<PAGE> 1
As filed with the Securities and Exchange Commission on July 11, 1995
Registration No. 33-85710
811-8734
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 3 [x]
Post-Effective Amendment No. [ ]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 3 [x]
(Check appropriate box or boxes)
The CountryBaskets Index Fund, Inc.
(Exact name of registrant as specified in charter)
c/o Deutsche Bank Securities Corporation
(Investment Adviser)
31 West 52nd Street
New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 474-8000
Robert Lynch
c/o Deutsche Bank Securities Corporation (Investment Adviser)
31 West 52nd Street
New York, New York 10019
(Name and Address of Agent for Service)
Copies to:
Stephen K. West, Esq. Tuuli-Ann Ristkok, Esq.
Sullivan & Cromwell Donovan Leisure Newton & Irvine
125 Broad Street 30 Rockefeller Plaza
New York, New York 10004 New York, New York 10112
Approximate date of proposed public offering: As soon as practicable
after the effective date of this Registration Statement.
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Note
This Amendment to the Registration Statement of The CountryBaskets(SM)
Index Fund, Inc. (the "Fund"), formerly Eurofund, Inc., contains one
prospectus and the related SAI.
The prospectus and related SAI filed as part of this Amendment apply
to an offering by the Fund of its shares on a "Fund-only" basis, pursuant
to which sales of shares of each Fund series (a "Series") will only be made
in aggregations of shares constituting a "Creation Unit". For example, an
investor seeking to purchase shares of the Germany Index Series from the
Fund must purchase shares in aggregations of 100,000 Germany Index Series
shares. Each aggregation of 100,000 Germany Index Series shares thus
constitutes a Creation Unit for that Series. Likewise, redemptions of
Series shares may only be made in Creation Unit size aggregations (e.g.,
100,000 shares in the case of the Germany Index Series). An investor may
not redeem shares of any Series in less than Creation Unit size
aggregations. The number of shares constituting a Creation Unit for each
Fund Series differs and is set forth in the Prospectus. Application is
being made to list the shares of each Fund Series (referred to as "CB
Shares(SM)") on the New York Stock Exchange, Inc. (the "NYSE"). This "Fund-
only" prospectus and SAI, first filed with the Securities and Exchange
Commission (the "Commission") as part of Amendment No. 1 to the Fund's
Registration Statement, have been amended as described in the letter, dated
July 11, 1995, from John J. O'Brien and Tuuli-Ann Ristkok to the
Commission.
A second prospectus and related SAI applying to an offering by the
Fund in which shares of the Fund may be exchanged for redeemable units of a
separate unit trust and filed with Amendment No. 1 to the Fund's
Registration Statement on December 2, 1994, are not being amended at this
time and, accordingly, are omitted.
Only one of the two prospectuses and the related SAI will be used
upon the effectiveness of the Registration Statement.
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<PAGE> 3
SUBJECT TO COMPLETION DATED JULY 11, 1995
[FUND-ONLY] PROSPECTUS
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
The CountryBaskets(SM) Index Fund, Inc. (the "Fund") is a management
investment company organized as a series fund, with each series of shares
(a "Series") representing a component of the FT/S&P Actuaries World
Indices(TM) (the "FT Index"). The components of the FT Index are based on
equity securities trading in the markets of a particular country,
geographical region or industry sector.
The initial nine Series offered by this Prospectus are the Australia
Index Series, the France Index Series, the Germany Index Series, the Hong
Kong Index Series, the Italy Index Series, the Japan Index Series, the
South Africa Index Series, the UK Index Series and the US Index Series. The
Board of Directors of the Fund may authorize additional Series.
The investment objective of each of the initial nine Series is to
provide investment results that substantially correspond to the price and
yield performance of its corresponding country component of the FT Index.
The shares of common stock of each Series offered hereby are sometimes
referred to herein as "CB Shares(SM)". The Fund will sell and redeem shares
of each Series only in aggregations of a specified number of shares for such
Series (each, a "Creation Unit") at their net asset value principally for an
in-kind portfolio of equity securities of the relevant FT Index component,
together with some cash. Except in Creation Unit size aggregations, the CB
Shares(SM) are not redeemable securities of the Fund. The number of CB
Shares(SM) constituting a Creation Unit will initially be either 100,000 or
75,000 CB Shares(SM), depending on the Series. See "The Fund--Purchase and
Issuance of Fund Shares in Creation Unit Aggregations" and "--Redemption of
Fund Shares in Creation Unit Aggregations".
Investors may not redeem CB Shares(SM) in less than Creation Unit
aggregations.
Application is being made to list the non-redeemable CB Shares(SM)
for trading on the New York Stock Exchange, Inc. (the "NYSE"). It is expected
that the non-redeemable CB Shares(SM) will trade on the NYSE during the day
at prices that differ to some degree from their net asset value. See "The
Fund--Determination of Net Asset Value", "--Exchange Listing and Trading"
and "--Investment Considerations and Risks".
Deutsche Bank Securities Corporation ("DBSC"), a subsidiary of
Deutsche Bank AG, will serve as investment adviser to each Series of the
Fund, providing investment advisory, management and certain administrative
services. ALPS Mutual Funds Services, Inc. is the distributor of the Fund.
See "The Fund--Investment Management" and "--Distributor".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund
that an investor should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
, 1995, provides further discussion of certain topics referred to
in this Prospectus and other matters which may be of interest to investors.
The Statement of Additional Information has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. The
Statement of Additional Information may be obtained without charge by
writing to the Fund or the Distributor (at its address set forth on the
back cover of this Prospectus). The Fund's address is c/o Deutsche Bank
Securities Corporation, 31 West 52nd Street, New York, New York 10019.
"The CountryBaskets Index Fund, Inc.", "CountryBaskets" and "CB
Shares" are service marks of DBSC. DBSC has filed applications for
registration of such service marks with the U.S. Patent and Trademark
Office. The Fund is an authorized licensee of such marks.
Distributor:
ALPS Mutual Funds Services, Inc.
Investor Information: 1-800-
Prospectus dated , 1995
***************************************************************************
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
***************************************************************************
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<PAGE> 2
"Financial Times/Standard & Poor's Actuaries World Indices", "FT/S&P
Actuaries World Indices" and "FT/S&P AWI" are trademarks of The Financial
Times Limited ("FT") and Standard & Poor's ("S&P") and have been licensed
for use by DBSC. The Fund is an authorized sublicensee thereof. The Fund
is not sponsored, managed, advised, sold or promoted by FT or S&P and
neither FT nor S&P makes any recommendation regarding the advisability of
investing therein. See the inside front cover of this Prospectus.
The Fund and the securities described herein (the "Products") are
not sponsored, endorsed, sold or promoted by The Financial Times
Limited, Goldman, Sachs & Co. or Standard & Poor's (collectively,
the "Owners"). None of the Owners makes any representation or
warranty, express or implied, to the sponsors of the Products
or any member of the public regarding the advisability of
investing in securities generally or in the Products
particularly or in the ability of the FT/S&P Actuaries World
Indices(TM) (the "Indices") to track general stock market
performance. The Owners' only relationship to Deutsche Bank
Securities Corporation ("Licensee") is the licensing of certain
trademarks and trade names and of the Indices which are
determined, composed and calculated without regard to the
Licensee or the Products. The Owners have no obligation to
take the needs of the Licensee or the Products into
consideration in determining, composing or calculating the
Indices. The Owners are not responsible for and have not
participated in the determination of the prices and amount of
the Products or the timing of the issuance or sale of the
Products. The Owners have no obligation or liability in
connection with the administration, marketing or trading of the
Products.
The Owners do not guarantee the accuracy and/or the
completeness of the Indices or any data included therein and
the Owners shall have no liability for any errors, omissions or
interruptions therein. The Owners make no express or implied
warranties, and expressly disclaim all warranties of quality or
merchantability or fitness for a particular purpose or use with
respect to the Indices or any data included therein. Without
limiting any of the foregoing, in no event shall the Owners
have any liability for any special, punitive, indirect or
consequential damages (including lost profits), even if
notified of the possibility of such damages.
The FT-Actuaries World Indices(TM) were originally developed by
Goldman, Sachs & Co., NatWest Securities Limited and The Financial Times
Limited in 1986, and until May 23, 1995, were jointly published by them. On
May 23, 1995, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., joined The Financial Times Limited and Goldman, Sachs & Co. as a co-
publisher of the FT-Actuaries World Indices(TM), now known as the Financial
Times/Standard & Poor's Actuaries World Indices(TM) or the FT/S&P Actuaries
World Indices(TM). The FT/S&P Actuaries World Indices(TM) are a
continuation of the FT-Actuaries World Indices(TM). Following a transition
period, Standard & Poor's and The Financial Times Limited will jointly
calculate the indices. The Fund is not sponsored by or affiliated with
Standard & Poor's or The Financial Times Limited. References herein to the
"FT Index" and to certain index data prior to May 23, 1995 are to the FT-
Actuaries World Index(TM); references thereafter are to the FT/S&P
Actuaries World Indices(TM).
Unless otherwise specified, all references in this Prospectus to
"dollars", "US $" or "$" are to United States dollars, all references to
"A$" are to Australian dollars, all references to "FF" are to the French
francs, all references to "DM" are to the Deutsche mark, all references to
"HK $" are to Hong Kong dollars, all references to "IL" are to Italian lira,
all references to "Y" are to Japanese Yen, all
<PAGE>
<PAGE> 3
references to "CR" are to South African commercial rands (a currency
abandoned as of March 20, 1995), all references to "R" are to South African
rands and all references to "L" are to pounds sterling. On __________,
1995, the noon buying rates in New York City for cable transfers payable in
the applicable currency, as certified for customs purposes by the Federal
Reserve Bank of New York, were as follows for each US $1.00: A$
____________, FF ____________, DM ____________, HK$ ____________,
____________, Y ____________, R ____________, and L ____________. Some
numbers in this Prospectus have been rounded. All US-dollar equivalents
provided in this Prospectus are calculated at the exchange rate prevailing
on the date to which the corresponding foreign currency amount refers.
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<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and in the Statement of
Additional Information.
The Fund and its
Investment Objective . . The CountryBaskets(SM) Index Fund, Inc., a
Maryland corporation (the "Fund"), is a
management investment company organized as a
series fund. Each series of shares (a
"Series") of the Fund seeks to provide
investment results that substantially
correspond to the price and yield
performance of its corresponding component
of the FT/S&P Actuaries World Indices(TM)
(the "FT Index"). The components of the FT
Index are based on equity securities trading
in the markets of a particular country,
geographical region or industry sector.
The initial nine Series of the Fund are the
Australia Index Series, the France Index
Series, the Germany Index Series, the Hong
Kong Index Series, the Italy Index Series,
the Japan Index Series, the South Africa
Index Series, the UK Index Series and the US
Index Series. Each such Series is non-
diversified. Such Series represent separate
portfolios of equity securities, each
substantially corresponding in composition
and weighting to its respective country
component of the FT Index. There can be no
assurance that the investment objective of
any Series will be achieved. See "The
Fund--The Country Baskets(SM) Index Fund,
Inc. and its Investment Objective". The net
asset value of shares of each Series will
fluctuate. See "The Fund--Determination of
Net Asset Value".
CB Shares(SM) . . . . . . . The shares of common stock of each Series
are sometimes referred to herein as the "CB
Shares(SM)". Except in the Creation Unit
aggregations referred to below, CB
Shares(SM) are not redeemable securities of
the Fund.
Trading of CB Shares(SM)
on the New York Stock
Exchange . . . . . . . . . Application has been made to list the CB
Shares(SM) of each Series for trading on the
New York Stock Exchange, Inc. (the "NYSE").
Their respective symbols are:
Series Trading Symbol
Australia CB Shares(SM) GXA
France CB Shares(SM) GXF
Germany CB Shares(SM) GXG
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<PAGE> 5
Series Trading Symbol
Hong Kong CB Shares(SM) GXH
Italy CB Shares(SM) GXI
Japan CB Shares(SM) GXJ
South Africa CB Shares(SM) GXR
UK CB Shares(SM) GXK
US CB Shares(SM) GXU
It is expected that the non-redeemable CB
Shares(SM) of each Series will trade on the
NYSE at prices that may differ to some
degree from their net asset value. See "The
Fund--Exchange Listing and Trading",
"--Investment Considerations and Risks" and
"--Determination of Net Asset Value".
Book Entry Ownership of
CB Shares(SM) . . . . . The Depository Trust Company, a limited
purpose trust company organized under the
laws of the State of New York (the
"Depositary" or "DTC"), or its nominee will
be the record or registered owner of all
outstanding CB Shares(SM). Beneficial
ownership of CB Shares(SM) will be shown on
the records of the Depositary or its
participants. Certificates will not be
issued for CB Shares(SM). Beneficial owners
of CB Shares(SM) will exercise their rights
through DTC and such participants. See "The
Fund--Book-Entry Only System".
Purchases and Redemptions
of Creation Unit Aggregations
of CB Shares(SM) . . . . . The Fund will issue and redeem CB Shares(SM)
of any Series only in aggregations of a
specified number of shares (each a "Creation
Unit") at their net asset value. A Creation
Unit of the Australia Index Series, the Hong
Kong Index Series, the Italy Index Series
and the South Africa Index Series consists
of 75,000 CB Shares(SM); a Creation Unit of
each other Series consists of 100,000 CB
Shares(SM).
The Fund will offer and sell Creation Unit
size aggregations of shares of each Series
continuously through the Distributor (see
below) at their net asset value next
determined after receipt of a purchase order
in proper form. Creation Unit aggregations
of shares are sold for an in-kind portfolio
of equity securities included in the
relevant component of the FT Index (the
"Fund Basket") and cash in an amount equal
to the difference between the value of a
Fund Basket and the net asset value of the
Creation Unit aggregation of shares (the
"Cash Component"), as described more fully
herein. See "The Fund--Purchase and Issuance
of Fund Shares in Creation Unit
Aggregations" in this Prospectus and
"Purchase and Issuance of Fund Shares in
Creation Unit Aggregations" in the Statement
of Additional Information.
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<PAGE> 6
The Fund will generally redeem shares of
each Series only in Creation Unit size
aggregations at their net asset value,
principally in-kind for a Fund Basket and a
cash payment equal to the difference between
the value of the Fund Basket and the net
asset value of the shares to be redeemed, as
described more fully herein. See "The
Fund--Redemption of Fund Shares in Creation
Unit Aggregations" in this Prospectus and
"Redemption of Fund Shares in Creation Unit
Aggregations" in the Statement of Additional
Information.
Investment Management . . . Deutsche Bank Securities Corporation ("DBSC"
or the "Adviser") will act as investment
adviser and, in addition, will provide
management and certain administrative
services to the Fund. DBSC is a wholly owned
indirect subsidiary of Deutsche Bank AG, a
major German banking institution.
Distributor . . . . . . . . ALPS Mutual Funds Services, Inc. ("ALPS") is
the distributor of the Fund shares (the
"Distributor"). Information about purchases
and redemptions of CB Shares(SM) in Creation
Unit aggregations may be obtained from the
Distributor.
Administrator . . . . . . . State Street Bank and Trust Company ("State
Street") will act as administrator of the
Fund (in such capacity, the "Administrator").
Fees . . . . . . . . . . . For its services as Adviser to each Series,
including services in connection with
lending portfolio securities (see "The
Fund--Lending of Securities"), DBSC will
receive a monthly investment management fee
at an annual rate of .30% of the average
daily net assets of each Series, except for
the Hong Kong and South Africa Index Series,
for which such annual rate will be .45%, and
the US Index Series, for which such annual
rate will be .20%, plus in each case 40% of
the gross investment income excluding
dividends on portfolio securities of each
Series. See "Fees".
Each Series will pay the Distributor for its
distribution services a monthly distribution
services fee equal to such Series' allocable
portion of .02% per annum of the average
aggregate daily net assets ("Aggregate Net
Assets") of all Series up to Aggregate Net
Assets of $2.5 billion, plus .01% per annum
of Aggregate Net Assets of all Series in excess
of $2.5 billion up to $5 billion, plus .005%
per annum of Aggregate Net Assets of all Series
in excess of $5 billion. The Distributor will
also be paid a marketing fee and will be
reimbursed for certain expenses and for payments
made to dealers and other persons for
distribution, marketing and shareholder
services. All payments to the Distributor by
each Series will be made
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<PAGE> 7
under the 12b-1 Plan (as defined herein) of
such Series and will not exceed on an
annualized basis .25% of its average daily
net assets. See "The Fund--Fees".
The Administrator will receive monthly
administrative fees for each Series at an
annual rate of .08% of the average daily net
assets of each Series up to $125 million,
plus .06% of the average daily net assets of
such Series in excess of $125 million up to
$250 million and .04% of average daily net
assets of such Series in excess of $250
million.
Investment Considerations
and Risks . . . . . . . . . An investment in CB Shares(SM) of the
initial nine Series of the Fund involves
risks similar to those of investing in a
broadly based portfolio of equity securities
traded on exchanges in the respective
countries represented by their corresponding
FT Index components. These risks include
equity market fluctuations caused by such
factors as economic and political
developments, changes in interest rates and
perceived trends in stock prices, and, with
respect to each Series other than the US
Index Series, exchange-rate fluctuations.
The net asset value of shares of each Series
will fluctuate with changes in the market
value of its portfolio securities and, in
the case of each Series except the US Index
Series, changes in the market rate of
exchange between the US dollar and the
national currency in which the relevant
component of the FT Index is denominated.
See "The Fund--Investment Considerations and
Risks".
Prior to the date of this Prospectus, there
has been no market for CB Shares(SM) and,
consequently, there can be no assurance that
active trading markets will develop. The
Distributor will not maintain a secondary
market in CB Shares(SM). The market prices
of CB Shares(SM) will fluctuate in
accordance with supply and demand on the
NYSE. The Fund cannot predict whether the CB
Shares(SM) will trade below, at or above
their net asset value. See "The Fund--
Investment Considerations and Risks."
The securities held by each Series, except
for the US Index Series, will primarily be
equity securities of non-U.S. companies.
Non-U.S. companies generally do not provide
all of the disclosure required by U.S. law
and accounting practice. See "The
Fund--Investment Considerations and Risks" in
this Prospectus and "Investment Policies and
Restrictions" in the Statement of Additional
Information.
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<PAGE> 8
The Fund will engage in the lending of its
portfolio securities (see "The Fund--Lending
of Securities") and engage in certain
foreign currency transactions designed to
maintain the value of each non-US Index
Series' assets in terms of the foreign
currency value of its respective FT Index
component (see "The Fund--Investment
Policies" in this Prospectus and "Investment
Policies and Restrictions--Currency
Transactions" in the Statement of Additional
Information).
Dividends and Capital
Gains Distributions . . . . Dividends from net investment income will be
declared and paid at least annually and
capital gains, if any, will be distributed
at least annually. Dividends and capital
gains distributions will be distributed by
each Series in US dollars. The Fund does not
currently maintain a plan for the automatic
reinvestment of cash distributions in
additional shares of the Fund. See "The
Fund--Dividends and Capital Gains
Distributions".
Tax Matters . . . . . . . . The purchase, sale, and redemption of CB
Shares(SM) are taxable events and may result
in a capital gain or loss to investors.
Dividend distributions, capital gain
distributions and capital gains or losses
from redemptions and sales of CB Shares(TM)
may be subject to federal, state and local
taxes.
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<PAGE> 9
SUMMARY OF FUND EXPENSES
The purpose of the following tables is to assist investors in
understanding the various costs and expenses an investor will bear directly
and indirectly in respect of each Series of the Fund. The tables show all
expenses and fees the Fund is expected to incur and are based on estimates
expressed as a percentage of average net assets. "Other Expenses" are
estimated amounts for the current fiscal year. The examples set forth below
are presented for an investment of $1,000(1) as required by rules of the
Securities and Exchange Commission (the "SEC"). The examples in the tables
should not be considered a representation of past or future expenses or
performance. Actual expenses may be greater or less than those shown.
_____________________
(1) As of December 30, 1994, the minimum value of a portfolio of index
securities comprising a Fund Basket (assuming the inclusion of all
stocks in the relevant FT Index component in their exact weightings)
for an in-kind purchase or redemption of a Creation Unit aggregation
of shares of each Series would have been as follows: the Australia
Index Series, $3,215,625; the France Index Series, $4,087,500; the
Germany Index Series, $3,587,500; the Hong Kong Index Series,
$2,446,875; the Italy Index Series, $2,821,875; the Japan Index
Series, $3,925,000; the South Africa Index Series, $2,521,875; the UK
Index Series, $4,875,000; and the US Index Series, $4,700,000.
<PAGE>
<PAGE> 10
<TABLE>
<CAPTION>
Fund Expense Table
The
The The The The South
Australia France The Germany Hong Kong Italy The Japan Africa The UK The US
Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A. Shareholder Transaction Expenses
Maximum Sales Load Imposed on
Purchases of Creation Unit
aggregations of Shares (as a
percentage of amount of
investment) . . . . . . . . . . None None None None None None None None None
Estimated Cost to Investor of
Transferring Securities in Fund
Basket to Fund(a) . . . . . . . $2,176 $3,774 $1,856 $3,192 $1,593 $12,636 $1,888 $5,508 $9,747
Purchases--Cash Component
Transaction Fee(b)
as a percentage of cash amount
of investment . . . . . . . . 1.3% 1.0% 1.0% 1.2% 1.0% 1.32% 2.0% 1.5% 1.0%
as a percentage of total
investment amount . . . . . . .013% .01% .01% .012% .01% .0132% .02% .015% .01%
Deferred Sales Load . . . . . . None None None None None None None None None
Estimated Cost to Redeemer of
Transferring Securities in Fund
Basket from Fund to Redeemer(a) $1,700 $3,060 $1,450 $2,800 $1,180 $9,360 $1,475 $4,080 $6,156
Redemptions--Transaction Fee on
Cash Portion(c)
as a percentage of cash
redemption proceeds . . . . . 1.3% 1.0% 1.0% 1.2% 1.0% 1.32% 1.0% 1.0% 1.0%
as a percentage of total
redemption proceeds . . . . . .013% .01% .01% .012% .01% .0132% .01% .01% .01%
B. Annual Series Operating Expenses
(as a percentage of average net
assets)
Management Fees(d) . . . . . . . .30% .30% .30% .45% .30% .30% .45% .30% .20%
Distribution Fees (12b-1)(e) . . .25% .25% .25% .25% .25% .25% .25% .25% .25%
Other Expenses . . . . . . . . . [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Total Operating Expenses . . . . [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
<PAGE>
<PAGE> 11
<FN>
____________________
(a) Estimated based on a delivery to or from the Fund of one Fund Basket of securities. An investor
purchasing shares in Creation Unit aggregations will bear the costs of transferring the securities in
the Fund Basket to the Fund and an investor redeeming Creation Unit aggregations of shares will bear
the costs of transferring securities in the Fund Basket constituting a portion of the redemption
proceeds from the Fund to the investor. In each case, such costs will include settlement and custody
charges, registration costs, transfer taxes and similar charges. See "Purchase and Issuance of Fund
Shares in Creation Unit Aggregations--The Fund Basket" and "Redemption of Fund Shares in Creation Unit
Aggregations--Redemption Proceeds" in the Statement of Additional Information.
(b) Paid to the Fund and applicable only to the amount of a purchase represented by the Cash
Component to offset the Fund's brokerage and other transaction costs of investing cash in portfolio
securities of the applicable Series. The cash purchase transaction fee is not a sales charge. The
Cash Component is generally estimated to be 1% of the total purchase price, but may amount to
a higher portion in the event that cash is permitted or required by the Adviser to be substituted
for a security or securities in the applicable Fund Basket. See "Purchase and Issuance of Fund Shares
in Creation Unit Aggregations".
(c) Paid to the Fund and applicable only to the amount of redemption proceeds represented by the
cash portion to offset the Fund's brokerage and other transaction costs of selling portfolio
securities of the applicable Series to pay a portion of redemption proceeds. The cash portion is generally
estimated to be 1% of the total redemption proceeds of a Creation Unit aggregation of shares, but the
cash portion could in certain limited circumstances amount to up to 100% of such proceeds. See "Redemption
of Fund Shares in Creation Unit Aggregations".
(d) Management fees are .30% of the average daily net assets of each Series, except for the Hong
Kong and South Africa Index Series, for which such annual rate will be .45%, and the US Index Series,
for which such annual rate will be .20% (see "The Fund--Fees"). In addition, each Series will pay to
the Adviser 40% of the gross investment income, excluding dividends on portfolio securities, of the
Series. Investment income is received primarily from interest earned on the collateral for securities
loaned. See "The Fund--Lending of Securities".
(e) The Distributor will be paid distribution services fees by each Series equal to such Series'
allocable portion of: .02% per annum of the Aggregate Net Assets of all Series up to Aggregate Net
Assets of $2.5 billion, plus .01% per annum of Aggregate Net Assets of all Series in excess of $2.5
billion up to $5 billion, plus .005% per annum of Aggregate Net Assets of all Series in excess of
$5 billion. The Distributor will also be paid a marketing fee and will be reimbursed for certain
expenses and for payments made to dealers and other persons for distribution, marketing and stockholder
services, as more fully described under "The Fund--Fees". All payments to the Distributor by each
Series will be made under the 12b-1 Plan of such Series and will not exceed, on an annualized basis,
.25% of its average daily net assets. See "The Fund--Fees".
</FN>
/TABLE
<PAGE>
<PAGE> 12
C. Examples of Expenses
(a) An investor would pay the following expenses on a $1,000 investment
(payment with a Fund Basket and a Cash Component of $10 (estimated
as 1% of the total purchase price)), assuming (1) a 5% annual
return and (2) redemption (delivery of a Fund Basket and a cash
redemption payment of $10 (estimated as 1% of the total redemption
proceeds)) at the end of each indicated time period:
<TABLE>
<CAPTION>
The The
The The The Hong The The South
Australia France Germany Kong Italy Japan Africa The UK The US
Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year
3 years
5 years
10 years
</TABLE>
(b) An investor would pay the following expenses on the same investment,
assuming no redemptions:
<TABLE>
<CAPTION>
The The
The The The Hong The The South
Australia France Germany Kong Italy Japan Africa The UK The US
Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year
3 years
5 years
10 years
</TABLE>
<PAGE>
<PAGE> 13
Explanation of Table
A. Shareholder Transaction Expenses are charges that investors pay to
buy or sell Creation Unit aggregations of shares of the Fund. See "The
Fund--Purchase and Issuance of Fund Shares in Creation Unit Aggregations"
and "--Redemption of Fund Shares in Creation Unit Aggregations" in this
Prospectus and "Purchase and Issuance of Fund Shares in Creation Unit
Aggregations" and "Redemption of Fund Shares in Creation Unit
Aggregations" in the Statement of Additional Information for an explanation
of how these charges apply.
B. Annual Series Operating Expenses are based on estimated expenses.
Management Fees are paid to DBSC to provide each Series with investment
advisory, management and certain administrative services and services in
connection with the lending of portfolio securities. See "The Fund--Lending
of Securities". Administration fees estimated at .077% of the average daily
net assets of each Series, based on average net assets of US $250,000,000,
are included in "Other Expenses" and are paid to State Street, as
Administrator, to provide the Fund with administrative services.
Distribution fees are paid to ALPS, as Distributor, to provide distribution
services to the Fund. The Distributor will also be paid a marketing fee and
the Distributor will be reimbursed for certain expenses and for payments
made to dealers and other persons providing distribution, marketing and
shareholder services. See "The Fund--Investment Management", "--Distributor",
"--Administrator" and "--Fees" for additional information.
C. Examples of Expenses. The hypothetical examples illustrate the
estimated expenses associated with a $1,000 investment in a Creation Unit
aggregation of Fund shares over periods of 1, 3, 5 and 10 years, based on
the expenses in the table and an assumed annual rate of return of 5%. The
return of 5% and estimated expenses are for illustration purposes only and
should not be considered indications of expected Series expenses or
performance, both of which may vary. The expenses associated with a
hypothetical $1,000 investment in CB Shares(SM) include a pro rata portion
of shareholder transaction expenses associated with the purchase or sale of
a Creation Unit aggregation of shares, which would have been valued as of
December 30, 1994 at between $2,000,000 and $5,000,000, depending on the
Series, assuming for this purpose that the net asset value of a Creation
Unit aggregation of shares were the same as the value of the Fund Basket as
of such date. See footnote 1 to the Summary of Fund Expenses. Based on the
1994 annual rates of return of the FT Index components represented by each
Series, the annual rate of return of each Series, without reinvestment of
dividends, after estimated expenses applicable to the respective Series,
would have been ____% for the Australia Index Series, ____% for the France
Index Series, ____% for the Germany Index Series, ____% for the Hong Kong
Index Series, ____% for the Italy Index Series, ____% for the Japan Index
Series, ____% for the South Africa Index Series, ____% for the UK Index
Series and ___% for the US Index Series. These rates of return do not
include interest earned on collateral from securities loaned, which would
have been increased to the extent of any net interest income so earned.
<PAGE>
<PAGE> 14
THE FUND
The The Fund is a non-diversified, open-end management
CountryBaskets(SM) investment company registered under the Investment
Index Fund, Inc. Company Act of 1940 (the "1940 Act"), organized as
and its Investment a series fund. Each Series of the Fund seeks to
Objective provide investment results that substantially
correspond to the price and yield performance of its
respective component of the FT Index. The FT Index
components are based on the equity securities
trading in the markets of a particular country,
geographic region or industry sector.
The Initial Series. Initially, nine Series of the
Fund will issue shares: the Australia Index Series,
the France Index Series, the Germany Index Series,
the Hong Kong Index Series, the Italy Index Series,
the Japan Index Series, the South Africa Index
Series, the UK Index Series and the US Index Series.
The Board of Directors of the Fund may authorize
additional Series. Each such Series seeks to provide
investment results that substantially correspond to
the price and yield performance of its respective
country component of the FT Index (e.g., the Germany
Index Series seeks to provide investment results
that substantially correspond to the price and yield
performance of the Germany component of the FT
Index). The investment objective of each Series is a
fundamental policy and cannot be changed without the
approval of the holders of a majority of the
respective Series' voting securities (as defined
in the 1940 Act). See "Investment Policies and
Restrictions--Investment Restrictions" in the
Statement of Additional Information. There can be
no assurance that the investment objective of any
Series will be achieved. Each country component of
the FT Index is a capitalization-weighted index of
equity securities traded on the principal securities
exchange(s) and, in some cases, the over-the-counter
market, of that country. The portfolio of equity
securities held by each Series will substantially
correspond in composition and weighting to the
securities comprising the FT Index component which
such Series represents. See "The FT Index Components".
Correlation with the FT Index. The correlation between
the performance of each Series and its respective FT
Index component is expected to be at least 0.95. The
ability to correlate the performance of a Series with
that of the corresponding component of the FT Index
will be affected by, among other things, changes in
securities markets, the manner in which the FT Index
is calculated by the Consortium (as defined below
under "FT/S&P Actuaries World Indices(TM)"), the
expenses incurred by such Series, the asset size of
such Series, and the timing and size of purchases and
redemptions of Creation Unit aggregations of shares.
Investment changes to accommodate purchases and
redemptions of shares in Creation Unit size
aggregations will be made at the direction of the
Adviser to maintain to the extent practicable the
correlation of each Series' portfolio to its
corresponding component of the FT Index.
<PAGE>
<PAGE> 15
Investment Policies Each Series will seek to implement its fundamental
investment objective by a policy of remaining fully
invested, except as described below, in a portfolio
of equity securities that will provide investment
results that substantially correspond to the price
and yield performance of its respective country
component of the FT Index. Each Series will invest
the largest proportion of its net assets
practicable, in any event at least 95% of its net
assets, in the securities of its respective
component of the FT Index, and the weighting of the
portfolio securities of each Series will
substantially correspond to their proportional
representation in the relevant component of the FT
Index. These investment policies are not
fundamental and so may be changed by the Board of
Directors of the Fund without stockholder approval.
Each Series may invest in high quality short-term
fixed income securities as cash reserves, including
securities denominated in US dollars and in the
principal foreign currency or currencies of the
portfolio securities of such Series (the "Series
Currency"). To a limited extent each Series may
also purchase stock index futures contracts and
options thereon traded on recognized exchanges in
the markets relevant to such Series, and purchase
call options, and write (sell) put options, on
securities and indices in such markets. A Series
will invest in such instruments (or combinations
thereof) only for the purpose of exposing cash
reserves and short-term money market investments to
the equity risk and return of the corresponding
component of the FT Index in order to achieve a
higher correlation to such component. Stock index
futures, options and options on futures in which a
Series may invest will be those which the Adviser
believes would, alone or in combination with other
options, replicate the performance of the relevant
FT Index component better than the uninvested cash.
For example, if market conditions make it
impracticable to purchase a security in the
relevant FT Index component, a Series may purchase
or write an option or combination of options on
such security (or a security expected to perform
similarly to the missing index security) to expose
the uninvested assets to the equity risk and return
of such unavailable security and thereby improve
the correlation of the Series with the relevant FT
Index component. A Series will not invest in
options and futures contracts and options thereon
for speculative purposes. See "Investment Policies
and Restrictions--Other Fund Investments" in the
Statement of Additional Information.
Investments other than the equity securities
included in the applicable FT Index component will
not exceed 5% of each Series' net assets. Such
investments include cash and cash equivalents, call
options and stock index futures contracts and
options thereon, and equity securities not included
in the relevant component of the FT Index that may
be an appropriate substitution for an index equity
security if market conditions make it impracticable
to purchase the index security in the relevant
FT Index component. See "Investment Policies and
Restrictions--Other Fund Investments" in the
Statement of Additional Information. The activities
of the Fund are subject to certain restrictions
that may not be changed without stockholder
approval. See "Investment Restrictions of
<PAGE>
<PAGE> 16
the Fund" in this Prospectus and "Investment
Policies and Restrictions--Investment Restrictions"
in the Statement of Additional Information.
Each Series may lend its portfolio securities in an
amount up to 33 1/3% of the value of its total assets
in order to earn additional income and thereby
reduce the effect that expenses have on the Series'
ability to provide investment results that
substantially correspond to the price and yield
performance of the relevant FT Index component. See
"Lending of Securities". Each Series will also
engage in certain foreign currency transactions
that are designed to maintain the correspondence
between the value of the Series' assets and the
foreign currency-denominated values of the
respective indices. A Series will not hold illiquid
assets in excess of 15% of its net assets. For
purposes of this restriction, "illiquid" securities
shall mean securities which may not be sold or
disposed of in the ordinary course of business
within seven days at approximately the value at
which the Series has valued the securities. In the
case of each non-US Index Series, portfolio
securities will not be deemed illiquid securities
if they are traded on an exchange and are not
legally restricted from sale by the Series. See
"Investment Policies and Restrictions" in the
Statement of Additional Information.
Portfolio Turnover. Each Series of the Fund is
permitted to sell securities irrespective of how
long they have been held. Given that the investment
management of each Series is fundamentally
"passive" in that it seeks to provide investment
results corresponding to that of an index, the
portfolio turnover rate for each Series is expected
to be under 50%. Ordinarily, securities will be
purchased or sold by a Series only to reflect
changes in the composition of the corresponding
component of the FT Index or to accommodate cash
flows required by, among other things, redemptions
of Creation Unit aggregations of shares.
FT/S&P Actuaries World The FT/S&P Actuaries World Indices(TM) are jointly
Indices(TM) owned by The Financial Times Limited, Standard &
Poor's (a division of The McGraw-Hill Companies,
Inc.) and Goldman, Sachs & Co. (collectively, the
"Owners"). The Financial Times Limited and Standard
& Poor's are jointly responsible for the calculation
of the FT Index components and The Institute of
Actuaries and The Faculty of Actuaries, the English
and Scottish bodies, respectively, that represent
the actuarial profession in the United Kingdom
(together with the Owners, the "Consortium") provide
assistance in managing the FT Index. The aim of the
Consortium is to create and maintain a series of equity
indices for use by the global investment community.
Selection Criteria. The World Index Policy
Committee (the "WIPC") makes all policy decisions
concerning the FT Index, including: objectives,
selection criteria, market representativeness,
calculation methodologies, and additions and
deletions of constituent securities. The WIPC makes
these decisions in a manner that is consistent with
the stated aims and objectives of the Consortium.
With respect to each
<PAGE>
<PAGE> 17
country, regional or sector component of the FT
Index, WIPC's objective is to capture 85% of the
"investible universe" of such country, region or
sector. The "investible universe" for a particular
component of the FT Index consists of the aggregate
capitalization of all equity securities listed on
the exchanges monitored within the relevant market
after application of five exclusionary "screens"
and certain other rules to the universe of such
exchange-traded equities. A fuller description of
the FT Index and the selection methodology is
included in the Statement of Additional
Information.
Market Capitalization Weighting. The proportional
representation of equity securities in the FT Index
is based on each security's total market
capitalization (that is, its market price times the
number of shares outstanding) relative to other
securities in the same market. The percentage of a
Series' assets to be invested in each equity
security will not deviate significantly from such
security's corresponding proportional
representation in the relevant component of the FT
Index. [FT Index values include dividends on
portfolio securities based on the most up-to-date
indicated annualized rates, adjusted for any
interim changes in, and any firm and precise
forecasts of, expected dividends.] Each Series will
reinvest dividends and distributions it receives as
soon as practicable.
The FT Index The Australia Component. The Australia component of
Components the FT Index consists of stocks that are traded on
the Australian Stock Exchange Limited. As of
December 30, 1994, stocks of 68 issuers were
included. The three largest stocks and the
approximate percentages of the Australia component
represented thereby were Broken Hill Proprietaries
(17.6%), National Australia Bank (7.5%) and CRA
(5.7%), for a total of 30.8% of the Australia
component. The ten largest equity issues in the
Australia component represented approximately 54%
of the Australia component. As of December 30,
1994, equities of the mining, metals and minerals,
commercial and other banking and diversified
industries represented approximately 33.4%, 16.8%
and 8.2%, respectively, or a total of 58.4%, of the
Australia component. Equities comprising the
Australia component of the FT Index accounted for
approximately 83.9% of the aggregate investible
Australian market capitalization.
The France Component. The France component of the
FT Index consists of stocks traded on the seven
French stock exchanges. As of December 30, 1994,
stocks of 102 issuers were included. The three
largest stocks and the approximate percentages of
the France component of the FT Index represented
thereby were Elf Aquitaine (5.5%), Total Petroleum
(3.9%) and LVMH-Moet Vuitton (4.1%), for a total of
13.5% of the France component. The ten largest
equity issues in the France component represented
approximately 36% of the France component. Equities
of the commercial and other banks, oil and retail
industries represented approximately 9.9%, 9.5% and
7.9%, respectively, or a total of 27.3%, of the
France component. As of December 30, 1994, equities
comprising the France component of the FT Index
accounted for approximately 88.2% of the aggregate
investible French market capitalization.
<PAGE>
<PAGE> 18
The Germany Component. The Germany component of the
FT Index consists of stocks that are traded on the
Frankfurt Stock Exchange. As of December 30, 1994,
stocks of 58 issuers were included. The three
largest stocks and the approximate percentages of
the Germany component of the FT Index represented
thereby were Allianz AG (9.8%), Daimler Benz AG
(7.4%) and Siemens AG (6.8%), for a total of 24.0%
of the Germany component. The ten largest equity
issues in the Germany component represented
approximately 55% of the Germany component.
Equities of the banking, insurance and chemicals
industries represented approximately 16.5%, 16.3%
and 14.0%, respectively, or a total of 46.8%, of
the Germany component. As of December 30, 1994,
equities comprising the Germany component of the FT
Index accounted for approximately 89% of the
aggregate investible universe of the official
market.
The Hong Kong Component. The Hong Kong component of
the FT Index consists primarily of stocks traded on
the Stock Exchange of Hong Kong Limited (the
"HKX"). As of December 30, 1994, stocks of 56
issuers (including two issuers listed on the
Singapore Stock Exchange but not on the HKX) were
included. The three largest stocks and the
approximate percentages of the Hong Kong component
represented thereby were Hutchison Whampoa (8.8%),
Sun Kung Kai Properties (8.4%), and Hang Seng Bank
(8.4%), for a total of 25.6% of the Hong Kong
component. The ten largest equity issues in the
Hong Kong component represented approximately 55%
of the Hong Kong component. Equities of the real
estate, utilities, and diversified holding
companies represented approximately 37.4%, 13.3%
and 12.0%, respectively, or a total of 62.7%, of
the Hong Kong component. As of December 30, 1994,
equities comprising the Hong Kong component of the
FT Index accounted for approximately 81% of the
aggregate investible market capitalization of the
HKX.
The Italy Component. The Italy component of the FT
Index consists of stocks that are traded on the
Milan Stock Exchange. As of December 30, 1994,
stocks of 59 issuers were included. The three
largest stocks and the approximate percentages of
the Italy component represented thereby were
Generali (14.2%), Telecom Italia (12.8%) and Stet
(8.5%), for a total of 35.5% of the Italy
component. The ten largest equity issues in the
Italy component represented approximately 63% of
the Italy component. Equities of the insurance,
utilities and automobile industries represented
approximately 27.6%, 25.8% and 10.4%, respectively,
or a total of 63.8%, of the Italy component. As of
December 30, 1994, equities comprising the Italy
component of the FT Index accounted for
approximately 89.7% of the aggregate investible
Italian market capitalization.
The Japan Component. The Japan component of the FT
Index consists of stocks traded on the Tokyo and
Osaka Stock Exchanges. As of December 30, 1994,
stocks of 468 issuers were included. The three
largest stocks and the approximate percentages of
the Japan component
<PAGE>
<PAGE> 19
represented thereby were Toyota Motor (2.8%),
Mitsubishi Bank (2.6%) and Industrial Bank of Japan
(2.5%), for a total of 7.9% of the Japan component.
The ten largest equity issues in the Japan
component represented approximately 21% of the
Japan component. Equities of the commercial and
other banks, financial institutions and services,
and electronics and instrumentation industries
represented approximately 22.9%, 6.0% and 6.0%,
respectively, or a total of 34.9%, of the Japan
component. As of December 30, 1994, equities
comprising the Japan component of the FT Index
accounted for approximately 83.1% of the aggregate
investible market capitalization of the Tokyo Stock
Exchange.
The South Africa Component. The South Africa
component of the FT Index consists of stocks that
are traded on the Johannesburg Stock Exchange. As
of December 30, 1994, stocks of 59 issuers were
included. The three largest stocks and the
approximate percentages of the South Africa
component represented thereby were Anglo American
Corp. (10.4%), De Beers/Centenary (6.8%) and South
African Breweries (5.1%), for a total of 22.3% of
the South Africa component. The ten largest equity
issues in the South Africa component represented
approximately 46% of the South Africa component.
Equities of the precious metals and minerals, life
and agents/brokers insurance, and diversified
holding companies industries represented
approximately 44.7%, 8.0% and 7.8%, respectively,
or a total of 60.5%, of the South Africa component.
As of December 30, 1994, equities comprising the
South Africa component of the FT Index accounted
for approximately 82.2% of the aggregate investible
market capitalization of the Johannesburg Stock
Exchange.
The UK Component. The UK component of the FT Index
consists of stocks that are traded on the London
Stock Exchange. As of December 30, 1994, stocks of
204 issuers were included. The three largest stocks
and the approximate percentages of the UK component
represented thereby were British Telecom (4.0%),
British Petroleum (4.0%) and Shell Transport &
Trading (3.9%), for a total of 11.9% of the UK
component. The ten largest equity issues in the UK
component represented approximately 28% of the UK
component. Equities of the utilities, commercial
and other banks, and health and personal care
industries represented approximately 13.5%, 10.7%
and 8.8%, respectively, or a total of 33.0%, of the
UK component. As of December 30, 1994, equities
comprising the UK component of the FT Index
accounted for approximately 88.4% of the aggregate
investible universe of the London Stock Exchange.
The US Component. The US component of the FT Index
consists of stocks traded on the NYSE, the American
Stock Exchange and the National Association of
Securities Dealers Automated Quotation (NASDAQ)
system. As of December 30, 1994, stocks of 513
issuers were included. The three largest stocks and
the approximate percentages of the US component
represented thereby were General Electric (2.7%),
AT&T (2.4%) and Exxon Corp. (2.3%), for a total of
7.4% of the US
<PAGE>
<PAGE> 20
component. The ten largest equity issues in the US
component represented approximately 18% of the US
component. Equities of the utilities, health and
personal care and oil industries represented
approximately 14.6%, 9.8% and 7.6%, respectively,
or a total of 32%, of the US component. As of
December 30, 1994, equities comprising the US
component of the FT Index accounted for
approximately 86.8% of the aggregate investible
United States market capitalization.
Investment Management DBSC will act as investment adviser to the Fund
and, subject to the supervision of the Board of
Directors of the Fund, will be responsible for
management of each Series' affairs, including
providing certain administrative services and
services in connection with the lending of
portfolio securities, pursuant to an Investment
Management Agreement entered into with the Fund
with respect to each Series. The Adviser receives a
fee from the Fund for its services. See "Fees" in
this Prospectus and "Investment Advisory,
Management and Administrative Services--The
Investment Adviser" in the Statement of Additional
Information. DBSC is organized under Delaware law
and is registered as an investment adviser under
the Investment Advisers Act of 1940 and as a
broker-dealer under the Securities Exchange Act of
1934 (the "Exchange Act"). DBSC is a wholly owned
indirect subsidiary of Deutsche Bank AG, a major
German banking institution ("Deutsche Bank").
DBSC is engaged in the securities underwriting and
securities brokerage businesses. The principal
business address of DBSC is 31 West 52nd Street,
New York, New York 10019. Subject to best price
together with efficient execution, the Fund may
place orders for the purchase and sale of
securities for the Fund's portfolio with both DBSC
and Deutsche Bank, among other brokers and dealers,
and incur brokerage commissions for such
transactions. All portfolio transactions with DBSC,
Deutsche Bank and their affiliates will be done on
an agency basis. No portfolio transaction on a
principal basis will be done with DBSC, Deutsche
Bank or their affiliates in securities, foreign
currency or other assets.
Distributor ALPS Mutual Funds Services, Inc. is the Distributor
of CB Shares(SM) (see "CB Shares(SM)" below). Its
address is 370 17th Street, Suite 2700, Denver,
Colorado 80202, and investor information can be
obtained by calling 1-800- - . CB Shares(SM)
will be sold by the Fund and distributed only in
Creation Unit size aggregations, as described below
under "Purchase and Issuance of Fund Shares in
Creation Unit Aggregations". CB Shares(SM) in less
than Creation Unit size aggregations will not be
distributed by the Distributor. The Distributor is
a registered broker-dealer under the Exchange Act.
The Distributor was incorporated in 1986 under
Colorado law. The Distributor has entered into a
Distribution Agreement with the Fund pursuant to
which it will distribute Fund shares. The
Distributor will receive fees from the Fund for its
services. See "Fees" below and "Purchase and
Issuance of Fund Shares
<PAGE>
<PAGE> 21
in Creation Unit Aggregations -- The Distributor" in
the Statement of Additional Information.
Administrator State Street will act as Administrator of the Fund
pursuant to an Administration Agreement with the
Fund and will be responsible for certain clerical,
recordkeeping and bookkeeping services, except
those to be performed by the Adviser or by State
Street in its capacity as Custodian. See
"Investment Advisory, Management and Administrative
Services -- The Administrator, Custodian and Transfer
Agent" in the Statement of Additional Information.
Custodian and Transfer State Street serves as the Custodian for the cash
Agent and portfolio securities of each Series of the Fund
and provides fund accounting services pursuant to a
Custodian Agreement between State Street and the
Fund. State Street also provides transfer agency
services (in such capacity, the "Transfer Agent")
pursuant to an agreement with the Fund. State
Street, as Custodian and Transfer Agent, has no
role in determining the investment policies of the
Fund or which securities are to be purchased or
sold by the Fund. The principal business address of
State Street is 225 Franklin Street, Boston,
Massachusetts 02110.
Fees As Adviser, DBSC will be paid a fee, computed daily
and paid monthly, at an annual rate of .30% of the
average daily net assets of each Series, except for
the Hong Kong and South Africa Index Series, for
which such annual rate will be .45%, and the US
Index Series, for which such annual rate will be
.20%, plus in each case 40% of the gross investment
income, excluding dividends on securities held in
the portfolio, of such Series. See "Summary of Fund
Expenses" for the fee for each Series.
Pursuant to a plan with respect to each Series
(each, a "12b-1 Plan") adopted by the Board of
Directors of the Fund under Rule 12b-1 under the
1940 Act, each Series will pay the Distributor such
Series' allocable portion of the aggregate
distribution services fees payable by all Series of
the Fund, equal to .02% per annum of the Aggregate Net
Assets of all Series up to Aggregate Net Assets of
$2.5 billion, plus .01% per annum of Aggregate Net
Assets of all Series in excess of $2.5 billion up to
$5 billion, plus .005% per annum of Aggregate Net
Assets of all Series in excess of $5 billion. In
addition, each Series will pay the Distributor
for marketing and promotional services pursuant to a
Marketing Agreement with the Distributor (the
"Marketing Agreement") such Series' allocable portion
of the aggregate marketing fees payable by all Series
subject to the Marketing Agreement, equal to .23% per
annum of the Aggregate Net Assets of all such Series
up to Aggregate Net Assets of $200 million, plus .03%
per annum of Aggregate Net Assets of all such Series
in excess of $1.5 billion up to $5 billion, plus .015%
per annum of Aggregate Net Assets of all such Series
in excess of $5 billion. Each Series will also
<PAGE>
<PAGE> 22
reimburse the Distributor and/or the Adviser for
its costs incurred in producing marketing material
prepared at the request of the Series. The Distributor
will also be reimbursed for payments made to dealers
or other persons for providing distribution, marketing
and shareholder services. The fees paid by a Series
under its 12b-1 Plan will be compensation for
distribution or marketing services for that Series.
Aggregate payments under each 12b-1 Plan will not
exceed, on an annualized basis, .25% of average
daily net assets of the applicable Series. Each
12b-1 Plan is subject to approval annually by the
Board of Directors. See "Purchase and Issuance of
Fund Shares in Creation Unit Aggregations -- The
Distributor" in the Statement of Additional
Information.
The Administrator will receive monthly
administrative fees from the Fund at an annual rate
of .08% of the average daily net assets of each
Series up to $125 million, plus .06% of the average
daily net assets of each Series in excess of $125
million up to $250 million and .04% of the average
daily net assets of each Series in excess of $250
million. In addition, the Administrator will be
reimbursed for its own out-of-pocket costs incurred
in providing administration services.
In addition to the fees described above, the Fund
will be responsible for the payment of expenses
that will include, among other things,
organizational expenses, compensation of the
Directors of the Fund, reimbursement of out-of-
pocket expenses incurred by the Administrator,
exchange listing fees, brokerage costs and
litigation and extraordinary expenses.
CB Shares(SM) The shares of common stock, par value $.001 per
share, of each Series are referred to herein as the
"CB Shares(SM)". The CB Shares(SM) of the initial
nine series of the Fund are the "Australia CB
Shares(SM)", the "France CB Shares(SM)", the
"Germany CB Shares(SM)", the "Hong Kong CB
Shares(SM)", the "Italy CB Shares(SM)", the "Japan
CB Shares(SM)", the "South Africa CB Shares(SM)",
the "UK CB Shares(SM)", and the "US CB Shares(SM)".
Except in the Creation Unit size aggregations
described under "Creation Units" below, CB
Shares(SM) are not redeemable securities of the
Fund.
Exchange Listing Application is being made to list the CB Shares(SM)
and Trading of each Series for trading on the NYSE. The CB
Shares(SM) are expected to trade on the NYSE at
prices that may differ to some degree from their
net asset value. See "Investment Considerations and
Risks" and "Determination of Net Asset Value".
There can be no assurance that the requirements of
the NYSE necessary to maintain the listing of CB
Shares(SM) of any Series will continue to be met or
will remain unchanged. The NYSE may remove the CB
Shares(SM) of a Series from listing if (1)
following the initial twelve-month period beginning
upon the commencement of trading of a Series of CB
Shares(SM), there are fewer than 50 record and/or
beneficial holders of the CB Shares(SM) for 30 or
more consecutive trading days, (2) the value of the
underlying index or portfolio of securities on
which such Series is based is no longer calculated
or available or (3) such other event shall occur or
<PAGE>
<PAGE> 23
condition exist that, in the opinion of the
NYSE, makes further dealings on the NYSE
inadvisable. In addition, the NYSE will remove the
CB Shares(SM) from listing and trading upon
termination of the Fund.
Creation Units The Fund will issue and redeem CB Shares(SM) of
each Series only in aggregations of a specific
number of shares applicable to a Series. See
"Purchase and Issuance of Fund Shares in Creation
Unit Aggregations" and "Redemption of Fund Shares
in Creation Unit Aggregations". A Creation Unit of
the Australia Index Series, the Italy Index Series,
the Hong Kong Index Series or the South Africa
Index Series consists of 75,000 shares; a Creation
Unit of each other Series consists of 100,000
shares. The Board of Directors of the Fund reserves
the right to declare a split in the number of CB
Shares(SM) outstanding of any Series, and to make a
corresponding change in the number of CB Shares(SM)
constituting a Creation Unit, in the event that the
per CB Share(SM) price in the secondary market
rises to an amount that exceeds the desirable
retail range.
Investment An investment in CB Shares(SM) of each Series
Considerations and involves risks similar to those of investing in a
Risks broadly-based portfolio of equity securities traded
on exchanges in the countries represented by the
relevant FT Index component, such as market fluctu-
ations caused by such factors as economic and
political developments, changes in interest rates
and perceived trends in stock prices. Investing in
Fund Series whose portfolios contain securities of
non-U.S. issuers involves certain risks and
considerations not typically associated with
investing in the securities of U.S. issuers. These
risks include generally greater price volatility;
reduced liquidity and the significantly smaller
market capitalization of most non-U.S. securities
markets; more substantial government involvement in
the economy; higher rates of inflation; greater
social, economic, and political uncertainty and the
risk of nationalization or expropriation of assets
and risk of war.
Each Series of the Fund is classified as "non-
diversified" for purposes of the 1940 Act, which
means the Series is not limited by the 1940 Act
with regard to the portion of its assets that may
be invested in the securities of a single issuer.
However, each Series intends to maintain the
required level of diversification and otherwise
conduct its operations so as to qualify as a
"regulated investment company" for purposes of the
Internal Revenue Code of 1986 (the "Code"), which
will relieve the Series of any liability for
Federal income tax to the extent that its earnings
are distributed to shareholders. See "Dividends and
Capital Gains Distributions" in this Prospectus and
"Taxes" in the Statement of Additional Information.
To a limited extent, each Series may purchase stock
index futures contracts and options thereon traded
on recognized exchanges in the markets relevant to
such Series. Each Series may also purchase call
options and write (sell) covered put options on
securities and indices in such markets. The purpose
of purchasing stock index futures and options
<PAGE>
<PAGE> 24
thereon, purchasing call options and writing put
options is to expose cash reserves and short-term
money market investments to the equity risk and
return of the corresponding component of the FT
Index in order to achieve a higher correlation to
such component. The aggregate value of futures
contracts and options thereon, plus the segregated
assets in respect of such contracts and written put
options, any equity securities in which the Fund
invests as temporary substitutes for FT Index
securities that are unavailable and any other
temporary cash and short-term investments, will not
exceed 5% of the Series' net assets. See
"Investment Policies and Restrictions -- Other Fund
Investments" and "Special Considerations and
Risks -- Options and Futures" in the Statement of
Additional Information.
The Fund is a newly organized investment company
with no previous operating history. As indicated
above, application is being made to list CB
Shares(SM) on the NYSE. There can be no assurance
that active trading markets for the CB Shares(SM)
will develop. The Distributor will not maintain a
secondary market in CB Shares(SM). Trading in CB
Shares(SM) on the NYSE may be halted due to market
conditions or, in light of NYSE rules and
procedures, for reasons that, in the view of the
NYSE, make trading in CB Shares(SM) inadvisable. In
addition, trading in CB Shares(SM) on the NYSE will
be subject to trading halts caused by extraordinary
market volatility pursuant to NYSE "circuit
breaker" rules that require trading in securities
on the NYSE to be halted for a specified time
period in the event of a specified market decline.
There can be no assurance that the requirements of
the NYSE necessary to maintain the listing of CB
Shares(SM) of any Series will continue to be met or
will remain unchanged. See "Exchange Listing and
Trading".
The net asset value of the CB Shares(SM) of each
Series will fluctuate with changes in the market
value of the portfolio securities of the Series
and, in each case other than the US Index Series,
changes in the market rate of exchange between the
US dollar and the Series Currency. The market
prices of CB Shares(SM) will fluctuate in
accordance with supply and demand on the NYSE. The
Fund cannot predict whether the CB Shares(SM) will
trade below, at or above their net asset value.
Price differences may be due, in large part, to the
fact that supply and demand forces at work in the
secondary trading market for CB Shares(SM) will be
closely related to, but not identical to, the same
forces influencing the prices of the stocks of the
relevant FT Index component trading individually or
in the aggregate at any point in time.
Because each Series' assets, except those of the US
Index Series, will generally be invested in non-
U.S. securities, the US dollar equivalent of a
Series' net assets would be adversely affected by
reductions in the value of such foreign currencies
relative to the dollar and would be positively
affected by increases in the value of such foreign
currencies relative to the dollar. The Fund does
not expect to engage in currency transactions for
the purpose of hedging against the decline in value
of any Series Currency. Each Series may, however,
purchase forward <PAGE>
<PAGE> 25
contracts, currency futures contracts
and options on such contracts and currency
call options in the Series Currency (other
than the US dollar) up to the aggregate amount of
any US dollar-denominated assets to maintain
exposure to the Series Currency and may engage in
currency transactions for the purpose of meeting
the US dollar cash requirements of redemptions of
Series shares in Creation Unit size aggregations.
See "Investment Policies and Restrictions -- Currency
Transactions" in the Statement of Additional
Information.
CB Shares(SM) may be more susceptible to any single
economic, political or regulatory occurrence than
the portfolio securities of an investment company
that is more broadly invested in the equity securi-
ties of the relevant market than the Fund Series.
In addition, the securities held by each Series
other than the US Index Series will primarily be
equity securities of non-U.S. companies, which do
not provide all of the disclosure required by U.S.
law and accounting practice.
Purchasers of Creation Unit aggregations of Shares
should also see "Special Considerations and
Risks -- Continuous Offering" in the Statement of
Additional Information.
Dividends and Capital Dividends from net investment income, including net
Gains Distributions foreign currency gains, if any, will be declared
and paid at least annually and capital gains, if
any, will be distributed at least annually.
Dividends and capital gains distributions will be
distributed by each Series in US dollars. The Fund
does not currently maintain a plan for the
automatic reinvestment of cash distributions in
additional CB Shares(SM). The Fund will inform
stockholders of the amount and nature of all
distributions made to them.
Tax Matters Each Series intends to qualify for and to elect
treatment as a "regulated investment company" under
Subchapter M of the Code. As a regulated investment
company, a Series will not be subject to U.S.
federal income tax on its income and gains that it
distributes to stockholders, provided that it
distributes annually at least 90% of its net
investment income. Net investment income includes
income from dividends and interest and gains and
losses from foreign currency transactions net of
operating expenses plus the Series' net short-term
capital gains in excess of its net long-term
capital losses. Each Series intends to distribute
at least annually to its stockholders all of its
net investment income and any net long-term capital
gains. See "Taxes -- Tax Treatment of the Fund" in the
Statement of Additional Information.
Dividends paid out of a Series' net investment
income and distributions of net realized short-term
capital gains in excess of long-term capital losses
are taxable to a U.S. investor as ordinary income.
Distributions of net long-term capital gains, if
any, in excess of net short-term capital losses are
taxable to a U.S. investor as long-term capital
gains, regardless of how long the investor has held
the CB Shares(SM).
<PAGE>
<PAGE> 26
Dividends and distributions paid by a Series other
than the US Index Series generally will not qualify
for the deduction for dividends received by
corporations. Distributions in excess of a Series'
current and accumulated earnings and profits will
generally be treated as a tax-free return of
capital to each of the Series' investors to the
extent of the investor's basis in its CB Shares(SM)
of the Series, and as capital gain thereafter.
Since more than 50% of the value of the total
assets of each Series other than the US Index
Series will consist of stock or securities of
foreign corporations at the close of its taxable
year, each such Series will be eligible to file an
election with the Internal Revenue Service to "pass
through" to its investors the amount of foreign
income taxes (including withholding taxes) paid by
such Series. The foreign income taxes passed
through may qualify as a deduction against income
or as a foreign tax credit against U.S. federal
income taxes. Each investor will be notified within
60 days after the close of the Series' taxable year
of the investor's portion of the foreign income
taxes paid to each country and the portion of
dividends that represents income derived from
sources within each country.
The Fund may be required to withhold for U.S.
federal income tax purposes 31% of the dividends
and distributions payable to investors who fail to
provide the Fund with their correct taxpayer
identification number or to make required
certifications, or who have been notified by the
U.S. Internal Revenue Service that they are subject
to backup withholding. Backup withholding is not an
additional tax; amounts withheld may be credited
against the investor's U.S. federal income tax
liability.
For further information on taxes, see "Taxes" in the
Statement of Additional Information.
Lending of Securities The Fund may lend securities from the portfolio of
each Series to brokers, dealers and other financial
institutions needing to borrow securities to
complete transactions and for other purposes.
Because the cash, government securities or other
assets that are pledged as collateral to the Fund
earn interest, securities lending enables each
Series to earn additional income, which may
partially offset the expenses of the Series and
thereby reduces the effect that expenses have on
the Series' ability to provide investment results
that substantially correspond to the price and
yield performance of the relevant component of the
FT Index. These loans may not exceed 33 1/3% of a
Series' total assets. The Fund will comply with the
conditions for lending established by the SEC. In
connection with these loans, the Series will
receive collateral equal to at least 100% of the
current market value of the loaned securities, as
marked to market each day that the net asset value
of the Series is determined, consisting of cash,
government securities or other assets permitted by
applicable regulations. Each Series will pay
reasonable administrative and custodial fees in
connection with the loan of securities. The
interest income the Series earns from the loan
collateral
<PAGE>
<PAGE> 27
is included in the Series' gross investment income
on which a portion of the management fee paid to
DBSC is based. See "Fees". The Fund will not pay
any finder's fees in connection with the lending of
portfolio securities. See "Investment Policies and
Restrictions -- Lending Portfolio Securities" in the
Statement of Additional Information for further
details of the lending transactions.
Investment Restrictions Each Series intends to observe certain limitations
of the Fund on its investment practices. Specifically, a Series
may not:
(i) lend any funds or other assets except that a
Series may lend its portfolio securities in an
amount not to exceed 33 1/3% of the value of its
total assets;
(ii) issue senior securities or borrow money,
except borrowings from banks (which may be from an
affiliate of the Adviser) for temporary or
emergency purposes in an amount up to 33 1/3% of
the value of the Series' total assets (including
the amount borrowed), valued at the lesser of cost
or market, less liabilities (not including the
amount borrowed) valued at the time the borrowing
is made, and the Series will not purchase
securities while borrowings in excess of 5% of the
Series' total assets are outstanding, provided,
that for purposes of this restriction, short-term
credits necessary for the clearance of transactions
are not considered borrowings;
(iii) pledge, hypothecate, mortgage or otherwise
encumber its assets, except in an amount up to
33 1/3% of the value of its total assets, to secure
permitted borrowings, except that the deposit of
underlying securities and other assets in escrow
and collateral arrangements with respect to initial
or variation margin for currency transactions,
options, futures contracts and options on futures
will not be deemed to be pledges of the Series'
assets;
(iv) purchase a security (other than obligations of
the United States Government, its agencies or
instrumentalities) if as a result 25% or more of
its total assets would be invested in a particular
industry, except that a Series will invest 25% or
more of its total assets in a single industry in
the event that the relevant component of the FT
Index becomes so concentrated.
See "The FT Index" in the Statement of Additional
Information for a description of the ten most
highly represented industry sectors in the FT Index
component for each Series. Except with regard to a
Series' borrowing policy, all percentage
limitations apply immediately after a purchase or
initial investment, and any subsequent change in
any applicable percentage resulting from market
fluctuations or other changes in total or net
assets does not require elimination of any security
from the Series' portfolio. With respect to the
fundamental restriction set forth in (iv) above,
the Adviser has advised the Fund that as of
December 30, 1994, the following FT Index
components were concentrated (in excess
<PAGE>
<PAGE> 28
of 25% of such component) in the stocks of the
indicated industry groups (as defined by the
Consortium):
Australia Mining, Metals and Minerals
Hong Kong Real Estate
Italy Insurance Multi/Property/Casualty
Utilities
South Africa Precious Metals and Minerals
The investment limitations described here, and
certain additional limitations described under
"Investment Policies and Restrictions -- Investment
Restrictions" in the Statement of Additional
Information, may be changed with respect to a
Series only with the approval of the holders of a
majority of the outstanding voting securities (as
defined in the 1940 Act) of such Series.
For a description of additional investment
restrictions of the Fund, see the Statement of
Additional Information.
Determination of Net Net asset value per share for each Series of the
Asset Value Fund is computed by dividing the value of the net
assets of such Series (i.e., the value of its total
assets less total liabilities) by the total number
of CB Shares(SM) of such Series outstanding,
rounded to the nearest cent. Expenses and fees,
including management, administration and
distribution fees, are accrued daily and taken into
account for purposes of determining net asset
value.
The net asset value per CB Share(SM) of each Series
is determined as of the close of the regular
trading session on the NYSE (currently 4:00 p.m.,
New York time) on each day that the NYSE is open.
See "Business Day".
In computing a Series' net asset value, the Series'
portfolio securities are valued based on their last
quoted current sales price (or, if no sales price
is available, most recent bid and asked prices) on
the primary exchange or market upon which they
trade. However, when market quotations are not
readily available, portfolio securities are valued
based on fair value as determined in good faith by
the Adviser in accordance with procedures adopted
by the Board of Directors of the Fund. Events
affecting the values of portfolio securities that
occur between the time their prices are determined
on the primary exchange or market in which they are
traded and the close of regular trading on the NYSE
will not be reflected in the calculation of a
Series' net asset value unless the Adviser
determines that the particular event would
materially affect net asset value, in which case an
adjustment will be made.
The values of portfolio securities denominated in
currencies other than the US dollar, determined as
described above, are converted into US dollars at
the relevant foreign exchange rate for each Series
in effect at 11:00 a.m., New York time, on the day
that the foreign-currency values of the securities
are determined.
<PAGE>
<PAGE> 29
Board of Directors The Board of Directors of the Fund has
responsibility for the overall management of the
Fund, including general supervision of the duties
performed by the Adviser and other service
providers. Additional information about the Board
of Directors and the officers of the Fund appears
in the Statement of Additional Information under
the heading "Management of the Fund -- Directors and
Officers of the Fund".
Capital Stock The Fund, a Maryland corporation incorporated on
August 8, 1994, is currently comprised of nine
series of shares of common stock, par value $.001
per share, referred to herein as "CB Shares(SM)":
the Australia Index Series, the France Index
Series, the Germany Index Series, the Hong Kong
Index Series, the Italy Index Series, the Japan
Index Series, the South Africa Index Series, the UK
Index Series and the US Index Series. The Board of
Directors of the Fund may designate additional
series of common stock and classify shares of a
particular series into one or more classes of that
series.
Each CB Share(SM) issued by the Fund will have a
pro rata interest in the assets of the
corresponding Series. The Fund is currently
authorized to issue 5 billion shares of common
stock, including 200 million shares of each of the
initial nine Series. Fractional shares may be
issued. Each CB Share(SM) has one vote with respect
to matters upon which a stockholder vote is
required; stockholders have no cumulative voting
rights with respect to their shares. Shares of all
series vote together as a single class except that
if the matter being voted on affects only a
particular Series it will be voted on only by that
Series and if a matter affects a particular Series
differently from other Series, that Series will
vote separately on such matter. Under Maryland law,
the Fund is not required to hold an annual meeting
of stockholders unless required to do so under the
1940 Act. The policy of the Fund is not to hold an
annual meeting of stockholders unless required to
do so under the 1940 Act. All shares of the Fund
(regardless of Series) have noncumulative voting
rights for the election of Directors. Under
Maryland law, Directors of the Fund may be removed
by vote of the stockholders.
The Fund has provisions in its charter and by-laws
that could have the effect of limiting the ability
of other entities or persons to acquire control of
the Fund. The Board of Directors currently consists
of [seven] Directors. The Board is divided into
three classes each having a term of three years.
Each year, the term of one class expires and the
successor or successors elected to such class will
serve for a three-year term. This provision could
delay for up to two years the replacement of a
majority of the Board of Directors by the
stockholders of the Fund.
The Fund expects that, immediately prior to the
initial public offering of the CB Shares(SM), the
sole holder of the capital stock of each Series
will be ALPS. Upon the commencement of trading of
CB Shares(SM) on the NYSE, each Series may have a
number of stockholders each holding more than 5% of
the outstanding shares of such Series in Creation
Unit
<PAGE>
<PAGE> 30
size aggregations. The Fund cannot predict the
length of time that such persons will remain
control persons of a Series.
Book-Entry Only System DTC will act as securities depositary for the CB
Shares(SM). CB Shares(SM) will be represented by
global securities, which will be registered in the
name of DTC or its nominee and deposited with, or
on behalf of, DTC. Except as provided below,
certificates will not be issued for CB Shares(SM).
DTC has advised the Fund as follows: it is a
limited-purpose trust company organized under the
laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities of
its participants (the "DTC Participants") and to
facilitate the clearance and settlement of
securities transactions among the DTC Participants
in such securities through electronic book-entry
changes in accounts of the DTC Participants,
thereby eliminating the need for physical movement
of securities certificates. DTC Participants
include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain
other organizations, some of whom (and/or their
representatives) own DTC. More specifically, DTC is
owned by a number of its DTC Participants and by
the NYSE, the American Stock Exchange, Inc., and
the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to
others such as banks, brokers, dealers and trust
companies that clear through or maintain a
custodial relationship with a DTC Participant,
either directly or indirectly (the "Indirect
Participants"). DTC agrees with and represents to
its Participants that it will administer its book-
entry system in accordance with its rules and by-
laws and requirements of law.
Beneficial ownership of CB Shares(SM) will be
limited to DTC Participants, Indirect Participants
and persons holding interests through DTC
Participants and Indirect Participants. Ownership
of beneficial interests in CB Shares(SM) (owners of
such beneficial interests are referred to herein as
"Beneficial Owners") will be shown on, and the
transfer of ownership will be effected only
through, records maintained by DTC (with respect to
DTC Participants) and on the records of DTC
Participants (with respect to Indirect Participants
and Beneficial Owners that are not DTC
Participants). Beneficial Owners are expected to
receive from or through the DTC Participant a
written confirmation relating to their purchase of
CB Shares(SM). The laws of some jurisdictions may
require that certain purchasers of securities take
physical delivery of such securities in definitive
form. Such laws may impair the ability of certain
investors to acquire beneficial interests in CB
Shares(SM).
So long as Cede & Co., as nominee of DTC, is the
registered owner of CB Shares(SM), the registered
or record owners of CB Shares(SM) shall not be the
Beneficial Owners of CB Shares(SM). Beneficial
Owners of CB Shares(SM) will not be entitled to
have CB Shares(SM) registered in their names, will
<PAGE>
<PAGE> 31
not receive or be entitled to receive physical
delivery of certificates in definitive form and
will not be considered the record or registered
holder thereof. Accordingly, each Beneficial Owner
must rely on the procedures of DTC, the DTC
Participant and any Indirect Participant through
which such Beneficial Owner holds its interests, to
exercise any rights of a holder of CB Shares(SM).
The Fund understands that under existing industry
practice, in the event the Fund requests any action
of holders of CB Shares(SM), or a Beneficial Owner
desires to take any action that DTC, as the record
owner of all outstanding CB Shares(SM), is entitled
to take, DTC would authorize the DTC Participants
to take such action and that the DTC Participants
would authorize the Indirect Participants and
Beneficial Owners acting through such DTC
Participants to take such action and would
otherwise act upon the instructions of Beneficial
Owners owning through them.
As described above, the Fund recognizes DTC or its
nominee as the owner of all CB Shares(SM) for all
purposes. Conveyance of all notices, statements and
other communications to Beneficial Owners is
effected as follows. Pursuant to the Depositary
Agreement between the Fund and DTC, DTC is required
to make available to the Fund upon request and for
a fee to be charged to the Fund a listing of the CB
Share(SM) holdings of each DTC Participant. The
Fund shall inquire of each such DTC Participant as
to the number of Beneficial Owners holding CB
Shares(SM), directly or indirectly, through such
DTC Participant. The Fund shall provide each such
DTC Participant with copies of such notice,
statement or other communication, in such form,
number and at such place as such DTC Participant
may reasonably request, in order that such notice,
statement or communication may be transmitted by
such DTC Participant, directly or indirectly, to
such Beneficial Owners. In addition, the Fund shall
pay to each such DTC Participant a fair and
reasonable amount as reimbursement for the expenses
attendant to such transmittal, all subject to
applicable statutory and regulatory requirements.
Distributions with respect to CB Shares(SM) of each
Series shall be made to DTC or its nominee,
Cede & Co., as the registered owner of all CB
Shares(SM). The Fund expects that DTC or its
nominee, upon receipt of any such distributions,
shall credit immediately DTC Participants' accounts
with payments in amounts proportionate to their
respective beneficial interests in CB Shares(SM) as
shown on the records of DTC or its nominee. The
Fund also expects that payments by DTC Participants
to Indirect Participants and Beneficial Owners of
CB Shares(SM) held through such DTC Participants
will be governed by standing instructions and
customary practices, as is now the case with
securities held for the accounts of customers in
bearer form or registered in "street name," and
will be the responsibility of such DTC
Participants. The Fund will have no responsibility
or liability for any aspects of the records
relating to or notices to Beneficial Owners, or
payments made on account of beneficial ownership
interests in such CB Shares(SM), or for
maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or
for any other aspect of the relationship between
DTC and the DTC
<PAGE>
<PAGE> 32
Participants or the relationship between such DTC
Participants and the Indirect Participants and
Beneficial Owners owning through such DTC
Participants.
DTC may determine to discontinue providing its
service with respect to CB Shares(SM) at any time
by giving 90 days' notice to the Fund and
discharging its responsibilities with respect
thereto under applicable law. Under such
circumstances, the Fund shall take action either to
find a replacement for DTC to perform its functions
at a comparable cost or, if such a replacement is
unavailable, to issue and deliver printed
certificates representing ownership of CB
Shares(SM), unless the Fund makes other
arrangements with respect thereto satisfactory to
the NYSE (or such other exchange on which the CB
Shares(SM) may be listed).
Business Day For purposes of purchasing a Creation Unit
aggregation of shares, a "Business Day" with
respect to each Series other than the US Index
Series is any day on which (i) the NYSE, (ii) the
stock exchange(s) and subcustodian(s) relevant to
such Series and (iii) financial institutions in
Massachusetts are open for business and, with
respect to the US Index Series, is any day on which
the NYSE and financial institutions in
Massachusetts are open for business. As of the date
of this Prospectus, the NYSE observes the following
holidays: New Year's Day, President's Day
(Washington's Birthday), Good Friday, Memorial Day
(observed), Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The local
holidays for each current Series of the Fund are
set forth in Appendix A to this Prospectus.
Massachusetts financial institutions, such as the
Fund's Custodian, are open on all days when the
NYSE is open except Columbus Day, Veterans Day and
Martin Luther King Day (observed) for such Series.
See "Purchase and Issuance of Fund Shares in
Creation Unit Aggregations".
Purchase and Issuance The Fund will issue and sell shares of each Series
of Fund Shares in only in Creation Unit size aggregations on a
Creation Unit continuous basis through the Distributor at their
Aggregations net asset value next determined after receipt of a
purchase order in proper form, without a sales
charge, on any Business Day. See "Business Day".
The consideration for purchase of a Creation Unit
size aggregation of shares of a Series will be the
in-kind deposit of a designated portfolio of equity
securities substantially corresponding in
composition and weighting to the corresponding FT
Index component (the "Fund Basket") and an amount
of cash computed as described below (the "Cash
Component"). Together, the Fund Basket and the Cash
Component constitute the "Fund Deposit" which
represents the minimum initial and subsequent
investment amount for shares of any Series from the
Fund. On each day that the NYSE is open,
immediately prior to the opening of business on the
NYSE (currently 9:30 a.m., New York time), the
names and number of shares of each security
constituting the Fund Basket, as determined by the
Adviser at the close of business on the previous
Business Day, for delivery on a subsequent Business
Day designated for such Series on which shares are
to be purchased and issued (the "Issue Date") will
be made available through the Distributor and the
National
<PAGE>
<PAGE> 33
Securities Clearing Corporation. Such Fund Basket
for each Series will be applicable to purchases of
Creation Unit aggregations of Fund shares on the
specified Issue Date, subject to any adjustments
made by the Adviser to reflect changes known to the
Adviser on the date of the announcement of such
Fund Basket to be in effect on the Issue Date in
the relevant component of the FT Index or resulting
from stock splits and other corporate actions. See
"Purchase and Issuance of Fund Shares in Creation
Unit Aggregations -- The Fund Basket" in the Statement
of Additional Information. The Cash Component will
equal the difference between the value of the Fund
Basket and the net asset value of a Creation Unit
aggregation of shares as determined on the Issue
Date. If the value of the Fund Basket should exceed
the net asset value of a Creation Unit size
aggregation of shares on a Business Day, the
Adviser may determine to accept fewer (or none) of
each, or a designated portion, of the portfolio
securities comprising the Fund Basket and may
request some cash to be substituted for the omitted
securities in order to limit the value of the Fund
Basket as tendered to the net asset value of the
Creation Unit of shares. Securities not accepted as
part of the Fund Basket will be returned. The net
asset value per share of each Series will be
computed as described above under "Determination of
Net Asset Value" at the close of business on the
NYSE (currently 4:00 p.m., New York time). Tendered
securities in the Fund Basket will be valued in the
same manner as the relevant Series values its
portfolio securities.
The Fund Basket for each Series will generally
change with changes in the corresponding FT Index
component; in addition, the Adviser reserves the
right to permit or require the substitution of an
amount of cash to be added to the Cash Component to
replace any security in the relevant FT Index
component which may not be available in sufficient
quantity for delivery or for other similar reasons.
The Fund Basket must be delivered for receipt on
the Issue Date into an account maintained at the
Custodian, in the case of the US Index Series, or
the applicable local subcustodian, in the case of
each other Series. Delivery procedures of local
subcustodians will vary from country to country.
Purchase orders for Creation Unit size aggregations
of shares may be placed with the Distributor only
by an "Authorized Participant", i.e., a DTC
Participant who has entered into an Authorized
Participant Agreement (the "Authorized Participant
Agreement") with the Distributor and the Fund. The
Authorized Participant Agreement sets forth
procedures for the purchase and redemption of
Creation Unit aggregations of Fund shares that
supplement those discussed in this Prospectus and
the Statement of Additional Information. The Fund
does not expect to enter into Authorized
Participant Agreements with more than a few
Authorized Participants. Investors who are not
Authorized Participants must make appropriate
arrangements with an Authorized Participant in
order to purchase Creation Unit size aggregations
of shares from the Fund. A list of the Authorized
Participants may be obtained from the Distributor.
These arrangements include making available in
advance of each purchase of shares an amount of
cash sufficient to pay
<PAGE>
<PAGE> 34
the Cash Component, once the net asset value of a
Creation Unit is next determined after receipt of
the purchase order in proper form, together with
the cash transaction fee described below.
For a purchase order submitted by an Authorized
Participant (on its own or on another investor's
behalf) to be in "proper form" means that a properly
completed purchase order has been submitted to the
Distributor not later than 4:00 p.m., New York time,
on the intended Issue Date; that delivery of the
applicable Fund Basket has been confirmed on such
date by the Custodian; and that arrangements
satisfactory to the Fund have been made for the
payment to the Custodian on such date of the Cash
Component (together with the Cash Component
transaction fee), as next determined upon
computation of the net asset value of shares of the
Series at 4:00 p.m. on such Issue Date. Currently,
information needed to confirm the delivery of the
Fund Basket will generally be available to the
Custodian by 3:00 p.m., New York time, in the case
of the US Index Series and by 1:00 p.m., New York
time, in the case of the other Series. The Fund,
and the Distributor on behalf of the Fund, reserve
the right to reject any order until acceptance.
A cash transaction fee payable to the Fund is
imposed only on the amount of the Cash Component to
compensate the Fund for the brokerage and other
costs of investing the cash in portfolio securities
of the applicable Series. Investors are also
responsible for payment of the costs of
transferring the Fund Basket securities to the
Fund. See "Summary of Fund Expenses".
Purchase orders for Creation Unit aggregations of
shares may be directed to the Distributor through
an Authorized Participant by a dealer which has
entered into an agreement with the Distributor for
solicitation of purchases of Creation Unit
aggregations of shares.
See "Distributor" and "Fees", above, and "Purchase
and Issuance of Fund Shares in Creation Unit
Aggregations -- The Distributor" in the Statement of
Additional Information, for additional information
concerning the distribution arrangements for Fund
shares. See "Purchase and Issuance of Fund Shares
in Creation Unit Aggregations" in the Statement of
Additional Information for additional details
concerning the purchase of CB Shares(SM) from the
Fund in Creation Unit aggregations.
Redemption of Fund CB Shares(SM) in less than Creation Unit size
Shares in Creation aggregations are not redeemable. CB Shares(SM) of a
Unit Aggregations Series may be redeemed only in Creation Unit size
aggregations on any day that the NYSE is open for
trading at their net asset value next determined
after receipt of a redemption request in proper
form by the Distributor on behalf of the Fund.
"Proper form" for a redemption request means
receipt of a duly completed redemption request form
by the Distributor from an Authorized Participant
by 4:00 p.m., New York time, on any day the NYSE is
open, and delivery of the shares being redeemed to
the Transfer Agent through the facilities of DTC by
4:00 p.m. on such day. Investors other than
Authorized
<PAGE>
<PAGE> 35
Participants must make arrangements through an
Authorized Participant in order to redeem their
Creation Unit aggregations of shares. Such
investors should allow for the additional time that
may be required to effect redemptions through their
banks, brokers or other financial intermediaries if
such intermediaries are not Authorized
Participants. Investors who use the services of a
broker or other such intermediary may be charged a
fee for their services. The Distributor will
furnish a list of the Authorized Participants on
request.
The Fund generally will redeem a Creation Unit
aggregation of shares of a Series principally on an
in-kind basis for a Fund Basket as announced by the
Distributor prior to the opening of business on the
NYSE on the day of the request for redemption, plus
cash in an amount equal to the difference between
the net asset value of the shares being redeemed,
as next determined after a receipt of a request in
proper form, and the value of the Fund Basket, less
the redemption cash transaction fee described
below. If the value of the Fund Basket should
exceed the net asset value of a Creation Unit size
aggregation of shares, the Adviser may determine
that fewer (or none) of each, or a designated
portion, of the portfolio securities comprising the
Fund Basket will be required to be delivered and an
amount of cash may be substituted for the omitted
securities in order to limit the value of the
redemption proceeds to the net asset value of the
Creation Unit aggregation of shares being redeemed.
The in-kind redemption proceeds will generally be
delivered within seven calendar days of the day on
which the redemption request is received in proper
form except, in the case of the Japan Index Series
and the UK Index Series, where because of local
holiday schedules, delivery may be made within a
few additional days as permitted by an order of
the SEC. See Appendix A to this Prospectus and
"Redemption of Fund Shares in Creation Unit
Aggregations" in the Statement of Additional
Information. The cash redemption proceeds will be
paid to the Authorized Participant redeeming shares
on behalf of the redeeming investor as soon as
practicable after the date of redemption (but in
any event within seven calendar days thereafter).
Investors may purchase CB Shares(SM) in the
secondary market and aggregate such purchases into
a Creation Unit for redemption. There can be no
assurance, however, that there always will be
sufficient liquidity in the public trading market
to permit assembly of a Creation Unit size
aggregation of CB Shares(SM). Investors should
expect to incur brokerage and other costs in
connection with assembling a sufficient number of
CB Shares(SM) to constitute a redeemable Creation
Unit. The approximate cost of a Creation Unit of
each Series, based on FT Index values at
December 30, 1994, is indicated in Note 1 to the
Fund Expense Table under "Summary of Fund
Expenses".
For additional details concerning the redemption of
Fund shares in Creation Unit aggregations, see
"Redemption of Fund Shares in Creation Unit
Aggregations" in the Statement of Additional
Information.
<PAGE>
<PAGE> 36
A cash redemption transaction fee payable to the
Fund is imposed only on the cash portion of the
redemption proceeds to offset brokerage and other
transaction costs that may be incurred by the
Series. Investors will also bear the costs of
transferring the Fund Basket from the Fund to their
account or on their order. See "Summary of Fund
Expenses".
Because the portfolio securities of a Series may
trade on the relevant exchange(s) on days that the
NYSE is closed or are otherwise not Business Days
for such Series, stockholders may not be able to
purchase or redeem, as the case may be, Creation
Unit aggregations of shares of such Series, or to
purchase or sell CB Shares(SM) on the NYSE, on days
when the net asset value of such Series could be
significantly affected by price movements in the
relevant foreign markets. Similarly, on any of the
three days when Massachusetts financial
institutions are closed but both the relevant
foreign exchange and the NYSE are open,
stockholders will not have the ability to purchase
Creation Unit aggregations of shares when price
movements in the foreign market could significantly
affect their prices.
Available Information This Prospectus does not contain all the
information included in the Registration Statement
filed with the SEC under the Securities Act of 1933
with respect to the securities offered hereby,
certain portions of which have been omitted
pursuant to the rules and regulations of the SEC.
The Registration Statement, including the exhibits
filed therewith and the Statement of Additional
Information, may be examined at the office of the
SEC, Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington D.C. 20549. Such documents and
other information concerning the Fund may also be
inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
Statements contained in this Prospectus as to the
contents of any agreement or other document
referred to are not necessarily complete, and, in
each instance, reference is made to the copy of
such agreement or other document filed as an
exhibit to the Registration Statement of which this
Prospectus forms a part, each such statement being
qualified in all respects by such reference.
Stockholder inquiries may be directed to the Fund
in writing, c/o Deutsche Bank Securities
Corporation, 31 West 52nd Street, New York,
New York 10019, and by telephone, to (212) 474-
8000.
<PAGE>
<PAGE> A-1
Appendix A
The CountryBaskets(SM) Index Fund, Inc.
Local Holidays *
Series Local Holidays
The Australia Index New Year's Day (Observed) (1/2/95), Australia Day
Series (1/26/95), Good Friday (4/14/95), Easter Monday
(4/17/95), ANZAC Day (4/25/95), Queen's Birthday
(6/12/95), Bank Holiday (8/7/95), Labour Day
(10/2/95), Christmas Day (12/25/95) and Boxing Day
(12/26/95)
The France Index Series New Year's Day (Observed) (1/2/95), Good Friday
(4/14/95), Easter Monday (4/17/95), Labour Day
(5/1/95), Victory Day (5/8/95), Ascension Day
(5/25/95), Whit Monday (6/5/95), National Day
(7/14/95), Holiday (8/14/95), Assumption Day
(8/15/95), All Saints Day (11/1/95) and Christmas
Day (12/25/95)
The Germany Index New Year's Day (1/1/95), Epiphany Day (1/6/95),
Series Carnival (2/27/95), Good Friday (4/14/95), Easter
Monday (4/17/95), Labour Day (5/1/95), Ascension
Day (5/25/95), Corpus Christi Day (6/2/95), Whit
Monday (6/5/95), Assumption Day (8/15/95), German
Unity Day (10/3/95), All Saints Day (11/1/95),
Prayer & Repentance (11/22/95), Christmas Day
(12/25/95) and Christmas Holiday (12/26/95)
The Hong Kong Index New Year's Day (Observed) (1/2/95), Lunar New Year
Series (1/31/95), Day After LNY (2/1/95 and 2/2/95),
Ching Ming Festival (4/5/95), Good Friday
(4/14/95), Easter Saturday (4/15/95), Easter
Monday (4/17/95), Tueng Ng Festival (6/2/95),
Queen's Birthday (6/17/95), Monday After Queen's
Birthday (6/19/95), Liberation Day (8/28/95), Mid
Autumn Festival (9/9/95), Chung Yeung Festival
(11/1/95), Christmas Day (12/25/95) and Boxing Day
(12/26/95)
The Italy Index Series New Year's Day (1/1/95), Epiphany Day (1/6/95),
Easter Monday (4/17/95), Liberation Day (4/25/95),
Labour Day (5/1/95), Assumption Day (8/15/95), All
Saints Day (11/1/95), Immaculate Conception
(12/8/95), Christmas Day (12/25/95) and Christmas
Holiday (12/26/95)
______________________
* Days that are not Business Days for purchases of Creation Unit
aggregations of shares of the indicated Series. The dates on which such
holidays fall during 1995 are indicated in parentheses. In addition to
the days listed in the table, days on which the NYSE or financial
institutions in Massachusetts are closed for business are not Business
Days for any Series. See "Business Day".
<PAGE>
<PAGE> A-2
The Japan Index Series Bank Holiday (1/2/95 and 1/3/95), Coming of Age
Day (1/16/95), National Foundation Day (2/11/95),
Vernal Equinox (3/21/95), Greenery Day (4/29/95),
Constitutional Memorial Day (5/3/95), National
Holiday (5/4/95) and Children's Day (5/5/95),
Respect For Aged (9/15/95), Autumnal Equinox
(9/23/95), Health Sports Day (10/10/95), Culture
Day (11/3/95), Labor Thanksgiving Day (11/23/95),
Emperor's Birthday (12/23/95) and Bank Holiday
(12/31/95)
The South Africa Index New Year's (Observed) (1/2/95), Human Rights Day
Series (3/21/95), Good Friday (4/14/95), Family Day
(4/17/95), Constitution Day (4/27/95), Worker's
Day (5/1/95), Youth Day (6/16/95), Woman's Day
(8/9/95), Heritage Day (Observed) (9/25/95), Day
of Reconciliation (12/16/95), Christmas Day
(12/25/95) and Day of Goodwill (12/26/95)
The UK Index Series Bank Holiday (1/2/95), Good Friday (4/14/95),
Easter Monday (4/17/95), May Day (5/8/95), Spring
Bank Holiday (5/29/95), Summer Bank Holiday
(8/28/95), Christmas Day (12/25/95), Boxing Day
(12/26/95)
The US Index Series New Year's (Observed) (1/2/95), Martin Luther King
Day (1/16/95), President's Day (2/20/95), Good
Friday (4/14/95), Memorial Day (5/29/95),
Independence Day (7/4/95), Labor Day (9/4/95),
Columbus Day (10/9/95), Veteran's Day (11/11/95),
Thanksgiving Day (11/23/95) and Christmas Day
(12/25/95)
Instances in 1995 in which local holidays will require a time period
longer than seven calendar days for delivery of in-kind redemption proceeds
for the Japan Index Series and the UK Index Series are set forth below.
The Japan Index Series
Redemption Redemption Period in
Request Date Delivery Date Calendar Days
4/28/95 5/8/95 10
5/1/95 5/9/95 8
5/2/95 5/10/95 8
The UK Index Series
Redemption Redemption Period in
Request Date Delivery Date Calendar Days
4/7/95 4/18/95 11
4/10/95 4/19/95 9
<PAGE>
<PAGE> A-3
Redemption Redemption Period in
Request Date Delivery Date Calendar Days
4/11/95 4/20/95 9
4/12/95 4/21/95 9
4/13/95 4/24/95 11
5/1/95 5/9/95 8
5/2/95 5/10/95 8
5/3/95 5/11/95 8
5/4/95 5/12/95 8
5/5/95 5/15/95 10
5/22/95 5/30/95 8
5/23/95 5/31/95 8
5/24/95 6/1/95 8
5/25/95 6/2/95 8
5/26/95 6/5/95 10
8/21/95 8/29/95 8
8/22/95 8/30/95 8
8/23/95 8/31/95 8
8/24/95 9/1/95 8
8/25/95 9/4/95 10
12/18/95 12/27/95 9
12/19/95 12/28/95 9
12/20/95 12/29/95 9
12/21/95 1/2/96 12
12/22/95 1/3/96 12
12/27/95 1/4/96 8
12/28/95 1/5/96 8
12/29/95 1/8/96 10
<PAGE>
<PAGE>
Page
Table of Contents of General Description of the Fund
Statement of Investment Policies and Restrictions
Additional Special Considerations and Risks
Information The FT Index
Exchange Listing and Trading
Reasons for Investors to Purchase
CB Shares(SM)
Management of the Fund
Investment Advisory, Management and
Administrative Services
Brokerage Transactions
Purchase and Issuance of Fund Shares
in Creation Unit Aggregations
Redemption of Fund Shares in
Creation Unit Aggregations
Determining Net Asset Value
Dividends and Distributions
Taxes
Capital Stock and Shareholder Reports
Counsel and Independent Accountants
Report of Independent Accountants
Statement of Assets and Liabilities
Notes to Financial Statements
APPENDICES
A. FT-Actuaries Australia Index Constituency Summary
B. FT-Actuaries France Index Constituency Summary
C. FT-Actuaries Germany Index Constituency Summary
D. FT-Actuaries Hong Kong Index Constituency Summary
E. FT-Actuaries Italy Index Constituency Summary
F. FT-Actuaries Japan Index Constituency Summary
G. FT-Actuaries South Africa Index Constituency Summary
H. FT-Actuaries UK Index Constituency Summary
I. FT-Actuaries US Index Constituency Summary
<PAGE>
<PAGE> BACK COVER
Investment Adviser
Deutsche Bank Securities Corporation
31 West 52nd Street
New York, New York 10019
Administrator THE COUNTRYBASKETS(SM)
State Street Bank and Trust Company INDEX FUND, INC.
225 Franklin Street
Boston, Massachusetts 02110
Custodian and Transfer Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Distributor
ALPS Mutual Funds Services, Inc.
370 Seventh Street, Suite 2700
Denver, Colorado 80202
Investor Information:
1-800- - _____________
_________________
PROSPECTUS
TABLE OF CONTENTS _____________
Page
Prospectus Summary . . . . . .
Summary of Fund Expenses . . .
The Fund . . . . . . . . . . .
The CountryBaskets(SM)
Index Fund, Inc. and its ______ __, 1995
Investment Objective . . .
Investment Policies . . . .
FT/S&P Actuaries World
Indices(TM) . . . . . . . No person has been
The FT Index Components . . authorized to give any
Investment Management . . . information or to make any
Distributor . . . . . . . . representations other than
Administrator . . . . . . . those contained in this
Custodian and Transfer Prospectus in connection
Agent. . . . . . . . . . . with the offer of the Fund's
Fees . . . . . . . . . . . . shares made by this Prospectus,
CB Shares(SM) . . . . . . . and, if given or made, such
Exchange Listing and information or representations
Trading. . . . . . . . . . must not be relied upon as
Creation Units . . . . . . . having been authorized by the
Investment Considerations Fund. This Prospectus does not
and Risks . . . . . . . . constitute an offer to sell,
Dividends and Capital Gains or a solicitation of an offer
Distributions . . . . . . to buy, any shares in any
Tax Matters . . . . . . . . jurisdiction in which such
Lending of Securities . . . offer to sell or solicitation
Investment Restrictions of of an offer to buy may not
the Fund . . . . . . . . . lawfully be made.
Determination of Net Asset
Value. . . . . . . . . . . Dealers effecting trans-
Board of Directors . . . . . actions in the shares, whether
Capital Stock . . . . . . . or not participating in this
Book-Entry Only System . . . distribution, are required
Business Day . . . . . . . . to deliver a prospectus.
Purchase and Issuance of Fund This is in addition to any
Shares in Creation Unit obligation of dealers to
Aggregations . . . . . . . deliver a prospectus when
Redemption of Fund Shares acting as underwriters.
in Creation Unit
Aggregations . . . . . . .
Available Information. . . . SUBJECT TO COMPLETION
Appendix A . . . . . . . . . . DATED _____________, 1995
Table of Contents of Statement
of Additional Information. .
<PAGE>
<PAGE> 1
[FUND-ONLY VERSION]
SUBJECT TO COMPLETION, DATED JULY 11, 1995
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
______, 1995
This Statement of Additional Information is not a Prospectus, and should be
read in conjunction with the Prospectus dated ________, 1995 (the
"Prospectus") for The CountryBaskets(SM) Index Fund, Inc. (the "Fund"), as it
may be revised from time to time. A copy of the Prospectus for the Fund
may be obtained without charge from ALPS Mutual Funds Services, Inc. at the
address set forth herein.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
General Description of the Fund. . . . . . . . . . . . . . . . . . 1
Investment Policies and Restrictions . . . . . . . . . . . . . . . 1
Special Considerations and Risks . . . . . . . . . . . . . . . . . 11
The FT Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exchange Listing and Trading . . . . . . . . . . . . . . . . . . . 24
Reasons for Investors to Purchase CB Shares(SM). . . . . . . . . . 25
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . 26
Investment Advisory, Management and Administrative Services . . . 28
Brokerage Transactions . . . . . . . . . . . . . . . . . . . . . . 29
Purchase and Issuance of Fund Shares in Creation Unit Aggregations 31
Redemption of Fund Shares in Creation Unit Aggregations . . . . . 36
Determining Net Asset Value . . . . . . . . . . . . . . . . . . . 39
Dividends and Distributions . . . . . . . . . . . . . . . . . . . 39
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Capital Stock and Shareholder Reports . . . . . . . . . . . . . . 42
Counsel and Independent Accountants . . . . . . . . . . . . . . . 42
Report of Independent Accountants . . . . . . . . . . . . . . . . 43
Statement of Assets and Liabilities . . . . . . . . . . . . . . . 44
Notes to Financial Statements . . . . . . . . . . . . . . . . . . 45
APPENDICES ____________________
"The CountryBaskets Index Fund, Inc.", "CountryBaskets" and "CB
Shares" are service marks of Deutsche Bank Securities Corporation ("DBSC").
DBSC has filed applications for registration of such service marks with the
U.S. Patent and Trademark Office. The Fund is an authorized licensee of
such marks.
______
"Financial Times/Standard & Poor's Actuaries World Indices", "FT/S&P
Actuaries World Indices" and "FT/S&P AWI" are trademarks of The Financial
Times Limited ("FT") and Standard & Poor's ("S&P") and have been licensed
for use by DBSC. The Fund is an authorized sublicensee thereof. The Fund
is not sponsored, managed, advised, sold or promoted by FT or S&P and
neither FT nor S&P makes any recommendation regarding the advisability of
investing therein.
____________________
THE FUND AND THE SECURITIES DESCRIBED HEREIN (THE "PRODUCTS") ARE NOT
SPONSORED, ENDORSED, SOLD OR PROMOTED BY THE FINANCIAL TIMES LIMITED,
GOLDMAN, SACHS & CO. OR STANDARD & POOR'S (COLLECTIVELY, THE
"OWNERS"). NONE OF THE OWNERS MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE SPONSORS OF THE PRODUCTS OR ANY MEMBER OF
THE PUBLIC REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES
GENERALLY OR IN THE PRODUCTS PARTICULARLY OR IN THE ABILITY OF THE
FT/S&P ACTUARIES WORLD INDICES(TM) (THE "INDICES") TO TRACK GENERAL
STOCK MARKET PERFORMANCE. THE OWNERS' ONLY RELATIONSHIP TO DEUTSCHE
BANK SECURITIES CORPORATION ("LICENSEE") IS THE LICENSING OF CERTAIN
TRADEMARKS AND TRADE NAMES AND OF THE INDICES WHICH ARE DETERMINED,
COMPOSED AND CALCULATED WITHOUT REGARD TO THE LICENSEE OR THE PRODUCTS.
THE OWNERS HAVE NO OBLIGATION TO TAKE THE NEEDS OF THE LICENSEE OR
THE PRODUCTS INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCU-
LATING THE INDICES. THE OWNERS ARE NOT RESPONSIBLE FOR AND HAVE NOT
PARTICIPATED IN THE DETERMINATION OF THE PRICES AND AMOUNT OF THE
PRODUCTS OR THE TIMING OF THE ISSUANCE OR SALE OF THE PRODUCTS. THE
OWNERS HAVE NO OBLIGATION OR LIABILITY IN CONNECTION WITH THE
ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCTS.
THE OWNERS DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE INDICES OR ANY DATA INCLUDED THEREIN AND THE OWNERS SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.
THE OWNERS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIM ALL WARRANTIES OF QUALITY OR MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDICES OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL THE OWNERS HAVE
<PAGE>
<PAGE> ii
ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSI-
BILITY OF SUCH DAMAGES.
The FT-Actuaries World Indices(TM) were originally developed by
Goldman, Sachs & Co., NatWest Securities Limited and The Financial Times
Limited in 1986, and until May 23, 1995, were jointly published by them.
On May 23, 1995, Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., joined The Financial Times Limited and Goldman, Sachs &
Co. as a co-publisher of the FT-Actuaries World Indices(TM), now known as
the Financial Times/Standard & Poor's Actuaries World Indices(TM) or FT/S&P
Actuaries World Indices(TM). The FT/S&P Actuaries World Indices(TM) are a
continuation of the FT-Actuaries World Indices(TM). Following a transition
period, Standard & Poor's and The Financial Times Limited will jointly
calculate the indices. The Fund is not sponsored by or affiliated with
Standard & Poor's or The Financial Times Limited. References herein to the
"FT Index" and to certain index data prior to May 23, 1995 are to the FT-
Actuaries World Index(TM); references thereafter are to the FT/S&P
Actuaries World Indices(TM).
____________________
Unless otherwise specified, all references in this Statement of
Additional Information to "dollars", "US$" or "$" are to United States
dollars, all references to "A$" are to Australian dollars, all references
to "FF" are to French francs, all references to "DM" are to the Deutsche
mark, all references to "HK $" are to Hong Kong dollars, all references to
"IL" are to Italian lira, all references to "Y" are to Japanese Yen, all
references to "CR" are to South African commercial rands (a currency
abandoned as of March 20, 1995), all references to "R" are to South African
rands and all references to "L" are to pounds sterling. On __________,
1995, the noon buying rates in New York City for cable transfers payable in
the applicable currency, as certified for customs purposes by the Federal
Reserve Bank of New York, were as follows for each US $1.00:
A$____________, FF____________, DM____________, HK$____________,
IL____________, Y____________, R____________ and L____________. Some
numbers in this Statement of Additional Information have been rounded. All
US-dollar equivalents provided in this Statement of Additional Information
are calculated at the exchange rate prevailing on the date to which the
corresponding foreign currency amount refers.
<PAGE>
<PAGE> 1
GENERAL DESCRIPTION OF THE FUND
The CountryBaskets(SM) Index Fund, Inc. (the "Fund") is a management
investment company organized as a series fund. The Fund was incorporated
under the laws of the State of Maryland under the name "Eurofund, Inc." on
August 8, 1994. The Fund is authorized to issue shares of common stock,
with a par value of $.001 per share, in one or more series. The Fund's
shares of common stock (referred to herein as "CB Shares(SM)" or
"CountryBaskets(SM)") currently are issued in nine series (each, a "Series"):
the Australia Index Series, the France Index Series, the Germany Index
Series, the Hong Kong Index Series, the Italy Index Series, the Japan Index
Series, the South Africa Index Series, the UK Index Series and the US Index
Series.
INVESTMENT POLICIES AND RESTRICTIONS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS ENTITLED "INVESTMENT POLICIES" AND
"INVESTMENT RESTRICTIONS OF THE FUND" IN THE PROSPECTUS.
Each of the initial nine Series will seek to remain fully invested,
except to the extent described below under "Other Fund Investments", in a
portfolio of common stocks and other equity securities which will provide
investment results that substantially correspond to the price and yield
performance of the corresponding country component of the FT Index. Brief
descriptions of the equity markets in which the Fund Series will be
invested are provided below. Unless otherwise indicated, numerical data
set forth below with respect to the equity markets represented by the
Series of the Fund were provided by the Owners. Neither the Fund nor the
Adviser has independently verified such data.
The Australian Equity Markets
General Background. Publicly traded Australian equity securities are
listed on the Australian Stock Exchange Limited ("ASX"), which maintains
wholly-owned subsidiary exchanges in Sydney, Adelaide, Brisbane, Hobart,
Melbourne and Perth. Only equity securities traded on the ASX are
currently eligible for inclusion in the Australia component of the FT
Index.
Reporting, Accounting, and Auditing. Australian reporting,
accounting, and auditing practices are regulated by the Australian
Securities Commission. These practices bear many similarities to American
standards, but differ significantly in some important respects. In
general, Australian corporations are not required to provide all of the
disclosure required by American law and accounting practice, and such
disclosure may be less timely and frequent than that required of U.S.
corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of the Australian equity markets was approximately
A$248.8 billion, or US $193.0 billion. The aggregate "investible" market
capitalization (as defined by the World Index Policy Committee ("WIPC") of
the FT Index, described below under "The FT Index--World Index Policy
Committee") of these stocks was approximately A$220.4 billion, or US $170.9
billion, as of December 30, 1994.
The French Equity Markets
General Background. Equity securities trade on France's seven stock
exchanges, of which the Paris Stock Exchange handled more than 95% of the
transactions nationally in 1994. Trading in most of the stocks listed on
the Paris Stock Exchange (Le Marche National), which consolidates all
listed securities on the other French exchanges, takes place through the
Cotation Assistee en Continu (CAC)
<PAGE>
<PAGE> 2
computer order-driven trading system. Only equities traded on the Official
Market (Marche Official) are currently eligible for inclusion in the France
component of the FT Index.
Reporting, Accounting, and Auditing. Although French reporting,
accounting, and auditing practices are considered rigorous by European
standards, they are not identical to U.S. standards in some important
respects. In general, French corporations are not required to provide all
of the disclosure required by U.S. law and accounting practice, and such
disclosure may be less timely and frequent than that required of U.S.
corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of the French equity markets was approximately
FF2,442.7 billion, or US $457.7 billion. The aggregate investible market
capitalization (as defined by the WIPC) was approximately FF1,999.6
billion, or US $374.7 billion, as of December 30, 1994.
The German Equity Markets
General Background. Equity securities trade on Germany's eight
independent local stock exchanges. The Frankfurt Stock Exchange, which
accounted for approximately [ ]% of the total trading volume on the
German stock exchanges in 1994, is the principal stock exchange in Germany.
Exchange securities are denominated in Deutsche marks, the official
currency of Germany. German stock exchanges offer three different market
segments in which stocks are traded: the official market segment
(Amtlicher Handel) of the German stock exchanges comprises trading in
shares which have been formally admitted to official listing by the
admissions committee of the relevant stock exchange, based upon disclosure
in the listing application or "prospectus". Only equity securities traded
on the official market on the Frankfurt Stock Exchange are currently
eligible for inclusion in the Germany component of the FT Index.
Reporting, Accounting, and Auditing. German reporting, accounting,
and auditing standards differ from U.S. standards in important respects.
German corporations, other than subsidiaries of U.S. companies, normally do
not provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and less frequent than
required of public corporations in the United States.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Germany was approximately DM 718.7 billion, or
US $463.7 billion. The aggregate investible market capitalization (as
defined by the WIPC) was approximately DM 591.1 billion, or US $381.4
billion, as of December 30, 1994.
The Hong Kong Equity Markets
General Background. The publicly traded equity securities of Hong
Kong are listed on the Stock Exchange of Hong Kong Limited ("HKX"), Hong
Kong's sole stock exchange. Exchange securities are denominated in Hong
Kong dollars, the official currency of Hong Kong. Only equity securities
traded on the HKX and shares of certain Hong Kong issuers that are listed
on the Singapore Stock Exchange are currently eligible for inclusion in the
Hong Kong component of the FT Index.
Reporting, Accounting, and Auditing. While Hong Kong has signifi-
cantly upgraded reporting, accounting, and auditing practices during
the last decade, its standards remain significantly less rigorous <PAGE>
<PAGE> 3
than U.S. standards. In general, Hong Kong corporations are not required
to provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and frequent than that
required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Hong Kong was approximately HK $1,774.2 billion,
or US $229.3 billion. The aggregate investible market capitalization (as
defined by the WIPC) of Hong Kong was approximately HK $1,574.8 billion, or
US $203.5 billion, as of December 30, 1994.
The Italian Equity Markets
General Background. Equity securities trade on Italy's ten stock
exchanges, of which the Milan Stock Exchange accounted for approximately
[90]% of the total volume in 1994. The Italian market is dominated by
financial companies and utilities and is not representative of that
country's overall economy. Only equity securities on the official list
(Listino della Borsa) and traded on the Milan Stock Exchange are currently
eligible for inclusion in the Italy component of the FT Index.
Reporting, Accounting, and Auditing. Italian reporting, accounting,
and auditing practices are regulated by Italy's National Control
Commission. These practices bear some similarities to American standards,
but differ significantly in many important respects. Generally, Italian
corporations are not required to provide all of the disclosure required by
U.S. law and accounting practice, and such disclosure may be less timely,
frequent and consistent than that required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the Italian markets was approximately IL 304.3 trillion, or
US $187.6 billion. The aggregate investible market capitalization (as
defined by the WIPC) of Italy was approximately IL 240.8 trillion, or US
$148.5 billion, as of December 30, 1994.
The Japanese Equity Markets
General Background. Equity securities trade on Japan's eight stock
exchanges, as well as in an over-the-counter market. Japan is second only
to the U.S. in aggregate stock market capitalization. Only equity
securities traded on the Tokyo and Osaka Stock Exchanges, which accounted
for approximately [ ]% of the total trading volume on the Japanese stock
exchanges in 1994, are currently eligible for inclusion in the Japan
component of the FT Index.
Reporting, Accounting, and Auditing. Although some Japanese
reporting, accounting, and auditing practices are substantially based on
U.S. principles, these standards are not identical to American ones in some
important respects, particularly with regard to unconsolidated subsidiaries
and related structures. Generally, Japanese corporations are not required
to provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and frequent than that
required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Japan was approximately Y366.4 trillion, or US
$3.7 trillion. The aggregate investible market capitalization (as defined
by the WIPC) of Japan was approximately Y329.8 trillion, or US $3.3
trillion, as of December 30, 1994.
<PAGE>
<PAGE> 4
The South African Equity Markets
General Background. South Africa's publicly traded equity securities
are listed on the Johannesburg Stock Exchange ("JSX"), South Africa's sole
stock exchange. The JSX, which has historically concentrated in mining
industries, is far less diversified than the overall South African economy.
Prior to March 20, 1995, South Africa had maintained a two-currency system
that included the Commercial Rand ("CR"), but now it has only a single unit
of currency, the Rand.
Reporting, Accounting, and Auditing. South Africa's reporting,
accounting, and auditing practices differ significantly from American
standards in many respects. In general, South African corporations are not
required to provide all of the disclosure required by U.S. law and
accounting practice, and such disclosure may be less timely and frequent
than that required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of South Africa was approximately CR796.9 billion, or
US $195.6 billion. The aggregate investible market capitalization (as
defined by the WIPC) of South Africa was approximately CR645.7 billion, or
US $158.4 billion, as of December 30, 1994.
The United Kingdom Equity Markets
General Background. The United Kingdom is Europe's largest equity
market in terms of aggregate market capitalization. Trading is fully
computerized under the Stock Exchange Automated Quotation System. The
London Stock Exchange has the largest volume of trading in international
equities in the world. Over 60% of cross-border trading in the world, and
approximately 93% of that in Europe, passes through London. Only stocks
traded on the London Stock Exchange are currently eligible for inclusion in
the UK component of the FT Index.
Reporting, Accounting, and Auditing. Although United Kingdom
reporting, accounting, and auditing standards are among the most stringent
outside the United States, such standards are not identical to U.S.
standards in some important respects. Some United Kingdom corporations are
not required to provide all of the disclosure required by U.S. law and
accounting practice, and such disclosure may, in certain cases, be less
timely and less frequent than that required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the United Kingdom markets was approximately L701.3
billion, or US $1,097.1 billion. The aggregate investible market
capitalization (as defined by the WIPC) of these stocks was approximately
L654.5 billion, or US $1,023.9 billion, as of December 30, 1994.
The United States Equity Markets
General Background. Equity securities trade on nine U.S. stock
exchanges. The New York Stock Exchange, Inc. (the "NYSE"), the American
Stock Exchange and the National Association of Securities Dealers Automated
Quotation ("NASDAQ") system, accounted for more than [ ]% of the total
U.S. equity trading volume in 1994. Only stocks traded on the NYSE, the
American Stock Exchange and the NASDAQ are currently eligible for inclusion
in the US component of the FT Index.
Reporting, Accounting, and Auditing. U.S. reporting, accounting, and
auditing practices are generally regarded as the most stringent of all
major global markets.
<PAGE>
<PAGE> 5
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the U.S. equity markets was approximately US $4.0
trillion. The aggregate investible market capitalization (as defined by
the WIPC) of these stocks was approximately US $3.8 trillion, as of
December 30, 1994.
Other Fund Investments
Because the investment objective of each Series is to provide
investment results that substantially correspond to the price and yield
performance of the equity securities in the applicable component of the FT
Index, each Series will invest the largest proportion of its assets as is
practicable, in any event at least 95% of its net assets, in the equity
securities of the relevant FT Index component.
The remainder of each Series' assets will consist of temporary cash
which may be used to purchase high quality, short-term fixed income
securities denominated in US dollars or foreign currency, stock index
futures contracts or options on such contracts and call options on
securities and indices in the relevant market. Each Series may also
purchase other equity securities that are not components of the relevant FT
Index component but may be an appropriate substitution for a security in
the relevant FT Index component if market conditions make it impracticable
to purchase such index security. Such "substitute" securities will be
carefully selected for the high degree of positive correlation between the
values of such securities and the values of the FT Index securities to
which the Series seeks exposure.
Regulatory requirements designed to eliminate leverage accompanying
investments in futures contracts and options on futures contracts require
each Series to segregate in an account with the Fund's Custodian (see
"Investment Advisory, Management and Administrative Services -- The
Administrator, Custodian and Transfer Agent" below) an amount of its assets
equal to the obligation to purchase the assets underlying such contracts.
The assets segregated will be cash, U.S. Government securities or other
liquid, high-grade, short-term debt securities denominated in the currency
or currencies of the portfolio equity securities of the particular Series
(the "Series Currency").
The purpose of investing in futures contracts and options on futures
contracts and purchasing call options and the related activity of writing
put options (explained below) is to expose cash reserves and short term
money market investments to the equity risk and return of the corresponding
component of the FT Index in order to achieve a higher correlation with
such component. A Series will not invest in options and futures contracts
and options thereon for speculative purposes. Certain of the risks
typically associated with such contracts, e.g., the risk that the portfolio
manager's view of future market movements may be mistaken, are therefore
not applicable to the Fund.
The total value of options and futures contracts and options thereon,
plus the related segregated assets, the "substitute" securities for FT
Index component securities referred to above and any other temporary cash
and short-term investments, will not exceed 5% of the net asset value of a
Series.
Options on Securities
Purchase of Call Options
Each Series may purchase call options on securities and indices
thereof. Call options are contracts which give the buyer the right, but
not the obligation, to buy a fixed amount of securities at a fixed price
for a fixed period of time or, in the case of options on indices, to make
or receive a cash settlement. A Series will only invest in call options,
in combination with other instruments, for the <PAGE>
<PAGE> 6
purpose of exposing the Series' cash reserves and short-term investments
to the equity risk and return of the corresponding component of the FT
Index in order to achieve a higher correlation with such component. It
will not purchase call options for purposes of benefiting from anticipated
market appreciation without the risk of market decline.
Each Series may purchase both options that are traded on United
States and foreign exchanges and options traded over-the-counter with
broker-dealers who make markets in these options. Unlike exchange-traded
options in the United States that are issued by clearing organizations
affiliated with the exchange on which the option is listed, which, in
effect, gives its guarantee to every exchange-traded option transaction,
"over-the-counter" options are contracts between the Fund and its
counterparty with no clearing organization guarantee. Thus, when a Series
purchases an over-the-counter option, it relies on the dealer from which it
has purchased the over-the-counter option to make or take delivery of the
securities underlying the option or pay any cash settlement amount.
Failure by the dealer to do so would result in the loss of the premium paid
by the Series as well as the loss of the expected benefit of the
transaction. The Adviser will evaluate the creditworthiness of any dealer
from which a Series proposes to purchase options.
Although exchange-traded options generally have a continuous liquid
market, over-the-counter options may not. Consequently, a Series will
generally be able to realize the value of an over-the-counter option it has
purchased only by exercising it or reselling it to the dealer who issued
it. While the Fund will purchase over-the-counter call options only with
dealers which agree to, and which are expected to be capable of, entering
into closing transactions with the Series, there can be no assurance that
the Series will be able to liquidate an over-the-counter call option at a
favorable price at any time prior to expiration. In the event of
insolvency of the counterparty, the Series may be unable to liquidate an
over-the-counter call option.
Writing Put Options
When the Fund writes (sells) a put option, the purchaser has the
right, for a specified period of time, to sell the securities or index
subject to the option to the Fund at the specified exercise price. The
Fund receives a premium for writing the put option which it retains whether
or not the option is exercised.
A Series will write a covered put option only in connection with its
purchase of a related call option on the same security or index. This
technique will allow a Series to expose uninvested cash to the risk of both
market appreciation and market decline in the value of the relevant
security or index.
Futures Contracts
A Series will enter into futures contracts only for the purpose of
exposing the Series' cash reserves and short-term investments to the equity
risk and return of the corresponding component of the FT Index in order to
achieve a higher correlation with such component. A Series will not use
futures for speculative purposes. Each Series intends to invest only in
contracts on indices of securities which the Adviser believes will provide
appropriate proxies for the performance of the FT Index component relevant
to such Series. A Series may enter into such futures contracts on any
recognized futures exchange, if permitted by applicable U.S. law.
<PAGE>
<PAGE> 7
A futures contract on a stock index is an agreement between two
parties to buy and sell an index of securities at its closing value at a
specified future time. Stock index futures are settled by delivery by one
party of the net cash settlement price rather than the securities
underlying the contract. Each Series will only take "long" futures
positions, i.e., the Series will assume the obligation to acquire the index
of securities underlying the contract.
In order to open and maintain a position in futures contracts, the
Fund is required to make a good faith deposit, known as "initial margin",
in cash or government securities, which are held in the broker's name in an
account at the Fund's custodian. A Series expects to earn interest income
on its initial margin deposits. Minimal initial margin requirements are
established by the futures exchange and may be changed. Brokers may
establish initial margin requirements which are higher than the exchange
minimums. Initial margin requirements typically range upward from less
than 5% of the underlying value of the contract being traded. After a
futures contract position is opened, the value of the contract is marked to
market daily. The change in the futures contract's closing value is
settled each day by paying or receiving "variation margin", depending upon
the direction of change in the value of the futures contract. Variation
margin payments are made to and from the futures broker for as long as the
contract remains open.
A Series will invest in futures contracts and options thereon only to
the extent that the Fund, the Adviser or any related persons will not as a
result of such contracts be required to register as a "commodity pool
operator" with the Commodity Futures Trading Commission (the "CFTC").
Under CFTC regulations, each Series will be required to limit the amount of
initial margin and premiums on positions in futures or options on futures
entered into by the Series for non-hedging purposes to not more than 5% of
the net assets of such Series. A Series will limit its investments to
those which have been approved by the CFTC for investment by United States
investors.
Options on Futures Contracts
Each Series may also enter into options on futures contracts for the
same purposes described above with respect to options and futures
contracts. The Fund may purchase only call options on futures contracts.
A call option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a long position in a futures
contract at a specified exercise price at any time during the option
exercise period.
Lending Portfolio Securities
To a limited extent the Fund may lend its portfolio securities to
brokers, dealers and other financial institutions, provided it receives
collateral in cash, U.S. Government securities or other assets permitted
by applicable regulations, the total value of which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, each
Series can increase its income through securities lending fees and through
the investment of the collateral, and help offset the effect that the
expenses of the Series have on the ability of such Series to provide
investment results that correspond to that of its applicable component of
the FT Index. These loans may not exceed 33 1/3% of each Series' total
assets. Each Series will pay reasonable administrative and custodial fees
in connection with the loan of securities. The interest income the Series
receives from the loan collateral is included in the Series' gross
investment income on which a portion of the management fee paid to DBSC,
in its capacity as investment adviser to the Fund, is based. See
<PAGE>
<PAGE> 8
"Investment Advisory, Management and Administrative Services--The Adviser".
The Fund will pay no finders fees in connection with the lending of its
securities.
The following conditions will be met whenever portfolio securities
are loaned: (1) the Series must receive at least 100% collateral from the
borrower; (2) the borrower must increase such collateral whenever the
market value of the securities loaned rises above the level of the
collateral; (3) the Series must be able to terminate the loan at any time;
(4) the Series must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions on the loaned securities, and
any increase in market value; (5) the Series may pay only reasonable
custodian fees in connection with the loan and will pay no finders fees;
and (6) while voting rights on the loaned securities may pass to the
borrower, the Fund's Board of Directors (the "Board" or the "Directors")
must terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. Each Series will
comply with the foregoing conditions. DBSC will provide securities lending
services to the Fund under its investment advisory and management agreement
with the Fund. See "Investment Advisory, Management and Administrative
Services--The Adviser".
Currency Transactions
The investment policy of each Series is to remain as fully invested
as practicable in the equity securities of the relevant FT Index component.
Hence, no Series of the Fund expects to engage in currency transactions for
the purpose of hedging against declines in the value of the Series
Currency.
Each Series will engage in currency transactions for the purpose of
meeting the U.S. dollar cash requirements of redemptions of Series shares
in Creation Unit size aggregations (see "Purchase and Issuance of Fund
Shares in Creation Unit Aggregations--Generally") and Series expenses and
distributions. This is considered a "transaction hedge". In addition, to
the extent a Series (other than the US Index Series) holds US dollar-
denominated cash balances or short-term money market-type investments, it
may purchase a forward currency contract or other instruments which would
enable it to purchase the applicable Series Currency at a fixed price in
the future and eliminate the risk that the US dollar-denominated assets of
the Series would widen any deviation between the performance of the
applicable FT Index component and the Series in the event that the value of
the Series Currency rose in relation to the US dollar. This is considered
a "position hedge". Since it is not expected that US dollar-denominated
assets would exceed 5% of net assets of any Series other than the US Index
Series (and would under normal conditions be significantly less than 5%),
the value of forward currency contracts, currency futures contracts and
options on such contracts and currency options should not exceed 5% of a
Series' net assets and net forward currency contracts and other currency
instruments should not exceed the value of US dollar-denominated assets.
Transaction hedging is the purchase or sale of a forward contract
with respect to specific receivables or payables of a Series generally
arising in connection with the purchase or sale of its portfolio
securities and accruals of interest or dividends receivable and Series
expenses. Position hedging is the sale of a foreign currency with respect
to portfolio security positions denominated or quoted in that currency.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set
at the time of the contract. Currency options give the buyer the right,
but not the obligation, to buy or sell a fixed amount of a specific
currency at a fixed price for a fixed period of time. A currency futures
contract is a contract involving an obligation to deliver or acquire the
specified amount of currency at a specified price at a specified future
time. Futures contracts may be settled on a net cash
<PAGE>
<PAGE> 9
payment basis rather than by the sale and delivery of the underlying
currency. Certain risks of transactions in foreign currency and
related derivatives are described below under "Special Considerations
and Risks--Currency Transactions".
Investment Restrictions
The Fund has adopted the following investment restrictions as
fundamental policies with respect to each Series. These restrictions
cannot be changed with respect to a Series without the approval of the
holders of a majority of such Series' outstanding voting securities. For
purposes of the Investment Company Act of 1940, as amended (the "1940
Act"), a majority of the outstanding voting securities of a Series means
the vote, at an annual or a special meeting of the security holders of the
Fund, of the lesser of (1) 67% or more of the voting securities of the
Series present at such meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (2) more than 50% of the outstanding voting securities of the
Series. A Series may not:
1. Change its investment objective, which is to provide investment
results that substantially correspond to the price and yield performance of
its corresponding country component of the FT Index;
2. Lend any funds or other assets except that a Series may lend its
portfolio securities in an amount not to exceed 33 1/3% of the value of its
total assets;
3. Issue senior securities or borrow money, except borrowings from
banks for temporary or emergency purposes in an amount up to 33 1/3% of the
value of the Series' total assets (including the amount borrowed), valued
at the lesser of cost or market, less liabilities (not including the amount
borrowed) valued at the time the borrowing is made, and the Series will not
purchase securities while borrowings in excess of 5% of the Series' total
assets are outstanding, provided, that for purposes of this restriction,
short-term credits necessary for the clearance of transactions are not
considered borrowings;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 33 1/3% of the value of its total assets to
secure permitted borrowings, except that the deposit of underlying
securities and other assets in escrow and collateral arrangements with
respect to initial or variation margin for currency transactions, options,
futures contracts and options on futures will not be deemed to be pledges
of the Series' assets;
5. Purchase a security (other than obligations of the United States
Government, its agencies or instrumentalities) if as a result 25% or more
of its total assets would be invested in a particular industry, except that
a Series will invest 25% or more of its total assets in a single industry
in the event that the relevant component of the FT Index is or becomes
similarly concentrated;
6. Purchase, hold or deal in real estate, or oil, gas or mineral
interests or leases, but a Series may purchase and sell securities that are
issued by companies that invest or deal in such assets;
7. Act as an underwriter of securities of other issuers, except to
the extent the Series may be deemed an underwriter in connection with the
sale of securities in its portfolio;
8. Purchase securities on margin, except for such short-term credits
as are necessary for the clearance of transactions, except that a Series
may make margin deposits in connection with transactions in currencies,
options, futures and options on futures;
<PAGE>
<PAGE> 10
9. Sell securities short, but reserves the right to sell securities
short if it owns the security;
10. Invest in commodities or commodity contracts, except that the
Series may buy and sell currencies and forward contracts with respect
thereto, futures contracts on securities, stock indices and currencies and
options on such futures contracts and make margin deposits in connection
with such contracts; or
11. Write put or call options or combinations thereof, except that a
Series may write put options.
With respect to the fundamental restriction set forth in (5), above,
the Adviser has advised the Fund that as of December 30, 1994, the
following FT Index components were concentrated (in excess of 25% of such
component) in stocks of the indicated industry groups, as defined by the
Consortium of the FT Index (see "The FT Index" below):
Australia Mining, Metals and Minerals
Hong Kong Real Estate
Italy Insurance Multi/Property/Casualty
Utilities
South Africa Precious Metals and Minerals
The securities portfolios of the Australia Index Series, the Hong Kong
Index Series, the Italy Index Series and the South Africa Index Series will
be concentrated in the indicated industries for so long as the
corresponding FT Index components are so concentrated.
In addition to the investment restrictions adopted as fundamental
policies as set forth above, each Series will observe the following
restrictions, which may be changed by the Board without a stockholder vote.
A Series will not:
1. Invest in the securities of a company for the purpose of
exercising management or control, or in any event purchase and hold more
than 10% of the securities of a single issuer, provided that the Fund may
vote the investment securities owned by each Series in accordance with its
views; or
2. Hold illiquid assets in excess of 15% of its net assets. An
illiquid asset is any asset which may not be sold or disposed of in the
ordinary course of business within seven days at approximately the value at
which the Series has valued the investment.
For purposes of the percentage limitation on each Series' investments
in illiquid securities, with respect to each Series other than the US Index
Series, foreign equity securities, though not registered under the
Securities Act of 1933 (the "Securities Act"), will not be deemed illiquid
if they are otherwise readily marketable. Such securities will be
considered "readily marketable" if they are traded on an exchange and are
not legally restricted from sale by the Series. The Consortium, i.e., the
Owners of the FT Index and their associates (see "The FT Index--In
General"), automatically excludes a security from the FT Index if it fails
to trade for more than fifteen working days within each of two successive
calendar quarters. The Adviser will monitor the liquidity of restricted
securities in each Series' portfolio under the supervision of the Fund's
Board of Directors. In reaching liquidity decisions, the Adviser will
consider, among other things, the following factors:
(1) the frequency of trades and quotes for the security;
<PAGE>
<PAGE> 11
(2) the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers;
(3) dealer undertakings to make a market in the security; and
(4) the nature of the security and the nature of the
marketplace in which it trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of
transfer).
If a percentage limitation is adhered to at the time of investment or
contract, a later increase or decrease in percentage resulting from any
change in value or total or net assets will not result in a violation of
such restriction, except that the percentage limitations with respect to
the borrowing of money and illiquid securities will be observed
continuously.
SPECIAL CONSIDERATIONS AND RISKS
A discussion of the risks associated with an investment in the Fund
is contained in the Prospectus under the heading "The Fund--Investment
Considerations and Risks". The discussion below supplements, and should be
read in conjunction with, such section of the Prospectus.
Non-U.S. Equity Portfolios
Investing in securities issued by companies domiciled in countries
other than the domicile of the investor and denominated in currencies other
than an investor's local currency entails certain considerations and risks
not typically encountered by the investor in making investments in its home
country and in that country's currency. These considerations include
favorable or unfavorable changes in interest rates, currency exchange rates
and exchange control regulations, and the costs that may be incurred in
connection with conversions between various currencies. In addition,
investments in countries other than the United States could be affected by
other factors generally not thought to be present in the United States,
including less liquid and less efficient securities markets, greater price
volatility, less publicly available information about issuers, the
imposition of withholding or other taxes, restrictions on the expatriation
of funds or other assets of a Series, higher transaction and custody costs,
delays attendant in settlement procedures and difficulties in enforcing
contractual obligations.
Currency Transactions
Foreign exchange transactions involve a significant degree of risk
and the markets in which foreign exchange transactions are effected are
highly volatile, highly specialized and highly technical. Significant
changes, including changes in liquidity and prices, can occur in such
markets within very short periods of time, often within minutes. Foreign
exchange trading risks include, but are not limited to, exchange rate
risk, maturity gaps, interest rate risk and potential interference by
foreign governments through regulation of local exchange markets, foreign
investment or particular transactions in foreign currency. The risks
associated with foreign currency options and futures contracts generally
include those discussed under "Other Fund Investments--Options on
Securities" and "--Futures Contracts", with respect to stock index futures,
options on securities and indices and options on futures, and below under
"Options and Futures". If the Adviser applies a currency hedging strategy
at an inappropriate time or judges market correlations incorrectly, foreign
currency derivatives strategies may not serve their intended <PAGE>
<PAGE> 12
purpose of improving the correlation of a Series' return with the
performance of the corresponding FT Index component and may lower the
Series' return. The Series could experience losses if the values of its
currency forwards, options and futures positions were poorly correlated
with its other investments or if it could not close out its positions
because of an illiquid market. In addition, each Series will incur
transaction costs, including trading commissions, in connection with its
foreign currency transactions.
Options and Futures
A Series' ability to establish and close out positions in options,
futures contracts and options on futures contracts will be subject to the
existence of a liquid market. Although a Series generally will purchase or
sell only those options, futures contracts and options thereon for which
there appears to be a liquid market and, in the case of futures contracts,
which are traded on regulated futures exchanges, there can be no assurance
that a liquid market will exist for any particular option or futures
contract or option thereon in which the Series maintains a position. Thus,
it may not be possible to effect a closing transaction in any contract or
to do so at a satisfactory price and the Series would have to either make
or take delivery under the contract or, in the case of a written option,
wait to sell the underlying securities until the option expires or is
exercised or, in the case of a purchased option, exercise the option. In
the case of a futures contract that the Series has purchased and which the
Fund is unable to close, the Series may be required to maintain margin
deposits on the futures contract and to make variation margin payments
until the contract is closed. In such situations, if a Series has
insufficient cash, it may have to sell portfolio securities to meet
applicable daily margin requirements. Closing transactions in these
contracts may result in short-term capital gains. These transactions may
be limited by U.S. tax considerations because the beneficial treatment
accorded regulated investment companies under Subchapter M of the Code (as
defined herein) limits the amount of permissible short-term gain.
Because the futures strategies of each Series are engaged in only for
the purpose of seeking a higher correlation with the corresponding
component of the FT Index and its use of futures will be unleveraged, the
Fund does not believe that the Series are subject to the risks of loss
frequently associated with futures transactions. A Series would presumably
have sustained comparable losses if, instead of the futures contract, it
had invested in the underlying security or index of securities and sold it
after the decline.
Successful use of futures contracts and options thereon by any Series
is subject to the ability of the Adviser to predict correctly correlations
between the movements in the values of such contracts (or the underlying
securities or indices) with the direction of the relevant FT Index
component or securities to which the Series seeks exposure. If the
Adviser's expectations are not met, the Series would be in a worse position
than if the futures exposure had not been effected. If a Series buys
futures contracts on stock indices that historically have had a high degree
of positive correlation to the value of the FT Index, and such historical
experience were not to obtain in the future, the value of the relevant FT
Index Component might rise or decline more rapidly than the value of such
an imperfectly correlated futures contract. In that case, the futures
strategy will be less effective than if the correlation had been greater.
In a similar but more extreme situation, the value of the futures position
might in fact decline while the value of the relevant FT Index component
holds steady or rises. This would result in a loss that would not have
occurred but for the futures position.
<PAGE>
<PAGE> 13
Continuous Offering
Since new Creation Unit aggregations of shares can be issued and sold
by the Fund on an ongoing basis, at any point during the life of the
offering a "distribution", as such term is used in the Securities Act, may
be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in
their being deemed participants in a distribution in a manner which could
render them statutory underwriters and subject them to the prospectus-
delivery and liability provisions of the Securities Act. For example, a
broker-dealer firm or its client may be deemed a statutory underwriter if
it takes Creation Unit aggregations of shares after placing a purchase
order with the Distributor, breaks them down into the constituent CB
Shares(SM), and sells the CB Shares(SM) directly to its customers; or if it
chooses to couple the acquisition of a supply of new CB Shares(SM) with an
active selling effort involving solicitation of secondary market demands
for CB Shares(SM). A determination of whether one is an underwriter must take
into account all the facts and circumstances pertaining to the activities
of a broker-dealer or its client in the particular case, and the examples
mentioned above should not be considered a complete description of all the
activities that could lead to categorization as an underwriter.
Broker-dealer firms should also note that dealers who are not
"underwriters" but are participating in a distribution (as contrasted with
ordinary secondary trading transactions), and thus dealing with shares that
are part of an "unsold allotment" within the meaning of Section 4(3)(C) of
the Securities Act, would be unable to take advantage of the prospectus-
delivery exemption provided by Section 4(3) of the Securities Act. Firms
that do incur a prospectus-delivery obligation with respect to CB Shares(SM)
are reminded that under Securities Act Rule 153 a prospectus-delivery
obligation under Section 5(b)(2) of the Securities Act owed to a NYSE
member in connection with a sale on the NYSE is satisfied by the fact that
prospectuses will be available at the NYSE upon request. Of course, the
prospectus-delivery mechanism provided in Rule 153 is only available with
respect to transactions on an exchange.
THE FT INDEX
In General
The FT-Actuaries World Indices(TM) were originally developed by
Goldman, Sachs & Co., NatWest Securities Limited and The Financial Times
Limited in 1986, and until May 23, 1995, were jointly published by them.
On May 23, 1995, Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., joined The Financial Times Limited and Goldman, Sachs &
Co. (collectively, the "Owners") as a co-publisher of the FT-Actuaries
World Indices(TM), now known as the Financial Times/Standard & Poor's
Actuaries World Indices(TM) or the FT/S&P Actuaries World Indices(TM). The
FT/S&P Actuaries World Indices(TM) are a continuation of the FT-Actuaries
World Indices(TM). Following a transition period, Standard & Poor's and
The Financial Times Limited (the "Compilers") will jointly calculate the
indices. The Compilers are responsible for the day-to-day data processes
that enable the calculation of the FT Index. The Fund is not sponsored by
or affiliated with Standard & Poor's or The Financial Times Limited. The
FT Index is managed with the assistance of The Institute of Actuaries and
The Faculty of Actuaries, the English and Scottish bodies, respectively,
that represent the actuarial profession in the United Kingdom (together
with the Owners, the "Consortium"). NatWest Securities Limited has
withdrawn as an owner of the FT Index, but will continue to be recognized
as a founding member.
<PAGE>
<PAGE> 14
The following summary of the compilation and operation of the FT
Index is based on information provided by Goldman, Sachs & Co. and Standard
& Poor's.*
The FT Index offers measures of stock price performance for the major
world stock markets as well as for regional areas, broad economic sectors,
and industry groups. The components of the FT Index represent separately
each of 26 countries, 12 geographic regions and 7 broad economic sectors.
In total over 1,000 indices are calculated daily across countries, regions,
industry groups, and economic sectors. Among the criteria that the FT
Index is structured to satisfy are coverage of the investible opportunities
available in the world's equity markets for the international investor and
an objectively constructed measure of the changes in market value of
international investors' portfolios resulting from market activity.
The World Index Policy Committee
Daily and quarterly review of and policy decisions made concerning
the FT Index are the responsibility of the WIPC. The Financial Times
Limited, Goldman, Sachs & Co., and Standard & Poor's each have one vote on
the WIPC, and they can each appoint two additional voting members to the
WIPC to act as representatives of actual or prospective main user groups of
the FT Index. In addition, The Institute of Actuaries and The Faculty of
Actuaries have two voting members on the WIPC, including the Chairman.
NatWest Securities Limited has one vote on the WIPC until 1998. To
the best of the Adviser's knowledge, WIPC includes no employees of DBSC or
Deutsche Bank AG as of December 30, 1994.
Specifically, the WIPC determines the overall policy and objectives
of the FT Index; establishes selection criteria, liquidity requirements,
calculation methodologies, rules and representation for inclusion of index
components and the timing and disclosure of additions and deletions of FT
Index constituents; determines what data on distributions to shareholders
and other capital changes are included; and scrutinizes and ensures that
the FT Index is theoretically and operationally correct and accurate. The
guidelines for the determinations of the Consortium, and its calculation
methodologies, are publicly available. The WIPC may at any time change the
stock exchange or exchanges from which the constituents of a particular FT
Index component may be selected.
Delivery and Availability
The FT Index's values and related performance figures for various
periods of time are calculated after the close of the NYSE for publication
the following day in the various editions of the Financial Times. The FT
Index components are reported in local currency, US dollars, and UK pounds
sterling to allow an explicit valuation of the impact of the currency
component on various user groups.
____________________
* See The FT-Actuaries World Indices(TM)--An Introduction (The
Financial Times Limited, Goldman, Sachs & Co. and Wood MacKenzie &
Co., Ltd., 1987); FT-Actuaries World Indices(TM)--Construction and
Maintenance Rules (The Financial Times Limited, Goldman, Sachs & Co.
and County NatWest Securities Limited, 1991); FT-Actuaries World
Indices(TM)-- Construction and Maintenance Rules Amendments (Goldman,
Sachs & Co. and NatWest Securities Limited, April 1993); FT-
Actuaries World Indices(TM)-- Construction and Maintenance Rules
Amendments (The Financial Times Limited, Goldman, Sachs & Co. and
NatWest Securities Limited, March 1995).
<PAGE>
<PAGE> 15
Constituent changes during a quarter are noted at the foot of the FT Index
table. Where possible, these are shown prior to the actual day of imple-
mentation. Decisions regarding the addition of new eligible constituents
which are unrelated to existing index constituents, or investible weighting
changes to existing constituents, will be announced in the Financial Times
at least four working days before they are implemented in the indices which
are published in the daily table. Monday editions of the Financial Times
show all constituent changes made during the previous week together with
base values for the country indices. Quarter-end changes are published as
soon as is practicable following the quarterly WIPC meeting but before the
quarter-end. The FT Index components are calculated on weekdays when one
or more of the constituent markets are open; the indices are syndicated
and published in the financial sections of several newspapers worldwide,
including The New York Times. FT Index data also may be purchased
electronically through Goldman, Sachs & Co. Extensive index data will be
available through a number of market data vendors to their subscribers.
The Adviser will make available on diskette to _________________ five-year
historical data on the FT Index components corresponding to the initial
nine Series of the Fund and related major market indices.
Selection
Country Selection Criteria. In order for a country to be included in
the FT Index, the following criteria must be satisfied: (1) direct equity
investment by non-nationals must be permitted; (2) accurate and timely data
must be available; (3) no significant exchange controls exist which would
prevent the timely repatriation of capital or dividends; (4) significant
international investor interest in the local equity market must have been
demonstrated; and (5) adequate liquidity must exist.
Allocation of Stocks to Countries. In most instances stocks are
included in the index component of that country where the company is
legally registered and is recognized for taxation purposes, including
regulation of its financial affairs. However, exceptions may be made where
the international investor's recognition of the area of the company's
business or its market listings clearly suggests a different allocation.
Classes Included. Companies whose business is that of holding equity
and other investments (e.g., United Kingdom investment trusts) are eligible
for inclusion. Split capital investment trusts are excluded. Those whose
price is a direct derivation of underlying holdings (e.g., mutual funds)
are also excluded.
Investibility Screens. All securities are subjected to the five
investibility screens described below:
1. A "Size Screen". All securities comprising the bottom 5% of
any market's capitalization are excluded from the FT Index. The
average size of the remaining 95% of the companies represents
the "Large Company Cut-Off Size".
2. A "Total Restriction Screen". A security is totally excluded
from the FT Index if foreign investors are barred from
ownership.
3. A "Partial Restriction Screen". An "investibility weight" is
attached to those securities for which there are partial
restrictions on foreign ownership. The capitalization
included, therefore, for any such security generally is
restricted to that portion available to foreign investors.
Consideration will also be given to what extent this portion is
effectively reduced by "strategic" foreign holdings which may
either require a commensurate <PAGE>
<PAGE> 16
adjustment to the investibility weight or lead to a company
being considered ineligible for inclusion.
4. A "'Free Float' Screen". The full capitalization of a security
is eligible for inclusion in the FT Index if 25% or more of the
outstanding securities is publicly available for investment and
not in the hands of a single party or parties "acting in
concert". A government's shareholdings are included in this
total if these holdings have a stock exchange listing and could
be offered to the public. However, when a government is a
holder of shares but either the shares are not listed or the
government is constrained through requiring legislation before
being able to sell them, a weighting factor will be applied.
Two or more identifiable holders of more than 75% of a single
security may be deemed to be acting in concert unless evidence
is available to the contrary.
Securities will also be considered for inclusion, however, if
the existing "free float" is less than 25% but more than 10%
and if the free float capitalization is more than one half of
the large-company cut-off size (described below) in that
particular market. Only that portion of capitalization deemed
to be "free float" will be eligible for inclusion, this being
considered to be equivalent to the application of the "Partial
Restriction Screen". The free float will be automatically
included if its size is greater than the large-company cut-off
size. The free float may be considered for inclusion if it is
more than one half of but less than the Large Company Cut-Off
Size.
5. A "Liquidity Screen". A security is deemed to be illiquid, and
therefore ineligible for inclusion, if it fails to trade for
more than 15 working days within each of two successive
quarters.
Stock Selection Criteria. The "investible universe" consists of the
aggregate capitalization of all equity securities listed on the exchanges
monitored within a market after the application of the five investibility
screens described above and after certain "multiple equity line" rules are
applied. Where there are multiple lines of equity capital in the one
company, all are included and priced separately, except that lines will be
excluded if: (i) they are not available owing to failure under the inves-
tibility screens; (ii) the size of the line is less than 50% of the
market's minimum size; or (iii) the size of the line is between 50% and
100% of the market's minimum size but is less than 25% of the company's
main line of equity. All partly-paid classes of equity are priced on a
fully-paid basis if the calls are payable at known future dates. Those
recognized as being "permanently partly-paid" are priced on a partly-
paid basis.
An objective of the FT Index in selecting constituent stocks is
to capture 85% of the investible universe in each market. In practice,
representation is maintained within a band of 82%-88% of the investible
universe. For the purposes of the implementation of the current FT Index
rules, a band of 82%-90% is used in order to restrict turnover to 5%-7% for
the larger markets. Consideration is also given in assembling the equities
comprising any market to the economic sector distribution of the sample
chosen. The objective is that this distribution reflect the overall
economic sector distribution of the investible universe.
Companies greater in size than the "Large Company Cut-Off Size"
qualify for inclusion in an FT Index component automatically should they
remain eligible after application of all other investibility
<PAGE>
<PAGE> 17
screens. Stocks in the investible universe below the Large Company Cut-Off
Size are selected and added to the existing sample using the methods
described below.
Stocks are added in descending order of size within economic sectors
such that any divergences in economic sector weights between the Large
Company sample and the investible universe are minimized. The selection
process continues until the aggregate capitalization of the sample
represents as closely as possible 85% of the capitalization of the
investible universe. The representation of each market is reviewed as a
rolling process and at any time that there is evidence that representation
of the investible universe has fallen without the normal band of 82%-88%.
Constituent Changes
Additions may be made to existing FT Index components for six
reasons: (1) the current representation of the total investible market is
below the required level or is not representative of its economic sector
make-up; (2) a non-constituent has gained in importance and replaces an
existing constituent under the rules of review; (3) market events indicate
that the current representation is below that required; (4) a new, eligible
security becomes available whose capitalization available for foreign
investment, taking into account all relevant factors including application
of the investability screens and consideration of any existing strategic
foreign holdings, is 1% or more of the current capitalization of the
relevant FT Index component and is greater than the Large Company Cut-Off
Size, as last calculated; (5) an existing constituent "spins off" a part of
its business and issues new equity to the existing shareholders; or
(6) changes in investibility factors lead to a stock being eligible for
inclusion and that stock now qualifies on other grounds.
Deletions from the FT Index may be made for any of four reasons:
(1) the FT Index component comprises too high a percentage of its
representative universe or is such that it does not represent the market's
sectoral make-up; (2) a review shows that a constituent has declined in
importance and should be replaced by a non-constituent; (3) market events
result in evidence that the current representation as above that required;
or (4) evidence of a change in circumstances regarding investibility would
make an existing constituent ineligible if a full market review was to be
undertaken.
Certain adjustments may be made to the constituents of an FT Index
component immediately. For example, if an existing constituent is acquired
for eligible shares by a quoted non-constituent in the same market then the
acquiring company is added to the FT Index immediately if eligible on all
other counts. The existing constituent is deleted immediately.
Calculation Methodologies
The FT Index values are calculated through widely accepted
mathematical formulae, with the effect that the components are weighted
arithmetic averages of the price relatives of the constituents -- as
produced solely by changes in the marketplace -- adjusted for intervening
capital changes. The FT Index component values are base-weighted
aggregates of the initial market capitalization, the price of each issue
being weighted by the number of shares outstanding. The FT Index
components are modified to maintain continuity when subsequent capital
changes occur. Values are derived to illustrate the longer-term changes
associated with the value of the component over time, although still
reflecting day-to-day movements. The arithmetic average is the sum of the
values divided by the total shares in a component. The arithmetic average
is suitable so long as the series of data is not widely dispersed.
<PAGE>
<PAGE> 18
Dividends. The FT Index uses the most up-to-date indicated
annualized rates, adjusted for any interim changes and updated also for any
firm and precise forecasts.
Policy Changes. Policy changes made by the WIPC are disseminated to
all end-users through the Financial Times and in advance of any
implementation.
Special Issues. Where the WPIC has given special consideration to
issues of particular importance to end-users of the FT Index, and where the
decision is not to implement a change, then users will be notified through
the Financial Times that such issues have been reviewed.
The Australia Component
On December 30, 1994, the Australia component of the FT Index
consisted of 68 stocks with an aggregate market capitalization of
approximately A$184.9 billion, or US $143.4 billion. In percentage terms,
the Australia component represented approximately 83.9% of the aggregate
investible Australian market capitalization. The ten largest constituents
of the Australia component and the respective approximate percentages of
the Australia component represented by such constituents were, in order:
Broken Hill Proprietaries (17.6%), National Australia Bank (7.5%), CRA
(5.7%), Western Mining (4.5%), Westpac (4.3%), BTR-Nylex (3.5%), ANZ Bank
(3.1%), Coles Myer (3.1%), Amcor (3.0%) and CSR (2.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 40% of the market capitalization of the Australia component;
the largest ten holdings comprised approximately 54% of the market
capitalization of the Australia component; and the largest 20 holdings
comprised approximately 73% of the market capitalization of the Australia
component.
The ten most highly represented industry sectors in the Australia
component of the FT Index, and the approximate percentages of the Australia
component represented thereby, as of December 30, 1994, were:
1) Mining, Metals & Minerals 33.4%
2) Banks: Commercial & Other 16.8%
3) Diversified Industrials 8.2%
4) Construction & Building Materials 6.2%
5) Real Estate 4.9%
6) Retail Trade 4.6%
7) Oil 3.7%
8) Transportation 3.2%
9) Forestry & Paper Products 3.0%
10) Diversified Consumer Goods 2.6%
Appendix A hereto contains a complete list of the securities in the
Australia component as of December 30, 1994.
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<PAGE> 19
The France Component
On December 30, 1994, the France component of the FT Index consisted
of 102 stocks with an aggregate market capitalization of approximately
FF1,762.7 billion, or US $330.5 billion. In percentage terms, the France
component represented approximately 88.2% of the aggregate investible
French market capitalization. The ten largest constituents of the France
component and the respective approximate percentages of the France
component represented by such constituents were, in order: Elf Aquitaine
(5.5%), LVMH-Moet Vuitton (4.1%), Total Petroleum (3.9%), L'Oreal (3.7%),
Alcatel Alsthom (3.7%), Eaux (3.3%), Carrefour (3.2%), Danone (2.9%), Saint
Gobain (2.8%) and Societe Generale (2.6%).
As of December 30, 1994, the largest five holdings together comprised
approximately 21% of the market capitalization of the France component; the
largest ten holdings comprised approximately 36% of the market
capitalization of the France component; and the largest 20 holdings
comprised approximately 59% of the market capitalization of the France
component.
The ten most highly represented industry sectors in the France
component of the FT Index, and the approximate percentages of the France
component represented thereby, as of December 30, 1994, were:
1) Banks: Commercial & Other 9.9%
2) Oil 9.5%
3) Retail Trade 7.9%
4) Health & Personal Care 7.9%
5) Construction & Building Materials 6.0%
6) Beverages & Tobacco 5.3%
7) Food & Grocery Products 5.3%
8) Chemicals 5.2%
9) Insurance Multi/Property/Casualty 5.0%
10) Utilities 4.8%
Appendix B hereto contains a complete list of the securities in the France
component as of December 30, 1994.
The Germany Component
On December 30, 1994, the Germany component of the FT Index consisted
of 58 stocks with an aggregate market capitalization of approximately DM
526.1 billion or US $339.4 billion. In percentage terms, the Germany
component represented approximately 89% of the aggregate investible market
capitalization of the official market. The ten largest constituents of the
Germany component and the respective approximate percentages of the Germany
component represented by such constituents were, in order: Allianz (9.8%),
Daimler Benz (7.4%), Siemens (6.8%), Deutsche Bank (6.5%), Veba (5.0%),
Bayer (4.6%), Munich Re (4.0%), Hoechst (3.8%), BASF (3.6%), and Dresdner
Bank (3.5%).
As of December 30, 1994, together, the largest five holdings
comprised approximately 36% of the market capitalization of the Germany
component; the largest ten holdings comprised approximately 55% of the
market capitalization of the German component; and the largest 20 holdings
comprised approximately 77% of the market capitalization of the Germany
component.
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<PAGE> 20
The ten most highly represented industry sectors in the Germany
component of the FT Index and the approximate percentages of the Germany
component represented thereby as of December 30, 1994, were:
1) Banks: Commercial & Other 16.5%
2) Insurance Multi/Property/Casualty 16.3%
3) Chemicals 14.0%
4) Automobiles 12.9%
5) Electrical Equipment 7.5%
6) Utilities 5.6%
7) Machinery & Engineering Services 5.5%
8) Mining, Metals & Minerals 5.3%
9) Diversified Holding Companies 5.0%
10) Construction & Building Materials 3.3%
Appendix C hereto contains a complete list of the component securities of
the Germany component as of December 30, 1994.
The Hong Kong Component
On December 30, 1994, the Hong Kong component of the FT Index
consisted of 56 stocks with an aggregate market capitalization of
approximately HK $1,275.6 billion, or US $164.8 billion. In percentage
terms, the Hong Kong component represented approximately 81% of the
aggregate investible market capitalization of the HKX. The ten largest
constituents of the Hong Kong component and the respective approximate
percentages of the Hong Kong component represented by such constituents
were, in order: Hutchison Whampoa (8.8%), Sun Kung Kai Properties (8.4%),
Hang Seng Bank (8.4%), Cheung Kong (5.4%), China Light & Power (5.2%),
Henderson Land (4.6%), Wharf Holdings (4.4%), Swire Pacific (3.7%), Hong
Kong Electric (3.4%) and Hong Kong Land Holdings (3.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 36% of the market capitalization of the Hong Kong component;
the largest ten holdings comprised approximately 55% of the market
capitalization of the Hong Kong component; and the largest 20 holdings
comprised approximately 68% of the market capitalization of the Hong Kong
component.
The ten most highly represented industry sectors in the Hong Kong
component of the FT Index, and the approximate percentages of the Hong Kong
component represented thereby, as of December 30, 1994, were:
1) Real Estate 37.4%
2) Utilities 13.3%
3) Diversified Consumer Goods 12.0%
4) Diversified Holding Companies 11.8%
5) Banks: Commercial & Other 10.2%
6) Transportation 4.0%
7) Retail Trade 3.8%
8) Entertainment/Leisure/Toys 2.7%
9) Media 1.6%
10) Financial Institutions & Services 1.2%
<PAGE>
<PAGE> 21
Appendix D hereto contains a complete list of the securities in the Hong
Kong component as of December 30, 1994.
The Italy Component
On December 30, 1994, the Italy component of the FT Index consisted
of 59 stocks with an aggregate market capitalization of approximately
IL 224.2 trillion, or US $133.2 billion. In percentage terms, the Italy
component represented approximately 89.7% of the aggregate investible
market capitalization of Italy. The ten largest constituents of the Italy
component and the respective approximate percentages of the Italy component
represented by such constituents were, in order: Generali (14.2%), Telecom
Italia (12.8%), Stet (8.5%), Fiat (7.6%), Alleanza (4.0%), INA (4.0%), San
Paolo (3.2%), Mediobanca (2.9%), Montedison (2.9%) and IMI (2.8%).
As of December 30, 1994, the largest five holdings together comprised
approximately 47% of the market capitalization of the Italy component; the
largest ten holdings comprised approximately 63% of the market
capitalization of the Italy component; and the largest 20 holdings
comprised approximately 81% of the market capitalization of the Italy
component.
The ten most highly represented industry sectors in the Italy
component of the FT Index, and the approximate percentages of the Italy
component represented thereby, as of December 30, 1994, were:
1) Insurance Multi/Property/Casualty 27.6%
2) Utilities 25.8%
3) Automobiles 10.4%
4) Banks: Commercial & Other 8.7%
5) Financial Institutions & Services 7.2%
6) Diversified Holding Companies 4.5%
7) Insurance: Life & Agents/Brokers 4.0%
8) Computers/Office Equipment 2.5%
9) Food & Grocery Products 2.4%
10) Auto Components 2.1%
Appendix E hereto contains a complete list of the securities constituting
the Italy component as of December 30, 1994.
The Japan Component
On December 30, 1994, the Japan component of the FT Index consisted
of 468 stocks with an aggregate market capitalization of approximately
Y274.1 trillion, or US $2.7 trillion. In percentage terms, the Japan
component represented approximately 83.1% of the aggregate investible
market capitalization of the Tokyo Stock Exchange. The ten largest
constituents of the Japan component and the respective approximate
percentages of the Japan component represented by such constituents were,
in order: Toyota Motor (2.8%), Mitsubishi Bank (2.6%), Ind Bank of Japan
(2.5%), Fuji Bank (2.3%), Sumitomo Bank (2.2%), Dai-ichi Kangyo Bank
(2.1%), Sanwa Bank (2.1%), Sakura Bank (1.6%), Nomura Securities (1.5%) and
Tokyo Electric Power (1.3%).
As of December 30, 1994, the largest five holdings together comprised
approximately 12% of the market capitalization of the Japan component; the
largest ten holdings comprised approximately 21% <PAGE>
<PAGE> 22
of the market capitalization of the Japan component; and the largest 20
holdings comprised approximately 31% of the market capitalization of the
Japan component.
The ten most highly represented industry sectors in the Japan
component of the FT Index, and the approximate percentages of the Japan
component represented thereby, as of December 30, 1994, were:
1) Banks: Commercial & Other 22.9%
2) Financial Institutions & Services 6.0%
3) Electronics & Instrumentation 6.0%
4) Utilities 5.4%
5) Automobiles 5.2%
6) Transportation 4.3%
7) Construction & Building Materials 4.0%
8) Household Durables 4.0%
9) Retail Trade 3.9%
10) Chemicals 3.9%
Appendix F hereto contains a complete list of the securities constituting
the Japan component as of December 30, 1994.
The South Africa Component
On December 30, 1994, the South Africa component of the FT Index
consisted of 59 stocks with an aggregate market capitalization of
approximately CR530.7 billion, or US $130.2 billion. In percentage terms,
the South Africa component represented approximately 82.2% of the aggregate
investible market capitalization of the JSX. The ten largest constituents
of the South Africa component and the respective approximate percentages of
the South Africa component represented by such constituents were, in order:
Anglo American Corp. (10.4%), De Beers/Centenary (6.8%), South African
Breweries (5.1%), Liberty Life Association (4.4%), Gencor (3.8%), SASOL
(3.7%), JCI (2.9%), Rembrandt Group (2.8%), Standard Bank Inv. (2.7%) and
Rustenburg Platinum (2.6%).
As of December 30, 1994, the largest five holdings together comprised
approximately 31% of the market capitalization of the South Africa
component; the largest ten holdings comprised approximately 45% of the
market capitalization of the South Africa component; and the largest 20
holdings comprised approximately 67% of the market capitalization of the
South Africa component.
The ten most highly represented industry sectors in the South Africa
component of the FT Index, and the approximate percentages of the South
Africa component represented thereby, as of December 30, 1994, were:
1) Precious Metals & Minerals 44.7%
2) Insurance: Life & Agents/Brokers 8.0%
3) Beverage & Tobacco 7.9%
4) Diversified Holding Companies 7.8%
5) Banks: Commercial & Other 6.4%
6) Food & Grocery Products 5.2%
7) Oil 3.7%
<PAGE>
<PAGE> 23
8) Metals, Mining & Minerals 3.5%
9) Forestry & Paper Products 3.5%
10) Construction & Bldg. Materials 2.2%
Appendix G hereto contains a complete list of the securities in the South
Africa component as of December 30, 1994.
The UK Component
On December 30, 1994, the UK component of the FT Index consisted of
204 stocks with an aggregate market capitalization of approximately L580.2
billion, or US $905.1 billion. In percentage terms, the UK component
represented approximately 88.4% of the aggregate investible market
capitalization of the London Stock Exchange. The ten largest constituents
of the UK Component and the respective approximate percentages of the UK
component represented by such constituents were, in order: British Telecom
(4.0%), British Petroleum (4.0%), Shell Transport & Trading (3.9%), Glaxo
Holdings (3.4%), British Gas (2.3%), BAT Industries (2.3%), HSBC Holdings
(2.1%), Hanson (2.0%), Marks & Spencer (1.9%) and BTR (1.8%).
As of December 30, 1994, the largest five holdings together comprised
approximately 18% of the market capitalization of the UK component; the
largest ten holdings comprised approximately 28% of the market
capitalization of the UK component; and the largest 20 holdings comprised
approximately 43% of the market capitalization of the UK component.
The ten most highly represented industry sectors in the UK component
of the FT Index, and the approximate percentages of the UK component
represented thereby, as of December 30, 1994, were:
1) Utilities 13.5%
2) Commercial Banks 10.7%
3) Health & Personal Care 8.8%
4) Oil 8.7%
5) Beverage & Tobacco 8.6%
6) Retail Trade 8.6%
7) Food & Grocery Products 4.1%
8) Media 3.5%
9) Construction & Building Materials 3.5%
10) Diversified Industrials 2.9%
Appendix H hereto contains a complete list of the component securities of
the UK component as of December 30, 1994.
The US Component
On December 30, 1994, the US component of the FT Index consisted of
513 stocks with an aggregate market capitalization of approximately US $3.3
trillion. In percentage terms, the US component represented approximately
86.8% of the aggregate investible market capitalization of the U.S.
markets. The ten largest constituents of the US component and the
respective approximate percentages of the US component represented by such
constituents were, in order: General Electric (2.7%), AT&T
<PAGE>
<PAGE> 24
(2.4%), Exxon Corp. (2.3%), Coca-Cola (2.0%), Philip Morris (1.5%),
Wal-Mart (1.5%), Merck (1.5%), IBM (1.3%) Procter & Gamble (1.3%), and
DuPont (1.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 11% of the market capitalization of the US component; the
largest ten holdings comprised approximately 18% of the market
capitalization of the US component; and the largest 20 holdings comprised
approximately 27% of the market capitalization of the US component.
The ten most highly represented industry sectors in the US component
of the FT Index, and the approximate percentages of the US component
represented thereby, as of December 30, 1994, were:
1) Utilities 14.6%
2) Health & Personal Care 9.8%
3) Oil 7.6%
4) Beverages & Tobacco 5.5%
5) Banks: Commercial & Other 5.4%
6) Retail Trade 5.2%
7) Chemicals 4.0%
8) Computer & Office Equipment 3.9%
9) Electrical Equipment 3.8%
10) Media 3.4%
Appendix I hereto contains a complete list of the securities in the US
component as of December 30, 1994.
Other Components of the FT Index
In addition to the country components of the FT Index represented by
the initial nine Series offered hereby, the FT Index includes components
representing fifteen other countries, twelve regions grouped by geographic
areas, thirty-six groups classified by industry sectors and seven broad
economic sectors. It is anticipated that Series of the Fund covering
additional national markets, will be organized in the future, although
there can be no assurance that any such additional Series will be created.
EXCHANGE LISTING AND TRADING
Application is being made to list the CB Shares(SM) of each Series for
trading on the NYSE. The NYSE has approved modifications to its Rules to
permit the listing of CB Shares(SM). The non-redeemable CB Shares(SM) are
expected to trade on the NYSE at prices that may differ to some degree from
their net asset value. See "Investment Considerations and Risks" and
"Determination of Net Asset Value". There can be no assurance that the
requirements of the NYSE necessary to maintain the listing of CB Shares(SM) of
any Series will continue to be met. The NYSE may remove the CB Shares(SM) of
a Series from listing if (1) following the initial twelve-month period
beginning upon the commencement of trading of a Series of CB Shares(SM), there
are fewer than 50 record and/or beneficial holders of the CB Shares(SM) for 30
or more consecutive trading days, (2) the value of the underlying index or
portfolio of securities on which such Series is based is no longer
calculated or available or (3) such other event shall occur or condition
exist that, in the opinion of the NYSE, makes further dealings on the NYSE
inadvisable. In addition, the NYSE will remove the shares from listing and
trading upon termination of the Fund.
<PAGE>
<PAGE> 25
The size of each Series' Fund Basket and the related size of its
Creation Unit is designed to provide an initial net asset value per CB(TM)
Share, depending on the Series, of between $30 and $50. Because of the
range of initial net asset values, it is expected that initial trading of
CB Shares(SM) of the various Series on the NYSE will commence at market prices
also within this range. Price movements in CB Shares(SM) on the NYSE will be
quoted in 1/8ths. The Adviser anticipates that the movements in the price
of CB Shares(SM) will correlate closely with the value of the respective FT
Index component. As in the case of other stocks traded on the NYSE, the
brokers commission on transactions will be based on negotiated commission
rates at customary levels for retail customers and rates which are
anticipated to range between $.015 to $.12 per share for institutions and
high net worth individuals.
Within the next year the Fund plans to apply for listing CB Shares
on a number of foreign stock exchanges such as the Deutsche Borse and the
Sydney Stock Exchange with the intention of creating a 24-hour global
market for the CB Shares(SM). There can be no assurance that any such
listings will be obtained.
REASONS FOR INVESTORS TO PURCHASE CB SHARES(SM)
User Rationale
Investors with differing investment objectives and trading styles may
consider using CB Shares(SM) as part of their investment program. For
investments of less than US $25 million, it is expected that each Series
will have a cost structure roughly equivalent to comparable institutional
index-based investments. Individual investors could use CountryBaskets(SM) to
gain exposure to foreign markets represented by the various FT Index
components, both for investment and trading. In addition, CB Shares(SM) may
be used in combination with other foreign securities for hedging or to
pursue various trading strategies. Professional investors could use CB
Shares(SM) for arbitrage, hedging and trading, including as an alternative to
futures based on different foreign market indices when the investor wants
exposure to foreign markets. It is expected that arbitrage involving the
purchase and redemption of multiple Creation Units would eventually enable
dealers and other investors [in Creation Unit aggregations] to benefit from
certain economies of scale [in transactional costs]. Institutional
investors could use CB Shares(SM) as a management tool for tactical asset
allocation without the use of derivatives, to gain international exposure
and, depending on future experiences with costs and liquidity, for long
term holdings in core positions for their investment portfolio. In addi-
tion, CB Shares(SM) may be used by asset managers to gain market exposure in
markets for their clients where they do not necessarily possess the
analytic resources needed to select individual securities; to invest cash
balances on a short- to medium-term basis; to reduce or neutralize port-
folio exposure in a specific national market by short selling CB Shares(SM);
in tandem with use of other securities and derivatives, to tailor portfolio
exposure to foreign markets to meet specific investment objectives; to
reallocate relative market exposures of a portfolio without disposing of
existing portfolio components; and to take advantage of expected liquidity
and pricing disparities and potential stock lending returns.
Possible User Benefits
CountryBaskets(SM) are designed to provide investors with a highly
liquid, securities-based instrument for investing in the national markets
represented by each series. The Adviser intends to make reasonable
efforts to foster a liquid and transparent market, which is generally
characteristic of securities trading on the NYSE. There can be no
assurance, however, that active trading markets for the CB
<PAGE>
<PAGE> 26
Shares(SM) will develop. In addition, since CB Shares(SM) will be quoted on
the NYSE, CB Shares(SM) are expected to serve as a price discovery mechanism
during U.S. trading hours for investment in the various foreign markets
represented by the Series. Subject to any suspension of trading by the
NYSE, CB Shares(SM) may be traded throughout the regular trading session of
the NYSE, including at times when the relevant foreign markets are closed.
Because the securities portfolio of each Series will substantially
replicate the securities portfolio of the corresponding FT Index component,
the Adviser expects that index tracking error relative to index-based
products relying on optimization or other management strategies should be
substantially reduced. Moreover, CB Shares(SM) do not entail the counterparty
risk present in over-the-counter derivatives contracts, like index swaps,
to which CB Shares(SM) are an alternative.
CB Shares(SM) are book-entry securities subject to normal U.S.
settlement procedures, including a three-day settlement cycle, and, unlike
direct investments in foreign equities, CB Shares(SM) traded on the secondary
market will not entail complicated foreign custody and settlement
arrangements, stamp taxes and other levies associated with trading in non-
U.S. equities. In addition, CB Shares(SM) may be loaned on the same basis as
other U.S. equity securities, creating potential for increasing the total
return to an investor.
Investment Rationale
Since the basket of securities held by each Series is represented by
an individual stock, the CB Shares(SM) of such Series, it is anticipated that
investors will trade CB Shares(SM) based on their investment outlook for the
particular national market represented by the Series. Accordingly, it is
expected that much of the trading in CB Shares(SM) will be driven by
macroeconomic fundamentals applied to an assessment of the prospects for
the particular national market. Further, the CB Shares(SM) of each Series
will have statistical characteristics normally associated with shares of
stock of any company (price/earnings ratios, price/book value ratios,
price/cash flow ratios, earnings per share, etc.). Because of these
characteristics, CB Shares(SM) can be included in an investment portfolio in
much the same way as other stocks and ADRs, such as General Electric, AT&T,
Intel, Royal Dutch Shell or Norsk Hydro. Because no Series may borrow
money for the purpose of leveraging its portfolio, an investment in CB
Shares(SM) does not carry the risks associated with investment in a leveraged
portfolio.
MANAGEMENT OF THE FUND
Directors and Officers of the Fund
The Fund's Board consists of [seven] Directors. The Board of
Directors is divided into three classes each having a term of three years.
Each year, the term of one class expires and the successor or successors
elected to such class will serve for a three-year term. This provision
could delay for up to two years the replacement of a majority of the Board
of Directors by the stockholders of the Fund. The Board has the respon-
sibility for the overall management of the Fund, including general
supervision and review of its investment activities. The Board, in turn,
elects the officers of the Fund. The addresses, principal occupations,
and present positions, including any affiliations with the Adviser, State
Street Bank and Trust Company ("State Street" or the "Administrator") or
ALPS Mutual Funds Services, Inc., the principal underwriter of each Series
("ALPS" or the "Distributor"), of the Directors and the officers of the
Fund and their principal occupations for the past five years are listed
below. As of __________, 1995, the Directors and officers of the Fund
owned of record as a group less than 1%
<PAGE>
<PAGE> 27
of the outstanding shares of the Fund. Directors who are deemed to be
interested persons of the Fund, as defined in the 1940 Act, are indicated
by an asterisk (*).
Position with Principal Occupations During
Name and Address the Fund Past Five Years
Certain Affiliated Relationships
[Disclose, as necessary, affiliations of officers/directors with
service providers.]
[Non-Resident Directors
[____________ of the directors of the Fund reside outside of the
United States and all or a significant portion of the assets of such
directors are located outside of the United States. The non-resident
directors of the Fund, all of whom reside in Germany, have no authorized
agents in the United States to receive service of process. As a result, it
may not be possible for investors to effect service of process within the
United States upon such persons or to enforce against them in United States
courts judgments predicated upon the civil liability provisions of United
States securities laws. The Fund has been advised by German counsel,
Punder, Volhard, Weber & Axster, that a final and conclusive judgment based
on civil liability for a definite sum obtained in a United States court
will generally be held enforceable against directors resident in Germany in
the appropriate courts of Germany without re-examination or re-litigation
of the matter adjudicated, except that such judgment will not be so
enforceable if any of the reasons for excluding enforceability set forth
in Section 328(1) of the German Code of Civil Procedure is present, in
particular (i) under German law, such United States court does not have
jurisdiction, (ii) such director has not been served with process in a
proper and timely fashion and has not defended himself against the claim
in court, (iii) the judgment conflicts with a prior judgment of a German
court or a prior judgment of a foreign court that is to be recognized in
Germany or the litigation resulting in the judgment to be enforced
conflicts with litigation previously commenced in Germany, (iv) recognition
of the judgment would clearly be contrary to basic principles of German
law, in particular fundamental constitutional rights or (v) reciprocity is
not assured. The Fund has been advised further by Punder, Volhard, Weber &
Axster that enforcement of liabilities predicated solely on the United
States securities laws in original actions in German courts is uncertain,
as it depends on the nature of the claim, applicable conflict of laws rules
and whether or not the liability under United States securities laws would
conflict with mandatory German law and public policy.]
<PAGE>
<PAGE> 28
INVESTMENT ADVISORY, MANAGEMENT
AND ADMINISTRATIVE SERVICES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS IN THE PROSPECTUS ENTITLED "INVESTMENT
MANAGEMENT" AND "ADMINISTRATOR".
The Investment Adviser
DBSC, a corporation organized under the laws of the State of
Delaware, is a wholly owned direct subsidiary of DB U.S. Financial Markets
Holding Corporation and a wholly owned indirect subsidiary of Deutsche Bank
AG, a major German banking institution. DBSC is engaged in the securities
underwriting, investment advisory, and securities brokerage business. It
is a member of the NYSE and other principal U.S. stock exchanges. DBSC has
significant global investment management experience. As of ___________,
Deutsche Bank AG and its affiliates together managed over US $130 billion
in institutional and mutual fund assets.
DBSC serves as investment adviser to each Series pursuant to an
Investment Management Agreement (the "Management Agreement") between the
Fund and DBSC. Under the Management Agreement, the Adviser, subject to the
supervision of the Fund's Board of Directors and in conformity with the
stated investment policies of each Series, will manage the investment of
each Series' assets. The Adviser will be responsible for placing purchase
and sale orders and providing continuous supervision of the investment
portfolio of each Series. In addition, the Adviser will provide
administrative services to the Fund that will include negotiating and
overseeing the Fund's contractual arrangements with third-party service
providers. Each Series will pay the Adviser an investment advisory and
management fee, computed daily and paid monthly, equal to an annual rate of
(i) .20% (in the case of the US Index Series), .30% (in the case of the
Australia Index Series, the France Index Series, the Germany Index Series,
the Italy Index Series, the Japan Index Series and the UK Index Series) or
.45% (in the case of the Hong Kong Index Series and the South Africa Index
Series) of the average daily net assets of such Series, plus (ii) in the
case of each Series, as remuneration for the Adviser's services in
connection with lending portfolio securities of the Series, 40% of the
Series' gross investment income, excluding dividends on portfolio
securities. In addition, DBSC will be reimbursed by each Series for its
out-of-pocket costs incurred in providing certain administrative services.
See "Investment Policies and Restrictions--Lending Portfolio Securities".
The Management Agreement will continue in effect until ______, 1997, and
thereafter will be subject to annual approval by (1) the Fund's Board of
Directors or (2) vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund, provided that in either event the
continuance also is approved by a majority of the Fund's Board who are not
interested persons (as defined in the 1940 Act) of the Fund by vote cast in
person at a meeting called for the purpose of voting on such approval. The
Management Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board or by vote of the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding voting securities. The Management
Agreement is also terminable upon 60 days' notice by DBSC and will
terminate automatically in the event of its assignment (as defined in the
1940 Act).
The Management Agreement provides that the Adviser will not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which the Management Agreement
relates, except for a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance of its
obligations and duties under the Management Agreement.
<PAGE>
<PAGE> 29
The Adviser will reimburse, on a pro rata basis, each Series for
annual expenses of such Series which exceed the most stringent limits
prescribed by any state in which shares of the Series are offered for sale.
Currently, the only limitation which the Fund believes would be applicable
requires the Adviser to reimburse a Series to the extent that aggregate
operating expenses of the Series (excluding interest, taxes, brokerage
commissions, distribution expenses, if any, and extraordinary expenses)
exceed in any year 2.5% of the first $30 million of average net assets of
such Series, 2.0% of the next $70 million of average net assets of the
Series and 1.5% of average net assets of the Series in excess of $100
million.
The Administrator, Custodian and Transfer Agent
State Street, a Massachusetts trust company, provides certain
administrative services to the Fund, including clerical, bookkeeping and
recordkeeping services not otherwise performed by the Adviser or the
Custodian (as defined below), pursuant to an Administration Agreement (the
"Administration Agreement") between the Fund and State Street, which will
continue in effect until _____________, 199[ ]. Pursuant to the
Administration Agreement, State Street will provide administrative services
to the Fund which include, among other things, monitoring and administering
payment of Fund expenses, preparing the Fund's financial statements and
regulatory filings and preparing the Fund's tax returns. The Admin-
istration Agreement is terminable with respect to the Fund without penalty,
on 60 days' notice, by the Fund's Board. The Administration Agreement is
also terminable upon 60 days' notice by State Street.
The Administration Agreement provides that State Street will not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which the Administration
Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or negligence on the part of State Street in the performance of
its obligations and duties under the Administration Agreement.
For its administrative services to the Fund, State Street is entitled
to a fee, computed daily and paid monthly, equal to an annual rate of .08%
of the average daily net assets of each Series up to $125 million, plus
.06% of the average daily net assets of such Series in excess of $125
million up to $250 million and .04% of the average daily net assets of such
Series in excess of $250 million. In addition, State Street will be
reimbursed by the Fund for its out-of-pocket costs incurred in providing
administrative services.
State Street will also act as Custodian and Transfer Agent for the
Fund. See "Custodian and Transfer Agent" in the Prospectus. State Street
serves as custodian for more than $1,300 billion in assets worldwide and
manages securities processing operations and treasury centers in the United
States, Europe and the Pacific Basin.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale
of portfolio securities, the Adviser looks for prompt execution of the
order at a favorable price. Generally, the Adviser works with recognized
dealers in these securities, except when a better price and execution of
the order can be obtained elsewhere. The Fund will not deal with
affiliates in principal transactions unless permitted by exemptive order
or applicable rule or regulation. Since the investment objective of each
Series is investment performance that corresponds to that of an index, the
Adviser does not intend to select brokers <PAGE>
<PAGE> 30
and dealers for the purpose of receiving research services in addition to
a favorable price and prompt execution either from that broker or an
unaffiliated third party. Orders for agency brokerage transactions may
be placed with Deutsche Bank AG as well as DBSC. The Fund's policy
requires that commissions paid to Deutsche Bank AG and DBSC be reasonable
and fair compared with commissions received by other brokers in connection
with comparable transactions involving similar securities being purchased
or sold on a securities exchange during a comparable period of time.
Subject to allocating brokerage to receive a favorable price and
prompt execution, the Adviser may select brokers who are willing to provide
payments to third party service suppliers to a Series, to reduce expenses
of the Series.
The Adviser will assume general supervision over placing orders on
behalf of the Fund for the purchase or sale of portfolio securities. If
purchases or sales of portfolio securities of the Fund and one or more
other investment companies or clients supervised by the Adviser are
considered at or about the same time, transactions in such securities will
be allocated among the several investment companies and clients in a manner
deemed equitable to all by the Adviser, taking into account the sizes of
such other investment companies and clients and the amount of securities to
be purchased or sold. In some cases this procedure could have a
detrimental effect on the price or volume of the security so far as the
Fund is concerned. However, in other cases it is possible that the ability
to participate in volume transactions and to negotiate lower brokerage
commissions will be beneficial to the Fund. The primary consideration is
prompt execution of orders at the most favorable net price. Portfolio
turnover may vary from year to year, as well as within a year. High
turnover rates are likely to result in comparatively greater brokerage
expenses. The portfolio turnover rate for each Series is expected to be
under 50%. See "The Fund--Investment Policies--Portfolio Turnover" in the
Prospectus. The overall reasonableness of brokerage commissions is
evaluated by the Adviser based upon its knowledge of available information
as to the general level of commissions paid by other institutional
investors for comparable services.
<PAGE>
<PAGE> 31
PURCHASE AND ISSUANCE OF FUND SHARES IN CREATION UNIT AGGREGATIONS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "PURCHASE AND
ISSUANCE OF FUND SHARES IN CREATION UNIT AGGREGATIONS".
Generally
The Fund will offer and sell shares of each Series on a continuous
basis only in aggregations of a specified number of shares for such Series
as set forth below (each a "Creation Unit"), without a sales charge, at the
net asset value of the shares next determined after receipt of an order in
proper form (as described below under "Procedures for Purchasing Creation
Units"). The consideration for a purchase of each Creation Unit
aggregation of shares of a Series is an in-kind deposit of a designated
portfolio of equity securities substantially corresponding in composition
and weighting to the relevant component of the FT Index (a "Fund Basket"),
plus a specified amount of cash (the "Cash Component"). Together, a single
Fund Basket and related Cash Component (the "Fund Deposit") represent the
minimum initial and subsequent investment amount required for the purchase
of shares of a Series, which may only be made in Creation Unit size
aggregations. The number of shares constituting a Creation Unit of each
Series, subject to any stock splits or reclassifications by the Board of
Directors, is 100,000 for the France Index Series, the Germany Index
Series, the Japan Index Series, the UK Index Series and the US Index
Series, and 75,000 for the Australia Index Series, the Hong Kong Index
Series, the Italy Index Series and the South Africa Index Series. The
aggregate net asset value of a Creation Unit of shares is expected to be
between US$2 million and US$6 million. Orders for Creation Units must be
placed with ALPS, the Fund's Distributor. The address and telephone number
of the Distributor are 370 Seventeenth Street, Suite 2700, Denver,
Colorado, 1-800- - ; facsimiles should be sent to - - . See
"Procedures for Purchasing Creation Units" below.
The Fund will issue and sell shares of a Series only on a Business
Day. A "Business Day" with respect to a Series other than the US Index
Series is any day on which (i) the NYSE, (ii) the stock exchange(s) and
Fund subcustodian(s) relevant to such Series and (iii) financial
institutions in Massachusetts are open for business, and in the case of the
US Index Series, any day on which the NYSE is open and financial
institutions in Massachusetts are open for business. As of the date of
this Statement of Additional Information, the NYSE observes the following
holidays: New Year's Day, President's Day (Washington's Birthday), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. The stock exchange and/or subcustodian holidays
relevant to each Series are set forth in Appendix A to the Prospectus.
Massachusetts financial institutions are open on all days when the NYSE is
open (see "Business Day" below) except Columbus Day, Veterans Day and
Martin Luther King Day (observed). See also "Special Considerations and
Risks--Continuous Offering".
The Fund Basket
The Adviser will make available through the Distributor and the
National Securities Clearing Corporation immediately prior to the opening
of business on the NYSE (currently 9:30 a.m. New York time) on each day
that the NYSE is open the list of the names and required number of shares
of each of the portfolio securities constituting the Fund Basket for such
Series, based on the Adviser's determination at the end of the prior
business day. Such Fund Basket will be effective, subject to any adjust-
ments described below, for purchases of Creation Unit aggregations of
shares of the Series on a specified Business Day following the date of
announcement of the Fund Basket by the Distributor (an "Issue Date"). The
Issue Date for a Series will be as follows: The Australia Index Series,
the ___ Business
<PAGE>
<PAGE> 32
Day; the France Index Series, the ___ Business Day; the Germany Index
Series, the ___ Business Day; the Hong Kong Index Series, the ___ Business
Day; the Italy Index Series, the ___ Business Day; the Japan Index Series,
the ___ Business Day; the South Africa Index Series, the ___ Business Day;
the UK Index Series, the ___ Business Day; and the US Index Series, the ___
Business Day. The composition of the Fund Basket will change with changes
in the relevant FT Index component. In addition, in the event that the
Adviser determines, in its discretion, that a security is likely to be
unavailable or available in insufficient quantities for delivery as part of
a Fund Basket or that, for example, an investor is legally prohibited from
acquiring a particular security, the cash equivalent value of such security
may be required or permitted to be delivered in lieu of the security in the
Fund Basket. Such amount will be added to the Cash Component (see "The
Cash Component" below). The announcement of a Fund Basket for a Series
will include the announcement of any adjustments to the Fund Basket that
will be in effect for purchases of such Series' shares on the Issue Date in
order to reflect stock splits, mergers, issuer replacements or other
corporate events. If the securities tendered by an investor for a purchase
of a Creation Unit aggregation of shares will not constitute the complete
Fund Basket for the Issue Date, the Adviser in its discretion may waive any
deficiency in the Fund Basket delivered and require the cash equivalent
value of any undelivered securities to be included in the Cash Component of
the Fund Deposit.
No shares of any Series will be issued until the transfer of good
title to the Fund of the Fund Basket and the payment of the Cash Component
(together with the applicable Cash Component transaction fee) have been
completed. All questions as to the number of shares of each security in
the Fund Basket and the validity, form, eligibility and acceptance for
deposit of any securities to be delivered shall be determined by the
Adviser, whose determination shall be final and binding.
Purchasers of Fund shares in Creation Unit size aggregations are
responsible for the costs of transferring the Fund Basket securities to the
account of the Fund. The estimated costs of transferring the securities in
a Fund Basket to the Fund, which may include, among others, settlement and
custody charges, securities registration costs, stock transfer taxes and
similar costs, are as follows: the Australia Index Series, $2,176; the
France Index Series, $3,774; the Germany Index Series, $1,856; the Hong
Kong Index Series, $3,192; the Italy Index Series, $1,593; the Japan Index
Series, $12,636; the South Africa Index Series, $1,888; the UK Index
Series, $5,508; and the US Index Series, $9,747. See "Summary of Fund
Expenses" in the Prospectus.
The Cash Component
The Cash Component will be equal to the difference between the value
of the Fund Basket delivered on the Issue Date and the net asset value of
the Creation Unit aggregation of shares of the particular Series next
computed on such Business Day and will be determined at the close of the
NYSE (currently 4:00 p.m., New York time) on such Business Day when the net
asset value of Fund shares is determined. If the value of the Fund Basket
should exceed the net asset value of a Creation Unit size aggregation of
shares on a Business Day, the Adviser may determine to accept fewer (or
none) of each, or a designated portion, of the portfolio securities
comprising the Fund Basket and may request some cash to be substituted for
the omitted securities in order to limit the value of the Fund Basket as
tendered to the net asset value of the Creation Unit aggregation of shares.
Securities not accepted as part of the Fund Basket will be returned. The
tendered securities in the Fund Basket will be valued on an Issue Date in
the same manner as the relevant Series values its portfolio securities for
purposes of calculating the Series' net asset value. See "Determining Net
Asset Value". The Distributor will also make available on the morning of
each Business Day information with respect to the Cash Component for
purchases of shares of such Series at the end of the previous Business Day.
<PAGE>
<PAGE> 33
A cash transaction fee will be imposed by the Fund on the Cash
Component of the Fund Deposit to offset the Fund's brokerage and other
transaction costs of investing such cash. The Cash Component transaction
fee for the purchase of shares of each Series, as a percentage of the Cash
Component, is as follows: the Australia Index Series, 1.3%; the France
Index Series, 1.0%; the Germany Index Series, 1.0%; the Hong Kong Index
Series, 1.2%; the Italy Index Series, 1.5%; the Japan Index Series, 1.32%;
the South Africa Index Series, 2.0%; the UK Index Series, 1.5%; and the US
Index Series, 1.0%. See "Summary of Fund Expenses" in the Prospectus.
Arrangements satisfactory to the Fund for delivery of the Cash Component
and the cash purchase transaction fee must be made on the date of purchase
in order for shares to be issued. See "Procedures for Purchasing Creation
Units" below.
Procedures for Purchasing Creation Units
Orders for Creation Unit size aggregations of shares of any Series
may be placed with the Distributor only by an "Authorized Participant",
i.e., a participant in The Depository Trust Company ("DTC") who has entered
into an Authorized Participant Agreement (the "Authorized Participant
Agreement") with the Distributor and the Fund. The Authorized Participant
Agreement provides for procedures with respect to the purchase and
redemption of Creation Unit aggregations of shares that supplement the
procedures set forth herein. Investors who are not Authorized Participants
must make appropriate arrangements with an Authorized Participant to
purchase Creation Unit aggregations of shares. Investors should be aware
that their particular broker may not be a DTC Participant or may not have
executed an Authorized Participant Agreement, and that therefore orders to
purchase Creation Unit aggregations of Fund shares may have to be placed by
the investor's broker through an Authorized Participant. As a result,
purchase orders placed through an Authorized Participant may result in
additional charges to such investor. The Fund anticipates that it will
enter into Authorized Participant Agreements with only a few DTC
Participants. Investors seeking to purchase Creation Unit size
aggregations of Fund shares are directed to contact the Distributor for a
current list of Authorized Participants. Purchase orders for Creation Unit
aggregations of shares may be directed to the Distributor through an
Authorized Participant by a dealer which has entered into an agreement with
the Distributor for solicitation of purchases of Creation Unit aggregations
of shares. All shares of the Fund will be entered on the records of DTC in
the name of Cede & Co. for the account of the Authorized Participant. For
additional information, see "The Fund--Book-Entry Only System" in the
Prospectus. In placing an order, an Authorized Participant agrees that it
will provide for payment of the Cash Component and related Cash Component
transaction fee on its own behalf or on behalf of the investor for which it
acts. Investors are responsible for making their own arrangements with an
Authorized Participant for payment to it of the Cash Component amount and
related cash purchase transaction fee.
To place an order for shares to be issued on an Issue Date, the
Authorized Participant must first give notice to the Distributor on the day
a Fund Basket is announced by delivering a notice of intention to purchase
one or more Creation Unit aggregations of shares on the applicable Issue
Date and cause to be delivered or arrange for the investor to deliver the
securities constituting the Fund Basket to the account maintained by the
Custodian, in the case of the US Index Series, or with the appropriate
subcustodian in the jurisdiction where the portfolio securities of the
Series are traded, in the case of each other Series, by the intended Issue
Date.
Following the notice of intention, an order to purchase Creation
Units on an Issue Date, in the form required by the Fund, must be received
by the Distributor from an Authorized Participant on its own or another
investor's behalf by the closing time of the regular trading session on the
NYSE (currently 4:00 p.m., New York time) on the designated Business Day,
i.e., the Issue Date, in order for
<PAGE>
<PAGE> 34
the issuance of Creation Unit aggregations of shares to be effected at the
net asset value next determined at the close of trading on the NYSE on such
date. Those placing orders to purchase Creation Units through an
Authorized Participant should afford sufficient time to permit proper
submission of the purchase order to the Distributor in time for issuance on
the desired Issue Date. Orders must be transmitted by the Authorized
Participant to ALPS by facsimile or electronic transmission as provided in
the Authorized Participant Agreement.
The Authorized Participant shall have also made available, by means
satisfactory to the Fund, immediately available or same day funds
estimated to be sufficient to pay the Cash Component determined on the
Issue Date (together with the Cash Component transaction fee) on such date.
Any excess funds will be returned. Those placing orders should ascertain
the applicable deadline for cash transfers by contacting the operations
department of the broker or depositary institution effectuating the
transfer of the Cash Component. This deadline is likely to be
significantly earlier than the closing time of the regular trading session
on the NYSE.
A purchase order for shares of any Series will be considered in
"proper form" if (i) a properly completed purchase order, in the form
required by the Fund (available through the Distributor), has been
submitted on the intended date of purchase, whether on its own or another
customer's behalf, by the Authorized Participant by the 4:00 p.m. close of
trading on the NYSE, (ii) delivery of the Fund Basket is confirmed on such
date by the Custodian, and (iii) arrangements satisfactory to the Fund have
been made for the payment to the Custodian on such date of any Cash
Component (together with the Cash Component transaction fee) which may be
due based on the determination of the net asset value of the shares at the
close of trading on the NYSE (4:00 p.m.) on such Issue Date. Currently,
information as to the delivery of the Fund Basket will be available to the
Custodian by 1:00 p.m., New York time, in the case of each Series except
the US Index Series, for which confirmation of delivery of the Fund Basket
will be available by 3:00 p.m., New York time, on the Issue Date. If the
Authorized Participant's purchase order is received in proper form, the
Fund, or the Distributor on behalf of the Fund, will accept the order and
upon determination of the net asset value of the shares of such Series at
the close of business on the NYSE, issue the appropriate number of Creation
Unit aggregations of shares. Until acceptance, either the Fund or the
Distributor may at their sole discretion reject any purchase order. Upon
payment in full, the Transfer Agent will issue the shares to DTC on the
same Business Day for credit to the account of the Authorized Participant
by ___ on the following Business Day. Once the Fund has accepted an order,
the Distributor will transmit a confirmation of acceptance to the
Authorized Participant that placed the order. Investors should be aware
that an Authorized Participant may require orders for purchases of CB
Shares(SM) placed with an Authorized Participant to be in the form required by
the individual Authorized Participant, which form will not be the same as
the form of purchase order specified by the Fund, which the Authorized
Participant must deliver to the Distributor.
The Fund reserves the absolute right to reject a purchase order
transmitted to it by the Distributor in respect of any Fund Basket or any
component thereof if (a) the purchaser or group of purchasers, upon
obtaining the shares ordered, would own 80% or more of the current
outstanding shares of any Series; (b) the Fund Basket is not as specified
by the Adviser, as described above; (c) acceptance of the Fund Basket would
have certain adverse tax consequences; (d) the acceptance of the Fund
Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance
of the Fund Deposit would otherwise, in the discretion of the Fund or the
Adviser, have an adverse effect on the Fund or the rights of beneficial
owners; or (f) in the event that circumstances outside the control of the
Fund, the Distributor and the Adviser make it for all practical purposes
impossible to process purchase orders. The Fund and the Distributor are
under no duty to give notification of any defects or irregularities in the
delivery of Fund
<PAGE>
<PAGE> 35
Deposits or any component thereof nor shall either of them incur any
liability for the failure to give any such notification.
The Distributor
Creation Unit size aggregations of shares for each Series will be
continuously offered for sale through the Fund's principal underwriter and
Distributor, ALPS. The Distributor will serve as the principal underwriter
for each Series pursuant to an agreement which will continue, unless
earlier terminated as described below, until ________, 1997, and which is
renewable annually thereafter (the "Distribution Agreement") with respect
to each Series only if its continuance is specifically approved annually as
to such Series by the affirmative vote of both the Fund's Board of
Directors or a majority of the outstanding voting securities (as defined
under the 1940 Act) of such Series and a majority of the Directors who are
not "interested persons" (as defined in the 1940 Act) of the Fund and have
no direct or indirect financial interest in the operation of the 12b-1 Plan
(as defined below) or in the Distribution Agreement, cast in person at a
meeting called for the purpose of voting on such Plan or the Distribution
Agreement. The Distributor will act as agent for the Fund.
Pursuant to plans adopted by the Board of Directors of the Fund for
each Series under Rule 12b-1 under the 1940 Act (each, a "12b-1 Plan"),
each Series will pay the Distributor distribution services fees, calculated
daily and payable monthly, equal to such Series' allocable portion of the
aggregate distribution services fees payable by the Fund as follows: .02%
per annum of the average aggregate daily net assets ("Aggregate Net Assets")
of all Series up to Aggregate Net Assets of $2.5 billion, plus .01% per annum
of Aggregate Net Assets of all Series in excess of $2.5 billion up to $5
billion, plus .005% per annum of Aggregate Net Assets of all Series in excess
of $5 billion. In addition, pursuant to a Marketing Agreement with the
Distributor (the "Marketing Agreement"), each Series will pay the Distributor
for marketing and promotional services its allocable portion of the aggregate
marketing fees payable by the Fund, equal to .23% per annum of the Aggregate
Net Assets of all Series subject to the Marketing Agreement up to Aggregate
Net Assets of $200 million, plus .03% per annum of Aggregate Net Assets of
such Series in excess of $1.5 billion up to $5 billion, plus .015% per annum
of Aggregate Net Assets of such Series in excess of $5 billion. The
allocation among the Series of fees payable under the Distribution Agreement
and Marketing Agreement will be made pro rata in accordance with the [average
daily net assets] of the respective Series. Each Series will also reimburse
the Distributor and/or the Adviser for its costs incurred in producing
marketing material prepared at the request of the Series. The Distributor
will also be reimbursed for payments made to broker-dealers or other persons
for providing distribution, marketing and shareholder services. The fees paid
by a Series under its 12b-1 Plan will be compensation for distribution or
marketing services for that Series. The aggregate payments under each
12b-1 Plan will not exceed, on an annualized basis, .25% of average daily net
assets of the applicable Series. The continuation of the 12b-1 Plan of each
Series is subject to the annual approval of the Fund's Board, including a
majority of the Directors who are not "interested persons" of the Fund and
have no direct or indirect financial interest in the operation of such 12b-1
Plan or any related agreements.
Each of the Distribution Agreement and the Marketing Agreement will
provide that it may be terminated at any time, without the payment of any
penalty, (i) by vote of a majority of the Directors who are not interested
persons of the Fund (as defined under the 1940 Act) or (ii) by vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the relevant Series, on at least 60 days'
<PAGE>
<PAGE> 36
written notice to the Distributor. Each of the Distribution Agreement and
the Marketing Agreement is also terminable upon 60 days' notice by the
Distributor and will terminate automatically in the event of its assignment
(as defined in the 1940 Act).
The Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, and a member of the National Association
of Securities Dealers, Inc.
The Distributor may enter into agreements with securities dealers
("Soliciting Dealers") who will solicit purchases of Creation Unit
aggregations of Fund shares. The Distributor may also enter into
agreements with Soliciting Dealers or other persons to provide certain
investor services in return for fees and expense reimbursement paid
pursuant to the 12b-1 Plans. Such Soliciting Dealers will also be
Authorized Participants.
REDEMPTION OF FUND SHARES IN CREATION UNIT AGGREGATIONS
SEE "REDEMPTION OF FUND SHARES IN CREATION UNIT AGGREGATIONS" IN THE
PROSPECTUS FOR INFORMATION CONCERNING REDEMPTIONS OF FUND SHARES. THE
FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH
SUCH SECTION.
Generally
The Fund will redeem shares of a Series only in Creation Unit size
aggregations and only on a day on which the NYSE is open for trading. The
Fund will not redeem Fund shares in less than Creation Unit size
aggregations of Fund shares. Generally, redemption proceeds for a Creation
Unit aggregation of shares will consist of a Fund Basket and a minimal
amount of cash. See "Redemption Procedures". All redemptions will be
effected at the net asset value next determined after receipt of a
redemption request in proper form. Investors may purchase CB Shares(SM) in
the secondary market and aggregate such purchases into Creation Units for
redemption. There can be no assurance, however, that there will be
sufficient liquidity in the public trading market at any time to permit
assembly of a Creation Unit size aggregation of CB Shares(SM). See
"Investment Considerations and Risks" in the Prospectus. Investors will
incur brokerage and other costs in connection with such purchase in the
secondary market. See "Summary of Fund Expenses" in the Prospectus for
information about the dollar value of Creation Unit aggregations of shares.
Redemption Proceeds
With respect to each Series, the Adviser will make available through
the Distributor and the National Securities Clearing Corporation
immediately prior to the opening of business on the NYSE (currently 9:30
a.m., New York time) on each day that the NYSE is open for business the
Fund Basket that will be applicable to redemption requests received in
proper form on that day. The redemption proceeds for a Creation Unit
aggregation of shares generally will consist of a Fund Basket together with
a cash redemption payment equal to the difference, if any, between the net
asset value of the Creation Unit aggregation of shares being redeemed next
determined following receipt of a redemption request in proper form, and
the value of the Fund Basket. The cash redemption transaction fee
described below will be deducted from such proceeds. Net asset value is
determined at the close of the regular trading session on the NYSE
(currently 4:00 p.m., New York time). For this purpose the securities in
the Fund Basket will be valued in the same manner as the relevant Series
values its portfolio securities. See
<PAGE>
<PAGE> 37
"Determination of Net Asset Value" in the Prospectus and "Determining Net
Asset Value" in this Statement of Additional Information.
A cash redemption transaction fee payable to the Fund will be imposed
on the cash portion of the redemption proceeds of Fund shares in Creation
Unit size aggregations to offset brokerage and other transaction costs of
the portfolio transactions that may be required. The fee that will be
imposed ranges from 1% to 1.32%, depending on the Series. See "Summary of
Fund Expenses" in the Prospectus. Investors redeeming shares of the Fund
will also bear the costs of transferring the Fund Basket, which may
include, without limitation, settlement and custody charges, registration
fees, stock transfer taxes and similar fees, from the Fund to their account
or on their order. Currently, the estimated redemption transfer costs for
each Series are as follows: the Australia Index Series, $1,700; the France
Index Series, $3,060; the Germany Index Series, $1,450; the Hong Kong Index
Series, $2,800; the Italy Index Series, $1,180; the Japan Index Series,
$9,360; the South Africa Index Series, $1,475; the UK Index Series, $4,080;
and the US Index Series, $6,156. Investors who use the services of a
broker or other such intermediary may be charged a fee for their services.
Redemption Procedures
Redemption requests in respect of shares of any Series must be
submitted to the Distributor by or through an Authorized Participant on a
day that the NYSE is open for business. Investors other than Authorized
Participants are responsible for making arrangements for a redemption
request to be made through an Authorized Participant. The Distributor (at
1-800- - ) will provide a list of current Authorized Participants. A
Creation Unit aggregation of shares will be redeemed at the net asset value
determined at the close of the NYSE on the day that the redemption request
is received in proper form, provided that such request is received by the
Distributor from the Authorized Participant by 4:00 p.m., New York time,
and the shares to be redeemed are delivered through the facilities of DTC
by 4:00 p.m., New York time, on such day. Redemption requests received
after such time will be rejected and may be resubmitted on the next day
that the NYSE is open for business.
The Authorized Participant must transmit the request for redemption,
in the form required by the Fund, to the Distributor in accordance with
procedures set forth in the Authorized Participant Agreement. Investors
should be aware that their particular broker may not have executed an
Authorized Participant Agreement, and that, therefore, requests to redeem
Creation Unit size aggregations of shares may have to be placed by the
investor's broker through an Authorized Participant who has executed an
Authorized Participant Agreement. At any given time there may be only a
limited number of broker-dealers that have executed an Authorized
Participant Agreement. Investors making redemption requests should be
aware that an Authorized Participant acting on its behalf may require that
such request be in the form specified by such Authorized Participant.
Investors making requests to redeem shares should afford sufficient time to
permit proper submission of the request by an Authorized Participant and
transfer of the CB Shares(SM) to the Fund's Transfer Agent. A redemption
request will be considered to be in proper form if (i) a duly completed
request form is received by the Distributor by 4:00 p.m., New York time,
and (ii) the Authorized Participant has transferred or caused to be
transferred to the Fund's Transfer Agent the Creation Unit aggregation of
shares being redeemed through the DTC book-entry system by 4:00 p.m., New
York time, on the same day that the redemption request is received. If the
Transfer Agent does not receive the investor's Fund shares through DTC
facilities by 4:00 p.m. on the same day that the redemption request is
received, the redemption request shall be rejected and may be resubmitted
the next day that the NYSE is open for business. Those making redemption
requests should ascertain
<PAGE>
<PAGE> 38
the deadline applicable to transfers of shares through the DTC system by
contacting the operations department of the broker or depositary
institution effecting the transfer of the CB Shares(SM).
Upon receiving the redemption request, the Distributor shall notify
the Fund and the Fund's Transfer Agent of such redemption request. The
tender of an investor's Fund shares for redemption (as described above) and
the distribution of the cash redemption payment in respect of Creation
Units redeemed will be effected through DTC and the relevant Authorized
Participant to the beneficial owner thereof as recorded on the book-entry
system of DTC or the DTC Participant through which such investor holds
shares, as the case may be, or by such other means specified by the
Authorized Participant submitting the redemption request. See "The
Fund--Book-Entry Only System" in the Prospectus. The Fund will transfer
the Fund Basket in the case of the US Index Series, to or on the order of
the relevant Authorized Participant through the DTC system and, in the case
of each other Series, to the account of the Authorized Participant or
beneficial owner in the foreign jurisdiction where such securities are
traded not later than the seventh calendar day following the date on which
the redemption request is made, except in certain instances, in the case of
the Japan Index Series and the UK Index Series, where holiday schedules in
the respective national markets will require a longer delivery process. In
such instances, pursuant to an order of the Securities and Exchange
Commission, the Fund will make delivery of in-kind redemption proceeds
within a number of days not to exceed 10 calendar days in the case of the
Japan Index Series and 12 calendar days in the case of the UK Index Series.
The dates of redemption in 1995 when such delays in the delivery process
would occur are set forth in Appendix A to the Prospectus. Cash redemption
proceeds will be paid to the account of, or on the order of, the Authorized
Participant for the beneficial owner as soon as practicable after the date
of redemption but in any event within seven calendar days thereof.
In order to accept delivery of the portfolio securities in the Fund
Basket, a redeeming investor or the Authorized Participant on its behalf
must maintain appropriate securities broker-dealer, bank or other custody
arrangements in the jurisdiction in which the portfolio securities of the
Series are customarily traded, to which account such portfolio securities
will be delivered. In the event that neither the redeeming investor nor
the Authorized Participant acting on its behalf has appropriate
arrangements in place to take delivery of the portfolio securities in the
applicable jurisdiction, and it is not possible to make other comparable
arrangements satisfactory to the Fund, or if it is not possible to effect
deliveries of the portfolio securities in such jurisdiction, the Fund will
exercise its option to redeem such shares in cash and the redeeming
beneficial owner will be required to receive the redemption proceeds
entirely in cash. In such a case the cash redemption transaction fee will
be charged by the Fund upon and be subtracted from the entire redemption
proceeds.
Suspension of Redemption
The right of redemption may be suspended or the date of payment
postponed with respect to any Series (1) during any period when the NYSE is
closed (other than customary weekend and holiday closings); (2) when
trading on the NYSE is suspended or restricted; or (3) when an emergency
exists as a result of which disposal of the Series' portfolio securities or
determination of its net asset value is not reasonably practicable.
<PAGE>
<PAGE> 39
DETERMINING NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "DETERMINATION OF
NET ASSET VALUE".
Each Series calculates its net asset value per share at the close of
the regular trading session on the NYSE (currently 4:00 p.m., New York
time) on each day when the NYSE is open for business. See "Purchase and
Issuance of Creation Unit Aggregations of Fund Shares -- Business Day".
Valuation of Portfolio Securities by the Fund
Portfolio securities held by a Series are valued, for purposes of
determining the net asset value per share of the Series, at the last quoted
sales price on the securities exchange or national securities market on
which such securities are primarily traded. The value of portfolio
securities delivered to the Fund as part of the in-kind deposit of
portfolio securities (i.e., the Fund Basket) required for a purchase of
Creation Units on any Business Day will be determined on the same basis.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average
of the most recent bid and asked prices, or if no asked price is available,
at the bid price. However, when market quotations are not readily
available, portfolio securities and other assets are valued based on fair
value as determined in good faith by the Adviser in accordance with
procedures adopted by the Board of Directors of the Fund. Events affecting
the values of portfolio securities that occur between the time their prices
are determined on the primary exchange or market in which they are traded
and the close of regular trading on the NYSE will not be reflected in the
calculation of a Series' net asset value unless the Adviser determines that
the particular event would materially affect net asset value, in which case
an adjustment will be made. The values of portfolio securities denominated
in currencies other than the US dollar are converted into US dollars at the
WMRH closing spot Mid Rate for the relevant Series Currency at 11:00 a.m.,
New York time, on the day that the foreign-currency values of the
securities are determined, or at such other quoted exchange rate as may be
determined by the Adviser to be appropriate. Expenses and fees, including
the investment advisory, administration and distribution fees of each
Series, are accrued daily and taken into account for the purpose of
determining the net asset value of shares of that Series.
DIVIDENDS AND DISTRIBUTIONS
See "Dividends and Capital Gains Distributions" in the Prospectus for
information concerning the Fund's policy on dividends and distributions.
TAXES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS IN THE PROSPECTUS ENTITLED "DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS" AND "TAX MATTERS".
Tax Treatment of the Fund
Each Series is expected to be treated as a separate entity for tax
purposes. As such, each Series must calculate its income and losses, and
satisfy the requirements as to its status as a regulated investment
<PAGE>
<PAGE> 40
company, separately. It is intended that each Series will qualify for and
elect treatment as a regulated investment company (a "RIC") under the
Internal Revenue Code of 1986, as amended (the "Code"). Such treatment
generally will relieve a Series of federal income tax liability to the
extent it distributes its net investment income and net capital gain income
to stockholders.
To qualify for treatment as a RIC, a company must annually distribute
at least 90 percent of its net investment company taxable income (which
includes dividends, interest and net short-term capital gains) and meet
several other requirements. Among such other requirements are the
following: (1) at least 90 percent of the company's annual gross income
must be derived from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock or
securities or foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to its business
of investing in such stock, securities or currencies; (2) at the close of
each quarter of the company's taxable year, (a) at least 50 percent of the
market value of the company's total assets must be represented by cash and
cash items, U.S. government securities, securities of other RICS and other
securities, with such other securities limited for purposes of this
calculation in respect of any one issuer to an amount not greater than 5%
of the value of the company's assets and not greater than 10% of the
outstanding voting securities of such issuer, and (b) not more than 25
percent of the value of its total assets may be invested in the securities
of any one issuer or of two or more issuers that are controlled by the
company (within the meaning of Section 851(b)(4)(B) of the Code) that are
engaged in the same or similar trades or businesses or related trades or
businesses (other than U.S. government securities or the securities of
other RICs); and (3) the company may not derive 30 percent or more of its
annual gross income from the sale or other disposition of (i) stock or
securities, (ii) options, futures or forward contracts on stock or
securities (other than options, futures or forward contracts on foreign
currencies) or (iii) foreign currencies (including options, futures and
forward contracts on foreign currencies) not directly related to the
company's principal business of investing in stock, securities or foreign
currencies, in each case held for less than three months.
Any dividend declared by a Series in October, November or December of
any calendar year and payable to investors of record on a specified date in
such a month shall be deemed to have been received by each investor on
December 31 of such calendar year and to have been paid by the Series not
later than such December 31 so long as the dividend is actually paid by the
Series during January of the following calendar year.
Tax Treatment of Investors
A person other than a tax-exempt entity who exchanges securities for
Creation Units of Fund shares generally will recognize gain or loss equal
to the difference between the market value of the Creation Units and the
sum of his aggregate basis in the securities surrendered and the Cash
Component paid.
Generally, persons who are not subject to tax on their income will
not be taxed upon distributions from the Fund (unless the persons are
subject to the U.S. federal tax on unrelated business income and incur
indebtedness allocable to shares of the Fund). The Series' dividends and
distributions will not be a specified preference item for purposes of the
U.S. federal alternative minimum tax imposed on individuals and
corporations. Other investors will be taxed upon the distribution of
dividends from the Fund. Dividends paid from net investment income will
generally be taxable as ordinary income for federal income tax purposes.
Distributions in excess of a Series' current and accumulated earnings and
profits will, as to each of the Series' investors, be treated as a tax-free
return of capital, to the extent of
<PAGE>
<PAGE> 41
the investor's basis in his shares and as a capital gain thereafter.
Investors should consult their own tax advisers regarding the treatment of
distributions under applicable state law. Dividends of net investment
income from a Series other than the US Index Series generally will not
qualify for the dividends-received deduction permitted to corporate owners
under Section 243 of the Code. Regardless of the length of time a
stockholder has held his shares, distributions designated as being from a
Series' net long-term capital gains (i.e., the excess of net long-term
capital gains over net short-term capital losses) will be taxable as such.
A distribution by a Series will reduce its net asset value per share.
Such a distribution may be taxable to the investor as ordinary income or
capital gain as described above even though, from an investment standpoint,
it may constitute a return of capital.
Upon the sale or exchange of Fund shares, an investor will realize a
taxable gain or loss equal to the difference between the amount realized
and the investor's basis in the shares. Such gain or loss will be treated
as capital gain or loss, if the shares are capital assets in the investor's
hands, and will be long-term or short-term depending upon the investor's
holding period for the shares. Any loss realized on a sale or exchange
will be disallowed to the extent that the shares disposed of are replaced
within a 61-day period beginning 30 days before and ending 30 days after
the disposition of the shares. In such a case, the basis of the shares
acquired will be adjusted upward to reflect the disallowed loss. Any loss
realized by an investor on a disposition of the Fund's shares held by the
investor for six months or less will be treated as a long-term capital loss
for U.S. income tax purposes to the extent of any distributions of long-
term capital gains received by the investor (and any amounts retained by
the fund that were designated as undistributed capital gains), with respect
to such shares.
The Fund will make annual reports of the federal income tax status of
distributions to owners of shares. Such reports will set forth the dollar
amounts of dividends from net investment income and long-term capital
gains, the investor's portion of the foreign income taxes paid to each
country, the portion of dividends that represents income derived from
sources within each country and, in the case of the US Index Series,
dividends which may qualify for the dividends-received deduction described
above. Investors should consult their own tax advisers to determine the
consequences of holding shares in a Series under state, local or other tax
law.
The Fund may be required to withhold for U.S. federal income tax
purposes 31% of the dividends and distributions payable to investors who
fail to provide the Fund with their correct taxpayer identification number
or to make required certifications, or who have been notified by the U.S.
Internal Revenue Service that they are subject to backup withholding.
Corporate investors and other investors specified in the Code are or may be
exempt from such backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability.
THE FOREGOING DISCUSSION IS A SUMMARY ONLY AND IS NOT INTENDED AS A
SUBSTITUTE FOR CAREFUL TAX PLANNING. PURCHASERS OF SHARES OF THE FUND
SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF
INVESTING IN SUCH SHARES, INCLUDING UNDER STATE, LOCAL AND OTHER TAX LAWS.
Finally, the foregoing discussion is based on applicable provisions of the
Code, regulations, judicial authority and administrative interpretations in
effect on the date hereof. Changes in applicable authority could
materially affect the conclusions discussed above, and such changes often
occur.
<PAGE>
<PAGE> 42
CAPITAL STOCK AND SHAREHOLDER REPORTS
Each Fund share has one vote as to matters affecting the holder
thereof and, when issued and paid for in accordance with the terms of
purchase described under "Purchase and Issuance of Fund Shares in Creation
Unit Aggregations", will be fully paid and non-assessable. Shares have no
preemptive, exchange, subscription or conversion rights and are freely
transferable. 200,000,000 shares are currently authorized for each Series
of the Fund.
Shares of all Series vote together as a single class except that if
the matter being voted on affects only a particular Series it will be voted
on only by that Series and if a matter affects a particular Series
differently from other Series, that Series will vote separately on such
matter. Fractional shares of the Fund may be issued. Each share is
entitled to participate equally in dividends and distributions declared by
the Board of Directors with respect to the relevant Series, and in the net
distributable assets of such Series on liquidation. Stockholders are
entitled to require the Fund to redeem only Creation Unit size aggregations
of their shares. The Board of Directors of the Fund may from time to time
change the number of shares constituting a Creation Unit aggregation of
shares of any Series.
[A registered investment company incorporated in Maryland, such as
the Fund, is not required to hold annual shareholder meetings if its
charter or bylaws provide that such meetings would not be held in any year
such a meeting is not required to be held for certain purposes specified in
the 1940 Act. Accordingly, the Fund's bylaws provide that it is not
required to hold annual shareholder meetings for the purpose of electing
Directors as long as two-thirds of the Directors then in office have been
elected by the shareholders. Under Maryland law, Directors of the Fund may
be removed by the vote of the holders of a majority of the outstanding
shares of the Fund. The Fund does not intend to hold shareholder meetings
unless required to for certain purposes specified in the 1940 Act.]
Control Persons. The Fund expects that, immediately prior to the
initial public offering of Fund shares contemplated hereby, the sole
stockholder and controlling person of each Series will be ALPS. Upon the
commencement of trading of CB Shares(SM) on the NYSE, each Series may have a
number of stockholders each holding more than 5% of the outstanding shares
of such Series. The Fund cannot predict the length of time that such
persons will remain control persons of each Series.
Reports. The Fund will issue to its stockholders semi-annual reports
containing unaudited financial statements and annual reports containing
financial statements audited by independent accountants approved by the
Fund's Directors and by the stockholders when meetings are held.
Stockholder Inquiries. Stockholder inquiries may be made by writing
to the Fund, c/o Deutsche Bank Securities Corporation, 31 West 52nd Street,
New York, New York 10019.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, is
counsel to the Fund and has passed upon the validity of the Fund shares.
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as the independent accountants of the Fund.
<PAGE>
<PAGE> 43
REPORT OF INDEPENDENT ACCOUNTANTS
<PAGE>
<PAGE> 44
STATEMENT OF ASSETS AND LIABILITIES
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
________ __, 1995
<TABLE>
<CAPTION>
AUSTRALIA FRANCE GERMANY HONG KONG ITALY JAPAN S. AFRICA UK US
INDEX INDEX INDEX INDEX INDEX INDEX INDEX INDEX INDEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash $ $ $ $ $ $ $ $ $
Deferred organization
expenses ________ ________ ________ ________ ________ ________ ________ ________ _____
TOTAL ASSETS ________ ________ ________ ________ ________ ________ ________ ________ _____
LIABILITIES
Organization expenses
payable ________ ________ ________ ________ ________ ________ ________ ________ _____
TOTAL LIABILITIES $ $ $ $ $ $ $ $ $
NET ASSETS $ $ $ $ $ $ $ $ $
Shares outstanding
($.001 par value)
Net Asset Value per share $ $ $ $ $ $ $ $ $
Composition of net assets
Capital stock
Paid-in capital $_______ $_______ $_______ $_______ $_______ $_______ $_______ $_______ $____
NET ASSETS,
________ __, 1995 $ $ $ $ $ $ $ $ $
See Notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 45
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS
________ [ ], 1995
1. GENERAL
The CountryBaskets(SM) Index Fund, Inc. (the "Fund") was incorporated under
the laws of the State of Maryland on August 8, 1994. The Fund is
registered under the Investment Company Act of 1940 (the "Act") as an open-
end management investment company. The Fund currently has nine common
stock series: the Australia Index Series; the France Index Series; the
Germany Index Series; the Hong Kong Index Series; the Italy Index Series;
the Japan Index Series; the South Africa Index Series; the UK Index Series;
and the US Index Series (each, a "Series").
Deutsche Bank Securities Corporation ("DBSC"), an indirect subsidiary of
Deutsche Bank AG, serves as investment adviser (the "Adviser") to the Fund.
State Street Bank and Trust Company ("State Street") serves as
administrator and custodian to the Fund, and ALPS Mutual Funds Services,
Inc. ("ALPS") serves as distributor of the Fund.
The Series have had no operations other than the sale of the following Fund
Series shares to ALPS for the noted amounts: Australia Index Series
(________ shares for proceeds of $________); France Index Series (________
shares for proceeds of $________); Germany Index Series (________ shares
for proceeds of $________); Hong Kong Index Series (________ shares for
proceeds of $________); Italy Index Series (________ shares for proceeds of
$________); Japan Index Series (________ shares for proceeds of $________);
South Africa Index Series (________ shares for proceeds of $________); UK
Index Series (________ shares for proceeds of $________); and US Index
Series (________ shares for proceeds of $________).
The costs of organizing the Fund and registering its shares will be paid
initially by DBSC and reimbursed by the Fund at the time of the initial
offering. These costs in turn will be equitably allocated to each Series
as provided for by the Fund's Board. Such organization costs have been
deferred and will be amortized ratably over a period of sixty months from
the commencement of operations of the Series. If any of the initial shares
are redeemed before the end of the amortization period, the proceeds of the
redemption will be reduced by the pro rata share of the unamortized
organization costs.
2. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Management Agreement (the "Management
Agreement") with DBSC. As investment adviser, DBSC manages the investments
of each of the Series. For its services, DBSC is entitled to receive a fee
from each Series at an annual rate of .20% of the average daily net assets,
in the case of the US Index Series, .45% of the average daily net assets in
the case of the Hong Kong Index Series and the South African Index Series,
and .30% of the average daily net assets of each other Series, plus, in the
case of each Series, 40% of the gross investment income, less dividends on
securities held in portfolio. The Management Agreement also provides that
DBSC will be reimbursed for out-of-pocket expenses incurred in providing
certain administrative services.
The Fund has an Administration Agreement with State Street. Under the
Administration Agreement, State Street assists in supervising the
operations of the Series. For its services, State Street is entitled to
receive a fee from each Series at an annual rate of .08% of the average
daily net assets of such Series
<PAGE>
<PAGE> 46
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS
________ [ ], 1995
up to $125 million, plus .06% of the average daily net assets of such
Series in excess of $125 million up to $250 million, and .04% of the
average daily net assets of such Series in excess of $250 million. The
Administration Agreement also provides that State Street will be reimbursed
for out-of-pocket expenses incurred in providing certain services.
The Fund has a Distribution Agreement with ALPS. Under the Distribution
Agreement, ALPS serves as Distributor of the shares of the Series. The
Fund also has established a 12b-1 Plan for each Series (each, a "Plan"),
pursuant to which each Series pays the Distributor a distribution services
fee for activities intended to result in the sale of shares of the Series,
equal to such Series' allocable portion of the aggregate distribution
services fees payable by the Fund, as follows: .02% per annum of the average
aggregate daily net assets ("Aggregate Net Assets") of all Series up to
Aggregate Net Assets of $2.5 billion, plus .01% per annum of Aggregate Net
Assets of all Series in excess of $2.5 billion up to $5 billion, plus .005%
per annum of Aggregate Net Assets of all Series in excess of $5 billion. The
Distributor will also be paid a marketing fee and reimbursed for certain
expenses and for payments made to dealers and other persons for distribution,
marketing and shareholder services. All payments to the Distributor by each
Series will be made under the 12b-1 Plan of such Series and will not exceed
in the aggregate, on an annualized basis, .25% of the average daily net assets
of the Series.
3. CAPITAL SHARES
The Fund is authorized to issue 5,000,000,000 shares of common stock.
Currently, the Board has created nine Series of stock and allocated the
following number of shares to each Series: Australia Index Series
(200,000,000 shares); France Index Series (200,000,000 shares); Germany
Index Series (200,000,000 shares); Hong Kong Index Series (200,000,000
shares); Italy Index Series (200,000,000 shares); Japan Index Series
(200,000,000 shares); South Africa Index Series (200,000,000 shares); UK
Index Series (200,000,000 shares); and US Index Series (200,000,000
shares). Shares of each Series are offered at net asset value without a
sales charge, in exchange for an in-kind deposit of a designated portfolio
of securities specified by the Distributor each day, plus a specified
amount of cash. Redemptions of the shares of the Series are made
principally in portfolio securities. The Fund imposes a transaction fee to
the cash portion of each purchase, and each redemption, of Series shares.
The percentage fee imposed on the cash portion of purchases, for each
Series, is as follows: Australia Index Series (1.3%); France Index Series
(1.0%); Germany Index Series (1.0%); Hong Kong Index Series (1.2%); Italy
Index Series (1.0%); Japan Index Series (1.32%); South Africa Index Series
(2.0%); UK Index Series (1.5%); and US Index Series (1.0%). The percentage
fee imposed on the cash portion of redemption proceeds, for each Series, is
as follows: Australia Index Series (1.3%); France Index Series (1.0%);
Germany Index Series (1.0%); Hong Kong Index Series (1.2%); Italy Index
Series (1.0%); Japan Index Series (1.32%); South Africa Index Series
(1.0%); UK Index Series (1.0%); and US Index Series (1.0%).
<PAGE>
<PAGE> A-1
APPENDIX A
FT-Actuaries World Indices
Australia Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BROKEN HILL PROP Basic Industries 25,168.818 17.550
NATL AUSTRALIA BANK Financial, Insurance 10,736.394 7.486
CRA Basic Industries 8,218.603 5.731
WESTERN MINING Basic Industries 6,424.700 4.480
WESTPAC Financial, Insurance 6,128.195 4.273
BTR NYLEX Capital Goods 4,996.956 3.484
ANZ BANK Financial, Insurance 4,387.752 3.059
COLES MYER Consumer Goods / Ser 4,385.022 3.058
AMCOR Basic Industries 4,363.691 3.043
CSR Basic Industries 3,128.947 2.182
NEWS CORP Consumer Goods / Ser 2,916.665 2.034
BORAL Basic Industries 2,899.547 2.022
FOSTERS BREWING GR Capital Goods 2,837.967 1.979
PACIFIC DUNLOP Capital Goods 2,833.151 1.975
COMMONWLTH BK OF AUS Financial, Insurance 2,784.642 1.942
LEND LEASE CORP Financial, Insurance 2,646.538 1.845
MIM HOLDINGS Basic Industries 2,645.384 1.845
ICI AUSTRALIA Basic Industries 2,491.465 1.737
COCA-COLA AMATIL Consumer Goods / Ser 2,451.262 1.709
WOODSIDE PETROLEUM Energy 2,451.132 1.709
WOOLWORTHS LTD. Consumer Goods / Ser 2,226.916 1.553
PIONEER INTERNATIONAL Basic Industries 2,192.083 1.528
COMALCO Basic Industries 2,174.267 1.516
BRAMBLES INDUSTRIES Transportation and Ser 2,091.063 1.458
NORTH LTD Basic Industries 1,765.649 1.231
MAYNE NICKLESS Transportation and Ser 1,571.881 1.096
WESTFIELD TRUST Financial, Insurance 1,565.755 1.092
SANTOS Energy 1,425.891 0.994
WESFARMERS Consumer Goods / Ser 1,266.148 0.883
SOUTHCORP HOLDINGS Consumer Goods / Ser 1,256.546 0.876
GENERAL PROPERTY TST Financial, Insurance 1,076.262 0.750
GOODMAN FIELDER LTD Consumer Goods / Ser 1,036.043 0.722
NEWCREST MINING LTD. Basic Industries 1,029.807 0.718
BURNS PHILP Consumer Goods / Ser 1,024.228 0.714
T.N.T Transportation and Ser 972.911 0.678
ARNOTTS Consumer Goods / Ser 928.741 0.648
AUST GAS LIGHT Utilities 923.468 0.644
AMPOLEX LTD. Energy 779.679 0.544
QBE INSURANCE GP Financial, Insurance 773.744 0.540
TUBEMAKERS Capital Goods 773.084 0.539
SMITH (HOWARD) Energy 762.298 0.532
RENISON GOLD Basic Industries 762.115 0.531
EMAIL Consumer Goods / Ser 761.857 0.531
<PAGE>
<PAGE> A-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
AUST NATIONAL INDS Capital Goods 723.706 0.505
COAL & ALLIED INDS Energy 709.126 0.494
NORMANDY POSEIDON Basic Industries 708.265 0.494
HARDIE (JAMES) INDS Basic Industries 670.860 0.468
STOCKLAND TST Financial, Insurance 668.785 0.466
WESTFIELD HDGS Financial, Insurance 661.020 0.461
QCT RESOURCES Energy 636.786 0.444
CALTEX AUSTRALIA Energy 481.694 0.336
ASHTON MINING Basic Industries 466.610 0.325
ROTHMANS HDG Consumer Goods / Ser 453.852 0.316
METAL MANUFACTURERS Capital Goods 415.007 0.289
SCHRODERS PROP FUND Financial, Insurance 387.144 0.270
ENERGY RES AUSTRALIA Basic Industries 305.306 0.213
PANCONTL MGN Basic Industries 289.399 0.202
SONS OF GWALIA LTD Basic Industries 256.908 0.179
KIDSTON GOLD MINES Basic Industries 242.398 0.169
ABERFOYLE Basic Industries 238.554 0.166
BOUGAINVILLE COPPER Basic Industries 230.210 0.161
OPSM PROTECTOR LTD Consumer Goods / Ser 219.277 0.153
FAI INSURANCES Financial Insurance 180.655 0.126
NAT CONSOLIDATED Capital Goods 145.282 0.101
CLYDE INDUSTRIES Capital Goods 131.824 0.092
CRUSADER Energy 106.298 0.074
MCPHERSONS Basic Industries 26.745 0.019
JENNINGS GROUP Basic Industries 23.054 0.016
</TABLE>
<PAGE>
<PAGE> B-1
APPENDIX B
FT-Actuaries World Indices
France Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ELF AQUITAINE Energy 18,566.417 5.618
LVMH - MOET VUITTON Consumer Goods / Ser 13,729.394 4.155
TOTAL Energy 12,974.658 3.926
L'OREAL Consumer Goods / Ser 12,536.924 3.794
ALCATEL ALSTHOM Capital Goods 12,521.459 3.789
EAUX (GENERALE DES) Utilities 10,950.270 3.314
CARREFOUR Consumer Goods / Ser 10,623.137 3.215
DANONE Consumer Goods / Ser 9766.978 2.955
SAINT GOBAIN Basic Industries 9,337.476 2.826
SOCIETE GENERALE Financial, Insurance 8,755.166 2.649
BANQUE NATIONALE DE PARIS Financial, Insurance 8,742.372 2.645
AIR LIQUIDE Basic Industries 8,707.193 2.635
RENAULT Consumer Goods / Ser 7,873.584 2.383
PARIBAS Financial, Insurance 7,709.583 2.333
U.A.P Financial, Insurance 7,636.274 2.311
AXA Financial, Insurance 7,446.430 2.253
RHONE POULENC A ORD Basic Industries 7,291.563 2.206
SUEZ (FINANCIERE) Financial, Insurance 7,124.777 2.156
PEUGEOT S.A Consumer Goods / Ser 6,863.117 2.077
LAFARGE COPPEE Basic Industries 5,816.703 1.760
LYONNAISE DES EAUX-DUMEZ Utilities 4,981.236 1.507
ELF SANOFI Consumer Goods / Ser 4,209.086 1.274
SCHNEIDER (EX SPEP) Capital Goods 4,110.279 1.244
MICHELIN 'B' Capital Goods 3,885.943 1.176
PINAULT-PRINTEMPS/La REDOUTE Consumer Goods / Ser 3,880.249 1.174
HAVAS Consumer Goods / Ser 3,866.595 1.170
CANAL PLUS Consumer Goods / Ser 3,457.777 1.046
THOMSON-CSF Capital Goods 3,444.797 1.042
VALEO Capital Goods 3,416.043 1.034
ERIDANIA/BEGHIN-SAY Consumer Goods / Ser 3,372.541 1.021
PERNOD RICARD Consumer Goods / Ser 3,301.780 0.999
CHRISTIAN DIOR Consumer Goods / Ser 3,271.832 0.990
PROMODES Consumer Goods / Ser 3,257.990 0.986
ROUSSEL-UCLAF Consumer Goods / Ser 3,248.506 0.983
NAVIGATION MIXTE Financial, Insurance 2,788.206 0.844
CMB PACKAGING S.A Basic Industries 2,749.308 0.832
CREDIT. COMM. FRANCE Financial, Insurance 2,719.125 0.823
ACCOR Consumer Goods / Ser 2,713.210 0.821
LEGRAND Capital Goods 2,599.169 0.787
PECHINEY INTL. Basic Industries 2,575.016 0.779
CREDIT LOCAL DE FRANCE Financial, Insurance 2,562.939 0.776
BANCAIRE (CIE) Financial, Insurance 2,337.585 0.707
BOUYGUES Basic Industries 2,131.305 0.645
<PAGE>
<PAGE> B-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
SAINT - LOUIS Consumer Goods / Ser 2,061.160 0.624
EUROTUNNEL Transportation and Ser 1,994.094 0.603
LAGARDERE GROUP Capital Goods 1,992.671 0.603
SYNTHELABO Consumer Goods / Ser 1,954.451 0.591
BON MARCHE Consumer Goods / Ser 1,821.380 0.551
POLIET Basic Industries 1,752.265 0.530
CR FONCIER FRANCE Financial, Insurance 1,748.328 0.529
CASTORAMA DUBOIS Consumer Goods / Ser 1,740.989 0.527
BIC Consumer Goods / Ser 1,738.102 0.526
CAP GEMINI SOGETI Consumer Goods / Ser 1,690.125 0.511
CASINO Consumer Goods / Ser 1,678.576 0.508
EURO DISNEY Consumer Goods / Ser 1,598.371 0.484
GROUPE WORMS ET CIE Financial, Insurance 1,587.469 0.480
DOCKS DE FRANCE Consumer Goods / Ser 1,537.428 0.465
S.E.B Consumer Goods / Ser 1,528.297 0.462
CHARGEURS Financial, Insurance 1,517.583 0.459
C.G.I.P Financial, Insurance 1,377.657 0.417
SAGEM Capital Goods 1,355.320 0.410
AGF Financial, Insurance 1,351.015 0.409
IMETAL Basic Industries 1,295.705 0.392
COMPTOIRS MODERNES Consumer Goods / Ser 1,275.747 0.386
SIDEL Capital Goods 1,271.816 0.385
SIMCO Financial, Insurance 1,263.345 0.382
FROMAGERIES Consumer Goods / Ser 1,223.365 0.370
ECCO Consumer Goods / Ser 1,190.354 0.360
SEFIMEG Financial, Insurance 1,127.378 0.341
GROUP DE LA CITE Consumer Goods / Ser 1,115.506 0.338
OXYGENE D'ACETYL Basic Industries 1,031.673 0.312
ESSILOR INTL Consumer Goods / Ser 1,023.419 0.310
EURAFRANCE Financial, Insurance 1,017.029 0.308
BONGRAIN Consumer Goods / Ser 1,016.581 0.308
CLUB MEDITERRANEE Consumer Goods / Ser 917.969 0.278
CREDIT NATIONAL Financial, Insurance 891.982 0.270
GAZ ET EAUX Financial, Insurance 847.324 0.256
UNIBAIL Financial, Insurance 755.729 0.229
UIF Financial, Insurance 684.646 0.207
G.T.M. ENTREPOSE Basic Industries 678.362 0.205
SOMMER ALLIBERT Consumer Goods / Ser 677.703 0.205
DAMART S.A Consumer Goods / Ser 664.097 0.201
CPR (PARIS REESC.) Financial, Insurance 626.604 0.190
SALOMON Consumer Goods / Ser 617.683 0.187
FONCIERE LYONNAISE Financial, Insurance 590.878 0.179
EBF Capital Goods 557.613 0.169
EURO RSCG Consumer Goods / Ser 545.486 0.165
MOULINEX Consumer Goods / Ser 526.793 0.159
LABINAL Capital Goods 523.376 0.158
LEGRIS Capital Goods 510.509 0.154
IMMEUBLES DE FRANCE Financial, Insurance 496.992 0.150
<PAGE>
<PAGE> B-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
UFB LOCABAIL Financial, Insurance 447.413 0.135
S.I.L.I.C. Financial, Insurance 398.474 0.121
CASINO PREF. Consumer Goods / Ser 396.673 0.120
VALLOUREC Basic Industries 395.644 0.120
D.M.C. Consumer Goods / Ser 370.609 0.112
INTERBAIL Financial, Insurance 350.781 0.106
NORD - EST Financial, Insurance 331.246 0.100
TAITTINGER Consumer Goods / Ser 309.389 0.094
SPIE BATIGONOLLES Basic Industries 253.674 0.077
FINEXTEL Financial, Insurance 196.296 0.059
GEOPHYSIQUE Energy 174.081 0.053
</TABLE>
<PAGE>
<PAGE> C-1
APPENDIX C
FT-Actuaries World Indices
Germany Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ALLIANZ AG HLDG. Financial, Insurance 33,414.194 9.845
DAIMLER BENZ Consumer Goods / Ser 25,219.121 7.430
SIEMENS Capital Goods 23,058.520 6.794
DEUTSCHE BANK Financial, Insurance 22,034.081 6.492
VEBA Financial, Insurance 16,931.608 4.989
BAYER Basic Industries 15,708.510 4.628
MUNICH RE (PART PD. REG) Financial, Insurance 13,627.194 4.015
HOECHST Basic Industries 12,783.251 3.766
BASF Basic Industries 12,202.328 3.595
DRESDNER BANK Financial, Insurance 11,698.800 3.447
MANNESMANN Capital Goods 9,948.337 2.931
RWE Utilities 9,260.706 2.728
BMW (BR.) Consumer Goods / Ser 9,145.161 2.694
COMMERZBANK Financial, Insurance 7,777.359 2.291
VOLKSWAGEN REGD. Consumer Goods / Ser 7,420.645 2.186
BAY. HYP.-U. WECHSEL BANK. Financial, Insurance 6,699.004 1.974
VIAG Basic Industries 6,416.373 1.890
THYSSEN Basic Industries 5,967.194 1.758
BAYERISCHE VEREINSBANK Financial, Insurance 5,890.685 1.736
SCHERING Basic Industries 4,492.649 1.324
PREUSSAG Basic Industries 4,422.077 1.303
LUFTHANSA Transportation and S 4,381.210 1.291
HOCHTIEF Basic Industries 4,218.065 1.243
LINDE Capital Goods 4,030.613 1.188
RWE PREF Utilities 4,000.830 1.179
VEW Utilities 3,666.004 1.080
KARSTADT Consumer Goods / Ser 3,051.098 0.899
MAN Capital Goods 3,016.692 0.889
AACH. & MUNCH. BETEIL REGD. Financial, Insurance 2,879.303 0.848
BEIERSDORF Consumer Goods / Ser 2,750.323 0.810
HEIDELBERGER ZEMENT Basic Industries 2,720.737 0.802
DEGUSSA Basic Industries 2,595.717 0.765
RHEINELEKTRA Capital Goods 2,447.742 0.721
HOLZMANN (PHILIPP) Basic Industries 2,409.132 0.710
VICTORIA HLDG. REGD. Financial, Insurance 2,405.806 0.709
KAUFHOF Consumer Goods / Ser 2,305.414 0.679
HENKEL KGA PREF. Basic Industries 2,209.226 0.651
GEHE Consumer Goods / Ser 2,107.045 0.621
BER. KRAFT UND LICHT (BEWAG) Utilities 2,095.484 0.617
COLONIA KONZERN REGD. Financial, Insurance 1,966.452 0.579
<PAGE>
<PAGE> C-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BHF-BANK Financial, Insurance 1,966.098 0.579
ASKO DEUTSCHE KAUFHAUS Consumer Goods / Ser 1,960.403 0.578
BILFINGER & BERGER Basic Industries 1,834.839 0.541
ALTANA Consumer Goods / Ser 1,560.593 0.460
VOLKSWAGEN PREF Consumer Goods / Ser 1,408.681 0.415
SPRINGER (AXEL) VERLAG REG Consumer Goods / Ser 1,366.581 0.403
CONTINENTAL Capital Goods 1,364.726 0.402
METALLGESELLSCHAFT Basic Industries 1,302.074 0.384
AGIV Capital Goods 1,251.613 0.369
PWA Basic Industries 987.724 0.291
MAN PREF. Capital Goods 912.403 0.269
DOUGLAS HLDG. Consumer Goods / Ser 838.386 0.247
DEUTSCHE BABCOCK Capital Goods 779.032 0.230
AACH. & MUNCH. BET. BR. Financial, Insurance 596.129 0.176
LINOTYPE-HELL Capital Goods 540.387 0.159
MUNICH RE Financial, Insurance 470.323 0.139
KAUFHOF PREF Consumer Goods / Ser 462.647 0.136
BMW (PREF.) Consumer Goods / Ser 429.281 0.126
</TABLE>
<PAGE>
<PAGE> D-1
APPENDIX D
FT-Actuaries World Indices
Hong Kong Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
HUTCHISON WHAMPOA Consumer Goods / Ser 14,640.302 8.880
SUN HUNG KAI PROPS Financial, Insurance 13,880.543 8.419
HANG SENG BANK Financial, Insurance 13,855.284 8.404
CHEUNG KONG Financial, Insurance 8,947.011 5.427
CHINA LIGHT & POWER Utilities 8,490.584 5.150
HENDERSON LAND Financial, Insurance 7,611.740 4.617
WHARF HLDS Financial, Insurance 7,302.995 4.429
SWIRE PACIFIC `A' Financial, Insurance 6,048.548 3.669
HONG KONG ELECTRIC Utilities 5,522.823 3.350
HONG KONG LAND HLDGS Financial, Insurance 5,254.943 3.187
JARDINE MATHESON Consumer Goods / Ser 5,190.228 3.148
CITIC PACIFIC $HKO.40 Financial, Insurance 4,808.029 2.916
HONG KONG TELECOMM Utilities 4,571.316 2.773
NEW WORLD DEV Financial, Insurance 4,252.621 2.579
CATHAY PACIFIC A/WYS Transportation and S 4,165.149 2.526
HOPEWELL Financial, Insurance 3,571.787 2.166
WHEELOCK AND CO. Consumer Goods / Ser 3,404.788 2.065
HK & CHINA GAS Utilities 3,343.339 2.028
JARDINE STRATEGIC Financial, Insurance 3,101.652 1.881
SWIRE PACIFIC `B' Financial, Insurance 3,028.506 1.837
BANK OF EAST ASIA Financial, Insurance 2,930.393 1.777
AMOY PROPERTIES Financial, Insurance 2,045.306 1.241
HYSAN DEV Financial, Insurance 2,004.245 1.216
CHINESE ESTATES Financial, Insurance 1,925.020 1.168
DAIRY FARM INTL Consumer Goods / Ser 1,842.485 1.118
HANG LUNG DEV Financial, Insurance 1,745.153 1.058
GUOCO GROUP LIMITED Financial, Insurance 1,718.009 1.042
HENDERSON INVESTMENT Financial, Insurance 1,690.658 1.025
TELEVISION BROADCAST Consumer Goods / Ser 1,677.410 1.017
SINO LAND Financial, Insurance 1,674.193 1.015
HK & SHANGHAI HOTELS Consumer Goods / Ser 1,248.047 0.757
MIRAMAR HOTEL Consumer Goods / Ser 1,204.869 0.731
SHUN TAK HOLDINGS LTD Transportation and S 1,033.015 0.627
SOUTH CHINA MORNING POST $HKO.10 Consumer Goods / Ser 877.278 0.532
JOHNSON ELECTRIC Capital Goods 874.538 0.530
GREAT EAGLE HLDS Financial, Insurance 870.186 0.528
MANDARIN ORIENTAL Consumer Goods / Ser 806.735 0.489
KOWLOON MOTOR Transportation and S 719.946 0.437
HK REALTY `A' Financial, Insurance 642.727 0.390
HK AIRCRAFT Capital Goods 617.552 0.375
SHAW BROS Consumer Goods / Ser 612.750 0.372
<PAGE>
<PAGE> D-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
SEMI-TECH (GLOBAL) Consumer Goods / Ser 556.311 0.337
REALTY DEV 'A' Financial, Insurance 539.347 0.327
SIME DARBY Consumer Goods / Ser 518.184 0.314
JARDINE INTNL. MOTOR Consumer Goods / Ser 502.819 0.305
DICKSON CONCEPTS INT Consumer Goods / Ser 447.335 0.271
CROSS-HARBOUR TUNNEL Transportation and S 367.821 0.223
HARBOUR CENTRE DEV Consumer Goods / Ser 358.278 0.217
CHINA MOTOR BUS Transportation and S 351.333 0.213
WINSOR INDUSTRIAL Consumer Goods / Ser 320.762 0.195
WING ON CO INTL LTD Consumer Goods / Ser 315.733 0.192
SUN HUNG KAI Financial, Insurance 277.181 0.168
PLAYMATES TOYS HLDG Consumer Goods / Ser 196.251 0.119
LANE CRAWFORD INTL A Consumer Goods / Ser 137.624 0.083
PLAYMATES PROP HLDGS Financial, Insurance 127.989 0.078
LANE CRAWFORD INTL B Consumer Goods / Ser 102.358 0.062
</TABLE>
<PAGE>
<PAGE> E-1
APPENDIX E
FT-Actuaries World Indices
Italy Compenent as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENERALI (ASSICURAZIONI) Financial, Insurance 18,851.591 14.156
TELECOM ITALIA Utilities 17,086.039 12.831
STET Utilities 11,297.896 8.484
FIAT Consumer Goods / Ser 10,169.919 7.637
ALLEANZA (ASSICURAZIONI) Financial, Insurance 5,378.785 4.039
INA Financial, Insurance 5,313.608 3.990
SAN PAOLO Financial, Insurance 4,292.090 3.223
MEDIOBANCA Financial, Insurance 3,870.205 2.906
MONTEDISON Financial, Insurance 3,845.148 2.887
IMI Financial, Insurance 3,687.471 2.769
STET RISP Utilities 3,429.392 2.575
BANCA COMM. ITALIANA Financial, Insurance 3,353.635 2.518
TELECOM ITALIA SVGS Utilities 3,120.744 2.343
RAS Financial, Insurance 2,742.123 2.059
CREDITO ITALIANO Financial, Insurance 2,287.690 1.718
FIAT PTC PREF Consumer Goods / Ser 2,186.228 1.642
PIRELLI SPA Capital Goods 1,910.055 1.434
ITALGAS Utilities 1,821.170 1.368
OLIVETTI ORD Capital Goods 1,793.578 1.347
FONDIARIA Financial, Insurance 1,714.053 1.287
FIAT SVG N/CV Consumer Goods / Ser 1,426.760 1.071
SIRTI Capital Goods 1,423.948 1.069
SAI Financial, Insurance 1,378.082 1.035
IFIL Consumer Goods / Ser 1,362.588 1.023
BANCO AMBROVENETO Financial, Insurance 1,318.196 0.990
GEMINA Financial, Insurance 1,238.844 0.930
ITALCEMENTI Basic Industries 1,142.007 0.858
SME Consumer Goods / Ser 1,117.688 0.839
TORO ASSICURAZIONI Financial, Insurance 896.731 0.673
RINASCENTE ORD Consumer Goods / Ser 888.877 0.667
IFI PTC PREF Financial, Insurance 856.449 0.643
BURGO (CARTIERE) Basic Industries 835.291 0.627
FIDIS Financial, Insurance 817.152 0.614
SNIA BPD Basic Industries 772.699 0.580
RAS SVGS N/CV Financial, Insurance 740.738 0.556
ALLEANZA ASSIC N/CV Financial, Insurance 730.186 0.548
SAIPEM Energy 727.855 0.547
IFIL N/C SVGS. Consumer Goods / Ser 691.576 0.519
CIR-COMPAGNIE Financial, Insurance 656.014 0.493
MILANO ASSICURAZIONI Financial, Insurance 623.475 0.468
LLOYD ADRIATICO Financial, Insurance 600.401 0.451
<PAGE>
<PAGE> E-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GILARDINI Capital Goods 542.152 0.407
MONTEDISON SVG. N/CV. Financial, Insurance 461.704 0.347
SASIB Capital Goods 419.047 0.315
MARZOTTO Consumer Goods / Ser 388.097 0.291
MAGNETI MARELLI Capital Goods 363.144 0.273
ITALCEMENTI SVGS N/CV Basic Industries 351.115 0.264
BANCO AMBROVEN N/C SVGS Financial, Insurance 316.836 0.238
SAI SVGS N/CV Financial, Insurance 303.375 0.228
UNICEM Basic Industries 292.005 0.219
EDITOR L'ESPRESSO Consumer Goods / Ser 270.218 0.203
TORO ASSICURAZIONI SVG N/CV Financial, Insurance 223.561 0.168
SASIB SVG N/CV Capital Goods 197.950 0.149
CIR-COMPAGNIE SVG N/CV Financial, Insurance 195.852 0.147
TORO ASS. PTC PREF Financial, Insurance 158.690 0.119
TECNOST SPA Capital Goods 125.381 0.094
UNICEM SVG N/CV Basic Industries 104.354 0.078
BANCA COMM. ITALIANA SVGS N/CV Financial, Insurance 34.117 0.026
CREDITO ITALIANO SVG N/CV Financial, Insurance 22.145 0.017
</TABLE>
<PAGE>
<PAGE> F-1
APPENDIX F
FT-Actuaries World Indices
Japan Component as of 30DEC94
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TOYOTA MOTOR Consumer Goods / Ser 78,413.968 2.854
MITSUBISHI BANK Financial, Insurance 70,739.099 2.575
IND BANK OF JAPAN Financial, Insurance 69,528.044 2.531
FUJI BANK Financial, Insurance 63,885.138 2.325
SUMITOMO BANK Financial, Insurance 59,817.761 2.177
DAI-ICHI KANGYO BANK Financial, Insurance 58,804.471 2.140
SANWA BANK Financial, Insurance 57,567.838 2.095
SAKURA BANK LTD. Financial, Insurance 44,526.693 1.621
NOMURA SECURITIES Financial, Insurance 40,717.250 1.482
TOKYO ELEC POWER Utilities 37,323.180 1.359
MATSUSHITA ELECT IND Consumer Goods / Ser 34,473.990 1.255
HITACHI Capital Goods 32,584.831 1.186
BANK OF TOKYO Financial, Insurance 31,259.310 1.138
SEVEN-ELEVEN Consumer Goods / Ser 27,631.523 1.006
ASAHI BANK Financial, Insurance 26,995.283 0.983
LONG TERM CREDIT BK Financial, Insurance 26,142.784 0.952
NIPPON STEEL Basic Industries 25,896.698 0.943
MITSUBISHI HEAVY IND Capital Goods 25,656.747 0.934
TOKAI BANK Financial, Insurance 24,403.901 0.888
TOSHIBA Capital Goods 23,308.537 0.848
KANSAI ELEC POWER Utilities 23,308.383 0.848
ITO YOKADO Consumer Goods / Ser 22,143.223 0.806
SONY CORP Consumer Goods / Ser 21,174.338 0.771
NISSAN MOTOR Consumer Goods / Ser 20,725.817 0.754
MITSUBISHI CORP Consumer Goods / Ser 20,572.792 0.749
SHARP CORP Consumer Goods / Ser 20,039.607 0.729
MITSUBISHI TRUST BNK Financial, Insurance 19,449.037 0.708
DAIWA SECURITIES Financial, Insurance 19,399.912 0.706
TOKYO MARINE & FIRE Financial, Insurance 18,917.023 0.689
FUJITSU Capital Goods 18,389.909 0.669
CHUBU ELEC POWER Utilities 17,974.901 0.654
NIPPONDENSO Capital Goods 17,759.297 0.646
NEC CORP Capital Goods 17,601.596 0.641
SUMITOMO TRUST BANK Financial, Insurance 17,454.804 0.635
HONDA MOTOR Consumer Goods / Ser 17,282.695 0.629
NIKKO SECS Financial, Insurance 16,631.819 0.605
SEIBU RAILWAY Transportation and S 16,112.660 0.586
DAIWA BANK Financial, Insurance 15,292.300 0.557
MITSUBISHI ELECTRIC Capital Goods 15,211.267 0.554
ASAHI GLASS Capital Goods 14,455.851 0.526
MITSUBISHI ESTATE Financial, Insurance 13,933.327 0.507
<PAGE>
<PAGE> F-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
KYOCERA Capital Goods 13,820.782 0.503
CANON Capital Goods 13,635.253 0.496
KAWASAKI STEEL Basic Industries 13,590.234 0.495
MITSUI Consumer Goods / Ser 13,231.552 0.482
KINKI NIPPON RAILWAY Transportation and S 12,989.875 0.473
DAI-NIPPON PRINTING Consumer Goods and / Ser 12,773.198 0.465
TOHOKU ELEC POWER Utilities 12,626.000 0.460
MITSUI TRUST & BANKING Financial, Insurance 12,491.015 0.455
TOKYO GAS Utilities 12,167.122 0.443
BRIDGESTONE CORP Capital Goods 12,135.884 0.442
MITSUBISHI KASEI Basic Industries 12,027.422 0.438
FUJI PHOTO FILM Consumer Goods / Ser 11,915.259 0.434
KIRIN BREWERY Consumer Goods / Ser 11,709.480 0.426
FANUC Capital Goods 11,250.340 0.410
SANYO ELECTRIC Consumer Goods / Ser 11,133.792 0.405
KYUSHU ELEC POWER Utilities 11,058.403 0.403
ASAHI CHEMICAL INDS Basic Industries 11,044.931 0.402
SUMITOMO SHOJI Consumer Goods / Ser 10,881.994 0.396
NIPPON EXPRESS Transportation and S 10,765.088 0.392
DAIEI Consumer Goods / Ser 10,658.549 0.388
TAKEDA CHEMICAL Consumer Goods / Ser 10,620.616 0.387
NIPPON CREDIT BANK Financial, Insurance 10,418.942 0.379
TORAY INDS Basic Industries 10,184.164 0.371
SUMITOMO METAL Basic Industries 10,182.995 0.371
ITOCHU CORP Consumer Goods / Ser 10,143.314 0.369
OSAKA GAS Utilities 10,135.963 0.369
TONEN CORP Energy 10,109.369 0.368
SUMITOMO ELECTRIC Capital Goods 10,099.713 0.368
KUBOTA Capital Goods 10,085.779 0.367
SANKYO Consumer Goods / Ser 10,064.041 0.366
SHIZUOKA BANK Financial, Insurance 9,918.277 0.361
NKK Basic Industries 9,747.505 0.355
BANK OF YOKOHAMA Financial, Insurance 9,634.956 0.351
TOPPAN PRINTING Consumer Goods / Ser 9,435.494 0.343
SUMITOMO CHEMICAL Basic Industries 9,264.864 0.337
YAMAICHI SECURITIES Financial, Insurance 9,134.296 0.332
KOMATSU Capital Goods 9,056.124 0.330
MURATA MFG Capital Goods 9,008.020 0.328
KOBE STEEL Basic Industries 8,838.537 0.322
YASUDA TST AND BANK Financial, Insurance 8,779.632 0.320
MITSUI FUDOSAN Financial, Insurance 8,608.694 0.313
CHUGOKU ELEC POWER Utilities 8,459.136 0.308
MITSUBISHI MOTORS Consumer Goods / Ser 8,391.264 0.305
AJINOMOTO Consumer Goods / Ser 8,324.172 0.303
MARUBENI CORP Consumer Goods / Ser 8,232.183 0.300
KAJIMA Basic Industries 8,228.517 0.300
NIPPON OIL Energy 8,172.153 0.297
TOYO TST AND BANKING Financial, Insurance 8,113.968 0.295
<PAGE>
<PAGE> F-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
NEW OJI PAPER Basic Industries 7,857.086 0.286
SHIMIZU CORP Basic Industries 7,760.632 0.282
NIPPON YUSEN Transportation and S 7,602.214 0.277
NINTENDO Consumer Goods / Ser 7,596.764 0.277
MATSUSHITA ELEC WKS Capital Goods 7,513.548 0.273
SEKISUI HOUSE Basic Industries 7,365.325 0.268
TOKYU Transportation and S 7,262.360 0.264
CHIBA BANK Financial, Insurance 7,095.023 0.258
SECOM Consumer Goods / Ser 7,064.973 0.257
NIPPON PAPER CO. Basic Industries 6,958.795 0.253
JUSCO Consumer Goods / Ser 6,866.157 0.250
JOYO BANK Financial, Insurance 6,834.486 0.249
KAO Consumer Goods / Ser 6,792.418 0.247
HACHIJUNI BANK Financial, Insurance 6,771.731 0.246
DAIWA HOUSE INDUSTRY Basic Industries 6,763.890 0.246
MARUI Consumer Goods / Ser 6,719.063 0.245
TOYO SEIKAN Basic Industries 6,712.543 0.244
YAMANOUCHI PHARM Consumer Goods / Ser 6,639.604 0.242
SHIKOKU ELEC POWER Utilities 6,523.911 0.237
YASUDA FIRE & MARINE Financial, Insurance 6,498.254 0.237
TAISHO PHARM Consumer Goods / Ser 6,497.867 0.237
RICOH Capital Goods 6,464.738 0.235
SHIN-ETSU CHEMICAL Basic Industries 6,441.407 0.234
TOSTEM CORP Basic Industries 6,378.075 0.232
TDK Consumer Goods / Ser 6,365.993 0.232
TAISEI CORP Basic Industries 6,314.861 0.230
KAWASAKI HEAVY Capital Goods 6,069.377 0.221
MAZDA MOTOR Consumer Goods / Ser 6,030.047 0.219
MITSUBISHI MATERIALS Basic Industries 6,013.126 0.219
IHI Capital Goods 6,012.877 0.219
ONO PHARMACEUTICAL Consumer Goods / Ser 5,913.707 0.215
TOYODA AUTO LOOM Capital Goods 5,795.593 0.211
SEGA ENTERPRISES Consumer Goods / SEr 5,791.419 0.211
SUMITOMO MARINE & FIRE Financial, Insurance 5,753.409 0.209
GUNMA BANK Financial, Insurance 5,538.952 0.202
TOTO Basic Industries 5,518.468 0.201
MITSUI MARINE & FIRE Financial, Insurance 5,481.732 0.200
SEKISUI CHEMICAL Basic Industries 5,476.688 0.199
HITACHI ZOSEN Capital Goods 5,353.688 0.195
ALL NIPPON AIRWAYS Transportation and S 5,301.636 0.193
SUZUKI MOTOR Consumer Goods / Ser 5,261.296 0.192
ODAKYU ELEC RAILWAY Transportation and S 5,184.819 0.189
ISUZU MOTORS Consumer Goods / Ser 5,175.943 0.188
TEIJIN Basic Industries 5,127.735 0.187
NISSHIN STEEL Basic Industries 5,114.776 0.186
SUMITOMO METAL MNG Basic Industries 5,078.660 0.185
MITSUKOSHI Consumer Goods / Ser 5,063.724 0.184
BANK OF FUKUOKA Financial, Insurance 5,052.640 0.184
<PAGE>
<PAGE> F-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TOBU RAILWAY Transportation and S 5,008.995 0.182
HANKYU CORP Transportation and S 4,998.452 0.182
MATSUSHITA COMMS Capital Goods 4,958.875 0.180
HOKURIKU ELEC POWER Utilities 4,958.094 0.180
HOKKAIDO ELEC POWER Utilities 4,935.515 0.180
HOKURIKU BANK Financial, Insurance 4,889.371 0.178
EBARA Capital Goods 4,838.154 0.176
OHBAYASHI-GUMI Basic Industries 4,772.417 0.174
SHISEIDO Consumer Goods / Ser 4,733.425 0.172
TOKYO ELECTRON Capital Goods 4,650.602 0.169
ASAHI BREWERIES Consumer Goods / Ser 4,605.255 0.168
COSMO OIL Energy 4,451.484 0.162
NIPPON SEIKO Capital Goods 4,433.476 0.161
YAMAZAKI BAKING Consumer Goods / Ser 4,415.796 0.161
ASHIKAGA BANK Financial, Insurance 4,414.071 0.161
KYOWA HAKKO KOGYO Consumer Goods / Ser 4,406.619 0.160
JAPAN ENERGY CORP. Energy 4,320.024 0.157
OKI ELECTRIC Capital Goods 4,319.742 0.157
PIONEER ELECTRONIC Consumer Goods / Ser 4,319.663 0.157
KYUSHU MATSUSHITA Capital Goods 4,313.076 0.157
DAIICHI SEIYAKU Consumer Goods / Ser 4,279.389 0.156
OMRON TATEISI ELECT Capital Goods 4,261.974 0.155
FURUKAWA ELECTRIC Capital Goods 4,249.027 0.155
HITACHI METALS Basic Industries 4,240.374 0.154
EISAI Consumer Goods / Ser 4,202.259 0.153
JAPAN AIR LINES Transportation and S 4,177.850 0.152
MITSUI OSK LINES Transportation and S 4,155.959 0.151
SHOWA SHELL SEKIYU Energy 4,138.488 0.151
MATSUSHITA KOTOBUKI Consumer Goods / Ser 4,121.275 0.150
YAMATO TRANSPORT Transportation and S 4,081.743 0.149
NISSHO-IWAI Consumer Goods / Ser 4,046.217 0.147
NIPPON FIRE & MARINE Financial, Insurance 4,027.611 0.147
ISETAN Consumer Goods / Ser 3,975.229 0.145
FAMILYMART Consumer Goods / Ser 3,972.019 0.145
HOKKAIDO TAKUSHOKU Financial, Insurance 3,949.233 0.144
FUJI ELECTRIC Capital Goods 3,894.348 0.142
KEYENCE CORP Capital Goods 3,887.225 0.141
NAGOYA RAILROAD Transportation and S 3,878.851 0.141
DAINIPPON INK & CHEM Basic Industries 3,878.135 0.141
AISIN SEIKI Capital Goods 3,859.921 0.140
KEIO TEITO ELEC RAIL Transportation and S 3,760.811 0.137
GENERAL SEKIYU Energy 3,727.312 0.136
VICTOR CO OF JAPAN Consumer Goods / Ser 3,694.277 0.134
KURARAY Basic Industries 3,675.548 0.134
BANK OF HIROSHIMA Financial, Insurance 3,665.373 0.133
NGK INSULATORS Capital Goods 3,634.115 0.132
AMADA Capital Goods 3,632.019 0.132
SHOWA DENKO Basic Industries 3,631.097 0.132
<PAGE>
<PAGE> F-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
NIKON CORP Capital Goods 3,592.823 0.131
NIPPON LIGHT METAL Basic Industries 3,572.722 0.130
NICHII Consumer Goods / Ser 3,561.959 0.130
MITSUBISHI OIL Energy 3,539.259 0.129
KUMAGAI-GUMI Basic Industries 3,534.223 0.129
KINDEN Capital Goods 3,523.140 0.128
CANON SALES Consumer Goods / Ser 3,522.188 0.128
HINO MOTORS Consumer Goods / Ser 3,508.767 0.128
CASIO COMPUTER Capital Goods 3,484.697 0.127
NANKAI ELECTRIC RAIL Transportation and S 3,481.344 0.127
FUJISAWA PHARM Consumer Goods / Ser 3,475.418 0.127
NTN TOYO-BEARING Capital Goods 3,467.008 0.126
TOKYO STEEL Basic Industries 3,378.742 0.123
CHUO TST AND BANKING Financial, Insurance 3,350.507 0.122
TAKASHIMAYA Consumer Goods / Ser 3,321.518 0.121
ONODA CEMENT Basic Industries 3,285.033 0.120
MINEBEA Capital Goods 3,273.461 0.119
MITSUI TOATSU CHEM Basic Industries 3,258.286 0.119
UBE INDUSTRIES Basic Industries 3,233.178 0.118
SAPPORO BREWERIES Consumer Goods / Ser 3,208.276 0.117
KOKUYO Capital Goods 3,144.110 0.114
NISSIN FOOD Consumer Goods / Ser 3,142.509 0.114
SHIONOGI Consumer Goods / Ser 3,139.350 0.114
HITACHI CABLE Basic Industries 3,131.402 0.114
HOYA Capital Goods 3,096.030 0.113
KURITA WATER Capital Goods 3,033.863 0.110
KONICA Consumer Goods / Ser 3,010.489 0.110
NIPPON MEAT PACKERS Consumer Goods / Ser 2,990.867 0.109
DAI TOKYO FIRE & MARINE INSURANCE Financial, Insurance 2,962.565 0.108
TOKYO DOME CORP Consumer Goods / Ser 2,948.487 0.107
KEIHIN ELC EXP RAIL Transportation and S 2,935.785 0.106
SEIYU Consumer Goods / SEr 2,916.194 0.106
MAKITA ELECTRIC WKS Capital Goods 2,904.745 0.106
OLYMPUS OPTICAL Capital Goods 2,886.297 0.105
NIPPON ELECTR GLASS Capital Goods 2,882.487 0.105
NISSHIN FLOUR Consumer Goods / Ser 2,880.001 0.105
NISHIMATSU CONSTRN Basic Industries 2,879.701 0.105
TODA CORP Basic Industries 2,867.973 0.104
KANDENKO Capital Goods 2,856.855 0.104
SUMITOMO FORESTRY Basic Industries 2,835.818 0.103
MITSUBISHI WAREHOUSE Transportation and S 2,795.042 0.102
SEINO TRANSPORT Transportation and S 2,777.855 0.101
TOYOBO Consumer Goods / Ser 2,749.595 0.100
MITSUI PETROCHEMICAL Basic Industries 2,749.019 0.100
TOHO Consumer Goods / Ser 2,732.016 0.099
NISSHINBO INDS Consumer Goods / Ser 2,725.318 0.099
JGC CORP Capital Goods 2,718.926 0.099
NGK SPARK PLUC CO Capital Goods 2,712.494 0.099
<PAGE>
<PAGE> F-6
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
YOKOGAWA ELECTRIC Capital Goods 2,702.994 0.098
BANYU PHARMACEUTICAL Consumer Goods / Ser 2,698.926 0.098
MITSUBISHI RAYON Basic Industries 2,685.271 0.098
SHIMANO IND Consumer Goods / SEr 2,678.689 0.098
FUJIKURA Basic Industries 2,678.571 0.097
FUJITA TOURIST Consumer Goods / Ser 2,667.353 0.097
TOMEN CORP Y50 Consumer Goods / Ser 2,651.410 0.097
CHIYODA CHEMICAL ENG Capital Goods 2,641.600 0.096
FUJITA CORP Basic Industries 2,621.418 0.095
KANEGAFUCHI CHEMICAL Basic Industries 2,613.229 0.095
FUJI HEAVY INDS Consumer Goods / Ser 2,599.063 0.095
CHUGAI PHARM Consumer Goods / SEr 2,593.753 0.094
NATIONAL HOUSE Basic Industries 2,585.059 0.094
MITSUI ENG & SHIPBLD Capital Goods 2,581.999 0.094
HASEKO Basic Industries 2,538.673 0.092
MEIJI SEIKA Consumer Goods / Ser 2,505.911 0.091
MITSUBISHI GAS CHEM Basic Industries 2,503.259 0.091
INAX Basic Industries 2,501.812 0.091
DAIDO STEEL Basic Industries 2,484.640 0.090
YAMAHA Consumer Goods / Ser 2,470.503 0.090
SNOW BRAND MILK Consumer Goods / Ser 2,459.104 0.090
MOCHIDA PHARM Consumer Goods / Ser 2,439.688 0.089
TOSOH CORP Basic Industries 2,420.241 0.088
MITSUBISHI PAPER Basic Industries 2,416.775 0.088
CITIZEN WATCH Capital Goods 2,416.476 0.088
SUMITOMO REALTY Financial, Insurance 2,405.716 0.088
TOKYU LAND Financial, Insurance 2,401.547 0.087
NITTO ELECTRIC IND Capital Goods 2,398.784 0.087
NIPPON SHINPAN Financial, Insurance 2,398.338 0.087
ORIX CORPORATION Financial, Insurance 2,392.697 0.087
NIHON CEMENT Basic Industries 2,373.271 0.086
NIPPON SHEET GLASS Capital Goods 2,360.943 0.086
ALPS ELECTRIC Capital Goods 2,352.081 0.086
HONSHU PAPER Basic Industries 2,348.458 0.085
KAWASAKI KISEN Transportation and S 2,347.407 0.085
DAIKIN INDUSTRIES Capital Goods 2,337.492 0.085
MORI SEIKI Capital Goods 2,328.956 0.085
ARABIAN OIL Energy 2,322.131 0.085
HIROSE ELECTRONICS Capital Goods 2,285.735 0.083
HOUSE FOOD INDS Consumer Goods / Ser 2,260.997 0.082
BANK OF KYOTO Financial, Insurance 2,226.880 0.081
MATSUZAKAYA Consumer Goods / SEr 2,226.268 0.081
SUMITOMO HEAVY INDS Capital Goods 2,218.607 0.081
CHIYODA FIRE & MAR Financial, Insurance 2,211.979 0.081
MEIJI MILK Consumer Goods / Ser 2,182.422 0.079
MITSUI MIN & SMELT Basic Industries 2,180.693 0.079
HITACHI CREDIT Financial, Insurance 2,142.662 0.078
DAIMARU Consumer Goods / Ser 2,130.919 0.078
<PAGE>
<PAGE> F-7
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
DAICEL CHEMICAL Basic Industries 2,106.457 0.077
CSK CORP Consumer Goods / Ser 2,082.693 0.076
ONWARD KASHIYAMA Consumer Goods / Ser 2,082.602 0.076
SANWA SHUTTER Basic Industries 2,078.716 0.076
SUMITOMO OSAKA CEMNT Basic Industries 2,073.607 0.075
NICHIREI Transportation and S 2,071.891 0.075
JAPAN RADIO Capital Goods 2,046.763 0.075
ORIENT FINANCE Financial, Insurance 2,042.287 0.074
IZUMIYA Consumer Goods / Ser 2,037.616 0.074
YOKOHAMA RUBBER Capital Goods 2,021.327 0.074
TANABE SEIYAKU Consumer Goods / Ser 2,005.277 0.073
DOWA FIRE & MARINE Financial, Insurance 1,976.854 0.072
KOYO SEIKO Capital Goods 1,962.209 0.071
GREEN CROSS Consumer Goods / Ser 1,944.630 0.071
TOKYU DEBT STORE Consumer Goods / Ser 1,929.416 0.070
NIPPON HODO Basic Industries 1,924.456 0.070
NIPPON SHOKUBAI Basic Industries 1,914.151 0.070
DAIFUKU Capital Goods 1,913.339 0.070
HITACHI MAXELL Consumer Goods / Ser 1,908.020 0.069
SKYLARK Consumer Goods / Ser 1,899.413 0.069
TOYO INK Basic Industries 1,878.715 0.068
TEIKOKU OIL Energy 1,865.028 0.068
AOKI CONSTRUCTION Basic Industries 1,852.038 0.067
OKUMURA CORP Basic Industries 1,851.487 0.067
MAEDA CORP Basic Industries 1,850.087 0.067
NIPPON PAINT Basic Industries 1,819.485 0.066
ITOHAM FOODS Consumer Goods/ Ser 1,802.081 0.066
KANEBO Consumer Goods / Ser 1,799.062 0.065
LION Consumer Goods / Ser 1,792.819 0.065
DAINIPPON PHARM Consumer Goods / Ser 1,786.776 0.065
BROTHER INDS Capital Goods 1,774.948 0.065
FUJI FIRE & MARINE Financial Insurance 1,747.723 0.064
MARUICHI STEEL TUBE Basic Industries 1,742.286 0.063
TOKYO STYLE Consumer Goods / Ser 1,732.366 0.063
PENTA OCEAN CONST Basic Industries 1,730.047 0.063
WACOAL Consumer Goods / Ser 1,714.639 0.062
ZEXEL CORPN Capital Goods 1,700.917 0.062
TAKARA SHUZO Consumer Goods / Ser 1,674.126 0.061
ANRITSU Capital Goods 1,660.555 0.060
AOYAMA TRADING Consumer Goods / Ser 1,655.298 0.060
JAPAN SYNTH RUBBER Capital Goods 1,638.450 0.060
NIPPON SANSO Basic Industries 1,620.182 0.059
KANSAI PAINT Basic Industries 1,608.682 0.059
NOK Capital Goods 1,604.807 0.058
SUMITOMO BAKELITE Basic Industries 1,602.510 0.058
ATSUGI NYLON Consumer Goods / Ser 1,590.660 0.058
UNITIKA Basic Industries 1,574.319 0.057
KIKKOMAN Consumer Goods / Ser 1,573.340 0.057
<PAGE>
<PAGE> F-8
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
MATSUSHITA REFRIGER Consumer Goods / Ser 1,559.291 0.057
DAISHOWA PAPER MFG Basic Industries 1,550.873 0.056
NIPPON SHARYO Capital Goods 1,544.407 0.056
HANWA Consumer Goods / Ser 1,538.859 0.056
MINOLTA CAMERA Capital Goods 1,527.761 0.055
TOKUYAMA CORP Basic Industries 1,507.802 0.055
KANEMATSU CORPN Consumer Goods / Ser 1,489.729 0.054
DOWA MINING Basic Industries 1,482.783 0.054
HANSHIN ELECT RAIL Transportation and S 1,463.268 0.053
TOSHOKU Consumer Goods / Ser 1,460.325 0.053
DAIKYO Basic Industries 1,458.071 0.053
NAGASE Consumer Goods / Ser 1,454.021 0.053
NIIGATA ENG Capital Goods 1,452.817 0.053
MIZUNO Consumer Goods / Ser 1,440.499 0.052
EZAKI GLICO Consumer Goods / Ser 1,438.335 0.052
NISSAN FIRE & MARINE Financial, Insurance 1,432.555 0.052
STANLEY ELECTRIC Capital Goods 1,424.853 0.052
IWATANI Consumer Goods / Ser 1,417.188 0.052
GUNZE Consumer Goods / Ser 1,416.772 0.052
AMANO CORP Capital Goods 1,411.699 0.051
NIPPON SUISAN Consumer Goods / Ser 1,393.179 0.051
KOKUSAI ELECTRIC Capital Goods 1,393.164 0.051
NAVIX LINE LTD Transportation and S 1,390.829 0.051
HAZAMA-GUMI Basic Industries 1,380.592 0.050
NIPPON KAYAKU Consumer Goods / Ser 1,366.397 0.050
MORINAGA MILK Consumer Goods / Ser 1,366.106 0.050
YAMATAKE HONEYWELL Capital Goods 1,338.679 0.049
YOSHIMTOMI PHARM Consumer Goods 1,338.119 0.049
NHK SPRING Capital Goods 1,320.995 0.048
NISSAN DIESEL MOTOR Consumer Goods / Ser 1,317.780 0.048
JAPAN STORAGE BATTRY Capital Goods 1,310.356 0.048
SANKYU Transportation and S 1,292.844 0.047
NORITAKE Consumer Goods / Ser 1,287.170 0.047
KOITO MFG Capital Goods 1,286.582 0.047
SANYO CHEMICAL Basic Industries 1,271.914 0.046
ISHIHARA SANGYO Basic Industries 1,268.255 0.046
NIPPON ZEON Basic Industries 1,260.538 0.046
OKUMA MACHINERY Capital Goods 1,255.648 0.046
TEKKEN CONSTRUCTION Basic Industries 1,250.644 0.046
YASKAWA ELECTRIC Capital Goods 1,248.583 0.045
RENOWN Consumer Goods / Ser 1,243.091 0.045
HITACHI KOKI Capital Goods 1,227.385 0.045
NITSUKO Capital Goods 1,214.066 0.044
NISSEI SANGYO Consumer Goods / Ser 1,210.294 0.044
TOA Basic Industries 1,208.088 0.044
SHOWA ELEC WIRE Basic Industries 1,203.203 0.044
KUREHA CHEMICAL Basic Industries 1,199.409 0.044
NISSHIN OIL MILLS Consumer Goods / Ser 1,194.733 0.043
<PAGE>
<PAGE> F-9
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
MITSUI-SOKO Transportation and S 1,193.349 0.043
TOEI Consumer Goods / Ser 1,190.158 0.043
MARUHA CORP Consumer Goods / Ser 1,178.711 0.043
TOKYU CONSTRUCTION Basic Industries 1,178.454 0.043
JAPAN STEEL WORKS Capital Goods 1,176.529 0.043
SANRIO Consumer Goods / Ser 1,173.024 0.043
YUASA CORP Capital Goods 1,172.114 0.043
KAKEN PHARMACEUTICAL Consumer Goods / Ser 1,168.535 0.043
KURABO INDS Consumer Goods / Ser 1,160.662 0.042
TOSHIBA MACHINERY Capital Goods 1,141.293 0.042
SUMITOMO LT METAL Basic Industries 1,138.375 0.041
JAPAN WOOL Consumer Goods / Ser 1,125.580 0.041
MISAWA HOMES Basic Industries 1,118.497 0.041
CALSONIC CORPORATION Capital Goods 1,093.265 0.040
HITACHI SALES Consumer Goods / Ser 1,068.835 0.039
TSUBAKIMOTO CHAIN Capital Goods 1,041.230 0.038
MERCIAN CORPN. Consumer Goods / Ser 1,041.077 0.038
MARUDAI FOOD Consumer Goods / Ser 1,040.303 0.038
HYOGO BANK Financial, Insurance 1,021.267 0.037
RYOBI Capital Goods 1,020.629 0.037
MITSUBISHI PLASTICS Basic Industries 1,015.066 0.037
DENNY'S JAPAN CO Consumer Goods / Ser 1,011.264 0.037
SANDEN Capital Goods 996.737 0.036
NIPPON YAKIN KOGYO Basic Industries 984.445 0.036
NACHI-FUJIKOSHI Capital Goods 983.738 0.036
TOYO TIRE Capital Goods 981.710 0.036
SHOWA ALUMINUM Basic Industries 981.585 0.036
TOBISHIMA Basic Industries 981.302 0.036
YAMATO KOGYO Basic Industries 975.755 0.036
ISEKI & CO Capital Goods 975.566 0.036
SUMITOMO WAREHOUSE Transportation and S 961.092 0.035
HEIWA REAL ESTATE Financial, Insurance 956.959 0.035
NIPPON FLOUR MILLS Consumer Goods / Ser 954.572 0.035
YAMAMURA GLASS Basic Industries 953.602 0.035
NIPPON ROAD Basic Industries 948.056 0.035
KAGOME Consumer Goods / Ser 939.364 0.034
CENTRAL GLASS Basic Industries 938.721 0.034
HATTORI SEIKO Capital Goods 935.656 0.034
NAGASAKIYA Consumer Goods / Ser 920.700 0.034
SEIYO FOOD SYSTEMS Consumer Goods / Ser 917.919 0.033
TOKAI CARBON Basic Industries 909.630 0.033
SHOWA SANGYO Consumer Goods / Ser 906.974 0.033
TOKYO ROPE Basic Industries 906.599 0.033
SHOCHIKU Consumer Goods / Ser 904.544 0.033
SETTSU Basic Industries 884.509 0.032
MAKINO MILLING MACHINE CO Capital Goods 848.049 0.031
ASICS CORP Consumer Goods / Ser 836.379 0.030
MIKUNI COCA COLA Consumer Goods / Ser 834.288 0.030
<PAGE>
<PAGE> F-10
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
YOMIURI LAND Consumer Goods / Ser 823.694 0.030
TOYO KANETSU Energy 819.764 0.030
TOYO CONSTRUCTION Basic Industries 814.081 0.030
TOKYU CAR Basic Industries 802.501 0.029
NISSIN ELECTRIC Capital Goods 801.961 0.029
NIPPON SHINYAKU Consumer Goods / Ser 786.280 0.029
GAKKEN Consumer Goods / Ser 773.378 0.028
NITTO BOSEKI Consumer Goods / Ser 739.781 0.027
CALPIS FOOD INDS Consumer Goods / Ser 738.010 0.027
MITSUBISHI STEEL Basic Industries 730.320 0.027
MITSUMI ELECTRIC Capital Goods 720.666 0.026
ROYAL CO Consumer Goods / Ser 713.919 0.926
JAPAN METALS & CHEM Basic Industries 708.830 0.026
TOSHIBA ENG & CONSTR Capital Goods 702.001 0.026
MITSUBOSHI BELTING Capital Goods 687.932 0.025
FUJIYA Consumer Goods / Ser 685.097 0.025
TOKICO Capital Goods 672.781 0.024
PRIMA MEAT PACKERS Consumer Goods / Ser 671.335 0.024
FUDO CONSTRUCTION Basic Industries 667.347 0.024
NICHIRO GYOGYO Consumer Goods / Ser 647.944 0.024
ASAHI OPTICAL Consumer Goods / Ser 633.980 0.023
NIPPON SIGNAL Capital Goods 618.899 0.023
NIPPON TV Consumer Goods / Ser 606.739 0.022
SHOKUSAN JUTAKU SOGO Basic Industries 599.385 0.022
TAKAOKA ELECTRIC Capital Goods 596.790 0.022
NIPPON SODA Basic Industries 595.864 0.022
NIHON NOSAN KOGYO Consumer Goods / Ser 590.976 0.022
TOKYO BROADCASTING Consumer Goods / Ser 578.339 0.021
IWATSU ELECTRIC Capital Goods 575.904 0.021
IKEGAMI TSUSHINKI Capital Goods 575.435 0.021
GUN-EI CHEMICAL Basic Industries 566.630 0.021
CENTRAL FINANCE Financial, Insurance 554.838 0.020
AKEBONO BRAKE Capital Goods 547.584 0.020
FUJI SPINNING Consumer Goods / Ser 540.162 0.020
DAI NIPPON TORYO Basic Industries 512.654 0.019
JEOL Capital Goods 487.120 0.018
ANDO CONSTRUCTION Basic Industries 471.268 0.017
NIHON PARKERIZING Basic Industries 458.540 0.017
JANOME SEW MACH Consumer Goods / Ser 456.906 0.017
NIPPON DENKO Basic Industries 448.590 0.016
KYODO SHIRYO Consumer Goods / Ser 406.518 0.015
KYOTARU Consumer Goods / Ser 363.665 0.013
GODO SHUSEI Consumer Goods / Ser 264.878 0.010
</TABLE>
<PAGE>
<PAGE> G-1
APPENDIX G
FT-Actuaries World Indices
South Africa Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ANGLO AMER CORP Basic Industries 13,492.250 10.359
DE BEERS/CENTENARY Basic Industries 8,817.034 6.770
SA BREWERIES Consumer Goods / Ser 6,581.445 5.053
LIBERTY LIFE ASSOC. Financial, Insurance 5,787.291 4.443
GENCOR Basic Industries 4,930.414 3.785
SASOL Energy 4,777.816 3.668
JCI Basic Industries 3,818.494 2.932
REMBRANDT GP Consumer Goods / Ser 3,586.748 2.754
STANDARD BK. INV. Financial, Insurance 3,488.934 2.679
RUSTENBURG PLATINUM Basic Industries 3,444.378 2.645
ANGLO AMERICAN IND Financial, Insurance 3,360.928 2.580
DRIEFONTEIN CONSOL Basic Industries 3,128.834 2.402
LIBERTY HLDGS. Financial, Insurance 3,056.702 2.347
GFSA Basic Industries 3,035.909 2.331
FIRST NATL. BANK Financial, Insurance 2,670.759 2.051
SAPPI Basic Industries 2,657.185 2.040
SAMANCOR Basic Industries 2,643.239 2.029
ANAMINT Basic Industries 2,625.767 2.016
AMGOLD Basic Industries 2,459.164 1.888
SMITH (CG) LTD. Consumer Goods / Ser 2,195.971 1.686
NEDCOR Financial, Insurance 2,116.880 1.625
KLOOF GOLD MINING Basic Industries 2,057.742 1.580
ANGLOVAAL INDS. Financial, Insurance 1,947.058 1.495
NAMPAK Basic Industries 1,848.876 1.420
TIGER OATS Consumer Goods / Ser 1,845.975 1.417
FREEGOLD Basic Industries 1,795.701 1.379
BARLOW LIMITED Financial, Insurance 1,776.375 1.364
SAFREN Transportation and S 1,768.354 1.358
EDGARS STORES Consumer Goods / Ser 1,767.705 1.357
VAAL REEFS EXP & MNG Basic Industries 1,735.563 1.333
MURRAY & ROBERTS Basic Industries 1,706.820 1.310
REMBRANDT CONTROLLING INV. Financial, Insurance 1,700.613 1.306
SOUTHERN LIFE ASSOC Financial, Insurance 1,630.504 1.252
AMCOAL Energy 1,607.326 1.234
IMPALA PLATINUM Basic Industries 1,526.380 1.172
ANGLOVAAL LTD. (N.) Financial, Insurance 1,404.264 1.078
PRETORIA PORTLND CEM Basic Industries 1,132.933 0.870
WESTERN DEEP LEVEL Basic Industries 1,122.123 0.862
AECI Basic Industries 1,110.185 0.852
TONGAAT-HULETT GP Consumer Goods / Ser 1,107.099 0.850
PREMIER GROUP HLDG Consumer Goods / Ser 1,065.473 0.818
<PAGE>
<PAGE> G-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENBEL Financial, Insurance 1,013.134 0.778
PLATE GLASS Capital Goods 917.117 0.704
HIGHVELD STEEL Basic Industries 903.234 0.693
MID WITS Basic Industries 887.968 0.682
SOUTHVAAL HDGS Basic Industries 749.693 0.576
RANDFONTEIN ESTATE Basic Industries 697.671 0.536
ELANDSRAND GM Basic Industries 672.353 0.516
BEATRIX MINES Basic Industries 588.221 0.452
PALABORA MINING Basic Industries 548.948 0.421
HARTEBEESTFONTEIN Basic Industries 508.466 0.390
ALLIED ELECTRONICS Capital Goods 471.755 0.362
ISCOR Basic Industries 439.647 0.338
PICK & PAY STORES Consumer Goods / Ser 376.428 0.289
IRVIN & JOHNSON Consumer Goods / Ser 332.299 0.255
ICS HOLDINGS Consumer Goods / Ser 252.541 0.194
ALLIED TECHNOLOGIE Capital Goods 235.040 0.180
DEELKRAAL COLD MNG Basic Industries 162.440 0.125
STELLENBOSCH Consumer Goods / Ser 154.601 0.119
</TABLE>
<PAGE>
<PAGE> H-1
APPENDIX H
FT-Actuaries World Indices
United Kingdom Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BRITISH TELECOM Utilities 36,797.514 4.065
BRITISH PETROLEUM Energy 36,632.439 4.047
SHELL TRANS & TRAD Energy 36,095.745 3.988
GLAXO HLDGS Consumer Goods / Ser 31,639.987 3.496
BRITISH GAS Utilities 21,274.949 2.350
BAT INDUSTRIES Consumer Goods / Ser 20,804.380 2.298
HSBC HOLDINGS (HK$ 10) Financial, Insurance 19,045.654 2.104
HANSON Financial, Insurance 18,680.861 2.064
MARKS & SPENCER Consumer Goods / Ser 17,361.230 1.918
BTR Capital Goods 16,703.696 1.845
BARCLAYS Financial, Insurance 15,615.907 1.725
UNILEVER Consumer Goods / Ser 14,716.239 1.626
GUINNESS Consumer Goods / Ser 14,197.280 1.569
RTZ (REG) Basic Industries 13,807.091 1.525
NATL WESTMINSTER BANK Financial, Insurance 13,793.104 1.524
GRAND METROPOLITAN Consumer Goods / Ser 13,280.748 1.467
ZENECA Consumer Goods / Ser 13,000.939 1.436
CABLE & WIRELESS Utilities 12,894.047 1.425
REUTERS HOLDINGS Consumer Goods / Ser 12,196.449 1.347
GENERAL ELECTRIC Capital Goods 11,795.645 1.303
SAINSBURY (J) Consumer Goods / Ser 11,598.944 1.281
LLOYDS BANK Financial, Insurance 11,212.071 1.239
VODAFONE GROUP Utilities 10,095.545 1.115
NATIONAL POWER Utilities 9,804.706 1.083
SMITHKLINE BEECHAM A Consumer Goods / Ser 9,771.943 1.080
WELLCOME Consumer Goods / Ser 9,529.104 1.053
HSBC HOLDINGS (ORD 75P) Financial, Insurance 9,412.073 1.040
PRUDENTIAL CORP Financial, Insurance 9,395.051 1.038
ABBEY NATIONAL Financial, Insurance 8,836.221 0.976
ALLIED DOMECQ Consumer Goods / Ser 8,698.571 0.961
SMITHKLINE BEECH/SMITH BECK UNITS Consumer Goods / Ser 8,648.641 0.956
GREAT UNIVERSAL STORES Consumer Goods / Ser 8,512.523 0.940
I.C.I. Basic Industries 8,475.312 0.936
TESCO Consumer Goods / Ser 8,006.882 0.885
BAA Transportation and S 7,571.998 0.837
BOOTS Consumer Goods / Ser 7,467.812 0.825
BASS Consumer Goods / Ser 7,024.964 0.776
REED INTL Consumer Goods / Ser 7,016.512 0.775
THORN-EMI Consumer Goods / Ser 6,911.377 0.764
POWERGEN Utilities 6,560.042 0.725
P.& O. DEFD STOCK Transportation and S 5,750.465 0.635
<PAGE>
<PAGE> H-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
CADBURY SCHWEPPES Consumer Goods / Ser 5,622.364 0.621
TSB GROUP Financial, Insurance 5,616.088 0.620
RANK ORGANISATION Consumer Goods / Ser 5,416.746 0.598
BOC GROUP Basic Industries 5,265.728 0.582
COMMERCIAL UNION Financial, Insurance 5,251.852 0.580
ROYAL BANK SCOTLAND Financial, Insurance 4,929.691 0.545
BRITISH STEEL Basic Industries 4,854.120 0.536
PEARSON Consumer Goods / Ser 4,799.265 0.530
LAND SECURITIES Financial, Insurance 4,755.270 0.525
ARGYLL GROUP Consumer Goods / Ser 4,729.664 0.523
GRANADA GROUP Consumer Goods / Ser 4,635.836 0.512
WHITBREAD (ORD.) Consumer Goods / Ser 4,623.933 0.511
KINGFISHER Consumer Goods / Ser 4,619.348 0.510
SCOTTISH POWER Utilities 4,461.535 0.493
SCOT & NEWCASTLE Consumer Goods / Ser 4,278.945 0.473
STANDARD CHARTERED Financial, Insurance 4,232.556 0.468
TOMKINS Basic Industries 4,063.586 0.449
ASSD BRITISH FOODS Consumer Goods / Ser 3,968.955 0.438
BANK OF SCOTLAND Financial, Insurance 3,866.592 0.427
SIEBE Capital Goods 3,735.187 0.413
REDLAND Basic Industries 3,728.165 0.412
SUN ALLIANCE GROUP Financial, Insurance 3,655.456 0.404
LLOYDS ABBEY LIFE Financial, Insurance 3,585.591 0.396
GENERAL ACCIDENT Financial, Insurance 3,575.794 0.395
FORTE Consumer Goods / Ser 3,537.222 0.391
INCHCAPE Consumer Goods / Ser 3,522.907 0.389
RENTOKIL GP Basic Industries 3,501.529 0.387
RECKITT & COLMAN Consumer Goods / Ser 3,449.092 0.381
SOUTHERN ELECTRIC Utilities 3,435.858 0.380
BOWATER Basic Industries 3,401.977 0.376
WOLSELEY Basic Industries 3,368.814 0.372
LEGAL & GENERAL GROUP Financial, Insurance 3,313.003 0.366
CARLTON COMMS Consumer Goods / Ser 3,223.321 0.356
BLUE CIRCLE INDS Basic Industries 3,207.904 0.354
GKN Capital Goods 3,186.142 0.352
NORTH WEST WATER Utilities 3,176.161 0.351
EASTERN GROUP Utilities 3,131.144 0.346
LADBROKE GROUP Consumer Goods / Ser 3,112.365 0.344
ASDA GROUP Consumer Goods / Ser 3,061.028 0.338
ARJO WIGGINS APPLETON Basic Industries 3,031.695 0.335
ENTERPRISE OIL Energy 3,019.144 0.334
THAMES WATER Utilities 3,005.100 0.332
SEVERN TRENT WATER Utilities 2,990.913 0.330
COURTAULDS Basic Industries 2,909.535 0.321
RMC GP Basic Industries 2,885.716 0.319
DE LA RUE Consumer Goods / Ser 2,845.012 0.314
ROYAL INSURANCE HDGS Financial, Insurance 2,841.199 0.314
WILLIAMS HLDGS. Capital Goods 2,835.029 0.313
<PAGE>
<PAGE> H-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TI GROUP Capital Goods 2,795.238 0.309
VENDOME UNITS Consumer Goods / Ser 2,733.229 0.302
UNITED BISCUITS Consumer Goods / Ser 2,692.918 0.298
SEARS Consumer Goods / Ser 2,607.999 0.288
SMITH & NEPHEW Consumer Goods / Ser 2,605.909 0.288
LUCAS INDS Capital Goods 2,543.474 0.281
BURMAH CASTROL Energy 2,542.970 0.281
MEPC Financial, Insurance 2,429.107 0.268
TATE & LYLE Consumer Goods / Ser 2,381.197 0.263
WARBURG (SG) GROUP Financial, Insurance 2,376.018 0.263
ANGLIAN WATER Utilities 2,375.592 0.262
NEW ROTHMANS UNITS Consumer Goods / Ser 2,354.785 0.260
CARADON Basic Industries 2,335.384 0.258
SCHRODERS Financial, Insurance 2,314.847 0.256
BPB INDS Basic Industries 2,310.203 0.255
GUARDIAN ROYAL EXCHANGE Financial, Insurance 2,275.690 0.251
FOR & COL IT Financial, Insurance 2,236.272 0.247
LAPORTE Basic Industries 2,143.528 0.237
SMITH (W H) Consumer Goods / Ser 2,089.120 0.231
PILKINGTON Basic Industries 2,066.232 0.228
COATS VIYELLA Consumer Goods / Ser 2,060.403 0.228
SMITHS INDUSTRIES Capital Goods 2,049.542 0.226
COOKSON GROUP Basic Industries 2,020.375 0.223
BICC Capital Goods 1,981.296 0.219
EUROTUNNEL UNITS ORD Transportation and S 1,970.918 0.218
SCOT HYDRO-ELECTRIC Utilities 1,959.805 0.217
HILLSDOWN Consumer Goods / Ser 1,937.820 0.214
NORTHERN FOODS Consumer Goods / Ser 1,911.674 0.211
NFC Transportation and S 1,853.537 0.205
BRITISH LAND Financial, Insurance 1,839.879 0.203
LONRHO Financial, Insurance 1,837.998 0.203
UNITED NEWSPAPERS Consumer Goods / Ser 1,799.275 0.199
ENGLISH CHINA CLAYS Basic Industries 1,755.486 0.194
TARMAC Basic Industries 1,722.769 0.190
ARGOS Consumer Goods / Ser 1,647.510 0.182
JOHNSON MATTHEY Basic Industries 1,633.838 0.181
IMI Basic Industries 1,614.447 0.178
ASSD BRITISH PORTS Transportation and S 1,604.260 0.177
ELECTROCOMPONENTS Capital Goods 1,554.627 0.172
HAMMERSON PLC Financial, Insurance 1,534.859 0.170
HARRISONS & CROSFIELD Consumer Goods / Ser 1,530.051 0.169
DALGETY Consumer Goods / Ser 1,513.369 0.167
BURTON GROUP Consumer Goods / Ser 1,501.540 0.166
BET Financial, Insurance 1,484.581 0.164
SLOUGH ESTATES Financial, Insurance 1,431.771 0.158
GREENALLS GROUP Consumer Goods / Ser 1,406.330 0.155
STOREHOUSE Consumer Goods / Ser 1,402.684 0.155
BOOKER Consumer Goods / Ser 1,395.513 0.154
<PAGE>
<PAGE> H-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
EDINBURGH INV TRUST Financial, Insurance 1,390.402 0.154
WITAN INV Financial, Insurance 1,350.422 0.149
T&N Capital Goods 1,337.586 0.148
KWIK SAVE GROUP Consumer Goods / Ser 1,331.574 0.147
BRITISH AIRWAYS Transportation and S 1,331.068 0.147
SEDGWICK GP Financial, Insurance 1,281.576 0.142
BBA GROUP Capital Goods 1,279.271 0.141
TRAFALGAR HOUSE Financial, Insurance 1,275.107 0.141
UNIGATE Consumer Goods / Ser 1,226.289 0.135
RUGBY GROUP Basic Industries 1,217.890 0.135
HEPWORTH Basic Industries 1,187.148 0.131
FISONS Consumer Goods / Ser 1,183.919 0.131
DIXONS GROUP Consumer Goods / Ser 1,182.183 0.131
KLEINWORT BENSON GROUP Financial, Insurance 1,153.076 0.127
BUNZL Basic Industries 1,148.065 0.127
MAI Financial, Insurance 1,145.500 0.127
PROVIDENT FINANCIAL Financial, Insurance 1,145.096 0.127
M&G GROUP Financial, Insurance 1,137.374 0.126
MORGAN CRUCIBLE Capital Goods 1,090.364 0.120
GLYNWED INTL Capital Goods 1,087.970 0.120
FARNELL ELECTRONICS Capital Goods 1,084.030 0.120
ALLIED COLLOIDS Basic Industries 1,063.221 0.117
CHARTER Basic Industries 1,053.153 0.116
PORTALS Basic Industries 1,042.519 0.115
FKI Capital Goods 1,040.188 0.115
ROLLS-ROYCE Capital Goods 1,015.977 0.112
GREAT PORTLAND EST Financial, Insurance 926.313 0.102
WILLIS CORROON GROUP Financial, Insurance 897.905 0.099
VICKERS Capital Goods 892.098 0.099
HIGHLAND DISTILLERIES Consumer Goods / Ser 881.238 0.097
ELECTRA INV TRUST Financial, Insurance 866.551 0.096
BOWTHORPE Capital Goods 844.678 0.093
BRITISH AEROSPACE Capital Goods 838.237 0.093
TAYLOR WOODROW Basic Industries 775.467 0.086
COURTAULDS TEXTILES Consumer Goods / Ser 725.007 0.080
WIMPEY (G) Basic Industries 722.731 0.080
SCAPA GP Capital Goods 711.375 0.079
MEYER INTL Basic Industries 700.622 0.077
FIRST LEISURE CORP Consumer Goods / Ser 699.047 0.077
INVESCO Financial, Insurance 672.155 0.074
HALMA Capital Goods 669.905 0.074
HAMBROS Financial, Insurance 629.483 0.070
BRIXTON ESTATE Financial, Insurance 625.116 0.069
FLEMING MERCANTILE INV TRUST Financial, Insurance 620.545 0.069
MCKECHNIE Basic Industries 603.332 0.067
SCHRODERS NON/VTG Financial, Insurance 593.370 0.066
MARLEY Basic Industries 592.155 0.065
SPIRAX-SARCO ENG Capital Goods 547.375 0.060
<PAGE>
<PAGE> H-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BRYANT GROUP Basic Industries 537.269 0.059
ALBERT FISHER Consumer Goods / Ser 525.859 0.058
TR SMALLER COMPANIES INV. TST. Financial, Insurance 511.572 0.057
WILSON (CONNOLLY) Basic Industries 475.527 0.053
TR CITY OF LON (DFD) Financial, Insurance 471.369 0.052
VAUX GROUP Consumer Goods / Ser 470.810 0.052
BARRATT DEVELOPMENTS Basic Industries 470.478 0.052
CHRISTIES INTL Consumer Goods / Ser 446.413 0.049
BRADFORD PROPERTY TRUST Financial, Insurance 428.672 0.047
MERCHANTS TRUST Financial, Insurance 421.037 0.047
BAIRD (WILLIAM) Consumer Goods / Ser 377.311 0.042
DIPLOMA Capital Goods 369.698 0.041
DAWSON INTL Consumer Goods / Ser 348.487 0.039
BILTON Financial, Insurance 344.360 0.038
HEATH (C.E.) Financial, Insurance 253.052 0.028
AMSTRAD Capital Goods 243.741 0.027
APV Capital Goods 242.761 0.027
LAING (JOHN) Basic Industries 159.554 0.018
LAING (JOHN) `A Basic Industries 154.829 0.017
</TABLE>
<PAGE>
<PAGE> I-1
APPENDIX I
FT-Actuaries World Indices
US Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENERAL ELECTRIC CO Capital Goods 87,192.660 2.645
AMER TEL & TEL Utilities 78,543.062 2.383
EXXON CORP Energy 75,415.962 2.288
COCA-COLA Consumer Goods / Ser 66,420.529 2.015
PHILIP MORRIS Consumer Goods / Ser 49,796.438 1.511
WAL-MART STORES Consumer Goods / Ser 48,837.281 1.482
MERCK & CO Consumer Goods / Ser 47,975.204 1.456
IBM Capital Goods 42,987.504 1.304
PROCTER & GAMBLE Consumer Goods / Ser 42,493.126 1.289
DU PONT E I DE NEMOURS Basic Industries 38,300.513 1.162
MICROSOFT CORP Consumer Goods / Ser 35,473.649 1.076
JOHNSON & JOHNSON Consumer Goods / Ser 35,218.759 1.069
MOBIL CORP Energy 33,483.646 1.016
MOTOROLA Capital Goods 32,320.699 0.981
GENERAL MOTORS Consumer Goods / Ser 31,838.121 0.966
AMER INTL GROUP Financial, Insurance 31,012.884 0.941
AMOCO Energy 29,371.526 0.891
BRISTOL MYERS SQUIBB CO Consumer Goods / Ser 29,212.869 0.886
GTE CORP Utilities 29,124.644 0.884
CHEVRON CORP Energy 29,081.354 0.882
PEPSICO Consumer Goods / Ser 28,710.979 0.871
FORD MOTOR Consumer Goods / Ser 28,251.804 0.857
BELLSOUTH CORP Utilities 26,858.016 0.815
INTEL Capital Goods 26,361.213 0.800
ABBOTT LABS Consumer Goods / Ser 26,305.113 0.798
HEWLETT-PACKARD Capital Goods 25,391.121 0.770
DISNEY (WALT) PRODS Consumer Goods / Ser 24,683.286 0.749
PFIZER Consumer Goods / Ser 24,316.601 0.738
SOUTHWESTERN BELL Utilities 24,211.071 0.735
BERKSHIRE HATHAWAY INC DEL Financial, Insurance 23,378.400 0.709
MINNESOTA MINING Consumer Goods / Ser 22,551.898 0.684
AMERITECH Utilities 22,177.422 0.673
BELL ATLANTIC Utilities 21,697.866 0.658
HOME DEPOT INC Consumer Goods / Ser 20,837.264 0.632
MCDONALD'S CORP Consumer Goods / Ser 20,549.324 0.623
FED NATL MORTGAGE Financial, Insurance 19,915.863 0.604
AMER HOME PRODUCTS Consumer Goods / Ser 19,180.604 0.582
LILLY (ELI) Consumer Goods / Ser 19,175.953 0.582
DOW CHEMICAL Basic Industries 18,635.177 0.565
CHRYSLER Consumer Goods / Ser 17,369.128 0.527
GILLETTE Consumer Goods / Ser 16,544.119 0.502
<PAGE>
<PAGE> I-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ATLANTIC RICHFIELD Energy 16,347.867 0.496
CITICORP Financial, Insurance 16,287.434 0.494
U S WEST INC. Utilities 16,242.257 0.493
EASTMAN KODAK Consumer Goods / Ser 16,219.959 0.492
SEARS ROEBUCK & CO Financial, Insurance 16,175.532 0.491
BOEING Capital Goods 15,927.585 0.483
TEXACO Energy 15,536.545 0.471
NYNEX CORP Utilities 15,455.102 0.469
BANKAMERICA Financial, Insurance 14,675.396 0.445
AMERICAN EXPRESS Financial, Insurance 14,600.258 0.443
AIRTOUCH COMMUNICATIONS Utilities 14,375.168 0.436
SCHERING-PLOUGH Consumer Goods / Ser 14,084.420 0.427
EMERSON ELECTRIC Capital Goods 14,000.125 0.425
ANHEUSER-BUSCH Consumer Goods / Ser 13,452.062 0.408
TIME WARNER INC Consumer Goods / Ser 13,319.365 0.404
COLUMBIA HEALTHCARE CORP Consumer Goods / Ser 13,216.322 0.401
CAP CITIES/ABC Consumer Goods / Ser 13,131.228 0.398
SOUTHERN CO Utilities 13,068.340 0.396
KELLOGG Consumer Goods / Ser 13,103.490 0.395
VIACOM CLASS B Consumer Goods / Ser 12,918.794 0.392
WASTE MANAGEMENT Capital Goods 12,699.698 0.385
ORACLE SYSTEMS CORP Consumer Goods / Ser 12,626.325 0.383
TELECOM CORP `A' Consumer Goods / Ser 12,566.650 0.381
NATIONSBANK CORP Financial, Insurance 12,479.003 0.379
SCHLUMBERGER Energy 12,261.426 0.372
PACIFIC TELESIS Utilities 12,085.853 0.367
SARA LEE Consumer Goods / Ser 12,080.358 0.367
CATERPILLAR TRACTOR Capital Goods 11,169.869 0.339
CAMPBELL SOUP Consumer Goods / Ser 10,974.505 0.333
MORGAN (J.P.) Financial Insurance 10,666.040 0.324
ARCHER-DANIELS Consumer Goods / Ser 10,631.332 0.323
THE TRAVELERS Financial, Insurance 10,543.033 0.320
PACIFIC GAS & ELECTRIC Utilities 10,536.654 0.320
XEROX CORP Capital Goods 10,479.447 0.318
PENNY (J.C.) Consumer Goods / Ser 10,416.055 0.316
WARNER-LAMBERT Consumer Goods / Ser 10,315.382 0.313
BANC ONE CORP Financial, Insurance 10,300.372 0.313
COMPAQ COMPUTER CORPORATION Capital Goods 10,206.800 0.310
GENERAL RE CORP Financial, Insurance 10,126.091 0.307
GENERAL MOTORS `E' Consumer Goods / Ser 10,066.441 0.305
MCI COMMS Utilities 9,916.547 0.301
SPRINT CORP Utilities 9,627.920 0.292
ALLIED SIGNAL Capital Goods 9,621.558 0.292
ITT CORP Capital Goods 9,456.288 0.287
INTERNATIONAL PAPER Basic Industries 9,406.348 0.285
UNION PACIFIC Transportation and S 9,357.094 0.284
DUN & BRADSTREET Consumer Goods / Ser 9,338.340 0.283
COLGATE-PALMOLIVE Consumer Goods / Ser 9,188.234 0.279
<PAGE>
<PAGE> I-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
HEINZ (H.J.) Consumer Goods / Ser 9,065.858 0.275
FEDERAL HOME LN MTG CORP Financial, Insurance 9,057.680 0.275
GENERAL MILLS Consumer Goods / Ser 8,990.040 0.273
CHEMICAL BANKING CORP. Financial, Insurance 8,769.034 0.266
RAYTHEON Capital Goods 8,619.101 0.261
PHILLIPS PETROLEUM Energy 8,566.188 0.260
TOYS (R) Consumer Goods / Ser 8,465.397 0.257
MAY DEPT STORES Consumer Goods / Ser 8,378.843 0.254
NORFOLK STHN CORP Transportation and S 8,345.213 0.253
MONSANTO Basic Industries 8,310.258 0.252
AUTO DATA PROCESS Consumer Goods / Ser 8,229.137 0.250
KIMBERLY-CLARK Basic Industries 8,087.373 0.245
UNITED TECHNOLOGIES Capital Goods 7,941.867 0.241
CPC INTL Consumer Goods / Ser 7,907.572 0.240
PPG INDUSTRIES Basic Industries 7,892.070 0.239
AMGEN INC Consumer Goods / Ser 7,871.544 0.239
BAXTER INTL INC Consumer Goods / Ser 7,829.459 0.238
DUKE POWER Utilities 7,810.249 0.237
COMPUTER ASSOC INTEL INC Consumer Goods / Ser 7,800.158 0.237
ROCKWELL INTL CORP Capital Goods 7,787.709 0.236
CONAGRA Consumer Goods / Ser 7,752.906 0.235
ENRON CORP Energy 7,715.341 0.234
WEYERHAEUSER Basic Industries 7,710.450 0.234
ALUMINUM CO AMER Basic Industries 7,706.507 0.234
AMP Capital Goods 7,626.746 0.231
AMERICAN BRANDS Consumer Goods / Ser 7,552.163 0.229
WELLS FARGO & CO DEL Financial, Insurance 7,548.120 0.229
NORWEST CORP Financial, Insurance 7,444.493 0.226
GANNETT Consumer Goods / Ser 7,412.374 0.225
ALBERTSONS Consumer Goods / Ser 7,359.736 0.223
CSX Transportation and S 7,292.801 0.221
TENNECO Capital Goods 7,283.480 0.221
TEXAS UTILITIES Utilities 7,226.912 0.219
MERRILL LYNCH Financial, Insurance 7,139.561 0.217
FIRST UNION Financial, Insurance 7,113.811 0.216
TEXAS INSTRUMENTS Capital Goods 6,935.671 0.210
LIN BROADCASTING Utilities 6,885.663 0.209
CHUBB Financial, Insurance 6,743.077 0.205
FPL GROUP Utilities 6,692.823 0.203
UNOCAL Energy 6,632.378 0.201
CORNING INC Basic Industries 6,600.344 0.200
SCECORP Utilities 6,549.060 0.199
PUBLIC SVC ENTERPRISE GROUP Utilities 6,484.497 0.197
LIMITED Consumer Goods / Ser 6,482.968 0.197
GEORGIA-PACIFIC Basic Industries 6,461.026 0.196
MEDTRONIC Consumer Goods / Ser 6,390.089 0.194
NOVELL INC Capital Goods 6,333.664 0.192
RJR NABISCO HOLDINGS CORP Consumer Goods / Ser 6,280.197 0.191
<PAGE>
<PAGE> I-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
CHASE MANHATTAN Financial, Insurance 6,231.844 0.189
DOMINION RESOURCES Utilities 6,088.475 0.185
AMER ELEC POWER Utilities 6,078.094 0.184
CON EDISON Utilities 6,048.315 0.184
OCCIDENTAL PETROL Energy 6,014.663 0.182
K MART CORP Consumer Goods / Ser 5,940.168 0.180
AMER GENERAL CORP Financial, Insurance 5,911.454 0.179
MARSH & MCLENNAN Financial, Insurance 5,818.773 0.177
DEAN WITTER DISCOVER & CO Financial, Insurance 5,778.228 0.175
DEERE & CO Capital Goods 5,723.801 0.174
SUNTRUST BANKS Financial, Insurance 5,702.639 0.173
ALLTEL CORP Utilities 5,651.420 0.171
UST INC Consumer Goods / Ser 5,630.531 0.171
MCDONNELL DOUGLAS Capital Goods 5,611.272 0.170
BROWNING-FERRIS Capital Goods 5,578.582 0.169
MARION MERRELL DOW INC. Consumer Goods / Ser 5,577.901 0.169
LOWE'S COS. Consumer Goods / Ser 5,530.775 0.168
WACHOVIA CORP Financial, Insurance 5,509.203 0.167
FIRST INTERSTATE BK Financial, Insurance 5,474.041 0.166
BANK OF NEW YORK Financial, Insurance 5,473.837 0.166
PECO ENERGY CO Utilities 5,428.245 0.165
WALGREEN Consumer Goods / Ser 5,384.356 0.163
UPJOHN Consumer Goods / Ser 5,322.456 0.161
AETNA LIFE & CAS Financial, Insurance 5,308.254 0.161
LOEW'S CORP Financial, Insurance 5,211.197 0.158
SCOTT PAPER CO Basic Industries 5,159.697 0.157
PACIFICORP Utilities 5,152.049 0.156
INTERNATIONAL FLAVORS & FRAGRA Consumer Goods / Ser 5,150.631 0.156
UNICOM CORP Utilities 5,130.024 0.156
GOODYEAR TIRE Capital Goods 5,087.328 0.154
DAYTON-HUDSON Consumer Goods / Ser 5,068.955 0.154
AIR PRODUCTS & CHEM Basic Industries 5,060.877 0.154
PITNEY BOWES Capital Goods 5,001.800 0.152
PNC BANK CORP Financial, Insurance 4,982.775 0.151
ILLINOIS TOOL Capital Goods 4,978.750 0.151
ENERGY CORP. Utilities 4,973.916 0.151
RHONE POULENC RORER INC Consumer Goods / Ser 4,938.195 0.150
SYSCO US$1 Consumer Goods / Ser 4,727.932 0.143
USC-MARATHON GROUP Energy 4,702.671 0.143
READERS DIGEST ASSN INC Consumer Goods / Ser 4,681.220 0.142
HOUSTON INDUSTRIES Utilities 4,677.456 0.142
APPLE COMPUTER Capital Goods 4,675.749 0.142
RUBBERMAID Consumer Goods / Ser 4,675.613 0.142
HERCULES Basic Industries 4,611.193 0.140
CIGNA CORP Financial, Insurance 4,596.079 0.139
DIGITAL EQUIPMENT Capital Goods 4,584.610 0.139
LOCKHEED CORP Capital Goods 4,565.062 0.139
DONNELLEY (RR) Consumer Goods / Ser 4,525.241 0.137
<PAGE>
<PAGE> I-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BURLINGTON RES INC Utilities 4,516.190 0.137
MATTEL INC Consumer Goods / Ser 4,484.511 0.136
MORGAN STANLEY GROUP INC Financial, Insurance 4,481.109 0.136
RALSTON PURINA Consumer Goods / Ser 4,463.750 0.135
GENUINE PARTS CO Capital Goods 4,439.592 0.135
TEXTRON Capital Goods 4,435.821 0.135
GAP INC DEL Consumer Goods / Ser 4,424.696 0.134
FIRST CHICAGO Financial, Insurance 4,423.560 0.134
UNION CARBIDE Basic Industries 4,403.195 0.134
MELLON BK CORP Financial, Insurance 4,400.996 0.134
FLEET NORSTAR FINANCIAL GROUP Financial, Insurance 4,384.608 0.133
PHELPS DODGE CORP Basic Industries 4,373.078 0.133
BANKERS TRUST Financial, Insurance 4,372.687 0.133
WESTINGHOUSE ELEC Capital Goods 4,357.742 0.132
CENTRAL & SOUTH WEST Utilities 4,298.071 0.130
BURLINGTON NORTHERN Transportation and S 4,293.472 0.130
TRW Capital Goods 4,288.284 0.130
CAROLINA PWR & LIGHT Utilities 4,277.972 0.130
NBD BANKCORP INC Financial, Insurance 4,268.447 0.130
AMERADA HESS Energy 4,243.627 0.129
ARCO CHEM CO Basic Industries 4,227.608 0.128
MARTIN MARIETTA Capital Goods 4,218.110 0.128
MORTON INTL INC Basic Industries 4,206.173 0.128
AVON PRODUCTS Consumer Goods / Ser 4,203.293 0.128
EASTMAN CHEMICAL Basic Industries 4,175.996 0.127
QUAKER OATS Consumer Goods / Ser 4,105.371 0.125
HONEYWELL Capital Goods 4,071.470 0.124
GREAT LAKES CHEM CORP Basic Industries 4,066.665 0.123
AMR CORP Transportation and S 4,040.344 0.123
TIMES MIRROR CO Consumer Goods / Ser 4,035.264 0.122
DSC COMMUNICATIONS Capital Goods 4,022.197 0.122
CONRAIL Transportation and S 3,984.501 0.121
SALOMON Financial, Insurance 3,968.663 0.120
COOPER INDUSTRIES Capital Goods 3,939.117 0.120
NATIONAL CITY CORP Financial, Insurance 3,883.475 0.118
BLOCK (H&R) Consumer Goods / Ser 3,871.581 0.117
ROHM & HAAS CO Basic Industries 3,871.304 0.117
DETROIT EDISON Utilities 3,841.943 0.117
FIRST BANK SYSTEM Financial, Insurance 3,817.100 0.116
WINN-DIXIE STORES Consumer Goods / Ser 3,806.579 0.115
HALLIBURTON Energy 3,780.126 0.115
EATON CORP Capital Goods 3,776.850 0.115
ST PAUL COMPANIES Financial, Insurance 3,760.029 0.114
WHIRLPOOL CORP Consumer Goods / Ser 3,745.434 0.114
BARNETT BANKS INC Financial, Insurance 3,721.531 0.113
CORESTATES FINL Financial, Insurance 3,658.330 0.111
TRIBUNE Consumer Goods / Ser 3,651.825 0.111
HUMANA Consumer Goods / Ser 3,642.399 0.111
<PAGE>
<PAGE> I-6
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GRACE (WR) Basic Industries 3,629.784 0.110
MASCO CORP Basic Industries 3,625.000 0.110
UNION ELEC CO Utilities 3,612.637 0.110
FIRST FIDELITY BANCORP Financial, Insurance 3,584.166 0.109
HOUSEHOLD INTL Financial, Insurance 3,576.771 0.109
FLUOR CORP Capital Goods 3,557.468 0.108
TRANSAMERICA CORP Financial, Insurance 3,502.798 0.106
MARRIOTT INTERNATIONAL Consumer Goods / Ser 3,489.750 0.106
DRESSER INDS Energy 3,467.281 0.105
NORDSTROM BEST Consumer Goods / Ser 3,452.064 0.105
GEICO CORP Financial, Insurance 3,436.615 0.104
ALCO STANDARD Basic Industries 3,425.021 0.104
BECTON DICKINSON Consumer Goods / Ser 3,406.608 0.103
CHAMPION INTL Basic Industries 3,394.829 0.103
CBS Consumer Goods / Ser 3,391.719 0.103
TYCO INTERNATIONAL Capital Goods 3,382.713 0.103
FEDERAL EXPRESS Transportation and S 3,369.543 0.102
CROWN CORK & SEAL Basic Industries 3,368.433 0.102
SUN MICROSYSTEMS Capital Goods 3,366.785 0.102
LINCOLN NAT CORP Financial, Insurance 3,323.985 0.101
INGERSOLL-RAND Capital Goods 3,322.557 0.101
MCGRAW-HILL Consumer Goods / Ser 3,321.013 0.101
CONS NATURAL GAS Utilities 3,302.033 0.100
UNION CAMP Basic Industries 3,296.064 0.100
SAFECO CORP Financial, Insurance 3,275.740 0.099
SANTA FE PAC CORP Transportation and S 3,264.170 0.099
BALTIMORE GAS & ELEC Utilities 3,262.154 0.099
MELVILLE CORP Consumer Goods / Ser 3,257.807 0.099
AON CORP Financial, Insurance 3,257.696 0.099
REEBOK INTERNATIONAL Consumer Goods / Ser 3,241.923 0.098
HILTON HOLTELS CORP Consumer Goods / Ser 3,233.462 0.098
AFLAC INC Financial, Insurance 3,188.992 0.097
PROMUS Consumer Goods / Ser 3,174.338 0.096
TANDY CORP Consumer Goods / Ser 3,170.908 0.096
LORAL CORP Capital Goods 3,170.781 0.096
VF CORP Consumer Goods / Ser 3,144.190 0.095
CLOROX Consumer Goods / Ser 3,142.277 0.095
NEWMONT MINING Basic Industries 3,097.584 0.094
DOW JONES Consumer Goods / Ser 3,092.033 0.094
SUN CO Energy 3,072.426 0.093
PROVIDIAN CORP Financial, Insurance 3,050.481 0.093
REYNOLDS METALS Basic Industries 3,038.588 0.092
PIONEER HI BRED Consumer Goods / Ser 3,026.444 0.092
GENERAL PUB UTILS CP Utilities 3,022.688 0.092
DILLARD DEPT STORE Consumer Goods / Ser 3,022.536 0.092
DOVER CORP Capital Goods 2,954.344 0.090
NTHN STATES POWER Utilities 2,943.864 0.089
GRAINGER (W.W.) Capital Goods 2,930.466 0.089
<PAGE>
<PAGE> I-7
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
PENNSYLVANIA PW< Utilities 2,924.138 0.089
MEAD Basic Industries 2,884.143 0.088
SHERWIN-WILLIAMS Basic Industries 2,834.771 0.086
OHIO EDISON Utilities 2,822.527 0.086
KROGER Consumer Goods / Ser 2,817.318 0.085
PRAXAIR INC Basic Industries 2,813.666 0.085
FLORIDA PROG CORP Utilities 2,813.280 0.085
WISCONSIN ENERGY CORP Utilities 2,800.555 0.085
UNUM CORP Financial, Insurance 2,788.895 0.085
BANK OF BOSTON Financial, Insurance 2,773.515 0.084
HARCOURT GENERAL INC Consumer Goods / Ser 2,744.953 0.083
GENERAL DYNAMICS Capital Goods 2,743.980 0.083
MOLEX INC Capital Goods 2,742.681 0.083
GENERAL MOTORS `H' Capital Goods 2,723.145 0.083
NORTH EAST UTILITIES Utilities 2,699.384 0.082
KNIGHT-RIDDER Consumer Goods / Ser 2,697.963 0.082
COASTAL CORP Energy 2,696.875 0.082
USX-US STEEL Basic Industries 2,691.965 0.082
WESTVACO CORP Basic Industries 2,637.365 0.080
WILLAMETTE Basic Industries 2,613.925 0.079
SERVICE CORP INTL Consumer Goods / Ser 2,604.948 0.079
CINCINNATI FINANCIAL Financial, Insurance 2,593.746 0.079
ALLEGHENY POWER Utilities 2,576.440 0.078
BAKER HUGHES INC. Energy 2,573.360 0.078
HASBRO Consumer Goods / Ser 2,566.571 0.078
DELTA AIR LINES Transportation and S 2,555.603 0.078
TEMPLE ISLAND Basic Industries 2,514.591 0.076
JEFFERSON-PILOT Financial, Insurance 2,513.344 0.076
PRICE/COSTCO INC Consumer Goods / Ser 2,508.372 0.076
TORCHMARK Financial, Insurance 2,495.516 0.076
STUDENT LOAN MARKETING ASSN Financial, Insurance 2,489.500 0.076
FREEPORT-MCMORAN Basic Industries 2,488.089 0.075
SONAT Utilities 2,440.676 0.074
INTERPUBLIC GROUP CO Consumer Goods / Ser 2,423.446 0.074
CYPRUS AMAX MINERALS Basic Industries 2,417.764 0.073
WASHINGTON POST Consumer Goods / Ser 2,415.058 0.073
NAT SEMICONDUCTOR Capital Goods 2,402.205 0.073
REPUBLIC N Y CORP Financial, Insurance 2,401.372 0.073
KERR-MCGEE Energy 2,376.544 0.072
NEW YORK TIMES Consumer Goods / Ser 2,361.092 0.072
HOMESTAKE MINING Basic Industries 2,358.763 0.072
NAT MED ENTERPRISES Consumer Goods / Ser 2,348.649 0.071
ADVANCED MICRO DEV Capital Goods 2,339.568 0.071
DANA CORP Capital Goods 2,308.866 0.070
MALLINCKRODT GROUP Consumer Goods / Ser 2,300.554 0.070
MALCO CHEMICAL Basic Industries 2,289.859 0.069
WILLIAMS COS INC DEL Utilities 2,276.451 0.069
SAN DIEGO GAS & ELEC Utilities 2,242.163 0.068
<PAGE>
<PAGE> I-8
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
UNITRIN INC Financial, Insurance 2,229.034 0.068
LUBRIZOL CORP Basic Industries 2,222.098 0.067
PARKER-HANNIFIN Capital Goods 2,219.718 0.067
ROADWAY SERVICES Transportation and S 2,215.066 0.067
DELUXE CORP Consumer Goods / Ser 2,188.556 0.066
POTOMAC ELECTRIC Utilities 2,170.951 0.066
PALL CORP Capital Goods 2,162.325 0.066
LSI LOGIC Capital Goods 2,142.459 0.065
GREAT WSTN FINANCIAL Financial, Insurance 2,140.656 0.065
ENGLEHARD CORP Basic Industries 2,132.485 0.065
GOLDEN WEST FIN Financial, Insurance 2,131.850 0.065
FMC CORP Capital Goods 2,105.681 0.064
ASHLAND OIL Energy 2,092.632 0.063
NEW ENGLAND ELECT Utilities 2,087.161 0.063
NORTHROP CORP Capital Goods 2,064.048 0.063
NIAGARA MOHAWK POWER Utilities 2,051.615 0.062
PENNZOIL Energy 2,030.986 0.062
AMERICAN GREETINGS A Consumer Goods / Ser 2,007.828 0.061
PREMIER INDUSTRIES Consumer Goods / Ser 2,004.274 0.061
BAUSCH & LOMB Consumer Goods / Ser 2,003.334 0.061
BLACK & DECKER MFG Consumer Goods / Ser 2,001.531 0.061
AVERY DENNISON CORP Basic Industries 1,996.378 0.061
JOHNSON CONTROLS Capital Goods 1,992.536 0.060
WOOLWORTH CORP Consumer Goods / Ser 1,979.295 0.060
RITE AID Consumer Goods / Ser 1,970.302 0.060
DIAL CORP ARIZ Financial, Insurance 1,966.730 0.060
TANDEM COMPUTERS Capital Goods 1,963.005 0.060
BETHLEHEM STEEL Basic Industries 1,962.864 0.060
WESTERN ATLAS INC Energy 1,953.189 0.059
CMS ENERGY CORP Utilities 1,948.881 0.059
SHAWMUT NATIONAL CORP. Financial, Insurance 1,930.334 0.059
SONOCO PRODUCTS Basic Industries 1,903.016 0.058
OMNICOM GROUP INC. Consumer Goods / Ser 1,891.928 0.057
AHMANSON (H.F.) Financial, Insurance 1,885.754 0.057
LOTUS DEV Consumer Goods / Ser 1,883.171 0.057
CUMMINS ENGINE Capital Goods 1,882.400 0.057
SERVICEMASTER LTD PARTNERSHIP Consumer Goods / Ser 1,871.269 0.057
AUTODESK Consumer Goods / Ser 1,864.792 0.057
VULCAN MATERIALS Basic Industries 1,849.483 0.056
LONG ISLAND LIGHTING Utilities 1,816.203 0.055
WHITMAN CORP Consumer Goods / Ser 1,814.148 0.055
BRUNSWICK CORP Consumer Goods / Ser 1,801.657 0.055
ECHLIN INC Capital Goods 1,772.520 0.054
BEAR STEARNS COMPANIES INC Financial, Insurance 1,768.755 0.054
SUPER VALU STORES Consumer Goods / Ser 1,751.481 0.053
ANALOG DEVICES Capital Goods 1,742.481 0.053
PACIFIC ENTERPRISES Utilities 1,742.011 0.053
RYDER SYSTEM Transportation and S 1,728.518 0.052
<PAGE>
<PAGE> I-9
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
PINNACLE WEST CAPITAL CORP. Utilities 1,726.328 0.052
PACCAR Capital Goods 1,719.467 0.052
MANOR CARE Consumer Goods / Ser 1,707.105 0.052
LITTON INDUSTRIES Capital Goods 1,700.816 0.052
SANTA FE PACIFIC GOLD Basic Industries 1,691.131 0.051
HARRIS CORP Capital Goods 1,675.180 0.051
JAMES RIVER CORP VA Basic Industries 1,653.899 0.050
ILLINOVA CORP Utilities 1,645.257 0.050
MAYTAG Consumer Goods / Ser 1,606.935 0.049
BANDAG INC Capital Goods 1,602.403 0.049
STANLEY WORKS Capital Goods 1,601.636 0.049
VARIETY CORP Capital Goods 1,594.239 0.048
SCIENTIFIC ATLANTA Capital Goods 1,592.682 0.048
INLAND STEEL Basic Industries 1,562.114 0.047
DQE Utilities 1,550.484 0.047
RAYCHEM Capital Goods 1,546.018 0.047
GENERAL SIGNAL CORP Capital Goods 1,507.146 0.046
AVNET Capital Goods 1,504.050 0.046
POLAROID Consumer Goods / Ser 1,503.255 0.046
SUNDSTRAND CORP Capital Goods 1,494.493 0.045
MARRIOTT CORP Consumer Goods / Ser 1,475.156 0.045
UNISYS CORP Capital Goods 1,473.323 0.045
WENDYS INTL Consumer Goods / Ser 1,459.652 0.044
MERC STORES Consumer Goods / Ser 1,455.338 0.044
ARMSTRONG WORLD IND Basic Industries 1,445.367 0.044
LEGGETT & PLATT Consumer Goods / Ser 1,430.030 0.043
SNAP-ON-TOOLS Capital Goods 1,424.696 0.043
ECOLAB Consumer Goods / Ser 1,419.789 0.043
TAMBRANDS Consumer Goods / Ser 1,425.838 0.043
E-SYSTEMS Capital Goods 1,414.542 0.043
OWENS-CORNING FIBER Basic Industries 1,397.184 0.042
DOLE FOOD INC Consumer Goods / Ser 1,367.994 0.042
LIZ CLAIBORNE Consumer Goods / Ser 1,330.543 0.040
MCKESSON CORP (NEW) Consumer Goods / Ser 1,327.674 0.040
MCDERMOTT INTL Capital Goods 1,327.565 0.040
CENTERIOR ENERGY COR Utilities 1,313.784 0.040
HARNISCHFEGER Capital Goods 1,292.400 0.039
PUGET SOUND Utilities 1,280.534 0.039
TRI-CONTINENTAL CP Financial, Insurance 1,275.816 0.039
KEMPER CORP Financial, Insurance 1,275.441 0.039
AMDAHL CORP Capital Goods 1,272.942 0.039
NAT SERVICE Consumer Goods / Ser 1,270.488 0.039
KING WORLD PRODUCTIONS Consumer Goods / Ser 1,268.255 0.038
TRINITY INDS Basic Industries 1,258.457 0.038
DIEBOLD Consumer Goods / Ser 1,255.341 0.038
RUSSELL CORP Consumer Goods / Ser 1,255.282 0.038
FOOD LION INC CLASS A Consumer Goods / Ser 1,251.218 0.038
LEUCADIA NATL Financial, Insurance 1,247.202 0.038
<PAGE>
<PAGE> I-10
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
AMER NATL INSURANCE Financial, Insurance 1,244.513 0.038
FOOD LION INC CLASS B Consumer Goods / Ser 1,227.801 0.037
BROWN-FORMAN `B' Consumer Goods / Ser 1,224.270 0.037
USF & G Financial, Insurance 1,219.860 0.037
LOUISIANA LAND & EXP Energy 1,214.016 0.037
CERIDAN CORP Capital Goods 1,197.147 0.036
BEVERLY ENTERPRISES DEL Consumer Goods / Ser 1,194.721 0.036
ASARCO Basic Industries 1,194.663 0.036
MILLIPORE CORP Basic Industries 1,190.025 0.036
COLUMBIA GAS SYSTEM Utilities 1,188.137 0.036
NICOR INC Utilities 1,183.387 0.036
ORYX ENERGY COMPANY Energy 1,151.234 0.035
ETHYL CORP COM Basic Industries 1,139.927 0.035
NAVISTAR INTL CORP Capital Goods 1,134.783 0.034
PAINE WEBBER Financial, Insurance 1,132.650 0.034
TJX COS INC Consumer Goods / Ser 1,131.391 0.034
PERKIN-ELMER Capital Goods 1,126.065 0.034
GOODRICH (BF) Basic Industries 1,119.292 0.034
TELEDYNE Capital Goods 1,115.911 0.034
PITTSTON SERVICES GROUP Transportation and S 1,105.024 0.034
UAL INC. Transportation and S 1,085.984 0.033
OLIN CORP Basic Industries 1,083.818 0.033
DELMARA POWER & LT Utilities 1,071.756 0.033
CABOT CORP Basic Industries 1,066.815 0.032
FOSTER WHEELER CORP. Capital Goods 1,065.139 0.032
WEIS MARKETS INC Consumer Goods / Ser 1,054.359 0.032
CONTINENTAL CORP Financial, Insurance 1,054.101 0.032
BROOKLYN UNION GAS Utilities 1,052.759 0.032
PETRIE STORES CORP Consumer Goods / Ser 1,046.591 0.032
TEKTRONIX Capital Goods 1,036.748 0.031
ALEX & BALDWIN Transportation and S 1,023.522 0.031
BOISE CASCADE CORP Basic Industries 1,017.945 0.030
BOWATER Basic Industries 974.582 0.030
BRIGGS & STRATON Capital Goods 947.392 0.029
CLARK EQUIPMENT Capital Goods 943.787 0.029
BALL CORP Basic Industries 939.078 0.028
STRATUS COMPUTER Capital Goods 922.868 0.028
ROUSE Financial, Insurance 915.684 0.028
PEOPLES ENERGY CORP Utilities 910.927 0.028
BATTLE MTN GOLD Basic Industries 889.757 0.027
ENSERCH CORP Utilities 877.997 0.027
CYPRESS SEMICONDUCTOR CORP. Capital Goods 872.414 0.026
US SHOE Consumer Goods / Ser 868.913 0.026
COMSAT CORP Utilities 868.204 0.026
FLEMING Consumer Goods / Ser 866.876 0.026
SAFETY-KLEEN Consumer Goods / Ser 851.886 0.026
TRINOVA CORP. Capital Goods 845.824 0.026
CONS FREIGHTWAYS Transportation and S 810.937 0.025
<PAGE>
<PAGE> I-11
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ALEX & ALEXANDER Financial, Insurance 810.282 0.025
PROV LIFE Financial, Insurance 797.594 0.024
CINCINNATI MILACRON Capital Goods 797.084 0.024
USLIFE CORP Financial, Insurance 796.161 0.024
EG & G Capital Goods 778.584 0.024
SHARED MED SYS Consumer Goods / Ser 749.549 0.023
BELO (AH) CORP Consumer Goods / Ser 744.444 0.023
MENTOR GRAPHICS Capital Goods 740.022 0.022
CHRIS-CRAFT INDS Consumer Goods / Ser 721.050 0.022
WASHINGTON GAS LT Utilities 709.463 0.022
ARMCO Basic Industries 693.585 0.021
GREAT ATLANTIC & PAC Consumer Goods / Ser 692.738 0.021
CHARMING SHOPPES Consumer Goods / Ser 681.216 0.021
TRANSCO ENERGY Utilities 680.428 0.021
YELLOW FREIGHT SYST Transportation and S 671.079 0.020
CHIQUITA BRANDS INTL INC Consumer Goods / Ser 668.892 0.020
NORAM ENERGY CORP Utilities 658.287 0.020
LONG DRUG STORES Consumer Goods / Ser 655.701 0.020
NL INDUSTRIES Basic Industries 644.380 0.020
COORS (ADOLPH) CO CLASS B Consumer Goods / Ser 641.961 0.019
HELMERICH & PAYNE Energy 633.424 0.019
FUND AMERICAN ENTRPS Financial, Insurance 604.588 0.018
COMCAST CORP. Consumer Goods / Ser 599.118 0.018
MACFRUGAL'S BARGAINS Consumer Goods / Ser 592.620 0.018
PHH GROUP Consumer Goods / Ser 592.279 0.018
AMETEK Capital Goods 592.026 0.018
THIOKOL CORP. Capital Goods 527.311 0.016
SHONEY'S INC Consumer Goods / Ser 525.032 0.016
COMM PSYCHIATRIC Consumer Goods / Ser 479.259 0.015
MAXUS ENERGY CORP Energy 454.278 0.014
CRAY RESEARCH INC Capital Goods 405.232 0.012
GENCORP Capital Goods 379.086 0.012
INTERGRAPH Capital Goods 362.733 0.011
CCH INC CLASS A Consumer Goods / Ser 296.106 0.009
FOXMEYER HEALTH CORP Consumer Goods / Ser 265.236 0.008
USAIR GROUP Transportation and S 262.719 0.008
SOUTHDOWN INC. Basic Industries 250.241 0.008
NETWORK SYSTEMS Capital Goods 208.544 0.006
OSHKOSH B'GOSH `A' Consumer Goods / Ser 192.710 0.006
SEQUA CORP CLASS A Capital Goods 160.706 0.005
</TABLE>
<PAGE>
<PAGE> C-1
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part B - The CountryBaskets(SM) Index Fund, Inc. Financial Statements:
Statement of Assets and Liabilities, at [ ], 1995.
(b) Exhibits:
(1) --Articles of Amendment and Restatement of the Fund
*(2) --Bylaws of the Fund
(3) --Not applicable
(4) (A) --Form of global certificate evidencing shares of the
Common Stock, $.001 par value, of the Fund
**(4) (B) --Articles FIFTH, SIXTH, NINTH and TWELFTH of the Fund's
Articles of Amendment and Restatement, and Article II,
Article III Section 3, Article IV and Article VII of the
Fund's Bylaws, relating to the rights of stockholders
(5) --Investment Management Agreement between the Fund and
Deutsche Bank Securities Corporation
(6) (A) --Distribution Agreement between the Fund and ALPS Mutual
Funds Services, Inc.
(6) (B) --Marketing Agreement between the Fund and ALPS Mutual
Funds Services, Inc.
(6) (C) --Form of Soliciting Dealer Agreement
(6) (D) --Investor Services Agreement between ALPS Mutual Fund
Services, Inc. and Smith Barney Inc.
(6) (E) --Form of Participating Institutions Investor Services
Agreement
(6) (F) --Form of Authorized Participant Agreement (including as
annexes the forms of purchase order, notice of intention
and redemption request)
(7) --Not applicable
(8) --Custodian Agreement between the Fund and State Street
Bank and Trust Company
(9) (A) --Administration Agreement between the Fund and State
Street Bank and Trust Company
(9) (B) --Transfer Agency and Service Agreement between the Fund
and State Street Bank and Trust Company
***(10) --Opinion and consent of Sullivan & Cromwell
***(11) --Opinion and consent of Price Waterhouse LLP
(12) --Not applicable
(13) (A) --Subscription Agreement between the Fund and ALPS Mutual
Funds Services, Inc. with respect to the Fund's initial
capitalization
________________
* Previously filed.
** The indicated portions of the Articles of Amendment and Restatement
are incorporated herein by reference to Exhibit (1) filed with this
Amendment No. 3 and the indicated portions of the Bylaws are
incorporated herein by reference to the Bylaws filed as Exhibit (2)
to this Registration Statement on October 28, 1994.
*** To be filed by Amendment.
<PAGE>
<PAGE> C-2
(13) (B) --Letter of Representations among The Depository Trust
Company, the Fund and State Street Bank and Trust Company
(14) --Not applicable
(15) --Form of 12b-1 Plan
(16) --Not applicable
(17) --Not applicable
<PAGE>
<PAGE> C-3
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Immediately prior to the initial public offering of the shares of the
Fund, ALPS Mutual Funds Services, Inc. ("ALPS"), a Colorado corporation,
will own all of the outstanding shares of each of Australia Index Series,
France Index Series, Germany Index Series, Hong Kong Index Series, Italy
Index Series, Japan Index Series, South Africa Index Series, UK Index
Series and US Index Series of the Fund. At such time, based on their
percentage shareholdings of the common stock of ALPS at [June 30], 1995,
the following persons may be deemed to control ALPS and, therefore,
indirectly control the Fund: W. Robert Alexander and Arthur J.L. Lucey.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of [____________________], 1995, the number of record holders of
each class of securities of the Fund is one. See Item 25.
ITEM 27. INDEMNIFICATION
State Law, Articles of Amendment and Restatement, and Bylaws. It is
the Fund's policy to indemnify officers, directors, employees and other
agents to the maximum extent permitted by Section 2-418 of the Maryland
General Corporation Law, Articles SEVENTH and EIGHTH of the Fund's Articles
of Amendment and Restatement and Article VI of the Fund's Bylaws (each
set forth below).
Section 2-418 of the Maryland General Corporation Law reads as follows:
"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
(a) In this section the following words have the meaning indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a corporation, is or
was serving at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger, consolidation, or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of director in
the corporation; and
(ii) When used with respect to a person other than a director as
contemplated in subsection (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
other enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or
investigative.
(b)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established
that:
<PAGE>
<PAGE> C-4
(i) the act or omission of the director was material to the matter
giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding
in which the director shall have been adjudged to be liable to the
corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the director did
not meet that standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise,
in the defense of any proceeding referred to in subsection (B) of this
section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of
securing such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director has met the standards of conduct set forth in
subsection (b) of this section or has been adjudged liable under the
circumstances described in subsection (c) of this section, the court may
order such indemnification as the court shall deem proper. However,
indemnification with respect to any proceeding by or in the right of the
corporation or in which liability shall have been adjudged in the
circumstances described in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific proceeding
after a determination has been made that indemnification of the director is
permissible in the circumstances because the director has met the standard
of conduct set forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding, or, if
such a quorum cannot be obtained, then by a majority vote of a committee of
the board consisting solely of two or more directors not, at the time,
parties to such
<PAGE>
<PAGE> C-5
proceeding and who were duly designated to act in the matter by a majority
vote of the full board in which the designated directors who are parties
may participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the
full board in which director [sic] who are parties may participate; or
(iii) By the shareholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the proceeding may
not be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the
final disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good
faith belief that the standard of conduct necessary for indemnification by
the corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to financial
ability to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws, or contract or as specified in subsection (e) of this
section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a director may be entitled under
the charter, the bylaws, a resolution of shareholders or directors, an
agreement or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance
as a witness in a proceeding at a time when the director has not been made
a named defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's
duties to the corporation also imposes duties on, or otherwise involves
services by, the director to the plan or participants or beneficiaries of
the plan;
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's duties for a
purpose reasonably believed by the director to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall
be entitled, to the same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
<PAGE>
<PAGE> C-6
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may
indemnify directors under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to
an officer, employee, or agent who is not a director to such further
extent, consistent with law, as may be provided by its charter, bylaws,
general or specific action of its board of directors or contract.
(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against
and incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power to
indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the
right of the corporation, shall be reported in writing to the shareholders
with the notice of the next stockholders' meeting or prior to the meeting."
Article SEVENTH of the Fund's Articles of Amendment and Restatement
provides:
"To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment Company
Act of 1940, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money
damages; provided, however, that nothing herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office. No amendment of the charter of the
Corporation or repeal of any of its provisions shall limit or
eliminate the limitation of liability provided to directors and
officers hereunder with respect to any act or omission occurring
prior to such amendment or repeal."
Article EIGHTH of the Fund's Articles of Amendment and Restatement
provides:
"The Corporation shall indemnify (i) its directors and
officers, whether serving the Corporation or at its request any other
entity, to the full extent required or permitted by the General Laws
of the State of Maryland now or hereafter in force, including the
advance of expenses under the procedures and to the full extent
permitted by law, and (ii) other employees and agents to such extent
as shall be authorized by the Board of Directors or the Bylaws and as
permitted by law. Nothing contained herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office. The foregoing rights of
indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such Bylaws, resolutions or
contracts implementing such provisions or such further
<PAGE>
<PAGE> C-7
indemnification arrangements as may be permitted by law. No
amendment of the charter of the Corporation or repeal of any of its
provisions shall limit or eliminate the right of indemnification
provided hereunder with respect to acts or omissions occurring prior
to such amendment or repeal."
Article SIXTH of the Fund's Bylaws provides*:
SECTION 1. Indemnification of Directors and Officers. The
Corporation shall indemnify to the fullest extent permitted by law
(including the Investment Company Act of 1940) any person made or
threatened to be made a party to any action, suit or proceeding,
whether criminal, civil, administrative or investigative, by reason
of the fact that such person or such person's testator or intestate
is or was a director, officer or employee of the Corporation or
serves or served at the request of the Corporation any other
enterprise as a director, officer or employee. To the fullest extent
permitted by law (including the Investment Company Act of 1940),
expenses incurred by any such person in defending any such action,
suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay
such expenses if it shall ultimately be determined that such person
is not entitled to be indemnified by the Corporation. The rights
provided to any person by this Article shall be enforceable against
the Corporation by such person who shall be presumed to have relied
upon it in serving or continuing to serve as a director, officer or
employee as provided above. No amendment of this Article shall
impair the rights of any person arising at any time with respect to
events occurring prior to such amendment. For purposes of this
Article, the term "Corporation" shall include any predecessor of the
Corporation and any constituent corporation (including any
constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include
any corporation, partnership, joint venture, trust or employee
benefit plan; service "at the request of the Corporation" shall
include service as a director, officer or employee of the Corporation
which imposes duties on, or involves services by, such director,
officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a person
with respect to an employee benefit plan shall be deemed to be
indemnifiable expenses; and action by a person with respect to any
employee benefit plan which such person reasonably believes to be in
the interest of the participants and beneficiaries of such plan shall
be deemed to be action not opposed to the best interests of the
Corporation.
______________
*The Fund expects to adopt and to file as an exhibit to this
Registration Statement, prior to its effectiveness, amended Bylaws.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Fund" in the Statement of Additional
Information. Information as to the directors and officers of the Adviser
is included in its form ADV filed with the Commission and is incorporated
herein by reference thereto.
<PAGE>
<PAGE> C-8
ITEM 29. PRINCIPAL UNDERWRITERS
(a) ALPS is the Fund's principal underwriter. ALPS also acts as a
principal underwriter and distributor for the following investment
companies: Mariner Funds Trust, Mariner Mutual Funds Trust, Duff & Phelps
Mutual Funds and FGIC Public Trust.
(b)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS* WITH UNDERWRITER WITH REGISTRANT
W. Robert Alexander Chairman, President and None
Director
Arthur J.L. Lucey Secretary, Vice President None
and Director
John W. Hannon, Jr. Director None
Asa W. Smith Director None
Rick Pederson Director None
Gordon Hobgood, Jr. Director None
Steve J. Bettcher Director None
Mark A. Pougnet CFO None
Ned Burke Senior Vice President None
* The principal business address for each of the above directors is
370 Seventeenth Street, Suite 2700, Denver, Colorado 80202.
(c) ALPS has received no commissions or other compensation from the
Fund to date.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder will be maintained
at the offices of State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110 except that the accounts, books and other
documents required by Rules 31(a)[ ] will be kept at the offices of
the Fund's Adviser, Deutsche Bank Securities Corporation, 31 West 52nd
Street, New York, New York 10019.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
<PAGE>
<PAGE> C-9
ITEM 32. UNDERTAKINGS
The Fund undertakes that it will file:
(a) an amendment to the registration statement with certified
financial statements showing the initial capital received before
accepting subscriptions from any persons in excess of 25 if the
Fund proposes to raise its initial capital pursuant to
Section 14(a)(3) of the 1940 Act [15 U.S.C. 80a-14(a)(3)]; and
(b) a post-effective amendment, using financial statements
which need not be certified, within four to six months from the
effective date of the Fund's registration statement under the
Securities Act of 1933, as amended (the "Act").
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Fund
pursuant to the foregoing provisions, or otherwise, the Fund 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 Fund of expenses
incurred or paid by a director, officer or controlling person of the Fund
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 Fund 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.
<PAGE>
<PAGE> C-10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE FUND HAS DULY CAUSED THIS AMENDMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THERETO DULY AUTHORIZED, IN THE
CITY AND STATE OF NEW YORK, ON THE 11TH DAY OF JULY, 1995.
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
By: /s/ Stephen K. West
Stephen K. West
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
AMENDMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON IN THE CAPACITIES
AND ON THE DATE INDICATED:
Name Title Date
/s/ Stephen K. West Director and President July 10, 1995
STEPHEN K. WEST
<PAGE> 1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
THE COUNTRYBASKET INDEX FUND, INC.
Pursuant to Section 2-609 of the General Corporation Law of the
State of Maryland, The CountryBasket Index Fund, Inc., a Maryland
corporation (the "Corporation"), hereby certifies that:
First: The name of the Corporation is The CountryBasket Index
Fund, Inc. The Corporation's original charter was filed with the State
Department of Assessments and Taxation on August 8, 1994 and the name under
which it was originally incorporated was Eurofund, Inc.
Second: The current address of the principal office of the
Corporation in this State is c/o The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202.
Third: The Corporation's current resident agent in the State
of Maryland is The Corporation Trust Incorporated and the agent's current
address is 32 South Street, Baltimore, Maryland 21202.
Fourth: The Corporation has one director. Stephen K. West is
currently the sole director of the Corporation.
Fifth: The Corporation desires to restate its charter as
currently in effect and to integrate the amendments made hereby.
Sixth: The charter of the Corporation is hereby amended to
change the name of the Corporation to The CountryBaskets Index Fund, Inc.;
<PAGE>
<PAGE> 2
to increase the total number of shares of Common Stock of all series that
the Corporation shall have authority to issue; to increase the number of
shares of Common Stock initially classified and allocated to the Germany
Index Series and the UK Index Series; to designate seven additional series
of Common Stock and the number of shares of Common Stock initially
classified and allocated to such series; to restrict the stockholders'
right of redemption of shares of Common Stock of each series to
redemptions in aggregations of a number of shares to be determined by
the Board of Directors; to permit the Corporation to pay the redemption
or repurchase price of shares within such time period after surrender of
such shares as may be permitted by any applicable rule, regulation or
order of the Securities and Exchange Commission; and to make certain
other modifications, all as set forth in these Articles of Amendment
and Restatement.
Seventh: Immediately prior to the amendments to the charter
set forth herein, the Corporation had the authority to issue 100,000,000
shares, par value $.001 per share, of Common Stock of all series and
classes, of which 50,000 and 20,000 shares were classified and allocated to
the UK Index Series and Germany Index Series, respectively; and the
aggregate par value of all of the authorized shares was $100,000.
Eighth: Immediately after giving effect to the amendments to
the charter set forth herein, the Corporation will have the authority to
issue 5,000,000,000 shares, par value $.001 per share, of Common Stock of
all series and classes, of which 200,000,000 shares will be classified and
<PAGE>
<PAGE> 3
allocated to each of the following nine series of Common Stock: the
Australia Index Series, the France Index Series, the Germany Index Series,
the Hong Kong Index Series, the Italy Index Series, the Japan Index
Series, the South Africa Index Series, the UK Index Series and the US
Index Series, and 3,200,000,000 shares shall be Common Stock undesignated
as to series; and the aggregate par value of all the authorized shares
will be $5,000,000.
Ninth: Each series of Common Stock and, if and when authorized
(as hereinafter contemplated), each class of that series shall have such
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, terms and conditions of
redemption and other characteristics as the Board of Directors may
determine in the absence of a contrary provision set forth in these
Articles of Amendment and Restatement.
Tenth: The provisions set forth in these Articles of Amendment
and Restatement are all the provisions of the charter currently in effect,
as so amended and incorporating the provisions of previously filed Articles
of Amendment.
Eleventh: The charter of the Corporation is restated in its
entirety as follows:
FIRST: Incorporator. I, THE UNDERSIGNED, Stephen K. West,
whose post office address is 125 Broad Street, New York, New York 10004,
being at least twenty-one years of age, do under and by virtue of the
General Laws of the State of Maryland authorizing the formation of
corporations, associate myself as incorporator with the intention of
forming a corporation (hereinafter called the "Corporation").
SECOND: Name. The name of the Corporation is The CountryBaskets
Index Fund, Inc.
<PAGE>
<PAGE> 4
THIRD: Purposes and Powers. The purpose for which the
Corporation is formed is to act as an open-end management investment
company under the Investment Company Act of 1940, as currently in effect or
as hereafter may be amended and the Rules and Regulations from time to time
promulgated and effective thereunder (referred to herein collectively as
the "Investment Company Act of 1940"), and to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations
by the General Laws of the State of Maryland now or hereafter in force.
FOURTH: Principal Office. The post office address of the
principal office of the Corporation in this State is c/o The Corporation
Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. The name of
the Corporation's resident agent is The Corporation Trust Incorporated, and
its post office address is 32 South Street, Baltimore, Maryland 21202. Said
resident agent is a corporation of the State of Maryland.
FIFTH: Capital Stock. 1. The total number of shares of capital
stock of all series and classes that the Corporation initially shall have
authority to issue is 5,000,000,000 shares, with a par value of one-tenth
of one cent ($.001) per share, to be known and designated as Common Stock,
such shares of Common Stock having an aggregate par value of five million
dollars ($5,000,000). The Board of Directors shall have power and authority
to increase or decrease, from time to time, the aggregate number of shares
of stock, or of any series or class of stock, that the Corporation shall
have the authority to issue.
2. Subject to the provisions of these Articles of
Incorporation, the Board of Directors shall have the power to issue shares
of Common Stock of the Corporation from time to time, at prices not less
than the net asset value or par value thereof, whichever is greater, for
such consideration (which may consist of, among other things, cash and/or
securities) as may be fixed from time to time pursuant to the direction of
the Board of Directors. All stock, upon issuance against receipt of the
consideration specified by the Board of Directors, shall be fully paid and
non-assessable.
3. Pursuant to Section 2-105 of the Maryland General
Corporation Law, the Board of Directors of the Corporation shall have the
power to designate one or more series of shares of Common Stock, to fix the
number of shares in any such series and to classify or reclassify any
unissued shares with respect to such series. Any series of Common Stock
shall be referred to herein individually as a "Series" and collectively,
together with any further series from time to time established, as the
"Series". Any such Series (subject to any applicable rule, regulation or
order of the Securities and Exchange Commission or other applicable law or
regulation) shall have such preferences, conversion or other rights, voting
powers, restrictions, limitations
<PAGE>
<PAGE> 5
as to dividends, qualifications, terms and conditions of redemption and
other characteristics as the Board of Directors may determine in the
absence of a contrary provision set forth herein. The aforesaid power shall
include the power to create, by classifying or reclassifying unissued
shares in the aforesaid manner, one or more Series in addition to those
initially designated as named below and to increase the aggregate number of
shares of a Series. Subject to such aforesaid power, the Board of Directors
has initially designated nine Series of shares of Common Stock of the
Corporation. The names of such Series and the number of shares of Common
Stock initially classified and allocated to these Series are as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
Initially Classified and Name of
Series Allocated
<S> <C>
Australia Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
France Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
Germany Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
Hong Kong Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
Italy Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
Japan Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
South Africa Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
UK Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
US Index Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000,000
</TABLE>
The remaining 3,200,000,000 shares of Common Stock shall be undesignated as
to Series until the Board of Directors shall have made such designation
pursuant to this Section 3.
4. The Board of Directors may, from time to time and without
stockholder action, classify shares of a particular Series into one or more
additional classes of that Series, the voting, dividend, liquidation and
other rights of which shall differ from the classes of Common Stock of that
Series to the extent provided in Articles Supplementary for such additional
class, such Articles Supplementary to be filed for record with the
appropriate authorities of the State of Maryland. Any class of a Series of
Common Stock shall be referred to herein individually as a "Class" and
collectively, together with any further class or classes of such Series
from time to time established, as the "Classes".
5. All Classes of a particular Series of Common Stock of the
Corporation shall represent the same interest in the Corporation and have
identical voting, dividend, liquidation and other rights with any other
shares of Common Stock of that Series; provided, however, that
notwithstanding anything in the charter of the Corporation to the contrary:
(i) Any Class of shares may be subject to such sales loads,
contingent deferred sales charges, Rule 12b-1 fees, administrative
fees, service fees or other fees, however designated, in such amounts
<PAGE>
<PAGE> 6
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act of 1940 and the applicable
rules and regulations of the National Association of Securities
Dealers, Inc.
(ii) Expenses related solely to a particular Class of a Series
(including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or
service agreement, plan or other arrangement, however designated)
shall be borne by that Class and shall be appropriately reflected in
the manner determined by the Board of Directors in the net asset
value, dividends, distributions and liquidation rights of the shares
of that Class.
(iii) As to any matter with respect to which a separate vote of
any Class of a Series is required by the Investment Company Act of
1940 or by the Maryland General Corporation Law (including, without
limitation, approval of any plan, agreement or other arrangement
referred to in subsection (ii) above), such requirement as to a
separate vote by that Class shall apply in lieu of single class
voting (as defined in Section 7 of this Article), and if permitted by
the Investment Company Act of 1940 or the Maryland General
Corporation Law, the Classes of more than one Series shall vote
together as a single Class on any such matter that shall have the
same effect on each such Class. As to any matter that does not affect
the interest of a particular Class of a Series, only the holders of
shares of the affected Class or Classes of that Series shall be
entitled to vote.
6. Subject to the foregoing, each share of a Series or Class
shall have equal rights with each other share of that Series or Class with
respect to the assets of the Corporation pertaining to that Series or
Class. The dividends payable to the holders of any Series or Class (subject
to any applicable rule, regulation or order of the Securities and Exchange
Commission or any other applicable law or regulation) shall be determined
by the Board of Directors and need not be individually declared, but may be
declared and paid in accordance with a formula adopted by the Board of
Directors (whether or not the amount of dividend or distribution so
declared can be calculated at the time of such declaration).
7. The holder of each share of Common Stock of the Corporation
shall be entitled to one vote for each share, and a fractional vote for
each fractional share, irrespective of the Series or Class, then standing
in his or her name in the books of the Corporation. On any matter submitted
to a vote of stockholders, all shares of Common Stock of the Corporation
then issued and outstanding and entitled to vote, irrespective of the
Series or Class, shall be voted in the aggregate and not by Series or Class
("single class voting") except (1) when otherwise expressly provided by the
Maryland General Corporation Law, or when required by the Investment
<PAGE>
<PAGE> 7
Company Act of 1940, shares shall be voted by individual Series or Class;
and (2) when the matter does not affect any interest of a particular Series
or Class, then only stockholders of such other Series or Class or Series or
Classes whose interests may be affected shall be entitled to vote thereon.
Holders of shares of Common Stock of the Corporation shall not be entitled
to cumulative voting in the election of Directors or on any other matter.
8. All consideration received by the Corporation for the
issuance or sale of stock of each Series or Class, together with all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in whatever form
the same may be, shall belong to the Series or Class of shares of stock
with respect to which such assets, payments or funds were received by the
Corporation for all purposes, subject only to the rights of creditors, and
shall be so handled upon the books of account of the Corporation. Such
assets, income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, and any
assets derived from any reinvestment of such proceeds, in whatever form the
same may be, are herein referred to as "assets belonging to" such Series or
Class.
9. The Board of Directors may from time to time declare and
pay dividends or distributions in stock, property (including securities) or
in cash on any or all Series or Class of stock and to the stockholders of
record as of such date as the Board of Directors may determine; provided
that such dividends or distributions on shares of any Series or Class of
stock shall be paid only out of earnings, surplus, or other lawfully
available assets belonging to such Series or Class. Subject to the
foregoing proviso, the amount of any dividends or distributions and the
payment thereof shall be wholly in the discretion of the Board of
Directors.
10. In the event of the liquidation or dissolution of the
Corporation, stockholders of each Series and Class therein shall be
entitled to receive, as a Series or Class, out of the assets of the
Corporation available for distribution to stockholders, but other than
general assets, the assets belonging to such Series or Class and the assets
so distributable to the stockholders of any Series or Class shall be
distributed among such stockholders in proportion to the number of shares
of such Series or Class held by them and recorded on the books of the
Corporation. In the event that there are any general assets not belonging
to any particular Series or Class of stock and available for distribution,
such distribution shall be made to the holders of stock of all Series and
Classes in proportion to the net asset value of the respective Series or
Class determined as hereinafter provided.
11. The assets belonging to any Series or Class of stock shall
be charged with the liabilities in respect to such Series or Class and
<PAGE>
<PAGE> 8
shall also be charged with such Series' or Classes' proportionate share of
the general liabilities of the Corporation, based upon the ratio of the net
asset value, determined as hereinafter provided, of the shares of such
Series or Class then outstanding to the net asset value of all shares of
Common Stock of the Corporation then outstanding. The determination of
the Board of Directors shall be conclusive with respect to the amount of
liabilities, including accrued expenses and reserves, the allocation of
such liabilities to a given Series or Class, and whether the same or
general assets of the Corporation are allocable to one or more Series or
Classes.
12. The Board of Directors may provide for a holder of any
Series or Class of stock of the Corporation, who surrenders his certificate
in good form for transfer to the Corporation or, if the shares in question
are not represented by certificates, who delivers to the Corporation a
written request in good order signed by the stockholder, to convert the
shares in question on such basis as the Board may provide, into shares of
stock of any other Series or Class of the Corporation.
13. Subject to Section 14 below, the net asset value per share
of the Corporation's Common Stock shall be determined by adding the value
of all securities, cash and other assets of the Corporation pertaining to
that Series or Class, subtracting the liabilities applicable to that Series
or Class, proportionally allocating any general assets and general
liabilities to that Series or Class, and dividing the net result by the
number of shares of that Series or Class outstanding. Subject to Section
14 below, the value of the securities, cash and other assets, and the
amount and nature of liabilities, and the allocation thereof to any
particular Series or Class, shall be determined pursuant to the direction
of, or procedures or methods prescribed or approved by, the Board of
Directors in its sole discretion and shall be so determined at the time or
times prescribed or approved by the Board of Directors in its sole
discretion.
14. The net asset value per share of a Series or Class of the
Corporation's Common Stock for the purpose of issuance, redemption or
repurchase of shares, shall be determined in accordance with the Investment
Company Act of 1940 and any other applicable Federal securities law or rule
or regulation.
15. All shares of Common Stock now or hereafter authorized
shall be subject to redemption and redeemable at the option of the
stockholder in accordance with and pursuant to procedures or methods
prescribed or approved by the Board of Directors and, in the case of any
Series now or hereafter authorized, if so determined by the Board of
Directors, shall be redeemable only in aggregations of such number of
shares and on such days as may be determined by, or determined pursuant to
procedures or methods prescribed by or approved by, the Board of Directors
from time to time with respect to such Series. The number of shares
comprising an aggregation for purposes of redemption or repurchase so
<PAGE>
<PAGE> 9
determined from time to time with respect to any Series shall be referred
to herein as a "Creation Unit" and collectively, as "Creation Units".
Initially, a Creation Unit of the Australia Index Series, the Hong Kong
Index Series, the Italy Index Series, and the South Africa Index Series
shall consist of 75,000 shares and a Creation Unit of all other Series
shall consist of 100,000 shares. Until October 1, 1995 (or such earlier or
later date as House Bill 750 filed in the 1995 Session of the Maryland
General Assembly or any similar provision shall become law), the Board
of Directors shall have the right, by resolution adopted at any regular
or special meeting of the Board of Directors, to alter the number of
shares constituting a Creation Unit to not less than 10,000 shares nor
more than 250,000 shares. Thereafter, the Board of Directors shall have
the unrestricted power to alter the number of shares constituting a
Creation Unit by resolutions adopted at any regular or special meeting of
the Board of Directors. Each holder of a Creation Unit aggregation of
shares of a Series, upon request to the Corporation accompanied by
surrender of the appropriate stock certificate or certificates in proper
form for transfer if certificates have been issued to such holder, or in
accordance with such other procedures as may from time to time be in
effect if certificates have not been issued, shall be entitled to require
the Corporation to redeem all or any number of such holder's shares of
Common Stock standing in the name of such holder on the books of the
Corporation, but in the case of shares of any Series as to which the
Board of Directors has determined that such shares shall be redeemable
in Creation Unit aggregations, only in such Creation Unit aggregations
of shares of such Series as the Board of Directors may determine from
time to time in accordance with this Section 15, at a redemption price
per share equal to an amount determined by the Board of Directors in
accordance with any applicable laws and regulations; provided that
(i) such amount shall not exceed the net asset value per share determined
in accordance with this Article, and (ii) if so authorized by the Board
of Directors, the Corporation may, at any time from time to time, charge
fees for effecting such redemption or repurchase, at such rates as the
Board of Directors may establish, as and to the extent permitted under
the Investment Company Act of 1940. The redemption price may be payable in
cash, securities or a combination thereof, as determined by or pursuant to
the direction of the Board of Directors from time to time.
16. Notwithstanding Section 15 above (or any other provision
of these Articles of Incorporation), the Board of Directors of the
Corporation may suspend the right of the holders of Creation Unit
aggregations of shares of any Series to require the Corporation to redeem
such shares (or may suspend any voluntary purchase of shares pursuant to
the provisions of the charter of the Corporation) or postpone the date of
payment or satisfaction upon redemption of such shares during any financial
emergency.
For the purpose of these Articles, a "financial emergency" is
defined as the whole or part of any period (i) during which the New York
<PAGE>
<PAGE> 10
Stock Exchange is closed other than customary weekend and holiday
closings, (ii) during which trading on the New York Stock Exchange is
restricted, (iii) during which an emergency exists as a result of which
disposal by the Corporation of securities owned by such Series is not
reasonably practicable or it is not reasonably practicable for the
Corporation fairly to determine the value of the net assets of such
Series, or (iv) during any other period when the Securities and Exchange
Commission (or any succeeding governmental authority) may for the
protection of security holders of the Corporation by order permit
suspension of the right of redemption or postponement of the date of
payment on redemption.
17. The Board of Directors may by resolution from time to time
authorize the repurchase by the Corporation, either directly or through an
agent, of shares upon such terms and conditions and for such consideration
as the Board of Directors shall deem advisable, out of funds legally
available therefor and at prices per share not in excess of the net asset
value per share, determined in accordance with this Article and to take all
other steps deemed necessary or advisable in connection therewith.
18. Except as otherwise permitted by the Investment Company Act
of 1940 or any applicable rule, regulation or order of the Securities and
Exchange Commission, payment of the redemption or repurchase price of
shares surrendered to the Corporation for redemption pursuant to the
provisions of Section 15 or 20 of this Article or for repurchase by the
Corporation pursuant to the provisions of Section 17 of this Article shall
be made by the Corporation within seven (7) days after surrender of such
shares to the Corporation for such purpose. Any such payment may be made in
whole or in part in portfolio securities or in cash, as the Board of
Directors shall deem advisable, and no stockholder shall have the right,
other than as determined by the Board of Directors, to have shares redeemed
or repurchased in portfolio securities or in cash or in any particular
combination thereof.
19. In the absence of any specification of the purpose for
which the Corporation redeems or repurchases any shares of its Common
Stock, all redeemed or repurchased shares shall be deemed to be acquired
for retirement in the sense contemplated by the General Corporation Law of
the State of Maryland. Shares of any Series retired by redemption or
repurchase shall thereafter have the status of authorized but unissued
shares of such Series.
20. The holders of shares of Common Stock or other securities
of the Corporation shall have no preemptive rights to subscribe for new or
additional shares of its Common Stock or other securities.
SIXTH: Directors. The initial number of directors of the
Corporation shall be one (1), which shall be the minimum number of
<PAGE>
<PAGE> 11
directors for so long as there is only one or no stockholders. The name of
the director who shall act until the first annual meeting or until his
successor is duly chosen and qualified is Stephen K. West. Upon such time
as the Corporation has issued two or more shares of its capital stock, the
minimum number of directors shall be increased in accordance with the
provisions of Section 2-402 of the Maryland General Corporation Law. The
number of directors may be changed from time to time in such lawful manner
as is provided in the Bylaws of the Corporation. Unless otherwise provided
by the Bylaws of the Corporation, directors of the Corporation need not be
stockholders.
At such time as the number of Directors first equals or exceeds
three, the Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of Directors constituting
the entire Board permits with the term of office of one class expiring each
year. At the annual meeting of stockholders next following such division
into three classes, Directors of the first class shall be elected to hold
office for a term expiring at the next succeeding annual meeting, Directors
of the second class shall be elected to hold office for a term expiring at
the second succeeding annual meeting and Directors of the third class shall
be elected to hold office for a term expiring at the third succeeding
annual meeting. At each annual meeting of stockholders succeeding the
annual meeting of stockholders next following such division into three
classes, the successors to the class of Directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
SEVENTH: Liabilities of Directors and Officers. To the fullest
extent permitted by Maryland statutory or decisional law, as amended or
interpreted, and the Investment Company Act of 1940, no director or officer
of the Corporation shall be personally liable to the Corporation or its
stockholders for money damages; provided, however, that nothing herein
shall be construed to protect any director or officer of the Corporation
against any liability to the Corporation or its security holders to which
he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office. No amendment of the charter of the Corporation or
repeal of any of its provisions shall limit or eliminate the limitation of
liability provided to directors and officers hereunder with respect to any
act or omission occurring prior to such amendment or repeal.
EIGHTH: Indemnification of Directors, Officers, Employees and
Agents. The Corporation shall indemnify (i) its directors and officers,
whether serving the Corporation or at its request any other entity, to
the full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses
under the procedures and to the full extent permitted by law, and
(ii) other employees and agents to such extent as shall be authorized by
the Board of Directors or the Bylaws and as permitted by law. Nothing
<PAGE>
<PAGE> 12
contained herein shall be construed to protect any director or officer of
the Corporation against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take
such action as is necessary to carry out these indemnification provisions
and is expressly empowered to adopt, approve and amend from time to time
such Bylaws, resolutions or contracts implementing such provisions or such
further indemnification arrangements as may be permitted by law. No
amendment of the charter of the Corporation or repeal of any of its
provisions shall limit or eliminate the right of indemnification provided
hereunder with respect to acts or omissions occurring prior to such
amendment or repeal.
NINTH: Management of the Affairs of the Corporation. The Board
of Directors shall have the management and control of the property,
business and affairs of the Corporation and is hereby vested with all the
powers possessed by the Corporation itself so far as is not inconsistent
with law or the charter of the Corporation. In furtherance and without
limitation of the foregoing provisions, it is expressly declared that,
subject to any other provisions of the charter of the Corporation, the
Board of Directors shall have the power:
(i) To make, alter, amend or repeal from time to time the
Bylaws of the Corporation except as such power may otherwise be
limited in the Bylaws.
(ii) From time to time to determine whether, to what extent, at
what times and places and under what conditions and regulations the
books and accounts of the Corporation, or any of them other than the
stock ledger, shall be open to the inspection of the stockholders,
and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by law or
authorized by resolution of the Board of Directors or of the
stockholders.
(iii) In addition to the powers and authorities granted herein
and by statute expressly conferred upon it, the Board of Directors is
authorized to exercise all such powers and do all acts and things as
may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of Maryland law, of the charter of the Corporation
and of the Bylaws of the Corporation.
TENTH: Corporate Books. The books of the Corporation may be
kept (subject to any provisions contained in applicable statutes) outside
the State of Maryland at such place or places as may be designated from
<PAGE>
<PAGE> 13
time to time by the Board of Directors or in the Bylaws of the
Corporation. Election of directors need not be by ballot unless the
Bylaws of the Corporation shall so provide.
ELEVENTH: Amendments. The Corporation reserves the right from
time to time to amend, alter, or repeal any of the provisions of the
charter of the Corporation (including any amendment that changes the terms
of any of the outstanding shares by classification, reclassification or
otherwise), and any contract rights, as expressly set forth in the charter
of the Corporation, of any outstanding shares, and to add or insert any
other provisions that may, under the statutes of the State of Maryland at
the time in force, be lawfully contained in articles of incorporation, and
all rights at any time conferred upon the stockholders of the Corporation
by these Articles of Incorporation are subject to the provisions of this
Article ELEVENTH.
TWELFTH: Quorum; Majority Vote. 1. The presence in person or by
proxy of the holders of record of one-third of the shares issued and
outstanding and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the stockholders except as
otherwise provided by law (including the Investment Company Act of 1940) or
in the charter of the Corporation.
2. On any given matter, the presence at any meeting, in person
or by proxy, of holders of record of less than one-third of the shares
issued and outstanding and entitled to vote thereat shall not prevent
action at such meeting upon any other matter or matters which may properly
come before the meeting, if there shall be present thereat, in person or by
proxy, holders of record of the number of shares required for action in
respect of such other matter or matters.
Notwithstanding any provision of Maryland law requiring more
than a majority vote of the Common Stock, or any Series or Class thereof,
in connection with any corporate action (including, but not limited to, the
amendment of the charter of the Corporation), unless otherwise provided in
the charter of the Corporation, the Corporation may take or authorize such
action upon the favorable vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote thereon.
THIRTEENTH: Acquisition Subject to the Charter of the
Corporation. All persons who shall acquire shares in the Corporation shall
acquire the same subject to the provisions of the charter of the
Corporation.
FOURTEENTH: Duration. The duration of the Corporation shall be
perpetual.
* * * * *
<PAGE>
<PAGE> 14
Twelfth: This Amendment and Restatement of the charter of the
Corporation as hereinabove set forth was approved by the Corporation's sole
director and no stock entitled to be voted on the matter was outstanding or
subscribed for at the time of approval.
<PAGE>
<PAGE> 15
IN WITNESS WHEREOF, THE COUNTRYBASKET INDEX FUND, INC., has
caused these Articles of Amendment and Restatement to be signed in its name
and on its behalf by its sole Director and President and attested to by its
Secretary, and each said officer of the Corporation has also acknowledged
these Articles of Amendment and Restatement to be the act of the
Corporation and has stated under penalty of perjury that to the best of his
knowledge, information and belief the matters and facts set forth herein
are true in all material respects, all on June 27, 1995.
THE COUNTRYBASKET INDEX FUND, INC.
By: /s/ Stephen K. West
Stephen K. West
Director and President
Attest:
/s/ John J. O'Brien
John J. O'Brien
Secretary
<PAGE> 1
Draft - 6/27/95
[Form of the Face of Global Certificate]
COMMON STOCK COMMON STOCK
THE COUNTRYBASKETS INDEX FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
THE ____________________ INDEX SERIES
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water
Street, New York, New York) to the issuer or its agent for
registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of
The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
CEDE & CO.
is the owner and registered Holder of the number of fully paid and non-
assessable shares of the common stock, par value $.001 per share (the
"CB(SM) Shares"), of the ____________ Index Series of The CountryBaskets
Index Fund, Inc., a Maryland corporation (the "Corporation"), shown from
time to time on the records of the transfer agent thereof as represented by
this Certificate which shall be all of the outstanding CB(SM) Shares of the
____ Index Series of the Corporation. This Certificate and the shares
represented hereby are issued and shall be held subject to the provisions
of the General Corporation Law of the State of
<PAGE>
<PAGE> 2
Maryland and the Articles of Incorporation and By-laws of the Corporation,
as they may be amended from time to time.
This certificate is not valid unless manually countersigned by
the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
SECRETARY PRESIDENT
TRANSFER AGENT
By
Authorized Officer
<PAGE>
<PAGE> 3
[Reverse of form of global certificate]
THE COUNTRYBASKETS INDEX FUND, INC.
Incorporated Under the Laws of the State of Maryland
Index Series
This Certificate represents all shares of common stock, par
value $.001 per share (the "CB(SM) Shares"), of the ____ Index Series of
The CountryBaskets Index Fund, Inc. (the "Corporation") recorded from time
to time on the books of the Transfer Agent. The registered Holder is
entitled to all the rights, interests and privileges of a stockholder as
provided in the Articles of Incorporation and By-Laws of the Corporation,
as amended, which are incorporated by reference herein.
This Certificate shall be transferable by Cede & Co. as the
registered Holder hereof by presentation and surrender hereof at the office
of State Street Bank and Trust Company, as transfer agent (the "Transfer
Agent"), located in Boston, Massachusetts, properly endorsed or accompanied
by an instrument of transfer, in form satisfactory to the Transfer Agent,
and executed in blank by the registered Holder hereof or his authorized
attorney. CB(SM) Shares represented hereby may be redeemed at the net
asset value thereof in kind, in cash or a combination thereof pursuant to
Article ___ of the Articles of Incorporation, as amended in accordance with
the requirements thereof, by the registered Holder when tendered together
with an instrument of assignment and transfer duly endorsed or executed in
blank, together with an irrevocable instruction in writing to redeem the
same, and the Corporation will thereafter redeem said CB(SM) Shares at net
asset value, provided that the CB(SM) Shares to be redeemed represented by
this Certificate shall equal one or more Creation Units of shares as
provided in the Articles of Incorporation, as amended from time to time.
The Corporation has authority to issue stock of more than one
series. The Corporation will furnish without charge to the registered
Holder hereof a full statement of: (1) the designations and any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the stock of each series which the Corporation
<PAGE>
<PAGE> 4
is authorized to issue; (2) the differences in the relative rights and
preferences between the shares of each series which the Corporation is
authorized to issue to the extent such rights and preferences have been
set; and (3) the authority of the Board of Directors to set the relative
rights and preferences of subsequent series.
The registered Holder hereof may be required to pay taxes or
other governmental charges that may be imposed in connection with the
transfer, redemption or other surrender of this Certificate.
The Transfer Agent, notwithstanding any notice to the contrary,
may treat the person in whose name this Certificate is registered upon the
books of the Transfer Agent as the absolute owner hereof for all purposes.
[SEE CURRENT PROSPECTUS FOR FURTHER INFORMATION
CONCERNING REDEMPTION OF SHARES]
_____________
<PAGE>
<PAGE> 5
[FORM OF ASSIGNMENT]
For value received ______________________________ hereby sells,
assigns and transfers unto ____________________ [______________] (please
insert Social Security Number or other identifying number of the Assignee)
all shares of the __________ Index Series of The CountryBaskets Index Fund,
Inc. represented by the within Certificate, and does hereby irrevocably
constitute and appoint __________________________ Attorney to transfer the
said shares on the books of the Transfer Agent for such __________ with
full power of substitution in the premises.
Dated:____________
(Signature)
SIGNATURE GUARANTEED BY:
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within instrument in every
particular without alteration or enlargement or any change
whatever.
<PAGE> 1
Draft of July 7, 1995
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"), dated
________ __, 1995, between The CountryBaskets Index Fund, Inc., a Maryland
corporation (the "Company"), with respect to each series of the Company
listed on Annex A (each such series, and each series hereafter authorized
and incorporated into Annex A, herein referred to as a "Series"), and
Deutsche Bank Securities Corporation, a Delaware corporation (the
"Adviser").
W I T N E S S E T H :
WHEREAS, the Company is a management investment company organ-
ized as a series fund and registered under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Adviser is a registered investment adviser under
the Investment Advisers Act of 1940, as amended, and a registered broker-
dealer under the Securities Exchange Act of 1934, as amended (the "1934
Act");
WHEREAS, each Series is considered to be an open-end fund and
the Company desires to retain the Adviser to render specified investment
advisory and certain management and administrative services to it with
respect to each Series; and
WHEREAS, the Adviser desires to render such services to the
Company with respect to each Series;
NOW, THEREFORE, in consideration of the mutual agreements,
covenants, and representations contained in this Agreement, the parties
hereto agree as follows:
ARTICLE I
Investment Management Services
1.1 Investment Advisory Services. The Adviser shall, for the
period and on the terms set forth in this Agreement, act as the investment
adviser to each Series. The Adviser shall determine which securities shall
be purchased, sold and loaned, which options contracts, futures contracts
and options thereon the Series will enter into and which other investments
shall be made by the Series, make purchases and sales of securities and
other investments on behalf of the Series and arrange for the lending of
the portfolio securities of the Series, determine how the securities held
by the Series should be voted, determine what portion of the Series' assets
shall be held uninvested, in each case subject to the overall supervision of
<PAGE>
<PAGE> 2
the Company's Board of Directors and in compliance with the investment
objectives, policies and restrictions pertaining to such Series set forth
from time to time in the Fund's registration statement (File Nos. 33-85710,
811-8734) under the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act (the "Registration Statement"), the prospectus and
statement of additional information contained therein, the 1940 Act, and
other applicable laws and regulations. The lending of portfolio securities
shall be subject to liability as set forth in Section 3.1 and conducted in
accordance with such policies, standards and procedures as may be adopted
by the Board of Directors from time to time and all applicable laws and
regulations, and in connection therewith the Adviser, subject to the
approval of the Company's Board of Directors, may appoint as its agent and
at its expense and continuing responsibility hereunder, one or more persons
to carry out such lending operations.
1.2 Portfolio Transactions.
(a) The Adviser shall select the brokers or dealers that will
execute the purchases and sales of securities and other investments for the
Series and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as permitted herein.
(b) If in good faith the Adviser believes it can obtain the
best price and most favorable execution in connection therewith, the
Adviser may execute each Series' portfolio transactions on an agency basis
through itself or an affiliated broker or dealer, provided that the price,
execution, and fee terms offered by the Adviser or its affiliate are at
least as favorable to the Series as those offered by other qualified
broker-dealers to unaffiliated customers in similar transactions. Such
transactions may not be executed by the Adviser or an affiliate as
principal.
(c) Unless and until otherwise directed by the Board of
Directors of the Company, the Adviser may also effect individual securities
and other transactions with nonaffiliated brokers or dealers at commission
rates in excess of the commission rates another broker or dealer would
have charged, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the Adviser's overall responsibili-
ties with respect to the Series as contemplated by Section 28(e) of the
1934 Act. The execution of such transactions shall not be deemed to
represent an unlawful
<PAGE>
<PAGE> 3
act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Board of Directors
of the Company such information relating to Series portfolio transactions
as they may reasonably request. [Check SAI p. 27 conform]
1.3 Third-Party Service Providers. The Adviser shall:
(a) negotiate, maintain, evaluate and coordinate contractual
arrangements with third-party service providers, including, but not limited
to, administrators, custodians, transfer agents, distributors, independent
accountants, principal underwriters, attorneys, insurers and printers; and
(b) assist the various third-party service providers retained
by the Company for itself or with respect to a Series by, among other
things, providing any information to such service providers as the
Company's Board of Directors deems appropriate; reviewing and providing
advice to such service providers regarding sales literature and marketing
plans and providing information to the Series' principal underwriters
concerning Series performance and administration.
1.4 Determination of Fund Basket. The Adviser shall determine
prior to each trading day on the New York Stock Exchange (the "NYSE"), in
accordance with the Series' policies as adopted from time to time by the
Board of Directors, the identity and weighting of the securities in the
Fund Basket (as defined in the Registration Statement) required for the
issuance of shares of the Series on a specified date of purchase and for
the redemption of shares of the Series on such trading day. The Adviser
shall provide or cause to be provided this information to the Series'
distributor and other persons according to the policy established by the
Company's Board of Directors.
1.5 Reports and Records. (a) The Adviser shall assist the
Company in determining the amount of dividends and other shareholder
distributions to be declared and paid with respect to the Series; provide
the Company's Board of Directors with those financial reports and analyses
that the Board deems necessary to fulfill its fiduciary obligations with
respect to the Series; plan and facilitate all quarterly and special
meetings of the Board of Directors of the Company; oversee the preparation
of and, as necessary, filing of all documents and reports required under
the 1933 Act, the 1934 Act and the 1940 Act, including all information,
documents and reports required to be filed by the
<PAGE>
<PAGE> 4
Company under Sections 30(a) and (b) of the 1940 Act and any financial
statements contained therein, but the Adviser shall not be responsible
for the preparation of any of the above material; oversee the tabulation
of proxies by the Company's transfer agent; assist the Company in
maintaining its corporate existence; oversee and implement procedures
for monitoring the Company's compliance with federal and state law,
regulations applicable to the Company's operations and each Series'
investment objective, policies and restrictions as established by the
Company's Board of Directors; oversee and coordinate the maintenance of
appropriate insurance and fidelity bonds on behalf of each Series and
provide any other management services that the Company may reasonably
request with respect to the Series, and oversee the filings and other
requirements under the rules of the NYSE applying to the shares of its
Series as listed securities.
(b) The Adviser shall be responsible for preparing,
maintaining and preserving for the periods prescribed by Rule 31a-2 of the
Securities and Exchange Commission (the "Commission") under the 1940 Act
the following records:
(i) the journals required by paragraph (b)(1) of Rule 31a-
1 under the 1940 Act (the "Rule") insofar as such journals require
entries with respect to purchases and sales of portfolio securities
of each Series;
(ii) the securities record or ledger required by paragraph
(b)(3) of the Rule;
(iii) the Company's Articles of Incorporation, by-laws and
other corporate documents required by paragraph (b)(4) of the Rule;
(iv) the record of brokerage orders and portfolio purchases
and sales required by paragraphs (b)(5) and (b)(6) of the Rule;
(v) the record of all puts, calls, spreads, straddles and
other options required by paragraph (b)(7) of the Rule;
(vi) the record of allocation of portfolio purchase and
sale orders to named brokers or dealers required by paragraph (b)(9)
of the Rule;
<PAGE>
<PAGE> 5
(vii) the record of authorizations of transactions in
portfolio securities required by paragraph (b)(10) of the Rule; and
(viii) the file of advisory material required by paragraph
(b)(11) of the Rule.
1.6 Budgets and Allocation of Expenses.
(a) The Adviser shall establish the Series' operating expense
budgets and oversee the payment of incurred operating expenses. The
Adviser shall bear all expenses, including personnel costs and overhead,
incurred by the Adviser pursuant to its duties under this Agreement and
shall pay the salaries of directors and officers of the Company who are
affiliated persons (as defined in the 1940 Act) of the Adviser. The
Adviser shall provide office facilities and personnel adequate to perform
the services described in Article I of this Agreement. The Adviser shall
not be required to pay expenses of any activity which is primarily intended
to result in sales of shares of the Series.
(b) Each Series shall be responsible for all its own
expenses, including, without limitation, its allocable share of the
organizational expenses of the Company; insurance expenses; the
compensation of directors not affiliated with the Adviser, administrator or
distributor and their travel expenses; expenses incurred by the Series in
connection with Board of Directors meetings other than those incurred by
persons affiliated with the Adviser, administrator or distributor;
brokerage and other costs of executing portfolio transactions; payment for
portfolio pricing services to a pricing agent, if any; litigation expenses;
interest expense; taxes and governmental fees; registration and qualifying
fees paid to the Commission and any other state or foreign governmental
agency regulating the purchase and sale of the Series' shares; legal and
independent accountants' fees; custody, dividend paying, and transfer agent
expenses; fees payable to the Series' administrator; expenses of obtaining
and maintaining stock exchange listings of the Series' shares; shareholder
meeting expenses; proxy and shareholder report expenses; expenses of
preparing, printing and delivering the Company's prospectuses and
statements of additional information required to be delivered to purchases
of its shares by the 1934 Act as well as those used in connection with
making offers to sell the Series' shares in Creation Unit size which are
paid for by each Series in accordance with its plan adopted under
Rule 12b-1 of the 1940 Act; expenses incurred by the Series in connection
with the Company's membership in investment
<PAGE>
<PAGE> 6
company organizations and trade associations; and extraordinary expenses.
1.7 Shareholder and Press Relations. The Adviser shall
arrange the Company's relationships with shareholders of the Series and the
NYSE, including responding to shareholder inquiries and requests related to
the Series and shall prepare and oversee the preparation of all press
releases and notices to the NYSE.
ARTICLE II
Fees and Duration
2.1 Fees. In return for the Adviser's services with respect
to the Series under this Agreement, each Series shall pay the Adviser a
fee, computed daily and paid monthly, equal to the annualized percentage of
the average daily net assets of the Series set forth on Annex A, plus 40%
of: (a) the gross investment income of the Series as calculated for
financial reporting purposes less (b) dividends on securities held in the
portfolio of the Series.
2.2 Duration.
(a) Unless sooner terminated, this Agreement shall continue
in effect with respect to each Series until __________, 1997. Thereafter,
if not terminated, this Agreement shall continue in effect for successive
periods of twelve months after such date, provided that each such
continuance shall be subject to annual approval with respect to each Series
by (i) the Company's Board of Directors or (ii) the vote of a majority of
the Series' outstanding voting securities (as defined in the 1940 Act),
provided that in either event the continuance is also approved by a
majority of the Company's Board of Directors who are not interested persons
(as defined in the 1940 Act) of the Company by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement
is terminable with respect to any Series, without penalty, upon 60 days'
notice, by the Board of Directors or by the vote of a majority (as defined
in the 1940 Act) of the Series' outstanding voting securities. The
Agreement is also terminable without penalty, upon 60 days' notice, by the
Adviser with respect to any Series, and will terminate automatically in the
event of its assignment (as defined in the 1940 Act). Except as may be
provided by law, the termination of this Agreement with respect to one or
more particular Series shall not act to terminate this Agreement with
respect to any other Series, as to which this Agreement shall remain in
full force and effect.
<PAGE>
<PAGE> 7
(b) Notwithstanding anything to the contrary contained in
this Section 2.2, the sublicense granted to the Company pursuant to Section
4.7 shall terminate upon the termination of this Agreement except that in
the event of termination resulting from a change of control of the Adviser
that is deemed to be an assignment under the 1940 Act and a termination by
the Adviser, the Company can continue as a sublicensee for 90 days provided
it pays the Adviser a license fee during the period equal to the license
fee the Adviser is paying under the License Agreement.
(c) Upon termination of this Agreement with respect to any
Series the obligations of each party shall cease except for the provisions
of this Section 2.2 and Sections 4.7 and 4.9.
2.3 Reductions to Fees. The Adviser shall reimburse the
Series for that portion of the Series' annual net expenses (excluding
interest, taxes, brokerage commissions, distribution expenses, if any, and
extraordinary expenses), that exceeds the most stringent limits prescribed
by any state in which Series shares are offered for sale. However, the
Adviser will not be obligated to reimburse any Series for any such amounts
that exceed the fees (calculated pursuant to Section 2.1) paid to the
Adviser by the Series.
ARTICLE III
Liability
3.1 Generally. Absent (i) willful misfeasance, bad faith or
gross negligence on its part in the performance of, or reckless disregard
by it of its obligations and duties under, this Agreement, or (ii) a breach
of a fiduciary duty owed to the Series with respect to the receipt of com-
pensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940
Act), neither the Adviser nor any of its directors, officers, or employees
shall be liable to the Series, the Company or to any Series shareholder for
any error of judgment, mistake of law, or for any loss suffered by the
Series in connection with the matters to which this Agreement relates
including, without limitation, any loss that may be sustained in connection
with the purchase, holding, redemption, sale or lending of any security or
investments or the entering into of any futures or options on futures
contracts on behalf of the Series.
<PAGE>
<PAGE> 8
3.2 Other Liabilities. The Adviser does not assume
responsibility for the acts or omissions of any other person.
ARTICLE IV
Miscellaneous
4.1 Notices. Any notice or other communication required to be
given pursuant to this Agreement shall be deemed duly given if addressed
and delivered or mailed by registered mail, postage prepaid, to (1)
Deutsche Bank Securities Corporation at 31 West 52nd Street, New York, New
York 10019, Attention: Robert Lynch; and (2) The CountryBaskets Index
Fund, Inc. at 31 West 52nd Street, New York, New York 10019, Attention:
___________.
4.2. Choice of Law. This Agreement shall be construed in
accordance with New York State law.
4.3. Captions. The captions in this Agreement are included
for convenience only and in no way define or limit any of the provisions
hereof or otherwise affect their construction.
4.4 Severability. If any provisions of this Agreement shall
be held or made invalid, in whole or in part, then the other provisions of
this Agreement shall remain in force. Invalid provisions shall, in
accordance with this Agreement's intent and purpose, be replaced, to the
extent legally possible, by valid provisions in order to effectuate the
intended results of the invalid provisions.
4.5 Agency. The Company has not appointed the Adviser as its
agent under this Agreement.
4.6 Reliance on Communications. The Adviser shall be entitled
to rely on any notice or communication reasonably believed by it to be
genuine and correct and to have been sent by or on behalf of the Series.
4.7 FT Index Sublicense. The Adviser hereby grants to the
Company with respect to any Series a non-exclusive, non-transferable
royalty free sublicense to use and refer to the FT-Actuaries World
Indices(TM) published by the Financial Times from time to time only for the
uses permitted to the Adviser and specified in the License Agreement, dated
as of __________, 1995, between Goldman, Sachs & Co. and the Adviser (the
"License Agreement"), and on the terms and conditions specified therein.
Such sublicense shall terminate at the later of 60 days after
<PAGE>
<PAGE> 9
notice is given under Section 2.2 by the Adviser of termination of this
Agreement or 60 days after the termination of the License Agreement. No
Series shall be required to make any payments in respect of such sublicense
after the termination of the sublicense except as provided in Section 2.2.
4.8 Exclusivity. The Adviser's services to the Series shall
not be exclusive and nothing in the Agreement shall prevent the Adviser, or
any of its affiliates, from providing similar services to other investment
companies or clients (regardless of whether their investment objectives or
policies are similar to the Series') or from engaging in any other
activities. When the Adviser's other clients seek to purchase or sell a
security at the same time such security is being purchased or sold for the
Series, such purchases and sales will, to the extent feasible, be allocated
among the Series and the Adviser's other clients in a manner that the
Adviser believes equitable.
4.9 Right of Fund to Use Name of CountryBaskets Index Fund.
The name of CountryBaskets and various names connected with CountryBaskets
are copyrighted trademarks of the Adviser. The Adviser consents to the
Company's use of CountryBaskets in its corporate name and otherwise during
the terms of this Agreement. Upon termination of this Agreement such
consent shall terminate after 120 days and the Company will promptly take
the necessary steps to change its name. To the extent that is not
accomplished within 120 days, the Company agrees that it will cease
issuing new shares until its name is changed to one that has no
similarity to CountryBaskets Index Fund.
4.10 Amendments. This Agreement may be amended at any time by
agreement of the parties, provided that the amendment shall be in writing,
signed by the Adviser and the Company, and approved by the vote of a
majority of the Company's, or in the case of an amendment to this Agreement
with respect to one Series, such Series' outstanding voting securities (as
defined in the 1940 Act) and by the Company's Board of Directors, and
provided further, that the amendment is also approved by a majority of the
Company's Board of Directors who are not interested persons (as defined in
the 1940 Act) of the Company by vote cast in person at a meeting called for
the purpose of voting on such amendment.
<PAGE>
<PAGE> 10
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first written above.
THE COUNTRYBASKETS INDEX FUND, INC.
By:________________________________
Name:
Title:
DEUTSCHE BANK SECURITIES CORPORATION
By:________________________________
Name:
Title:
<PAGE>
<PAGE> 11
INVESTMENT MANAGEMENT AGREEMENT
The CountryBaskets Index Fund, Inc.
Annex A
Percentage of
Average Daily
Series Net Assets (Annualized)
Australia Index Series .30%
France Index Series .30%
Germany Index Series .30%
Hong Kong Index Series .45%
Italy Index Series .30%
Japan Index Series .30%
South Africa Index Series .45%
UK Index Series .30%
US Index Series .30%
<PAGE> 1
Draft - 6/27/95
THE COUNTRYBASKETS INDEX FUND, INC.
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (the "Agreement") made as of
, 1995, between THE COUNTRYBASKETS INDEX FUND, INC., a
Maryland corporation (the "Fund"), and ALPS MUTUAL FUNDS SERVICES, INC., a
Colorado corporation (the "Distributor").
W I T N E S S E T H :
WHEREAS, the Fund is an open-end management investment company
organized as a series fund and registered under the Investment Company Act
of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is authorized to issue shares of common
stock, par value $.001 per share (the "Shares"), in one or more series
(each, a "Series"), currently consisting of the Series listed in Annex A
hereto; and
WHEREAS, the Shares of each Series will be listed on the New
York Stock Exchange ("NYSE") and traded under the symbols set forth in
Annex A hereto; and
WHEREAS, the Fund will sell and redeem Shares of each Series
only in aggregations constituting a Creation Unit as such term is used in
the Registration Statement (as defined herein), in accordance with the
terms and conditions set forth therein; and
WHEREAS, the Distributor is a registered broker-dealer under
the Securities Exchange Act of 1934, as amended (the "1934 Act"); and
WHEREAS, the Fund desires to retain the Distributor to act as
distributor with respect to the continuous offering and sale of Shares of
each Series in Creation Unit aggregations as set forth in the Fund's
Registration Statement, to provide for the servicing of stockholder
accounts, to enter into arrangements with dealers and to coordinate the
redemption of Shares of each Series in Creation Unit size aggregations; and
WHEREAS, the Distributor desires to render these services to
the Fund; and
<PAGE>
<PAGE> 2
WHEREAS, the Board of Directors of the Fund has adopted a Plan
of Distribution pursuant to Rule 12b-1 under the 1940 Act with respect to
each Series (collectively, the "12b-1 Plan") and may make payments to the
Distributor pursuant to such 12b-1 Plan, subject to and in accordance with
the terms and conditions thereof and any related agreements;
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Fund and the Distributor hereby agree as
follows:
Section 1
Distribution and Stockholder Services
1
1.1 Appointment. The Fund hereby appoints the Distributor as
the exclusive distributor for the continuous offering and sale of the
Shares of each Series in Creation Unit aggregations on the terms and for
the periods set forth in this Agreement, and the Distributor hereby accepts
such appointment and agrees to act in such capacity hereunder.
1.2 Definitions.
(a) The term "Registration Statement" shall mean the
registration statement most recently filed from time to time by the
Fund with the Securities and Exchange Commission (the "Commission")
and effective under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act, as such registration statement is amended by
any amendments thereto at the time in effect.
(b) The term "Prospectus" shall mean the prospectus included
as part of the Fund's Registration Statement, as such prospectus may
be amended or supplemented from time to time.
(c) The term "Statement of Additional Information" shall mean
the Statement of Additional Information included as part of the
Fund's Registration Statement, as such Statement of Additional
Information may be amended or supplemented from time to time.
(d) All capitalized terms used but not defined in this Agreement
shall have the meanings ascribed to such terms in the Registration
Statement.
1.3 Distributor's Duties. The Distributor shall have the
following duties:
<PAGE>
<PAGE> 3
(a) The Distributor agrees to sell, as agent for each Series,
from time to time during the term of this Agreement, Shares of each
Series in Creation Unit size aggregations specified for such Series
in the Registration Statement on the terms described therein and in
accordance with the provisions hereof. Each Series reserves the
right to issue and sell Shares in the event that the Distributor,
either in the exercise of its rights or in breach of its covenants
hereunder, is not selling Creation Unit aggregations of Shares of
such Series.
(b) At the request of the Fund, the Distributor shall enter
into an agreement in the form specified by the Fund (each an
"Authorized Participant Agreement") with selected participants in the
system for book-entry of securities of The Depository Trust Company
("DTC") (or any successor depository thereto) (each an "Authorized
Participant").
(c) Upon commencement of the Fund's operations, the
Distributor will hold itself available to receive notices of
intention to purchase and purchase orders in the form specified by
the Fund from Authorized Participants for the purchase of Creation
Unit size aggregations of Shares of each Series on business days
designated for such Series and on the terms and in the manner set
forth in the Prospectus and the Statement of Additional Information.
The Distributor will transmit each such notice of intention and
purchase order received to the Fund's Custodian and Transfer Agent as
promptly as practicable. Upon confirmation by the Custodian of
receipt of the Fund Basket and cash in an amount sufficient to pay
the Cash Component and acceptance by the Fund or by the Distributor
as agent on behalf of the Fund of a purchase order in "proper form,"
as defined in the Prospectus and the Statement of Additional
Information, the Distributor will transmit advice of such acceptance
to the Transfer Agent and the Custodian. Upon receipt of advice from
the Transfer Agent of the issuance of Creation Unit aggregations of
Shares pursuant to such purchase order, the Distributor shall confirm
the issuance and sale of such Creation Unit aggregations of Shares to
the Authorized Participant placing the order by mailing a
confirmation, together with copies of the Prospectus and the
Statement of Additional Information. Purchase orders shall be deemed
effective only at the time accepted by the Fund or by the Distributor
as agent of the Fund. The Fund, and the Distributor on behalf of the
Fund, reserves the right to reject any purchase order until
acceptance.
<PAGE>
<PAGE> 4
(d) The offering price of each Creation Unit aggregation of
Shares of a Series shall be the net asset value per Share for such
Series next determined following receipt of a purchase order in
proper form and shall be determined as set forth in the Registration
Statement. The Fund will cause the Custodian to furnish or cause to
be furnished to the Distributor, promptly after 4:00 p.m., New York
time, an advice (i) on each day the NYSE is open of each computation
of net asset value per Share of each Series and (ii) on each Business
Day for a Series on which Creation Unit aggregations of Shares are
sold of the amount of the Cash Component for each Series on such
Business Day.
(e) Based on information provided to it, the Distributor will
make available immediately prior to the opening of the regular
trading session on the NYSE on each day the NYSE is open for business
as set forth in the Registration Statement (i) the list of names and
required number of shares of each of the portfolio securities
constituting the Fund Basket for each Series, as designated by the
Fund's investment adviser (which shall be the Fund Basket for a
designated subsequent Business Day for purchases and for redemption
on the date of announcement of such Fund Basket), and (ii) the amount
of the Cash Component for purchases of Creation Unit size
aggregations of Shares of such Series on the previous Business Day,
as designated by the Fund's Custodian.
(f) In performing its duties hereunder, the Distributor shall
act in conformity with the Articles of Incorporation, By-Laws,
Registration Statement and each Prospectus and Statement of
Additional Information relating to Shares of the Fund and with the
instructions and directions of the Board of Directors of the Fund,
and will comply with and conform in all material respects to the
requirements of the 1933 Act, the 1934 Act and the 1940 Act and all
other applicable federal and state laws, regulations and rulings, and
the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD").
(g) The Distributor shall not be obligated to sell any certain
number of Creation Unit size aggregations of Shares of any Series,
and, subject to Section 6.6 hereof, nothing herein contained shall
prevent the Distributor from entering into like distribution
arrangements with other investment companies.
<PAGE>
<PAGE> 5
(h) The Distributor may enter into written dealer agreements
("Dealer Agreements") and service agreements ("Service Agreements"),
in each case in the forms approved by the Board of Directors of the
Fund, with registered broker-dealers and other persons, as the case
may be, for distribution, marketing and for stockholder services to
stockholders of one or more Series. Such Dealer Agreements may be
entered into with registered broker-dealers who are members of the
NASD or foreign securities dealers who are not eligible for
membership in the NASD who have agreed to comply with the applicable
provisions of the Rules of Fair Practice of the NASD. Each Dealer
Agreement and Service Agreement shall be subject to annual approval
by the Board of Directors of the Fund and if payments thereunder are
to be made pursuant to the 12b-1 Plans shall comply with the terms
and conditions thereof.
(i) The Distributor agrees to be responsible for implementing
and/or operating the 12b-1 Plans in accordance with the terms
thereof, including maintaining Dealer Agreements and Service
Agreements and processing payments and reimbursements thereunder (in
conjunction with the services provided with respect thereto by the
Fund's administrator).
(j) The Distributor shall provide toll-free lines for direct
investor and stockholder use between the hours of 6:30 a.m. to 6 p.m.
Mountain time on each day that the NYSE is open for business, with
appropriate NASD licensed order taking and distribution services
staff.
(k) The Distributor shall clear and file all advertising,
sales, marketing and promotional materials of the Fund provided to
the Distributor, or in the preparation of which it has participated,
with the NASD as required by the 1933 Act and the 1940 Act, and the
rules promulgated thereunder, and by the rules of the NASD.
(l) The Distributor will ensure that all direct requests for
Prospectuses and Statements of Additional Information are fulfilled.
In addition, the Distributor will arrange to provide the NYSE (and
any other national stock exchange on which the Shares may be listed)
with copies of Prospectuses to be provided to purchasers in the
secondary market. The Distributor will generally make it known in
the brokerage community that prospectuses and statements of
additional information are available, [including] by (i) advising the
NYSE on behalf of its member firms of the same,
<PAGE>
<PAGE> 6
(ii) making such disclosure in all marketing and advertising materials
prepared and/or filed by the Distributor with the NASD, and (iii) as
may otherwise be required by the Commission.
(m) The Distributor agrees to make available at its own cost
and expense one or more members of its staff to attend all Board
meetings of the Fund in order to provide information with regard to
the ongoing distribution process and for such other purposes as may
be requested by the Board of Directors of the Fund.
(n) The Distributor will provide and maintain a direct
computer communications link with the DTC, the Fund's Transfer Agent
and Custodian and the National Securities Clearing Corporation, Inc.
(the "NSCC"). The Distributor will compare for consistency the Fund
Basket for each Series as made available by the NSCC through its
systems with the composition of the Fund Basket as provided to the
Distributor.
(o) The Distributor shall examine the notices of intention to
purchase and purchase order forms submitted by Authorized
Participants with respect to the representations made therein to
determine whether the beneficial owners of the Creation Unit or Units
if purchased in accordance with such order upon issuance of such
Shares would own or hold 80% or more of the outstanding Shares of
such Series for purposes of compliance with section 351 of the
Internal Revenue Code of 1986, as amended, and shall review the
determination of the Transfer Agent with respect thereto.
(p) The Distributor shall consult with Authorized Participants
with respect to estimating the amount of the Cash Component for
purchase of Creation Unit aggregations of Shares of each Series.
(q) The Distributor shall consult with the Fund with respect
to the production and printing of prospectuses to be used in
connection with purchases by new investors of Creation Unit
aggregations of Shares of each Series.
(r) The Distributor shall coordinate the redemptions of
Creation Unit size aggregations of Shares of each Series with the
Custodian and the Transfer Agent of the Fund in accordance with the
terms, conditions and procedures set forth in the Prospectus and the
Statement of Additional Information and will generate and transmit
confirmations of receipt
<PAGE>
<PAGE> 7
of a redemption request in "proper form" as defined in the Prospectus
and Statement of Additional Information to the Authorized Participants
submitting the same.
(s) In performing its duties hereunder the Distributor shall
be entitled to rely on and shall not be responsible in any way for
information provided to it by the Fund and its service providers and
shall not be liable or responsible for the errors and omissions of
such service providers, provided that the foregoing shall not be
construed to protect the Distributor against any liability to the
Fund or its stockholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this
Agreement.
1.4 The Fund's Duties. The Fund shall have the following
duties:
(a) The Fund agrees to sell Creation Unit size aggregations of
Shares of each Series, subject to paragraph (e) of this Section 1.4,
so long as it has Shares of such Series available for sale and to
request the Transfer Agent to record on its books the ownership of
such Shares in accordance with the book-entry system procedures
described in the Prospectus and the Statement of Additional
Information in such amounts as the Distributor has requested in
writing or other means of data transmission, as promptly as
practicable after receipt by Custodian on behalf of the Fund of the
Fund Basket and Cash Component (together with any fees) for such
purchases and acceptance by the Fund or by the Distributor on behalf
of the Fund of a purchase order for such Shares, upon the terms
described in the Registration Statement.
(b) The Fund shall furnish to the Distributor copies of all
information, financial statements and other papers which the
Distributor may reasonably request for use of each Series in
connection with the distribution of Shares, and this shall include
one certified copy, upon request by the Distributor, of all financial
statements for each Series by independent accountants and such
reasonable number of copies of the Prospectus, Statement of
Additional Information and the Fund's annual and interim reports as
the Distributor may request. The Fund authorizes the Distributor to
use the Prospectus and Statement of Additional Information, but the
Fund shall not be responsible in
<PAGE>
<PAGE> 8
any way for any information, statements or representations given or
made by the Distributor or its representatives or agents other than
such information, statements or representations as are contained in
the Prospectus and Statement of Additional Information or financial
reports filed by the Fund or in any sales literature or advertisements
specifically approved by the Fund in writing.
(c) The Fund shall take, from time to time, such steps,
including payment of the related filing fees, as may be necessary to
register Shares under the 1933 Act and the 1940 Act to the end that
there will be available for sale such number of Creation Unit size
aggregations of Shares of each Series as the Distributor may be
expected to sell. The Fund agrees to file from time to time such
amendments, supplements, reports and other documents as may be
necessary in order that there may be in a Registration Statement,
Prospectus or Statement of Additional Information no (i) untrue
statement of a material fact or (ii) omission to state a material
fact necessary in order to make the statements therein, in the case
of the Prospectus and Statement of Additional Information in light of
the circumstances in which made, not misleading. The Distributor
shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund for inclusion
in the Registration Statement, Prospectus or Statement of Additional
Information.
(d) The Fund shall keep the Distributor informed of the states
and other foreign and domestic jurisdictions in which the Fund has
qualified and maintains the qualification of Shares of the respective
Series for sale under the securities laws thereof. The Distributor
shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund in connection
with such qualifications.
(e) The Fund may reject any purchase order for Creation Unit
aggregations of Shares or stop all sales of Shares at any time or
from time to time upon notice to the Distributor.
1.5 Representations.
(a) The Distributor represents and warrants to the Fund that
(i) it is duly organized as a Colorado corporation and is and at all
times will remain duly authorized and licensed to carry out its
services as
<PAGE>
<PAGE> 9
contemplated herein; and (ii) its entering into this Agreement or
providing the services contemplated hereby does not conflict with or
constitute a default or require a consent under or breach of any
provision of any agreement or document to which the Distributor is a
party or by which it is bound (except for any consent in writing which
shall have been obtained by the date hereof, including the consent of
the Mariner Funds Trust and the Mariner Mutual Funds Trust).
(b) The Fund represents and warrants to the Distributor that
(i) the Registration Statement and the Prospectus have been or will
be, as the case may be, prepared in conformity in all material
respects with the 1933 Act, the 1940 Act and the rules and
regulations of the Commission (the "Rules and Regulations"); (ii)
contain or will contain all statements required to be stated therein
in accordance with the 1933 Act, the 1940 Act and the Rules and
Regulations; and (iii) all statements of fact contained or to be
contained therein are or will be true and correct in all material
respects at the time indicated or the effective date, as the case may
be, and neither the Registration Statement nor the Prospectus, when
it shall become effective under the 1933 Act or be authorized for
use, shall include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the case of the Prospectus in light
of the circumstances in which made, not misleading. The Fund shall
from time to time file such amendment or amendments to the
Registration Statement and the Prospectus as, in the light of future
developments, shall, in the opinion of the Fund's counsel, be
necessary in order to have the Registration Statement and the
Prospectus at all times contain all material facts required to be
stated therein or necessary to make the statements therein, in the
case of the Prospectus in light of the circumstances in which made,
not misleading to a purchaser of shares. If the Fund shall not file
such amendment or amendments within 15 days after receipt by the Fund
of a written request from the Distributor to do so, the Distributor
may, at its option, cease to accept orders for the purchase of
Creation Units of Shares until such amendment is filed. The Fund
shall not file any amendment to the Registration Statement or the
Prospectus without giving the Distributor reasonable notice thereof
in advance, provided that nothing in this Agreement shall in any way
limit the Fund's right to file at any time such amendments to the
Registration Statement or the
<PAGE>
<PAGE> 10
Prospectus as the Fund may deem advisable. Notwithstanding the
foregoing, the Fund shall not be deemed to make any representation or
warranty as to any information or statement provided by the Distributor
for inclusion in the Registration Statement or the Prospectus.
Section 2
Fees and Expenses
2
2.1 Compensation of the Distributor. Except to the extent
that may be provided in Section 2.2, the Distributor shall not receive any
payment or compensation with respect to the provision of distribution
services under this Agreement; provided, however, that the Distributor
shall be entitled to receive payments, if any, under the 12b-1 Plan in
accordance with the terms thereof.
2.2 Expenses. (a) Each Series shall bear all costs and
expenses of the continuous offering of the Creation Unit size aggregations
of Shares of such Series in connection with: (i) fees and disbursements of
the Fund's counsel and independent accountants, (ii) the preparation,
filing and printing of any registration statements, prospectuses and/or
statements of additional information required to be filed by and under
federal and state securities laws or required to be delivered by dealers in
connection with purchases and sales of Shares on the NYSE, (iii) the
preparation and mailing of annual and interim reports, prospectuses and
proxy materials required to be distributed to stockholders, (iv) any
qualifications of Shares for sale and of the Fund as a broker or dealer
under the securities laws of such states or other foreign or domestic
jurisdictions as shall be selected by the Fund pursuant to Section 1.4(d)
hereof and the cost and expenses payable to each such state for continuing
qualification therein and (v) all fees and expenses incident to the listing
of the Shares of each Series on the NYSE or any other stock exchange.
(b) The Distributor shall bear the following costs and
expenses relating to the distribution of the Shares: (i) the costs (other
than those payable pursuant to the Fund's agreement with its Transfer
Agent) of generating and mailing confirmations of purchases of Creation
Unit aggregations of Shares, mailing accompanying Prospectuses and
Statements of Additional Information and generating and transmitting
confirmations of redemptions of Shares, (ii) all costs of maintaining the
records required of a broker/dealer registered under the 1934 Act;
(iii) incremental printing and mailing costs for
<PAGE>
<PAGE> 11
prospectuses to be used in connection with offers and sales to prospective
investors of Creation Units of Shares up to a maximum of $25,000 per annum;
(iv) the expenses of maintaining its registration or qualification as a
dealer or broker under federal or state laws; (v) the expenses incurred by
the Distributor and its officers for attending regular and special meetings
of the Board of Directors of the Fund held in the United States (or
approximately equivalent amounts in the case of such meetings held outside
of the United States); and (vi) all other expenses incurred in connection
with the distribution services as contemplated herein, except as otherwise
specifically provided in this Agreement.
2.3 Segregation of Fees and Expenses. Amounts paid by each
Series to the Distributor under its 12b-1 Plan either for distribution
related services or stockholder services shall not be used to pay for the
distribution of Shares of, or stockholder servicing in respect of, any
other Series. However, fees under the 12b-1 Plan attributable to the Fund
as a whole shall be allocated to each Series according to the method
adopted by the Fund's Board of Directors. Fees attributable to the Fund as
a whole shall include any amounts payable under the 12b-1 Plans to the
Distributor for its services rendered hereunder. The Distributor's
allocation of such 12b-1 Plan fees shall be subject to review by the Fund's
Board of Directors.
Section 3
Indemnification
3.1 Indemnification of Distributor. The Fund agrees to
indemnify, defend and hold the Distributor, its officers and directors and
any person who controls the Distributor within the meaning of Section 15 of
the 1933 Act (any of the Distributor, its officers and directors or such
control persons, for purposes of this Section 3.1, an "Indemnitee"), free
and harmless from and against any and all claims, demands, liabilities, and
expenses (including costs reasonably incurred in connection with
investigating or defending such claims, demands or liabilities and any
counsel fees reasonably incurred in connection therewith) which the
Indemnitee may incur, under the 1933 Act or under common law or otherwise,
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's Registration
Statement, or the omission or alleged omission to state in such document a
material fact required to be stated therein or necessary to make the
statements therein not misleading or, with respect to the Prospectus or the
Statement of Additional Information
<PAGE>
<PAGE> 12
or any amendment or supplement thereto, any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to
state in such document a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances
under which they were made, not misleading; provided, however, that nothing
in this Section 3.1 shall protect the Indemnitee against any liability to
the Fund or its security holders that the Indemnitee would otherwise be
subject to (i) by reason of willful malfeasance, bad faith, or gross
negligence in the performance of its duties, (ii) by reason of the
Indemnitee's reckless disregard of its obligations and duties under this
Agreement, or (iii) where such liability arises out of or is based upon any
untrue statement or omission or alleged untrue statement or omission in the
Fund's Registration Statement, Prospectus or Statement of Additional
Information that was made in reliance upon and in conformity with written
information furnished by the Distributor to the Fund; and provided,
further, that the Fund will not be liable in any such case to the
Indemnitee with respect to any untrue statement or omission or alleged
untrue statement or omission made in the Registration Statement, the
Prospectus or the Statement of Additional Information that is subsequently
corrected in such document (or an amendment thereof or supplement thereto),
if a copy of the Prospectus or Statement of Additional Information (or such
amendment thereof or supplement thereto) was not sent or given to the
person asserting any such claim, demand, liability or expense at or before
the written confirmation of the sale to such person in any case where such
delivery is required by the 1933 Act and the Fund had notified the
Distributor of the amendment or supplement prior to sending of the written
confirmation of sale. Notwithstanding the foregoing, this indemnity of any
person who is an officer or director of the Distributor and who is also a
director of the Fund shall not inure to the benefit of such officer or
director unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result would
not be against public policy as expressed in the 1933 Act or the 1940 Act,
and in no event shall anything contained herein be so construed as to
protect the Distributor against any liability to the Fund or its
stockholders to which the Distributor would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement. The Fund's obligation to indemnify the
Indemnitee is expressly conditioned upon the Indemnitee's notification of
the Fund of the commencement of any action against the Indemnitee, which
notification shall be given by letter or by facsimile transmission
addressed to the Fund at
<PAGE>
<PAGE> 13
its principal office in New York, New York, and sent to the Fund by the
person against whom such action is brought within ten days after the
summons or other first legal process shall have been served. The
Indemnitee's failure to so notify the Fund shall not relieve the Fund of
any liability which it may have to the Indemnitee by reason of any such
alleged untrue statement or omission or alleged untrue statement or
omission independent of this indemnification. The Fund will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability and to retain legal counsel of good standing chosen by the Fund
and approved by the Indemnitee (such approval not to be unreasonably
withheld). If the Fund elects to assume the defense of any such suit and
retain counsel approved by the Indemnitee, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel
retained by any of them. In the event the Fund does not elect to assume
the defense of any such suit and retain counsel of good standing approved
by the Indemnitee or the Indemnitee does not approve of the counsel chosen
by the Fund (such approval not to be unreasonably withheld), the defendant
or defendants in such suit shall bear the fees and expenses of any counsel
retained by any of them and the Fund shall reimburse any Indemnitee named
as defendant in such suit for the reasonable fees and expenses of any such
counsel retained by them. The indemnification agreement contained in this
Section 3.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Indemnitee and shall
survive the sale of any Creation Units of Shares made pursuant to purchase
orders obtained by the Indemnitee. This indemnification will inure
exclusively to the benefit of the Indemnitee and its successors, assigns
and estate. The Fund shall promptly notify the Indemnitee of the
commencement of any litigation or proceeding against the Fund in connection
with the issue and sale of any Creation Units of Shares.
3.2 Indemnification of the Fund. The Distributor agrees to
indemnify, defend, and hold the Fund, its several officers and directors
and any person who controls the Fund within the meaning of Section 15 of
the 1933 Act (for purposes of this Section 3.2, the Fund, its officers and
directors, and its controlling persons are collectively referred to as the
"Fund Affiliates"), free and harmless from and against any and all claims,
demands, liabilities, and expenses (including costs reasonably incurred in
investigating or defending such claims, demands or liabilities and any
counsel fees reasonably incurred in connection therewith) which the Fund
Affiliates may incur under the 1933 Act or under common law or otherwise,
but only to the extent that such liability or expense shall
<PAGE>
<PAGE> 14
arise out of or be based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in information furnished by the
Distributor to the Fund for use in the Registration Statement, Prospectus
or Statement of Additional Information in effect from time to time under
the 1933 Act, or (ii) any omission or alleged omission, on the part of the
Distributor, to state a material fact in connection with such information
required to be stated in the Registration Statement, Prospectus or
Statement of Additional Information or necessary to make such information
not misleading, it being understood that the Fund will rely upon the
information provided by the Distributor for use in the preparation of the
Registration Statement, the Prospectus and the Statement of Additional
Information, or (iii) any alleged act or omission on the Distributor's part
as the Fund's agent that has not been expressly authorized by the Fund in
writing. The Distributor's obligation to indemnify the Fund Affiliates is
expressly conditioned upon the Distributor being notified of the
commencement of any action brought against the Fund Affiliates, which
notification shall be given by letter or facsimile transmission addressed
to the Distributor at its principal offices in Denver, Colorado, and sent
to the Distributor by the person against whom such action is brought within
ten days after the summons or other first legal process shall have been
served. The Fund Affiliates' failure to notify the Distributor of the
commencement of any such action shall not relieve the Distributor from any
liability which it may have to the Fund Affiliates by reason of any such
untrue statement or omission or alleged untrue statement or omission on the
part of the Distributor independent of this indemnification. The
Distributor shall have a right to control the defense of such action, with
counsel of its own choosing, satisfactory to the Fund Affiliates, if such
action is based solely upon such untrue statement or omission or alleged
untrue statement or omission on its part, and in any other event the
Distributor and the Fund Affiliates shall each have the right to
participate in the defense or preparation of the defense of such action at
their own expense.
Section 4
Duration, Termination, and Amendment
4
4.1 Duration. This Agreement shall become effective on
, 1995 and continue, unless terminated as provided in Section
4.2 or Section 4.5(a), until , 1997. This Agreement shall
thereafter be renewed for successive one-year periods only so long as such
continuance or renewal is specifically approved at least annually with
respect to each Series as to which it is to
<PAGE>
<PAGE> 15
continue in effect by both (a) the Fund's Board of Directors or the vote of
a majority of the outstanding voting securities (as such term is defined in
the 1940 Act) of the Fund and (b) a majority of the Fund's directors who
are not parties to this Agreement or "interested persons" (as defined in
the 1940 Act) of either party hereto cast in person at a meeting called for
the purpose of voting on approval of this Agreement, and, if applicable,
as provided in Section 4.5(a).
4.2 Termination. Subject to Section 4.5(b), this Agreement
may be terminated at any time as to any Series, without penalty, upon 60
days' prior written notice to the other party by the Fund or by the
Distributor. If this Agreement is terminated with respect to any Series,
it shall nevertheless remain in effect with respect to any remaining
Series.
4.3 Assignment. This Agreement shall automatically terminate
in the event of its "assignment." As used in this Agreement, the term
"assignment" shall have the meaning such term has in the 1940 Act.
4.4 Amendment. Subject to Section 4.5(c), this Agreement may
be amended by mutual consent, provided that no provision of this Agreement
may be changed, waived, discharged or terminated except by an instrument in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought, and that the Fund's consent to
any material amendment to this Agreement requires the approval provided for
in Section 4.1.
4.5 Rule 12b-1 Requirements. During such period as the
Distributor receives compensation pursuant to the 12b-1 Plan and this
Agreement constitutes a 12b-1 Plan related agreement:
(a) This Agreement shall continue in effect from and after
________, 1996 only if such continuance is specifically approved
annually as to any Series as to which it is to continue in effect by
the vote of both (x) the Fund's Board of Directors or a majority of
its outstanding voting securities (as defined in the 1940 Act) and
(y) by the directors who are not "interested persons" (as defined in
the 1940 Act) of the Fund and have no direct or indirect financial
interest in the operation of the 12b-1 Plan or in any agreements
related thereto (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on such Plan or related
agreements.
<PAGE>
<PAGE> 16
(b) This Agreement may be terminated, without the payment of
any penalty, by the Fund as to any Series by vote of a majority of
the Independent Directors or by a vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the
Fund, or by the Distributor, in either case, on sixty days' prior
written notice to the other party.
(c) Any material amendment to this Agreement requires the
approval provided for in Section 4.1(a) with respect to annual
renewals of this Agreement, and any amendment that materially
increases the amount to be spent for distribution services requires
the additional approval of the majority of the Fund's outstanding
voting securities (as defined in the 1940 Act) of each affected
Series.
(d) The selection and nomination of those directors who are
not "interested persons" (as defined in the 1940 Act) of the Fund
shall be committed to the discretion of the directors of the Fund who
are not such "interested persons" of the Fund.
Section 5
Notice
5
5.1 Conditions. The Fund shall notify the Distributor
immediately of:
(a) any request by the Commission for amendments to the Fund's
Registration Statement, Prospectus or Statement of Additional
Information or for additional information;
(b) any stop order suspending the effectiveness of the Fund's
Registration Statement or the initiation of any proceeding for that
purpose;
(c) all actions of the Commission with respect to any
amendment to the Fund's Registration Statement, Prospectus or
Statement of Additional Information.
5.2 Notification of Parties. Any notice or other
communication required or permitted to be given pursuant to this Agreement
shall be deemed duly given if addressed and delivered, or mailed by
registered mail, postage prepaid, to (1) ALPS Mutual Funds Services, Inc.,
at 370 17th Street, Suite 1700, Denver, CO 80202, Attention: Chief
Financial Officer and (2) The CountryBaskets Index Fund, Inc. at 31 West
52nd Street, New York, New York 10019, Attention: Secretary.
<PAGE>
<PAGE> 17
Section 6
Miscellaneous
6
6.1 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
6.2 Captions. The caption in this Agreement are included for
convenience only and in no way define or limit any of the provisions hereof
or otherwise affect their construction.
6.3 Severability. If any provisions of this Agreement shall
be held or made invalid, in whole or in part, then the other provisions of
this Agreement shall remain in force. Invalid provisions shall, in
accordance with this Agreement's intent and purpose, be amended, to the
extent legally possible, by valid provisions in order to effectuate the
intended results of the invalid provisions.
6.4 Seed Money. The Distributor shall not redeem any Shares
which it owns and has invested in as seed money in a Series during the
first five years of the Fund's operations without obtaining approval by the
Fund's Board of Directors prior to any such redemption. Thereafter, the
Distributor may make such a redemption in its sole discretion. In the
event that this Agreement is terminated, the Distributor shall be entitled
to redeem such Shares subject to applicable regulatory requirements.
6.5 Insurance. The Distributor will maintain at its expense
an errors and omissions insurance policy which covers services by the
Distributor hereunder.
6.6 Exclusivity. The Distributor agrees to obtain the prior
written approval of the Board of Directors of the Fund before agreeing to
render or rendering any distribution or marketing services to an investment
company, whether directly or through any affiliate ("distribution
services"), if the total number of such distribution services arrangements
to be provided by the Distributor and its affiliates on behalf of
registered investment companies shall be more than nine (9) in number.
None of the nine distribution services arrangements may be for an
investment product substantially similar to the CB Shares(SM), which involves
an investment company registered under the 1940 Act and listing of the
securities for trading on the NYSE or on another securities exchange;
provided further that no more than one (1) such distribution services
arrangement may be with a company that is primarily a registered
broker-dealer with more than 24 retail offices (other than bank branches).
<PAGE>
<PAGE> 18
The foregoing provisos shall not be applicable: (i) at any time after April
28, 1997; (ii) if the Distributor provides services to investment companies
which are not distribution services and (iii) if the total net assets of
the Fund are below $1 billion at any time nine months after the initial
issuance of Creation Units of shares.
6.7 Separate and Additional Series. The Fund is entering into
this Agreement on behalf of the Series listed on Annex A severally and not
jointly. Except as otherwise indicated herein, the responsibilities and
benefits set forth in this Agreement shall refer to each Series severally
and not jointly. Except as provided in Section 2.3 hereof, no individual
Series shall have any responsibility for any obligation, if any, with
respect to any other Series arising out of this Agreement. The Fund will
initially issue and sell Shares of the Series listed in Annex A to this
Agreement. In the event that the Fund is authorized to issue and issues
Shares of one or more additional Series with respect to which it wishes to
retain the Distributor to act as distributor and principal underwriter
hereunder, the Fund shall notify the Distributor in writing. Upon written
acceptance by the Distributor, such Series shall become subject to the
provisions of this Agreement to the same extent as the existing Series,
except to the extent that such provisions may be modified with respect to
each additional Series in writing by the Fund and the Distributor at the
time of the addition of the Series.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first written above.
THE COUNTRYBASKETS INDEX FUND,
INC.
By:
Name:
Title:
ALPS MUTUAL FUNDS SERVICES,
INC.
By:
Name:
Title:
<PAGE>
<PAGE> 19
Annex A
No. of Shares
per NYSE CUSIP
Series Creation Unit Symbol No.
Australia Index Series 75,000 GXA
France Index Series 100,000 GXF
Germany Index Series 100,000 GXG
Hong Kong Index Series 75,000 GXH
Italy Index Series 75,000 GXI
Japan Index Series 100,000 GXJ
South Africa Index 75,000 GXR
Series
UK Index Series 100,000 GXK
US Index Series 100,000 GXU
<PAGE> 1
Draft of July 10, 1995
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
MARKETING AGREEMENT
MARKETING AGREEMENT (the "Agreement") made as of
________________, 1995, between The CountryBaskets(SM) Index Fund, Inc., a
Maryland corporation (the "Company"), and ALPS Mutual Funds Services, Inc.,
a Colorado corporation ("ALPS").
W I T N E S S E T H :
WHEREAS, the Company is a management investment company
organized as a series fund and registered under the Investment Company Act
of 1940 (the "1940 Act");
WHEREAS, the Company has entered into a Distribution Agreement
with ALPS providing for, among other things, the distribution and sale of
the shares ("CB Shares(SM)") of common stock of its initial nine series
(each, a "Series");
WHEREAS, the Company desires to retain ALPS to provide various
marketing and stockholder services with respect to the CS Shares(SM) of the
Series as described herein;
WHEREAS, ALPS desires to render these services to the Company;
and
WHEREAS, the Company has adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act (each, a "12b-1 Plan") with
respect to each Series and will make payments to ALPS pursuant to such 12b-
1 Plans for providing these marketing and stockholder services.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Company and ALPS agree as follows:
SECTION 1
MARKETING AND STOCKHOLDER SERVICES
1.1 Definitions.
(a) The term "Registration Statement" shall mean the
registration statement most recently filed from time to time by the
Company with the Securities and Exchange Commission (the
"Commission") and effective under the Securities Act of 1933, as
amended (the "1933
<PAGE>
<PAGE> 2
Act"), and the 1940 Act, as such registration statement is amended by
any amendments thereto at the time in effect.
(b) The term "Prospectus" shall mean the prospectus included
as part of the Company's Registration Statement, as such prospectus
may be amended or supplemented from time to time.
(c) The term "SAI" shall mean the Statement of Additional
Information included as part of the Company's Registration Statement,
as such Statement of Additional Information may be amended or
supplemented from time to time.
(d) All capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to such terms in the
Registration Statement.
1.2 ALPS' Representations and Obligations. ALPS represents
that:
(a) It has approval of and consent by all parties necessary
to permit it to carry out its obligations under this Agreement,
including the consent of the Mariner Funds Trust and the Mariner
Mutual Funds Trust;
(b) It is duly organized as a Colorado corporation and is and
at all times will remain duly authorized and licensed to carry out
its services as contemplated herein; and
(c) Its entering into this Agreement or providing the
services contemplated hereby does not conflict with or constitute a
default or require a consent (except for any consent in writing which
shall have been obtained by the date hereof) under or breach of any
provision of any agreement or document to which it is a party or by
which it is bound.
1.3 ALPS Obligations. (a) ALPS agrees to make available
four regional wholesalers on a full time basis and four product
knowledgeable 800-line registered representatives to carry out the
marketing plan and provide stockholder services as contemplated by Section
1.4.
(b) The regional wholesalers will:
(i) within 30 days after the Company's commencement of
sales to the public, create four territory business plans;
<PAGE>
<PAGE> 3
(ii) conduct product training for the benefit of product
and branch managers and account executives of broker/dealers who are
active or potentially active in the secondary markets for
CB Shares(SM);
(iii) conduct product seminars for the same persons
listed in (ii) above and potential retail and institutional investors
for CB Shares(SM);
(iv) be subject to specific activity requirements to be
developed as part of the marketing plan as described in Section 1.4;
and
(v) refer any inquiries concerning Creation Units to
the Distributor.
(c) The four product knowledgeable 800-line registered
representatives will be available to:
(i) provide support for the wholesalers' activities set
forth in (b) above;
(ii) provide support for broker/dealers active in the
secondary market;
(iii) provide product information suitable for the
secondary market upon inquiry; and
(iv) maintain lists of dealer contacts.
(d) Mr. Chris Jemapete will, for the first twelve months
following the Company's commencement of sales to the public, spend
full-time and be exclusively dedicated to the services to be provided
by ALPS hereunder and will be based in the borough of Manhattan and
have his principal family residence within commuting distance
thereof. Mr. Jemapete will be involved with the services provided by
ALPS hereunder as long as he is in the employ of or have any
consulting or other relationship with ALPS or any affiliate and the
Company so desires.
(e) At such time as the aggregate average daily net assets of
the first nine Series of the Company exceed $1 billion for three
successive months, ALPS agrees it will pay $20,000 during the next
twelve-months for marketing expenses provided for in the marketing
budget. Such annual payments shall continue for succeeding twelve
month periods as long as the aggregate average daily net assets of
the first nine
<PAGE>
<PAGE> 4
Series of the Company during the preceding twelve-month period exceed
$1 billion.
(f) It is understood that all Prospectuses and SAIs required
to be delivered by ALPS under this Agreement or by law, regulation or
NYSE or NASD rules shall be delivered at the Company's expense to
ALPS at its Denver office.
1.4 Marketing Plans and Stockholder Servicing. ALPS agrees:
(a) to develop in conjunction with the Company and its
Adviser a marketing plan to encourage the use and trading of CB
Shares(SM) on the secondary market by various elements of the
financial community, both institutional and retail, in order to make
effective use of the resources provided by ALPS under this Agreement.
ALPS agrees to use its best efforts to cooperate with the Company and
its Adviser in developing a marketing plan for the first year of this
Agreement by 30 days after the Company's commencement of sales to the
public. During the term of this Agreement it will continue to work
with the Company and its Adviser to adjust such marketing plans as
may be appropriate and to develop plans for successive years.
(b) to work with broker/dealers and other intermediaries who
hold CB Shares(SM) for the benefit of their customers to facilitate
communications with such customers and to develop a knowledge and
understanding of CB Shares(SM) with such customers.
(c) to consult and advise on the preparation of marketing
material with respect to its substance and legality.
SECTION 2
COMPANY'S REPRESENTATION AND OBLIGATIONS
2.1 Company's Obligations. The Company shall have the
following obligations:
(a) The Company shall take, from time to time, such steps,
including payment of the related filing fee, as may be necessary to
register CB Shares(SM) under the 1933 Act to the end that CB
Shares(SM) of each Series to which the services under this Agreement
relate will be registered under the 1933 Act during the term of this
Agreement.
<PAGE>
<PAGE> 5
(b) The Company will furnish ALPS such marketing material as
may be agreed upon from time to time to be used in conjunction with
the marketing program.
The Company represents that when such material is signed by an
officer or authorized agent of the Company it will be true and
correct in all material respects. ALPS will have responsibility for
filing and clearing the signed materials with the NASD.
SECTION 3
COMPENSATION
3.1 Compensation of ALPS. Subject to the terms and
conditions of the 12b-1 Plans, each Series will pay to ALPS a fee in
compensation for its services hereunder, calculated daily and payable
monthly, equal to such Series' allocable portion of the aggregate fees payable
by the initial nine series, as follows:
(i) .23% per annum of the average aggregate daily net assets of
all nine Series ("Aggregate Net Assets") up to Aggregate Net Assets of
$200 million, plus
(ii) 0% per annum of Aggregate Net Assets in excess of $200 million
up to $1.5 billion, plus
(iii) .03% per annum of Aggregate Net Assets in excess of $1.5
billion up to $5 billion, plus
(iv) .015% per annum of Aggregate Net Assets in excess of
$5 billion.
Such fees shall be allocated by the Distributor among the Series subject to
this Agreement pro rata in accordance with the [average daily net assets] of
the respective Series, the method of such allocation to be subject to the
annual review and approval of the Board of Directors of the Fund.<PAGE>
<PAGE> 6
3.2 Each Series shall reimburse ALPS on a monthly basis for
its reasonable costs incurred in connection with the costs to ALPS of
marketing materials which ALPS is asked in writing by the Company to
provide the Company or the Adviser but not including the costs of any
marketing material provided by ALPS pursuant to Section 1.3(e).
3.3 Maximum Monthly Payments. With respect of payment under
Section 3.1(a) and in order that the payments made during a fiscal year
under this Agreement and the Distribution Agreement to any one Series do
not exceed 25 basis points on an annualized basis by a material amount,
payments made under this Agreement shall not exceed on an annualized basis
(a) 35 basis points during the first six months of a year, (b) 30 basis
points during the first nine months of a year, (c) 26 basis points during
the first ten months and (d) 23 basis points during the first eleven months
of a year, all on an annualized basis.
3.4 Segregating Expenses. With respect to reimbursement
payments to ALPS pursuant to Section 3.2 as provided by each Series' 12b-1
Plan, ALPS shall indicate with its reimbursement request one or more Series
for which the expense was incurred. Reimbursed payments attributable to
the Company as a whole shall be requested with allocations for each Series
according to the method adopted by the Company's Board of Directors. ALPS'
allocation of reimbursed expenses shall be subject to the review of the
Company's Board of Directors.
SECTION 4
TERMINATION AND AMENDMENT
4.1 Termination. This Agreement may be terminated at any
time as to any Series, without penalty, upon
(a) sixty days' written notice to the other party, by (i) the
Company by the vote of a majority of the members of the Board of
Directors of the Company who are not "interested persons" of the
Company (as defined in the 1940 Act) who have no direct or indirect
financial interest in the operation of the 12b-1 Plan, this Agreement
or the Distribution Agreement ("Independent Directors"), or the vote
of a majority of the outstanding voting securities (as defined in the
1940 Act) of such Series, or (ii) ALPS, or
<PAGE>
<PAGE> 7
(b) upon the termination of the Distribution Agreement.
4.2 Assignment. This Agreement may not be assigned and shall
automatically terminate in the event of its "assignment" as defined in the
1940 Act or upon a change of control of ALPS.
4.3 Amendment. This Agreement may be amended by mutual
consent, provided that the Fund's consent to any material amendment to this
Agreement requires the approval provided for in paragraph (b)(4) of
Rule 12b-1 under the 1940 Act.
4.4 Non-interested Company Directors. While this Agreement
is in effect, the selection and nomination of the Independent Directors
shall be committed to the discretion of such Independent Directors.
SECTION 5
NOTICE
5.1 Conditions. The Company shall notify ALPS immediately
of:
(a) any request by the Commission for amendments to the
Company's Registration Statement, Prospectus or SAI, or for
additional information;
(b) any stop order suspending the effectiveness of the
Company's Registration Statement or the initiation of any proceeding
for that purpose;
(c) all actions of the Commission with respect to any
amendment to the Company's Registration Statement, Prospectus, or
Statement of Additional Information.
5.2 Notification of Parties. Any notice or other
communication required or permitted to be given pursuant to this Agreement
shall be deemed duly given if addressed and delivered, or mailed by
registered mail, postage prepaid, to (1) ALPS Mutual Funds Services, Inc.,
310 Seventeenth Street, Suite 2700, Denver, Colorado 80202 Attention:
____________ and (2) The CountryBaskets(SM) Index Fund, Inc. at 31 West
52nd Street, New York, New York 10019, Attention: Secretary.
<PAGE>
<PAGE> 8
SECTION 6
MISCELLANEOUS
6.1 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
6.2 Captions. The captions in this Agreement are included
for convenience only and in no way define or limit any of the provisions
hereof or otherwise affect their construction.
6.3 Severability. If any provisions of this Agreement shall
be held or made invalid, in whole or in part, then the other provisions of
this Agreement shall remain in force. Invalid provisions shall, in
accordance with this Agreement's intent and purpose, be replaced, to the
extent legally possible, by valid provisions in order to effectuate the
intended economic results of the invalid provisions.
6.4 Exclusivity. ALPS agrees to obtain the prior written
approval of the Board of Directors of the Company before agreeing to render
or rendering any distribution or marketing services to any investment
company, whether directly or through any affiliate ("distribution
services"), if the total number of such distribution services arrangements
to be provided by ALPS and its affiliates on behalf of registered
investment companies shall be more than nine (9) in number. None of the
nine distribution services arrangements may be for an investment product
substantially similar to the CB Shares(SM), which involves an investment
company registered under the 1940 Act and listing of the securities for
trading on the NYSE or on another securities exchange; provided further
that no more than one (1) such distribution services arrangement may be
with a company that is primarily a registered broker-dealer with more than
24 retail offices (other than bank branches). The foregoing provisos shall
not be applicable: (i) at any time after April 28, 1997; (ii) if ALPS
provides services to investment companies which are not distribution
services and (iii) if the total net assets of the Company are below
$1 billion at any time nine months after the initial issuance of Creation
Units of shares by the Fund.
6.5 Electronic Compatibility. ALPS will adopt its Local Area
Network capabilities so that it is compatible and can interface with the
equipment of the Adviser for the following utilizations:
(1) E-Mail
<PAGE>
<PAGE> 9
(2) Electronic download of trade activity
(3) Electronic access to call reports of wholesalers and 800-
line registered representatives provided by ALPS under
Section 1.3.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
THE COUNTRYBASKETS INDEX
FUND, INC.
By:____________________
Name:
Title:
ALPS MUTUAL FUNDS SERVICES,
INC.
By:____________________
Name:
Title:
<PAGE> 1
DRAFT - 6/30/95
THE COUNTRYBASKETS INDEX FUND, INC.
SOLICITING DEALER AGREEMENT
Date: , 1995
______________________
______________________
______________________
Ladies and Gentlemen:
The CountryBaskets Index Fund, Inc. (the "Fund") is an open-end
management investment company registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), organized as a series fund and formed
as a corporation under the laws of the State of Maryland. The Fund will
consist initially of nine series (each a "Series"),1 and will issue shares
of common stock, par value $.001, of each series (the "Shares"). The Fund
will only sell and redeem Shares in aggregations of a specified number of
Shares (each a "Creation Unit") depending on the Series as set forth in
Annex I hereto. Pursuant to a Distribution Agreement between the Fund and
us (the "Distribution Agreement"), we will act as distributor (the
"Distributor") and principal underwriter of Creation Units of Shares of the
Series listed on Annex I as exclusive agent on behalf of the Fund.
Capitalized terms not defined herein shall have the meanings attributed to
them in the current prospectus and statement of additional information of
the Fund relating to the Shares.
Creation Units of Shares of each Series will be sold at net
asset value, without a sales charge, in exchange for the Fund Basket
designated for delivery on a subsequent business day for a Series and the
Cash Component. A purchase order must be preceded by a notice of intention
as provided in the Fund's current prospectus and statement of additional
information.
_____________________
1 Australia Index Series, France Index Series, Germany Index Series,
Hong Kong Index Series, Italy Index Series, Japan Index Series, South
Africa Index Series, UK Index Series and US Index Series.
<PAGE>
<PAGE> 2
In consideration of the mutual covenants contained herein, it
is hereby agreed that our respective rights and obligations shall be as
follows:
1. Role of Distributor. Pursuant to and in accordance with
the provisions of the Distribution Agreement, we will make arrangements for
securities dealers which can make the representations set forth in Section
4 of this Agreement to solicit from the public orders to purchase Creation
Units of Shares of each Series. You are hereby invited to become one of
the securities dealers referred to herein as a "Soliciting Dealer". This
will confirm our mutual agreement as to the terms and conditions applicable
to your participation as a Soliciting Dealer, such agreement to be
effective on your confirmation hereof. You understand that we are seeking
to enter into this Agreement in counterparts with you and other firms which
also may act as Soliciting Dealers. All purchases of Creation Units of
Shares from the Fund shall be effected through us in our capacity as
principal underwriter and distributor acting as agent on behalf of the
Fund. You understand that we shall have no obligation to you hereunder at
such times as we are not acting as distributor and principal underwriter
for the sale of Shares in Creation Unit aggregations.
2. Role of Soliciting Dealers. (a) As a Soliciting Dealer,
you shall offer and solicit purchase orders for Creation Units of Shares.
As, when and if you generate a customer request for the purchase of
Creation Units of Shares of any Series and you determine to transmit such
request to us, you shall comply with the procedures for the purchase of
Creation Units of Shares set forth in the then current prospectus and
statement of additional information of the Fund. You shall be responsible
for opening, approving and monitoring customer accounts and for the review
and supervision of these accounts, all in accordance with the rules of the
Securities and Exchange Commission ("SEC") and the National Association of
Securities Dealers, Inc. (the "NASD"). You understand that all orders for
the purchase of Creation Units of Shares of each Series must be placed with
us and may be placed only through an Authorized Participant that has
entered into an Authorized Participant Agreement with us and the Fund.
During the period you are an Authorized Participant, you may submit
purchase orders to us in such capacity. Your duties and obligations as an
Authorized Participant are determined by the terms and conditions of the
Authorized Participant Agreement and not pursuant hereto. The procedures
relating to orders and the handling thereof will be subject to the terms of
the then current prospectus and statement of
<PAGE>
<PAGE> 3
additional information of the Fund and instructions in writing received by
you from us or the Fund's transfer agent from time to time. No conditional
orders will be accepted. No Creation Units of Shares shall be issued
except upon receipt of the consideration therefor. If payment for any
purchase order is not received in accordance with the terms of the then
current prospectus and statement of additional information, we reserve the
right, without notice, to cancel the sale and to hold you responsible for
any loss sustained as a result thereof. Unless otherwise mutually agreed
in writing, each transaction shall be promptly confirmed in writing to the
customer on a fully disclosed basis and a copy of each confirmation shall
be sent simultaneously to you. You agree that upon receipt of duplicate
confirmations you will examine the same and promptly notify us of any
errors or discrepancies which you discover and shall promptly bring to our
attention and the Fund's any errors in such confirmations claimed by your
customers.
(b) You agree to offer Shares in Creation Unit size
aggregations to the public at the then current public offering price per
Share (i.e. the net asset value per Share) as set forth in the then current
prospectus and statement of additional information for the Shares, as the
same may be amended or supplemented. All orders are subject to acceptance
or rejection by us or the Fund in our or its sole discretion.
(c) Subject to the requirements of applicable law and
regulations, nothing in this Agreement shall be construed to prohibit or
restrict your purchasing or selling for your own account Creation Unit
aggregations of Shares, whether as agent or principal. Nothing herein
shall be deemed to constitute you or any other Soliciting Dealer as agent
for the Fund, for us, or any other Soliciting Dealer. You agree not to act
as our agent and not to claim to act as our agent or as agent of any of the
foregoing.
3. Information.
We will furnish you, without charge, the Fund's current
prospectus and statement of additional information and copies of sales
materials relating to the offer and sale of Creation Units of Shares
approved and filed with the NASD by us ("Fund Sales Materials") in such
quantities as are reasonably requested by you and made available to us by
the Fund or are supplied by us under a marketing agreement between the Fund
and us (the "Marketing Agreement") for use in connection with the offer and
sale of Creation Units of Shares. You agree to the use of your name
therein as a
<PAGE>
<PAGE> 4
Soliciting Dealer in accordance with Annex II hereto. Such Fund Sales
Materials, as prepared pursuant to the Marketing Agreement or otherwise on
behalf of the Fund, are expected to include materials suitable for
institutional marketing efforts, including conferences, road shows and
institutional advertisements and/or "tombstones" related to the initial
public offering of Creation Units of Shares. Under this Agreement you will
not act for us, the Fund or the Investment Adviser, nor make any
representation on our behalf or the Fund's, or as authorized by us, the
Fund or the Investment Adviser, and in offering and selling Creation Units
of Shares hereunder you may rely only upon, the Fund's then current
prospectus and statement of additional information and the Fund Sales
Materials, provided that you are authorized to prepare and use at your own
cost and expense other brochures, advertisements (in print or other format)
or similar materials in connection with your solicitation of purchases of
Creation Units of Shares which may constitute "sales literature" within the
meaning of Section 24(b) of the 1940 Act ("Other Soliciting Materials"),
but only if such Other Soliciting Materials (i) are prepared in compliance
with all applicable NASD and SEC rules and regulations, (ii) provided to
us a reasonable time prior to their intended use and (iii) are not used
until approved by us and the Fund and filed by us with the NASD. You
understand that the Fund will not be advertised or marketed as an open-end
investment company, i.e., as a mutual fund, which offers redeemable
securities. Any advertising materials, including the Fund prospectus, will
prominently disclose that the CB Shares(SM) are not redeemable units of
beneficial interest in the Fund. In addition, any advertising material,
including the Fund prospectus, will disclose that the owners of CB
Shares(SM) may acquire and tender those shares for redemption to the Fund
in Creation Unit aggregations only.
4. Representations.
(a) You represent to us as follows, and agree to abide by all
of the rules and regulations of the NASD, including, without limitation,
the following provisions of its Rules of Fair Practice, except as otherwise
permitted by the NASD as set forth in writing, a copy of which shall be
provided to you by us:
(i) you will not withhold placing customers' orders for any
Creation Units of Shares so as to profit yourself as a result of such
withholding;
<PAGE>
<PAGE> 5
(ii) you shall not, as principal, purchase any Shares from a
record holder at a price lower than the net asset value next computed
by or for the Fund in accordance with the provisions of the 1940 Act;
nothing in this subparagraph shall prevent you from redeeming a
Creation Unit aggregation of Shares for the account of a record
holder at the net asset value then quoted by or for the Fund and
charging the investor a fair commission or administrative fee for
handling the transaction;
(iii) you are familiar with Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), Section 4(3) of
the Securities Act of 1933, as amended (the "1933 Act"), and Section
24(d) of the 1940 Act relating to the distribution and delivery of
preliminary and final prospectuses and agree that you will comply
therewith;
(iv) you are a member in good standing of the NASD or, if you
are not such a member, you are a foreign bank, dealer or institution
not eligible for membership in the NASD which agrees to make no sale
within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making
other sales to comply, as though you were a member of NASD, with the
provisions of Sections 8, 24 and 36 of Article III of the Rules of
Fair Practice of the NASD and with Section 25 thereof as that Section
applies to a non-NASD member broker or dealer in a foreign country.
(b) You agree that your expulsion from the NASD will
automatically terminate this Agreement.
(c) You agree to comply with any rules of the New York Stock
Exchange or such other secondary market or markets as has or have been
approved by an order of the SEC for the trading of the Shares. You
acknowledge that you have been provided a copy of the conditions of the SEC
order in accordance with which the Shares are offered.
(d) We represent to you that we are a member in good standing
of the NASD and agree to abide by all of the NASD's rules and regulations.
5. Expenses; No Compensation. Unless otherwise specifically
provided for in this Agreement, you shall bear all of your own costs and
expenses in connection with your acting as a Soliciting Dealer, it being
understood that we
<PAGE>
<PAGE> 6
and the Fund shall bear our and the Fund's respective costs and expenses as
set forth in the Distribution Agreement. You shall not be required to bear
any of the costs or expenses assumed by us or any other Soliciting Dealer
except as provided for herein or as you may have agreed with another
Soliciting Dealer. You shall be obligated to pay for the cost of printing
and delivering all prospectuses requested by you other than as provided
pursuant to Section 3 of this Agreement. No compensation shall be due to
you from us or the Fund hereunder.
6. Compliance.
(a) You agree that your activities pursuant to this Agreement
will be at all times in conformity in all material respects with all
applicable federal and state laws, rules and regulations, including without
limitation, the 1933 Act, the 1934 Act, the 1940 Act and the Rules of Fair
Practice of the NASD (as provided in Section 4 hereof). In connection with
offers to sell and sales of Shares of each Series, you agree to deliver or
cause to be delivered to each person to whom any such offer or sale is
made, at or prior to the time of such offer or sale, a copy of the then
current prospectus and the statement of additional information of the Fund.
(b) We agree to inform you, as the Fund provides or causes to
be provided to us such information, as to the states in which we believe
Shares of the respective Series have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws thereof,
but we shall have no obligation or responsibility to make Shares of any
Series available for sale in any jurisdiction.
7. Term; Termination; Amendment. (a) This Agreement will
become effective on the date a fully executed copy of this Agreement is
received by us, and is subject to approval by the Board of Directors of the
Fund. This Agreement is terminable, without penalty, at any time by us or
by you upon 20 days' prior written notice to the other party hereto. This
Agreement will also terminate automatically in the event of its assignment
(within the meaning of the 1940 Act) or, unless we and the Fund consent
thereto in writing, a change in control (within the meaning of the 1940
Act) of the undersigned Soliciting Dealer.
(b) This Agreement may be amended in writing by the parties
hereto.
<PAGE>
<PAGE> 7
8. Suspension. All sales will be made subject to receipt of
Shares from the Fund. We and the Fund reserve the right, in our sole
discretion, without notice, to suspend sales or withdraw the offering of
sales of Creation Units of Shares of any Series entirely, including the
sale of such Shares to you for the account of any client or clients.
9. No Other Agreement. This Agreement shall supersede any
prior agreements between us regarding the sale of Creation Units of Shares.
10. Miscellaneous. (a) Notice. Notice shall have been duly
given if delivered by hand, mail or facsimile transmission to you, at your
address or facsimile number set forth below and (b) if to us, to ALPS
Mutual Funds Services, Inc., 370 Seventeenth Street, Suite 2700, Denver,
Colorado 80202, facsimile no. ( ) - , Attention: , or in
each case such other addresses as may be notified to the other party.
(b) Successors. Subject to Section 8 hereof, this Agreement
will inure to the benefit of and be binding upon the parties hereto and
their respective legal successors and the Fund, and no other person will
have any right or obligation hereunder.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of law.
Please confirm your agreement by signing and returning to us
the enclosed duplicate copies of this Agreement. Upon our acceptance hereof,
this Agreement shall constitute a valid and binding contract between us.
After our acceptance, we will deliver to you one fully executed copy of
this Agreement.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
By_____________________________
Name:
Title:
Confirmed: , 1995
<PAGE>
<PAGE> 8
(Name of Soliciting Dealer)
By_____________________________
(sign name and print title)
<PAGE>
<PAGE> 9
Annex I
Soliciting Dealer Agreement
CB Shares(SM)
NYSE CUSIP
Series Symbol No.
Australia Index Series GXA
France Index Series GXF
Germany Index Series GXG
Hong Kong Index Series GXH
Italy Index Series GXI
Japan Index Series GXJ
South Africa Index GXR
Series
UK Index Series GXK
US Index Series GXU<PAGE>
<PAGE> 10
Annex II
As a Soliciting Dealer, you agree that you may be named as such
in sales materials and presentations as follows:
Yes No
1. Institutional marketing efforts, _____ _____
including conferences, road shows
and institutional advertisements.
2. Print advertising related to the _____ _____
initial public offering of Creation
Units of Shares.
<PAGE> 1
DRAFT - 6/30/95
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 2700
Denver, Colorado 80202
INVESTOR SERVICES AGREEMENT
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Gentlemen:
As distributor and principal underwriter of The
CountryBaskets(SM) Index Fund, Inc. (the "Fund"), a management investment
company organized as a series fund and registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), we wish to enter into
this Investor Services Agreement ("this Agreement") with you concerning
(i) your provision of broker-dealer and shareholder support services to
your clients ("Clients") who may from time to time beneficially own issued
and outstanding shares of common stock (the "CB Shares(SM)" or
"CountryBaskets(SM)") of the series (each a "Series") of the Fund indicated
on Appendix A hereto, and (ii) your educational and promotional activities
in the secondary market for CB Shares(SM) listed and traded on the New York
Stock Exchange (the "NYSE"). Pursuant to a Marketing Agreement (the
"Marketing Agreement") between us and the Fund we will provide various
marketing and shareholder services with respect to the CB Shares(SM).
Capitalized terms, unless otherwise defined herein, shall have the meanings
attributed to them in the Fund's current prospectus and statement of
additional information.
This Agreement is a related agreement as contemplated by Rule
12b-1 under the 1940 Act with respect to the Rule 12b-1 plan of each Series
of the Fund (each a "12b-1 Plan" and together the "12b-1 Plans"). Both you
and we and the Fund expect that your services and educational and
promotional activities in connection with CB Shares(SM) pursuant to this
Agreement will tend to increase investor interest in and the use and
trading of CB Shares(SM) on the secondary market and thus further sales of
shares by the Fund.
<PAGE>
<PAGE> 2
The terms and conditions of this Agreement are as follows:
Section 1. The services you agree to provide to the Fund with
respect to the Series shall include: (a) broker/dealer and shareholder
support services to Clients in connection with the outstanding and issued
CB Shares(SM), including one or more of the following: (i) distributing
prospectuses and shareholder reports to current shareholders; (ii) as
applicable, complying with federal and state securities laws pertaining to
transactions in CB Shares(SM); (iii) processing dividend payments on behalf
of Clients; (iv) providing information periodically to Clients showing
their positions in CB Shares(SM); (v) providing and maintaining elective
services such as check writing on the Client's account and wire transfer
services; (vi) acting as nominee for Clients; (vii) maintaining account
records for Clients; (viii) issuing confirmations of transactions;
(ix) providing subaccounting with respect to CB Shares(SM) beneficially
owned by Clients or the information necessary for subaccounting; (x) if
required by law, forwarding shareholder communications from us or on behalf
of the Fund (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices);
(xi) providing services primarily intended to result in the sale of CB
Shares(SM); (xii) assisting shareholders who wish to aggregate sufficient
CB Shares(SM) of a Series to constitute a Creation Unit for redemption; and
(xiii) such other services analogous to the foregoing as we or the Fund may
reasonably request to the extent you are permitted to do so under
applicable statutes, rules and regulations; and
(b) educational and promotional services related to the
secondary market trading of CB Shares(SM), including the following:
(i) facilitating access for investor relations representatives for CB
Shares(SM) to designated Smith Barney branches for the purpose of broker
education, including through sales meetings, one-on-one broker contact and
broker luncheons; (ii) making your country allocation research available
widely through your internal systems and reformatting such allocation
research to make specific country recommendations against the S&P 500;
(iii) working with us and the Fund to facilitate the flow of
CountryBaskets(SM) data through your internal information systems, which
information shall include all available CB Shares(SM) data (i.e., real-time
pricing on CB Shares(SM), the major market indexes, spot foreign exchange
rates and, eventually, data on the underlying indexes) and may also include
composite data, such as earnings estimates, P/Es and EPSs for the CB
Shares(SM), and other research and news; (iv) support of senior management
for use of CB Shares(SM) as a trading and hedging tool, including
appearances by senior
<PAGE>
<PAGE> 3
executives in a CountryBaskets(SM) video for internal Smith Barney use
only; and (v) during the first 180 days following the initial sale of
Creation Units, provide sales incentives to your brokers pursuant to
arrangements set forth in a letter from you to us.
Section 2. You will provide such office space and equipment,
telephone facilities and personnel (which may be any part of the space,
equipment and facilities currently used in your business, or any personnel
employed by you) as may be reasonably necessary or beneficial in order to
provide such services to Clients and as is otherwise provided in Section 1.
Section 3. (a) Pursuant to the terms of the 12b-1 Plans,
during the initial twelve months thereunder, the Fund is expected to have
available ______ 0.___ of 1% of the average aggregate daily net assets over
$200 million of the Series subject to this Agreement on the date hereof for
expenditures for sales, advertising and marketing materials. Such
materials are expected to be produced pursuant to arrangements which may be
entered into by the Fund through us as Distributor and under the Marketing
Agreement or with third parties, including the Investment Adviser to the
Fund; additional amounts may be made available by such third parties for
the costs of advertising and marketing materials related to the CB
Shares(SM). Such sales, advertising and marketing materials are expected
to include customer and account executive brochures, materials for sales
presentations, videotapes, print advertisements in national publications
and radio and TV advertising. Mutual understandings with respect to the
sales, advertising and marketing materials which may be provided to you in
connection with your services hereunder shall be set forth in a separate
letter; provided, however, that you shall have the right to be named
("tagged") in one third of such materials for radio and national TV
advertising which we shall file with the National Association of Securities
Dealers, Inc. ("NASD"). To the extent that you do not wish to be referred
to by name in such radio or TV advertisements, at your option, you may be
named instead in a comparable number of print sales, marketing or
advertising materials for use on a national level, filed by us with the
NASD. Your consent to the use of your name in any of the foregoing shall
not be unreasonably refused. We agree that during the six month period
hereunder commencing with the date of the initial sale of Creation Units,
we shall not make similar arrangements to provide advertising "tags" to any
other major national retail "wire houses."
(b) Pursuant to the Marketing Agreement, we expect to retain
appropriate investor representatives and marketing
<PAGE>
<PAGE> 4
staff to provide sales and marketing support with respect to CB Shares(SM).
In accordance therewith, we will make available their services to conduct a
broker education program for your sales staff.
Section 4. You and your officers, employees or agents will not
make any representations on our behalf or the Fund's, or as authorized by
us, the Fund or the Investment Adviser, except those contained in the
Fund's then current prospectus and statement of additional information for
such CB Shares(SM) or in such sales, marketing or advertising materials as
may be authorized by us and the Fund in writing, including those referred
to in Section 3 hereof. You understand that the Fund will not be
advertised or marketed as an open-end investment company, i.e., as a mutual
fund, which offers redeemable securities. Any advertising materials,
including the Fund prospectus, will prominently disclose that the CB
Shares(SM) are not redeemable units of beneficial interest in the Fund. In
addition, any advertising material, including the Fund prospectus, will
disclose that the owners of CB Shares(SM) may acquire and tender those
shares for redemption to the Fund in Creation Unit aggregations only.
Section 5. For all purposes of this Agreement, you will be
deemed to be an independent contractor, and will have no authority to act
as agent for us in any matter or in any respect. You and your employees
will, upon request, be available during normal business hours to consult
with us or our designees concerning the performance of our responsibilities
under this Agreement.
Section 6. In consideration of the services and facilities
provided by you hereunder, subject to the terms and conditions of the 12b-1
Plans, in our capacity as the Distributor implementing the 12b-1 Plans, we
will pay to you and you agree to accept as full payment therefor, a fee at
the annual rate of 0.10 of 1% of the average aggregate daily net assets
over $200 million of the Series subject to this Agreement on the date
hereof, computed daily and payable on a quarterly basis. If this Agreement
is renewed, as set forth in Section 9 hereof, your fee, subject to the
terms and conditions of the 12b-1 Plans, for any subsequent twelve-month
period hereunder will be 0.05 of 1% of the average aggregate daily net
assets over $200 million of the Series listed on Appendix A to this
Agreement, subject to review by the Board of Directors of the Fund. You
understand and agree that no amounts shall be paid or payable to you
hereunder except from amounts paid to us by the Fund for disbursements to
you under this Agreement and pursuant to and in accordance with the 12b-1
Plans. For purposes of determining the fees payable under this Section 6,
the
<PAGE>
<PAGE> 5
average aggregate daily net assets of the Series will be computed in the
manner specified in the Fund's Registration Statement (as the same is in
effect from time to time) in connection with the computation of the net
asset value of CB Shares(SM) for purposes of purchases and redemptions.
All fees payable by the Fund under this Agreement with respect to the CB
Shares(SM) of a particular Series shall be borne solely by the holders of
such CB Shares(SM); and no other Series of CB Shares(SM) or shareholders
shall be responsible for such fees. However, payments and reimbursed
expenses under the 12b-1 Plans attributable to the Fund as a whole shall be
allocated to each Series according to the method adopted by the Fund's
Board of Directors. Our allocation of reimbursed expenses shall be subject
to the review of the Fund's Board of Directors.
Section 7. You will provide to us and the Fund's Board of
Directors, and we and the Fund's Directors will review, at least quarterly,
a written report of the amounts so expended and the purposes for which such
expenditures were made. In addition, you will furnish us or our designees
with such information as we or they may reasonably request (including,
without limitation, periodic certifications confirming the provision to
Clients of the services described herein), and will otherwise cooperate
with us and our designees (including, without limitation, any auditors
designated by us), in connection with preparation of reports to the Fund's
Board of Directors concerning this Agreement and the monies paid or payable
by us pursuant hereto, as well as any other reports or filings that may be
required by law.
Section 8. By your written acceptance of this Agreement, you
represent, warrant and agree that you understand that this Agreement is a
Rule 12b-1 related agreement under the 1940 Act, subject to the provisions
of such Rule, as well as any other applicable rules or regulations of the
Securities and Exchange Commission, and agree to conform to the applicable
compliance standards adopted by the Fund's distributor for sale of CB
Shares(SM), as in effect from time to time.
Section 9. Unless sooner terminated, this Agreement will
continue for one year following the date of its adoption as provided in
Section 12, and thereafter will continue automatically for successive
annual periods provided such continuance is specifically approved at least
annually by the Fund in the manner described in Section 12 hereof. This
Agreement is terminable, without penalty, at any time by the Fund with
respect to any Series of CB Shares(SM) (which termination may be by a vote
of a majority of the Disinterested Directors as defined in Section 12
hereof or by
<PAGE>
<PAGE> 6
vote of the holders of a majority of the voting securities (as such term is
defined in the 1940 Act) of such Series) or by you upon 60 days' notice in
writing to the other party hereto. This Agreement will also terminate
automatically in the event of its assignment (within the meaning of the
1940 Act). This Agreement may be amended in writing by the parties hereto.
Section 10. All notices and other communications to either you
or us will be duly given if mailed, telegraphed, telexed or transmitted by
similar telecommunications device to us at the address shown above and to
you at the address shown below.
Section 11. This Agreement will be construed in accordance
with the laws of the State of New York.
Section 12. This Agreement, and each Rule 12b-1 Plan, is
subject to approval by vote of (i) the Fund's Board of Directors and
(ii) of a majority of those Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the 12b-1 Plans adopted by the Fund
regarding the provision of support services to the beneficial owners of CB
Shares(SM) of the respective Series or in any agreement related thereto
cast in person at a meeting called for the purpose of voting on such
approval ("Disinterested Directors").
<PAGE>
<PAGE> 7
If you agree to be bound by the provisions for this Agreement,
please sign a copy of this letter where indicated below and promptly return
it to us, c/o ALPS Mutual Funds Services Inc., 370 17th Street, Suite 2700,
Denver, Colorado 80202.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
Date: By:
Authorized Officer
Accepted and Agreed to:
SMITH BARNEY INC.
Date: By:
Authorized Officer
Acknowledged and Agreed to:
THE COUNTRYBASKETS(SM) INDEX
FUND, INC.
By:
Authorized Officer
Date:
<PAGE>
<PAGE> 8
Appendix A
Investor Services Agreement
CB Shares(SM)
NYSE CUSIP
Series Symbol No.
Australia Index Series GXA
France Index Series GXF
Germany Index Series GXG
Hong Kong Index Series GXH
Italy Index Series GXI
Japan Index Series GXJ
South Africa Index GXR
Series
UK Index Series GXK
US Index Series GXU
<PAGE> 1
DRAFT - 6/30/95
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 2700
Denver, Colorado 80202
PARTICIPATING INSTITUTIONS INVESTOR SERVICES AGREEMENT
____________________
____________________
____________________
Ladies and Gentlemen:
As distributor and principal underwriter of The
CountryBaskets(SM) Index Fund, Inc. (the "Fund"), a management investment
company organized as a series fund and registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), we wish to enter into
this Participating Institutions Investor Services Agreement ("this
Agreement") with you concerning (i) your provision of certain broker-dealer
and shareholder support services to your clients ("Clients") who may from
time to time beneficially own issued and outstanding shares of common stock
(the "CB Shares(SM)" or "CountryBaskets(SM)") of the series (each a
"Series") of the Fund indicated on Appendix A hereto, and (ii) your
research and activities related to trading strategies for CB Shares(SM)
listed and traded on the New York Stock Exchange (the "NYSE"). Pursuant to
a Marketing Agreement between us and the Fund (the "Marketing Agreement"),
we will provide various marketing and shareholder services with respect to
the CB Shares(SM). Capitalized terms, unless otherwise defined herein,
shall have the meanings attributed to them in the Fund's current prospectus
and statement of additional information.
This Agreement is a related agreement as contemplated by Rule
12b-1 under the 1940 Act with respect to the Rule 12b-1 plan of each Series
of the Fund (each a "12b-1 Plan" and together the "12b-1 Plans"). Both you
and we and the Fund expect that your services and research and activities
in connection with secondary market trading of CB Shares(SM) pursuant to
this Agreement will tend to increase investor interest in and the use and
trading of CB Shares(SM) on the secondary market and thus further sales of
shares by the Fund.
The terms and conditions of this Agreement are as follows:
<PAGE>
<PAGE> 2
Section 1. Services The services you agree to provide with
respect to the Series shall include:
(a) broker/dealer and shareholder support services to Clients
in connection with outstanding and issued CB Shares(SM), including one or
more of the following: (i) distributing prospectuses and shareholder
reports to current shareholders; (ii) as applicable, complying with federal
and state securities laws pertaining to transactions in CB Shares(SM);
(iii) processing dividend payments on behalf of Clients; (iv) providing
information periodically to Clients showing their positions in CB
Shares(SM); (v) providing and maintaining elective services such as check
writing on the Client's account and wire transfer services; (vi) acting as
nominee for Clients; (vii) maintaining account records for Clients;
(viii) issuing confirmations of transactions; (ix) providing subaccounting
with respect to CB Shares(SM) beneficially owned by Clients or the
information necessary for subaccounting; (x) if required by law, forwarding
shareholder communications from us or on behalf of the Fund (such as
proxies, shareholder reports, annual and semi-annual financial statements
and dividend, distribution and tax notices); (xi) providing services
primarily intended to result in the sale of CB Shares(SM); (xii) assisting
shareholders who wish to aggregate sufficient CB Shares(SM) of a Series to
constitute a Creation Unit for redemption; and (xiii) such other services
analogous to the foregoing as we or the Fund may reasonably request to the
extent you are permitted to do so under applicable statutes, rules and
regulations; and
(b) research and services related to the secondary market
trading of CB Shares(SM), including the following: (i) generating and
publishing periodic product research, such as product applications,
statistics, efficiency comparisons and other similar data; (ii) developing
trading strategies for CB Shares(SM) for institutional investors and others
and with respect to proprietary trading of CB Shares(SM); and (iii)
following developments in trading of CB Shares(SM).
(c) You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by
you) as may be reasonably necessary or beneficial in order to provide such
services to Clients and as is otherwise provided in this Section 1.
(d) You agree that reference may be made to you in advertising
and marketing literature of the Fund as providing and generating the
research and data referred to in paragraph (b) of this Section 1.
<PAGE>
<PAGE> 3
Section 2. Consideration
(a) In consideration of the services and facilities provided by
you hereunder, subject to the terms and conditions of the 12b-1 Plans, in
our capacity as the Distributor implementing the 12b-1 Plans, we will pay
to you and you agree to accept as full payment therefor, a fee at the
annual rate of .0025% of the average aggregate daily net assets over $200
million of the Series that are subject to this Agreement on the date
hereof, computed daily and payable on a quarterly basis to defray costs
associated with performing your services hereunder. You understand and
agree that no amounts shall be paid or payable to you hereunder except from
amounts paid to us by the Fund for disbursements to you under this
Agreement and pursuant to and in accordance with the 12b-1 Plans. For
purposes of determining the fees payable under this Section 2(a), the
average aggregate daily net assets of the Series will be computed in the
manner specified in the Fund's registration statement (as the same is in
effect from time to time) in connection with the computation of the net
asset value of CB Shares(SM) for purposes of purchases and redemptions.
All fees payable pursuant to its Rule 12b-1 Plan under this Agreement with
respect to the CB Shares(SM) of a particular Series shall be borne solely
by the holders of such CB Shares(SM); and no other Series of CB Shares(SM)
or shareholders shall be responsible for such fees. However, payments and
reimbursed expenses under the 12b-1 Plans attributable to the Fund as a
whole shall be allocated to each Series according to the method adopted by
the Fund's Board of Directors. Our allocation of reimbursed expenses shall
be subject to the review of the Fund's Board of Directors.
(b) We have been advised that out of funds expected by the Fund
to be available under the 12b-1 Plans with respect to the average aggregate
daily net assets over $200 million of the Series for expenditures for
sales, advertising and marketing materials, or out of funds available from
other third parties, including the Investment Adviser, for advertising and
marketing materials, up to an aggregate amount from all such sources not to
exceed $100,000 (unless otherwise agreed to by the Fund and us) may be used
during the initial twelve (12) month period hereunder for preparing and
providing marketing, advertising and sales literature suitable for use,
subject to compliance with applicable securities laws and the rules of the
National Association of Securities Dealers, Inc., by you and the other
Participating Institutions in connection with your secondary marketing
activities for institutional investors. Reference may be made therein to
you by name to the effect that you and certain other Participating
Institutions that enter into
<PAGE>
<PAGE> 4
similar agreements with us will publish research and follow developments in
the secondary market trading of CB Shares(SM).
(c) A representative of your organization designated by you
will be invited to, and will, participate in any annual conference
organized pursuant to the marketing plan to be developed in accordance with
the Marketing Agreement and in conjunction with the Investment Adviser at
which CB Shares(SM) product and market trends will be considered. The
conference agenda is expected to be presented by CB Shares(SM) product
specialists, academics, international economists and others.
(d) You will be provided with access to information, including
back data on diskette and in printed form, key analytic data (spreads,
correlations, historic performance, optimization routines) and specific
dealer research (such as hedging strategies, options strategies and
security-specific correlation) as made available to us or the Fund by the
Investment Adviser or another third party (who shall consent to such data
being provided to you) to support your trading and investment strategies in
CB Shares(SM) for redistribution to your Clients under your name.
Section 3. Rule 12b-1 Compliance
(a) By your written acceptance of this Agreement, you (i)
represent, warrant and agree that you understand that this Agreement is,
subject to Rule 12b-1 under the 1940 Act, as well as any other applicable
rules or regulations of the Securities and Exchange Commission, and (ii)
agree to conform to the applicable compliance standards adopted by the
Fund's distributor for sale of CB Shares(SM), as in effect from time to
time.
(b) You will provide to us and the Fund's Board of Directors,
and we and the Fund's Directors will review, at least quarterly, a written
report of the amounts expended hereunder and the purposes for which such
expenditures were made. In addition, you will furnish us or our designees
with such information as we or they may reasonably request (including,
without limitation, periodic certifications confirming the provision to
Clients of the services described herein), and will otherwise cooperate
with us and our designees (including, without limitation, any auditors
designated by us), in connection with preparation of reports to the Fund's
Board of Directors concerning this Agreement and the monies paid or payable
by us pursuant hereto, as well as any other reports or filings that may be
required by law.
(c) This Agreement, and each 12b-1 Plan, is subject to approval
by vote of (i) the Fund's Board of Directors and
<PAGE>
<PAGE> 5
(ii) a majority of those Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the 12b-1 Plans adopted by the Fund
regarding the provision of support services to the beneficial owners of CB
Shares(SM) of the respective Series or in any agreement related thereto
cast in person at a meeting called for the purpose of voting on such
approval ("Disinterested Directors").
Section 4. No Representations You and your officers,
employees or agents shall not make any representations as authorized by us,
the Fund or the Investment Adviser except those contained in the Fund's
then current prospectus and statement of additional information or in such
sales literature or advertising as may be authorized by us and the Fund in
writing, including the materials referred to in Section 1(b) hereof. You
understand that the Fund will not be advertised or marketed as an open-end
investment company, i.e., as a mutual fund, which offers redeemable
securities. Any advertising materials will prominently disclose that the
CB Shares(SM) are not redeemable units of beneficial interest in the Fund.
In addition, any advertising material, including the Fund's prospectus,
will disclose that the owners of CB Shares(SM) may acquire and tender those
shares for redemption to the Fund in Creation Unit aggregations only.
Section 5. Independent Contractor For all purposes of this
Agreement, you will be deemed to be an independent contractor, and will
have no authority to act as agent for us in any matter or in any respect.
You and your employees will, upon request, be available during normal
business hours to consult with us or our designees concerning the
performance of our responsibilities under this Agreement.
Section 6. Termination; Amendment This Agreement will become
effective between us on the date a fully executed copy of this Agreement is
received by us or our designee. Unless sooner terminated, this Agreement
will continue for one year following the date of its adoption as provided
in Section 3(c), and thereafter will continue automatically for successive
annual periods, provided such continuance is specifically approved at least
annually by the Fund in the manner described in Section 3(c) hereof. This
Agreement is terminable, without penalty, at any time by the Fund with
respect to any Series of CB Shares(SM) (which termination may be by a vote
of a majority of the Disinterested Directors as defined in Section 3(c)
hereof or by vote of the holders of a majority of the voting securities (as
such term is defined in the 1940 Act) of such Series) or by you, in either
case upon 60 days' notice in writing to the other party hereto. This
Agreement will also terminate automatically in the event of
<PAGE>
<PAGE> 6
its assignment or upon a change in control of the undersigned Participating
Institution (the terms "assignment" and "control" being referred to within
the meaning of the 1940 Act). Termination of this Agreement shall
terminate our obligation to pay you any compensation hereunder. This
Agreement may be amended in writing by the parties hereto.
Section 7. Miscellaneous
(a) All notices and other communications to either you or us
will be duly given if mailed, telegraphed or transmitted by facsimile or
similar telecommunications device at the address shown below.
(b) This Agreement will be construed in accordance with the
laws of the State of New York.
(c) You understand that we are seeking to enter into this
Agreement in counterparts with you and other Participating Institutions,
but we shall not have such agreements with more than twelve (12)
Participating Institutions at any one time.
If you agree to be bound by the provisions for this Agreement,
please sign a copy of this letter where indicated below and promptly return
it to us, c/o ALPS Mutual Funds Services Inc., 370 17th Street, Suite 2700,
Denver, Colorado 80202.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
Date: , 1995 By:
Authorized Officer
Accepted and Agreed to:
Date: , 1995 By:
Authorized Officer
<PAGE>
<PAGE> 7
Acknowledged and Agreed to: Address:
THE COUNTRYBASKETS(SM) INDEX Facsimile No.
FUND, INC.
By:
Authorized Officer
Date: , 1995
<PAGE>
<PAGE> 8
Appendix A
Participating Institutions
Investor Services Agreement
CB Shares(SM)
NYSE CUSIP
Series Symbol No.
Australia Index Series GXA
France Index Series GXF
Germany Index Series GXG
Hong Kong Index Series GXH
Italy Index Series GXI
Japan Index Series GXJ
South Africa Index GXR
Series
UK Index Series GXK
US Index Series GXU
<PAGE> 1
DRAFT - 6/30/95
Exhibit __
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
FORM OF
- AUTHORIZED PARTICIPANT AGREEMENT -
This Authorized Participant Agreement (the "Agreement") is entered into by
and among THE COUNTRYBASKETS(SM) INDEX FUND, INC. (the "Fund"), ALPS MUTUAL
FUNDS SERVICES, INC. (the "Distributor"), and ___________________________
(the "Participant"). The Distributor has been retained to provide services
as principal underwriter of the Fund acting on an agency basis in connection
with the sale and distribution of shares of common stock, par value $.001
per share (sometimes referred to each as a "CB Share(SM)" and collectively
as the "CB Shares(SM)"), of the series of the Fund (each a "Series") named
on Annex I hereto. As specified in the Fund's prospectus included as part
of its registration statement on Form N-1A (No. 33-85710), the CB Shares(SM)
of any Series offered thereby may be purchased or redeemed only in
aggregations of a specified number of CB Shares(SM), referred to therein and
herein as a "Creation Unit". The number of CB Shares(SM) presently
constituting a Creation Unit of each Series is set forth in Annex I. The
Fund's prospectus and statement of additional information ("SAI") provide
that Creation Units shall be sold in exchange for a Fund Deposit delivered
to the Fund by the Participant for its own account or acting on behalf of
another party in accordance with and subject to the terms and conditions set
forth therein. References to the Fund prospectus and the SAI are to the then
current prospectus and SAI as each may be supplemented or amended from time
to time. Capitalized terms not otherwise defined herein are used herein as
defined in the Fund prospectus or SAI (as the case may be).
This Agreement is intended to set forth certain premises and the procedures
by which the Participant may acquire and/or redeem Creation Unit size
aggregations of Fund shares through the facilities of The Depository Trust
Company ("DTC"). The parties hereto in consideration of the
<PAGE>
<PAGE> 2
premises and of the mutual agreements contained herein agree as follows:
1. STATUS OF PARTICIPANT. The Participant hereby represents, covenants
and warrants that with respect to orders for the purchase or
redemption of Creation Unit size aggregations of Fund shares of any
Series, it is a DTC Participant. The Participant may place orders
for the purchase or redemption of Creation Unit size aggregations of
Fund shares subject to the procedures for purchase and redemption
referred to in paragraph 2 of this Agreement ("Execution of Orders").
Any change in the foregoing status of the Participant shall terminate
this Agreement and Participant shall give prompt written notice to
the Distributor and the Fund of such change. The Participant
understands and agrees that requests for redemption by Beneficial
Owners may be submitted on each day that the New York Stock Exchange
("NYSE") is open for trading.
2. EXECUTION OF ORDERS. All orders for the purchase or redemption of
Creation Units shall be handled in accordance with the terms of the
Fund prospectus and SAI and the procedures described in Annex II to
this Agreement and shall require the timely execution and delivery of
an appropriate notice of intent to place an order, purchase order or
redemption request, as the case may be, substantially in the forms
set forth in Annex III, IV and V hereto respectively. Each party
hereto agrees to comply with the provisions of such documents to the
extent applicable to it. In the event the procedures include the use
of recorded telephone lines, the Participant hereby consents to such
use. The Fund reserves the right to issue additional or other
procedures relating to the manner of purchasing or redeeming Creation
Units and the Participant agrees to comply with such procedures as
may be issued from time to time.
3. SUBCUSTODIAN ACCOUNT. The Participant understands and agrees that in
the case of each Series other than the US Index Series, the Fund has
caused the Fund custodian ("Custodian") to maintain with the
applicable subcustodian for such Series an account in the relevant
foreign jurisdiction to which the Participant shall deliver or cause
to be delivered in connection with the
<PAGE>
<PAGE> 3
purchase of a Creation Unit the securities constituting a Fund Basket
on behalf of itself or any party for which it is acting (whether or
not a customer) in accordance with the terms and conditions
applicable to such account in such jurisdiction. The Participant
also acknowledges and agrees on behalf of itself and any party for
which it is acting (whether as a customer or otherwise) that delivery
of the securities constituting a Fund Basket together with a purchase
order shall be irrevocable, subject to acceptance by the Fund, or the
Distributor on behalf of the Fund, of the order.
4. TITLE TO SECURITIES; RESTRICTED SHARES. The Participant represents
on behalf of itself and any party for which it acts that upon
delivery of portfolio securities constituting a Fund Basket to the
Custodian and/or the relevant subcustodian in accordance with the
terms of the Fund prospectus and the SAI, the Fund will acquire good
and unencumbered title to such securities, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any
adverse claims, including, without limitation, any restriction upon
the sale or transfer of such securities imposed by (i) any agreement
or arrangement entered into by the Participant or any party for which
it is acting in connection with a purchase order or (ii) any
provision of the Securities Act of 1933, as amended (the "1933 Act"),
and any regulations thereunder (except that portfolio securities of
issuers other than U.S. issuers shall not be required to have been
registered under the 1933 Act if not exempt from such registration),
or of the securities laws or regulations of any other applicable
jurisdiction and (iii) no such securities are "restricted securities"
as such term is used in Rule 144(a)(3)(i) promulgated under the 1933
Act.
5. CASH COMPONENT AND FEES. The Participant hereby agrees that as
between the Fund and itself or any party for which it acts in
connection with a purchase order, it will provide for and assume
responsibility for payment of the Cash Component and any other
amounts of cash due to the Fund in connection with the purchase of
any Creation Unit aggregation of shares (including the cash purchase
transaction fee), which shall be made to an account maintained by the
Custodian at __________
<PAGE>
<PAGE> 4
providing payment on the Issue Date in same day or immediately
available funds. The Participant may require the investor to enter
into an agreement with the Participant with respect to such matters.
The Participant shall be liable to the Distributor for any amounts
advanced by the Distributor in its sole discretion to the Participant
for payment of the amounts due and owing for the Cash Component and
related cash transaction fee.
6. ROLE OF PARTICIPANT. (a) The Participant shall have no authority in
any transaction to act as agent of the Distributor or the Fund.
(b) In executing this Agreement, the Participant agrees in connection
with any purchase or redemption transactions in which it acts for a
customer or for any other DTC Participant or indirect Participant, or
any other Beneficial Owner, that it shall extend to any such party
all of the rights, and shall be bound by all of the obligations, of a
DTC Participant in addition to any obligations that it undertakes
hereunder or in accordance with the Fund prospectus and SAI.
7. AUTHORIZED PERSONS. Concurrently with the execution of this
Agreement and from time to time thereafter, the Participant shall
deliver to the Distributor and the Fund, with copies to the Custodian
and the Transfer Agent (referred to below) duly certified as
appropriate by its Secretary or other duly authorized official, a
certificate setting forth the names and signatures of all persons
authorized to give instructions relating to activity contemplated
hereby or any other notice, request or instruction on behalf of the
Participant (each an "Authorized Person"). Such certificate may be
accepted and relied upon by the Distributor and the Fund as
conclusive evidence of the facts set forth therein and shall be
considered to be in full force and effect until delivery to the
Distributor and the Fund of a superseding certificate bearing a
subsequent date. The Distributor shall issue to each Authorized
Person a unique personal identification number ("PIN Number") by
which such Authorized Person and the Participant shall be identified
and instructions issued by the Participant hereunder shall be
authenticated. The PIN number shall be kept confidential and only
provided to
<PAGE>
<PAGE> 5
Authorized Persons. Upon the termination or revocation of authority
of such Authorized Person by the Participant, the Participant shall
give immediate written notice of such fact to the Distributor and the
Fund and such notice shall be effective upon receipt by both the
Distributor and the Fund.
8. REDEMPTION. (a) The Participant represents and warrants that it will
not obtain an Order Number (as described in Annex II) from the Fund
for the purpose of redeeming any Creation Unit size aggregation of
Fund shares of any Series unless it or its customer, as the case may
be, first has full legal authority and legal and beneficial right to
tender for redemption the requisite number of CB Shares(SM) of the
relevant Series to be redeemed and to the entire proceeds of the
redemption. The Participant understands that CB Shares(SM) of any Series
can be redeemed only when Creation Unit size aggregations of a
Beneficial Owner are held in the account of a single Participant.
(b) In order to provide for taking delivery of shares of portfolio
securities constituting a Fund Basket (or lesser amount of such
securities as may be the case, as provided in the Fund prospectus and
SAI) upon redemption of CB(SM) Shares in Creation Unit aggregations,
the Participant agrees for itself and on behalf of any Beneficial
Owner for which it is acting, to maintain, or to ascertain that the
party to receive the redemption proceeds maintains, appropriate
securities broker-dealer, bank or other custody arrangements in the
jurisdiction in which the portfolio securities are customarily
traded, to which account such portfolio securities of the Fund Basket
will be delivered by the Custodian or subcustodian. If neither the
redeeming Beneficial Owner, nor the Participant acting on behalf of
such redeeming Beneficial Owner, has appropriate arrangements
satisfactory to the Fund to take delivery of the portfolio securities
in the applicable foreign jurisdiction, and it is not possible to
make other such arrangements (to which the Participant shall
reasonably agree), or if it is not possible to effect deliveries of
the portfolio securities of the Fund Basket in such jurisdiction, the
Participant understands and agrees that the Fund will exercise its
option to redeem such shares in cash and
<PAGE>
<PAGE> 6
the redeeming Beneficial Owner will be required to receive its
redemption proceeds in cash, less the cash transaction fee applicable
to cash redemption proceeds.
9. BENEFICIAL OWNERSHIP. The Participant represents and warrants to the
Distributor and the Fund that it does not hold for the account of any
single Beneficial Owner of CB Shares(SM) of the relevant Series 80
percent or more of the outstanding CB Shares(SM) of such relevant
Series, so as to cause the Fund to have a basis in the portfolio
securities deposited with the Fund with respect to such Series
different from the market value of such portfolio securities on the
date of such deposit, pursuant to section 351 of the Internal Revenue
Code of 1986, as amended. The Fund, and its Transfer Agent and
Distributor, shall have the right to require information from the
Participant regarding CB Share(SM) ownership of each Series and to
rely thereon to the extent necessary to make a determination
regarding ownership of 80 percent or more of outstanding CB
Shares(SM) of any Series by a Beneficial Owner as a condition to the
acceptance of a Fund Deposit.
10. INDEMNIFICATION. The Participant hereby agrees to indemnify and hold
harmless the Distributor, the Fund, State Street Bank and Trust
Company as Custodian and Transfer Agent, their respective
subsidiaries, affiliates, directors, officers, employees and agents
(each an "Indemnified Party") from and against any loss, liability,
cost and expense incurred by such Indemnified Party as a result of
(i) any breach by the Participant of any provision of this Agreement;
or (ii) any actions of such Indemnified Party in reliance upon any
instructions issued in accordance with Annex II (as may be amended
from time to time) believed by the Distributor and/or the Fund to be
genuine and to have been given by the Participant. This paragraph
shall survive the termination of this Agreement. THE DISTRIBUTOR
SHALL NOT BE LIABLE TO THE PARTICIPANT FOR ANY DAMAGES ARISING OUT OF
MISTAKES OR ERRORS IN DATA PROVIDED TO THE DISTRIBUTOR BY OR
INTERRUPTIONS OR DELAYS OF COMMUNICATIONS WITH THIRD PARTY SERVICE
PROVIDERS TO THE FUND.
<PAGE>
<PAGE> 7
11. NSCC STATUS. The Participant understands that the number and names
of the portfolio securities constituting the Fund Basket for each
Series will be made available by the Distributor as such information
is supplied to the Distributor each day that the NYSE is open for
trading and will also be available on each such day through the
facilities of the National Securities Clearing Corporation ("NSCC")
to its members. The Participant represents that it is ; is not
a member of the NSCC.
12. ACKNOWLEDGMENT. The Participant acknowledges receipt of the Fund
prospectus and the SAI and represents it has reviewed such documents
and understands the terms thereof.
13. NOTICES. Except as otherwise specifically provided in this
Agreement, all notices required or permitted to be given pursuant to
this Agreement shall be given in writing and delivered by personal
delivery or by postage prepaid registered or certified United States
first class mail, return receipt requested, or by telex, telegram or
facsimile or similar means of same day delivery (with a confirming
copy by mail as provided herein). Unless otherwise notified in
writing, all notices to the Fund shall be at the address or
telephone, facsimile or telex numbers indicated below the Fund's
signature line, Attn.: , with a copy to State Street Bank
and Trust Company, , P.O. Box 1978, Boston, MA
02105, Attn.: CB Shares(SM).
All notices to the Participant and the Distributor shall be directed
to the address or telephone, facsimile or telex numbers indicated
below the signature line of such party.
14. TERMINATION AND AMENDMENT. This Agreement shall become effective in
this form as of the date executed by the Fund and may be terminated
at any time by any party upon sixty days prior written notice to the
other parties and may be terminated earlier by the Fund at any time
in the event of a breach by the Participant of this Agreement or the
procedures described or incorporated herein or upon a change in control
(as such term is
<PAGE>
<PAGE> 8
used in the Investment Company Act of 1940, as amended) of the
Participant. This Agreement supersedes any prior such agreement
between or among the parties. This Agreement may be amended by the
Fund from time to time by the following procedure. The Fund will
mail a copy of the amendment to the Distributor and the Participant.
If neither the Distributor nor the Participant objects in writing to
the amendment within five days after its receipt, the amendment will
become part of this Agreement in accordance with its terms.
15. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year written below.
ALPS MUTUAL FUNDS SERVICES, INC.
BY:
TITLE:
ADDRESS:
Date: , 199 TELEPHONE:
FACSIMILE:
PARTICIPANT
BY:
TITLE:
ADDRESS:
<PAGE>
<PAGE> 9
Date: , 199 TELEPHONE:
FACSIMILE:
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
BY:
TITLE:
ADDRESS:
Date: , 199 TELEPHONE:
FACSIMILE:
TELEX:
<PAGE>
<PAGE> I-1
DRAFT - 6/30/95
ANNEX I
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
FORM OF AUTHORIZED PARTICIPANT AGREEMENT
No. of Shares
Series in Creation Units
The 75,000
Australia
Index
The 100,000
France
Index
The 100,000
Germany
Index
The 75,000
Hong Kong
Index
The 75,000
Italy
Index
The 100,000
Japan
Index
The 75,000
South
Africa
Index
The UK 100,000
Index
The US 100,000
Index
<PAGE>
<PAGE> II-1
ANNEX II
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
This Annex II to the Authorized Participant Agreement supplements the
Fund prospectus and SAI with respect to the procedures to be used in
processing an order for the purchase of CB Shares(SM) in Creation Unit size
aggregations of each Series and an order for the redemption of CB
Shares(SM) in Creation Unit size aggregations of each Series. Capitalized
terms, unless otherwise defined in this Annex II, have the meanings
attributed to them in the Authorized Participant Agreement or the Fund
prospectus and SAI.
A Participant is required to have signed the Authorized Participant
Agreement. Upon acceptance of the agreement and execution thereof by the
Fund, the Distributor will assign a personal identification number ("PIN")
to each Authorized Person authorized to act for a Participant. This will
allow a Participant through its Authorized Person(s) to place an order with
respect to the purchase or redemption of Creation Units of CB Shares(SM).
<PAGE>
<PAGE> II-2
PART A
TO SUBMIT A NOTICE OF INTENTION FOR THE SUBSEQUENT PURCHASE OF ONE OR MORE
CREATION UNITS OF CB SHARES(SM)
A Notice of Intention is not an order for the purchase of CB Shares(SM),
which can only be completed subsequently. See the Fund prospectus and SAI
and Part B to this Annex II. A Notice of Intention must be submitted on
the date that a given Fund Basket for a Series is announced for delivery on
a subsequent Issue Date.
1. Call to Receive an Intention Number. An Authorized Person of a
Participant must call the CB Shares(SM) telephone representative at
800- - not later than 15 minutes prior to the closing time of
the regular trading session on the New York Stock Exchange (the "NYSE
Closing Time") (ordinarily 4:00 p.m. New York time) to receive an Intention
Number. Upon verifying the authenticity of the caller (as determined by
the use of the appropriate PIN Number) and the terms of the Notice of
Intention, the CB Shares(SM) telephone representative will issue a unique
Intention Number. All submissions with respect to a notice of the
intention to purchase CB Shares(SM) are required to be in writing in the
form of Notice of Intention approved by the Fund (see Annex III hereto) and
accompanied by the designated Intention Number. Incoming telephone calls
are queued and will be handled in the sequence received. Calls placed
before the NYSE Closing Time will be processed even if the call is taken
after this cutoff time. ACCORDINGLY, DO NOT HANG UP AND REDIAL. INCOMING
CALLS THAT ARE ATTEMPTED LATER THAN THE NYSE CLOSING TIME WILL NOT BE
ACCEPTED.
NOTE THAT THE TELEPHONE CALL IN WHICH THE INTENTION NUMBER IS ISSUED
INITIATES THE INTENTION PROCESS BUT DOES NOT ALONE CONSTITUTE THE NOTICE OF
INTENTION. A NOTICE OF INTENTION IS ONLY COMPLETED AND PROCESSED UPON
RECEIPT OF WRITTEN INSTRUCTIONS CONTAINING THE DESIGNATED INTENTION NUMBER
AND TRANSMITTED BY FACSIMILE OR THE APPROPRIATE ELECTRONIC INTERFACE
PROVIDED BY THE DISTRIBUTOR ("ELECTRONIC INTERFACE") (SUCH NOTICE REFERRED
TO HEREIN AS THE "INTENTION") TO [fax number to be inserted].
<PAGE>
<PAGE> II-3
2. Place the Intention. An Intention Number is only valid for a limited
time. The Intention must be sent by facsimile or Electronic Interface to
the CB Shares(SM) telephone representative within 15 minutes of the
issuance of the Intention Number, but prior to the NYSE Closing Time. In
the event that the Intention is not received within such time period, the
CB Shares(SM) representative will attempt to contact the Participant to
request immediate transmission of the Intention. Unless the Intention is
received by the CB Shares(SM) representative upon the earlier of (i) within
15 minutes of contact with the Participant or (ii) the NYSE Closing Time,
the Intention will be deemed invalid.
3. Await Receipt of Confirmation. The Distributor shall issue an advice
of receipt of the Intention within 1 hour of its receipt of an Intention in
good form. In the event the Participant does not receive a timely advice
from the Distributor, it should contact the CB Shares(SM) telephone
representative at the telephone number indicated above.
4. Ambiguous Instructions. In the event that an Intention contains
ambiguous instructions or terms that differ from the information provided
in the telephone call at the time of issuance of the Intention Number, the
CB Shares(SM) telephone representative will attempt to contact the
Participant to request confirmation of the terms of the Intention. If an
Authorized Person confirms the terms as they appear in the Intention, the
Intention will be processed. If an Authorized Person contradicts its
terms, the Intention will be deemed invalid and a corrected Intention must
be received by the CB Shares(SM) telephone representative not later than
the earlier of (i) within 15 minutes of such contact with the Participant
or (ii) 1 hour after the NYSE Closing Time. If the CB Shares(SM) telephone
representative is not able to contact an Authorized Person, then the
Intention shall be processed in accordance with its terms notwithstanding
any inconsistency from the terms of the telephone information. In the
event that an Intention contains terms that are illegible, the Intention
will be deemed invalid and the CB Shares(SM) representative will attempt to
contact the Participant to request retransmission of the Intention. A
corrected Intention must be received by the CB Shares(SM) representative
not later than the earlier
<PAGE>
<PAGE> II-4
of (i) within 15 minutes of such contact with the Participant or (ii) the
NYSE Closing Time.
5. Processing an Intention. The Distributor reserves the right to
suspend an Intention in the event that the acceptance of a Purchase Order
subsequent to the Intention would appear to result in the Participant or a
Beneficial Owner owning 80 percent or more of all outstanding CB Shares(SM)
of a given Series upon the subsequent purchase of CB Shares(SM). In such
event, the CB Shares(SM) telephone representative will attempt to contact
an Authorized Person for purposes of confirmation of the fact that with
respect to such Participant no Beneficial Owner would own 80 percent or
more of all outstanding CB Shares(SM) of the applicable Series upon
execution of the subsequent Purchase Order. In the event that (i) the CB
Shares(SM) telephone representative is unable to contact an Authorized
Person or (ii) the Participant fails to transmit an identical Intention
containing a representation and warranty as to such fact, then the
Intention shall be deemed invalid.
6. Delivery of Intention. The Participant must make delivery to State
Street Bank and Trust Company as the Custodian or the appropriate
subcustodian for the Series (see Annex VI) of a single Fund Basket with
respect to one Intention with respect to a given Series. For multiple
Intentions (greater than one), one Fund Basket must be delivered with the
number of shares of each component security of that Fund Basket multiplied
by the number of Intentions. The Custodian or the appropriate subcustodian
will expect delivery from a single designated counter-party determined at
the time of completion of the Authorized Participant Agreement. The
counter-party may be changed by the Participant by written instructions to
the Custodian no later than [24] hours prior to executing an Intention.
7. Cancellation of Intention. If upon the designated settlement date
for the purchase of CB Shares(SM) (as determined by the Intention) a
purchase order is not received from the Participant and accepted, the
Intention will be canceled, and any securities deposited at the Custodian
or appropriate subcustodian will be delivered back
<PAGE>
<PAGE> II-5
to the Participant at a cost to be incurred by the Participant.
<PAGE>
<PAGE> II-6
PART B
TO PLACE AN ORDER FOR PURCHASE OF CB SHARES(SM) IN CREATION UNIT SIZE
AGGREGATIONS
1. Call to Receive an Order Number. An Authorized Person for the
Participant must call the CB Shares(SM) telephone representative at
800-___-____ not later than 15 minutes prior to the NYSE Closing Time to
receive an Order Number. Upon verifying the authenticity of the caller (as
determined by the use of the appropriate PIN Number) and the terms of the
order, the CB Shares(SM) telephone representative will issue a unique Order
Number. All orders with respect to the creation of Creation Unit
aggregations of shares of any Series are required to be in writing on the
form of purchase order ("Purchase Order") approved by the Fund (see
Annex IV hereto) and accompanied by the designated Order Number. Incoming
telephone calls are queued and will be handled in the sequence received.
Calls placed before the NYSE Closing Time will be processed even if the
call is taken after this cut-off time. ACCORDINGLY, DO NOT HANG UP AND
REDIAL. INCOMING CALLS THAT ARE ATTEMPTED LATER THAN THE NYSE CLOSING TIME
WILL NOT BE ACCEPTED.
NOTE THAT THE TELEPHONE CALL IN WHICH THE ORDER NUMBER IS ISSUED INITIATES
THE ORDER PROCESS BUT DOES NOT ALONE CONSTITUTE THE PURCHASE ORDER. A
PURCHASE ORDER IS ONLY COMPLETED AND PROCESSED UPON RECEIPT OF WRITTEN
INSTRUCTIONS CONTAINING THE DESIGNATED ORDER NUMBER AND PIN NUMBER AND
TRANSMITTED BY FACSIMILE OR ELECTRONIC INTERFACE (THE "PURCHASE ORDER").
2. Place the Order. An Order Number is only valid for a limited time.
The Purchase Order for creation of Creation Unit size aggregations of CB
Shares(SM) must be sent by facsimile or Electronic Interface to the CB
Shares(SM) telephone representative within 15 minutes of the issuance of
the Order Number. In the event that the Purchase Order is not received
within such time period, the CB Shares(SM) telephone representative will
attempt to contact the Participant to request immediate transmission of the
Purchase Order. Unless the Purchase Order is received by the CB Shares(SM)
telephone representative upon the earlier of (i) within 15 minutes of
contact with the Participant or
<PAGE>
<PAGE> II-7
(ii) the NYSE Closing Time, the order will be deemed invalid.
3. Await Receipt of Confirmation.
(a) In the case of the US Index Series, the Participant shall deliver
on the Issue Date (i) the Fund Basket to the Custodian through DTC
and (ii) the Cash Component or estimated amount sufficient to pay the
Cash Component, together with the applicable Cash Component
transaction fee, and the cash purchase transaction fee in same day or
immediately available funds to the account designated by the
Custodian.
(b) In the case of all other Series, the Participant shall deliver on
the Issue Date (i) the Fund Basket to the relevant subcustodian and
(ii) the Cash Component or estimated amount sufficient to pay the
Cash Component and the Cash Component transaction fee to the
Custodian in same day or immediately available funds to the account
designated by the Custodian.
The Participant will receive an acknowledgment of acceptance of the
Order from the Distributor within 1 hour of its receipt of a Purchase Order
in proper form and confirmation from the Custodian that all securities have
been delivered and that cash is on hand to cover the Cash Component,
together with the applicable Cash Component transaction fee. In certain
circumstances, the confirmation from the Custodian that all securities have
been delivered may not be available until the NYSE Closing Time. In the
event that the Participant does not receive a timely confirmation from the
Distributor, the Participant should contact the CB Shares(SM) telephone
representative at the telephone number indicated.
4. Ambiguous Instructions. In the event that a Purchase Order contains
ambiguous instructions or terms that differ from the information provided
in the telephone call at the time of issuance of the Order Number, the CB
Shares(SM) telephone representative will attempt to contact the Participant
to request confirmation of the terms of the order. If an Authorized Person
confirms the terms as they appear in the Purchase Order then the order will
be accepted
<PAGE>
<PAGE> II-8
and processed. If an Authorized Person contradicts its terms, the Purchase
Order will be deemed invalid and a corrected Order must be received by the
CB Shares(SM) telephone representative not later than the earlier of (i)
within 15 minutes of such contact with the Participant or (ii) the NYSE
Closing Time. If the CB Shares(SM) telephone representative is not able to
contact an Authorized Person, then the Purchase Order shall be accepted and
processed in accordance with its terms notwithstanding any inconsistency
with the telephone information. In the event that a Purchase Order
contains terms that are illegible, the Purchase Order will be deemed
invalid and the CB Shares(SM) telephone representative will attempt to
contact the Participant to request retransmission of the Purchase Order. A
corrected Purchase Order must be received by the CB Shares(SM) telephone
representative not later than the earlier of (i) within 15 minutes of such
contact with the Participant or (ii) the NYSE Closing time.
5. Processing Purchase Order. The Distributor reserves the right to
suspend a Purchase Order in the event that its acceptance would appear to
result in the Participant or a Beneficial Owner owning 80 percent or more
of all outstanding CB Shares(SM) of a Series. In such event, the CB
Shares(SM) telephone representative will attempt to contact an Authorized
Person for purposes of confirmation of the fact that with respect to such
Participant no Beneficial Owner would own 80 percent or more of all
outstanding CB Shares(SM) of a given Series upon execution of the Purchase
Order. In the event that (i) the CB Shares(SM) telephone representative is
unable to contact an Authorized Person or (ii) the Participant fails to
transmit an identical Purchase Order confirming the representation and
warranty as to such fact, then the Purchase Order shall be deemed invalid.
If the Participant fails to deliver all components of the Fund
Basket, the Distributor shall notify the Adviser to determine whether cash
may be accepted in lieu of the securities not delivered, as provided in the
Fund prospectus and SAI. If the order is not accepted, any securities
delivered by the Participant to the Custodian or appropriate subcustodian
will be delivered back to the Participant at a cost to be incurred by the
Participant.
<PAGE>
<PAGE> II-9
6. Subcustodian Accounts. Annex VI hereto contains a list of the
subcustodian accounts to which the portfolio securities constituting the
Fund Basket of each Series other than the US Index Series are to be
delivered in connection with a Purchase Order.
<PAGE>
<PAGE> II-10
PART C
TO PLACE A REQUEST FOR REDEMPTION OF CB SHARES(SM) IN CREATION UNIT SIZE
AGGREGATIONS
1. Call to Receive a Redemption Number and to Notify Delivery of CB
Shares. (a) An Authorized Person of the Participant must call the CB
Shares(SM) telephone representative at 800-___-____ not later than 15
minutes prior to the closing time of the regular trading session on the
NYSE (ordinarily 4:00 p.m. New York time) to receive a Redemption Request
Number. Upon verifying the authenticity of the caller (as determined by
the use of the appropriate PIN Number) and the terms of the order, the CB
Shares(SM) telephone representative will issue a unique Redemption Request
Number. All orders with respect to the redemption of Creation Unit
aggregations of CB Shares(SM) are required to be on the form of redemption
request approved by the Fund (see Annex V hereto) and accompanied by the
designated Redemption Request Number. Incoming telephone calls are queued
and will be handled in the sequence received. Calls placed before the NYSE
Closing Time will be processed even if the call is taken after this on-off
time. ACCORDINGLY, DO NOT HANG UP AND REDIAL. INCOMING CALLS THAT ARE
ATTEMPTED LATER THAN THE NYSE CLOSING TIME WILL NOT BE ACCEPTED.
(b) An Authorized Person of the Participant must also inform the CB
Shares telephone representative at 800- - prior to delivering the
aggregated CB Shares(SM) constituting a Creation Unit to notify the
Transfer Agent of the intention to redeem. Participants planning to
deliver CB Shares(SM) for redemption on such day should ascertain the
deadlines applicable to DTC by contacting the operations department of the
broker or depository institution effectuating such transfer of securities.
These deadlines will vary and are likely to be significantly earlier than
the closing time of the regular trading session of the New York Stock
Exchange (the "NYSE Closing Time") (ordinarily 4:00 p.m. New York time).
NOTE THAT THE TELEPHONE CALL IN WHICH THE REDEMPTION REQUEST NUMBER IS
ISSUED INITIATES THE REDEMPTION REQUEST PROCESS BUT DOES NOT ALONE
CONSTITUTE THE REDEMPTION REQUEST. A REDEMPTION REQUEST IS ONLY COMPLETED
AND PROCESSED UPON
<PAGE>
<PAGE> II-11
RECEIPT OF WRITTEN INSTRUCTIONS CONTAINING THE DESIGNATED REDEMPTION
REQUEST NUMBER AND PIN NUMBER AND TRANSMITTED BY FACSIMILE OR ELECTRONIC
INTERFACE (THE "REDEMPTION REQUEST").
2. Place the Request. A Redemption Request Number is only valid for a
limited time. The Redemption Request for Creation Unit size aggregations
of CB Shares(SM) must be sent by facsimile or Electronic Interface to the
CB Shares(SM) telephone representative within 15 minutes of the issuance of
the Order Number. In the event that the Redemption Request is not received
within such time period, the CB Shares(SM) telephone representative will
attempt to contact the Participant to request immediate transmission of the
Redemption Request. Unless the Redemption Request is received by the CB
Shares(SM) telephone representative upon the earlier of (i) within 15
minutes of contact with the Participant or (ii) the NYSE Closing Time, the
order will be deemed invalid.
3. Ambiguous Instructions. In the event that a Redemption Request
contains terms that differ from the information provided in the telephone
call at the time of issuance of the Order Number, the CB Shares(SM)
telephone representative will attempt to contact the Participant to request
confirmation of the terms of the request. If an Authorized Person confirms
the terms as they appear in the Redemption Request then the order will be
accepted and processed. If an Authorized Person contradicts its terms, the
Request will be deemed invalid and a corrected Redemption Request must be
received by the CB Shares(SM) telephone representative not later than the
earlier of (i) within 15 minutes of such contact with the Participant or
(ii) the NYSE Closing Time. If the CB Shares(SM) telephone representative
is not able to contact an Authorized Person, then the Redemption Request
shall be accepted and processed in accordance with its terms
notwithstanding any inconsistency with the terms of the telephone
information. In the event that a Redemption Request contains terms that
are illegible, the Request will be deemed invalid and the CB Shares(SM)
telephone representative will attempt to contact the Participant to request
retransmission of the Request. A corrected Request must be received by the
CB Shares(SM) telephone representative not later than the earlier of (i)
within 15
<PAGE>
<PAGE> II-12
minutes of such contact with the Participant or (ii) the NYSE Closing Time.
4. Await Receipt of Confirmation. As described in Section 1(b) above, the
Participant must deliver on the same date the Redemption Request is made
the Creation Unit size aggregation of CB Shares(SM) of the relevant Series
to the Transfer Agent on behalf of the Fund through DTC. Upon completion
of the process and receipt of the completed Redemption Request and the CB
Shares(SM) by the Transfer Agent in proper form, the Distributor will
deliver to the Participant an acknowledgment of acceptance. The Fund shall
make delivery of the Fund Basket and cash redemption proceeds (less the
amount of the applicable cash redemption transaction fee) in accordance
with the time required by applicable rules or an appropriate order of the
Securities and Exchange Commission. In the case of each Series other than
the US Index Series, the Fund Basket will be delivered to the appropriate
foreign account indicated on the Redemption Request form. An appropriate
account must be established by the Participant or the customer on whose
behalf the Participant is acting in the foreign jurisdiction to which the
in-kind redemption proceeds are to be delivered in advance of the request
for redemption. The cash proceeds will be delivered to or for the account
of the Participant in accordance with the instructions on the Redemption
Request form.
<PAGE>
<PAGE> III-1
ANNEX III
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
FORM OF NOTICE OF INTENTION
CONTACT INFORMATION FOR ORDER EXECUTION:
Telephone Order Number: (800) - Business Number: (303) 623-2577
Facsimile Number: (303) 623-7580
ALL ITEMS IN PART I MUST BE COMPLETED BY PARTICIPANT.
I. TO BE COMPLETED BY PARTICIPANT.
Date: Time:
Participant Name: Soliciting Dealer (if any):
Telephone Number: PIN (issued by the Distributor):
Fax Number: DTC Participant Number:
Telex Number:
NUMBER AND SERIES OF CREATION UNITS* INTENDED TO BE PURCHASED:
(This Notice of Intention may be used for intended purchases of Creation
Units of only one Series of the Fund. Use additional forms for intended
purchases of Creation Units of other Series.)
___________ Creation Unit(s) of the _____________ Index Series
INTENTION NUMBER (assigned by Distributor): ______ Intended Issue Date:______
DELIVERY OF FUND BASKET:
Upon acknowledgment of this Notice of Intention by the Distributor,
the undersigned Participant will arrange for the delivery to
_________________ (the designated (sub)Custodian for the __________
Series, of the designated Fund Basket(s) of securities for a purchase of
shares of such Series on ____________________, _______ (intended Issue
Date). Transfer of the Fund Basket securities will be made from the
following custodial account:
________________________________________
[Originating Bank or other Custodian]
________________________________________
[Account Name]
________________________________________
[Reference #]
________________________
* One Creation Unit of the Australia Index Series, the Italy Index Series,
the Hong Kong Index Series or the South Africa Index Series consists of
75,000 shares and one Creation Unit of the France Index Series, the
Germany Index Series, the Japan Index Series, the UK Index Series or the
US Index Series consists of 100,000 shares.
<PAGE>
<PAGE> III-2
The Participant represents and warrants to the Distributor and the Fund
that it does not and will not, after the consummation of the purchase
contemplated by this notice, hold for the account of any single beneficial
owner of Fund shares of the Series to which this Notice of Intention
relates eighty percent (80%) or more of the outstanding shares of such
Series.
Signature of Authorized Person:
Name:
Title:
II. TO BE COMPLETED BY DISTRIBUTOR.
[ ] Reviewed by the Distributor to determine whether the Participant will
hold for the account of any beneficial owner of Fund shares of the
Series to which this Notice relates, after the consummation of the
purchase contemplated by this Notice, eighty percent (80%) or more of
the outstanding shares of such Series.
The above intention is:
[ ] Acknowledged by the Distributor.
The Issue Date for the above intention is __________________,
_______.
[ ] Rejected - Reason:
__________ __________ _________________________
Date Time Authorized Signature
Acknowledgement of the above intention by the Distributor does not
constitute acceptance of a purchase order. In order for Fund shares to be
issued on the relevant Issue Date indicated above, (1) a properly completed
purchase order (in the form available from the Distributor) must be
received by the Distributor from the Participant by 4:00 p.m. (New York
time) on the Issue Date, (2) delivery of the applicable Fund Basket of
securities announced for the Series to the account of the Fund's Custodian
or the appropriate subcustodian in the relevant country must be confirmed
on the Issue Date and (3) arrangements satisfactory to the Custodian for
credit to the account of the Custodian of the Cash Component and the
applicable cash purchase transaction fee for the intended purchase on such
Issue Date (based on the net asset value determined at 4:00 p.m. on the
Issue Day) must have been made.
THE FUND, AND THE DISTRIBUTOR ON BEHALF OF THE FUND, RESERVES THE RIGHT TO
REJECT ANY PURCHASE ORDER.
<PAGE>
<PAGE> IV-1
ANNEX IV
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
FORM OF PURCHASE ORDER
CONTACT INFORMATION FOR ORDER EXECUTION:
Telephone Order Number: (800) - Business Number: (303) 623-2577
Facsimile Number: (303) 623-7850
ALL ITEMS IN PART I MUST BE COMPLETED BY PARTICIPANT. THE DISTRIBUTOR, IN
ITS DISCRETION, MAY REJECT ANY ORDER NOT SUBMITTED IN PROPER FORM. SEE THE
FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION.
I. TO BE COMPLETED BY PARTICIPANT
Date:__________ Time:____________
Participant Name:__________
Telephone Number:__________ PIN (issued by the
Fax Number:__________ Distributor):___________
Telex Number:___________ DTC Participant Number:__________
Date of Notice of
Intention:___________ Soliciting Dealer
Intention Number:__________ Placing Order (if any):__________
NUMBER AND SERIES OF CREATION UNITS* TO BE PURCHASED:
(This Purchase Order Form may be used for purchases
of Creation Units of only one Series of the Fund.)
____________ Creation Units of the _________________ Index Series
PURCHASE ORDER NUMBER (assigned by Distributor): _______________________
DELIVERY OF CASH COMPONENT:
The undersigned Participant has arranged for delivery to the Custodian
of funds equal, at a minimum, to the Cash Component and the cash
purchase transaction fee with respect to the above Order. The details of
the delivery of the Cash Component and cash transaction fee to the
Custodian are set forth below:
Wire Transfer: Other:
_________________________
_________________________
[Originating Bank]
_________________________
_________________________
[Account]
_________________________
_________________________
[Ref. #]
TRANSFER OF GOOD TITLE:
The undersigned Participant understands and agrees that upon acceptance
by the Fund or the Distributor on behalf of
<PAGE>
<PAGE> IV-2
the Fund of this Order and the related Fund Basket(s) of securities, the
purchase of Creation Unit aggregations of Fund shares shall be
irrevocable and that transfer to the Fund of good title to the
securities constituting the Fund Basket shall have been made. The
Participant also represents and warrants to the Distributor and the Fund
that it does not and will not, after the consummation of the purchase
contemplated by this Order, hold for the account of any single
beneficial owner of Fund shares of the Series to which this Order relates
80 percent or more of the outstanding shares of such Series.
Signature of Authorized Person:
________________________________
Name:
Title:
* One Creation Unit of the Australia Index Series, the Italy Index Series,
the Hong Kong Index Series or the South Africa Index Series consists of
75,000 shares and one Creation Unit of the France Index Series, the
Germany Index Series, the Japan Index Series, the UK Index Series or the
US Index Series consists of 100,000 shares.
<PAGE>
<PAGE> IV-3
PURCHASE ORDER NUMBER __________________
II. TO BE COMPLETED BY DISTRIBUTOR
[ ] Reviewed by the Distributor to determine whether the
Participant will hold for the account of any beneficial owner
of Fund shares of the Series to which this Order relates, after
the consumation of this Order, eighty percent (80%) or more of
the outstanding shares of such Series.
[ ] Fund Basket(s) Received by (sub)Custodian.
[ ] Cash Component and Cash Component transaction fee received by
Custodian.
This certifies that the above order has been:
[ ] Accepted by the Fund
[ ] Declined - Reason:
__________ __________ _________________________
Date Time Authorized Signature
<PAGE>
<PAGE> V-1
ANNEX V
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
FORM OF REDEMPTION REQUEST
CONTACT INFORMATION FOR REQUEST EXECUTION:
Telephone Order Number: (800) - Business Number: (303) 623-2577
Facsimile Number: (303) 623-7580
ALL ITEMS IN PART I MUST BE COMPLETED BY PARTICIPANT. THE DISTRIBUTOR IN
ITS DISCRETION MAY REJECT ANY REQUEST NOT SUBMITTED IN PROPER FORM. SEE
THE FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION.
I. TO BE COMPLETED BY PARTICIPANT
Date:_________________________ Time:________________________________
Participant Name:_____________
Telephone Number:_____________ PIN (issued by the Distributor):______
Fax Number:___________________ DTC Participant Number:_______________
Telex Number:_________________
NUMBER AND SERIES OF CREATION UNITS* TO BE REDEEMED:
(This Redemption Request Form may be used for the redemption
of Creation Units of only one Series of the Fund. Use
additional forms for redemptions of Creation Units of
other Series.)
____________ Creation Units of the _________________ Index Series
REDEMPTION REQUEST NUMBER: __________________
(Issued by telephone representative of Distributor)
INSTRUCTIONS FOR DELIVERY OF FUND BASKET(S):
(for Series other than the US Index Series,
indicate foreign custodial account information)
Deliver ________ Fund Basket(s) to __________; ________ Fund Basket(s)
to ______________
(Number) [Custodian] (Number) [Custodian]
______________________ ________________________
[Account Name] [Account Name]
______________________ ________________________
[Account No.] [Account No.]
______________________ ________________________
[Other Reference No.] [Other Reference No.]
Additional delivery instructions, if necessary, may be attached on a
separate sheet.
INSTRUCTIONS FOR DELIVERY OF CASH REDEMPTION PROCEEDS:
_________________________
[Bank]
_________________________
[Account Name]
_________________________
[Account Number]
________________________
[Other Reference No.]
________________________
* One Creation Unit of the Australia Index Series, the Italy Index Series,
the Hong Kong Index Series or the South Africa Index Series consists of
75,000 shares and one Creation Unit of the France Index Series, the
Germany Index Series, the Japan Index Series, the UK Index Series or the
US Index Series consists of 100,000 shares.
<PAGE>
<PAGE> V-2
REDEMPTION REQUEST NUMBER ___________________
The Participant must deliver, on the redemption date, to the Transfer Agent
(account name ____________________; account number ____________________;
reference number ____________________) the Creation Unit size
aggregation(s) of Fund shares being redeemed.
The undersigned Participant represents and warrants to the Distributor and
the Fund that it has the right and authority for itself or on behalf of its
customer to redeem the Fund shares contemplated by this redemption.
Signature of Authorized Person:
_____________________________________
Name:
Title:
II. TO BE COMPLETED BY DISTRIBUTOR
This certifies that the above request has been:
[ ] Accepted by the Fund
[ ] Declined - Reason:_____________________________________
__________ __________ _______________________________________
Date Time Authorized Signature
<PAGE>
<PAGE> VI-1
ANNEX VI
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
LIST OF CUSTODIAN/SUBCUSTODIAN ACCOUNTS
[To be supplied.]
Draft: 6/29/95
CUSTODIAN CONTRACT
Between
THE COUNTRYBASKETS SM INDEX FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
GlobalSeriesCorp 21N
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held
by It . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United
States . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Holding Securities and other Assets. . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . . . . 5
2.4 Options. . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Foreign Exchange Transactions and Futures. . . . . . . . . 6
2.6 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . 6
2.7 Call or Time Deposits. . . . . . . . . . . . . . . . . . . 7
2.8 Availability of Federal Funds. . . . . . . . . . . . . . . 7
2.9 Collection of Income . . . . . . . . . . . . . . . . . . . 7
2.10 Payment of Fund Monies . . . . . . . . . . . . . . . . . . 8
2.11 Liability for Payment in Advance of
Receipt of Securities Purchased. . . . . . . . . . . . . 9
2.12 Appointment of Agents. . . . . . . . . . . . . . . . . . . 9
2.13 Deposit of Fund Assets in U.S. Securities
Systems. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.14 Fund Assets Held in the Custodian's Direct
Paper System . . . . . . . . . . . . . . . . . . . . . . 11
2.15 Segregated Account . . . . . . . . . . . . . . . . . . . . 12
2.16 Ownership Certificates for Tax Purposes. . . . . . . . . . 13
2.17 Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.18 Communications Relating to Series Securities . . . . . . . 13
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States . . . . . . . . . 13
3.1 Appointment of Foreign Sub-Custodians. . . . . . . . . . . 13
3.2 Assets to be Held. . . . . . . . . . . . . . . . . . . . . 14
3.3 Holding Securities . . . . . . . . . . . . . . . . . . . . 14
3.4 Foreign Securities Systems . . . . . . . . . . . . . . . . 14
3.5 Agreements with Foreign Banking Institutions . . . . . . . 15
3.6 Access of Independent Accountants of the Fund. . . . . . . 15
3.7 Reports by Custodian . . . . . . . . . . . . . . . . . . . 15
3.8 Transactions in Foreign Custody Account. . . . . . . . . . 15
3.9 Liability of Foreign Sub-Custodians. . . . . . . . . . . . 16
3.10 Monitoring Responsibilities. . . . . . . . . . . . . . . . 16
3.11 Branches of U.S. Banks . . . . . . . . . . . . . . . . . . 17
3.12 Tax Law. . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
<PAGE> ii
4. Payments for Purchases or Redemptions
of Shares of the Fund . . . . . . . . . . . . . . . . . . . 17
4.1 Purchase of Fund Shares. . . . . . . . . . . . . . . . . . 17
4.2 Redemption of Fund Shares. . . . . . . . . . . . . . . . . 18
5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . 18
6. Actions Permitted Without Express Authority . . . . . . . . . 19
7. Evidence of Authority . . . . . . . . . . . . . . . . . . . . 19
8. Duties of Custodian with Respect to the Books
of Account and Calculation of Net Asset Value
and Net Income . . . . . . . . . . . . . . . . . . . . . . . 20
9. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10. Opinion of Fund's Independent Accountants . . . . . . . . . . 20
11. Reports to Fund by Independent Public Accountants . . . . . . 21
12. Compensation of Custodian . . . . . . . . . . . . . . . . . . 21
13. Responsibility of Custodian . . . . . . . . . . . . . . . . . 21
14. Effective Period, Termination and Amendment . . . . . . . . . 23
15. Successor Custodian . . . . . . . . . . . . . . . . . . . . . 24
16. Interpretive and Additional Provisions . . . . . . . . . . . . 25
17. Additional Series . . . . . . . . . . . . . . . . . . . . . . 25
18. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . 25
19. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . 26
20. Shareholder Communications . . . . . . . . . . . . . . . . . . 26
<PAGE>
<PAGE> 1
CUSTODIAN CONTRACT
This Contract between The CountryBaskets SM Index Fund, Inc., a
corporation organized and existing under the laws of Maryland, having its
principal place of business at 31 West 52nd Street, New York, New York
10019, hereinafter called the "Fund", and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of
business at 225 Franklin Street, Boston, Massachusetts 02110, hereinafter
called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate
series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Fund intends to initially offer shares of the
following series: Australia Index Series, France Index Series, Germany
Index Series, Hong Kong Index Series, Italy Index Series, Japan Index
Series, South Africa Index Series, UK Index Series and US Index Series
(such series, together with all other series subsequently established by
the Fund and made subject to this Contract in accordance with Article 17,
being herein referred to as the "Series");
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the
assets of the Series of the Fund, including securities which the Fund, on
behalf of the applicable Series, desires to be held in places within the
United States ("domestic securities") and securities it desires to be held
outside the United States and which constitute "foreign securities," as
defined in paragraph (c)(1) of Rule 17f-5 ("Rule 17f-5") under the
Investment Company Act of 1940, as amended (the "Investment Company Act")
("foreign securities"). The Fund agrees to deliver to the Custodian all
securities and other investments and cash of each Series, and all payments
of income, payments of principal or capital distributions received by it
with respect to all securities and other instruments owned by the Series
from time to time, and the consideration received by it for such new or
treasury shares of common stock of the Fund representing interests in the
Series, ("Shares") as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Series
held or received by the Series and not delivered to the Custodian.
<PAGE>
<PAGE> 2
Upon receipt of "Proper Instructions" (within the meaning of
Article 5), the Custodian shall on behalf of the applicable Series from
time to time employ one or more subcustodians, located in the United States
to hold domestic securities and cash, provided that any such subcustodian
meets at least the minimum qualifications required by Section 17(f)(1) of
the Investment Company Act to act as a custodian, but only in accordance
with an applicable vote by the Board of Directors of the Fund on behalf of
the applicable Series, and subject to Article 13. The Custodian may from
time to time employ any foreign banking institution or foreign securities
depositary determined by the Board of Directors of the Fund to qualify as
an "Eligible Foreign Custodian" (an "Eligible Foreign Subcustodian") under
Rule 17f-5 under the Investment Company Act as a subcustodian (a "Foreign
Subcustodian") for the Fund's foreign securities on behalf of the
applicable Series, but only in accordance with the provisions of Article 3
and subject to Article 13.
2. Duties of the Custodian with Respect to Property of the Fund Held
by the Custodian in the United States
2.1 Holding Securities and Other Assets. The Custodian shall hold in
a separate account or accounts and segregated at all times from
the assets of other Series and third parties all non-cash property
of each Series which may now or hereafter be delivered to it for
the account of such Series, including all domestic securities
owned by such Series, other than (a) securities which are
maintained pursuant to Section 2.10 in a "U.S. Securities System"
(as therein defined), (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying
agent ("Direct Paper") which is deposited and/or maintained in the
Direct Paper System of the Custodian pursuant to Section 2.11 and
(c) non-cash property delivered to any agent appointed pursuant to
Section 2.9 or subcustodian appointed pursuant to Article 1.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Series held by the Custodian or in
a U.S. Securities System account of the Custodian or in the
Custodian's Direct Paper book entry system account ("Direct Paper
System Account") only upon receipt of Proper Instructions from the
Fund on behalf of the applicable Series, which may be continuing
instructions when deemed appropriate by the parties, and only in
the following cases:
1) Upon sale of such securities for the account of the
Series against receipt of payment in full therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Series;
<PAGE>
<PAGE> 3
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.10
hereof;
4) To the agent of the issuer or trustee of such securities
in connection with invitations for tenders or other
similar offers for securities of the Series provided, in
any such case, that the consideration is either to be
paid or delivered to the Custodian or the tendered
securities are to be returned to the Custodian;
5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into
the name of the Series or into the name of any nominee or
nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new secu-
rities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Series, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) 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; provided that, in any such case, the new
<PAGE>
<PAGE> 4
securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities
made by the Series, but only against receipt of adequate
collateral as agreed upon from time to time by the
Custodian and the Fund on behalf of the Series, which may
be in the form of cash, obligations issued or guaranteed
by the United States government, its agencies or instru-
mentalities or such other securities or instruments as
may be permitted under the Investment Company Act and
which have been approved as acceptable collateral by the
Board of Directors of the Fund, except that in connection
with any loans for which collateral is to be credited to
the Custodian's account in a U.S. Securities System, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Series prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrow-
ings by the Fund on behalf of the Series requiring a
pledge of assets by the Fund on behalf of the Series, but
only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Series, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and a member of The National Association
of Securities Dealers, Inc. ("NASD"), relating to compli-
ance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of
any similar organization or organizations, regarding
escrow or other arrangements in connection with trans-
actions by the Series of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Series, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits
in connection with transactions by the Series of the
Fund;
14) Upon receipt of Proper Instructions from the transfer
agent ("Transfer Agent") for the Fund, for delivery to
the holders of Shares in connection with redemptions in
kind, as may be described from time to time in the
currently effective prospectus and statement of addi-
tional information contained in the Fund's Registration
<PAGE>
<PAGE> 5
Statement (together, the "Prospectus"), in satisfaction
of requests by holders of Shares for repurchase or
redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from the
Fund on behalf of the applicable Series, a certified copy
of a resolution of the Board of Directors signed by an
officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the
Series to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Domestic securities physically held
by the Custodian (other than bearer securities) shall be
registered in the name of a Series or of the Fund or in the name
of any nominee of the Fund on behalf of such Series or of any
nominee of the Custodian which nominee shall be assigned
exclusively to the Series, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment
adviser as the Series, or in the name or nominee name of any agent
appointed pursuant to Section 2.9 or in the name or nominee name
of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of a Series under
the terms of this Contract shall be in "street name" or other good
delivery form. If, however, the Fund directs the Custodian to
maintain securities in "street name", the Custodian shall utilize
its best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts basis
only of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers.
2.4 Options. The Custodian shall receive and retain confirmations or
other documents evidencing the purchase of or writing of an option
on a security or securities index by a Series; deposit and
maintain in a segregated account, either physically or by book-
entry in a Securities System (as defined herein), securities
subject to a covered put option written by a Series; and release
and/or transfer such securities or other assets only in accordance
with a notice or other communication evidencing the expiration,
termination or exercise of such covered option furnished by the
Fund's investment adviser, The Options Clearing Corporation, the
securities or options exchange on which such covered option is
traded or such other organization as may be responsible for
handling such options transactions.
<PAGE>
<PAGE> 6
2.5 Foreign Exchange Transactions and Futures. Pursuant to Proper
Instructions, the Custodian shall enter into foreign exchange
contracts or options to purchase and sell foreign currencies for
spot and future delivery on behalf and for the account of a
Series. Such transactions may be undertaken by the Custodian with
such banking institutions, including the Custodian or any
subcustodian(s) appointed pursuant to Article I as principals, as
approved and authorized by the Fund. Foreign exchange contracts
and options other than those executed with the Custodian, shall be
deemed to be portfolio securities of the applicable Series and the
responsibilities of the Custodian therefor shall be the same as
those for demand deposit bank accounts placed with other banks or
trust companies as described in Section 2.6 of this Contract.
Upon receipt of Proper Instructions, the Custodian shall receive
and retain confirmations evidencing the purchase or sale of a
futures contract or an option on a futures contract by a Series;
deposit and maintain in a segregated account, for the benefit of
any futures commission merchant or to pay to such futures
commission merchant, assets designated by the fund as initial,
maintenance or variation "margin" deposits intended to secure the
Series' performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written by
the Series, in accordance with the provisions of any agreement or
agreements among any of the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or any contract market,
or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such
margin accounts only in accordance with any such agreements.
2.6 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of each
Series of the Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the
Series, other than cash maintained by the Series in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act or placed in fixed term and call deposits
pursuant to Section 2.7. Funds held by the Custodian for a Series
may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act
and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of
each applicable Series be approved by vote of a majority of the
Board of Directors of the Fund. Such funds
<PAGE>
<PAGE> 7
shall be deposited by the Custodian in its capacity as Custodian
and shall be withdrawable by the Custodian only in that capacity.
2.7 Call or Time Deposits. The Custodian may place interest bearing
fixed time and call deposits with such banks and in such amounts
as the Fund may authorize with respect to a Series pursuant to
Proper Instructions. Such deposits may be placed with the
Custodian, or with any subcustodian appointed under Article I or
such other banks or trust companies eligible to hold the Fund's
demand deposits pursuant to Section 2.6, as the Fund may
determine. Deposits may be denominated in U.S. Dollars or other
currencies and need not be evidenced by the issuance or delivery
of a certificate to the Custodian, provided that the Custodian
shall include in its records with respect to the assets of such
Series, appropriate notation as to the amount and currency of each
such deposit, the accepting banking institution, and other
appropriate details. Such deposits, other than those placed with
the Custodian, shall be deemed portfolio securities of the
applicable Series and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank
accounts placed with other banks, as described in Section 2.6 of
this Agreement. The responsibility of the Custodian hereunder for
such deposits accepted on the Custodian's books shall be that of a
U.S. bank for a similar deposit.
2.8 Availability of Federal Funds. Upon mutual agreement between the
Fund on behalf of each applicable Series and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions from the
Fund on behalf of a Series, make federal funds available to such
Series as of specified times agreed upon from time to time by the
Fund and the Custodian in the amount of checks received in payment
for Shares of such Series which are deposited into the Series's
account.
2.9 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held
hereunder to which each Series shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on
a timely basis all income and other payments with respect to bearer
domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to such Series's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other
income items requiring presentation as and when they become due and
shall collect interest when due on securities held hereunder.
Income due each Series on securities loaned pursuant to the
<PAGE>
<PAGE> 8
provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to [provide the Fund with such
information or data as may be necessary to assist the Fund in
monitoring and in arranging] for the timely delivery to the
Custodian of the income to which the Series is properly entitled.
2.10 Payment of Fund Monies. Upon receipt of Proper Instructions from
the Fund on behalf of the applicable Series, which may be
continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out monies of a Series in the following
cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for the
account of the Series but only (a) against the delivery
of such securities or evidence of title to such options,
futures contracts or options on futures contracts to the
Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is
qualified under the Investment Company Act to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the
Series or the Fund or its nominee or in the name of a
nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of
a purchase effected through a U.S. Securities System, in
accordance with the conditions set forth in Section 2.10
hereof; (c) in the case of a purchase involving the
Direct Paper System, in accordance with the conditions
set forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the
Series and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Series
of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Series or (e) for transfer to a
time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer may be effected prior
to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the
Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Series as set forth in Section
2.2 hereof;
<PAGE>
<PAGE> 9
3) For the redemption or repurchase of Shares issued by the
Series as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by
the Series, including but not limited to the following
payments for the account of the Series: interest, taxes,
management, accounting, administration, distribution,
transfer agent and legal fees, and operating expenses of
the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Series
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For repayment of loans made to the Fund or upon
redelivery of cash collateral for loans of securities
made by a Series or for payment in connection with a
foreign exchange transaction;
8) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on
behalf of the Series, a certified copy of a resolution of
the Board of Directors of the Fund signed by an officer
of the Fund and certified by its Secretary or an Assis-
tant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be
made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to
be made.
2.11 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase of
domestic securities for the account of a Series is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund on
behalf of such Series to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.12 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other
bank or trust company which is itself qualified under Sec-
tion 17(f)(1) of the Investment Company Act, to act as a
custodian, as its agent to carry out such of the provisions of
this Article 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities
<PAGE>
<PAGE> 10
hereunder and the Custodian shall be responsible for the acts
and omissions of such agents as if performed by the Custodian
hereunder.
2.13 Deposit of Fund Assets in U.S. Securities Systems. The Custodian
may deposit and/or maintain securities owned by a Series in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Exchange Act, which acts as a
securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and Securities
and Exchange Commission rules and regulations, including Rule 17f-
4 under the Investment Company Act, and subject to the following
provisions:
1) The Custodian may keep securities of the Series in a U.S.
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the U.S. Securities System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities
of the Series which are maintained in a U.S. Securities
System shall identify by book-entry those securities
belonging to the Series;
3) The Custodian shall pay for securities purchased for the
account of the Series upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Series. The
Custodian shall transfer securities sold for the account
of the Series upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has
been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Series.
Copies of all advices from the U.S. Securities System of
transfers of securities for the account of the Series
shall identify the Series, be maintained for the Series
by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the
Fund on behalf of the Series a confirmation of each
transfer to or from the account of the Series in the
form of a written advice or notice and shall furnish to
the Fund on behalf of the Series copies of daily
transaction sheets reflecting each day's transactions in
the U.S. Securities System for the account of the Series.
<PAGE>
<PAGE> 11
4) The Custodian shall promptly provide the Fund for the
Series with any report obtained by the Custodian on the
U.S. Securities System's accounting system, internal
accounting control and procedures for safeguarding
securities deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund on behalf
of the Series the initial certificate required by Article
14 hereof;
6) Anything to the contrary in this Contract notwithstand-
ing, the Custodian shall be liable to the Fund for the
benefit of the Series for any loss or damage to the
Series resulting from use of the U.S. Securities System
by reason of any negligence, misfeasance or misconduct of
the Custodian or any of its agents or of any of its or
their employees or from failure of the Custodian or any
such agent to enforce effectively such rights as it may
have against the U. S. Securities System; at the election
of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against
the U.S. Securities System or any other person which the
Custodian may have as a consequence of any such loss or
damage if and to the extent that the Series has not been
made whole for any such loss or damage.
2.14 Fund Assets Held in the Custodian's Direct Paper System.
Provided the Custodian has received a certified copy of a
resolution of the Board of Directors of the Fund specifically
approving participation in a system maintained by the Custodian
for the holding of commercial paper in book-entry form, upon
receipt of Proper Instructions, the Custodian may deposit and/or
maintain securities owned by a Series in the Direct Paper System
of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Series;
2) The Custodian may keep securities of the Series in the
Direct Paper System only if such securities are repre-
sented in an account ("Account") of the Custodian in the
Direct Paper System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
3) The records of the Custodian with respect to securities
of the Series which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Series;
<PAGE>
<PAGE> 12
4) The Custodian shall pay for securities purchased for the
account of the Series upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Series. The
Custodian shall transfer securities sold for the account
of the Series upon the making of an entry on the records
of the Custodian to reflect such transfer and receipt of
payment for the account of the Series. Upon the maturity
of a security, the Custodian shall make an entry on its
records to reflect such maturity and receipt of payment
for the account of the Series.
5) The Custodian shall furnish the Fund on behalf of the
Series confirmation of each transfer to or from the
account of the Series, in the form of a written advice or
notice, of Direct Paper on the next business day
following such transfer and shall furnish to the Fund on
behalf of the Series copies of daily transaction sheets
reflecting each day's transaction in the Direct Paper
System for the account of the Series;
6) The Custodian shall provide the Fund on behalf of the
Series with any report on its system of internal
accounting control as the Fund may reasonably request
from time to time.
2.15 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Series
establish and maintain on its books a segregated account or
accounts for and on behalf of each such Series, into which
account or accounts may be transferred cash and/or securities,
including securities maintained in an account by the Custodian
pursuant to Section 2.10 hereof, (i) in accordance with the provi-
sions of any agreement among the Fund on behalf of the Series,
the Custodian and a broker-dealer registered under the Exchange
Act and a member of the NASD (or any Futures Commission Merchant
registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and
of any registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the Series,
(ii) for purposes of segregating cash, U.S. government or other
liquid, high-grade debt securities in connection with options
purchased, sold or written by the Series or commodity futures
contracts or options thereon purchased or sold by the Series,
(iii) for the purposes of compliance by the Series with the
procedures required by Investment Company Act Release No. 10666,
or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and <PAGE>
<PAGE> 13
(iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper
Instructions from the Fund on behalf of the applicable Series,
a certified copy of a resolution of the Board of Directors
signed by an officer of the Fund and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.
2.16 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to domestic securities of
each Series held by it and in connection with transfers of
securities.
2.17 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are
registered otherwise than in the name of the Series or the Fund or
a nominee of either, all proxies, without indication of the manner
in which such proxies are to be voted, and shall promptly deliver
to the Fund such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.18 Communications Relating to Series Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly
to the Fund for each Series all written information (including,
without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund
on behalf of the Series and the maturity of futures contracts
purchased or sold by the Series) received by the Custodian from
issuers of the securities being held for the Series. With respect
to tender, subscription or exchange offers, the Custodian shall
transmit promptly to the Fund all written information received by
the Custodian from issuers of the securities in respect of which
tender, subscription or exchange is sought and from the party (or
his agents) making the tender, subscription or exchange offer.
If the Fund desires to take action with respect to any tender
offer, subscription rights offering, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least
three business days prior to the date on which the Custodian is to
take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes
the Custodian to employ as sub-custodians for the
<PAGE>
<PAGE> 14
Series's securities and other assets maintained outside the United
States the Foreign Sub-custodians [designated on Schedule A
hereto]. Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of
the Fund's Board of Directors, the Custodian and the Fund may agree
to amend Schedule A hereto from time to time to designate addi-
tional Foreign Sub-custodians which (i) qualify as Eligible Foreign
Custodians within the meaning of Rule 17f-5 (ii) or are exempted
therefrom by order of the Securities and Exchange Commission to
act as sub-custodians. Upon receipt of Proper Instructions, the
Fund may instruct the Custodian to cease the employment of any one
or more such Foreign Sub-custodians for maintaining custody of the
Series's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the Foreign
Sub-custodians to: (a) foreign securities and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Series's
foreign securities transactions. The Custodian shall identify on
its books as belonging to the Fund, the foreign securities of the
Fund held by each Foreign Sub-custodian.
3.3 Holding Securities. The Custodian may hold securities and other
non-cash property for all of its customers, including the Fund,
with a Foreign Sub-custodian in a single account that is
identified as belonging to the Custodian for the benefit of its
customers, provided, however, that (i) the records of the
Custodian with respect to securities and other non-cash property
of each Series which are maintained in such account shall identify
by book-entry those securities and other non-cash property
belonging to such Series and (ii) the Custodian shall require that
securities and other non-cash property so held by the Foreign Sub-
custodian be held separately from any assets of the Foreign Sub-
custodian or of others.
3.4 Foreign Securities Systems. Assets of the Series may be
maintained in a clearing agency named in Schedule A that acts as a
securities depository or which operates a book-entry system for
the central handling of securities located outside of the United
States and which qualifies as an Eligible Foreign Custodian (each
a "Foreign Securities System") only through arrangements
implemented by the foreign banking institutions serving as Foreign
Sub-custodians pursuant to the terms hereof (Foreign Securities
Systems and U.S. Securities Systems are collectively referred to
herein as the "Securities Systems"). Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
<PAGE>
<PAGE> 15
3.5 Agreements with Foreign Banking Institutions. Each agreement with
a [foreign banking institution] shall provide that: (a) the
assets belonging to each Series will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the foreign banking institution or its creditors or agent, except
a claim of payment for their safe custody or administration; (b)
beneficial ownership for the assets belonging to each Series will
be freely transferable without the payment of money or value other
than for safe custody or administration; (c) adequate records will
be maintained by the Custodian to identify the assets as belonging
to the applicable Series; (d) officers of or auditors employed by,
or other representatives of the Custodian, and, to the extent
permitted under applicable law, the independent public accountants
for the Fund, will be given access to the books and records of the
[foreign banking institution] relating to its actions under its
agreement with the Custodian; (e) assets of the Series held by the
Foreign Sub-custodian will be subject only to the instructions of
the Custodian or its agents; (f) the Fund will receive periodic
reports with respect to the safekeeping of the assets of the
applicable Series, including, but not limited to, notification of
any transfer to or from the Series' account; and (g) such [foreign
banking institution] will exercise reasonable care and indemnify
the Custodian and the Fund in accordance with Section 3.9.
3.6 Access of Independent Accountants of the Fund. Upon request of
the Fund, the Custodian will use its best efforts to arrange for
the independent accountants of the Fund to be afforded access to
the books and records of any foreign banking institution employed
as a foreign sub-custodian insofar as such books and records
relate to the performance of such [Foreign Subcustodian] under its
agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of
the securities and other assets of the Series held by Foreign
Sub-custodians, including but not limited to an identification of
entities having possession of the Series securities and other
assets and advices or notifications of any transfers of securities
to or from each custodial account maintained by a [Foreign Sub-
custodian] for the Custodian on behalf of its customers
indicating, as to securities acquired for such Series, the
identity of the entity having physical possession of such
securities.
3.8 Transactions in Foreign Custody Account. (a) Except as other-
wise provided in paragraph (b) of this Section 3.8, the provisions
of Sections [2.2, 2.3, 2.6 and 2.7] of this Contract shall apply,
mutatis mutandis, to the foreign
<PAGE>
<PAGE> 16
securities of the Fund held outside the United States by Foreign
Sub-custodians. (b) Notwithstanding any provision of this Contract
to the contrary, settlement and payment for securities received for
the account of each applicable Series and delivery of securities
maintained for the account of each applicable Series may[, if so
instructed by the investment adviser of the Series,] be effected
in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction
or market in which the transaction occurs unless otherwise
instructed pursuant to Proper Instructions, including, without
limitation, delivering securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against
a receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer. (c) Securities
maintained in the custody of a Foreign Sub-custodian may be
maintained in the name of such entity's nominee only to the same
extent and on the same conditions as set forth in Section 2.3 of
this Contract, and the Fund agrees to hold any such nominee
harmless from any liability in its capacity as a holder of record
of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs [an Eligible Foreign Custodian] as a
Foreign Sub-custodian (a) shall require the institution to
exercise reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the institution's performance
of such obligations and (b) shall entitle the Fund at its election
to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence
of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Fund has not been made whole for any such
loss, damage, cost, expense, liability or claim.
3.10 Monitoring Responsibilities. The Custodian shall furnish annually
to the Fund information concerning the Foreign Sub-custodians
employed by the Custodian to facilitate the review and approval by
the Fund's Board of Directors of the arrangements for the custody
of foreign securities of each Series. Such information shall be
similar in kind and scope to that furnished to the Fund in connec-
tion with the initial approval of this Contract. In addition,
the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial
condition of a Foreign Sub-custodian or any material loss of the
assets of the Fund or, in the case of any Foreign Sub-custodian
not the subject of an exemptive order from the Securities and
Exchange Commission, is notified by such Foreign Sub-custodian
that there appears to be a substantial likelihood that its <PAGE>
<PAGE> 17
shareholders' equity will decline below $200 million (U.S. dollars
or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance
with generally accepted U.S. accounting principles).
3.11 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions of Sections 3.1 and 3.5 shall not apply
where the custody of the Series assets are maintained in a foreign
branch of a banking institution which is a "Qualified U.S. Bank"
as defined in Rule 17f-5 and has aggregate capital, surplus and
undivided profits of not less than $100 million. The appointment
of any such branch as a sub-custodian shall be governed by Article
1 of this Contract. (b) Cash held for each Series of the Fund in
the United Kingdom shall be maintained in an interest bearing
account established for the Fund with the Custodian's London
branch, which account shall be subject to the direction of the
Custodian, State Street London Ltd. or both.
3.12 Tax Law. The Custodian shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of the United
States of America or any state or political subdivision thereof.
It shall be the responsibility of the Fund to notify the Custodian
of the obligations imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of jurisdictions other than
those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall
be to use reasonable efforts to claim for the Fund any available
exemption or refund under the tax law of jurisdictions for which
the Fund has provided such information by making filings on behalf
of the Fund for, and monitoring the Fund's collection of, refunds
or rebates of withholding or other foreign taxes paid.
4. Payments for Purchases or Redemptions of Shares of the Fund
4.1 Purchase of Fund Shares. The Custodian shall maintain, on its
own books in the case of the US Index Series, or with the
applicable Foreign Sub-custodian in the case of each other
Series, an account into which an Authorized Participant (as
defined in the Prospectus) proposing to purchase Shares of the
Series may deliver a Fund Basket of securities (as defined in
the Prospectus). Upon receipt from the appointed distributor of
Fund Shares of notice of a notice of intention for the purchase
of Shares of any Series, the Custodian shall promptly notify
(other than in the case of the US Index Series) the <PAGE>
<PAGE> 18
applicable Foreign Sub-custodian of the intended delivery to it of
the securities included in the designated Fund Basket. Upon
delivery to the Custodian, in the case of the US Index Series, or
advice from the applicable Foreign Sub-custodian of delivery to
it, in the case of each other Series, of the securities in one or
more of the designated Fund Baskets as contemplated in such
notice of intention, the Custodian shall promptly advise the
distributor of such fact and any deviation from delivery of the
securities required in respect of such purchase. The Custodian
shall also promptly advise the distributor of its receipt of the
requisite Cash Component and Cash Component transaction fee (both
as defined in the Prospectus) in respect of any such purchase.
4.2 Redemption of Fund Shares. [From such funds and securities held
by a Series as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable
votes of the Board of Directors of the Fund pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer
Agent, make funds and/or a Fund Basket of securities available for
payment to Authorized Participants of Shares who have delivered to
the Transfer Agent a request for redemption of their Shares. The
Custodian will transfer the Fund Basket of securities, in the case
of the US Index Series, to or on the order of the Authorized
Participant through the DTC system (as defined in the Prospectus)
and, in the case of each other Series, will instruct the applicable
Foreign Sub-custodian to transfer the Fund Basket of securities to
the account of the Authorized Participant or beneficial owner in
the applicable foreign jurisdiction, all as specified in such
instructions. Payments of cash in redemption will be effected
through the DTC system.]
5. Proper Instructions
Proper Instructions as used throughout this Contract means a
writing signed or initialled by one or more person or persons as the
Board of Directors shall have from time to time authorized. Each such
writing shall set forth the specific transaction or type of transaction
involved, including a specific statement of the purpose for which such
action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been
given by a person authorized to give such instructions with respect to
the transaction involved. The Fund shall cause all oral instructions to
be confirmed in writing. Upon receipt of a certificate of the Secretary
or an Assistant Secretary as to the authorization by the Board of
Directors of the Fund accompanied by a detailed description of procedures
approved by the Board of Directors, Proper Instructions may include
communications effected directly between electro-mechanical or <PAGE>
<PAGE> 19
electronic devices provided that the Board of Directors and the Custodian
are satisfied that such procedures afford adequate safeguards for the
Series' assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian (and which are designated
to be authorized instructions of the Fund) pursuant to any three-party
agreement which requires a segregated asset account in accordance with
Section 2.12 or from the Transfer Agent as provided in Section 2.2(14).
6. Actions Permitted Without Express Authority
The Custodian may in its discretion, without express authority
from the Fund on behalf of each applicable Series:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Fund on behalf
of the Series;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Series,
checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Series except as otherwise directed
by the Board of Directors of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting in good faith reliance
upon any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to have
been properly executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of Directors of
the Fund as conclusive evidence (a) of the authority of any person to act
in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as
described in such vote, and such vote may be considered as in full force
and effect until receipt by the Custodian of written notice to the
contrary.
<PAGE>
<PAGE> 20
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall keep the books of account of each Series as
set forth in Schedule attached hereto and compute the net asset value
per share of the outstanding Shares of each Series. The net asset value
calculation for each Series shall be made in accordance with the provisions
of the Price Source Authorization Agreement between the Fund and the
Custodian. If directed in writing to do so by the Fund, the Custodian
shall also transmit the net asset value of each Series to the National
Association of Securities Dealers Automated Quotations System and to such
other entities as directed by the Fund. If directed in writing to do so by
the Fund, the Custodian shall also calculate daily the net income of each
Series as described in the Fund's Prospectus and shall advise the Fund, its
distributor and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so,
shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset
value per share and the daily income of each Series shall be made at the
time or times described from time to time in the Fund's Prospectus related
to such Series. In connection with computing the net asset value of shares
of each Series, the Custodian shall on each day a Series is open for the
purchase of shares of a given Series compute the amount of the Cash
Component.
9. Records
The Custodian shall, with respect to each Series, create and
maintain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Fund under the
Investment Company Act including without limitation Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder. All such records shall be the property
of the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund
with a tabulation of securities owned by each Series and held by the
Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountants
The Custodian shall take all reasonable action, as the Fund
on behalf of each applicable Series may from time to time request, to
obtain from year to year favorable opinions from the Fund's independent
accountants with respect to its activities hereunder in
<PAGE>
<PAGE> 21
connection with the preparation of the Fund's Form N-1A, and Form N-SAR
or other annual reports to the Securities and Exchange Commission and
with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the
Series at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities deposited
and/or maintained in a [U.S.] Securities System relating to the services
provided by the Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between the Fund on behalf of each applicable Series and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be
held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed
by the proper party or parties, including any Futures Commission Merchant
acting pursuant to the terms of a three-party futures or options agreement.
The Custodian shall be held to the exercise of reasonable care in carrying
out the provisions of this Contract, but shall be kept indemnified by and
shall be without liability to the Fund for any action taken or omitted by
it in good faith without negligence. It shall be entitled to rely on and
may act upon advice of counsel (who may be counsel for the Fund) on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
The Custodian shall have no more or less responsibility or
liability to the Fund on account of the acts or omissions of a
[foreign banking institution] appointed pursuant to the provisions <PAGE>
<PAGE> 22
of Article 3 or a sub-custodian located in the United States and appointed
pursuant to the provisions of Article 1, than any such sub-custodian has
to the Custodian; provided that this provision shall not protect the
Custodian from responsibility or liability in the event of the Custodian's
own negligence or bad faith. Regardless of whether assets are maintained
in the custody of a foreign banking institution, a foreign securities
depository or a branch of a U.S. bank as contemplated by Section 3.11
hereof, the Custodian shall be without liability to the Fund for any loss,
liability, claim or expense resulting from or caused by: (i) events or
circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, nationalization or expropriation,
imposition of currency controls or restrictions, the interruption, suspen-
sion or restriction of trading on or the closure of any securities markets,
power or other mechanical or technological failures or interruptions,
computer viruses or communications disruptions which, in any such case,
the Custodian could not have prevented by using commercially reasonable
methods, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by the Fund
or its investment adviser in their instructions to the Custodian provided
such instructions have been given in accordance with this Contract;
(iii) the insolvency of or acts or omissions by a Securities System;
(iv) any delay or failure of any broker, agent or intermediary, central
bank or other commercially prevalent payment or clearing system to deliver
to the Custodian's sub-custodian or agent securities purchased or in the
remittance of payment made in connection with securities sold; (v) any
delay or failure of any company, corporation, or other body in charge of
registering or transferring securities in the name of the Custodian, the
Fund, the Custodian's sub-custodians, nominees or agents or any conse-
quential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and
other accretions or benefits; (vi) delays or inability to perform its
duties due to any disorder in market infrastructure with respect to any
particular security or Securities System; and (vii) any provision of any
present or future laws or regulations or orders of the United States of
America, or any state thereof, or any other country, or political
subdivision thereof or of any court of competent jurisdiction; provided
that this provision shall not protect the Custodian from responsibility
or liability in the event of the Custodian's own negligence or bad faith.
Notwithstanding the foregoing provisions of this Article 13, in delegating
custody duties to State Street London Ltd., the Custodian shall not be
relieved of any responsibility to the Fund for any loss due to such dele-
gation, except such loss as may result from (a) political risk (including,
but not limited to, exchange control restrictions, confiscation, expro-
priation, nationalization, insurrection, civil strife or armed hostilities)
or (b) other losses (excluding a bankruptcy or insolvency of State Street
London Ltd. not caused by political risk) due to Acts of God, nuclear <PAGE>
<PAGE> 23
incident or other losses under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.
If the Fund on behalf of a Series requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Series being liable
for the payment of money or incurring liability of some other form, the
Fund on behalf of the Series, as a prerequisite to requiring the Custodian
to take such action, shall provide indemnity to the Custodian in an amount
and form reasonably satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries
or agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) for the benefit of a Series including the purchase or sale of
foreign exchange or of contracts for foreign exchange, any property at any
time held for the account of the applicable Series shall be security for
such advance and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Series's assets to the extent necessary to obtain reimbursement.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual written agreement of the parties
hereto by a written instrument and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; provided, that at the Fund's
request such termination may be postponed for an additional thirty (30)
days if necessary to permit the Fund to obtain the services of a successor
custodian, and provided further, however, that the Custodian shall not
with respect to a Series act under Section 2.13 hereof in the absence of
receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors of the Fund has approved the initial
use of a particular U.S. Securities System by such Series, as required by
Rule 17f-4 under the Investment Company Act, that the Custodian shall
not with respect to a Series act under Section 2.14 hereof in the absence
of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Directors has approved the initial use of
the Direct Paper System by such Series and that the Custodian shall not,
with respect to a Series, act under Article 3 to appoint a Foreign Sub-
custodian or make any deposit of securities of a Series in any Foreign
Securities System in the absence of receipt of an initial <PAGE>
<PAGE> 24
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of such Foreign Sub-custodian or
Foreign Securities System by such Series; provided further, however, that
the Fund shall not amend or terminate this Contract in contravention of
any applicable federal or state regulations, or any provision of the
Articles of Incorporation, and further provided, that the Fund on behalf
of one or more of the Series may at any time by action of its Board of
Directors (i) substitute another bank or trust company for the Custodian
by giving notice as described above to the Custodian, or (ii) immediately
terminate this Contract in the event of the appointment of a conservator
or receiver for the Custodian by the Comptroller of the Currency or upon
the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each
applicable Series shall pay to the Custodian such compensation as may be
due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the
Series shall be appointed by the Board of Directors of the Fund, the
Custodian shall, upon termination, deliver to such successor custodian at
the office of the Custodian, duly endorsed and in the form for transfer,
all securities of each applicable Series and all cash and other instruments
then held by it or an agent hereunder and shall transfer to an account of
the successor custodian all of the securities of each such Series held in a
U.S. Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Directors of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Directors shall
have been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have the
right to deliver to a bank or trust company, which is a "bank" as defined
in the Investment Company Act, doing business in Boston, Massachusetts,
of its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the
Custodian on behalf of each applicable Series and all instruments held
by the Custodian relative thereto and all other property held by it under
<PAGE>
<PAGE> 25
this Contract on behalf of each applicable Series and to transfer to an
account of such successor custodian all of the securities of each such
Series held in any U.S. Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing
to failure of the Fund to procure the certified copy of the vote referred
to or of the Board of Directors to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services during
such period as the Custodian retains possession of such securities, funds
and other properties and the provisions of this Contract relating to the
duties and obligations of the Custodian shall remain in full force and
effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian
and the Fund on behalf of each of the Series, may from time to time agree
on such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed hereto, provided
that no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the Articles of
Incorporation of the Fund. No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
17. Additional Series
In the event that the Fund establishes one or more series of
Shares in addition to the Australia Index Series, France Index Series,
Germany Index Series, Hong Kong Index Series, Italy Index Series, Japan
Index Series, South Africa Index Series, UK Index Series and US Index
Series with respect to which it desires to have the Custodian render
services as custodian under the terms hereof, it shall so notify the
Custodian in writing, and if the Custodian agrees in writing to provide
such services, such series of Shares shall become a Series hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with the internal laws of The
Commonwealth of Massachusetts.
<PAGE>
<PAGE> 26
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof,
all prior contracts between the Fund on behalf of each of the Series and
the Custodian relating to the custody of the Fund's assets.
20. Shareholder Communications
Rule 14b-2 under the Exchange Act requires banks which hold
securities for the account of customers to respond to requests by issuers
of securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. Unless and until the
Custodian receives Proper Instructions to the contrary, the Custodian will
(check applicable provision) ( ) disclose ( ) not disclose the Fund's name,
address and securities position to issuers whose securities are held by the
Fund upon request of such issuers.
<PAGE>
<PAGE> 27
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of the day of
, 1995.
ATTEST THE COUNTRYBASKETS(SM) INDEX FUND, INC.
__________________ By ____________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
__________________ By ____________________________________
Executive Vice President
<PAGE>
<PAGE> 28
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of The
CountryBaskets Index Fund, Inc. for use as sub-custodians for the Fund's
securities and other assets:
(Insert banks and securities depositories)
Certified:
___________________________
Fund's Authorized Officer
Date: _____________________
w:\...\agmts\cbi-fnd3.cus
<PAGE> 1
DRAFT 6/27/95
ADMINISTRATION AGREEMENT
Agreement dated as of , 1995 by and between State
Street Bank and Trust Company, a Massachusetts trust company (the
"Administrator"), and The CountryBaskets(SM) Index Fund, Inc., a Maryland
corporation (the "Fund").
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, shares of the Fund's common stock will be listed on
the New York Stock Exchange ("NYSE"); and
WHEREAS, the Fund desires to retain the Administrator to
furnish certain administrative services to the Fund and the Administrator
is willing to furnish such services on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Fund hereby appoints the Administrator to act as
administrator with respect to the Fund for purposes of providing certain
administrative services for the period and on the terms set forth in this
Agreement. The Administrator accepts such appointment and agrees to render
the services stated herein.
The Fund will initially issue and sell shares of Common Stock,
par value $.001 per share ("Shares"), of the series (each, a "Series")
listed in Schedule A to this Agreement. In the event that the Fund is
authorized to issue and issues Shares of one or more additional Series with
respect to which it wishes to retain the Administrator to act as
administrator hereunder, the Fund shall notify the Administrator in
writing. Upon written acceptance by the Administrator, such Series shall
become subject to the provisions of this Agreement to the same extent as
the existing Series, except to the extent that such provisions (including
those relating to the fees and expenses payable by the Fund and its Series)
may be modified with respect to each additional Series in writing by the
Fund and the Administrator at the time of the addition of the Series.
<PAGE>
<PAGE> 2
2. DELIVERY OF DOCUMENTS
The Fund will promptly deliver to the Administrator copies of
each of the following documents and all future amendments and supplements
thereto, if any:
a. The Fund's charter document and by-laws;
b. The Fund's currently effective registration statement
under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act, and the Fund's Prospectus(es)
and Statement(s) of Additional Information relating to
all Series and all amendments and supplements thereto as
presently in effect;
c. Certified copies of the resolutions of the Board of
Directors of the Fund (the "Board") authorizing (1) this
Agreement and (2) certain individuals on behalf of the
Fund to (a) give instructions to the Administrator
pursuant to this Agreement and (b) authorize
disbursements, including payment of expenses;
d. A copy of the investment management agreement between the
Fund and its investment adviser (the "Adviser");
e. A copy of the distribution agreement between the Fund and
its distributor; and
f. Such other certificates, documents or opinions which the
Administrator may, in its reasonable discretion, deem
necessary or appropriate in the proper performance of its
duties.
3. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR
The Administrator represents and warrants to the Fund that:
a. It is a Massachusetts trust company duly organized,
existing and in good standing under the laws of The
Commonwealth of Massachusetts;
b. It has full power and authority to carry on its business
in The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been
instituted or threatened which would impair the
Administrator's ability to perform its duties and
obligations under this Agreement;
e. It possesses all material governmental licenses, permits,
consents, orders or approvals and other authorizations
necessary to perform its duties and obligations under
this Agreement; and
<PAGE>
<PAGE> 3
f. Its entry into this Agreement shall not cause a material
breach or be in material conflict with any other
agreement or obligation of the Administrator or any law
or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Administrator that:
a. It is a corporation duly incorporated, existing and in
good standing under the laws of the State of Maryland;
b. It has full power and authority to enter into and perform
this Agreement;
c. All requisite corporate proceedings have been taken to
authorize the Fund to enter into and perform this
Agreement;
d. It is an investment company duly registered under the
1940 Act;
e. A registration statement with respect to the Shares under
the 1933 Act and the 1940 Act has been filed and has
become effective. The Fund also warrants to the
Administrator that as of the date of commencement of this
Agreement, all necessary filings under the securities
laws of the states in which the Fund offers or sells its
Shares will have been made;
f. No legal or administrative proceedings have been
instituted or threatened which would impair the Fund's
ability to perform its duties and obligations under this
Agreement;
g. Its entry into this Agreement shall not cause a material
breach or be in material conflict with any other
agreement or obligation of the Fund or any law or
regulation applicable to it; and
h. As of the close of business on the date of this
Agreement, the Fund is authorized to issue Shares in the
amounts set forth in Schedule A to this Agreement.
5. ADMINISTRATIVE SERVICES
The Administrator shall provide the following administrative
services, subject to the general supervision and direction of the
Fund, and to review and correction by the Fund's independent accountants
and legal counsel, and in accordance with policies and procedures which may
be established from time to time between the Fund and the Administrator:
a. Oversee the determination and publication by the Fund's
custodian (the "Custodian") of the net asset value of
each Series in accordance with applicable regulations and
the Fund's policy as adopted from time to time by the
Board;
<PAGE>
<PAGE> 4
b. Oversee the maintenance by the Custodian of certain books
and records of the Fund as required under Rule 31a-1(b)
of the 1940 Act;
c. Maintain those books and records of the Fund that are
required under Rule 31a-1(b) of the 1940 Act and not
otherwise maintained by the Custodian, distributor,
transfer agent and dividend disbursing agent (the
"Transfer Agent") or the Adviser, including without
limitation, the books and records required to be
maintained under paragraphs (4) and (10) of such Rule,
unless otherwise directed by the Fund;
d. Prepare each Series' federal, state and local income tax
returns for review by the Fund's treasurer and
independent accountants prior to their filing by the
Fund's treasurer;
e. Review the calculation, submit for approval and arrange
for payment of the Fund's expenses and ensure proper
accounting treatment and allocation of the same to each
Series, where applicable;
f. Prepare each Series' expense projections, establish
accruals and review the same on a periodic basis and
submit the same for review by the Fund's treasurer;
g. Prepare, for review and approval by officers of the Fund,
financial information for the Fund's semi-annual and
annual reports, proxy statements and other communications
required by law, regulation or otherwise to be sent to
Fund shareholders, and arrange for the printing and
dissemination of such reports and communications to
record and through The Depository Trust Company to
beneficial owners of Shares;
h. Prepare, for review and approval by an officer of the
Fund, the Fund's periodic financial reports required to
be filed with the Securities and Exchange Commission
("SEC") on Form N-SAR and the financial information
required by Form N-1A and such other reports, forms or
filings as may be mutually agreed upon by the Fund and
the Administrator;
i. Prepare such reports relating to the business and affairs
of the Fund as may be mutually agreed upon and not
otherwise prepared by the Fund's Adviser, Custodian,
Transfer Agent, distributor, legal counsel or independent
accountants;
j. Prepare recommendations as to each Series' income and
capital gains available for distribution; calculate such
distributions for each Series in accordance with
applicable regulations and the distribution policies set
forth in the Fund's registration statement, and assist
Fund management in making final determination of
distribution amounts;
<PAGE>
<PAGE> 5
k. Monitor the Fund's share capital activity and notify the
Fund when a specified percentage of the authorized number
of Shares of each Series has been issued;
l. Make such reports and recommendations to the Fund's
officers and/or the Board concerning the performance of
the independent accountants and such other service
providers as the Board may reasonably request;
m. Make such reports and recommendations to the Fund's
officers and/or the Board concerning the performance and
fees of the Fund's Custodian, Transfer Agent and
distributor and the fees of the Fund's Adviser and
Administrator as the Board may reasonably request;
n. Oversee and review calculations of fees paid to the
Fund's Adviser, Administrator, Custodian, Transfer Agent
and distributor and pursuant to Rule 12b-1 plan(s) of the
Fund and its Series;
o. Consult with the Fund's officers, independent accountants
and legal counsel in establishing and implementing the
accounting policies and procedures of the Fund;
p. Review implementation of any dividend reinvestment
programs authorized by the Board;
q. Oversee the proper treatment/recording of all
transactions including, but not limited to, portfolio
transactions, capital stock transactions and income and
expense items, and reconciliation of such records with
Fund accounting records; monitor such records against
the list of approved brokers, compile all transactions
effected by the Adviser and provide the Fund with related
reports as agreed upon;
r. Monitor corporate actions on portfolio securities, the
receipt of other income, and cash and other
disbursements;
s. Monitor each Series' collection of refunds or rebates of
withholdings or other foreign taxes paid;
t. Prepare, and after review by the Fund's treasurer,
provide IRS Forms 1099 or 1042 to all persons (other than
shareholders) to whom the Fund is required to deliver
such forms;
u. Obtain Employer Identification Numbers and CUSIP numbers
for each Series;
v. Respond to or refer to the Fund's officers, distributor
or Transfer Agent shareholder inquiries relating to the
Fund;
<PAGE>
<PAGE> 6
w. Provide periodic testing of portfolios and portfolio
transactions to assist the Fund's Adviser in complying
with Internal Revenue Code mandatory qualification
requirements, the requirements of the 1940 Act, including
Rule 17e-1 thereunder, and Fund Prospectus restrictions,
as may be mutually agreed upon;
x. Review and provide assistance on shareholder
communications at the request of the Fund or the Fund's
distributor;
y. Maintain and monitor general Fund calendar for reporting,
filing and compliance purposes;
z. Maintain copies of the Fund's charter document and by-
laws;
aa. File annual and semi-annual shareholder reports with the
appropriate regulatory or self-regulatory agencies;
review text of "President's letters" to shareholders and
"Management's Discussion of Fund Performance" or any
equivalent text (which shall also be subject to review by
the Fund's independent accountants and legal counsel);
bb. Provide consultation on regulatory matters relating to
portfolio management, Fund operations and any potential
changes in each Series' investment policies, operations
or structure; act as liaison to outside legal counsel to
the Fund and, where applicable, to legal counsel to the
Fund's Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund;
cc. Develop or assist in developing guidelines and procedures
to improve overall accounting control and compliance by
the Fund and its various agents;
dd. Counsel and assist the Fund in the handling of routine
regulatory examinations and work closely with the Fund's
legal counsel in response to any non-routine regulatory
matters;
ee. Make presentations at Board meetings where appropriate
and follow up on matters raised at Board meetings;
ff. Provide assistance to the Fund's officers or the Adviser
in connection with notices, communications and press
releases for the NYSE pursuant to the Fund's listing
agreement with respect to the Shares; and
gg. Subject to review by the Fund's legal counsel,
1. prepare Rule 24f-2 Notices; and
2. maintain any state registrations or exemptions
from registration of the Fund's securities as
detailed in Schedule C to this Agreement.
The Administrator will also provide the office facilities and
the personnel required by it to perform the services contemplated herein.
<PAGE>
<PAGE> 7
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Administrator shall receive from the Fund with respect to
each Series such compensation for the Administrator's services provided
pursuant to this Agreement as may be agreed to from time to time in a
written fee schedule approved by the parties and initially set forth in
Schedule B to this Agreement. The fees are to be billed monthly and shall
be due and payable promptly upon receipt of the invoice. Upon the
termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to
the proportion which such part bears to the full monthly period and shall
be payable upon the date of termination of this Agreement. In addition,
the Fund shall reimburse the Administrator for reasonable out-of-pocket
costs incurred in connection with its services under this Agreement.
The Fund agrees to reimburse the Administrator promptly for
any equipment and supplies specially ordered by or for the Fund through the
Administrator and for any other expenses not contemplated by this Agreement
that the Administrator may incur on the Fund's behalf at the Fund's request
or as consented to by the Fund in advance in writing.
The Fund will bear all expenses that are incurred in its
operation and not specifically assumed by the Administrator. Expenses to
be borne directly or indirectly by the Fund with respect to each Series
include, but are not limited to: organizational expenses; cost of services
of independent accountants and outside legal and tax counsel (including
such counsel's review of the Fund's registration statement, proxy
materials, federal and state tax qualification as a regulated investment
company and other reports and materials prepared by the Administrator under
this Agreement); cost of any services contracted for by the Fund directly
from parties other than the Administrator; cost of trading operations and
brokerage fees, commissions and transfer taxes in connection with the
purchase and sale of securities for the Fund; investment advisory fees;
taxes, insurance premiums and other fees and expenses applicable to its
operation; costs incidental to any meetings of shareholders including, but
not limited to, legal fees, fees of independent accountants and proxy
filing fees and the costs of preparation (other than the preparation
specified in Section 5, subject to Schedule B), printing and mailing of any
proxy materials; costs incidental to Board meetings, including fees and
expenses of Board members; the salary and expenses of any officer or
director/trustee of the Fund (to the extent that any are paid); costs
incidental to the preparation (other than the preparation specified in
Section 5, subject to Schedule B), printing and distribution of the Fund's
shareholder reports; cost of typesetting and printing of prospectuses; cost
of preparation (other than the preparation specified in Section 5, subject
to Schedule B), and filing of the Fund's tax returns, Form N-1A and Form N-
SAR, and all notices, registrations and amendments associated with
applicable federal and state tax and securities laws; all applicable
registration fees and filing fees required under federal and state
securities laws; fidelity bond and directors' and officers' liability
insurance and the cost of independent pricing services used in computing
the net asset value of the Fund's Series, as set forth in the Custodian
Contract between the Fund and the Administrator.
The Administrator is authorized to and may employ or associate with
such person or persons as the Administrator may deem desirable to assist it
in performing its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by the Administrator
and that the Administrator shall be as fully responsible to the Fund for
the acts and omissions of any such person or persons as it is for its own
acts and omissions; and further provided
<PAGE>
<PAGE> 8
that the Administrator shall not make a material delegation of its duties,
except in accordance with Section 14 of this Agreement.
7. INSTRUCTIONS AND ADVICE
At any time the Administrator may apply to any officer of the
Fund for instructions and may consult with outside counsel for the Fund or
the independent accountants for the Fund at the expense of the Fund or its
own legal counsel, with respect to any matter arising in connection with
the services to be performed by the Administrator under this Agreement.
Subject to Sec. 8 of this Agreement, the Administrator shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by
it in good faith in reliance upon any such instructions or advice or upon
any paper or document reasonably believed by it to be genuine and to have
been signed by the proper person or persons. The Administrator shall not
be held to have notice of any change of authority of any person until
receipt of written notice thereof from the Fund. Nothing in this
paragraph shall be construed as imposing upon the Administrator any
obligation to seek such instructions or advice.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Administrator shall be responsible for the performance of
only such duties as are set forth in this Agreement and except as otherwise
provided under Section 6, shall have no responsibility for the actions or
activities of any other party, including other service providers. The
Administrator shall have no liability for any error of judgement or mistake
of law or for any loss or damage resulting from the performance or
nonperformance of its duties hereunder except for any loss or damage
resulting from acts or omissions of the Administrator, its officers or
employees involving bad faith, [gross] negligence, willful misconduct or
reckless disregard of its or their obligations and duties under this
Agreement. The Administrator shall not be liable for consequential damages
under any provision of this Agreement or for any consequential damages
arising out of any act or failure to act hereunder. [In any event, the
Administrator's liability under this Agreement shall be limited to its
total annual compensation earned and fees paid hereunder during the
preceding twelve months for any liability or loss suffered by the Fund,
including, but not limited to, any liability relating to qualification of
the Fund as a regulated investment company or any liability relating to the
Fund's compliance with any federal or state tax or securities statute,
regulation or ruling.]
The Fund shall indemnify and hold the Administrator harmless
from all loss, cost, damage and expense, including reasonable fees and
expenses for counsel, incurred by the Administrator resulting from any
claim, demand, action or suit in connection with the Administrator's
acceptance of this Agreement, any action or omission by it in the
performance of its duties hereunder, or as a result of acting upon any
instructions reasonably believed by it to have been duly authorized by the
Fund, provided that this indemnification shall not apply to actions or
omissions of the Administrator, its officers or employees in cases of its
or their own bad faith, [gross] negligence, willful misconduct or reckless
disregard of its or their obligations and duties under this Agreement.
The Fund will be entitled to participate at its own expense in
the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any liability subject to the indemnification provided above. In
the event the Fund elects to assume the defense of any such suit and retain
counsel, the Administrator or any of its affiliated persons, named as
defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) the
<PAGE>
<PAGE> 9
Fund shall have specifically authorized the retaining of such counsel or
(ii) the Administrator shall have determined in good faith that the
retention of such counsel is required as a result of a conflict of
interest.
The indemnification contained herein shall survive the
termination of this Agreement.
9. CONFIDENTIALITY
The Administrator agrees that, except as otherwise required by
law, it will keep confidential all books, records and information in its
possession relating to the Fund or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request or with
the written consent of the Fund.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Fund assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations
applicable to it.
In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Administrator agrees that all records which it maintains for
the Fund shall at all times remain the property of the Fund, shall be
readily accessible during normal business hours, and shall be promptly
surrendered upon the termination of the Agreement or otherwise on written
request. The Administrator further agrees that all records which it
maintains for the Fund pursuant to Rule 31a-1 under the 1940 Act will be
preserved for the periods prescribed by Rule 31a-2 under the 1940 Act
unless any such records are earlier surrendered as provided above. Records
shall be surrendered in usable machine-readable form.
11. SERVICES NOT EXCLUSIVE
The services of the Administrator to the Fund are not to be
deemed exclusive, and the Administrator shall be free to render similar
services to others. The Administrator shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or
authorized by the Fund from time to time, have no authority to act or
represent the Fund in any way or otherwise be deemed an agent of the Fund.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date first written
above. The Agreement shall [remain in effect for a period of one year from
the effective date, and shall automatically] continue in effect
[thereafter] unless terminated in writing by either party on sixty (60)
days' prior written notice. Termination of this Agreement with respect to
any given Series shall in no way affect the continued validity of this
Agreement with respect to any other Series. Upon termination of this
Agreement, the Fund shall pay to the Administrator such compensation and
any reimbursable expenses as may be due under the terms hereof as of the
date of such termination, including reasonable out-of-pocket expenses
associated with such termination. This Agreement may be modified or
amended from time to time by mutual written agreement of the parties
hereto.
<PAGE>
<PAGE> 10
13. NOTICES
Any notice or other communication authorized or required by
this Agreement to be given to either party shall be in writing and deemed
to have been given when delivered in person or by confirmed facsimile, or
posted by certified mail, return receipt requested, to the following
address (or such other address as a party may specify by written notice to
the other): if to the Fund: The CountryBaskets Index Fund, Inc., c/o
Deutsche Bank Securities Corporation, 31 West 52nd Street, New York, New
York, 10019, Attn: Robert Lynch, fax: (212) 468-5491; if to the
Administrator: State Street Bank and Trust Company, 1776 Heritage Drive,
North Quincy, Massachusetts 02171, Attn: David M. Elwood, Vice President
and Senior Counsel, fax: (617) 985-2497.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto
without the prior consent in writing of the other party, except that the
Administrator may assign this Agreement to a successor of all or a
substantial portion of its business, or to a party controlling, controlled
by or under common control with the Administrator.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the
benefit of the Fund and the Administrator and their respective successors
and permitted assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
previous representations, warranties or commitments regarding the services
to be performed hereunder whether oral or in writing.
17. WAIVER
The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be
in writing signed by the waiving party.
18. FORCE MAJEURE
The Administrator shall not be responsible or liable for any
failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond
its control, including without limitation, work stoppage, power or other
mechanical failure, computer virus which the Administrator could not have
prevented by using commercially reasonable methods, natural disaster,
governmental action or communication disruption.
19. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable,
the balance of the Agreement shall remain in effect, and if any provision
is inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
<PAGE>
<PAGE> 11
20. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
<PAGE>
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the date first written
above.
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
STATE STREET BANK AND TRUST COMPANY
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
<PAGE> 13
ADMINISTRATION AGREEMENT
The CountryBaskets(SM) Index Fund, Inc.
SCHEDULE A
Listing of Series and Authorized Shares
Series Authorized Shares as of , 1995
Australia Index Series
France Index Series
Germany Index Series
Hong Kong Index Series
Italy Index Series
Japan Index Series
South Africa Index Series
UK Index Series
US Index Series
<PAGE>
<PAGE> 14
ADMINISTRATION AGREEMENT
The CountryBaskets(SM) Index Fund, Inc.
SCHEDULE B
Fees and Expenses
<PAGE>
<PAGE> 15
ADMINISTRATION AGREEMENT
The CountryBaskets(SM) Index Fund, Inc.
SCHEDULE C
Registration of Fund Shares
with State Securities Administrators
The Administrator will prepare required documentation to maintain the
registration or exemption from registration of Shares of each Series in
accordance with the securities laws of each jurisdiction in which such
Shares are to be offered or sold pursuant to instructions given to the
Administrator by the Fund. The registration services shall consist of the
following:
1. Filing amendments to the Fund's Application to Register
Securities, if applicable;
2. Filing amendments to the Fund's registration statement where
required;
3. Filing Fund sales reports and advertising literature where
required;
4. Payment at the expense of the Fund of any Fund state
registration and filing fees in connection with the maintenance
of registration or exemption of the Shares;
5. Filing the Prospectus and statements of additional information
and any amendments or supplements thereto where required to
maintain the registration or exemption of the Shares;
6. Filing required documentation to renew registration of Fund as
issuer or issuer/dealer;
7. Filing of annual, semi-annual and quarterly reports and proxy
statements where required; and
8. The performance of such additional services as the
Administrator and the Fund may agree upon in writing.
Unless otherwise specified in writing by the Administrator, registration
services by the Administrator shall not include determining the
availability of exemptions under a jurisdiction's blue sky law. Any such
determination shall be made by the Fund or its legal counsel. In
connection with the services described herein, the Fund shall issue in
favor of the Administrator a power of attorney to register Shares on behalf
of the Fund, which power of attorney shall be substantially in the form of
Exhibit I attached hereto.
<PAGE>
<PAGE> 16
ADMINISTRATION AGREEMENT
The CountryBaskets(SM) Index Fund, Inc.
EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of , 1995 that The
CountryBaskets(SM) Index Fund, Inc. (the "Fund") makes, constitutes, and
appoints STATE STREET BANK AND TRUST COMPANY (the "Administrator") with
principal offices at 225 Franklin Street, Boston, Massachusetts its lawful
attorney-in-fact for it to do as if it were itself acting, the following:
1. REGISTRATION OF SHARES. The power to register shares of each
authorized Series of the Fund in each jurisdiction in which Shares
are offered or sold and in connection therewith the power to prepare,
execute, and deliver and file any and all applications, including
without limitation, applications to register shares, to register
agents, consents, including consents to service of process, reports,
including without limitation, all periodic reports, claims for
exemption, or other documents and instruments now or hereafter
required or appropriate in the judgement of the Administrator in
connection with the registration of Shares provided that this Limited
Power of Attorney shall not include the power to execute, deliver or
file any application, consent or other document to maintain an office
of the Fund in any state, to change the terms of the offering of the
Shares in any state from the terms set forth in its registration
statement, to qualify the Fund as a foreign corporation in any state
or to consent to service of process in any state other than with
respect to claims arising out of the offering of Shares.
2. CHECKS. The power to draw, endorse, and deposit checks in the name
of the Fund in connection with the registration of Shares of any
Series with state securities administrators.
The execution of this limited power of attorney shall be deemed coupled
with an interest and shall be revocable only upon receipt by the
Administrator of termination of such authority. Nothing herein shall be
construed to constitute the appointment of the Administrator as or
otherwise authorize the Administrator to act as an officer or director of
the Fund.
IN WITNESS WHEREOF, the Fund has caused this Agreement to be executed in
its name and on its behalf by and through its duly authorized officer, as
of the date first written above.
The CountryBaskets(SM) Index Fund, Inc.
By:
Name:
Title:
w:\...\agmts\cbi-fnd7.adm
<PAGE>
DRAFT 6/27/95
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
1G - Domestic Corp/Series
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
1. Terms of Appointment; Duties of the Bank...........1
2. Fees and Expenses..................................4
3. Representations and Warranties of the Bank.........5
4. Representations and Warranties of the Fund.........5
5. Data Access and Proprietary Information............5
6. Indemnification....................................7
7. Standard of Care...................................8
8. Covenants of the Fund and the Bank.................8
9. Termination of Agreement...........................9
10. Additional Series..................................9
11. Assignment.........................................9
12. Amendment..........................................9
13. Massachusetts Law to Apply........................10
14. Force Majeure.....................................10
15. Consequential Damages.............................10
16. Merger of Agreement...............................10
17. Counterparts......................................10
18. Book-Entry System.................................10
19. Schedule A........................................12
20. Schedule B........................................13
<PAGE>
<PAGE> 1
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of , 1995, by and between The
CountryBaskets(SM) Index Fund, Inc., a Maryland corporation, having its
principal office and place of business at 31 West 52nd Street, New York,
New York 10019 (the "Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal office and place of
business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares of common stock, par value
$.001 per share ("CB Shares(SM)"), in separate series, with each such series
representing interests in a separate portfolio of securities and other
assets;
WHEREAS, the Fund intends to sell and redeem CB Shares(SM) only in
aggregations of the number of CB Shares(SM) specified with respect to each
series (each a "Creation Unit");
WHEREAS, the Fund will initially offer CB Shares(SM) in nine series, the
Australia Index Series, the France Index Series, the Germany Index Series,
the Hong Kong Index Series, the Italy Index Series, the Japan Index Series,
the South Africa Index Series, the UK Index Series and the US Index Series
(each such series, together with all other series subsequently established
by the Fund and made subject to this Agreement in accordance with Section
10, being herein referred to as a "Series", and collectively as the
"Series");
WHEREAS, the CB Shares(SM) of each Series have been approved for listing on
the New York Stock Exchange ("NYSE"), subject to notice of issuance;
WHEREAS, the NYSE trading symbol, the CUSIP number of the CB Shares(SM) and
the number of CB Shares(SM) per Creation Unit of each Series is set forth
in Schedule A hereto;
WHEREAS, The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York ("DTC"), or its nominee
(together, the "Shareholder"), will be the initial record or registered
owner of all CB Shares(SM);
WHEREAS, certificates will not be issued for CB Shares(SM) unless neither
DTC nor a replacement depository shall be the depository for the
CB Shares(SM); and
WHEREAS, the Fund desires to appoint the Bank as the transfer agent and
dividend disbursing agent with respect to each Series and the Bank desires
to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
l. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this
Agreement and in the currently effective prospectus and
statement of additional information of the Fund (together,
the "Prospectus"), the Fund hereby employs and appoints the
Bank and the Bank agrees to act as transfer agent for the
<PAGE>
<PAGE> 2
Fund's authorized and issued CB Shares(SM) of each Series and
as the Fund's dividend disbursing agent.
1.2 Anything to the contrary herein notwithstanding, until such
time as the Fund issues certificates for the CB Shares(SM) and
neither DTC nor any replacement depository provides a book-
entry system for the CB Shares(SM), the CB Shares(SM) shall
be held in book-entry form only through the facilities of DTC
(or such other depository as may be selected by the Fund) and
the Bank shall deal with such CB Shares(SM) and perform its
services hereunder accordingly.
1.3 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time with respect to each Series by agreement between the
Fund and the Bank, the Bank shall:
(i) Review upon receipt from the Fund's distributor
(the "Distributor") orders for the purchase of
Creation Unit aggregations of CB Shares(SM) which
have been submitted to the Distributor and based on
its records and the records of DTC determine
whether the order if accepted will result in the
depositor of the Fund Basket or Baskets owning or
appearing to own eighty percent (80%) of the
outstanding CB Shares(SM) of such Series and
provide advice of the same to the Distributor;
(ii) Receive from the Distributor purchase orders for
Creation Unit aggregations of CB Shares(SM)
received in good form and accepted by or on behalf
of the Fund by the Distributor, and pursuant to
such orders issue the appropriate number of
CB Shares(SM) of the applicable Series and hold
such CB Shares(SM) in the account of the
shareholder of record (the "Shareholder") for each
of the respective Series of the Fund;
(iii) Provide the Distributor, by means of facsimile,
with confirmations of the issuance of Creation
Units, such confirmations to be delivered by the
Distributor;
(iv) Upon receipt of redemption requests in proper form
accepted by the Distributor, deliver the
appropriate documentation thereof to the authorized
custodian of the Fund (the "Custodian") and redeem
the appropriate number of CB Shares(SM) held in the
account of the Shareholder;
(v) Prepare and transmit by means of DTC's book-entry
system payments for dividends and distributions
declared by the Fund with respect to each Series;
(vi) Maintain the record of the name and address of the
Shareholder and the number of CB Shares(SM) issued
by each Series of the Fund and held by the
Shareholder;
(vii) Record the issuance of CB Shares(SM) of the Fund
and maintain pursuant to SEC Rule 17Ad-10(e) a
record of the total number of CB Shares(SM) of the
Fund and of each Series which are authorized, based
upon data provided to it by the Fund, issued and
outstanding. The Bank shall also provide the Fund
on a regular basis with the total number of CB
<PAGE>
<PAGE> 3
Shares(SM) which are authorized, issued and
outstanding and shall not issue any Shares of
a Series in excess of the number of authorized
Shares of such Series and shall have no
obligation when recording the issuance
of CB Shares(SM)[, except as expressly provided
herein,] to take cognizance of any laws
relating to the issue or sale of such CB
Shares(SM), which function shall be the sole
responsibility of the Fund;
(viii) On days that a Series may accept orders for
purchases or redemptions, calculate and
transmit to the Custodian and the Fund's
administrator the number of outstanding CB
Shares(SM) for each Series;
(ix) On days that a Series may accept orders for
purchases or redemptions, transmit to the
Custodian, the Fund and DTC the amount of
CB Shares(SM) purchased and redeemed for such
Series;
(x) Confirm to DTC the number of CB Shares(SM)
evidenced by each global certificate in registered
form (the "Global Certificate") issued to the
Shareholder, as DTC may reasonably request;
(xi) Prepare and deliver other reports, information and
documents to DTC as DTC may reasonably request;
(xii) On days that a Series may accept orders for
purchases or redemptions, notify the Distributor of
the net asset value per CB Share(SM) of such Series
by sending a telecopy to the office of the
Distributor at the address set forth in the Fund's
Prospectus;
(xiii) Extend voting rights to the Shareholder
and/or beneficial owners of CB Shares(SM) in
accordance with the policies and procedures
of DTC for book-entry only securities;
(xiv) Issue Shares and maintain Shareholder records in
accordance with the Prospectus in connection with
any dividend reinvestment plan, if adopted by the
Board of Directors; and
(xv) Maintain those books and records of the Fund that
are required under Rule 31a-1(b)(2)(D) of the 1940
Act unless otherwise directed by the Fund.
(b) In addition to and neither in lieu nor in contravention
of the services set forth in the above paragraph (a), the
Bank shall perform the customary services of a transfer
agent and dividend disbursing agent, including but not
limited to: maintaining the account of the Shareholder
for each Series, obtaining a list of beneficial owners
of CB Shares(SM) holding through DTC at the request of
the Fund, mailing proxy material, shareholder reports
and Prospectuses to the Shareholder or DTC participants
or beneficial owners of CB Shares(SM) at the request
of the Distributor or the Fund.
<PAGE>
<PAGE> 4
(c) For so long as CB Shares(SM) are represented by Global
Certificates, the following shall be delivered to DTC for
delivery to beneficial owners in accordance with the
procedures for book-entry only securities of DTC:
(i) Annual and semi-annual reports of the Fund;
(ii) Proxies, proxy statements and other proxy
soliciting materials;
(iii) Prospectus and amendments and supplements to the
Prospectus, including stickers; and
(iv) Other communications as may be required by law or
reasonably requested by the Fund.
[(d) Unless this Agreement is amended in accordance with
Section 12 hereof, the Bank will not provide any services
under this Agreement if at any time certificates in
definitive form other than the Global Certificate are
issued by the Fund.]
(d) The Bank shall provide additional services on behalf of
the Fund (e.g., escheatment services) which may be agreed
upon in writing between the Fund and the Bank.
2. Fees and Expenses
2.1 For the performance by the Bank of the services to be rendered
by it pursuant to this Agreement, the Fund agrees with respect
to each Series to pay the Bank an annual maintenance fee for
each Shareholder account as set forth in the initial fee
schedule attached hereto as Schedule B. Such fees and
out-of-pocket expenses and advances identified under Section
2.2 below may be changed from time to time subject to mutual
written agreement between the Fund and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Fund
agrees with respect to each Series to reimburse the Bank for
reasonable out-of-pocket expenses, including but not limited to
postage, forms, telephone, microfilm, microfiche, tabulating
proxies, records storage or advances incurred by the Bank for
the items set out in Schedule B. In addition, any other
expenses incurred by the Bank at the request or with the
consent of the Fund, will be reimbursed by the Fund with
respect to each Series.
2.3 The Fund agrees with respect to each Series to pay all fees and
reimbursable expenses promptly upon the receipt of the billing
notice. Postage for mailing of dividends, proxies, Fund
reports and other mailings to all shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior
to the mailing date of such materials.
<PAGE>
<PAGE> 5
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized, existing and in good
standing under the laws of The Commonwealth of Massachusetts;
3.2 It is duly qualified to carry on its business in The
Commonwealth of Massachusetts;
3.3 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement;
3.4 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
3.5 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and
3.6 It is duly qualified to act as transfer agent and registrar in
accordance with the requirements of the New York Stock
Exchange.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a corporation, duly incorporated, existing and in good
standing under the laws of the State of Maryland;
4.2 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this
Agreement;
4.3 All necessary corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
4.4 It is an open-end and non-diversified management investment
company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
4.5 A registration statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act with respect to each
of the Series has become and is currently effective.
5. Data Access and Proprietary Information
5.1 The Fund acknowledges that the computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Bank as part
of the Fund's ability to access certain Fund-related share
activity and shareholder data ("Customer Data") maintained by
the Bank on databases under the control and ownership of the
Bank or other third party ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary
<PAGE>
<PAGE> 6
information (collectively, "Proprietary Information") of
substantial value to the Bank or other third party. In no
event shall Proprietary Information be deemed Customer Data or
Customer Data be deemed Proprietary Information. The Fund
agrees to treat all Proprietary Information as proprietary to
the Bank and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as
may be provided hereunder. Without limiting the foregoing, the
Fund agrees for itself, its employees, officers and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in
accordance with the Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information except for use in reports
prepared for the Fund's officers or directors or for use
in reports prepared for the Fund by the Fund's service
providers;
(c) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such
access is inadvertently obtained, to inform in a timely
manner of such fact and dispose of such information in
accordance with the Bank's instructions;
(d) to refrain from causing or allowing third-party data
acquired hereunder from being retransmitted to any other
computer facility or other location, except with the
prior written consent of the Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank
to protect at the Bank's expense the rights of the Bank
in Proprietary Information at common law, under federal
copyright law and under other federal or state law.
Each party shall take reasonable efforts to advise its officers
or employees of their obligations pursuant to this Section 5.
The obligations of this Section shall survive any termination
of this Agreement.
5.2 If the Fund notifies the Bank that any of the Data Access
Services do not operate in material compliance with the most
recently issued user documentation for such services, the Bank
shall endeavor in a timely manner to correct such failure.
Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for
the contents of such data and the Fund agrees to make no claim
against the Bank arising out of the contents of such third-
party data, including, but not limited to, the accuracy
thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND
SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE
PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE BANK EXPRESSLY
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.3 If the transactions available to the Fund include the ability
to originate electronic instructions to the Bank in order to
(i) effect the transfer or movement of cash or CB Shares(SM) or
(ii) transmit shareholder information or other information,
<PAGE> 7
then in such event the Bank shall be entitled to rely on the
validity and authenticity of such instruction without
undertaking any further inquiry as long as such instruction
is undertaken in conformity with security procedures
established by the Bank from time to time.
6. Indemnification
6.1 The Bank shall not be responsible for, and the Fund shall with
respect to each Series indemnify and hold the Bank harmless
from and against, any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
[identified to the Fund in Section 11.3 hereof]
required to be taken pursuant to this Agreement, provided
that such actions are taken in good faith and without
negligence, willful misconduct or reckless disregard of
its or their obligations and duties under this Agreement;
(b) The Fund's lack of good faith, or its negligence or
willful misconduct which arise out of the breach of any
representation or warranty of the Fund hereunder;
(c) The good faith reliance on or use by the Bank or its
agents or subcontractors [identified to the Fund in
Section 11.3 hereof] of information, records,
documents or services which (i) are received by the Bank
or its agents or such subcontractors from persons
authorized by the Fund's Board of Directors ("Authorized
Persons") or (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on
behalf of the Fund;
(d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors [identified to the Fund in
Section 11.3 hereof] of any instructions or requests
of the Fund received from Authorized Persons with respect
to each Series; or
(e) The offer or sale of CB Shares(SM) in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of any
state or in violation of any stop order or other
determination or ruling by any federal agency or any
state with respect to the offer or sale of such CB
Shares(SM) in such state.
6.2 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect
to any matter arising in connection with the services to be
performed by the Bank under this Agreement, and, subject
to the limitations or indemnifications of Sec. 601, the Bank
and its agents or subcontractors [identified to the Fund in
Section 11.3 hereof] shall not be liable and shall be
indemnified by the Fund with respect to the applicable Series
for any action taken or omitted by it in good faith reliance
upon such instructions or upon the opinion of such counsel.
The Bank, its agents and subcontractors [identified to the
Fund in Section 11.3 hereof] shall be protected and
indemnified in acting upon any paper or document furnished by
or on behalf of the Fund, reasonably believed to be genuine and
to have been signed by the proper person or persons, or upon
any instruction, information, data, records or documents
provided the Bank or its agents or such subcontractors by
machine readable input, telex, CRT data entry or other similar
means authorized by the Fund, and shall not be held to have
notice of any change of authority of any person, until receipt
of written notice thereof from the Fund.
<PAGE> 8
6.3 In order that the indemnification provisions contained in this
Section 6 shall apply to a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify
the Fund of such assertion and shall keep the Fund advised with
respect to all developments concerning such claim. The Fund
shall have the option to participate with the Bank in the
defense of such claim or to defend against said claim in its
own name or in the name of the Bank. The Bank shall in no case
confess any claim or make any compromise or settlement in any
case in which the Fund may be required to indemnify the Bank
except with the Fund's prior written consent.
7. Standard of Care
The Bank shall at all times act in good faith and agrees to use
its best efforts within reasonable limits to insure the
delivery and accuracy of all services to be performed,
including any documents or information to be provided by it,
under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said
errors are caused by its negligence, bad faith, or willful
misconduct or that of its agents, employees or subcontractors
or the reckless disregard of its or their obligations and
duties hereunder.
8. Covenants of the Fund and the Bank
8.1 The Fund shall with respect to each Series promptly furnish to
the Bank the following:
(a) Certified copies of the resolutions of the Board of
Directors of the Fund authorizing (1) the appointment of
the Bank and the execution and delivery of this Agreement
and (2) the Authorized Persons to give instructions or
requests to the Bank pursuant to this Agreement;
(b) A copy of the Articles of Incorporation and By-Laws of
the Fund and all amendments thereto; and
(c) A copy of the Fund's currently effective registration
statement under the 1933 Act and the 1940 Act and the
Fund's Prospectus relating to all Series and all
amendments and supplements thereto.
8.2 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may
reasonably deem advisable. To the extent required by Section
31 of the 1940 Act and the rules thereunder, the Bank agrees
that all such records prepared or maintained by the Bank
relating to the services to be performed by the Bank hereunder
are the property of the Fund and will be preserved, maintained
and made available in accordance with such Section and rules,
and will be surrendered promptly to the Fund upon the
termination of this Agreement or on and in accordance with its
request. All records shall be reasonably available for
inspection and use by the Fund.
8.3 The Bank and the Fund agree that all books, records,
information and data pertaining to the business of the other
party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any
other person, except as may be required by law.
<PAGE> 9
8.4 In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Bank will endeavor to
notify the Fund and to secure instructions from an Authorized
Person of the Fund as to such inspection. The Bank reserves
the right, however, to exhibit the shareholder records to any
person whenever it is advised by its counsel that it may be
held liable under applicable law for the failure to exhibit the
shareholder records to such person.
9. Termination of Agreement
9.1 This Agreement may be terminated by either party upon sixty
(60) days' written notice to the other.
9.2 Upon the termination of this Agreement by either party, all
reasonable out-of-pocket expenses associated with the delivery
of records and material in accordance with the Fund's
instructions will be borne by the Fund with respect to each
Series. Additionally, the Bank reserves the right to charge
for any other reasonable expenses associated with such
termination. [In the case of termination by the Fund, the Bank
reserves the right to impose a charge equivalent to the average
of three (3) months' fees.]
10. Additional Series
In the event that at any time the Fund establishes one or more
Series in addition to those then set forth in Schedule A for
which it desires to have the Bank render services as transfer
agent and dividend disbursing agent under the terms hereof, it
shall so notify the Bank in writing, and if the Bank agrees in
writing to provide such services, such Series of the Fund shall
become a Series subject to the provisions of this Agreement and
shall be added to Schedule A.
11. Assignment
11.1 Except as provided in Section 11.3 below, neither this
Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written consent of
the other party.
11.2 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective successors and permitted
assigns.
11.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston
Financial Data Services, Inc., a Massachusetts corporation
("BFDS"), which is duly registered as a transfer agent pursuant
to Section 17A(c)(1) of the Securities Exchange Act of 1934, as
amended ("Section 17A(c)(1)"), (ii) a BFDS subsidiary duly
registered as a transfer agent pursuant to Section 17A(c)(1) or
(iii) a BFDS affiliate; provided, however, that the Bank shall
be as fully responsible to the Fund for the acts and omissions
of any subcontractor as it is for its own acts and omissions.
12. Amendment
This Agreement may be amended or modified by a written
agreement executed by both parties.
<PAGE> 10
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts without reference to the choice
of law provisions thereof.
14. Force Majeure
In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably
beyond its control, or other causes reasonably beyond its
control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or
otherwise from such causes.
15. Consequential Damages
Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this
Agreement or for any consequential damages arising out of any
act or failure to act hereunder.
16. Merger of Agreement
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect
to the subject matter hereof whether oral or written.
17. Counterparts
This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
18. Book-Entry System
Until the issuance of certificates in definitive form other
than the Global Certificate, the rights of beneficial owners of
CB Shares(SM) shall be exercised through DTC and the DTC
participants, and shall be those established by law and
agreements between DTC and DTC participants.
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first written above.
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
By:
Name:
Title:
ATTEST:
STATE STREET BANK AND TRUST COMPANY
By:
Name:
Title: Executive Vice President
ATTEST:
<PAGE> 12
Transfer Agency and Service Agreement
The CountryBaskets(SM) Index Fund, Inc.
Schedule A
Name of Series CUSIP CB Shares(SM) Per
(Trading Symbol) Creation Unit
Australia Index Series 75,000
(GXA)
France Index Series 100,000
(GXF)
Germany Index Series 100,000
(GXG)
Hong Kong Index Series 75,000
(GXH)
Italy Index Series 75,000
(GXI)
Japan Index Series 100,000
(GXJ)
South Africa Index Series 75,000
(GXR)
UK Index Series 100,000
(GXK)
US Index Series 100,000
(GXU)
<PAGE> 13
Transfer Agency and Service Agreement
The CountryBaskets(SM) Index Fund, Inc.
Schedule B
Fee Schedule
W:\...\surprise\agmts\cbi-fnd6.ta
<PAGE> 1
DRAFT 6/27/95
SUBSCRIPTION AGREEMENT
The CountryBaskets Index Fund, Inc., a Maryland
corporation (the "Fund"), and ALPS Mutual Funds Services,
Inc., a Colorado corporation (the "Distributor"), hereby agree
as follows:
1. The Fund hereby offers the Distributor and the
Distributor hereby agrees to purchase the following shares,
par value $.001 per share, of each series ("Series") of the
Fund: _______ shares at $_______ per share representing
_______ shares of the Australia Index Series; _______ shares
at $_______ per share representing shares of the France Index
Series; _______ shares at $_______ per share representing
_______ shares of the Germany Index Series; _______ shares
at $_______ per share representing _______ shares of the
Hong Kong Index Series; _______ shares at $_______ per share
representing _______ shares of the Italy Index Series; _______
shares at $_______ per share representing _______ shares of
the Japan Index Series; _______ shares at $_______ per share
representing _______ shares of the South Africa Index Series;
_______ shares at $_______ per share representing _______
shares of the UK Index Series; and _______ shares at $_______
per share representing _______ shares in US Index Series
(collectively, the "Shares"). The Distributor hereby
acknowledges receipt of a purchase confirmation reflecting the
purchase of the Shares, and the Fund hereby acknowledges
receipt from the Distributor of cash in the amount of $100,000
in full payment for the Shares.
2. The Distributor represents and warrants to the
Fund that the Shares are being acquired for investment
purposes and not with a view to the distribution thereof.
3. The Distributor agrees that if it or any direct
or indirect transferee of the Shares redeems the Shares prior
to the fifth anniversary of the date the Fund begins its
investment activities, the Distributor will pay to the Fund an
amount equal to the number resulting from multiplying each
Fund's total unamortized organizational expenses by a
fraction, the numerator of which is equal to the number of
Shares redeemed by the Distributor or such transferee and the
denominator of which is equal to the number of shares of each
Series outstanding as of the date of such redemption, as long
as the administrative position
<PAGE> 2
of the staff of the Securities and Exchange Commission
requires such reimbursement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the ____ day of ________, 1995.
THE COUNTRYBASKETS INDEX FUND, INC.
Attest:
_____________________ By:__________________________________
Name: Name:
Title:
ALPS MUTUAL FUNDS SERVICES, INC.
Attest:
_____________________ By:__________________________________
Name: Name:
Title:
<PAGE> 1
Draft - 6/27/95
CB(SM) Shares
BOOK-ENTRY-ONLY
Letter of Representation
The CountryBaskets(SM) Index Fund, Inc.
Name of Issuer
State Street Bank And Trust Company
Name of Agent
The Depository Trust Company 1995
55 Water Street (Date)
New York, NY 10041
Attention: General Counsel's Office
Re: CB(SM) Shares of The CountryBaskets(SM) Index Fund, Inc.
(Issue Description)
The purpose of this letter is to set out certain matters relating to the
above-referenced "CB(SM) Shares". State Street Bank and Trust Company (the
"Agent") is acting as Administrator, Custodian, Transfer Agent, Accounting
Agent, Paying Agent, or other Agent with respect to the CB(SM) Shares.
CB(SM) Shares are shares of common stock ("Shares") of The County
Baskets(SM) Index Fund, Inc. (the "Fund") issued by each of its initial
nine series, including: the Australia Index Series, the France Index
Series, the Germany Index Series, the Hong Kong Index Series, the Italy
Index Series, the Japan Index Series, the South Africa Index Series, the UK
Index Series, and the US Index Series pursuant to the Fund's articles of
incorporation and bylaws and its registration statement on Form N-1A and
related documents and instruments (the "Documents"). The Fund's Board of
Directors may authorize additional series. Pursuant to offering made in
accordance with the Documents, the Fund will sell and redeem CB(SM) Shares
of each series only in aggregations of a specified number of Shares
("Creation Units"). See Appendix A. CB(SM) Shares will be listed on the
New York Stock
<PAGE> 2
Exchange. The Depository Trust Company ("DTC") will act as securities
depository for the CB(SM) Shares, and the DTC or its nominee will be the
record or registered owner of all outstanding CB(SM) Shares.
To induce DTC to accept the CB(SM) Shares as eligible for deposit at DTC
and act in accordance with its Rules with respect to the CB(SM) Shares, the
Issuer and the Agent make the following representations to DTC.
1. The CB(SM) Shares of each series are Shares of common stock of an
open-end investment company registered or to be registered with the
Securities and Exchange Commission. Each series of CB(SM) Shares
will have its own CUSIP number. The Issuer shall cause to be
delivered at the time of the initial deposit a global certificate for
each of the series of CB(SM) Shares respectively (the "Certificates")
registered in the name of DTC's nominee, Cede & Co., to be held in
custody by the Agent on behalf of DTC, which will represent in each
case the total number of Shares of each series respectively issued by
the Fund, which number shall be adjusted as appropriate by the Agent.
Each Certificate shall bear the following legend:
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company ("DTC"), a New York corporation, to Issuer or its
agent for registration of transfer, exchange, or payment, and any
registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co., or in such other name as is
required by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC). ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co. has an interest herein.
The Certificate shall remain in the Agent's possession as custodian
for DTC pursuant to arrangements between the Agent and DTC, except as
provided below.
2. In the event of any solicitation of consents from or voting by
holders of the CB(SM) Shares, the Issuer shall
<PAGE> 3
establish a record date for such purposes and give DTC notice of such
record date not less than 15 calendar days in advance of such record
date to the extent possible. Notices to DTC pursuant to this paragraph
by telecopy shall be sent to DTC's Reorganization Department at (212)
709-6896, or (212) 709-6897, and receipt of such notices shall be
confirmed by telephoning (212) 709-6870. Notices to DTC pursuant to
this Paragraph by mail or by any other means shall be sent to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
Each CB(SM) Share will have one vote. DTC shall make available to the
Issuer and Agent upon written request and for a customary fee from time to
time a listing of the CB(SM) Share holdings of each DTC Participant. Such
request will be addressed to DTC's Reorganization Department. Notices sent
by telecopy will be sent to (212) 709-1093 or (212) 709-1094. Notices sent
by mail or by any other means will be sent to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
The Issuer or Agent shall provide each such DTC Participant with
copies of such notice, statement or other communication, in such
form, number and at such place as such DTC Participant may reasonably
request, in order that such notice, statement, or communication may
be transmitted to by such DTC Participant, directly or indirectly, to
the beneficial owners of the CB(SM) Shares.
3. All notices and payment advices sent to DTC shall contain the CUSIP
number of the CB(SM) Shares of the respective series.
4. Dividend or distribution payments by the Fund or any series thereof
shall be received by Cede & Co., a nominee of DTC, or its registered
assignments in same-day funds on each payment date (or the equivalent
in accordance with existing arrangements between the
<PAGE> 4
Issuer or Agent and DTC). Such payments shall be made payable to the
order of Cede & Co., and addressed as follows:
Manager, Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square, 24th Floor
New York, NY 10004-2695
In the event that the Fund takes any action in respect of payment or
nonpayment of dividends or other distributions on CB(SM) Shares of any
series, the Agent shall promptly notify DTC of such action, and shall give
DTC notice of any applicable record date and the per CB(SM) Share amount to
be paid. Such notice shall be given by telephoning the Supervisor of DTC's
Dividend Announcement Section at (212) 709-1270 or by telecopy sent to
(212) 709-1723 on the date the dividend is declared. Such verbal or
telecopy notice shall be followed promptly by written confirmation sent by
a secure means to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
5. DTC may direct the Issuer or Agent to use any other telephone number
for facsimile transmission, address or department of DTC as the
number, address or department to which notices may be sent.
6. Upon written request to DTC's Reorganization Department DTC shall
release security position listings only to such authorized persons of
the Issuer and Agent as are listed in the attached Appendix B, as
amended from time to time.
7. In the event of issuance and redemption of CB(SM) Shares in Creation
Unit size aggregations or any similar transactions necessitating an
increase or decrease in the number of outstanding CB(SM) Shares of
any series, DTC's DWAC procedures will be followed. Agent recognizes
that DTC accepts such instructions up until 6:30 p.m. New York City
time. Concurrently therewith, the Agent shall make appropriate
notation on an attachment to each applicable Certificate indicating
the amount of such decrease or increase and the total number of
CB(SM) Shares outstanding. On each day on which
<PAGE> 5
Agent is open for business and on which it receives an instruction
originated by a Participant through DTC's DWAC system to increase the
Participant's account by a specified number of shares (a "Deposit
Instruction"), Agent shall, before 6:30 p.m., New York City time,
approve or cancel the Deposit Instruction through the DWAC system.
On each day on which Agent is open for business and on which it
receives an instruction originated by a Participant through the DWAC
system to decrease the Participant's account by a specified number of
CB(SM) Shares (a "Withdrawal Instruction"), Agent shall, before 6:30
p.m. New York City time either approve or cancel the Withdrawal
Instruction through the DWAC system. Agent agrees that its approval
of a Deposit or Withdrawal Instruction shall be deemed to be the
receipt by DTC of registration of transfer to the name of Cede & Co.
for the quantity of CB(SM) Shares evidenced by the instruction after
the Deposit or Withdrawal Instruction is effected. All such
transactions shall be effected utilizing DTC's procedures as in
effect until further notice.
8. In the event the Issuer determines pursuant to the Document(s) that
beneficial owners of the CB(SM) Shares shall be able to obtain
certificated CB(SM) Shares, the Issuer or Agent shall notify DTC of
the availability of CB(SM) Share certificates and shall issue,
transfer and exchange CB(SM) Share certificates in appropriate
amounts as required by DTC and others.
9. (a) DTC may determine to discontinue providing its service as
securities depository with respect to the CB(SM) Shares at any time
by giving 90 days prior written notice to the Issuer or Agent (with a
copy to the Issuer) (at which time DTC will confirm with the Issuer
or Agent the aggregate number of CB(SM) Shares of each series
outstanding) and discharge its responsibilities with respect thereto
under applicable law.
(b) The Issuer may determine to discontinue the services of DTC
thereunder by giving 90 days prior written notice to DTC (at which
time DTC will confirm with the Agent the aggregate number of CB(SM)
Shares of each series outstanding).
10. If applicable, publication of tax information and other like
notification will also be made to DTC.
11. Issuer (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any
<PAGE> 6
person having an interest in the CB(SM) Shares any information
contained in the Certificate(s); and (b) acknowledges that neither
DTC's Participants nor any person having an interest in the CB(SM)
Shares shall be deemed to have notice of the provisions of the
Certificate(s) by virtue of submission of such Certificates(s) to
DTC.
12. Nothing herein shall be deemed to require the Agent to advance funds
on behalf of the Issuer.
Very truly yours,
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
(As Issuer)
THE DEPOSITORY TRUST COMPANY
By:
(Authorized Officer's Signature)
Dated: , 1995
STATE STREET BANK AND TRUST
(As Agent)
By:
(Authorized Officer's Signature)
Address for Purposes of Notice:
Received and Accepted:
<PAGE> 1
Draft of July 10, 1995
THE COUNTRYBASKETS(SM) INDEX FUND, INC.
________ INDEX SERIES
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
WHEREAS, The CountryBaskets(SM) Index Fund, Inc. (the "Fund")
is an open-end management investment company registered as such under the
Investment Company Act of 1940, as amended (the "Act"), and organized as a
series fund; and
WHEREAS, the Fund desires to adopt a Plan of Distribution
pursuant to Rule 12b-1 under the Act with respect to the shares of Common
Stock, par value $.001 per share (the "Shares" or "CB Shares(SM)"), of the
_________________ Index Series (the "Designated Series"; the Designated
Series and any other series of Shares of the Fund authorized from time to
time each being referred to herein as a "Series"), and the Board of
Directors of the Fund (the "Board of Directors") has determined that there
is a reasonable likelihood that adoption of this Plan of Distribution (the
"Plan") will benefit the Designated Series and its holders of Shares and
accordingly has approved the adoption of this Plan for the Designated
Series; and
WHEREAS, ALPS Mutual Funds Services, Inc., a Colorado
corporation (the "Distributor"), is the exclusive distributor of the
Shares;
NOW, THEREFORE, the Fund hereby adopts this Plan in accordance
with Rule 12b-1 under the Act on the following terms and conditions
(capitalized terms not otherwise defined herein having the meanings
assigned thereto in the Fund's registration statement under the Act and the
Securities Act of 1933):
1. Each Series will pay to the Distributor a fee, calculated
daily and payable monthly, that will not exceed, on an annualized basis,
.25% of such Series' average daily net assets. Such fee shall be paid to
the Distributor on the following basis:
(a) a portion of the fee (such portion, the
"Distributor's Fee"), equal to such Series' allocable portion of
(i) .02% per annum of the average aggregate daily net assets,
calculated on a daily basis ("Aggregate Net Assets"), of all
Series of the Fund up to Aggregate Net Assets of $2.5 billion,
plus (ii) 01% per annum of Aggregate Net Assets of all Series in
excess of $2.5 billion up to $5 billion, plus (iii) .005% per
annum of Aggregate Net Assets of all Series in excess of $5
billion, shall be paid to the Distributor, monthly in arrears,
<PAGE> 2
for its distribution-related services to all Series of the Fund
under the Distribution Agreement, dated as of __________________,
1995 (the "Distribution Agreement"), between the Distributor
and the Fund, including without limitation (A) acting as agent
of the Fund with respect to the sale and redemption of Shares
in "Creation Unit" size aggregations as set forth in the Fund's
registration statement under the Securities Act of 1933, (B)
disseminating information with respect to the "Fund Basket" of
securities applicable to purchases and redemptions of Creation
Unit aggregations of Shares and the "Cash Component" for
purchases of Creation Unit aggregations of Shares, all in
accordance with the Distribution Agreement, (C) generating and
transmitting confirmations of purchases of, and receipt of
requests for redemption of, Creation Unit aggregations of
Shares and delivering copies of the Fund's Prospectus and
Statement of Additional Information in connection with
purchases thereof; (D) implementing this 12b-1 Plan in
accordance with the terms hereof, including making payments and
reimbursements to third parties as provided for herein; (E)
clearing and filing all advertising, sales, marketing and
promotional materials of the Fund with the National Association
of Securities Dealers, Inc. (the "NASD"); (F) maintaining
direct computer communications links with The Depository Trust
Company, the Fund's transfer agent and the Fund's custodian;
and (G) such other services and obligations as are set forth in
the Distribution Agreement.
(b) a portion of the fee (such portion, the "Marketing
Fee"), equal to such Series' allocable portion of (i) .23% per
annum of the Aggregate Net Assets of all Series subject to the
Marketing Agreement up to Aggregate Net Assets of $200 million,
plus (ii) 0% per annum of the Aggregate Net Assets of all such
Series in excess of $200 million up to $1.5 billion, plus (iii)
.03% per annum of Aggregate Net Assets of all such Series in
excess of $1.5 billion up to $5 billion, plus (iv) .015% per
annum of the Aggregate Net Assets of all such Series in excess
of $5 billion, monthly in arrears, for its marketing and
promotional services to the Fund under the Marketing Agreement,
dated as of ____________________, 1995 (the Marketing
Agreement"), between the Distributor and the Fund, including
without limitation (A) making available four regional
wholesalers and four 800-line registered representatives to
carry out the Fund's marketing plan and provide certain
stockholder services; (B) developing in conjunction with the
Fund and Deutsche Bank Securities Corporation, the Fund's
investment adviser (the "Adviser"), a marketing plan for the
use and trading of CB Shares(SM) of all Series of
<PAGE> 3
the Fund; (C) facilitating through broker-dealers and other
persons communications with and product education of beneficial
owners of CB Shares(SM); and (D) certain other services and
obligations set forth in the Marketing Agreement. For purposes
of this paragraph (b), the term "First Breakpoint" means the
level of average daily net assets of the Designated Series in
the first month in which Aggregate Net Assets exceed $200
million; the term "Second Breakpoint" shall mean the level of
average daily net assets of the Designated Series in the first
month in which Aggregate Net Assets exceed $1.5 billion; and
the term "Third Breakpoint" means the level of average daily
net assets of the Designated Series in the first month in which
Aggregate Net Assets exceed $5 billion, provided that in the
event that Aggregate Net Assets in any month exceed and in a
subsequent month fall below any such level, the First
Breakpoint, Second Breakpoint or Third Breakpoint, as the case
may be, shall be reset at the level of average daily net assets
of the Designated Series in the next succeeding month in which
Aggregate Net Assets exceed $200 million, $1.5 billion or $5
billion, respectively. In order that payments made by the
Designated Series pursuant to the [Distribution Agreement and
the] Marketing Agreement in any fiscal year in which Aggregate
Net Assets in any month are less than $200 million do not, on
an annualized basis, exceed .25% of the average daily net
assets of the Designated Series, payments made under the
Marketing Agreement shall not exceed on an annualized basis
(i) .35% of average daily net assets of the Designated Series
during the first six months of a year, (ii) .30% during the
first nine months of a year, (iii) .26% during the first ten
months of the year and (iv) .23% during the first eleven months
of a year, all on an annualized basis.
(c) The remainder of the fee, not to exceed, on an
annualized basis, .25% of the average daily net assets of the
Designated Series less any applicable Distributor's Fee and
Marketing Fee paid or payable to the Distributor, shall be
used, subject to paragraph 4 hereof, to pay for any activities
primarily intended to result in the sale of Shares of the Fund
in Creation Unit aggregations or for the provision of
stockholder services to holders of CB Shares(SM), including,
but not limited to:
(i) reimbursing the Distributor for payments made to
Smith Barney Inc. pursuant to an investor services
agreement (the "Investor Services Agreement"), in
substantially the form approved by the Board of
Directors of the Fund and attached hereto as Annex
A, as compensation for certain stockholder support,
educational and promotional services relating to CB
Shares(SM) of all Series of the Fund
<PAGE> 4
subject to such Agreement, of an investor services
fee, computed daily and payable quarterly, equal to
(A) for the twelve-month period following the
effectiveness of the Investor Services Agreement,
.1% per annum of the average daily net assets of
all Series subject to the Investor Services
Agreement in excess of $200 million and (B) for
each subsequent twelve-month period, subject to the
annual approval by the Board of Directors of the
continuance of the Investor Services Agreement,
.05% per annum of the average daily net assets of
all Series subject to the Investor Services
Agreement in excess of $200 million;
(ii) reimbursing the Distributor for any payments
made to registered broker-dealers, banks and
other persons ("Service Organizations") to
compensate them for the provision of certain
stockholder support, research and other
services with respect to the CB Shares(SM) of
all Series of the Fund pursuant to investors
services agreements ("Service Agreements"),
in each case in the form approved by the
Board of Directors and attached hereto as
Annex B, to which the ________ Index Series
is subject;
(iii) reimbursing the Distributor for any payments made
to registered broker-dealers who are members of the
NASD or foreign securities dealers not eligible for
membership in the NASD who have agreed to comply
with the applicable provisions of the Rules of Fair
Practice of the NASD ("Dealers") to compensate them
for the provision of distribution-related services
in connection with the offer and sale of CB
Shares(SM) of the Designated Series and other
Series in Creation Unit aggregations pursuant to
dealer agreements ("Dealer Agreements"), in each
case in the form approved by the Board of Directors
and attached hereto as Annex C, to which the
_________ Index Series is subject; and
(iv) reimbursing the Distributor and/or the Adviser for
promotion and marketing activities (including any
such activities undertaken by arrangement with
third parties pursuant to Service Agreements or
otherwise) related to the sale of Shares of the
Designated Series in Creation
<PAGE> 5
Unit aggregations and secondary market trading in
CB Shares(SM) of the Designated Series, including,
but not limited to, paying for the preparation,
printing and distribution of the Fund's prospectus
and Statement of Additional Information (other than
expenses of such preparation, printing and
distribution to be borne by the Fund directly and
incremental printing costs to be borne by the
Distributor, in each case as provided in the
Distribution Agreement in connection with sales of
Creation Unit aggregations of Shares) and, in
accordance with the Marketing Agreement, sales and
marketing materials relating to the Designated
Series, communications to and with the Designated
Series stockholders and advertisements (including
the creative costs associated therewith).
2. Payments to Smith Barney Inc. for the stockholder support,
educational and promotional services referred to in paragraph 1(c)(i)
hereof are subject to the terms and conditions of the Investor Services
Agreement. Payments to Service Organizations for stockholder support,
research and other services referred to in paragraph 1(c)(ii) hereof are
subject to the terms and conditions of the Service Agreement between each
Service Organization and the Distributor. Payments to Dealers, if any, for
the distribution-related services referred to in paragraph 1(c)(iii) hereof
are subject to the terms and conditions of the Dealer Agreement between
each Dealer and the Distributor.
3. The Adviser may make payments from time to time from its
own resources for the purposes described in paragraph 1(c)(iv) hereof.
4. Any fees or expenses for distribution-related, marketing,
promotional or stockholder services relating to a Series' Shares accrued by
the Distributor, any Service Organization or, if applicable, any Dealer in
one fiscal year of the Fund may not be paid from fees hereunder received or
receivable from the Designated Series with respect to subsequent fiscal
years. Amounts paid by the Designated Series to the Distributor or the
Adviser under paragraph 1(c)(iv) above in reimbursement of certain expenses
of marketing and promotional activities shall not be used to pay for
reimbursement of similar expenses with respect to any other Series.
The aggregate Distributor's Fees and Marketing Fees payable by all Series of
the Fund shall be allocated among the Series pro rata in accordance with the
[average daily net assets] of each Series, and reimbursements of expenses for
such activities and services attributable to the Fund as a whole shall be
allocated to each Series according to the method adopted by the Board of
Directors. The Distributor's allocation of fees and other expenditures
hereunder shall be subject to the [annual] review of the Board of Directors.
Fees and other expenditures hereunder also will not be used by the recipient
to pay any interest expense, carrying charges or other financing costs.
<PAGE> 6
5. This Plan shall become effective with respect to the
Designated Series (the "Effective Date") upon the later of (i) ________ __,
1995 or (ii) the date upon which it has been approved by a "vote of a
majority of the outstanding voting securities" (as defined in the Act) of
the Designated Series and a majority of the Board of Directors, including a
majority of those Directors of the Fund ("Directors") who are not "inter-
ested persons" of the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to it (the "Independent Directors"), cast in person at a meeting
(or meetings) called for the purpose of voting on this Plan.
6. This Plan and any related agreements shall remain in effect
with respect to the Designated Series until ________ __, 1996 (such period
being within one year from the Effective Date) and may be continued
thereafter if this Plan or such related agreement is approved each year
with respect to the Designated Series by votes of a majority of both
(a) the Directors and (b) the Independent Directors, cast in person at a
meeting (or meetings) called for the purpose of voting on this Plan and
such related agreements.
7. The Treasurer of the Fund shall provide to the Directors
and the Directors shall review, at least quarterly, a quarterly written
report, and once a year, an annual written report, complying with the
requirements of Rule 12b-1 under the Act, setting forth all amounts
expended pursuant to this Plan or any related agreement and the purposes
for which such expenditures were made. In such reports, only expenses
properly attributable to the sale or servicing of Shares of the Designated
Series will be used to justify any expenses reimbursed hereunder and
charged to Shares of the Designated Series.
8. This Plan may be terminated with respect to the Designated
Series at any time, without the payment of any penalty, by the vote of a
majority of the outstanding voting securities (as defined in the Act) of
the Designated Series, or by the vote of a majority of the Independent
Directors.
9. All agreements related to this Plan (including any Service
Agreement or Dealer Agreement) shall be in writing, and shall provide: (a)
that such agreement may be terminated with respect to any Series at any
time, without payment of any penalty, by vote of a majority of the
Independent Directors or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Designated Series, on not more
than 60 days' written notice to any other party to the agreement, and (b)
that such agreement shall terminate automatically in the event of its
assignment (as defined in the Act).
10. This Plan may not be amended with respect to the
Designated Series to increase materially the amount of fees and expenses
provided for in
<PAGE> 7
paragraph 1 hereof unless such amendment is approved by a majority of the
outstanding voting securities (as defined in the Act) of the Designated
Series and no material amendment to this Plan shall be made unless approved
in the manner provided for annual continuance in paragraph 6 hereof.
11. While this Plan is in effect, the selection and nomination
of Directors who are not "interested persons" (as defined in the Act) of
the Fund shall be committed to the discretion of the Directors who are not
"interested persons".
12. The Fund shall preserve copies of this Plan and any
related agreements and all reports made pursuant to paragraph 7 hereof, for
a period of not less than six years from the date of this Plan, or such
agreement or such report, as the case may be, the first two years in an
easily accessible place.
