consultants, New
21st Floor York, NY.
New York, New York
Noel S. Shadko 44 Director Marketing Consultant; prior to May 1996,
1908 W. 49th Street Senior Vice President of Marketing &
Minneapolis, Minnesota Strategic Planning, Rollerblade, Inc.,
Minneapolis, MN.
<PAGE>
Joseph M. Wikler 57 Director Investment consultant and private
12520 Davan Drive investor.
Silver Spring, Maryland
Gary N. Yalen 56 Vice President and Chief Investment Officer of
One Chase Manhattan Plaza President Advisers (since 1995) New York, NY, and
New York, New York Senior Vice President, Investments,
Fortis, Inc.; prior to 1996, President and
Chief Investment Officer, Fortis Asset
Management, a former division of Fortis,
Inc.
Howard G. Hudson 61 Vice Executive Vice President and Head of Fixed
One Chase Manhattan Plaza President Income Investments of Advisers since 1995;
New York, New York prior to 1996, Senior Vice President,
Fixed Income, Fortis Asset Management.
Lucinda S. Mezey 51 Vice Executive Vice President and Head of
One Chase Manhattan Plaza President Equity Investments of Advisers since
New York, New York October 1997; from 1995 to October 1997,
Chief Investment Officer, Alex Brown
Capital Advisory and Trust Co., Baltimore,
MD; and prior to 1995, Senior Vice
President and Head of Equity Investments,
PNC Bank, Philadelphia, PA.
James S. Byrd 47 Vice Executive Vice President of Advisers since
90 South 7th Street President 1995; prior to 1995, Vice President of
Suite 5030, Advisers and Investors.
Minneapolis, Minnesota
Nicholas L. M. de Peyster 32 Vice Vice President of Advisers since 1995;
One Chase Manhattan Plaza President prior to 1996, Vice President, Equities,
New York, New York Fortis Asset Management.
Diane M. Gotham 40 Vice Vice President of Advisers since 1998;
90 South 7th Street President from 1994 to 1998, securities analyst for
Suite 5030, Advisers.
Minneapolis, Minnesota
Laura E. Granger 37 Vice Vice President of Advisers since 1998;
One Chase Manhattan Plaza President from 1993 to 1998, portfolio manager,
New York, New York General Motors Investment Management, New
York, NY.
Maroun M. Hayek 50 Vice Vice President of Advisers; prior to
One Chase Manhattan Plaza President August 1996, Vice President, Fixed Income,
New York, New York Fortis Asset Management.
Robert C. Lindberg 46 Vice Vice President of Advisers since 1993.
One Chase Manhattan Plaza President
New York, New York
Charles L. Mehlhouse 56 Vice Vice President of Advisers since 1996;
One Chase Manhattan Plaza President prior to March 1996, Portfolio Manager to
New York, New York Marshall & Ilsley Bank Corporation,
Milwaukee, WI.
Kevin J. Michels 47 Vice Vice President of Advisers since 1995.
One Chase Manhattan Plaza President Prior to 1996, Vice President,
New York, New York Administration, Fortis Asset Management.
Christopher J. Pagano 35 Vice Vice President of Advisers since 1996;
One Chase Manhattan Plaza President prior to March 1996, Government Strategist
New York, New York for Merrill Lynch, New York, N.Y.
Stephen M. Rickert 55 Vice Vice President of Advisers since 1995;
One Chase Manhattan Plaza President from 1994 to 1996, Corporate Bond Analyst,
New York, New York Fortis Asset Management.
Michael J. Romanowski 47 Vice Vice President of Advisers since 1998;
One Chase Manhattan Plaza President from October 1995 to March 1998, Portfolio
New York, New York Manager, Value Line, New York, NY; prior
to October 1995, securities analyst,
Conning & Co., Hartford, CT.
Ho Wang 51 Vice Vice President of Advisers since 1998;
One Chase Manhattan Plaza President from 1995 to 1998, senior securities
New York, New York analyst, Lord, Abbett & Co., New York, NY;
prior to 1995, portfolio manager, New York
Life, New York, NY.
Christopher J. Woods 38 Vice Vice President of Advisers since 1995;
One Chase Manhattan Plaza President prior to 1996, Vice President, Fixed
New York, New York Income, Fortis Asset Management.
Robert W. Beltz, Jr. 49 Vice Vice President - Securities Operations of
500 Bielenberg Drive President Advisers and Investors.
Woodbury, Minnesota
<PAGE>
Peggy E. Ettestad 41 Vice Senior Vice President, Operations of
500 Bielenberg Drive President Advisers; prior to March 1997, Vice
Woodbury, Minnesota President G.E. Capital Fleet Services,
Minneapolis, MN.
Tamara L. Fagely 40 Vice Vice President of Advisers and Investors
500 Bielenberg Drive President since 1998; prior thereto, Second Vice
Woodbury, Minnesota and President of Advisers and Investors.
Treasurer
Dickson Lewis 49 Vice Senior Vice President, Marketing and Sales
500 Bielenberg Drive President of Advisers; from 1993 to July 1997,
Woodbury, Minnesota President and Chief Executive Officer
Hedstrom/Blessing, Inc., a marketing
communications company, Minneapolis, MN.
David A. Peterson 56 Vice Vice President and Assistant General
500 Bielenberg Drive President Counsel, Fortis Benefits Insurance
Woodbury, Minnesota Company.
Scott R. Plummer 39 Vice Vice President since 1998, Associate
500 Bielenberg Drive President General Counsel since 1998 and Assistant
Woodbury, Minnesota Secretary of Advisers; prior thereto,
Second Vice President and Corporate
Counsel of Advisers.
Rhonda J. Schwartz 40 Vice Senior Vice President and General Counsel
500 Bielenberg Drive President of Advisers; Senior Vice President and
Woodbury, Minnesota General Counsel, Life and Investment
Products, Fortis Benefits Insurance
Company and Vice President and General
Counsel, Life and Investment Products,
Time Insurance Company; from 1993 to
January 1996, Vice President, General
Counsel, Fortis, Inc.
Melinda S. Urion 45 Vice Since December 1997, Senior Vice President
500 Bielenberg Drive President and Chief Financial Officer of Advisers.
Woodbury, Minnesota Prior to December 1997, Senior Vice
President of Finance and Chief Financial
Officer, American Express Financial
Corporation; prior to 1995, Corporate
Controller, American Express Financial
Corporation.
Michael J. Radmer 53 Secretary Partner, Dorsey & Whitney LLP, the Fund's
220 South Sixth Street General Counsel.
Minneapolis, Minnesota
</TABLE>
- --------------------
* Mr. Kopperud is an "interested person" (as defined under the 1940 Act) of
Advisers and Fortis Money because he holds certain positions including serving
as Chief Executive Officer and a director of Advisers. Mr. Freedman is an
"interested person" of Advisers and Fortis Money because he holds certain
positions including serving as Chairman and Chief Executive Officer of Fortis,
Inc., the parent company of Advisers.
Each director who is not affiliated with Advisers or Investors receives a
monthly fee of $100 from the Fund, $100 per meeting attended from the Fund, and
$100 per committee meeting attended from the Fund (and reimbursement of travel
expenses to attend meetings). Each such director also receives a monthly fee, a
meeting fee and a committee meeting fee from each fund in the Fund Complex for
which they are a director. The following table sets forth the aggregate
compensation received by each director from Fortis Money during the fiscal year
ended September 30, 1998, as well as the total compensation received by each
director from the Fund and all other registered investment companies managed by
Advisers during the calendar year ended December 31, 1998. Mr. Freedman and Mr.
Kopperud, who are affiliated with Advisers and Investors, did not receive any
compensation. No executive officer receives any compensation from the Funds.
During the fiscal year ended September 30, 1998, the Fund paid $12,300 in legal
fees and expenses to a law firm of which the Fund's Secretary is a partner.
<TABLE>
<CAPTION>
COMPENSATION FROM TOTAL COMPENSATION
DIRECTOR FORTIS MONEY FROM FUND COMPLEX*
-------- ------------------------ -----------------------
<S> <C> <C>
Richard W. Cutting $1,800 $30,200
Dr. Robert M. Gavin $1,800 $29,200
<PAGE>
Benjamin S. Jaffray $1,800 $20,400
Jean L. King $1,800 $30,200
Edward M. Mahoney $1,800 $29,200
Robb L. Prince $1,800 $29,200
Leonard J. Santow $1,700 $29,050
Noel S. Shadko $1,800 $20,400
Joseph M. Wikler $1,800 $30,300
</TABLE>
- --------------------
* The Fund Complex consists of one closed-end and eight open-end investment
companies managed by Advisers.
Directors Gavin, Jaffray, Kopperud, Mahoney, Prince and Shadko are members
of the Executive Committee of the Board of Directors. While the Executive
Committee is authorized to act in the intervals between regular board meetings
with full capacity and authority of the full Board of Directors, except as
limited by law, it is expected that the Committee will meet at least twice a
year.
PRINCIPAL HOLDERS OF SECURITIES
As of January 15, 1999, no person owned of record or, to the Fund's
knowledge, beneficially as much as 5% of the outstanding shares of any Class of
Fund shares, except as follows:
CLASS B -- Kermit and Peggy J. Douglas, 1913 Kiska Rd., Salem, VA (6%);
David L.and Barbara K. Shaw, 1041 Lecuyer Dr., Stillwater, MN (6%); First Trust
N.A., C/F Evelyn A. Parker IRA, PO Box 72, Pittsford, VT (7%); Ervin J. and Mary
Jane Hammen, 1731 Sheehan Dr., Berthoud, CO (9%); David L. Shaw, Trustee FBO
David L. Shaw Revocable Trust, 1041 Lecuyer Dr., Stillwater, MN (10%); Barbara
K. Shaw, Trustee FBO Barbara K. Shaw Revocable Trust, 1041 Lecuyer Dr.,
Stillwater, MN (13%) and The Shaw Family Foundation, 1041 Lecuyer Dr.,
Stillwater, MN (16%). CLASS H -- First Trust N.A., C/F Steven L. Shrader IRA,
14704 107th Ave NE, Bothell, WA (6%); First Trust N.A., Trustee for The Thobe
Group Profit Sharing Key Plan, 2727 Raintree Dr., Carrollton, TX (7%); William
R. and Julia K. Stephenson, 3301 E Superior St., Duluth, MN (8%) and First Trust
N.A., C/F James R. Davis IRA, 11888 Winged Foot Terrace, Coral Springs, FL (8%).
CLASS C -- GB Sales & Service, 39550 Schoolcraft Rd., Plymouth, MI (18%); J.C.
Bradford and Co., Custodian FBO DCIP Limited Partners, 330 Commerce St.,
Nashville, TN (33%) and J.C. Bradford and Co., Custodian FBO RCIP Limited
Partners, 330 Commerce St., Nashville, TN (34%).
As of January 15, 1999, the directors and executive officers as a group
beneficially owned less than 1% of the outstanding shares of each class of each
Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
GENERAL
<PAGE>
Fortis Advisers, Inc. ("Advisers") has been the investment adviser and
manager of the Fund since inception. Fortis Investors, Inc. ("Investors") acts
as the Fund's underwriter. Each acts pursuant to written agreements
periodically approved by the directors or shareholders. The address of each is
that of the Fund. As of December 31, 1998, Advisers managed thirty-three
investment company portfolios with combined net assets of approximately $6.4
billion.
CONTROL AND MANAGEMENT OF ADVISERS AND INVESTORS
Fortis, Inc. ("Fortis") owns 100% of the outstanding voting securities of
Advisers, and Advisers owns all of the outstanding voting securities of
Investors.
Fortis, located in New York, New York, is a financial services company that
provides specialty insurance and investment products to individuals, businesses,
associations and other financial services organizations in the United States.
Fortis is a part of a worldwide group of companies active in the fields of
insurance, banking and investments. Fortis is jointly owned by Fortis (NL) N.V.
of The Netherlands and Fortis (B) of Belgium.
Fortis (NL) N.V. is a diversified financial services company headquartered
in Utrecht, The Netherlands, where its insurance operations began in 1847.
Fortis (B) is a diversified financial services company headquartered in
Brussels, Belgium, where it insurance operations began in 1824. Fortis (NL)
N.V. and Fortis (B) own a group of companies active in insurance, banking and
financial services, and real estate development in The Netherlands, Belgium, the
United States, Western Europe, and the Pacific Rim.
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS
Advisers act as investment adviser and manager of the Fund an Investment
Advisory and Management Agreement (the "Agreement"). The Agreement will
terminate automatically in the event of its assignment. In addition, the
Agreement is terminable at any time, without penalty, by the Board of Directors
or, by vote of a majority of the Fund's outstanding voting securities, on not
more than 60 days' written notice to Advisers, and by Advisers on 60 days'
notice to the Fund. Unless sooner terminated, the Agreement continues in effect
only so long as such continuance is specifically approved at least annually by
either the Board of Directors or by a vote of a majority of the outstanding
voting securities of the Fund; provided that, in either event, such continuance
is also approved by the vote of the majority of the directors who are not
parties to such Agreement, or interested persons of such parties, cast in person
at a meeting called for the purpose of voting on such approval.
The Agreement provides for a monthly investment advisory and management fee
to be paid by the Fund at an annual rate of .60% on average daily net assets up
to $500 million and .55% on average daily net assets in excess of $500 million.
From the advisory fee, Advisers pays Investors on a monthly basis a distribution
fee of .20% of the average daily net assets of the Fund. For more information,
see "Distribution Plan" below.
The Agreement requires the Fund to pay all its expenses which are not
assumed by
<PAGE>
Advisers and/or Investors. These expenses include, by way of example, but not
by way of limitation, the fees and expenses of directors and officers who are
not "affiliated persons" of Advisers, interest expenses, taxes, brokerage fees
and commissions, fees and expenses of registering and qualifying the Fund and
its shares for distribution under Federal and state securities laws, expenses of
preparing prospectuses and of printing and distributing prospectuses annually to
existing shareholders, custodian charges, auditing and legal expenses, insurance
expenses, association membership dues, and the expense of reports to
shareholders, shareholders' meetings and proxy solicitations.
Although investment decisions for the Fund are made independently from
those of the other funds or private accounts managed by Advisers, sometimes the
same security is suitable for more than one fund or account. If and when two or
more funds or accounts simultaneously purchase or sell the same security, the
transactions will be allocated as to price and amount in accordance with
arrangements equitable to each fund or account. The simultaneous purchase or
sale of the same securities by the Fund and other funds or accounts may have a
detrimental effect on the Fund, as this may affect the price paid or received by
the Fund or the size of the position obtainable by the Fund.
The Fund paid advisory and management fees of $724,040 for the fiscal year
ended September 30, 1996, $772,701 for the fiscal year ended September 30, 1997
and $853,729 for the fiscal year ended September 30, 1998.
EXPENSES
Advisers bears the costs of acting as the Fund's transfer agent, registrar
and dividend agent. Advisers also furnishes the Fund with all required
management services, facilities, equipment, and personnel. Advisers or
Investors also shall bear all promotional expenses in connection with the
distribution of Fund shares, including paying for prospectuses and shareholder
reports for new shareholders and the costs of sales literature.
DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act.
Rule 12b-1 provides that any payments made by the Fund in connection with
financing the distribution of its shares may only be made pursuant to a written
plan describing all aspects of the proposed financing of distribution, and also
requires that all agreements with any person relating to the implementation of
the plan must be in writing. In addition, Rule 12b-1(b)(1) requires that such
plan be approved by a majority of the Fund's outstanding shares, and
Rule 12b-1(b)(2) requires that such plan, together with any related agreements,
be approved by a vote of the Board of Directors who are not interested persons
of the Fund and have no direct or indirect interest in the operation of the plan
or in the agreements related to the plan, cast in person at a meeting called for
the purpose of voting on such plan or agreement.
Pursuant to the provisions of the Distribution Plan and pursuant to the
terms of the Investment Advisory and Management Agreement, a portion of the
Fund's advisory fee is paid
<PAGE>
by Advisers to Investors to compensate Investors for its expenses in connection
with the sale and distribution of Fund shares and for ongoing servicing of
accounts. From the advisory fee, Advisers pays Investors on a monthly basis a
fee of .20% of the average daily net assets of the Fund. With respect to Class
B, Class C and Class H shares, an additional .80% of the average daily net
assets of each such class is paid by each such class to Investors on a monthly
basis. Payments made under the Distribution Plan are not tied to actual
expenses incurred by Investors and may exceed such expenses.
A portion of the Fund's total fee is paid as a distribution fee and will be
used by Investors to cover expenses that are primarily intended to result in, or
that are primarily attributable to, the sale of shares of the Fund
("Distribution Fees"), and the remaining portion of the fee is paid as a
shareholder servicing fee and will be used by Investors to provide compensation
for ongoing servicing and/or maintenance of shareholder accounts ("Shareholder
Servicing Fees"). For the Class A shares, the entire fee of .20% is designated
as a Distribution Fee. For the Class B, Class C and Class H shares, Investors
receives a total fee of 1.00% of the average daily net assets of each such
class, of which .75% is designated as a Distribution Fee and .25% is designated
as a Shareholder Servicing Fee.
Distribution Fees under the Plan include, but are not limited to, initial
and ongoing sales compensation (in addition to sales charges) paid to registered
representatives of Investors and to other broker-dealers; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of Investors'
overhead; and payments to and expenses of persons who provide support services
in connection with the distribution of Fund shares. Shareholder Servicing Fees
include all expenses of Investors incurred in connection with providing
administrative or accounting services to shareholders, including, but not
limited to, an allocation of Investors' overhead and payments made to persons,
including employees of Investors, who respond to inquiries of shareholders of
the Fund regarding their ownership of shares or their accounts with the Fund, or
who provide other administrative or accounting services not otherwise required
to be provided by Advisers.
From its advisory fee, the Fund paid Investors a distribution fee for Class
A shares of $284,576 for the fiscal year ended September 30, 1998. The
additional distribution fee paid by the Class B, Class C and Class H shares
totaled $ 6,868. Listed below are the total distribution fees paid by the Fund
and how those fees were used by Investors for the fiscal year ended September
30, 1998.
<TABLE>
<S> <C>
Advertising $ -0-
Printing and Mailing of Prospectuses to
Other than Current Shareholders 27,540
Compensation to Underwriters 157,356
Compensation to Dealers -0-
Compensation to Sales Personnel -0-
Interest, Carrying or Other Financing Charges -0-
Other (distribution-related compensation, sales
literature, supplies, postage, toll-free phone) 106,548
---------
TOTAL $ 291,444
</TABLE>
<PAGE>
BROKERAGE ALLOCATION AND OTHER PRACTICES
Advisers selects and (where applicable) negotiates commissions with
broker-dealers who execute trades for each Fund. In selecting a broker-dealer
to execute an equity trade, Advisers primarily considers whether the
broker-dealer can provide best execution on the trade including best price for a
security. Other factors that Advisers considers when selecting a broker-dealer
for an equity trade include:
- - competitive commissions commensurate with the value of research products
and services provided to Advisers;
- - consistently good service quality;
- - adequate capital position;
- - broad market coverage;
- - continuous flow of information concerning bids and offers;
- - the ability to complete, clear and settle trades in a timely and efficient
manner;
- - capital usage;
- - specialized expertise;
- - access to new issues; and
- - the ability to handle large blocks of stock discreetly.
For a Fund exclusively composed of debt, rather than equity securities,
portfolio transactions are effected with dealers without the payment of
brokerage commissions, but at net prices which usually include a spread or
markup. The volume of business done with a broker-dealer for fixed income
trades is based to a large extent on the availability and competitive price of
the fixed income securities that fit the strategy of the fixed income portfolio.
Best execution, the quality of research, making of secondary markets and other
services are also determining factors for the allocation of business when buying
and selling fixed income securities. If a broker-dealer charging a higher
commission or offering a larger spread is more reliable or provides better
execution than a broker-dealer charging a lower commission or offering a smaller
spread, then Advisers may select the broker-dealer charging a higher commission
or offering a larger spread for a particular equity or fixed income trade.
Advisers may direct orders to broker-dealers who furnish research products
and services to Advisers as long as the broker-dealers meet the selection
criteria outlined above. The research products and services supplements
Advisers' own research and enables Advisers to obtain the views and information
of others prior to making investment decisions for the Funds. During fiscal
year ended September 30, 1998, the Fund did not pay any commissions to
broker-dealers who provided research products and services to Advisers.
Advisers has not entered and will not enter into any agreement with a
broker-dealer that would prevent Advisers from obtaining best execution on a
trade.
Advisers will authorize each Fund to pay an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker-dealer would have charged only if Advisers determines in good faith that
such amount of commission is reasonable
<PAGE>
in relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or
Adviser's overall responsibilities with respect to the accounts to which
Advisers exercises investment discretion. In 1998, the Funds generally paid
higher commissions than those obtainable from other broker-dealers in return for
research products and services.
Advisers believes that most research services obtained by it generally
benefit several or all of the investment companies, insurance company accounts
and private accounts which it manages, as opposed to solely benefitting one
specific managed fund or account. Such research services include advice, both
directly and in writing, as to the value of the securities; the advisability of
investing in, purchasing, or selling securities; the availability of securities,
or purchasers or sellers of securities; and analysis and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy,
and the performance of accounts. Examples of some of the research products and
services that were furnished to Advisers in 1998 include:
- - hard copy securities research services;
- - securities research software database services;
- - electronic securities trading networks; and
- - statistical services useful to mutual fund directors and account
representatives in evaluating the relative performance of mutual fund
portfolios.
If a broker-dealer furnishes Advisers with non-research products and
services, Advisers will pay the broker-dealer for such products and services.
No client brokerage will be used to pay for non-research product and services.
The Fund did not pay any brokerage commissions for the fiscal years ended
September 30, 1996, 1997 or 1998.
The Fund will not effect any brokerage transactions in its portfolio
securities with any broker-dealer affiliated directly or indirectly with
Advisers, unless such transactions, including the frequency thereof, the
receipt of commissions payable in connection therewith, and the selection of
the affiliated broker-dealer effecting such transactions are not unfair or
unreasonable to the shareholders of the Fund. No commissions were paid to
any affiliate of Advisers during the fiscal years ended September 30, 1996,
1997 and 1998 for the Fund.
From time to time, the Funds may acquire the securities of their regular
brokers or dealers or parent companies of such brokers or dealers. During the
fiscal year ended September 30, 1998, the Fund acquired the following securities
of its regular brokers or dealers or parent companies of such brokers or
dealers:
<TABLE>
<CAPTION>
Value of Securities
Name of Issuer Owned at Year End
- -------------- -------------------
<S> <C>
American Express Credit Corp $ 6,730,774
Commercial Credit Co. 6,947,013
<PAGE>
Deutsche Morgan Grenfell, Inc. 5,979,078
Ford Motor Credit Corp. 6,718,135
General Motors Acceptance Corp. 6,995,264
IBM Credit Corp. 6,450,618
John Deere Credit 6,888,082
Merrill Lynch & Co., Inc. 2,494,354
U.S. Bank (N.A.) 6,060,000
</TABLE>
Advisers has developed written trade allocation procedures for its
management of the securities trading activities of its clients. Advisers
manages multiple portfolios, both public (mutual funds) and private. The
purpose of the trade allocation procedures is to treat the portfolios fairly and
reasonably in situations where the amount of a security that is available is
insufficient to satisfy the volume or price requirements of each portfolio that
is interested in purchasing that security. Generally, when the amount of
securities available in a public offering or the secondary market is
insufficient to satisfy the requirements for the interested portfolios, the
procedures require a pro rata allocation based upon the amounts initially
requested by each portfolio manager. In allocating trades made on combined
basis, each participating portfolio will receive the same average price for the
securities purchased or sold.
Because a pro rata allocation may not always adequately accommodate all
facts and circumstances, the procedures provide for exceptions to allocate
trades on a basis other than pro rata. Examples of where adjustments may be
made include: (i) the cash position of the portfolios involved in the
transaction; and (ii) the relative importance of the security to a portfolio in
seeking to achieve its investment objective.
CAPITAL STOCK
The Fund's shares have a par value of $.01 per share and equal rights to
share in dividends and assets. The shares possess no preemptive or conversion
rights.
The Fund currently offers its shares in four classes, each with different
sales arrangements and bearing different expenses. Under Fortis Money's
Articles of Incorporation, the Board of Directors is authorized to create new
portfolios, each issuing its own series of shares, in addition to the Fund
without the approval of the shareholders of the Fund. Each share of stock will
have a pro rata interest in the assets of the Fortis Money portfolios to which
the stock of that series relates, and will have no interest in the assets of any
other Fortis Money portfolio. In the event of liquidation, each share of a
Fortis Money portfolio would have the same rights to dividends and assets as
every other share of that Fortis Money portfolio, except that, in the case of a
series with more than one class of shares, such distributions will be adjusted
to appropriately reflect any charges and expenses borne by each individual
class.
Fortis Money is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders. Minnesota corporation
law provides for the Board of Directors to convene shareholder meetings when it
deems appropriate. In addition, if a regular meeting of shareholders has not
been held during the immediately preceding fifteen months, a shareholder or
shareholders holding three percent or more of the voting shares of Fortis Money
<PAGE>
may demand a regular meeting of shareholders by written notice of demand given
to the chief executive officer or the chief financial officer of Fortis Money.
Within ninety days after receipt of the demand, a regular meeting of
shareholders must be held at Fortis Money's expense. Additionally, the 1940 Act
requires shareholder votes for all amendments to fundamental investment policies
and restrictions and for all investment advisory contracts and amendments
thereto.
Cumulative voting is not authorized. This means that the holders of more
than 50% of the shares voting for the election of directors can elect 100% of
the directors if they choose to do so, and in such event the holders of the
remaining shares will be unable to elect any directors.
PRICING OF SHARES
The Fund values its portfolio securities at amortized cost in accordance
with Rule 2a-7 under the 1940 Act. This method involves valuing an instrument
at its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuations in interest rates
on the market value of the instrument and regardless of any unrealized capital
gains or losses. While this method provides certainty in valuation, it may
result in periods during which value, as determined by amortized cost, is higher
or lower than the price the Fund would receive if it sold the instrument.
During periods of declining interest rates, the daily yield on shares of the
Fund computed by dividing the annualized daily income of the Fund by the net
asset value computed as described above may tend to be higher than a like
computation made by the Fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
securities.
Pursuant to Rule 2a-7, the Board of Directors has determined, in good faith
based upon a full consideration of all material factors, that it is in the best
interests of the Fund and its shareholders to maintain a stable net asset value
per share by virtue of the amortized cost method of valuation. The Fund will
continue to use this method only so long as the Board of Directors believes that
it fairly reflects the market-based net asset value per share. In accordance
with Rule 2a-7, the Board of Directors has undertaken, as a particular
responsibility within the overall duty of care owed to the Fund's shareholders,
to establish procedures reasonably designed, taking into account current market
conditions and the Fund's investment objectives, to stabilize the Fund's net
asset value per share at a single value. These procedures include the periodic
determination of any deviation of current net asset value per share, calculated
using available market quotations, from the Fund's amortized cost price per
share, the periodic review by the Board of the amount of any such deviation and
the method used to calculate any such deviation, the maintenance of records of
such determinations and the Board's review thereof, the prompt consideration by
the Board if any such deviation exceeds 1/2 of 1%, and the taking of such
remedial action by the Board as it deems appropriate where it believes the
extent of any such deviation may result in material dilution or other unfair
results to investors or existing shareholders. Such remedial action may include
redemptions in kind, shortening the average portfolio maturity, withholding
dividends or utilizing a net asset value per share as determined by using
available market quotations. The Fund will, in further compliance with Rule
2a-7, maintain a dollar-weighted average portfolio maturity appropriate to its
objective of maintaining
<PAGE>
a stable net asset value and not exceeding 90 days, will not purchase any
instrument with a remaining maturity of greater than one year, will limit its
portfolio investments to those U.S. dollar-denominated instruments which the
Board determines present minimal credit risks and which are of high quality, and
will record, maintain and preserve a written copy of the above-described
procedures and a written record of the Board's considerations and actions taken
in connection with the discharge of its above-described responsibilities.
On September 30, 1998, the Fund's net asset values per share were
calculated as follows:
CLASS A
Net Assets ($156,622,549) = Net Asset Value per Share ($1.00)
-------------------------
Shares Outstanding (156,622,549)
CLASS B
Net Assets ($304,510) = Net Asset Value per Share ($1.00)
-------------------------
Shares Outstanding (304,510)
CLASS C
Net Assets ($714,291) = Net Asset Value per Share ($1.00)
-------------------------
Shares Outstanding (714,291)
CLASS H
Net Assets ($549,984) = Net Asset Value per Share ($1.00)
-------------------------
Shares Outstanding (549,984)
The primary close of trading of the New York Stock Exchange (the
"Exchange") currently is 3:00 P.M. (Central Time), but this time may be changed.
The offering price for purchase orders received in the office of the Fund after
the beginning of each day the Exchange is open for trading is based on net asset
value determined as of the primary closing time for business on the Exchange
that day; the price in effect for orders received after such close is based on
the net asset value as of such close of the Exchange on the next day the
Exchange is open for trading. Net asset value is the value of the securities
owned by the Fund, plus cash or other assets, less liabilities, divided by the
number of Fund shares outstanding.
Generally, the net asset value of the Fund's shares is determined on each
day on which the Exchange is open for business. The Exchange is not open for
business on the following holidays (or on the nearest Monday or Friday if the
holiday falls on a weekend): New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Additionally, net asset value need not be
determined (i) on days on which changes in the value of the Fund's portfolio
securities will not materially affect the current net asset value of the Fund's
shares; or (ii) on days during which no Fund shares are tendered for redemption
and no orders to purchase or sell Fund shares are received by the Fund.
PURCHASE OF SHARES
<PAGE>
SPECIAL PURCHASE PLANS
RETIREMENT PLANS. Individual taxpayers can defer taxes on current income
by investing in tax qualified retirement plans established by their employer,
such as a pension plan, profit-sharing plan and Section 403(b) plans, or in
Individual Retirement Accounts (IRAs), including a traditional IRA, Roth IRA and
Education IRA. If you are interested in a retirement plan account, you should
contact Investors. Investing in a retirement plan involves a long-term
commitment of assets and is subject to legal and tax requirements and
restrictions. You should consult with your attorney or tax adviser prior to
establishing such a plan.
SYSTEMATIC INVESTMENT PLAN. The Systematic Investment Plan enables you to
make regular purchases in amounts less than normally required.
You have no obligation to invest regularly or to continue the Plan, which
you may terminate at any time without penalty. Under the Plan, any
distributions of income and realized capital gains will be reinvested in
additional shares at net asset value unless you instruct Investors in writing to
pay distributions in cash. Investors reserves the right to increase or decrease
the amount required to open and continue a Plan, and to terminate any Plan after
one year if the value of the amount invested is less than the amount indicated.
EXCHANGE PRIVILEGE. Generally, you may exchange your shares for shares of
any class of another Fortis Fund, subject to that Fund's sales charge. There is
no exchange fee. The amount exchanged must meet the minimum purchase amount of
the Fund being purchased. You should consider the investment objectives and
policies of the other Fund prior to making such exchange.
For Federal tax purposes, except where the transferring shareholder is a
tax qualified plan, an exchange between funds is a taxable event that may result
in a capital gain or loss. If you exchange your shares within 90 days of
purchase, the sales charge on that purchase cannot be taken into account for
determining your gain or loss on the sale of those shares to the extent that the
sales charge that would have been applicable to the purchase of the
later-acquired shares in the other fund is reduced because of the exchange
privilege. However, the amount of the sales charge that may not be taken into
account in determining your gain or loss on the sale of the first-acquired
shares may be taken into account in determining gain or loss on the eventual
sale or exchange of the later-acquired shares.
GIFTS OR TRANSFERS TO MINOR CHILDREN. You may purchase Fund shares in an
account established for a minor. This gift or transfer is registered in the
name of the custodian for a minor under the Uniform Transfers to Minors Act (in
some states the Uniform Gifts to Minors Act). Control of the Fund shares passes
to the child upon reaching a specified age (either 18 or 21 years in most
states).
REDEMPTION OF SHARES
Redemption of shares, or payment, may be suspended at times (a) when the
Exchange is closed for other than customary weekend or holiday closings, (b)
when trading on said Exchange
<PAGE>
is restricted, (c) when an emergency exists, as a result of which disposal by
the Fund of securities owned by it is not reasonably practicable, or it is not
reasonably practicable for the Fund to fairly determine the value of its net
assets, or during any other period when the Securities and Exchange Commission,
by order, so permits; provided that applicable rules and regulations of the
Securities and Exchange Commission shall govern as to whether the conditions
prescribed in (b) or (c) exist.
SYSTEMATIC WITHDRAWAL PLAN
You may open a "Systematic Withdrawal Plan" providing for withdrawals of
$50 or more monthly, quarterly, semiannually or annually if the value of your
shares is at least $4,000 ($10,000 if you elect monthly withdrawals).
These withdrawals may constitute return of capital. The redemption of Fund
shares pursuant to the Plan is a taxable event to you. The withdrawals do not
represent a yield or a return on your investment and they may deplete or
eliminate your investment. You have no assurance of receiving payment for any
specific period because payments will terminate when all shares have been
redeemed. The number of such payments will depend on the amount and frequency
of each payment and the increase (or decrease) in value of the remaining shares.
Distributions of income and realized capital gains will continue to be
reinvested at net asset value. Additions to your account in which an election
has been made to receive systematic withdrawals will be accepted only if each
additional purchase is equal to at least one year's scheduled withdrawals or
$1,200, whichever is greater. You may not have a "Systematic Withdrawal Plan"
and a "Systematic Investment Plan" in effect at the same time.
The Systematic Withdrawal Plan is voluntary, flexible and under your
control and direction at all times, and does not limit or alter your right to
redeem shares. You or the Fund may terminate the Plan at any time by written
notification. Advisers bears the cost of operating the Plan.
TAXATION
The Fund qualified in its last fiscal year and intends to continue to
qualify, as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"). If so qualified, the Fund is not taxed on the
income it distributes to its shareholders.
Under the Code, the Fund is subject to a nondeductible excise tax for each
calendar year equal to 4 percent of the excess, if any, of the amount required
to be distributed over the amount distributed. However, the excise tax does not
apply to any income on which the Fund pays income tax. In order to avoid the
imposition of the excise tax, the Fund generally must declare dividends by the
end of a calendar year representing at least 98 percent of the Fund's ordinary
income for the calendar year.
Under the Code, the Fund is required to withhold and remit to the U.S.
Treasury 31% of
<PAGE>
dividend income on the accounts of certain shareholders who fail to provide a
correct tax identification number, fail to certify that they are not subject to
backup withholding, or are subject to backup withholding for some other reason.
The foregoing is a general discussion of the Federal income tax
consequences of an investment in the Fund as of the date of this Statement of
Additional Information. Distributions from net investment income may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to Federal, state, or local taxes.
UNDERWRITER AND DISTRIBUTION OF SHARES
Pursuant to the Underwriting and Distribution Agreement, Investors has
agreed to act as the principal underwriter for the Fund in the sale and
distribution to the public of shares of the Fund, either through dealers or
otherwise. Investors has agreed to offer such shares for sale at all times when
such shares are available for sale and may lawfully be offered for sale and
sold. As compensation for its services, in addition to receiving its
distribution fees pursuant to the Distribution Plan discussed above, Investors
receives any contingent deferred sales charges on redemptions of Class B, Class
C and Class H shares of the Fund, as set forth in the Prospectus. There is no
initial sales charge paid by any class of Fund shares. The following tables set
forth the amount of underwriting commissions paid by the Fund and the amount of
such commissions retained by Investors.
<TABLE>
<CAPTION>
TOTAL UNDERWRITING COMMISSIONS
-----------------------------------------------------
Fiscal year ended Fiscal year ended Fiscal year ended
September 30, 1996 September 30, 1997 September 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Money Fund $ 3,631 $ 7,928 $ 28,739
<CAPTION>
UNDERWRITING COMMISSIONS RETAINED BY INVESTORS
------------------------------------------------------
Fiscal year ended Fiscal year ended Fiscal year ended
September 30, 1996 September 30, 1997 September 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Money Fund $ 3,631 $ 7,928 $ 28,739
</TABLE>
Investors received the following compensation from each Fund during its
most recent fiscal year.
<TABLE>
<CAPTION>
Net Compensation
Underwriting on Redemptions
Discounts and and Brokerage Other
Commissions Repurchases Commissions Compensation
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
Money Fund $ 0 $ 28,739 $ 0 $ 0
</TABLE>
YIELD INFORMATION
The Fund may from time to time include its current yield in advertisements
or in sales or
<PAGE>
other materials furnished to current or prospective shareholders. The Fund's
current yield (calculated over a seven day period) is a percentage computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical preexisting account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting figure carried
to at least the nearest hundredth of one percent. Effective yield (calculated
over a seven-day period) is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical preexisting account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] * 1
The Fund also may quote annualized yield figures, calculated similarly to
the above methods.
For the seven-day period ended September 30, 1998, the Fund's annualized
and effective yields for each class of shares were as follows:
<TABLE>
<CAPTION>
Annualized Yield Effective Yield
---------------- ---------------
<S> <C> <C>
Class A Shares 4.77% 4.90%
Class B Shares 3.99% 4.00%
Class C Shares 4.01% 4.54%
Class H Shares 3.99% 4.00%
</TABLE>
FINANCIAL STATEMENTS
The audited financial statements as of September 30, 1998, as set forth in
the Fund's Annual Report to Shareholders, are incorporated herein by reference.
The audited financial statements are provided in reliance on the report of KPMG
Peat Marwick LLP, 4200 Norwest Center, Minneapolis, MN 55402, independent
auditors of the Fund, and given on the authority of such firm as experts in
accounting and auditing.
OTHER SERVICE PROVIDERS
U.S. Bank National Association, 601 Second Avenue South, Minneapolis, MN
55480 acts as custodian of the Fund's assets and portfolio securities. Dorsey &
Whitney LLP, 220 South Sixth Street, Minneapolis, MN 55402, is the independent
General Counsel for the Fund. Advisers bears the costs of serving as the
transfer agent and dividend-paying agent for the Fund.
<PAGE>
LIMITATION OF DIRECTOR LIABILITY
Under Minnesota law, each director of Fortis Money owes certain fiduciary
duties to it and to its shareholders. Minnesota law provides that a director
"shall discharge the duties of the position of director in good faith, in a
manner the director reasonably believes to be in the best interest of the
corporation, and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of
a Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate or limit the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of the fiduciary duty of "care." Minnesota law does not,
however, permit a corporation to eliminate or limit the liability of a director
(i) for any breach of the director's duty of "loyalty" to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for authorizing a
dividend, stock repurchase or redemption or other distribution in violation of
Minnesota law or for violation of certain provisions of Minnesota securities
laws, or (iv) for any transaction from which the director derived an improper
personal benefit. The Articles of Incorporation of Fortis Money limit the
liability of directors to the fullest extent permitted by Minnesota statutes,
except to the extent that such a liability cannot be limited as provided in the
1940 Act (which act prohibits any provisions which purport to limit the
liability of directors arising from such directors' willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of their role as directors).
Minnesota law does not eliminate the duty of "care" imposed upon a
director. It only authorizes a corporation to eliminate monetary liability for
violations of that duty. Minnesota law, further, does not permit elimination or
limitation of liability of "officers" to the corporation for breach of their
duties as officers (including the liability of directors who serve as officers
for breach of their duties as officers). Minnesota law does not permit
elimination or limitation of the availability of equitable relief, such as
injunctive or rescissionary relief. Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933 or the Securities Exchange Act of 1934, and it is uncertain whether and to
what extent the elimination of monetary liability would extend to violations of
duties imposed on directors by the 1940 Act and the rules and regulations
adopted under such act.
ADDITIONAL INFORMATION
The Fund has filed with the Securities and Exchange Commission, Washington,
D.C. 20549, a Registration Statement under the Securities Act of 1933, as
amended, with respect to the common stock offered hereby. The Prospectus and
this Statement of Additional Information do not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with Rules and Regulations of the Commission. The Registration
Statement may be inspected at the principal office of the Commission at 450
Fifth Street, N.W., Washington, D.C., and copies thereof may be obtained from
the Commission at
<PAGE>
prescribed rates.
<PAGE>
APPENDIX A
GLOSSARY OF TERMS
Some of the terms used in this Statement of Additional Information are
described below.
OBLIGATIONS OF OR GUARANTEED BY, THE U.S. GOVERNMENT, ITS AGENCIES OR
INSTRUMENTALITIES. Securities issued or guaranteed as to principal and interest
by the U.S. Government include a variety of Treasury securities which differ
only in their interest rates, maturities, and times of issuance. Treasury bills
have a maturity of one year or less. Treasury notes generally have maturities of
one to ten years, and Treasury bonds generally have maturities of more than ten
years. Agencies of the U.S. Government which issue obligations include, among
others, Farmers Home Administration, Federal Housing Administration, Government
National Mortgage Association, Export-Import Bank of the United States, and the
Tennessee Valley Authority. Obligations of instrumentalities of the U.S.
Government include, among others, securities issued by the Farm Credit System,
Federal Home Loan Mortgage Corporation, Federal Home Loan Banks, and Federal
National Mortgage Association. Some of these securities are supported by the
full faith and credit of the U.S. Treasury, some are supported only by the
credit of the issuer, while others are supported only by the right of the issuer
to borrow from the Treasury.
CERTIFICATES OF DEPOSIT are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 30 days to one year). Eurodollar C/Ds are issued by foreign
branches of domestic banks, while Yankee C/Ds are issued by domestic branches of
foreign banks.
LETTERS OF CREDIT are issued by banks to businesses that use them to
"support" their own notes that are sold to raise funds. The purpose of issuing
the letter of credit is to assist the bank's customers in borrowing money, and
the bank must pay under the letter of credit only if the customer defaults in
repaying the borrowed money.
BANKERS' ACCEPTANCES are credit instruments evidencing the obligation of a
bank to pay a draft which has been drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face amount
of the instrument upon maturity.
COMMERCIAL PAPER consists of short-term (usually 1 to 270 days) unsecured
promissory notes issued by corporations in order to finance their current
operations.
CORPORATE OBLIGATIONS are bonds and notes issued by corporations and other
business organizations, in order to finance their long-term credit needs.
<PAGE>
APPENDIX B
COMMERCIAL PAPER AND CORPORATE BOND RATINGS
COMMERCIAL PAPER RATINGS
STANDARD & POOR'S RATINGS SERVICES. Commercial paper ratings are graded
into four categories, ranging from "A" for the highest quality obligations to
"D" for the lowest. Issues assigned the A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are further
refined with the designation 1, 2, and 3 to indicate the relative degree of
safety. The Fund does not purchase commercial paper rated lower than "A-1."
The "A-1" designation indicates that the degree of safety regarding timely
payment is very strong. The "A-1+" rating is assigned to issues which meet
either of the following criteria:
1) The direct credit support of an issuer or guarantor that possesses
excellent long-term financial operating and financial strengths combined
with strong liquidity characteristics. Typically, such issuers or
guarantors would display credit quality characteristics which would warrant
a senior bond rating of "AA" - or higher; or
2) The direct credit support of an issuer or guarantor that possesses
above-average long-term fundamental operating and financial strengths
combined with ongoing excellent liquidity characteristics.
MOODY'S INVESTORS SERVICE, INC. Moody's commercial paper ratings are
opinions of the ability of the issuers to repay punctually promissory
obligations not having an original maturity in excess of nine months. Moody's
makes no representation that such obligations are exempt from registration under
the Securities Act of 1933, nor does it represent that any specific note is a
valid obligation of a rated issuer or issued in conformity with any applicable
law. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 Highest quality
Prime-2 Higher quality
Prime-3 High quality
CORPORATE BOND RATINGS
STANDARD & POOR'S RATINGS SERVICES. Its ratings for corporate bonds include
the following:
Bonds rated "AAA" have the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest-rated issues only in small degree.
<PAGE>
MOODY'S INVESTORS SERVICE, INC. Its ratings for corporate bonds include the
following:
Bonds rated "Aaa" are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin,
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Bonds rated "Aa" are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities.
<PAGE>
Part C
Money Fund
a series of
Fortis Money Portfolios, Inc.
OTHER INFORMATION
ITEM 23. EXHIBITS
THE FUND IS FILING OR INCORPORATING BY REFERENCE THE FOLLOWING EXHIBITS:
(a).1 Articles of Amendment dated 9/8/94 and Amended and Restated
Articles of Incorporation dated as of 9/9/94 *
(a).2 Certification of Designation of Classes A, B, C & H dated
10/31/94 *
(b) Amended and Restated Bylaws dated 1/31/92 *
(c) Instruments Defining Rights of Security Holders - not applicable
(d) Investment Advisory and Management Agreement dated 1/31/92 *
(e) Underwriting and Distribution Agreement dated 11/14/94 *
(e).2 Dealer Sales Agreement (1)
(e).3 Mutual Fund Supplement to Dealer Sales Agreement (1)
(f) Bonus or Profit Sharing Contracts -not applicable
(g) Custody Agreement dated 3/21/92 *
(h) Other Material Contracts - not applicable
(i) Legal Opinion - not applicable
(j) Consent of KPMG Peat Marwick LLP *
(k) Omitted Financial Statements - not applicable
(l) Initial Capital Agreements - not applicable
(m) Rule 12b-1 Plan (2)
(n) Financial Data Schedule - not applicable
(o) Rule 18f-3 Plan (3)
- --------------------
(1) Incorporated by reference to Post-Effective Amendment No. 45 to the
Registration Statement of Fortis Income Portfolios, Inc. on Form N-1A filed
with the Commission on December 1, 1998.
(2) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement of Fortis Worldwide Portfolios, Inc. on Form N-1A
filed with the Commission on February 26, 1998.
(3) Incorporated by reference to Post-Effective Amendment No. 22 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on January 31, 1996.
* Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
THE FOLLOWING IS A LIST OF ALL PERSONS DIRECTLY OR INDIRECTLY CONTROLLED BY
OR UNDER COMMON CONTROL WITH THE FUND:
No person is directly or indirectly controlled by or under common control
with the
<PAGE>
Registrant.
ITEM 25. INDEMNIFICATION
STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENTS OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE FUND IS
INSURED OR INDEMNIFIED AGAINST ANY LIABILITY INCURRED IN THEIR OFFICIAL
CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR, OFFICER, AFFILIATED
PERSON, OR UNDERWRITER FOR THEIR OWN PROTECTION.
Paragraph 8(d) of the Registrant's Articles of Incorporation provides that
the Registrant shall indemnify such person for such expenses and liabilities, in
such manner, under such circumstances, and to the full extent permitted by
Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended;
provided, however, that no such indemnification may be made if it would be in
violation of Section 17(h) of the Investment Company Act of 1940, as now enacted
or hereinafter amended, and any rules, regulations, or releases promulgated
thereunder.
The Registrant may indemnify its officers and directors and other "persons"
acting in an "official capacity" (as such terms are defined in Section 302A.521)
pursuant to a determination by the board of directors or shareholders of the
Registrant as set forth in Section 302A.521, by special legal counsel selected
by the board or a committee thereof for the purpose of making such a
determination, or by a Minnesota court upon application of the person seeking
indemnification. If a director is seeking indemnification for conduct in the
capacity of director or officer of the Registrant, then such director generally
may not be counted for the purposes of determining either the presence of a
quorum or such director's eligibility to be indemnified.
In any case, indemnification is proper only if the eligibility determining
body decides that the person seeking indemnification:
(a) has not received indemnification for the same conduct from any other
party or organization;
(b) acted in good faith;
(c) received no improper personal benefit;
(d) in the case of criminal proceedings, has no reasonable cause to
believe the conduct was unlawful;
(e) reasonably believed that the conduct was in the best interest of the
Registrant, or in certain contexts, was not opposed to the best
interest of the Registrant; and
(f) had not otherwise engaged in conduct which precludes indemnification
under either Minnesota or Federal law (including, without limitation,
conduct constituting willful misfeasance, bad faith, gross negligence,
or reckless disregard of duties as set forth in Section 17(h) and (i)
of the Investment Company Act of 1940).
ADVANCES. If a person is made or threatened to be made a party to a
proceeding, the person is entitled, upon written request to the Registrant, to
payment or reimbursement by the Registrant of reasonable expenses, including
attorneys fees and disbursements, incurred by the person in advance of the final
disposition of the proceeding, (a) upon receipt by the Registrant of
<PAGE>
a written affirmation by the person of a good faith belief that the criteria for
indemnification set forth in Section 302A.521 have been satisfied and a written
undertaking by the person to repay all amounts so paid or reimbursed by the
Registrant, if it is ultimately determined that the criteria for indemnification
have been satisfied, and (b) after a determination that the facts then known to
those making the determination would not preclude indemnification under
302A.521. The written undertaking required by clause (a) is an unlimited
general obligation of the person making it, but need not be secured and shall be
accepted without reference to financial ability to make the repayment.
UNDERTAKING. The Registrant undertakes that insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provision, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless, in the opinion of its counsel, the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
DESCRIBE ANY OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF A
SUBSTANTIAL NATURE THAT EACH INVESTMENT ADVISER, AND EACH DIRECTOR, OFFICER OR
PARTNER OF THE ADVISER, IS OR HAS BEEN ENGAGED WITHIN THE LAST TWO FISCAL YEARS
FOR HIS OR HER OWN ACCOUNT OR IN THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE,
PARTNER OR TRUSTEE.
Information on the business of the Adviser, its directors and officers is
described in the Statement of Additional Information. The following officers
are not listed in the Statement of Additional Information:
Other
Business/Employment
Name Position with Adviser During Past Two Years
- ---- ---------------------- -------------------------
Michael D. O'Connor Qualified Plan Officer Qualified Plan Officer of
Fortis Benefits Insurance
Company
David C. Greenzang Money Market Portfolio Debt securities manager with
Officer Fortis, Inc.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) STATE THE NAME OF EACH INVESTMENT COMPANY (OTHER THAN THE FUND) FOR WHICH
EACH PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING THE FUND'S SECURITIES ALSO
ACTS AS A PRINCIPAL UNDERWRITER, DEPOSITOR, OR INVESTMENT ADVISER.
Investors also acts as the principal underwriter for: Fortis Advantage
Portfolios, Inc.,
<PAGE>
Fortis Equity Portfolios, Inc., Fortis Income Portfolios, Inc., Fortis Tax Free
Portfolios, Inc., Fortis Securities, Inc., Fortis Series Fund, Inc., Fortis
Worldwide Portfolios, Inc., Fortis Growth Fund, Inc., Variable Account C of
Fortis Benefits Insurance Company and Variable Account D of Fortis Benefits
Insurance Company.
(b) PROVIDE THE INFORMATION REQUIRED BY THE FOLLOWING TABLE FOR EACH DIRECTOR,
OFFICER, OR PARTNER OF EACH PRINCIPAL UNDERWRITER NAMED IN RESPONSE TO ITEM 20.
In addition to those listed in the Statement of Additional Information with
respect to Investors, the following are also officers of Investors. The
principal business address of each individual is 500 Bielenberg Drive, Woodbury,
Minnesota 55125.
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Fund
- ---------------------- -------------------------- ---------------------
Carol M. Houghtby Director, Vice President & None
Treasurer
Roger W. Arnold Senior Vice President None
Peter M. Delehanty Senior Vice President None
John E. Hite Vice President & Secretary None
(c) PROVIDE THE INFORMATION REQUIRED BY THE FOLLOWING TABLE FOR ALL COMMISSIONS
AND OTHER COMPENSATION RECEIVED, DIRECTLY OR INDIRECTLY, FROM THE FUND DURING
THE LAST FISCAL YEAR BY EACH PRINCIPAL UNDERWRITER WHO IS NOT AN AFFILIATED
PERSON OF THE FUND OR ANY AFFILIATED PERSON OF AN AFFILIATED PERSON.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
STATE THE NAME AND ADDRESS OF EACH PERSON MAINTAINING PHYSICAL POSSESSION
OF EACH ACCOUNT, BOOK, OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION
31(a) AND THE RULES UNDER THAT SECTION.
The physical possession of the accounts, books, and other documents
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and Rules 3la-1 to 3la-3 promulgated thereunder is maintained by the Registrant
at Fortis Advisers, Inc., 500 Bielenberg Drive, Woodbury, MN 55125.
ITEM 29. MANAGEMENT SERVICES
PROVIDE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED
SERVICE CONTRACT NOT DISCUSSED IN PART A OR B, DISCLOSING THE PARTIES TO THE
CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM FOR THE FUND FOR THE LAST THREE
FISCAL YEARS.
All contracts were discussed in Part A or B.
ITEM 30. UNDERTAKINGS
<PAGE>
(a) IN INITIAL REGISTRATION STATEMENTS FILED UNDER THE SECURITIES ACT, PROVIDE
AN UNDERTAKING TO FILE AN AMENDMENT TO THE REGISTRATION STATEMENT WITH
CERTIFIED FINANCIAL STATEMENTS SHOWING THE INITIAL CAPITAL RECEIVED BEFORE
ACCEPTING SUBSCRIPTIONS FROM MORE THAN 25 PERSONS IF THE FUND INTENDS TO
RAISE ITS INITIAL CAPITAL UNDER SECTION 14(a)(3).
Not applicable.
(b) Each recipient of a prospectus of any series of the Registrant may request
the latest Annual Report of such series, and such Annual Report will be
furnished by the Registrant without charge.
(c) Registrant represents that it is relying on a No-Action Letter (IDS
Financial Services, June 20, 1986) and that it has complied with the
provisions of paragraphs (a) - (d) of such No-Action Letter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement on Form N-1A
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woodbury and State of Minnesota on the
29th day of January 1999.
FORTIS MONEY PORTFOLIOS, INC.
(Registrant)
By /s/ Dean C. Kopperud
--------------------------------
Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Dean C. Kopperud President (principal January 29, 1999
- ----------------------- executive officer)
Dean C. Kopperud
/s/ Tamara L. Fagely Treasurer (principal financial January 29, 1999
- ----------------------- and accounting officer)
Tamara L. Fagely
Richard D. Cutting* Director
Allen R. Freedman* Director
Robert M. Gavin* Director
Benjamin S. Jaffray* Director
Jean L. King* Director
Edward M. Mahoney* Director
Robb L. Prince* Director
Leonard J. Santow* Director
Noel S. Shadko Director
Joseph M. Wikler* Director
*By /s/ Dean C. Kopperu January 29, 1999
-------------------------------
Dean C. Kopperud, Attorney-in-Fact
<PAGE>
EXHIBIT (a).1
ARTICLES OF AMENDMENT
AMENDING AND RESTATING
ARTICLES OF INCORPORATION
OF
FORTIS MONEY PORTFOLIOS, INC.
1. The name of the corporation is Fortis Money Portfolios, Inc., a Minnesota
corporation.
2. The document entitled "Amended and Restated Articles of Incorporation of
Fortis Money Portfolios, Inc.," marked as Exhibit A attached hereto,
contains the full text of the amendment to the Articles of Incorporation of
the corporation.
3. The date of adoption of the amendment by the shareholders of the
corporation was August 23, 1994.
4. The amendment, among other things, permits Fortis Money Portfolios, Inc. to
issue multiple classes of shares and to increase the authorized capital of
the corporation.
5. The amendment amends and restates the Articles of Incorporation of the
corporation in their entirety, and the Amended and Restated Articles of
Incorporation attached hereto as Exhibit A supersede the original Articles
of Incorporation and all amendments to and restatements of them.
6. The amendment has been adopted pursuant to Chapter 302A of the Minnesota
Statutes.
IN WITNESS WHEREOF, the undersigned, Michael J. Radmer, the Secretary of
Fortis Money Portfolios, Inc., being duly authorized on behalf of Fortis Money
Portfolios, Inc., has executed this document this 8th day of September, 1994.
/s/ Michael J. Radmer
---------------------------
Michael J. Radmer
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FORTIS MONEY PORTFOLIOS, INC.
Pursuant to the provisions of Minnesota Statutes, Chapter 302A, the
following Articles of Incorporation are adopted, as amended and restated:
1. The name of this corporation is Fortis Money Portfolios, Inc.
2. This corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, this
corporation shall have specific power:
(a) To conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise acquire, and
to own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, choses in action, evidences of indebtedness, certificates
of indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of
the United States, or any state, commonwealth, territory or possession
thereof, or organized under the laws of any foreign country, or any state,
province, territory or possession thereof, or issued or to be issued by the
United States government or any agency or instrumentality thereof, options
on stock indexes, stock index and interest rate futures contracts and
options thereon, and other futures contracts and options thereon.
(c) In the above provisions of this Article 2, purposes shall also be
construed as powers and powers shall also be construed as purposes, and the
enumeration of
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specific purposes or powers shall not be construed to limit other statements of
purposes or to limit purposes or powers which the corporation may otherwise have
under applicable law, all of the same being separate and cumulative, and all of
the same may be carried on, promoted and pursued, transacted or exercised in any
place whatsoever.
3. This corporation shall have perpetual existence.
4. The location and post office address of the registered office in Minnesota
is 500 Bielenberg Drive, Woodbury, Minnesota 55125.
5. The total authorized number of shares of this corporation is
500,000,000,000, all of which shall be common shares of the par value of $.01
each. The corporation may issue and sell any of its shares in fractional
denominations to the same extent as its whole shares, and shares and fractional
denominations shall have, in proportion to the relative fractions represented
thereby, all the rights of whole shares, including, without limitation, the
right to vote, the right to receive dividends and distributions, and the right
to participate upon liquidation of the corporation.
(a) Of said common shares, 50,000,000,000 shares may be issued in the
series of common shares designated "Series A Common Shares." The balance
of 450,000,000,000 shares may be issued in such series with such
designations, preferences and relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, as
shall be stated or expressed in a resolution or resolutions providing for
the issue of any series of common shares as may be adopted from time to
time by the Board of Directors of this corporation pursuant to the
authority hereby vested in said Board of Directors. Each series of common
shares which the Board of Directors may establish, as provided herein, may
evidence, if the Board of Directors shall so determine by resolution, an
interest in a separate and distinct portion of the corporation's assets,
which shall take the form of a separate portfolio of investment securities,
cash and other assets. Authority to establish such separate portfolios is
hereby vested in the Board of Directors of this corporation, and such
separate portfolios may be established by the Board of Directors without
the authorization or approval of the holders of any series of shares of
this corporation.
(b) The shares of each series may be classified by the Board of
Directors in one or more classes with such relative rights and preferences
as shall be stated or expressed in a resolution or resolutions providing
for the issue of any such class or classes as may be adopted from time to
time by the Board of Directors of the corporation pursuant to the authority
hereby vested in the Board of Directors and Minnesota Statutes, Section
302A.401, Subd. 3, or any successor provision. The shares of each class
within a series may be subject to such charges and expenses (including by
way of example, but not by way of limitation, front-end and deferred sales
charges, expenses under Rule l2b-1 plans, administration plans, service
plans, or other plans or arrangements, however designated) as may be
adopted from time to time by the Board of Directors in accordance,
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<PAGE>
to the extent applicable, with the Investment Company Act of 1940, as
amended (together with the rules and regulations promulgated thereunder,
the "1940 Act"), which charges and expenses may differ from those
applicable to another class within such series, and all of the charges and
expenses to which a class is subject shall be borne by such class and shall
be appropriately reflected (in the manner determined or approved by the
Board of Directors) in determining the net asset value and the amounts
payable with respect to dividends and distributions on, and redemptions or
liquidations of, such class. Subject to compliance with the requirements
of the 1940 Act, the Board of Directors shall have the authority to provide
that shires of any class shall be convertible (automatically, optionally or
otherwise) into shares of one or more other classes in accordance with such
requirements and procedures as may be established by the Board of
Directors.
6. The shareholders of each series (or class thereof) of common shares of this
corporation:
(a) shall not have the right to cumulate votes for the election of
directors; and
(b) shall have no preemptive right to subscribe to any issue of
shares of any class or series of this corporation now or hereafter created,
designated, or classified.
7. A description of the relative rights and preferences of all series of
shares (and classes thereof) is as follows, unless otherwise set forth in one or
more amendments to these Articles of Incorporation or in the resolutions
providing for the issue of such series (and classes thereof):
(a) On any matter submitted to a vote of shareholders of this
corporation, all common shares of this corporation then issued and
outstanding and entitled to vote, irrespective of series or class, shall be
voted in the aggregate and not by series or class, except: (i) when
otherwise required by Minnesota Statutes, Chapter 302A, in which case
shares will be voted by individual series or class, as applicable; (ii)
when otherwise required by the 1940 Act, as amended, or the rules adopted
thereunder, in which case shares shall be voted by individual series or
class, as applicable; and (iii) when the matter does not affect the
interests of a particular series or class, in which case only shareholders
of the series or class affected shall be entitled to vote thereon and shall
vote by individual series or class, as applicable.
(b) All consideration received by this corporation for the issue or
sale of shares of any series, together with all assets, income, earnings,
profits and proceeds derived therefrom (including all proceeds derived from
the sale, exchange or liquidation thereof and, if applicable, any assets
derived from any reinvestment of such proceeds in whatever form the same
may be) shall become part of the assets of the portfolio to which the
shares of that series relate, for all purposes, subject only to the rights
of creditors, and shall be so treated upon the books of account of this
corporation. Such assets, income, earnings, profits and proceeds
(including any proceeds derived from the sale, exchange or liquidation
thereof and, if applicable, any assets derived from any reinvestment of
such
A-4
<PAGE>
proceeds in whatever form the same may be) are herein referred to as
"assets belonging to" a series of the common shares of this corporation.
(c) Assets of this corporation not belonging to any particular series
are referred to herein as "General Assets." General Assets shall be
allocated to each series in proportion to the respective net assets
belonging to such series. The determination of the Board of Directors
shall be conclusive as to the amount of assets, as to the characterization
of assets as those belonging to a series or as General Assets, and as to
the allocation of General Assets.
(d) The assets belonging to a particular series of common shares
shall be charged with the liabilities incurred specifically on behalf of
such series of common shares ("Special Liabilities"). Such assets shall
also be charged with a share of the general liabilities of this corporation
("General Liabilities") in proportion to the respective net assets
belonging to such series of common shares. The determination of the Board
of Directors shall be conclusive as to the amount of liabilities, including
accrued expenses and reserves, as to the characterization of any liability
as a Special Liability or General Liability, and as to the allocation of
General Liabilities among series.
(e) The Board of Directors may, to the extent permitted by Minnesota
Statutes, Chapter 302A or any successor provision thereto, and in the
manner provided herein, declare and pay dividends or distributions in
shares or cash on any or all series (or classes thereof) of common shares,
the amount of such dividends and the payment thereof being wholly in the
discretion of the Board of Directors. Dividends or distributions on shares
of any series of common shares shall be paid only out of the earnings,
surplus, or other lawfully available assets belonging to such series
(including, for this purpose, any General Assets allocated to such series).
(f) In the event of the liquidation or dissolution of this
corporation, holders of the shares of any series shall have priority over
the holders of any other series with respect to, and shall be entitled to
receive, out of the assets of this corporation available for distribution
to holders of shares, the assets belonging to such series of common shares
and the General Assets allocated to such series of common shares, and the
assets so distributable to the holders of the shares of any series shall be
distributed among such holders in proportion to the number of shares of
such series held by each such shareholder and recorded on the books of this
corporation, except that, in the case of a series with more than one class
of shares, such distributions shall be adjusted to reflect appropriately
any charges and expenses borne by each individual class.
(g) With the approval of a majority of the shareholders of each of
the affected series of common shares present in person or by proxy at a
meeting called for the following purpose (provided that a quorum of the
issued and outstanding shares of the affected series is present at such
meeting in person or by proxy), the Board of Directors
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<PAGE>
may transfer the assets of any series to any other series. Upon such a
transfer, the corporation shall issue common shares representing interests
in the series to which the assets were transferred in exchange for all
common shares representing interests in the series from which the assets
were transferred. Such shares shall be exchanged at their respective net
asset values.
8. The following additional provisions, when consistent with law, are hereby
established for the management of the business, for the conduct of the affairs
of the corporation, and for the purpose of describing certain specific powers of
the corporation and of its directors and shareholders.
(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(1) to make, adopt, alter, amend and repeal Bylaws of the
corporation unless reserved to the shareholders by the Bylaws or by
the laws of the State of Minnesota, subject to the power of the
shareholders to change or repeal such Bylaws;
(2) to distribute, in its discretion, for any fiscal year (in
the year or in the next fiscal year) as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to
enable each series to qualify under the Internal Revenue Code as a
regulated investment company to avoid any liability for federal income
tax in respect of such year. Any distribution or dividend paid to
shareholders from any capital source shall be accompanied by a written
statement showing the source or sources of such payment;
(3) to authorize, subject to such vote, consent, or approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the execution and performance
by the corporation of any agreement or agreements with any person,
corporation, association, company, trust, partnership (limited or
general) or other organization whereby, subject to the supervision and
control of the Board of Directors, any such other person, corporation,
association, company, trust, partnership (limited or general), or
other organization shall render managerial, investment advisory,
distribution, transfer agent, accounting and/or other services to the
corporation (including, if deemed advisable, the management or
supervision of the investment portfolios of the corporation) upon such
terms and conditions as may be provided in such agreement or
agreements;
(4) to authorize any agreement of the character described in
subparagraph (3) of this paragraph (a) with any person, corporation,
association,
A-6
<PAGE>
company, trust, partnership (limited or general) or other
organization, although one or more of the members of the Board of
Directors or officers of the corporation may be the other party to any
such agreement or an officer, director, employee, shareholder, or
member of such other party, and no such agreement shall be invalidated
or rendered voidable by reason of the existence of any such
relationship;
(5) to allot and authorize the issuance of the authorized but
unissued shares of any series, or class thereof, of this corporation;
(6) to accept or reject subscriptions for shares of any series,
or class thereof, made after incorporation;
(7) to fix the terms, conditions and provisions of and authorize
the issuance of options to purchase or subscribe for shares of any
series, or class thereof, including the option price or prices at
which shires may be purchased or subscribed for, and
(8) to determine what constitutes net income, total assets and
the net asset value of the shires of each series (or class thereof) of
the corporation. Any such determination made in good faith shall be
final and conclusive and shall be binding upon the corporation and all
holders (past, present, and future) of shares of each series (and
class thereof).
(b) Except as provided in the next sentence of this paragraph (b),
shares of any series, or class thereof, which are redeemed, exchanged, or
otherwise acquired by this corporation shall return to the status of
authorized and unissued shares of such series or class. Upon the
redemption, exchange, or other acquisition by the corporation of all
outstanding shares of any series (or class thereof), such shares shall
return to the status of authorized and unissued shares without designation
as to series (if no shares of the series remain outstanding) or with the
same designation as to series, but no designation as to class within such
series (if shares of such series remain outstanding, but no shares of such
class thereof remain outstanding), and all provisions of these Articles of
Incorporation relating to such series, or class thereof (including, without
limitation, any statement establishing or fixing the rights and preferences
of such series, or class thereof), shall cease to be of further effect and
shall cease to be a part of these Articles. Upon the occurrence of such
events, the Board of Directors of the corporation shall have the power,
pursuant to Minnesota Statutes Section 302A.135, Subdivision 5 or any
successor provision and without shareholder action, to cause restated
articles of incorporation of the corporation to be prepared and filed with
the Secretary of State of the State of Minnesota which reflect such removal
from these Articles of all such provisions relating to such series, or
class thereof.
A-7
<PAGE>
(c) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties, shall be final and
conclusive and shall be binding upon the corporation and every holder of
shares of its capital stock: namely, the amount of the assets, obligations,
liabilities and expenses of each series (or class thereof) of the
corporation; the amount of the net income of each series (or class thereof)
of the corporation from dividends and interest for any period and the
amount of assets at any time legally available for the payment of dividends
in each series (or class thereof); the amount of paid-in surplus, other
surplus, annual or other net profits, or net assets in excess of capital,
undivided profits, or excess of profits over losses on sales of securities
of each series (or class thereof); the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or charges
and the propriety thereof (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been paid
or discharged); the market value, or any sale, bid or asked price to be
applied in determining the market value, of any security owned or held by
or in each series (or class thereof) of the corporation; the fair value of
any other asset owned by or in each series of the corporation; the number
of shares of each series (or class thereof) of the corporation issued or
issuable; any matter relating to the acquisition, holding and disposition
of securities and other assets by each series (or class thereof) of the
corporation; and any question as to whether any transaction constitutes a
purchase of securities on margin, a short sale of securities, or an
underwriting of the sale of, or participation in any underwriting or
selling group in connection, with the public distribution of any
securities.
(d) The Board of Directors or the shareholders of the corporation may
adopt, amend, affirm or reject investment policies and restrictions upon
investment or the use of assets of each series of the corporation and may
designate some such policies as fundamental and not subject to change other
than by a vote of a majority of the outstanding voting securities, as such
phrase is defined in the Investment Company Act of 1940, of the affected
series of the corporation.
(e) The corporation shall indemnify such persons for such expenses
and liabilities, in such manner, under such circumstances, and to the full
extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided, however, that no such
indemnification may be made if it would be in violation of Section 17(h) of
the Investment Company Act of 1940, as now enacted or hereafter amended.
(f) Any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken without
a meeting if done in writing and signed by a majority of the directors or
committee members.
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(g) To the fullest extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereafter be amended (except as
prohibited by the Investment Company Act of 1940, as the same exists or may
hereafter be amended), a director of this corporation shall not be liable
to this corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director.
A-9
<PAGE>
EXHIBIT (a).2
CERTIFICATE OF DESIGNATION
OF
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
OF
FORTIS MONEY PORTFOLIOS, INC.
The undersigned duly elected Secretary of Fortis Money Portfolios, Inc., a
Minnesota corporation (the "Fund"), hereby certifies that the following is a
true, complete and correct copy of resolutions duly adopted by a majority of the
directors of the Board of Directors of the Fund on June 28, 1994, and further
certifies that the Amended and Restated Articles referred to in such resolutions
were approved by shareholders of the Fund on August 23, 1994.
APPROVAL OF CREATION AND DESIGNATION OF
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
WHEREAS, shareholders of the Fund are being asked to approve Amended and
Restated Articles of Incorporation (the "Articles") to allow the Fund to issue
Multiple Classes of shares and to increase its authorized capital; and
WHEREAS, following the approval of such amended Articles the total authorized
number of shares of the Fund will be 500,000,000,000 (five hundred billion); and
WHEREAS, as amended the Articles will provide that the sole currently
outstanding series will have 50,000,000,000 (fifty billion) shares of designated
shares; and
WHEREAS, the amended Articles set forth that the authorized shares may be issued
in such Classes and with such relative rights and preferences as shall be stated
or expressed in a resolution or resolutions providing for the issue of any such
Class or Classes of common shares as may be adopted from time to time by the
Board of Directors;
NOW, THEREFORE, BE IT RESOLVED, that of the to be authorized common shares of
the Fund, for the sole currently outstanding series, 5,000,000,000 (five
billion) are hereby designated as Class A Common Shares, 5,000,000,000 (five
billion) are hereby designated as Class B Common Shares, 5,000,000,000 (five
billion) are hereby designated as Class C Common Shares and 5,000,000,000 (five
billion) are hereby designated as Class H Common Shares; and the shares of the
Fund which are outstanding on November 13, 1994 are hereby redesignated as Class
A Common Shares of the currently outstanding series of the Fund.
FURTHER RESOLVED, that the Class A, Class B, Class C and Class H Common Shares
designated by these resolutions shall have the relative rights and preferences
set forth in the amended Articles of the Fund. As provided in Article 5(b) of
such amended Articles, any Class of Common Shares designated by these
resolutions may be subject to such charges and expenses (including by way of
example, but not by way of limitation, such front-end and deferred sales charges
as may be permitted under the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules of the National Association of Securities Dealers,
Inc., and expenses under Rule 12b-1 plans, administration plans, service plans,
or other plans or arrangements, however designated) as may be adopted from time
to time by the Board of Directors of the Fund in accordance, to the extent
applicable, with the 1940 Act, which charges and expenses may differ from those
applicable to another Class, and all of the charges and expenses to which a
Class is subject shall be borne by such Class and shall be appropriately
reflected in determining the net asset value and the amounts payable with
respect to dividends and distributions on, and redemptions or liquidations of,
such Class.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of Fortis Money Portfolios, Inc. this 31st day of October
1994.
/s/ Michael J. Radmer
-------------------------------
Michael J. Radmer, Secretary
<PAGE>
EXHIBIT (b)
As amended and restated
effective January 31, 1992
AMENDED AND RESTATED
BYLAWS
OF
FORTIS MONEY PORTFOLIOS, INC.
(formerly AMEV Money Fund, Inc.)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is Fortis Money
Portfolios, Inc. The name of the series represented by Series A Common Shares
shall be "Fortis Money Fund."
Section 1.02. REGISTERED OFFICE. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03. OTHER OFFICES. The corporation may have such other
offices and places of business, within or without the State of Minnesota, as the
directors shall, from time to time, determine.
Section 1.04. CORPORATE SEAL. The corporate seal shall be circular
in form and shall have inscribed thereon the name of the corporation and the
word "Minnesota" and the words "Corporate Seal." The form of the seal shall be
subject to alteration by the Board of Directors and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or director of the corporation shall have authority to
affix the corporate seal of the corporation to any document requiring the same.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETINGS. Except as provided
otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may
be held at any place, within or without the State of Minnesota, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at ten o'clock a.m.
Section 2.02. REGULAR MEETINGS. Annual meetings of shareholders are
not required by these Bylaws. Regular meetings shall be held only with such
frequency and at such
<PAGE>
times and places as provided in and required by law.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, and two or more directors, or by one or more
shareholders holding ten percent (10%) or more of the shares entitled to vote on
the matters to be presented to the meeting, except that a special meeting for
the purpose of considering any action directly or indirectly to facilitate or
effect a business combination, including any action to change or otherwise
affect the composition of the Board of Directors for that purpose, must be
called by 25% of the voting power of all shares entitled to vote.
Section 2.04. QUORUM; ADJOURNED MEETINGS. The holders of ten percent
(10%) of the shares outstanding and entitled to vote at the meeting shall
constitute a quorum for the transaction of business at any regular or special
shareholders' meeting. In case a quorum shall not be present at a meeting,
those present in person or by proxy shall adjourn to such day as they shall, by
majority vote, agree upon without further notice other than by announcement at
the meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present, the shareholders may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation. Upon the demand of any shareholder,
the vote upon any question before the meeting shall be by written ballot. Except
as otherwise specifically provided by these Bylaws or as required by provisions
of the Investment Company Act of 1940 or other applicable laws, all questions
shall be decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote. If the matter(s) to be
presented at a regular or special meeting relates only to a particular portfolio
or portfolios of the corporation, then only the shareholders of the series of
stock issued by each portfolio or portfolios are entitled to vote on such
matter(s).
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall
exist only if the instrument authorizing such proxy to act shall have been
executed in writing by the shareholder himself or by his attorney thereunto duly
authorized in writing. No proxy shall be voted after three years from its date
unless it provides for a longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a
time, not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting,
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<PAGE>
notwithstanding any transfer of shares on the books of the corporation after any
record date so fixed. If the Board of Directors fails to fix a record date for
determination of the shareholders entitled to notice of, and to vote at, any
meeting of shareholders, the record date shall be the thirtieth (30th) day
preceding the date of such meeting.
Section 2.08. NOTICE OF MEETINGS. The Secretary or an Assistant
Secretary shall mail to each shareholder, shown by the books of the corporation
to be a holder of record of voting shares, at his address as shown by the books
of the corporation, a notice setting out the time and date and place of each
regular meeting and each special meeting, which notice shall be mailed at least
ten (10) days prior thereto; except that notice of a meeting at which an
agreement of merger or consolidation is to be considered shall be mailed to all
shareholders of record, whether entitled to vote or not, at least two (2) weeks
prior thereto; and except that notice of a meeting at which a proposal to
dispose of all, or substantially all, of the property and assets of the
corporation is to be considered shall be mailed to all shareholders of record,
whether entitled to vote or not, at least ten (10) days prior thereto; and
except that notice of a meeting at which a proposal to dissolve the corporation
or to amend the Articles of Incorporation is to be considered shall be mailed to
all shareholders of record, whether entitled to vote or not, at least ten (10)
days prior thereto. Every notice of any special meeting shall state the purpose
or purposes for which the meeting has been called, pursuant to Section 2.03, and
the business transacted at all special meetings shall be confined to the purpose
stated in the call.
Section 2.09. WAIVER OF NOTICE. Notice of any regular or special
meeting may be waived either before, at or after such meeting in writing signed
by each shareholder or representative thereof entitled to vote the shares so
represented.
ARTICLE III
DIRECTORS
Section 3.01. NUMBER, QUALIFICATIONS AND TERM OF OFFICE. Until the
first meeting of shareholders, or until the directors increase their number by
resolution, the number of directors shall be the number named in the Articles of
Incorporation. Thereafter, the number of directors shall be established by
resolution of the shareholders (subject to the authority of the Board of
Directors to increase the number of directors as permitted by law), but shall
not be less than the lesser of (i) the number of shareholders of record and
beneficially, or (ii) three (3). In the absence of such resolution, the number
of directors shall be the number last fixed by the shareholders or the Board of
Directors, or the Articles of Incorporation. Directors may but need not be
shareholders. Each of the directors shall hold office until the regular meeting
of shareholders next held after his election and until his successor shall have
been elected and shall qualify, or until he shall resign, or shall have been
removed as hereinafter provided.
Section 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in
Section 3.11 and 3.12 hereof, the directors shall be elected at all regular
shareholders' meeting. Directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall
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contain mention of such purpose. At each shareholders' meeting for the election
of directors, the directors shall be elected by a plurality of the votes validly
cast at such election. The shareholders of each series of stock of the
corporation shall be entitled to vote for directors and shall have equal voting
power.
Section 3.03. GENERAL POWERS.
(a) The property, affairs and business of the corporation shall be
managed by the Board of Directors, which may exercise all the powers of the
corporation except those powers vested solely in the shareholders of the
corporation by statute, the Articles of Incorporation, or these Bylaws, as
amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his successor shall not have been duly elected
or appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.
Section 3.04. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
each series of stock of the corporation according to their respective rights and
interests in the investment portfolio of the corporation issuing such series of
stock.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than
(i) each investment portfolio's accumulated and accrued
undistributed net income (determined in accordance with generally
accepted accounting practice and the rules and regulations of the
Securities and Exchange Commission then in effect) and not including
profits or losses realized upon the sale of securities or other
properties; or
(ii) each investment portfolio's net income so determined for the
current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Commission may
prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of
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Directors may at any time declare and distribute pro rata among the shareholders
a "stock dividend" out of the each portfolois's authrorized but unissued shares
of stock, including any shares previously purchased by a portfolio of the
corporation.
Section 3.05. ANNUAL MEETING. The Board of Directors shall meet
annually at the registered office of the corporation, or at such other place
within or without the State of Minnesota as may be designated by the Board of
Directors, for the purpose of electing the officers of the corporation and for
the transaction of such other business as shall come before the meeting.
Section 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Minnesota as may be fixed by resolution adopted by a
majority of the whole Board of Directors.
Section 3.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.
Section 3.08. NOTICE OF MEETINGS. Unless otherwise required by
Statute, no notice need be given of any annual or regular meeting of the Board
of Directors. Notice of each special meeting of the Board of Directors shall be
given by the Secretary who shall give at least twenty-four (24) hours' notice
thereof to each director by mail, telephone, telegram or in person.
Section 3.09. WAIVER OF NOTICE. Notice of any meeting of the Board
of Directors may be waived either before, at, or after such meeting in writing
signed by each director. A director, by his attendance and participation in the
action taken at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting.
Section 3.10. QUORUM. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business except that, when a
vacancy or vacancies exist, a majority of the remaining directors (provided such
majority consists of not less than the lesser of (i) the number of directors
required by Section 3.02, or (ii) two (2) directors) shall constitute a quorum.
Section 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in
the Board of Directors of this corporation occurring by reason of death,
resignation or increase in the number of directors by the shareholders to the
minimum number required by Section 3.01 or by the Board pursuant to Section
3.01, shall be filled for the unexpired term by a majority of the remaining
directors of the Board although less than a quorum; newly created directorships
resulting from an increase in the authorized number of directors by action of
the Board of Directors as permitted by Section 3.01 may be filled by a
two-thirds (2/3) vote of the directors serving at the time of such increase; and
each person so elected shall be a director until his
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successor is elected by the shareholders, who may make such election at their
next regular meeting or at any meeting duly called for that purpose; provided,
however, that no vacancy can be filled as provided above if prohibited by the
provisions of the Investment Company Act of 1940.
Section 3.12. REMOVAL. Removal of directors shall be governed by the
provisions of Section 302A.233 of the Minnesota Statutes or other applicable
provisions of the Minnesota Statutes or successors thereto.
Section 3.13. EXECUTIVE COMMITTEE. The Board of Directors, by
unanimous affirmative action of the entire Board, may establish an Executive
Committee consisting of two (2) or more directors. Such Committee may meet at
stated times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such Committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation and, generally, perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such Committee authority to exercise all the
powers of the Board of Directors, except the power to amend the Bylaws and to
take action on matters reserved to the entire Board by the Investment Company
Act of 1940, while the Board of Directors is not in session. Vacancies in the
membership of the Committee shall be filled by the Board of Directors at a
regular meeting or at a special meeting called for that purpose.
Section 3.14. OTHER COMMITTEES. The Board of Directors may establish
other committees from time to time making such regulations as it deems advisable
with respect to the membership, authority and procedures of such committees.
Section 3.15. WRITTEN ACTION. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by a majority of
the directors or committee members.
Section 3.16. COMPENSATION. Directors who are not salaried officers
of this corporation shall receive such fixed sum per meeting attended or such
fixed annual sum as shall be determined, from time to time, by resolution of the
Board of Directors. All directors may receive their expenses, if any, of
attendance at meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving this corporation in any other capacity and receiving proper compensation
therefor.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist
of a Chairman of the Board (if one is elected by the Board), the President, one
or more Vice
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Presidents (if desired by the Board), a Secretary and one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers, and such other
officers and agents as may, from time to time, be elected by the Board of
Directors.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such other
officers as may be deemed advisable. Such officers shall hold office until the
next annual meeting of the directors or until their successors are elected and
qualified. The President and all other officers who may be directors shall
continue to hold office until the election and qualification of their
successors, notwithstanding an earlier termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his office at any
time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his office by a majority of the whole Board of Directors, with or without cause.
Such removal, however, shall be without prejudice to the contract rights of the
person so removed. If there be a vacancy among the officers of the corporation
by reason of death, resignation or otherwise, such vacancy shall be filled for
the unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one is elected, shall preside at all meetings of the shareholders and directors
and shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he shall preside at all meetings of the shareholders and
directors. He shall be the chief executive officer of the corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. He shall be ex officio a member of all standing committees. He may
execute and deliver, in the name of the corporation, any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
corporation and, in general, shall perform all duties usually incident to the
office of President. He shall have such other duties as may, from time to time,
be prescribed by the Board of Directors.
Section 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
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Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of shareholders and directors. He shall
keep the seal of the corporation and shall affix the same to any instrument
requiring it and may, when necessary, attest the seal by his signature. He
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall keep accurate accounts
of all moneys of the corporation received or disbursed. He shall deposit all
moneys, drafts and checks in the name of, and to the credit of, the corporation
in such banks and depositories as a majority of the whole Board of Directors
shall, from time to time, designate. He shall have power to endorse, for
deposit, all notes, checks and drafts received by the corporation. He shall
disburse the funds of the corporation, as ordered by the Board of Directors,
making proper vouchers therefor. He shall render to the President and the
directors, whenever required, an account of all his transactions as Treasurer
and of the financial condition of the corporation, and shall perform such other
duties as may, from time to time, be prescribed by the Board of Directors or by
the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary shall have
power to perform all the duties of the Secretary and, when so acting, shall have
all the powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.12. COMPENSATION. The officers of this corporation shall
receive such compensation for their services as may be determined, from time to
time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his duties
to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any such case, a new bond of like character shall be
given at least every six years, so that the date of the new bond
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shall not be more than six years subsequent to the date of the bond immediately
preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) Every owner of shares of the corporation shall be entitled to a
certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the corporation owned by him. The
certificates for such shares shall be numbered in the order in which they shall
be issued and shall be signed, in the name of the corporation, by the President
or a Vice President and by the Treasurer, or by such officers as the Board of
Directors may designate. Such signatures may be facsimile if authorized by the
Board of Directors. Every certificate surrendered to the corporation for
exchange or transfer shall be canceled, and no new certificate or certificates
shall be issued in exchange for any existing certificate until such existing
certificate shall have been so canceled, except in cases provided for in Section
5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued and
delivered by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is
authorized to cause to be issued shares of the corporation up to the full amount
authorized by the Articles of Incorporation in such series and in such amounts
as may be determined by the Board of Directors and as may be permitted by law.
No shares shall be allotted except in consideration of cash or of an amount
transferred from surplus to stated capital upon a share dividend. At the time
of such allotment of shares, the Board of Directors making such allotments shall
state, by resolution, their determination of the fair value to the corporation
in monetary terms of any consideration other than cash for which shares are
allotted. The amount of consideration to be received in cash, or otherwise,
shall not be less than the par value of the shares so allotted. No shares of
stock issued by the corporation shall be issued, sold, or exchanged by or on
behalf of the corporation for any amount less than the net asset value per share
of the shares outstanding as determined pursuant to Article XI hereunder.
Section 5.03. REDEMPTION OF SHARES. Upon the demand of any
shareholder this corporation shall redeem any share of stock issued by it held
and owned by such shareholder at the net asset value thereof as determined
pursuant to Article XI hereunder. The Board of Directors may suspend the right
of redemption or postpone the date of payment during any period when: (a)
trading on the New York Stock Exchange is restricted or such Exchange is closed
for other than weekends or holidays; (b) the Securities and Exchange Commission
has by order permitted such suspension; or (c) an emergency as defined by rules
of the Securities and
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Exchange Commission exists, making disposal of portfolio securities or
valuation of net assets of the corporation not reasonably practicable.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares or a duly executed assignment covering shares held
in unissued form. The corporation may treat, as the absolute owner of shares of
the corporation, the person or persons in whose name shares are registered on
the books of the corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.
Section 5.06. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.07. TRANSFER REGULATIONS. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
the shares of stock of the corporation.
Section 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES.
The holder of any stock of the corporation shall immediately notify the
corporation of any loss, theft, destruction or mutilation of any certificate
therefor, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock upon the surrender of the
mutilated certificate or in case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction, after
the owner of the lost, stolen or destroyed certificate, or his legal
representatives, gives to the corporation and to such registrar or transfer
agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft, or destruction of any such certificate.
Section 5.09. REDEMPTION OF SMALL SHAREHOLDER ACCOUNTS. If the value
of a
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shareholder's investments in the corporation becomes less than $1,000 (or such
other amount as may be determined from time to time by the Board of Directors)
as a result of a redemption or transfer of shares, the corporation's officers
are authorized, in their discretion, on behalf of the corporation, to redeem
such shareholder's entire interest and remit such amount, provided that such a
redemption will only be effected by the corporation following (a) the mailing by
the corporation to such shareholder of a "notice of intention to redeem," and
(b) the passage of such time period as may be determined by the Board of
Directors, during which time the shareholder will have the opportunity to make
an additional investment in the corporation to increase the value of such
shareholder's account to at least such minimum amount.
ARTICLE VI
DIVIDENDS, SURPLUS, ETC.
Section 6.01. The corporation's net investment income will be
determined, and its dividends shall be declared and made payable at such time(s)
as the Board of Directors shall determine; dividends shall be payable to
shareholders of record as of the date of declaration.
It shall be the policy of the corporation to qualify for and elect the
tax treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation will not be subjected to Federal income
tax on such part of its income or capital gains as it distributes to
shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. BOOKS AND RECORDS. The Board of Directors of the
corporation shall cause to be kept:
(1) share register, giving the names and addresses of the
shareholders, the number and classes held by each, and the dates
on which the certificates therefor were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.02. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of
Directors shall cause to be kept at the registered office of the corporation
originals or copies of:
(1) records of all proceedings of shareholders and directors
(2) Bylaws of the corporation and all amendments thereto; and
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(3) reports made to any or all of the shareholders within the last
preceding three (3) years.
Section 7.03. AUDIT, ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of
account of the corporation to be audited at least once in each fiscal year and
at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent certified public
accountant or firm of independent certified public accountants as its Accountant
to examine the accounts of the corporation and to sign and certify financial
statements filed by the corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the shareholders.
(c) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
Section 7.04. FISCAL YEAR. The fiscal year of the corporation shall
be determined by the Board of Directors.
ARTICLE VIII
INSPECTION OF BOOKS
Section 8.01. Every shareholder of the corporation and every holder
of a voting trust certificate shall have a right to examine, in person or by
agent or attorney, at any reasonable time or times, for any proper purpose, and
at the place or places where usually kept, the share register, books of account
and records of the proceedings of the shareholders and directors and to make
extracts therefrom.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock or other
securities of any such other corporation or association, or to consent in
writing to any action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed on behalf
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of the corporation and under its corporate seal, or otherwise, such written
proxies, consents, waivers, or other instruments as it may deem necessary or
proper in the circumstances; or any of such officers may themselves attend any
meeting of the holders of stock or other securities of any such corporation or
association and thereat vote or exercise any or all other powers of the
corporation as the holder of such stock or other securities of such other
corporation or association, or consent in writing to any action by any such
other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of each share of stock
issued by the corporation shall be determined in good faith by or under
supervision of the officers of the corporation as authorized by the Board of
Directors as often and on such days and at such time(s) as the Board of
Directors shall determine.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation
shall, as hereinafter provided, be held by or deposited with a bank or trust
company having (according to its last published report) not less than two
million dollars ($2,000,000) aggregate capital, surplus and undivided profits
(the "Custodian").
This corporation shall enter into a written contract with the
Custodian regarding the powers, duties and compensation of the Custodian with
respect to the cash and securities of this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by this
corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the whole Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the shareholders to change or repeal such Bylaws by a majority
vote of the shareholders present or represented at any annual or special meeting
of shareholders called for such purpose. The Board of Directors shall not make
or alter any Bylaws fixing their qualifications, classifications, term of
office, or number, except that the Board of Directors may make or alter any
Bylaw to increase their number.
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ARTICLE XIII
MISCELLANEOUS
Section 13.01. INTERPRETATION. When the context in which words are
used in these Bylaws indicates that such is the intent, singular words will
include the plural and vice versa, and masculine words will include the feminine
and neuter genders and vice versa.
Section 13.02. ARTICLE AND SECTION TITLES. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not control
or alter the meaning of any of these Bylaws as set forth in the text.
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EXHIBIT (d)
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 31st day of January 1992, by and between
Fortis Money Portfolios, Inc. (formerly AMEV Money Fund, Inc.), a Minnesota
corporation (the "Fund") and Fortis Advisers, Inc. (formerly AMEV Advisers,
Inc.), a Minnesota ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES
The Fund hereby engages Advisers, and Advisers hereby agrees to act,
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the assets of the Fund's Portfolios, which shall
consist of Fortis Money Fund, and any further Portfolios from time to time
created by the Board of Directors of the Fund. Each such Portfolio is herein
individually referred to as a "Portfolio," and the Portfolios are herein
collectively referred to as the "Portfolios."
The investment of the assets of the Portfolios shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund and the Portfolios as set forth in the Registration Statement and
Prospectus and Statement of Additional Information as interpreted from time to
time by the Board of Directors of the Fund. Within the framework of the
investment policies of the Portfolios, Advisers shall have the sole and
exclusive responsibility for the management of the Portfolios and the making and
execution of all investment decisions for the Portfolios. Advisers shall report
to the Board of Directors regularly at such times and in such detail as the
Board may from time to time determine to be appropriate, in order to permit the
Board to determine the adherence of Advisers to the investment policies of the
Portfolios.
Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. Advisers shall arrange, if requested by
the Fund, for officers, employees or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.
Advisers hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Advisers should
ever occur, Advisers will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of Advisers hereunder, the Fund shall pay to Advisers a monthly
fee for each Portfolio, which fee shall be paid to Advisers not later than the
fifth business day of the month following the month in which such services are
rendered. Each such monthly fee shall be at the rate or rates set forth below
and shall be based on the average of the net asset values of all of the issued
<PAGE>
and outstanding shares of the respective Portfolio und as determined as of the
close of each business day of the month pursuant to the Articles of
Incorporation, Bylaws and currently effective Prospectus and Statement of
Additional Information of the Fund. The following table sets forth the fee on a
monthly and annual basis:
<TABLE>
<CAPTION>
Monthly Equivalent Average Asset
Rate Annual Rate Values of The Fund
-------- ----------- ------------------
<S> <C> <C> <C>
Fortis Money Fund 1/12 of 0.60% 0.60% On the first $500,000,000
1/12 of 0.55% 0.55% On average net assets over
$500,000,000
</TABLE>
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolio(s).
Advisers shall pay to its subsidiary, Fortis Investors, Inc.
("Investors"), on a monthly basis a fee for each Portfolio equal to .2 of 1% of
the average daily net assets of the respective Portfolio as full compensation to
Investors for its services as distributor of the respective Portfolio's shares;
provided, however, that Advisers may directly pay certain expenses otherwise
payable by Investors, and deduct such amounts from the .2 of 1% otherwise
payable to Investors.
3. ALLOCATION OF EXPENSES.
In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers, Fortis Investors, Inc.
("Investors") or any other person. These Fund expenses include, by way of
example, but not by way of limitation, the fees and expenses of directors and
officers of the Fund who are not "affiliated persons" of Advisers, interest
expenses, taxes, brokerage fees and commissions, fees and expenses of
registering and qualifying the Fund and its shares for distribution under
federal and state securities laws, expenses of preparing Prospectuses and of
printing and distributing Prospectuses and Statements of Additional Information
annually to existing shareholders, custodian charges, auditing and legal
expenses, insurance expenses, association membership dues, and the expenses of
reports to shareholders, shareholders' meetings and proxy solicitations.
Advisers or Investors shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses for new shareholders. Advisers shall also pay the fees (but not
out-of-pocket costs) of the Fund's transfer agent, registrar, dividend
disbursing agent, redemption agent and accounting services agent, except as
otherwise provided herein.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to
<PAGE>
be rendered or the duties to be assumed hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
. The effective date of this Agreement shall be January 31, 1992.
Wherever referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding voting securities of a Portfolio or the Fund shall
mean the vote of 67% or more of such securities if the holders of more than 50%
of such securities are present in person or by proxy or the vote of more than
50% of such securities, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to a
particular Portfolio by the vote of the holders of a majority of the outstanding
voting securities of such Portfolio, and (b) by a majority of the directors who
are not interested persons of Advisers or of the Fund cast in person at a
meeting called for the purpose of voting on such approval; provided that, if a
majority of the outstanding voting securities of any of the Portfolios approves
this Agreement, this Agreement shall continue in effect with respect to such
approving Portfolio whether or not the shareholders of any other Portfolio of
the Fund approve this Agreement.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by Advisers,
upon sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to a particular Portfolio at any time without the
payment of any penalty by the vote of the holders of a majority of the
outstanding voting securities of such Portfolio, upon sixty (60) days' written
notice to Advisers. Any such termination may be made effective with respect to
both the investment advisory and management services provided for in this
Agreement or with respect to either of such kinds of services. This Agreement
shall automatically terminate in the event of its assignment.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by a vote of the holders of a majority of the outstanding voting
securities of the Portfolios which have approved and are subject to this
Agreement. In addition, if a majority of the outstanding voting securities of
any Portfolio of the Fund votes to amend this Agreement, such amendment shall be
effective with respect to such Portfolio whether or not the shareholders of any
other Portfolio vote to adopt such amendment.
7. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
<PAGE>
FORTIS MONEY PORTFOLIOS, INC.
By /s/ Edward M. Mahoney
---------------------------------
Its President
FORTIS ADVISERS, INC.
By /s/ Edward M. Mahoney
---------------------------------
Its President
<PAGE>
EXHIBIT (e).1
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 14th day of November 1994, by and between Fortis
Money Portfolios, Inc. (formerly AMEV Money Fund, Inc.), a Minnesota corporation
(the "Fund") for and on behalf of each class of shares (each such class is
referred to hereinafter as a "Class") of each of the Fund's Portfolios and
Fortis Investors, Inc. (formerly AMEV Investors, Inc.), a Minnesota corporation
("Investors")
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund on behalf of each Class hereby engages Investors, and Investors
hereby agrees to act, as principal underwriter for each Class in connection with
the sale and distribution of the shares of each Class of the Fund's Portfolios
to the public, either through dealers or otherwise. Investors agrees to offer
such shares for sale at all times when such shares are available for sale and
may lawfully be offered for sale and sold.
As used herein, "Portfolios" is defined as Fortis Money Fund and any other
Portfolios which may hereafter be created by the Board of Directors of the Fund.
In addition, as used herein, "Classes" of the Fund's Portfolios is defined as
Class A, Class B, Class C and Class H shares of each Portfolio and any other
classes which may hereinafter be created by the Fund's Board of Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed to
have been accepted by the Fund if the Fund shall fail to notify Investors of the
rejection of such offer or sale prior to the computation of the net asset value
of the applicable Class's shares next following receipt by the Fund of notice of
such offer or sale.
(b) No share of a Class shall be sold by Investors (i) for any amount
less than the net asset value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than cash, or, pursuant to any
exchange privilege provided for by such Class's currently effective Prospectus
or Statement of Additional Information, shares of the corresponding Class of
shares of any other investment company for which Investors acts as an
underwriter. All shares of the Fund's Portfolios sold by Investors shall be
sold at the applicable public offering price, which shall be equal to the
current net asset value per share.
(c) Investors may decline to offer for sale or sell shares of the
Fund in an amount the cumulative public offering price of which is less than
$500.00 or such smaller amount as it may from time to time fix.
<PAGE>
3. INVESTMENT OF DIVIDEND AND DISTRIBUTIONS.
The Fund may extend to its shareholders the right to purchase shares issued
by each Class of the Fund at the net asset value thereof with the proceeds of
any dividend or capital gain distribution paid or payable by the Fund (or any
other fund for which Investors serves as underwriter) to its shareholders.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and keep in
effect, at its own expense, the registration or qualification of each Class's
shares for sale in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with such information with
respect to the affairs and accounts of the Fund (and each Class and Portfolio
thereof) as Investors may from time to time reasonably require, and further
agrees that Investors, at all reasonable times, shall be permitted to inspect
the books and records of the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be paid
all expenses, costs and fees incurred by the Fund which are not assumed by
Investors or Fortis Advisers, Inc. ("Advisers"). Investors agrees to provide,
and shall pay costs which it incurs in connection with providing personal,
continuing services to shareholders (such costs are referred to as "Shareholder
Servicing Costs"). Shareholder Servicing Costs include all expenses of
Investors incurred in connection with providing administrative or accounting
services to shareholders of each Class, including, but not limited to, an
allocation of Investor's overhead and payments made to persons, including
employees of Investors, who respond to inquiries of shareholders regarding their
ownership of Class shares, or who provide other administrative or accounting
services not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding the foregoing, if the
National Association of Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair Practice
that differs from a definition of Shareholder Servicing Costs in this paragraph,
or if the NASD adopts a related definition intended to define the same concept,
the definition of Shareholder Servicing Costs in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of distributing the shares
of each Class ("Distribution Expenses"). Distribution expenses include, but are
not limited to, initial and ongoing sales compensation (in addition to sales
loads) paid to registered representatives of Investors and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
-2-
<PAGE>
literature; expenses of advertising of any type; an allocation of Investors'
overhead; payments to and expenses of persons who provide support services in
connection with the distribution of Fund shares; and other distribution-related
expenses. Advisers, rather than Investors, may bear the expenses referred to in
this paragraph, but Investors shall be primarily liable for such expenses until
paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive any contingent deferred
sales charge imposed in connection with any redemption of applicable Class
shares, as set forth in each applicable Class's current Prospectus. Any
contingent deferred sales charge may, at the discretion of the Fund and
Investors, be increased, reduced or eliminated in accordance with the terms of
an exemptive order received from, or any applicable rule or rules promulgated
by, the Securities and Exchange Commission by the Fund, provided such increase,
reduction or elimination shall be set forth in the Prospectus for such Class.
(b) Advisers and the Fund have entered in an Investment Advisory and
Management Agreement dated January 31, 1992 under which the Fund will pay
Advisers certain fees. From such fees Advisers shall, pursuant to the Plan of
Distribution adopted by each Class in accordance with Rule 12b-1 under the
Investment Company Act of 1940, pay to Investors on a monthly basis a fee equal
to .2 of 1% of the average daily net assets of each Class; provided, however,
that Advisers may directly pay certain expenses otherwise payable by Investors,
and deduct such amount from the .2 of 1% otherwise payable to Investors.
(i) CLASS A SHARES: With respect to Class A shares of each
of the Portfolios, this fee of .2 of 1% will constitute full compensation to
Investors for its services as distributor of the Fund's shares. All or a
portion of such total fee may be payable as a Distribution Fee, and all or any
portion of such total fee may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's Board of Directors. Until further
action by the Board of Directors, all of such fee shall be designated and
payable as a Distribution Fee.
(ii) CLASS B, CLASS C AND CLASS H SHARES: With respect to
Class B, Class C and Class H shares, the Fund will pay Investors an additional
.8 of 1.00% of the value of the respective Class's average daily net assets.
This total fee of 1.00% paid by each Class shall be paid in connection with
distribution-related services and servicing of shareholder accounts provided for
the respective Class. All or any portion of such total fee may be payable as a
Distribution Fee, and all or any portion of such total fee may be payable as a
Shareholder Servicing Fee, as determined from time to time by the Fund's Board
of Directors. Until further action by the Board, 75% of such fee (.75 of 1.00%)
shall be designated and payable as a Distribution Fee and 25% of such fee (.25
of 1.00%) shall be designated and payable as a
-3-
<PAGE>
Shareholder Servicing Fee.
(iii) FUTURE PORTFOLIOS AND/OR CLASSES: The 12b-1 fees for
Class A, Class B, Class C or Class H shares of any future Portfolios shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolios, but in no event shall such fees exceed any then existing limitations
imposed under any applicable rule or rules promulgated by the Securities and
Exchange Commission and/or the National Association of Securities Dealers, Inc.
Upon the creation of any new classes of shares for any or all of the Portfolios,
the respective levels of sales charges and 12b-1 fees shall be determined by the
Board of Directors of the Fund, subject to any necessary shareholder approval
and only in accordance with any applicable rule or rules promulgated by the
Securities and Exchange Commission and/or the National Association of Securities
Dealers, Inc. All or any portion of the l2b-1 fees referred to in this
paragraph may be payable as a Distribution Fee, and all or any portion of such
l2b-1 fees may be payable as a Shareholder Servicing Fee, as determined from
time to time by the Fund's Board of Directors.
(iv) OTHER INFORMATION: Average daily net assets shall be
computed in accordance with the Prospectus of each applicable Class. Amounts
payable to Investors under the Plan may exceed or be less than Investor's actual
distribution expenses and shareholder servicing costs. In the event such
distribution expenses and/or shareholder servicing expenses exceed amounts
payable to Investors under the Plan, Investors shall not be entitled to
reimbursement from the Fund.
(d) In each year during which this contract remains in effect, Investors
will prepare and furnish to the Board of Directors of the Fund, and the Board
will review, on a quarterly basis written reports complying with the
requirements of Rule l2b-1 under the Investment Company Act of 1940 (the " 1940
Act") that set forth the amounts expended under this contract and the Plan and
the purposes for which those expenditures were made.
8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS.
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
-4-
<PAGE>
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
Investors.
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation
and other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or
proceedings in any way arising out of or in connection with the sale or
distribution of the shares of the Fund by Investors. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, Investors shall defend such action on behalf of the Fund at its own
expense, and shall pay any such liability, judgment, cost or penalty
resulting therefrom, whether imposed by legal authority or agreed upon by way
of compromise and settlement; provided, however, Investors shall not be
required to pay or reimburse the Fund for any liability, judgment, cost or
penalty incurred as a result of information supplied by, or as the result of
the omission to supply information by, the Fund to Investors, or to Investors
by a director, officer, or employee of the Fund who is not an interested
person of Investors, unless the information so supplied or omitted was
available to Investors or the Fund's investment adviser without recourse to
the Fund or any such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
(a) This Agreement shall be effective as to Fortis Money Fund and
each Class thereof on November 14, 1994. Unless sooner terminated as
hereinafter provided, this Agreement shall continue in effect only so long as
such continuance is specifically approved at least annually (a) by the Board of
Directors of the Fund, or with respect to a particular Class by the vote of the
holders of a majority of the outstanding voting securities of such Class, and
(b) by a majority of the directors who are not interested persons of Investors
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval; provided that, if a majority of the outstanding voting securities
of any of the Classes approves this Agreement, this Agreement shall continue in
effect with respect to such approving Class whether or not the shareholders of
any other Class of the Fund approve this Agreement.
(b) This Agreement may be terminated at any time without the payment
of any penalty by the vote of the Board of Directors of the Fund or by
Investors, upon sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular Class at any time
without the payment of any penalty by the vote of the holders of a majority of
the outstanding voting securities of such Class, upon sixty (60) days' written
notice to Investors.
-5-
<PAGE>
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the Board of Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such amendment. Additionally, no amendment
to this Agreement that materially increases the distribution fee and/or
shareholder servicing fee payable by any Class hereunder shall be effective
until any necessary amendment to the applicable Rule 12b-1 Plan has been
approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS MONEY PORTFOLIOS, INC.
By: /s/ Edward M. Mahoney
----------------------------
Its President
FORTIS INVESTORS, INC.
By: /s/ Dean C. Kopperud
----------------------------
Its President
-6-
<PAGE>
EXHIBIT (g)
CUSTODIAN AGREEMENT
THIS AGREEMENT, made as of the 21st day of March, 1992, by and between
Fortis Money Portfolios, Inc., a Minnesota corporation (the "Fund"), for and on
behalf of each series of the Fund that adopts this Agreement (said series being
hereinafter referred to, individually, as a "Series" and, collectively, as the
"Series"), and Norwest Bank Minnesota, N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Custodian"). The name of each Series that adopts this Agreement and the
effective date of this Agreement with respect to each such Series are set forth
in EXHIBIT A hereto.
WITNESSETH:
WHEREAS, the Fund desires to appoint the Custodian as the custodian for the
assets of each Series, and the Custodian desires to accept such appointment,
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of deposit,
bankers' acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, investment contracts, voting trust certificates,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, severed and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
The words "Written Order from the Fund" shall mean a writing signed or
initialed by one or more person or persons designated in the current certified
list referred to in Article 2, provided that if said writing is signed by only
one person, that person shall be an officer of the Fund designated in said
current certified list. "Written Order from the Fund" also may include a
communication effected directly between electro-mechanical or electronic devices
(including, but not limited to, facsimile transceivers) provided that management
of the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the assets of each Series.
<PAGE>
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles and signatures of
officers and other persons who are authorized to give any Written Order from the
Fund on behalf of each Series. The Fund agrees that, whenever any change in
such authorization occurs, it will file with the Custodian a new certified list
of names, titles and signatures which shall be signed by at least one officer
previously certified to the Custodian if any such officer still holds an office
in the fund. The Custodian is authorized to rely and act upon the names, titles
and signatures of the individuals as they appear in the most recent such
certified list which has been delivered to the Custodian as hereinbefore
provided.
ARTICLE 3. SUB-CUSTODIANS AND DEPOSITORIES
Notwithstanding any other provision in this Agreement to the contrary, all
or any of the cash and Securities of each Series may be held in the Custodian's
own custody or in the custody of one or more other banks or trust companies
selected by the Custodian or as directed in one or more Written Orders from the
fund. Any such sub-custodian must have the qualifications required for
custodians under the Investment Company Act of 1940, as amended. The Custodian
or sub-custodian, as the case may be, may participate directly or indirectly in
one or more "securities depositories" (as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended, or in any successor provisions or
rules thereto). Any references in this Agreement to the delivery of Securities
by or to the Custodian shall, with respect to Securities custodied with one of
the aforementioned "securities depositories," be interpreted to mean that the
Custodian shall cause a bookkeeping entry to be made by the applicable
securities depository to indicate the transfer of ownership of the applicable
Security to or from the Fund, all as set forth in one or more Written Orders
from the Fund. Additionally, any references in this Agreement to the receipt of
proceeds or payments with respect to Securities transactions shall, with respect
to Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall have received an
advice from such securities depository that said proceeds or payments have been
received by such depository and deposited in the Custodian's account.
ARTICLE 4. RECEIPT AND DISBURSING OF MONEY
SECTION (1). The Fund shall from time to time cause cash owned by the Fund
to be delivered or paid to the Custodian for the account of any Series, but the
Custodian shall not be under any obligation or duty to determine whether all
cash of the Fund is being so deposited or to take any action or to give any
notice with respect to cash not so deposited. The Custodian agrees to hold such
cash, together with any other sum collected or received by it for or on behalf
of each Series of the Fund, in the account of such Series in conformity with the
terms of this Agreement. The Custodian shall be authorized to disburse cash
from the account of each Series only:
(a) upon receipt of and in accordance with Written Orders from the
Fund stating that such cash is being used for one or more of the following
purposes, and
<PAGE>
specifying such purpose or purposes, provided, however, that a reference in
such Written Order from the Fund to the pertinent paragraph or paragraphs
of this Article shall be sufficient compliance with this provision:
(i) the payment of interest;
(ii) the payment of dividends;
(iii) the payment of taxes;
(iv) the payment of the fees or charges to any investment adviser of
any Series;
(v) the payment of fees to a Custodian, stock registrar, transfer
agent or dividend disbursing agent for any Series;
(vi) the payment of distribution fees and commissions;
(vii) the payment of any operating expenses, which shall be deemed to
include legal and accounting fees and all other expenses not
specifically referred to in this paragraph (a);
(viii) payments to be made in connection with the conversion, exchange
or surrender of Securities owned by any Series;
(ix) payments on loans that may from time to time be due;
(x) payment to a recognized and reputable broker for Securities
purchased by the fund through said broker (whether or not
including any regular brokerage fees, charges or commissions on
the transaction) upon receipt by the Custodian of such
Securities in proper form for transfer and after the receipt of
a confirmation from the broker or dealer with respect to the
transaction;
(xi) payment to an issuer or its agent on a subscription for
Securities of such issuer upon the exercise of rights so to
subscribe, against a receipt from such issuer or agent for the
cash so paid;
(b) as provided in Article 5 hereof; and
(c) upon the termination of this Agreement.
SECTION (2). The Custodian is hereby appointed the attorney-in-fact of
the Fund to use reasonable efforts to enforce and collect all checks, drafts or
other orders for the payment of money received by the Custodian for the account
of each Series and drawn to or to the order of the Fund and to deposit them in
the account of the applicable Series.
ARTICLE 5. RECEIPT OF SECURITIES
The Fund agrees to place all of the Securities of each Series in its
account with the Custodian, but the Custodian shall not be under any obligation
or duty to determine whether all Securities of any Series are being so
deposited, or to require that such Securities be so deposited, or to take any
action or give any notice with respect to the Securities not so deposited. The
Custodian agrees to hold such Securities in the account of the Series designated
by the Fund, in the name of the Fund or of bearer or of a nominee of the
Custodian, and in conformity with the
<PAGE>
terms of this Agreement. The Custodian also agrees, upon Written Order from the
Fund, to receive from persons other than the Fund and to hold in the account of
the Series designated by the Fund Securities specified in said Written Order of
the Fund, and, if the same are in proper form, to cause payment to be made
therefor to the persons from whom such Securities were received, from the funds
of the applicable Series held by the Custodian in said account in the amounts
provided and in the manner directed by the Written Order from the Fund.
The Custodian agrees that all Securities of each Series placed in its
custody shall be kept physically segregated at all times from those of any other
Series, person, firm or corporation, and shall be held by the Custodian with all
reasonable precautions for the safekeeping thereof. Upon delivery of any
Securities of any Series to a subcustodian pursuant to Article 3 of this
Agreement, the Custodian will create and maintain records identifying those
assets which have been delivered to the subcustodian as belonging to the
applicable Series.
ARTICLE 6. DELIVERY OF SECURITIES
The Custodian agrees to transfer, exchange or deliver Securities as
provided in Article 7, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby:
(a) in the case of deliveries of Securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of a
confirmation from a broker or dealer (or, in accordance with industry
practice with respect to "same day trades," acceptance of delivery of such
securities by the broker or dealer, which acceptance is followed up by
confirmation thereof within the normal settlement period) with respect to
the transaction;
(b) in the case of deliveries of Securities which may mature or be
called, redeemed, retired or otherwise become payable, against receipt by
the Custodian of the sums payable thereon or against interim receipts or
other proper delivery receipts;
(c) in the case of deliveries of Securities which are to be
transferred to and registered in the name of the Fund or of a nominee of
the Custodian and delivered to the Custodian for the account of the Series,
against receipt by the Custodian of interim receipts or other proper
delivery receipts;
(d) in the case of deliveries of Securities to the issuer thereof,
its transfer agent or other proper agent, or to any committee or other
organization for exchange for other Securities to be delivered to the
Custodian in connection with a reorganization or recapitalization of the
issuer or any split-up or similar transaction involving such Securities,
against receipt by the Custodian of such other Securities or against
interim receipts or other proper delivery receipts;
(e) in the case of deliveries of temporary certificates in exchange
for
<PAGE>
permanent certificates, against receipt by the Custodian of such permanent
certificates or against interim receipts or other proper delivery receipts;
(f) in the case of deliveries of Securities upon conversion thereof
into other Securities, against receipt by the Custodian of such other
Securities or against interim receipts or other proper delivery receipts;
(g) in the case of deliveries of Securities in exchange for other
Securities (whether or not such transactions also involve the receipt or
payment of cash), against receipt by the Custodian of such other Securities
or against interim receipts or other proper delivery receipts;
(h) in the case of warrants, rights or similar Securities, the
surrender thereof in the exercise of such warrants, rights or similar
Securities or the surrender of interim receipts or temporary Securities for
definitive Securities;
(i) for delivery in connection with any loans of securities made by
the Fund for the benefit of any Series, but only against receipt of
adequate collateral as agreed upon from time to time by the Custodian and
the Fund;
(j) for delivery as security in connection with any borrowings by the
Fund for the benefit of any Series requiring a pledge of assets from the
applicable Series, but only against receipt of amounts borrowed;
(k) for delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a bank, broker-dealer or futures
commission merchant relating to compliance with applicable rules and
regulations regarding account deposits, escrow or other arrangements in
connection with transactions by the Fund for the benefit of any Series;
(l) in a case not covered by the preceding paragraphs of this
Article, upon receipt of a resolution adopted by the Board of Directors of
the Fund, signed by an officer of the Fund and certified to by the
Secretary, specifying the Securities and assets to be transferred,
exchanged or delivered, the purposes for which such delivery is being made,
declaring such purposes to be proper corporate purposes, and naming a
person or persons (each of whom shall be a properly bonded officer or
employee of the Fund) to whom such transfer, exchange or delivery is to be
made; and
(m) in the case of deliveries pursuant to paragraphs (a) through (k)
above, the Written Order from the Fund shall direct that the proceeds of
any Securities delivered, or Securities or other assets exchanged for or in
lieu of Securities so delivered, are to be delivered to the Custodian.
ARTICLE 7. CUSTODIAN'S ACTS WITHOUT WRITTEN ORDERS FROM THE FUND
<PAGE>
Unless and until the Custodian receives contrary Written Orders from the
Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and similar
items, and all coupons or other income items (except stock dividends), held
or received for the account of any Series, and which require presentation
in the ordinary course of business, and credit such items to the account of
the applicable Series conditionally, subject to final payment;
(b) present for payment all Securities which may mature or be
called, redeemed, retired or otherwise become payable and credit such items
to the account of the applicable Series conditionally, subject to final
payment;
(c) hold for and credit to the account of any Series all shares of
stock and other Securities received as stock dividends or as the result of
a stock split or otherwise from or on account of Securities of the Series,
and notify the Fund, in the Custodian's monthly reports to the Fund, of the
receipt of such items;
(d) deposit or invest (as instructed from time to time by the Fund)
any cash received by it from, for or on behalf of any Series to the credit
of the account of the applicable Series;
(e) charge against the account for any Series disbursements
authorized to be made by the Custodian hereunder and actually made by it,
and notify the Fund of such charges at least once a month;
(f) deliver Securities which are to be transferred to and reissued in
the name of any Series, or of a nominee of the Custodian for the account of
any Series, and temporary certificates which are to be exchanged for
permanent certificates, to a proper transfer agent for such purpose against
interim receipts or other proper delivery receipts; and
(g) hold for disposition in accordance with Written Orders from the
Fund hereunder all options, rights and similar Securities which may be
received by the Custodian and which are issued with respect to any
securities held by it hereunder, and notify the Fund promptly of the
receipt of such items.
ARTICLE 8. SEGREGATED ACCOUNTS
Upon receipt of a Written Order from the Fund, the Custodian shall
establish and maintain one or more segregated accounts for and on behalf of the
Series specified in said Written Order from the Fund for purposes of segregating
cash and/or Securities (of the type agreed upon from time to time by the
Custodian and the Fund) for the purpose or purposes specified in said Written
Order from the Fund.
<PAGE>
ARTICLE 9. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies, notices and
communications with relation to Securities held by it which it may receive from
sources other than the Fund.
ARTICLE 10. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer any Securities
which it may hold for the account of any Series of the Fund. For the purpose of
facilitating the handling of Securities, unless otherwise directed by Written
Order from the Fund, the Custodian is authorized to hold Securities deposited
with it under this Agreement in the name of its registered nominee or nominees
(as defined in the Internal Revenue Code and any regulations of the United
States Treasury Department issued thereunder or in any provision of any
subsequent federal tax law exempting such transaction from liability for stock
transfer taxes) and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. The Custodian shall, if requested by the Fund, advise the
Fund of the certificate number of each certificate so presented for transfer and
that of the certificate received in exchange therefor, and shall use its best
efforts to the end that the specific Securities held by it hereunder shall be at
all times identifiable.
ARTICLE 11. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund, for and on behalf of each Series, shall pay or reimburse the
Custodian for any transfer taxes payable upon transfers of Securities made
hereunder, including transfers incident to the termination of this Agreement,
and for all other necessary and proper disbursements and expenses made or
incurred by the Custodian in the performance or incident to the termination of
this Agreement, and the Custodian shall have a lien upon any cash or Securities
held by it for the account of each applicable Series of the fund for all such
items, enforceable, after thirty days' written notice by registered mail from
the Custodian to the Fund, by the sale of sufficient Securities to satisfy such
lien. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an amount sufficient to pay any transfer taxes payable upon
the transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any federal revenue act and any regulations of
the Treasury Department issued thereunder or any state laws, to exempt from
taxation any transfers and/or deliveries of any such Securities as may qualify
for such exemption.
ARTICLE 12. CUSTODIAN'S LIABILITY FOR PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the Custodian is
not specified in the Written Order from the Fund directing such delivery, the
Custodian shall make delivery of
<PAGE>
such Securities against receipt by it of cash, a postal money order or a check
drawn by a bank, trust company or other banking institution, or by a broker
named in such Written Order from the Fund, for the amount the Custodian is
directed to receive. The Custodian shall be liable for the proceeds of any
delivery of Securities made pursuant to this Article, but provided that it has
complied with the provisions of this Article, but provided that is has complied
with the provisions of this Article, only to the extent that such proceeds are
actually received.
ARTICLE 13. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of business on the
last business day of each month, a statement showing all cash transactions and
entries for the account of each Series of the Fund. The books and records of
the Custodian pertaining to its actions as Custodian under this Agreement shall
be open to inspection and audit, at reasonable times, by officers of, and
auditors employed by, the Fund. The Custodian shall furnish the Fund with a
list of the Securities held by it in custody for the account of each Series of
the fund as of the close of business on the last business day of each quarter of
the Fund's fiscal year.
ARTICLE 14. CUSTODIAN COMPENSATION
The Custodian shall be paid compensation at such rates and at such times as
may from time to time be agreed on in writing by the parties hereto (as set
forth with respect to each Series in EXHIBIT B hereto), and the Custodian shall
have a lien for unpaid compensation, to the date of termination of this
Agreement, upon any cash or Securities held by it for the Series accounts of the
Fund, enforceable in the manner specified in Article 11 hereof.
ARTICLE 15. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect with respect to each Series, as it
may from time to time be amended, until it shall have been terminated as
hereinafter provided, but no such amendment or termination shall affect or
impair any rights or liabilities arising out of any acts or omissions to act
occurring prior to such amendment or termination.
The Custodian may terminate this Agreement by giving the Fund ninety days'
written notice of such termination by registered mail addressed to the Fund at
its principal place of business.
The Fund may terminate this Agreement by giving ninety days' written notice
thereof delivered by registered mail to the Custodian at its principal place of
business. Additionally, this Agreement may be terminated with respect to any
Series of the Fund pursuant to the same procedures, in which case this Agreement
shall continue in full effect with respect to all other Series of the Fund.
Upon termination of this Agreement, the assets of the Fund, or Series
thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a Written Order from the
Fund designating the successor custodian; and if no
<PAGE>
successor custodian is designated in said Written Order from the Fund, the
Custodian shall, upon such termination, deliver all such assets to the Fund.
This Agreement may be amended or terminated at any time to the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended or terminated with respect to any Series of the Fund at any time by the
mutual agreement of the Fund and the Custodian, in which case such amendment or
termination would apply to such Series amending or terminating this Agreement
but not to the other Series of the Fund.
This Agreement may not be assigned by the Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Directors.
ARTICLE 16. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties and obligations of
the preceding custodian under this Agreement and any amendments thereof and
shall succeed to all the exemptions and privileges of the preceding custodian
under this Agreement and any amendments thereof.
ARTICLE 17. GENERAL
Nothing expressed or mentioned in or to be implied from any provisions of
this Agreement is intended to give or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund shall
retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisition, and the sale, or other disposition, of all of its Securities,
and that the duties and responsibilities of the Custodian hereunder shall be
limited to receiving and safeguarding the assets and Securities of each Series
of the Fund and to delivering or disposing of them pursuant to the Written Order
from the Fund as aforesaid, and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
Securities, except as hereinbefore specifically set forth.
<PAGE>
The Custodian shall in no case or event permit the withdrawal of any money
or Securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and Securities for
disposition under the procedures herein set forth.
ARTICLE 18. STANDARD OF CARE; INDEMNIFICATION
In connection with the performance of its duties and responsibilities
hereunder, the Custodian (and each officer, employee, agent, sub-custodian and
depository of or engaged by the Custodian) shall at all times be held to the
standard of reasonable care. The Custodian shall be fully responsible for any
action taken or omitted by any officer, employee, agent, sub-custodian or
depository of or engaged by the Custodian to the same extent as if the Custodian
were to take or omit to take such action directly. The Custodian agrees to
indemnify and hold the Fund and each Series of the Fund harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the Custodian's own negligence, misfeasance, bad
faith or willful misconduct or that of any officer, employee, agent,
sub-custodian and depository of or engaged by the Custodian in the performance
of the Custodian's duties and obligations under this Agreement; PROVIDED,
HOWEVER, that, notwithstanding any other provision in this Agreement, the
Custodian shall not be responsible for the following:
(a) any action taken or omitted in accordance with any Written Order
from the Fund reasonably believed by the Custodian to be genuine and to be
signed by the proper party or parties; or
(b) any action taken or omitted in reasonable reliance on the advice
of counsel of or reasonably acceptable to the Fund relating to any of its
duties and responsibilities hereunder.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the performance by the Custodian (and each officer,
employee, agent, sub-custodian and depository of or engaged by the Custodian) of
its duties and responsibilities under this Agreement PROVIDED THAT the Custodian
(or any officer, employee, agent, sub-custodian and depository of or engaged by
the Custodian, as applicable) exercised reasonable care in the performance of
its duties and responsibilities under this Agreement.
ARTICLE 19. EFFECTIVE DATE
This Agreement shall become effective with respect to each Series that
adopts this Agreement when this Agreement shall have been approved with respect
to such Series by the Board of Directors of the Fund. The effective date with
respect to each Series shall be set forth on EXHIBIT A hereto. The Fund shall
transmit to the Custodian promptly after such approval by said Board of
Directors a copy of its resolution embodying such approval, certified by the
Secretary of the Fund.
<PAGE>
ARTICLE 20. GOVERNING LAW
This Agreement is executed and delivered in Minneapolis, Minnesota, and the
laws of the State of Minnesota shall be controlling and shall govern the
construction, validity and effect of this contract.
IN WITNESS WHEREOF, the Fund and the custodian have caused this Agreement
to be executed in duplicate as of the date first above written by their duly
authorized officers.
ATTEST: FORTIS MONEY PORTFOLIOS, INC.
/s/ Michael J. Radmer By /s/ Edward M. Mahoney
- ----------------------------- ------------------------------
Secretary Its President
----------------------------
ATTEST: NORWEST BANK MINNESOTA, N.A.
/s/ Christine A. Garrick By /s/ Robert Spies
- ----------------------------- ------------------------------
Trust Officer Its Vice President
----------------------------
<PAGE>
Exhibit A
(as amended through March 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS MONEY PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
NAME OF SERIES EFFECTIVE DATE
-------------- --------------
10565610 Fortis Money Portfolio March 21, 1992
<PAGE>
EXHIBIT B
(as amended through March 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS MONEY PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
Compensation Schedule
---------------------
INVENTORY HOLDING CHARGE:
Bonds (face value) x .10M x 1/4
Stock (market value) x .,10M x 1/4
TRANSACTION CHARGE:
TDOA FB Milwaukee trans 10.00 each
Principal transactions 20.00 each
Remittances 2.50 each
VDN transactions 10.00 each
ISSUE CHARGE:
Issues 20.00 each x 1/4
TRUST FEE CREDIT
Average Daily Collected Balance
Less: Reserve of 12%
*Average Positive Daily Balances x Rate x Days/365
*Average Negative Daily Balances x Rate x Days/365
*Credit due using the average 90-day treasury bill rate averaged over the
90-day period ending is .
------------------ ------------------
<PAGE>
Exhibit (j)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fortis Money Portfolios, Inc.:
We consent to the use of our report incorporated herein by reference and the
references to our Firm under the headings "Financial Highlights" in Part A and
"Financial Statements" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 29, 1999
