<PAGE>
As filed with the Securities and Exchange Commission on July 16, 1998
Registration No. 2-75677
----------------------------------------------------------------------
----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES /X/
ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. _ / /
POST-EFFECTIVE AMENDMENT NO. 47 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /X/
ACT OF 1940
AMENDMENT NO. 48 /X/
WESTCORE TRUST
(Exact Name of Registrant as Specified in Charter)
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Registrant's Telephone Number: (303) 623-2577
W. BRUCE McCONNEL, III
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on October 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[x] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) 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.
Title of Securities being registered: Shares of Beneficial Interest.
<PAGE>
The Prospectus and Statement of Additional Information for the Cash Reserve
Fund is incorporated by reference to Post-Effective Amendment No. 43 to the
Registrant's Registration Statement on Form N-1A filed with the Securities and
Exchange Commission on July 14, 1995.
<PAGE>
WESTCORE TRUST
MIDCO Growth Fund, Blue Chip Fund, Growth and Income Fund, Small-Cap Opportunity
Fund, Long-Term Bond Fund, Intermediate-Term Bond Fund, Colorado Tax-Exempt Fund
and Mid-Cap Value Fund
Cross Reference Sheet
Form N-1A Item Prospectus Caption
-------------- ------------------
1. Cover Page Cover Page.
2. Synopsis Fund Highlights, and Expense
Information.
3. Condensed Financial Information Financial Highlights and
Performance Reporting.
4. General Description of Registrant Cover Page, Fund Highlights, Fund
Specifics, Information on
Investment Policies and
Additional Risk Factors, and
Management of the Funds or for
the MIDCO Growth Fund Prospectus:
Management of the Fund.
5. Management of the Fund Management of the Funds or for
the MIDCO Growth Fund Prospectus:
Management of the Fund.
5A. Management's Discussion of Fund Information is contained in
Performance Registrant's Annual Report.
6. Capital Stock and Other Investment Objectives and
Securities Policies, Distributions and
Taxes, How to Invest and Obtain
Information, and Management of
the Funds or for the MIDCO Growth
Fund Prospectus: Management of
the Fund.
7. Purchase of Securities Being Purchasing Shares, General
Offered Account Policies.
8. Redemption or Repurchase Exchanging Shares, and Redeeming
Shares.
9. Pending Legal Proceedings Inapplicable.
<PAGE>
CROSS REFERENCE SHEET
MIDCO Growth Fund, Blue Chip Fund, Growth and Income Fund, Small-Cap Opportunity
Fund, Long-Term Bond Fund, Intermediate-Term Bond Fund, Colorado Tax-Exempt Fund
and Mid-Cap Value Fund
Statement of Additional Information
Form N-1A Part B Item Information Caption
--------------------- -------------------
10. Cover Page Cover Page.
11. Table of Contents Table of Contents.
12. General Information and History Description of Shares.
13. Investment Objectives and Investment Objectives and Policies.
Policies
14. Management of Registrant Management of the Funds.
15. Control Persons and Principal Description of Shares.
Holders of Securities
16. Investment Advisory and Other Management of the Funds.
Services
17. Brokerage Allocation and other Investment Objectives and Policies.
Practices
18. Capital Stock and Other Net Asset Value; Additional Purchase
Securities and Redemption Information;
Description of Shares.
19. Purchase, Redemption and Pricing Net Asset Value; Additional Purchase
of Securities Being Offered and Redemption Information.
20. Tax Status Additional Information Concerning
Taxes.
21. Underwriters Not Applicable.
22. Calculation of Performance Data Additional Information on Performance
Calculations.
23. Financial Statements Auditors.
<PAGE>
[MOUNTAIN LOGO]
WESTCORE FUNDS
EQUITY & BOND FUNDS PROSPECTUS
[Black and white photograph of mountain and trees]
WESTCORE EQUITY FUNDS
Westcore MIDCO Growth Fund
Westcore Blue Chip Fund
Westcore Growth and Income Fund
Westcore Small-Cap Opportunity Fund
Westcore Mid-Cap Value Fund
WESTCORE BOND FUNDS
Westcore Long-Term Bond Fund
Westcore Intermediate-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
------------------------------------------------------------
Westcore Funds are managed by Denver Investment Advisors LLC.
<PAGE>
October 1, 1998
This Prospectus describes eight mutual funds (the "Funds") offered by Westcore
Trust ("Westcore" or the "Trust") including five equity funds, two taxable bond
funds and one tax-exempt bond fund, each with a different investment objective.
All Westcore Funds are no-load investments. This permits you to purchase and
sell shares of a Fund without a sales charge. If you enroll in our Automatic
Investment Plan, you can open your account for as little as $50 a month.
Otherwise, the minimum initial investment is normally $1,000.
This Prospectus sets forth information that you should consider before
investing. Please read this prospectus and keep it for future reference. It
contains important information including how each Fund invests and shareholder
services available to you. Additional information is contained in a Statement
of Additional Information ("SAI"), dated October 1, 1998, on file with the
Securities and Exchange Commission (the "SEC"). You may obtain a free copy of
the SAI by writing or calling Westcore at the address or telephone number shown
below. The SAI is incorporated by reference into this Prospectus. The SEC
maintains a Web site (http://www.sec.gov) that contains the SAI, material
incorporated by reference, and other information regarding the Funds.
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.
[Black and white photograph
of mountain and trees]
WESTCORE
FUNDS
EQUITY AND BOND FUNDS
PROSPECTUS
- -------------------------------------------------------------------------------
East Beckwith Mountain (12,432-feet),
West Elk Mountains, Colorado Photographer: Eric Wunrow
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
Westcore Funds
Denver Investment Advisors LLC ("Denver Investment Advisors" or the "Investment
Adviser") serves as investment adviser to each Fund. Denver Investment Advisors
and its predecessors have more than 40 years of investment management experience
and Denver Investment Advisors currently manages approximately $12 billion in
assets for clients such as corporations, insurance companies and individuals.
ALPS Mutual Funds Services, Inc. ("ALPS") serves as the Westcore Funds'
distributor.
TABLE OF CONTENTS
PAGES
FUND INFORMATION
Fund Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense Information. . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objectives & Policies . . . . . . . . . . . . . . . . . . . .
Fund Specifics . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Westcore Equity Funds. . . . . . . . . . . . . . . . . . . . . . . . . .
Westcore Bond Funds. . . . . . . . . . . . . . . . . . . . . . . . . . .
Fundamental Investment Limitations . . . . . . . . . . . . . . . . . . .
HOW TO INVEST AND OBTAIN INFORMATION
How to Open and Add to Your Account. . . . . . . . . . . . . . . . . . .
How to Contact Westcore Funds. . . . . . . . . . . . . . . . . . . . . .
Purchasing Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchanging Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeeming Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Account Policies . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information on Telephone and Computer Service . . . . . . . .
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions and Taxes. . . . . . . . . . . . . . . . . . . . . . . . .
Performance Reporting. . . . . . . . . . . . . . . . . . . . . . . . . .
Management of the Funds. . . . . . . . . . . . . . . . . . . . . . . . .
Inquiries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUPPLEMENTAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .
Information on Investment Policies and Additional Risk Factors . . . . .
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-i-
<PAGE>
FUND HIGHLIGHTS [Black and white photograph of mountain and trees]
This section provides you with a brief overview of the Westcore Funds and
summarizes each Fund's investment objectives and policies. A detailed
discussion of their investment objectives, policies and risks begins on page __
and complete information on how to purchase, exchange and redeem Fund shares
begins on page __.
WESTCORE EQUITY FUNDS
Westcore MIDCO Growth Fund SEEKS TO MAXIMIZE LONG-TERM CAPITAL APPRECIATION
BY INVESTING PRIMARILY IN MEDIUM-SIZED GROWTH COMPANIES.
Westcore Blue Chip Fund SEEKS TO MAXIMIZE LONG-TERM TOTAL RETURN BY
INVESTING IN STOCKS OF LARGE, WELL-ESTABLISHED COMPANIES WHOSE STOCKS APPEAR TO
BE UNDERVALUED.
Westcore Growth and Income Fund SEEKS TO MAXIMIZE LONG-TERM TOTAL RETURN BY
INVESTING IN EQUITY SECURITIES SELECTED FOR THEIR GROWTH POTENTIAL AND
INCOME-PRODUCING ABILITIES.
Westcore Small-Cap Opportunity Fund SEEKS TO MAXIMIZE LONG-TERM CAPITAL
APPRECIATION PRIMARILY THROUGH INVESTMENTS IN COMPANIES WITH RELATIVELY SMALL
CAPITALIZATIONS WHOSE STOCKS APPEAR TO BE UNDERVALUED.
Westcore Mid-Cap Value Fund SEEKS TO MAXIMIZE LONG-TERM CAPITAL
APPRECIATION BY INVESTING PRIMARILY IN MEDIUM-SIZED COMPANIES WHOSE STOCKS
APPEAR TO BE UNDERVALUED.
WESTCORE BOND FUNDS
Westcore Long-Term Bond Fund SEEKS TO MAXIMIZE LONG-TERM TOTAL RATE OF
RETURN BY INVESTING PRIMARILY IN INVESTMENT-GRADE BONDS. THE FUND EXPECTS TO
HAVE AN AVERAGE DOLLAR-WEIGHTED MATURITY OF AT LEAST 10 YEARS.
Westcore Intermediate-Term Bond Fund SEEKS CURRENT INCOME WITH LESS
VOLATILITY OF PRINCIPAL BY INVESTING PRIMARILY IN INVESTMENT-GRADE BONDS. THE
FUND EXPECTS TO HAVE AN AVERAGE DOLLAR-WEIGHTED MATURITY OF BETWEEN 3 AND 6
YEARS.
Westcore Colorado Tax-Exempt Fund SEEKS TO PROVIDE INCOME EXEMPT FROM BOTH
FEDERAL AND COLORADO STATE PERSONAL INCOME TAXES BY EMPHASIZING INSURED COLORADO
MUNICIPAL BONDS WITH INTERMEDIATE MATURITIES.
- --------------------------------------------------------------------------------
-1-
<PAGE>
[Mountain logo] WESTCORE FUNDS
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WESTCORE FUNDS SPECTRUM
The spectrum below shows Denver Investment Advisors' current assessment of
the potential risk of the Westcore Funds relative to one another. The spectrum
is not indicative of the future volatility or performance of the Funds and
should not be used to compare the Funds with other mutual funds or types of
investments.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FUNDS CONSERVATIVE MODERATE AGGRESSIVE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund -------
Westcore Blue Chip Fund -------
Westcore Growth and Income Fund -------
Westcore Small-Cap Opportunity Fund -------
Westcore Mid-Cap Value Fund -------
Westcore Long-Term Bond Fund -------
Westcore Intermediate-Term
Bond Fund -------
Westcore Colorado Tax-Exempt Fund -------
</TABLE>
EXPENSE INFORMATION
The tables and example below show you the various costs and expenses you
will bear directly or indirectly as an investor in the Westcore Funds.
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when buying, exchanging or
selling shares of a Westcore Fund. The no-load Westcore Funds do not charge any
Shareholder Transaction Expenses. ANNUAL FUND OPERATING EXPENSES, which are
paid out of a Fund's assets and include fees for portfolio management,
maintenance of shareholder accounts, general Fund administration, shareholder
servicing, accounting and other services. Annual fund operating expenses are
based on amounts incurred during the most recent fiscal year, restated to
reflect current expenses, except that for the Mid-Cap Value Fund, which is a new
fund, expenses are set forth as expected for that Fund's initial fiscal period.
The fee waivers and expense reimbursements reflected in the table are
voluntary and may be modified or terminated at any time without the Funds'
consent.
If you own shares through certain Service Organizations (as described in
the section entitled "General Account Policies") you may pay account charges in
connection with the maintenance of your account at the Service Organization.
These account charges are in addition to the expenses shown below.
For more complete descriptions of shareholder transaction expenses and the
Funds' operating expenses, see "General Account Policies" and "Management of the
Funds" in this Prospectus and the financial statements and related notes
included in the SAI.
- -----------------
THIS EXAMPLE ILLUSTRATES THE EFFECT OF EXPENSES AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
-2-
<PAGE>
[Mountain logo] WESTCORE FUNDS
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<TABLE>
<CAPTION>
Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Blue Growth and Small-Cap Westcore(4) Long-Term Intermediate- Colorado
Growth Chip Income Opportunity Mid-Cap Value Bond Term Bond Tax-Exempt
Fund Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Shareholder
Transaction
Expenses None None None None None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
Annual Operating Expenses (as a percentage of average net assets)
- ---------------------------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.58%(1) 0.13%(1) 0.63%(1) 0%(1) 0.19%(1) 0.34%(1) 0.00%(1)
(after fee waivers)
- ---------------------------------------------------------------------------------------------------------------------------------
12b-1 Fees None None None None None None None None
- ---------------------------------------------------------------------------------------------------------------------------------
All Other Expenses 0.48% 0.57%(2) 1.02%(2) 0.67%(2) 1.25%(2) 0.76%(2) 0.51%(2) 0.50%(2)
(after fee waivers and expense reimbursements)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses(3) 1.13% 1.15% 1.15% 1.30% 1.25% 0.95% 0.85% 0.50%
(after fee waivers and expense reimbursements)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume you invest $1,000, the annual return on each Fund is 5%, and
each Fund's annual operating expenses remain as listed above. The example below
shows the operating expenses that you would indirectly
bear as an investor in the Funds:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
One Year $12 $12 $12 $13 $13 $10 $9 $5
- ----------------------------------------------------------------------------------------------------------------------------
Three Years 36 37 37 41 39 30 27 16
- ----------------------------------------------------------------------------------------------------------------------------
Five Years 63 64 64 72 N/A 53 47 28
- ----------------------------------------------------------------------------------------------------------------------------
Ten Years 138 140 140 158 N/A 117 105 63
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Without advisory fee waivers, the advisory fee for the Blue Chip, Growth
and Income, Small-Cap Opportunity, Mid-Cap Value, Long-Term Bond,
Intermediate-Term Bond and Colorado Tax-Exempt Funds would be 0.65%, 0.65%,
1.00%, 0.75%, 0.45%, 0.45%, and 0.50%, respectively.
(2) Without fee waivers and expense reimbursements, the "All Other Expenses"
for the Blue Chip, Growth and Income, Small-Cap Opportunity, Mid-Cap Value,
Long-Term Bond, Intermediate-Term Bond and Colorado Tax-Exempt Funds would
be 0.58%, 1.06%, 0.66%, 1.53%, 0.78%, 0.53%, and 0.67%, respectively.
(3) The Administrators and the Investment Adviser have advised the Trust that
they currently intend to waive fees or reimburse expenses with respect to
each of the Funds so that the Total Operating Expenses of the MIDCO Growth,
Blue Chip, Growth and Income, Small-Cap Opportunity, Mid-Cap Value,
Long-Term Bond, Intermediate-Term Bond and Colorado Tax-Exempt Funds will
not exceed 1.15%, 1.15%, 1.15%, 1.30%, 1.25%, 0.95%, 0.85% and 0.50%,
respectively. Without such fee waivers and expense reimbursements, the
Total Operating Expenses of the Blue Chip, Growth and Income, Small-Cap
Opportunity, Mid-Cap Value, Long-Term Bond, Intermediate-Term Bond and
Colorado Tax-Exempt Funds would be 1.23%, 1.71%, 1.68%, 2.28%, 1.23%, 0.98%
and 1.17%, respectively.
(4) The Westcore Mid-Cap Value Fund is new, and the figures in the expense
summary for that Fund are estimates of expenses expected during that Fund's
first fiscal period.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-3-
<PAGE>
[Mountain logo] WESTCORE FUNDS
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FINANCIAL HIGHLIGHTS
The tables below provide supplementary information to each Fund's
financial statements contained in the SAI and set forth certain information
concerning the historic investment results of Fund shares. The financial
highlights are based on the financial statements of each Fund, which have been
audited by _________________, the Trust's independent auditors. You should
read the tables together with the financial statements and related notes
included in the SAI. Further information about the performance of the Funds
is available in the Annual Report to Shareholders. You may obtain both the
SAI and the Annual Report to Shareholders free of charge by contacting ALPS
or the Westcore Trust at 1-800-392-CORE (2673).
-4-
<PAGE>
- --------------------------------------------------------------------------------
WESTCORE MIDCO GROWTH FUND
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $9.82
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.15) (0.08) 0.00 0.00 0.04 0.06 0.07 0.24 0.19
Net realized and unrealized
gain (loss) on investments 1.19 6.58 1.56 1.34 2.48 1.84 3.16 1.32 2.52
Total income (loss) from
investment operations 1.04 6.50 1.56 1.34 2.52 1.90 3.23 1.56 2.71
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to
Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income 0.00 0.00 0.00 0.00 0.00 (0.32) (0.08) (0.24) (0.10)
Distributions from net realized
gain on investments (3.02) (0.72) (0.53) (1.03) (1.11) (1.20) (0.72) (1.93) (0.25)
Return of capital 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00
Total dividends, distributions
and return of capital to
shareholders (3.02) (0.72) (0.53) (1.04) (1.11) (1.52) (0.80) (2.17) (0.35)
Net asset value--end of period $20.92 $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18
Total return 5.27% 38.62% 10.05% 8.37% 18.04% 14.09% 30.44% 15.33% 28.46%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000 omitted) $590,008 $656,490 $401,760 $335,453 $231,595 $180,681 $131,420 $85,209 $81,948
Ratio of expenses to average
net assets 1.14% 1.08% 0.94% 0.84% 0.83% 0.80% 0.78% 0.83% 0.80%
Ratio of net investment
income (loss)
to average net assets (0.70%) (0.42%) (0.03%) (0.09%) 0.04% 0.12% 0.58% 2.05% 1.21%
Ratio of expenses to average
net assets without fee
waivers 1.14% 1.10% 0.96% 0.87% 0.85% 0.85% 0.88% 0.88% 0.85%
Ratio of net investment
income (loss) to average
net assets without fee waivers (0.71%) (0.44%) (0.05%) (0.12%) 0.02% 0.07% 0.48% 2.00% 1.16%
Portfolio turnover rate(1) 60.78% 62.83% 50.19% 52.05% 56.23% 48.17% 75.43% 86.62% 74.03%
Average commission rate(2) $.0466 -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $___________ and $___________, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
-6-
<PAGE>
- -------------------------------------------------------------------------------
WESTCORE BLUE CHIP FUND
(FORMERLY THE WESTCORE MODERN VALUE EQUITY FUND)
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of
period $17.41 $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.19 0.25 0.23 0.40 0.34 0.28 0.29 0.44 0.39
Net realized and unrealized
gain on investments 3.65 4.03 2.12 0.04 1.13 0.95 1.15 0.82 1.02
Total income from
investment operations 3.84 4.28 2.35 0.44 1.47 1.23 1.44 1.26 1.41
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to
Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.22) (0.27) (0.16) (0.43) (0.21) (0.35) (0.30) (0.46) (0.31)
Distributions from net
realized gain on investments (2.88) (1.30) (0.19) (1.18) (0.74) (0.21) (0.20) (0.16) 0.00
Total dividends and
distributions to shareholders (3.10) (1.57) (0.35) (1.61) (0.95) (0.56) (0.50) (0.62) (0.31)
Net asset value--end of period $18.15 $17.41 $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10
Total return 24.28% 30.48% 19.03% 3.12% 11.62% 10.02% 13.08% 11.74% 14.42%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000 omitted) $66,450 $68,286 $52,545 $36,674 $28,176 $30,572 $27,208 $25,857 $28,088
Ratio of expenses to average
net assets 1.15% 1.10% 1.01% 1.06% 0.99% 0.91% 0.84% 0.85% 0.88%
Ratio of net investment income
to average net assets 1.02% 1.52% 1.78% 2.30% 2.37% 2.17% 2.65% 3.81% 3.54%
Ratio of expenses to average
net assets without
fee waivers 1.21% 1.25% 1.06% 1.09% 1.02% 0.97% 0.94% 0.90% 0.93%
Ratio of net investment income
to average net assets
without fee waivers 0.97% 1.38% 1.73% 2.27% 2.34% 2.11% 2.55% 3.76% 3.49%
Portfolio turnover rate(2) 43.47% 65.11% 61.72% 41.32% 85.53% 123.91% 142.01% 158.54% 175.23%
Average commission rate(3) $.0498 -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations occurred on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $__________ and $__________, respectively.
(3) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-7-
<PAGE>
WESTCORE GROWTH AND INCOME FUND
FORMERLY THE WESTCORE EQUITY INCOME FUND)
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
WESTCORE EQUITY INCOME FUND(1) FOR THE YEAR ENDED MAY 31*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning
of period $12.32 $10.50 $10.62 $11.51 $10.99 $10.10 $9.94 $10.43 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.07 0.15 0.20 0.51 0.32 0.32 0.32 0.36 0.40
Net realized and unrealized
gain (loss) on investments 2.19 2.57 0.15 (0.30) 0.68 1.05 0.48 1.02 1.05
Total income from
investment operations 2.26 2.72 0.35 0.21 1.00 1.37 0.80 1.38 1.45
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to
Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.11) (0.24) (0.21) (0.54) (0.20) (0.43) (0.33) (0.37) (0.33)
Distributions from net
realized gain
on investments (1.44) (0.66) (0.26) (0.56) (0.28) (0.05) (0.31) (1.50) (0.69)
Total dividends and
distributions
to shareholders (1.55) (0.90) (0.47) (1.10) (0.48) (0.48) (0.64) (1.87) (1.02)
Net asset value--end of period $13.03 $12.32 $10.50 $10.62 $11.51 $10.99 $10.10 $9.94 $10.43
Total return 19.71% 27.25% 3.73% 1.71% 9.41% 14.12% 9.07% 14.58% 15.98%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
period (000 omitted) $20,725 $25,387 $27,029 $42,644 $35,791 $25,128 $19,932 $16,583 $12,594
Ratio of expenses to
average net assets 1.15% 1.22% 1.17% 1.03% 0.99% 0.95% 0.90% 0.93% 0.97%
Ratio of net investment income
to average net assets 0.75% 1.34% 2.09% 4.45% 2.75% 3.03% 3.51% 3.45% 3.75%
Ratio of expenses to average
net assets without fee waivers 1.56% 1.51% 1.22% 1.06% 1.03% 1.02% 1.00% 0.98% 1.02%
Ratio of net investment income
to average net assets without
fee waivers 0.33% 1.05% 2.04% 4.42% 2.71% 2.96% 3.41% 3.40% 3.70%
Portfolio turnover rate(3) 39.80% 88.31% 81.14% 53.86% 61.24% 68.56% 64.94% 59.36% 100.22%
Average commission rate(4) $.0491 -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Westcore Equity Income Fund is the former name of the Westcore Growth
and Income Fund. The Fund's name was changed as of January 1, 1996, to
reflect a different investment objective and different investment policies.
Prior to January 1, 1996, the Fund's investment objective was to seek
reasonable income through investments in income-producing securities. As
of January 1, 1996, the Fund's investment objective was revised to seek
long-term total return through capital appreciation and current income. A
new portfolio manager has managed the Fund since October 1995. Past
performance is not intended to be indicative or representative of future
performance.
(2) Commencement of operations was on the first day of this period.
(3) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $_________ and $__________, respectively.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- --------------------------------------------------------------------------------
-8-
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WESTCORE SMALL-CAP OPPORTUNITY FUND
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value--beginning of period $21.35 $15.95 $14.97 $15.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.04 0.09 0.05
Net realized and unrealized
gain (loss) on investments 3.37 5.86 1.11 (0.05)
Total income from
investment operations 3.40 5.90 1.20 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.02) (0.06) (0.10) (0.03)
Distributions from net realized gain
on investments (0.86) (0.44) (0.12) 0.00
Total dividends and distributions
to shareholders (0.88) (0.50) (0.22) (0.03)
Net asset value--end of period $23.87 $21.35 $15.95 $14.97
Total return 16.28% 37.49% 8.15% (0.07%)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $35,962 $23,951 $9,703 $2,159
Ratio of expenses to average net assets 1.30% 1.30% 1.27% 1.38%(3)
Ratio of net investment income
to average net assets 0.11% 0.24% 0.61% 1.00%(3)
Ratio of expenses to average net assets
without fee waivers 1.69% 2.20% 2.77% 6.56%(3)
Ratio of net investment income (loss)
to average net assets without
fee waivers (0.28%) (0.67%) (0.89%) (4.18%)(3)
Portfolio turnover rate(2) 77.73% 47.83% 59.17% 64.31%(3)
Average commission rate(4) $.0480 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on December 28, 1993.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $__________ and $__________, respectively.
(3) Annualized.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-9-
<PAGE>
WESTCORE LONG-TERM BOND FUND
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning
of period $9.59 $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.62 0.61 0.59 0.62 0.77 0.80 1.08 0.93 0.91
Net realized and unrealized
gain (loss) on investments 0.26 (0.27) 0.66 (0.51) 0.99 0.56 0.04 (0.21) 0.33
Total income from
investment operations 0.88 0.34 1.25 0.11 1.76 1.36 1.12 0.72 1.24
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to
Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.63) (0.62) (0.60) (0.62) (0.78) (0.77) (1.11) (0.93) (0.88)
Distributions from net
realized gain on investments (0.17) 0.00 0.00 (1.52) (0.33) 0.00 (0.11) (0.04) 0.00
Total dividends, distributions
to shareholders (0.80) (0.62) (0.60) (2.14) (1.11) (0.77) (1.22) (0.97) (0.88)
Net asset value--end of period $9.67 $9.59 $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36
Total return 9.40% 3.41% 14.37% (0.25%) 17.40% 14.04% 11.87% 7.06% 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000 omitted) $20,160 $25,070 $33,440 $26,962 $26,281 $30,800 $27,448 $18,113 $15,403
Ratio of expenses to
average net assets 0.95% 0.90% 0.94% 0.89% 0.77% 0.70% 0.65% 0.73% 0.73%
Ratio of net investment income
to average net assets 6.37% 6.07% 6.54% 5.74% 6.63% 7.59% 8.29% 8.99% 8.93%
Ratio of expenses to
average net assets
without fee waivers 1.15% 1.07% 0.99% 0.92% 0.80% 0.74% 0.73% 0.78% 0.78%
Ratio of net investment
income to average net
assets without fee waivers 6.18% 5.90% 6.49% 5.71% 6.60% 7.55% 8.21% 8.94% 8.88%
Portfolio turnover rate(2) 27.76% 33.10% 25.09% 52.82% 79.16% 51.79% 81.13% 40.21% 68.94%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations occurred on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $_________ and $__________, respectively.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- --------------------------------------------------------------------------------
-10-
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning
of period $10.10 $10.27 $10.02 $10.70 $10.14 $9.80 $9.91 $9.99 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.60 0.60 0.58 0.55 0.67 0.78 0.87 0.84 0.85
Net realized and unrealized
gain (loss) on investments 0.13 (0.17) 0.27 (0.52) 0.53 0.39 (0.10) (0.08) (0.04)
Total income from
investment operations 0.73 0.43 0.85 0.03 1.20 1.17 0.77 0.76 0.81
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions
to Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.60) (0.60) (0.60) (0.53) (0.64) (0.83) (0.88) (0.84) (0.82)
Distributions from net
realized gain on
investments 0.00 0.00 0.00 (0.18) 0.00 0.00 0.00 0.00 0.00
Total dividends and
distributions to
shareholders (0.60) (0.60) (0.60) (0.71) (0.64) (0.83) (0.88) (0.84) (0.82)
Net asset value--end of period $10.23 $10.10 $10.27 $10.02 $10.70 $10.14 $9.80 $9.91 $9.99
Total return 7.43% 4.26% 8.93% 0.10% 12.16% 12.42% 8.30% 7.82% 8.53%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000 omitted) $63,169 $83,039 $97,619 $88,965 $99,469 $87,712 $68,958 $107,288 $110,962
Ratio of expenses to average
net assets 0.85% 0.81% 0.77% 0.68% 0.65% 0.61% 0.59% 0.59% 0.60%
Ratio of net investment
income to average
net assets 5.81% 5.78% 5.86% 5.03% 6.37% 7.73% 9.01% 8.32% 8.59%
Ratio of expenses to
average net assets
without fee waivers 0.97% 0.92% 0.80% 0.70% 0.67% 0.65% 0.65% 0.64% 0.65%
Ratio of net investment
income to average
net assets without fee
waivers 5.68% 5.67% 5.83% 5.00% 6.35% 7.69% 8.95% 8.27% 8.54%
Portfolio turnover rate(2) 27.47% 71.97% 60.86% 65.04% 87.17% 53.92% 80.20% 71.42% 63.30%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations was on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $__________ and $__________, respectively.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-11-
<PAGE>
WESTCORE COLORADO TAX-EXEMPT FUND
<TABLE>
<CAPTION>
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $10.61 $10.70 $10.52 $10.71 $10.25 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.50 0.52 0.52 0.53 0.57 0.58
Net realized and unrealized
gain (loss) on investments 0.17 (0.10) 0.20 (0.19) 0.46 0.23
Total income from
investment operations 0.67 0.42 0.72 0.34 1.03 0.81
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.50) (0.51) (0.54) (0.53) (0.57) (0.56)
Distributions from net realized gain
on investments 0.00 0.00 0.00 0.00 0.00 0.00
Total dividends and distributions
to shareholders (0.50) (0.51) (0.54) (0.53) (0.57) (0.56)
Net asset value--end of period $10.78 $10.61 $10.70 $10.52 $10.71 $10.25
Total return 6.46% 3.97% 7.16% 3.22% 10.27% 8.36%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $21,348 $13,992 $10,792 $10,553 $7,326 $4,511
Ratio of expenses to average net assets 0.50% 0.44% 0.42% 0.27% 0.22% 0.11%
Ratio of net investment income
to average net assets 4.73% 4.87% 5.03% 4.98% 5.45% 5.84%
Ratio of expenses to average net assets
without fee waivers 1.21% 1.43% 1.62% 1.59% 1.88% 1.65%
Ratio of net investment income
to average net assets without fee waivers 4.02% 3.88% 3.83% 3.65% 3.79% 4.30%
Portfolio turnover rate(2) 30.78% 10.23% 3.15% 9.76% 1.82% 12.95%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations was the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998 were $__________ and $__________, respectively.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
- --------------------------------------------------------------------------------
-12-
<PAGE>
[Black and white photograph of mountain and trees]
To help you decide which Westcore Fund is appropriate for you, this section
looks more closely at the Funds' investment objectives, policies and securities
in which they invest. You should carefully consider your own investment goals,
time horizon and risk tolerance before investing in a Fund. You should also
carefully review the section entitled "Supplemental Information - Information on
Investment Policies and Additional Risk Factors" for a more detailed discussion
of the instruments in which the Funds may invest and their associated risks.
There can be no assurance that a Fund will achieve its investment objective.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES & POLICIES
FUND SPECIFICS:
EQUITY FUNDS
Upon notice to shareholders, each Fund's investment objective and policies may
be changed by the Trust's Board of Trustees without the approval of
shareholders. In the event of a change, you may want to consider whether that
Fund remains a suitable investment for you.
WESTCORE EQUITY FUNDS
THE WESTCORE EQUITY FUNDS are designed for long-term investors who can tolerate
the risks associated with investments in common stocks. They are most suitable
for investors with a long-term investment horizon. The following questions are
designed to help you better understand an investment in the Westcore Equity
Funds.
What is each Westcore Equity Fund's investment objective, and what are its
primary investments?
- --------------------------------------------------------------------------------
WESTCORE MIDCO GROWTH FUND seeks to maximize long-term capital appreciation
(rather than current income) by investing primarily in common stocks. The
Investment Adviser uses fundamental research techniques to identify medium-sized
growth companies it believes to be attractive. The Investment Adviser believes
medium-sized companies' earnings may be greatly impacted by factors such as new
products and services, and more entrepreneurial management. Medium-sized
companies may also have better opportunities for growth by gaining market share.
In the Investment Adviser's view, medium-sized company securities may tend to be
less volatile than the securities of smaller companies, while providing higher
returns than larger company stocks.
WESTCORE BLUE CHIP FUND seeks a high level of long-term total return through
capital appreciation and current income consistent with investment primarily in
a diversified portfolio of large company common stocks. The Investment Adviser
uses a value-oriented approach to identify large, established companies that may
be underpriced. The Investment Adviser believes that, because of their size,
large companies may benefit from
-13-
<PAGE>
attributes such as market dominance, substantial financial resources and the
opportunity to be global leaders in their industries. These characteristics, in
the Investment Adviser's view, may result in increased stability for the company
and a lower-risk investment. The Investment Adviser combines a quantitative
approach with a qualitative research discipline to individually select and
invest in stocks of larger companies that it believes to be undervalued and to
have improving growth prospects, and to seek to avoid investing in companies it
believes are mature and lack meaningful opportunities.
WESTCORE GROWTH AND INCOME FUND seeks long-term total return through capital
appreciation and current income. The stocks purchased by this Fund are
generally large to medium in terms of market capitalization, and, in the
Investment Adviser's judgment, are high-quality, based on financial
characteristics and management capability. The Investment Adviser uses
fundamental research techniques in an effort to structure the portfolio to
generally have a dividend yield close to the yield on the S&P 500 stock index,
to have potential earnings growth higher than the S&P 500, and to have a market
risk level approximately equal to the S&P 500.
WESTCORE SMALL-CAP OPPORTUNITY FUND seeks to maximize long-term capital
appreciation primarily through diversified investments in equity securities of
small-capitalization companies. The Investment Adviser uses a value-oriented
style to identify small companies in which the stocks are believed to be
attractively priced based on valuation measures including lower
price-to-earnings ratios and lower price-to-book value ratios. The Investment
Adviser believes that this emphasis on valuation produces a portfolio of stocks
with strong potential for price appreciation--and lower volatility than is
commonly associated with small-company stocks. The investment approach focuses
on stock selection and uses quantitative and qualitative research to identify
small-company stocks that are undervalued and where, in the Investment Adviser's
view, the fundamental business outlook and earnings potential are becoming more
attractive.
WESTCORE MID-CAP VALUE FUND seeks to maximize long-term capital appreciation by
investing primarily in medium-sized companies whose stocks appear to be
undervalued. The Investment Adviser uses a value-oriented approach to identify
these companies based on valuation measures including lower price-to-earnings
ratios and lower price-to-book value ratios. The Investment Adviser believes
that this emphasis on valuation produces a portfolio of stocks with strong
potential for price appreciation. The investment approach focuses on stock
selection and uses quantitative and qualitative research to identify appropriate
companies that, in the Investment Adviser's view, have improving growth
prospects due to increasingly attractive fundamental business outlook and
earnings potential.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-14-
<PAGE>
FUND SPECIFICS:
EQUITY FUNDS (Continued)
[Black and white photograph of mountain and trees]
IN WHAT TYPES OF SECURITIES DO THE WESTCORE EQUITY FUNDS INVEST?
The Investment Adviser selects securities for each of the Equity Funds from
internally defined universes of large, medium and small companies. These
universes are not mutually exclusive, and a given security may be owned by more
than one of the Equity Funds. Under normal circumstances, at least 65% of the
value of each Equity Fund's total assets will be invested as described.
Companies selected meet the Adviser's standards for business outlook, growth
opportunities and valuation.
Westcore MIDCO Growth Fund invests primarily in equity securities of medium
capitalization companies. As of _________, 1998, the median capitalization of
companies held by the Westcore MIDCO Growth Fund was $___ billion. The median
capitalization of the companies in the Westcore MIDCO Growth Fund can be
expected to fluctuate over time. Under normal market conditions, at least 65%
of the value of the Westcore MIDCO Growth Fund's total assets is invested in
companies with market capitalizations of $900 million to $14 billion at the time
of purchase.
Westcore Blue Chip Fund invests primarily in equity securities of large
capitalization companies. During normal market conditions, the portfolio will
consist of approximately 50 equity securities of these companies. As of
_______, 1998, the median capitalization of companies held by the Westcore Blue
Chip Fund was $___ billion. The median capitalization of the companies in the
Westcore Blue Chip Fund can be expected to fluctuate over time.
Westcore Growth and Income Fund invests primarily in large and medium
capitalization companies. As of __________, 1998, the median capitalization
of companies held by the Westcore Growth and Income Fund was $___ billion.
The median capitalization of the companies in the Westcore Growth and Income
Fund can be expected to fluctuate over time.
Westcore Small-Cap Opportunity Fund invests primarily in small-capitalization
companies. As of _________, 1998, the median capitalization of companies held
by the Westcore Small-Cap Opportunity Fund was $___ million. The median
capitalization of the companies in the Westcore Small-Cap Opportunity Fund can
be expected to fluctuate over time. Under normal market conditions, at least
65% of the value of the Westcore Small-Cap Opportunity Fund's total assets is
invested in companies with market capitalizations of $2 billion or less at the
time of purchase.
Westcore Mid-Cap Value Fund invests primarily in equity securities of
medium-sized companies whose stocks appear to be undervalued. Under normal
market conditions at least 65% of the value of the Westcore Mid-Cap Value Fund's
total assets is invested in companies with market capitalization of $500 million
to $10 billion at the time of purchase.
-15-
<PAGE>
WHAT ARE THE OTHER INVESTMENT POLICIES OF THE WESTCORE EQUITY FUNDS?
Each Westcore Equity Fund may also invest in options, futures, preferred stocks,
warrants, foreign currency transactions and fixed-income securities.
Additionally, each Westcore Equity Fund may invest up to 25% of its total assets
in securities which are below investment grade, whether rated or unrated, and
which are convertible into common stock. Each of the Westcore Equity Funds may
invest, directly or indirectly, up to 25% of its respective total assets in
securities issued by foreign companies, except that there is no limitation on
the amount of the Westcore Small-Cap Opportunity Fund's total assets that may be
held in foreign securities. Each of the Equity Funds may invest in real estate
investment trusts ("REITs").
Each Westcore Equity Fund may invest in short-term instruments such as U.S.
government obligations, money market instruments, repurchase agreements and
securities issued by other investment companies (within the limits prescribed by
the Investment Company Act of 1940, as amended ["1940 Act"]) and dollar
denominated debt obligations of foreign issuers including foreign corporations
and governments and municipal obligations. In addition, each Fund may borrow
money from banks and may enter into reverse repurchase agreements for temporary
purposes on a limited basis. Each Equity Fund may lend portfolio securities up
to 30% of the total assets (including the value of the collateral for the loans)
of the particular Fund. Each Fund may hold uninvested cash reserves (which
would not earn income) pending investment, to meet anticipated redemption
requests or during temporary defensive periods.
WHAT IS THE MAIN RISK OF INVESTING IN AN EQUITY FUND?
The fundamental risk associated with any equity fund is the risk that the value
of the stocks it holds might decrease. Stock values may fluctuate in response
to the activities of an individual company or in response to general market or
economic conditions. Historically, equity securities have provided greater
long-term returns and have entailed greater short-term risks than other
investment choices.
Although smaller or newer issuers are more likely to realize more substantial
growth than larger or more established issuers, they are more likely to suffer
more significant losses. Investments in such companies can be both more
volatile and more speculative.
- --------------------------------------------------------------------------------
For a discussion of risks related to such investments as lower rated securities
or "junk bonds," options and futures, foreign currency exchange transactions and
"derivative" instruments in general in which the Funds may invest, see
"Supplemental Information-Information on Investment Policies and Additional Risk
Factors" beginning on page __.
WHICH WESTCORE EQUITY FUNDS ARE DIVERSIFIED, AND WHAT DOES THAT MEAN?
All the Westcore Equity Funds are diversified. Diversification is a means of
reducing risk by investing a Fund's assets in a broad range of stocks or other
securities in various industries and economic sectors. Diversification does not
provide assurance against the possibility of loss.
HOW DO THE WESTCORE EQUITY FUNDS TRY TO REDUCE RISK?
- - Diversification of a Fund's assets reduces the effect of any single holding
on its overall portfolio value.
-16-
<PAGE>
- - The Funds may adjust the securities they hold to include issues that are
believed to involve less risk.
- - A Fund may use futures, options and similar instruments to attempt to hedge
its portfolio against disadvantageous movements in securities' prices and
interest rates. The Westcore Equity Funds may use various currency-hedging
techniques, including forward currency contracts, to manage exchange-rate
risk when investing directly in foreign markets.
- - To the extent that a Fund holds a large cash position, it may not
participate in market declines (or advances) to the same degree as a fund
that is more fully invested in common stocks.
WHAT IS MEANT BY "MARKET CAPITALIZATION"?
Market capitalization is the most commonly used measure of the size and value of
a company. It is computed by multiplying the current market price of a share of
the company's stock by the total number of its shares outstanding.
-17-
<PAGE>
FUND SPECIFICS:
BOND FUNDS
WESTCORE BOND FUNDS
[Black and white photograph of mountain and trees]
The following questions are designed to help you better understand an investment
in the Westcore Bond Funds.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE BOND FUNDS?
WESTCORE LONG-TERM BOND FUND seeks a high level of long-term total rate of
return (i.e., income plus capital appreciation).
WESTCORE INTERMEDIATE-TERM BOND FUND seeks current income with relatively small
volatility of principal primarily through investment in investment-grade
securities.
WESTCORE COLORADO TAX-EXEMPT FUND seeks to provide investors with income exempt
from federal income taxes and Colorado state income taxes consistent with safety
and stability of principal.
WHAT ARE THE PRIMARY INVESTMENTS OF THE WESTCORE BOND FUNDS?
The Westcore Long-Term Bond and Intermediate-Term Bond Funds are diversified
funds that invest at least 65% of their total assets in a broad range of debt
obligations during normal market conditions. Debt obligations include fixed and
variable-rate bonds; asset-backed and mortgage-backed securities; zero coupon
bonds; debentures; obligations convertible into common stocks; obligations
issued or guaranteed by the U.S. government, its agencies or instrumentalities;
dollar-denominated debt obligations of foreign issuers including foreign
corporations and foreign governments, municipal obligations; and money market
instruments.
Questions? Call 1-800-392-CORE (2673)
-18-
<PAGE>
FUND SPECIFICS:
BOND FUNDS (Continued)
[Black and white photograph of mountain and trees]
The Westcore Colorado Tax-Exempt Fund is a non-diversified fund that invests
substantially all of its assets (i.e., at least 80%) in debt instruments issued
by or on behalf of the state of Colorado ("Colorado Obligations"), other states,
territories and possessions of the United States, the District of Columbia and
their respective authorities, instrumentalities and political subdivisions
("Municipal Obligations"). The Fund normally will invest at least 65% of its
total assets in Colorado Obligations. The Westcore Colorado Tax-Exempt Fund
currently intends to invest at least 75% of its assets in Municipal
Obligations covered by insurance policies.
WHAT IS THE INVESTMENT QUALITY OF THE ASSETS OF THE WESTCORE BOND FUNDS?
Debt obligations acquired by the Westcore Long-Term Bond and Intermediate-Term
Bond Funds will be at least investment-grade at the time of purchase. Each
Fund's dollar-weighted average portfolio quality is expected to be "A" or
better.
Municipal Obligations acquired by the Westcore Colorado Tax-Exempt Fund will
be rated in one of the three highest investment-grade categories at the time
of purchase by one or more rating agencies. The Fund may invest up to 10% of
its total assets in Colorado Obligations rated at the time of purchase in the
fourth highest investment-grade category when acceptable Colorado Obligations
with higher ratings are unavailable for investment by the Fund. The Fund may
invest in unrated obligations only if Denver Investment Advisors determines
they are comparable in quality to instruments that meet the Fund's rating
requirements.
If the rating of an obligation held by a Fund is reduced below the Fund's rating
requirements, the Investment Adviser will sell the obligation when it is in the
best interests of the Fund to do so.
For a description of ratings, please review "Rating Categories" in the Appendix.
DO THE WESTCORE BOND FUNDS INVEST IN ANY OTHER TYPES OF SECURITIES?
The Westcore Long-Term Bond and Intermediate-Term Bond Funds may invest in
obligations convertible into common stocks and may acquire common stocks,
warrants or other rights to buy shares only if they are attached to a
fixed-income obligation. Common stock received through the conversion of
convertible debt obligations will normally be sold in an orderly manner as soon
as possible. The Westcore Long-Term Bond and Intermediate-Term Bond Funds may
invest in REITs. Each Fund may also invest in options and futures.
Additionally, each Fund may invest in short-term instruments including
repurchase agreements and securities issued by other investment companies
(within the limits prescribed by the 1940 Act). Each Bond Fund, other than
Westcore Colorado Tax-Exempt Fund, may lend portfolio securities up to 30% of
the total assets (including the value of the collateral for the loans) of the
particular Fund.
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<PAGE>
The Westcore Colorado Tax-Exempt Fund may invest in short-term taxable money
market instruments, securities issued by other investment companies that invest
in taxable or tax-exempt money market instruments and U.S. government
obligations.
During temporary defensive periods, each Bond Fund may invest without limitation
in various short-term investments. The Funds also may borrow money from banks
and may enter into reverse repurchase agreements for temporary purposes on a
limited basis.
WHAT ARE THE EXPECTED MATURITIES OF THE WESTCORE BOND FUNDS?
Except during temporary defensive periods or unusual market conditions, Denver
Investment Advisors expects that the average dollar-weighted portfolio
maturities of the Westcore Bond Funds will be as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average
Dollar-Weighted
Fund Maturity
- --------------------------------------------------------------------------------
<S> <C>
Westcore Long-Term Bond Fund at least 10 years
Westcore Intermediate-Term Bond Fund 3-6 years
Westcore Colorado Tax-Exempt Fund 7-10 years
</TABLE>
IS AN INVESTMENT IN THE WESTCORE COLORADO TAX-EXEMPT FUND A TAX-FREE INVESTMENT?
Dividends paid by the Fund that are derived from interest on Colorado
Obligations, as well as certain other governmental issuers, will be exempt from
regular federal income taxes and Colorado state income taxes. Dividends derived
from interest on non-Colorado Obligations will be subject to Colorado state
income tax. Because the Fund may invest up to 20% of its net assets in private
activity bonds whose interest may be subject to the federal alternative minimum
tax, a portion of the dividends paid by the Fund may be treated as a tax
preference item for purposes of this tax. See also "Taxes" in "Other
Information" on page __.
ARE THERE ANY INVESTMENT RISKS UNIQUE TO THE WESTCORE COLORADO TAX-EXEMPT FUND?
Because the Fund concentrates its investments in Colorado Obligations, it is
classified as a non-diversified fund for purposes of the 1940 Act. The Fund's
performance may be dependent upon fewer securities than is the case with a
diversified portfolio, and the Fund may experience greater fluctuations in net
asset value. In addition, although the Fund does not presently intend to do so
on a regular basis, it may invest 25% or more of its net assets in industrial
development bonds and in other Municipal Obligations, the interest on which is
paid solely from revenues of similar projects. To the extent that the Fund's
assets are concentrated in these types of Municipal Obligations and the Fund is
non-diversified, it will be more susceptible to economic, political and legal
developments than a diversified Fund with similar objectives whose assets are
not so concentrated.
HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
A fundamental risk associated with any fund that invests in fixed-income
securities is the risk that the value of the securities it holds will rise or
fall as interest rates change. Generally, a fixed-income security will increase
-20-
<PAGE>
in value when interest rates fall and decrease in value when interest rates
rise. Longer-term securities are generally more sensitive to interest rate
changes than shorter-term securities, but they usually offer higher yields to
compensate investors for the greater risks. A bond fund's average
dollar-weighted maturity is a measure of how the fund will react to interest
rate changes.
[Black and white photograph of mountain & trees]
WHAT IS MEANT BY A FUND'S "AVERAGE DOLLAR-WEIGHTED MATURITY?"
The stated maturity of a bond is the date when the issuer must repay the bond's
entire principal value to an investor, such as a Fund. A bond's term to
maturity is the number of years remaining to maturity. A bond fund does not
have a stated maturity, but it does have an average dollar-weighted maturity.
This is calculated by averaging the terms to maturity of bonds held by a Fund
with each maturity "weighted" according to the percentage of net assets it
represents.
HOW DO THE WESTCORE BOND FUNDS ATTEMPT TO MANAGE INTEREST RATE RISK?
Each Fund may vary the average dollar-weighted maturity of its portfolio to
reflect its portfolio manager's analysis of interest rate trends and other
factors. A Fund's average dollar-weighted maturity will tend to be shorter when
its portfolio manager expects interest rates to rise and longer when its
portfolio manager expects interest rates to fall. The Westcore Long-Term Bond
and Intermediate-Term Bond Funds may also use futures, options and similar
instruments to manage interest rate risk.
WHAT IS MEANT BY "CREDIT QUALITY"?
Another fundamental risk associated with all bond funds is credit risk -- the
risk that an issuer will be unable to make principal and interest payments when
due. U.S. government securities are generally considered to be the safest type
of investment in terms of credit risk. Municipal Obligations generally rank
between U.S. government securities and corporate debt securities in terms of
credit safety. Corporate debt securities, particularly those rated below
investment grade, may present the highest credit risk.
HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized rating agencies ("Rating Agencies"),
such as Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service,
Inc. ("Moody's"), are widely accepted measures of credit risk. The lower a bond
issue is rated by an agency, the more credit risk it is considered to represent.
Lower-rated bonds generally pay higher yields to compensate investors for the
greater risk.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-21-
<PAGE>
FUND SPECIFICS: IN GENERAL
WHAT POTENTIAL RISKS AND REWARDS MAY I EXPERIENCE IF I INVEST IN THE WESTCORE
FUNDS?
An investment in the Westcore Funds presents the potential rewards and risks
common to securities investments. The Westcore MIDCO Growth, Blue Chip, Growth
and Income, Small-Cap Opportunity and Mid-Cap Value Funds invest primarily in
common stocks. Although stocks historically have presented greater potential
for capital appreciation than debt obligations, they do not provide the same
assurance of income and may carry greater risk of loss. The value of an
investment in the Westcore Small-Cap Opportunity Fund, in particular, may
experience significant fluctuations over time because of the Fund's investments
in smaller companies.
The market value of debt obligations held by the Westcore Funds will also
fluctuate, normally rising when interest rates fall and falling when interest
rates rise. The value of some debt obligations (such as collateralized mortgage
obligations, asset-backed securities, municipal leases and structured notes) may
be more volatile than other types of instruments.
Several of the Funds may invest in foreign securities that are considered
attractive by Denver Investment Advisors. In addition to being more costly,
foreign securities may be subject to potentially adverse political, governmental
and economic developments and changes in foreign currency exchange rates.
Each Fund may purchase certain derivative instruments that derive their value
from the performance of underlying assets, interest or currency exchange rates,
or indices. Derivative instruments present, to varying degrees, special market,
volatility, leveraging, liquidity, pricing and operations risks. See
"Supplemental Information -- Risk Factors Associated with Derivative
Instruments" on page __.
The Funds, with the exception of Westcore Colorado Tax-Exempt Fund, may lend
their securities. All Funds may enter into repurchase agreements and reverse
repurchase agreements with banks and broker/dealers that could experience
financial difficulties and may make limited investments in illiquid securities.
As the Funds' investment adviser, Denver Investment Advisors will evaluate the
rewards and risks presented by all securities purchased by the Funds and will
determine how they will be used in furtherance of the investment objectives of
the Funds. It is possible, however, that Denver Investment Advisors'
evaluations will prove to be inaccurate and, even when accurate, it is possible
that the Funds will incur losses.
-22-
<PAGE>
FUNDAMENTAL INVESTMENT LIMITATIONS
[Black and white photograph of mountain and trees]
WHAT ARE FUNDAMENTAL INVESTMENT LIMITATIONS?
Fundamental investment limitations are those investment limitations that a Fund
may not change without the approval of the holders of a majority of the Fund's
outstanding shares. Some are summarized in the tables on this page (a complete
list is set forth in the SAI).
THE WESTCORE MIDCO GROWTH, BLUE CHIP, GROWTH AND INCOME, SMALL-CAP OPPORTUNITY,
MID-CAP VALUE, LONG-TERM BOND AND INTERMEDIATE-TERM BOND FUNDS MAY NOT:
- - Purchase securities if more than 5% of a Fund's total assets will be
invested in the securities of any issuer. However, up to 25% of the Fund's
total assets may be invested without regard to this 5% limitation. Certain
investments such as U.S. government securities are not subject to this
limitation.
- - Make loans, except that each Fund may purchase and hold debt instruments
and enter into repurchase agreements in accordance with its investment
objective and policies. Each Fund except Westcore Colorado Tax-Exempt Fund
may also lend portfolio securities in an amount not exceeding 30% of its
total assets.
For purposes of the preceding limitation, "total assets" includes the value of
the collateral for the securities loans.
THE WESTCORE LONG-TERM BOND, INTERMEDIATE-TERM BOND AND COLORADO TAX-EXEMPT
FUNDS MAY NOT:
- - Borrow money or issue senior securities except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of its total assets at the time of such
borrowing. No Fund may mortgage, pledge or hypothecate any assets, unless
it is in connection with a permissible borrowing and the amounts do not
exceed the lesser of the dollar amounts borrowed or 10% of the Fund's total
assets at the time of such borrowing.
IN ADDITION, THE WESTCORE COLORADO TAX-EXEMPT FUND MAY NOT:
- - Invest less than 80% of its net assets in securities the interest on which
is exempt from federal income tax, except during periods of unusual market
conditions. For purposes of this limitation only, securities, the interest
on which is treated as a specific tax preference item under the federal
alternative minimum tax, are considered taxable.
- - Make loans, except that the Fund may purchase and hold debt instruments and
enter into repurchase agreements in accordance with its investment
objective and policies.
- - Purchase securities if more than 5% of its total assets will be invested in
the securities of any one issuer. However, up to 50% of the Fund's total
assets may be invested without regard to the 5%
-23-
<PAGE>
limitation as long as not more than 25% of the Fund's total assets are
invested in the securities of any one issuer. Certain investments such as
U.S. government securities are not subject to this limitation.
No Fund will purchase securities so long as its outstanding borrowings
(including reverse repurchase agreements) exceed 5% of its total assets.
If a percentage limitation or other statistical requirement is met at the time a
Fund makes an investment, a later change in the percentage because of a change
in the value of the Fund's portfolio securities generally will not constitute a
violation.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
[Black and white photograph of mountain and trees]
-24-
<PAGE>
HOW TO INVEST AND OBTAIN INFORMATION
This section tells you how to purchase, exchange and redeem your shares. It
also explains various services and features offered in connection with your
account. You may open an account and purchase shares of the Westcore Funds by
completing an Account Application and returning it to Westcore with your check
made payable to Westcore/SSB. You may obtain an Account Application by calling
1-800-392-CORE (2673).
HOW TO OPEN AND ADD TO YOUR ACCOUNT
Please call Westcore Funds at 1-800-392-CORE (2673) if you have any questions or
need any information. ALPS Mutual Funds Services, Inc. is the distributor for
Westcore Funds and has its principal office at 370 Seventeenth Street, Suite
3100, Denver, CO 80202.
HOW TO CONTACT WESTCORE FUNDS
By Regular Mail:
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
By Express, Certified or Registered Mail:
Westcore Funds
c/o BFDS
66 Brooks Drive
Boston, MA 02184
By Telephone:
Investor Service Representative
Weekdays 7 a.m. to 6 p.m. Mountain Time
1-800-392-CORE (2673)
Automated Service Line
24 hours a day, seven days a week
1-800-392-CORE (2673)
By Computer:
Use your personal computer to
access www.westcore.com and the Westcore
Trans@ction Center 24 hours a
day, seven days a week.
-25-
<PAGE>
PURCHASING SHARES
By Mail If you are opening a new account:
Send a completed Account Application
with a check or money order made out to
Westcore/SSB and mail to Westcore Funds
at the address above. Please be sure to
provide your Social Security or taxpayer
identification number on the
application. Westcore Funds are only
available to U.S. residents.
If you are adding to an existing account:
Complete the tear-off investment slip
from your last statement and send it
with your check or money order made out
to Westcore/SSB to Westcore Funds at the
address above.
If you do not have an investment slip,
please send a written request, following
the instructions on pg.___ , along with
the check or money order made out to
Westcore/SSB to Westcore Funds, P.O. Box
8319, Boston, MA 02266-8319.
If you are purchasing shares in a
retirement account, please indicate
whether the purchase is a rollover or a
current or prior year contribution.
If you already have an existing account and
you wish to open a new account with identical
registration and account options in another
Fund:
Send a written request, following the
instructions on pg.___ , to Westcore
Funds, P.O. Box 8319, Boston, MA
02266-8319 referencing the new Fund you
would like to open. Include a check or
money order made out to Westcore/SSB.
By Telephone If you are adding to an existing account:
You can make purchases into Westcore
Funds accounts by calling 1-800-392-CORE
(2673) and speaking with an Investor
Service Representative during normal
business hours or using the Automated
Service Line 24 hours a day. Authorize
electronic transfers from your bank
account on your account application, or
call us for the appropriate form to add
electronic transfer authorization to
your existing account.
See below for further information about
the Automated Telephone Service.
-26-
<PAGE>
If you already have an existing account and
you wish to open a new account with identical
registration and account options in another
Fund:
You can open a new account copying your
existing Westcore Funds account
registration and account options by
calling 1-800-392-CORE (2673) and
speaking with an Investor Service
Representative during normal business
hours or using the Automated Service
Line 24 hours a day. Authorize
electronic transfers from your bank
account on your account application, or
call us for the appropriate form to add
electronic transfer authorization to
your existing account.
See below for further information about
the Automated Telephone Service.
By Automatic Investment Plan Complete the Automatic Investment Plan
Section of your new Account Application
to have money automatically withdrawn
from your bank account monthly,
quarterly or annually (minimum is the
equivalent of at least $50 per month).
Mail the application to Westcore Funds
at the address above.
To add an Automatic Investment Plan to
your existing account, please call us
for the appropriate form.
By Computer If you are adding to an existing account:
You can make purchases into Westcore
Funds accounts by accessing the Westcore
Trans@ction Center at www.westcore.com
24 hours a day. Authorize electronic
transfers from your bank account on your
account application, or call us for the
appropriate form to add electronic
transfer authorization to your existing
account.
See below for further information about
the Westcore Trans@ction Center.
If you already have an existing account and
you wish to open a new account with identical
registration and account options in another
Fund:
You can open a new account copying your
existing Westcore Funds account
registration and account options by
accessing the Westcore Trans@ction
Center at www.westcore.com 24 hours a
day. Authorize electronic transfers
from your bank account on your account
application, or call us for the
appropriate form to
-27-
<PAGE>
add electronic transfer authorization to
your existing account.
See below for further information about
the Westcore Trans@ction Center.
By Wire If you are adding to an existing account:
You can make purchases into Westcore
Funds accounts by a wire transaction.
Please call 1-800-392-CORE (2673) and
speak with an Investor Service
Representative during normal business
hours for wiring instructions.
If you already have an existing account and
you wish to open a new account with identical
registration and account options in another
Fund:
You can open a new account copying your
existing Westcore Funds account
registration and account options by
calling 1-800-392-CORE (2673) and
receiving wiring instructions from an
Investor Service Representative during
normal business hours.
In Person If you are opening a new account or adding to
an existing account:
An Investor Service Representative will
be happy to assist you in person at 370
Seventeenth Street, Suite 3100, Denver,
CO 80202 during normal business hours to
open a new account or add to an existing
account.
Please make checks payable to Westcore/SSB in U.S. dollars and drawn on a bank
located in the U.S. You may not purchase shares by cash, credit card, third
party checks or checks drawn on foreign banks.
If a check does not clear your bank, the Funds reserve the right to cancel the
purchase. If the Funds are unable to debit your predesignated bank account on
the day of purchase, they may make additional attempts or cancel the purchase.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Funds (or their agents) have the
authority to redeem shares in your account(s) to cover any losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund. The Funds reserve the right to reject any order.
EXCHANGING SHARES
You may exchange your Fund shares for shares of the other Funds or the
BlackRock Money Market Portfolio.* Exchanges must meet the "Minimum
Investments" described on pg. ___. Exchanges between
- -------------------------
*BLACKROCK MONEY MARKET PORTFOLIO (FORMERLY, THE COMPASS CAPITAL MONEY MARKET
PORTFOLIO) IS A NO-LOAD
-28-
<PAGE>
accounts will be accepted only if the registrations are identical. If the shares
you are exchanging are held in certificate form, you must return the certificate
to Westcore Funds, P.O. Box 8319, Boston, MA 02266-8319, with your request or
prior to making any exchanges. You should read the Prospectus for the Fund into
which you are exchanging. Please remember an exchange represents the sale of
shares from one fund and the purchase of shares of another fund, which may
produce a taxable gain or loss in a non tax-deferred account. For further
information on the exchange privilege, please call a Westcore Investor Service
Representative at 1-800-392-CORE (2673).
By Mail If you are exchanging into an existing
account:
Please send a written request, following
the instructions on pg.___ , to
Westcore Funds, P.O. Box 8319, Boston,
MA 02266-8319.
If you already have an existing account and you
wish to exchange into a new account with
identical registration and account options in
another Fund:
Please send a written request, following
the instructions on pg.___ , to
Westcore Funds, P.O. Box 8319, Boston,
MA 02266-8319.
By Telephone If you are exchanging into an existing account:
Your account will automatically have the
telephone exchange privilege, unless you
specifically decline this option on the
application or in writing. You can make
exchanges into Westcore Funds accounts
by calling 1-800-392-CORE (2673) and
speaking with an Investor Service
Representative during normal business
hours or using the Automated Service
Line 24 hours a day.
See below for further information about
the Automated Telephone Service.
If you already have an existing account and you
wish to exchange into a new account with
identical registration and account options in
another Fund:
Your account will automatically have the
telephone exchange privilege, unless you
specifically decline this option on the
application or in writing. You can
exchange into a new account copying your
existing Westcore Funds account
registration and account options by
calling 1-800-392-CORE (2673) and
speaking with an Investor Service
(..continued)
MONEY MARKET FUND ADVISED BY BLACKROCK ADVISORS INCORPORATED (FORMERLY PNC ASSET
MANAGEMENT GROUP, INC.), SUB-ADVISED BY BLACKROCK INSTITUTIONAL MANAGEMENT
CORPORATION (FORMERLY PNC INSTITUTIONAL MANAGEMENT CORPORATION) AND DISTRIBUTED
BY BLACKROCK DISTRIBUTORS, INC. (FORMERLY COMPASS DISTRIBUTORS, INC.).
-29-
<PAGE>
Representative during normal business
hours or using the Automated Service
Line 24 hours a day.
See below for further information about
the Automated Telephone Service.
By Automatic Exchange Plan Complete the Automatic Exchange Plan
Section of your new Account Application
to have money automatically exchanged
between funds monthly, quarterly or
annually (minimum is the equivalent of
at least $50 per month). Mail the
application to Westcore Funds at the
address above.
To add an Automatic Exchange Plan to
your existing account, please call us
for the appropriate form.
By Computer If you are exchanging into an existing account:
Your account will automatically have the
computer exchange privilege, unless you
specifically decline this option in
writing. You can make exchanges into
Westcore Funds accounts by accessing the
Westcore TRANS@CTION Center at
www.westcore.com 24 hours a day.
See below for further information about
the Westcore TRANS@CTION Center.
If you already have an existing account and you
wish to exchange into a new account with
identical registration and account options in
another Fund:
Your account will automatically have the
computer exchange privilege, unless you
specifically decline this option in
writing. You can exchange into a new
account copying your existing Westcore
Funds account registration and account
options by accessing the Westcore
TRANS@CTION Center at www.westcore.com
24 hours a day.
See below for further information about
the Westcore TRANS@CTION Center.
In Person If you are exchanging into a new account or an
existing account:
An Investor Service Representative will
be happy to assist you in person at 370
Seventeenth Street, Suite 3100, Denver,
CO 80202 during normal business hours to
process an exchange into a new account
or between existing accounts.
-30-
<PAGE>
REDEEMING SHARES
You may redeem your Fund shares on any business day which the New York Stock
Exchange is open. If you have any questions about how to redeem your shares,
please call a Westcore Investor Service Representative at 1-800-392-CORE (2673).
Redemption proceeds generally will be sent by check to the shareholder(s) of
record at the address of record within seven business days after receipt of a
valid redemption request.
If you have authorized the wire redemption service, your redemption proceeds
will be wired directly into your designated bank account normally on the next
business day after receipt of a valid redemption request.
If you have authorized the electronic funds transfer service, your redemption
proceeds will be transferred directly into your designated bank account
normally on the second business day after receipt of a valid redemption
request.
If the shares being redeemed are held in certificate form, the certificate must
be returned with or before your redemption request.
If the shares being redeemed were purchased by check, telephone, computer or
through the Automatic Investment Plan, the Trust may delay the mailing of your
redemption check for up to 15 days from the day of purchase to allow the
purchase to clear.
By Mail Please send a written request, following the
instructions on pg.___ , to Westcore Funds,
P.O. Box 8319, Boston, MA 02266-8319.
By Telephone Your account will automatically have the
telephone redemption privilege, unless you
specifically decline this option on the
application or in writing. You can make
redemptions from Westcore Funds accounts by
calling 1-800-392-CORE (2673) and speaking with
an Investor Service Representative during
normal business hours or using the Automated
Service Line 24 hours a day. Authorize
electronic transfers from your bank account on
your account application, or call us for the
appropriate form to add electronic transfer
authorization to your existing account.
See below for further information about the
Automated Telephone Service.
By Systematic Withdrawal Plan Complete the Systematic Withdrawal Plan Section
of your new Account Application or call
1-800-392-CORE (2673) for the appropriate form
to have money automatically sent to your bank
account monthly, quarterly or annually in any
multiple of $50.
-31-
<PAGE>
To add a Systematic Withdrawal Plan to your
existing account, please call us for the
appropriate form.
Participation requires a minimum of $10,000 in
a Fund in order to initiate this plan.
By Computer Your account will automatically have the
computer redemption privilege, unless you
specifically decline this option in writing.
You can make redemptions from Westcore Funds
accounts by accessing the Westcore TRANS@CTION
Center at www.westcore.com 24 hours a day. You
need to have authorized electronic transfers
from your bank account on your account
application or call us for the appropriate form
to add electronic transfer authorization to
your existing account.
See below for further information about the
Westcore TRANS@CTION Center.
By Wire Call 1-800-392-CORE (2673) during normal
business hours or write Westcore Funds, P.O.
Box 8319, Boston, MA 02266-8319. You will need
to include proper written instructions as
described on pg__. There is a $1,000 minimum
per transaction made by wire.
In Person An Investor Service Representative will be
happy to assist you in person at 370
Seventeenth Street, Suite 3100, Denver, CO
80202 during normal business hours to process a
redemption order.
GENERAL ACCOUNT POLICIES
Westcore Funds may modify or terminate account policies, services and features ,
but will not materially modify or terminate them without giving shareholders 60
days' written notice.
<TABLE>
<CAPTION>
Minimum Investments Amount
<S> <C>
To open a new account $1,000
To open a new retirement account
or certain other accounts 250
To open a new account with an
automatic investment plan 0
To add to any type of account 50
</TABLE>
The Funds reserve the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
-32-
<PAGE>
Written Instructions
To process transactions in writing, your request should be sent to Westcore
Funds, P.O. Box 8319, Boston, MA 02266-8319 and must include the following
information:
- - the name of the Fund(s)
- - the account number(s)
- - the amount of money or number of shares
- - the name(s) on the account
- - the signature(s) of all registered account owners (signature guaranteed, if
applicable)
- - your daytime telephone number
ADDITIONAL INFORMATION ON TELEPHONE AND COMPUTER SERVICE
Normal business hours to speak with an Investor Service Representative at
1-800-392-CORE (2673) are 7am - 6 pm Mountain Time, Monday through Friday.
Westcore Automated Service Line can be reached via 1-800-392-CORE (2673) for 24
hour access to account and fund information, purchases, exchanges and
redemptions and ordering duplicate statements, tax forms or additional
checkbooks for the BlackRock Money Market Portfolio.
Visit our website at www.westcore.com to find out up-to-date information on each
of the Westcore Funds. In addition, you can access the Westcore TRANS@CTION
Center for 24 hour access to account information, purchases, exchanges and
redemptions.
All shareholders [except for certain accounts opened through Service
Organizations (as defined below) and certain retirement accounts] automatically
have access to Telephone Service and Westcore TRANS@CTION Center unless written
notification explicitly declining these services is received by Westcore Funds
at P.O. Box 8319, Boston, MA 02266-8319.
Shareholders can follow the instructions provided at the Automated Service Line
and Westcore TRANS@CTION Center to access these services using a personal
identification number(s).
Telephone and Computer redemptions are not available for shares held in
individual retirement accounts sponsored by the Funds. In addition, telephone
and computer exchanges and redemptions are not available for shares held in
accounts registered to business entities (i.e. corporations, partnerships, sole
proprietorships) or fiduciary entities (i.e. Uniform Gift to Minor Account,
etc.).
Each separate transaction type (purchases, exchange-in, exchange-out and
redemptions) via these services has a $25,000 daily maximum for transactions
processed by telephone and/or computer.
Purchases or Redemptions by Wire are not available using either the Automated
Service Line or Westcore TRANS@CTION Center.
-33-
<PAGE>
You may choose to initiate certain transactions by telephone or computer.
Although Westcore Funds has designed procedures to enhance security, including
the use of 128-bit encryption through the Westcore TRANS@CTION Center, testing
the identity of the shareholder placing the order and sending prompt written
confirmation of transactions to the address of record, shareholders may give up
some level of security by choosing to purchase, exchange or redeem shares by
telephone or computer rather than by mail. Westcore Funds and their agents will
not be responsible for any losses resulting from unauthorized telephone or
computer transactions when procedures are followed which are reasonably designed
to confirm that computer or telephone transaction request is genuine. It may be
difficult to reach the Funds by telephone or computer during periods of unusual
market activity. If this happens, you may redeem your shares by mail as
described in this Prospectus.
The Funds or their agents may, in case of emergency, temporarily suspend
telephone and computer transactions and other shareholder services.
Signature Guarantee
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized transfers. A signature
guarantee is not the same as a notarized signature. You can obtain a signature
guarantee from a bank or trust company, credit union, broker, dealer, securities
exchange or association, clearing agency or savings association, as defined by
federal law.
The guarantee must be an ink stamp or medallion that states "Signature(s)
Guaranteed" and must be signed in the name of the guarantor by an authorized
person with that person's title and the date. Westcore Funds may reject a
signature guarantee if the guarantor is not a member of or participant in a
signature guarantee program. Call your financial institution to see if they
have the ability to guarantee a signature.
Shareholders living abroad may acknowledge their signatures at an overseas
branch of a U.S. bank, member firm of a stock exchange or any foreign bank
having a branch office in the U.S.
To protect your accounts from fraud, the following transactions will require a
signature guarantee:
- - Transferring ownership of an account.
- - Redeeming more than $25,000 from your account.
- - Redeeming by check payable to someone other than the account owner(s).
- - Redeeming by check mailed to an address other than the address of record.
- - Redemption check mailed to an address which has been changed within the
last 30 days of the redemption request without a signature guarantee.
The Funds reserve the right to require a signature guarantee under other
circumstances or to reject or delay a redemption on certain legal grounds.
Redemption of Low Balance Accounts
If your account balance falls below the required minimums presented on page __,
a letter will be sent advising you to either bring the value of the shares held
in the account up to the minimum or to establish an automatic investment that is
the equivalent of at least $50 per month. If action is not taken within 90 days
of the notice,
-34-
<PAGE>
the shares held in the account will be redeemed and the proceeds will be sent by
check to your address of record. We reserve the right to increase the
investment minimums.
Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to engage
in activities which are illegal or otherwise believed to be detrimental to the
Fund.
Address Changes
To change the address on your account, call 1-800-392-CORE (2673) or send a
written request signed by all account owners. Include the name of the Fund, the
account number(s), the name(s) on the account and both the old address and new
address. Certain options may be suspended for 30 days following an address
change unless a signature guarantee is provided.
Registration Changes
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-392-CORE (2673).
Share Certificates
The Funds will issue share certificates upon written request only. Share
certificates will not be issued until the shares have been held for at least 15
days and will not be issued for accounts that do not meet the minimum
requirements.
Quarterly Consolidated Statements and Shareholder Reports
Westcore Funds will send you a consolidated statement quarterly and a
confirmation after every transaction that affects your share balance or your
account registration with the exception of automatic investment plan
transactions and dividend reinvestment transactions. A statement with tax
information regarding the tax status of income dividends and capital gain
distributions will be mailed to you by January 31 of each year and filed with
the Internal Revenue Service.
Each year, we will send you an annual and a semi-annual report. The annual
report includes audited financial statements and a list of portfolio securities
as of the fiscal year end. The semi-annual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You will also receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your investments in Westcore Funds. Duplicate
mailings of Fund materials to shareholders who reside at the same address may be
eliminated.
[Black and white photograph of mountain and trees]
-35-
<PAGE>
Price of Fund Shares
All purchases, redemptions and exchanges will be processed at the net asset
value ("NAV") next calculated after your request and payment, if required, are
received by the transfer agent or certain authorized broker-dealers or
designated intermediaries in proper form. A Fund's NAV is determined by the
Administrators as of the close of regular trading on the New York Stock Exchange
(the "NYSE"), currently 4:00 p.m. (Eastern time), on each day that the NYSE is
open. In order to receive a day's price, your order must be received by the
transfer agent or certain authorized broker-dealers or designated intermediaries
by the close of regular trading on the NYSE on that day. If not, your request
will be processed at the Fund's NAV at the close of regular trading on the next
day. To be in proper form, your order must include your account number and must
state the Fund shares you wish to purchase, redeem or exchange.
In the case of participants in certain employee benefit plans investing in
certain Funds, purchase orders will be processed at the NAV next determined
after the Service Organization (as defined below) acting on their behalf
receives the purchase order.
The Trust has authorized certain broker-dealers to accept on its behalf purchase
orders made through a `mutual fund supermarket.' Such authorized broker-dealers
may designate other intermediaries to accept purchase orders on behalf of the
Trust.
A Fund's NAV is calculated by dividing the total value of its investments and
other assets, less liabilities, by the total number of shares outstanding. Each
Fund's investments are valued at market value or, when market quotations are not
readily available, at fair value as determined in good faith by or under the
direction of the Board of Trustees. Debt securities with maturities of 60 days
or less are valued at amortized cost, which generally equals market value.
Accounts Opened Through a Service Organization
You may purchase or sell Fund shares through an account you have with Denver
Investment Advisors, any qualified broker/dealer, any bank or any other
institution (your "Service Organization"). Your Service Organization may charge
transaction fees on the purchase and/or sale of Fund shares and may require
different minimum initial and subsequent investments than Westcore requires.
Service Organizations may impose charges, restrictions, transaction procedures
or cut-off times different from those applicable to shareholders who invest in
Westcore directly.
A Service Organization may receive fees from the Trust or Denver Investment
Advisors for providing services to the Trust or its shareholders. Such services
may include, but are not limited to, shareholder assistance and communication,
transaction processing and settlement, account set-up and maintenance, tax
reporting and accounting. In certain cases, a Service Organization may elect to
credit against the fees payable by its customers all or a portion of the fees
received from the Trust or Denver Investment Advisors with respect to their
customers' assets invested in the Trust. The Service Organization, rather than
you, may be the shareholder of record of your Fund shares. Westcore is not
responsible for the failure of any Service Organization to carry out its
obligations to its customers.
-36-
<PAGE>
[Black and white photograph of mountain and trees]
OTHER INFORMATION
DISTRIBUTIONS AND TAXES
Distributions
A Fund's income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as income dividends. A Fund realizes
capital gains whenever it sells securities for a higher price than it paid for
them. Net realized long-term gains are paid to shareholders as capital gain
dividends. A dividend will reduce the net asset value of a Fund share by the
amount of the dividend on the ex-dividend date.
DISTRIBUTION SCHEDULE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Income Dividends Capital Gains
- -------------------------------------------------------------------------------
<S> <C> <C>
Equity Funds Declared and Declared and
paid quarterly* paid in December
- -------------------------------------------------------------------------------
Bond Funds Declared and Declared and
paid monthly paid in December
- -------------------------------------------------------------------------------
</TABLE>
*THE WESTCORE MIDCO GROWTH FUND DISTRIBUTES INCOME DIVIDENDS IN DECEMBER ONLY.
When you open an account, all dividends and capital gains will be automatically
reinvested in the distributing Fund unless you specify on your Account
Application that you want to receive your distributions in cash or reinvest them
in another Fund. Income dividends and capital gain distributions will be
reinvested without a sales charge at the net asset value on the ex-dividend
date. You may change your distribution option at any time by writing or calling
1-800-392-CORE (2673).
TAXES
Federal
As with any investment, you should consider the tax implications of an
investment in the Funds. The following briefly summarizes some of the important
tax considerations generally affecting the Funds and their shareholders. You
should consult your tax adviser with specific reference to your own tax
situation, including the applicability of any state and local taxes. You will
be advised at least annually regarding the federal tax treatment of dividends
paid to you.
Dividends paid by the Westcore Equity Funds and the Westcore Long-Term Bond and
Intermediate-Term Bond Funds will generally be taxable to shareholders as
ordinary income and capital gains (which may be taxable at different rates
depending on the length of time the Fund held the relevant assets). You will be
subject to income tax on these distributions regardless whether they are paid in
cash or reinvested in additional shares.
You should note that if you purchase shares just prior to a distribution, the
purchase price will reflect the amount of the upcoming distribution, but you
will be taxed on the entire amount of the distribution received,
-37-
<PAGE>
even though, as an economic matter, the distribution simply constitutes a return
of your capital. This is known as "buying into a dividend."
You will recognize taxable gain or loss on a sale, exchange or redemption of
your shares, including an exchange for shares of another Fund, based on the
difference between your tax basis in the shares and the amount you receive for
them. (To aid in computing your tax basis, you generally should retain your
account statements for the periods during which you held shares.) Any loss
realized on shares held for six months or less will be treated as a long-term
capital loss to the extent of any capital gain dividends that were received with
respect to the shares.
The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
The Colorado Tax-Exempt Fund anticipates that substantially all of its income
dividends will be exempt from federal income tax (these dividends are known as
"exempt-interest dividends") although any dividends derived from occasional
taxable investments will be subject to federal income tax. In addition,
shareholders must treat the portion of dividends paid by the Fund derived from
interest received on certain private activity bonds as an item of tax preference
for purposes of the federal alternative minimum tax.
-38-
<PAGE>
[Black and white photograph of mountain and trees]
Colorado State Taxes
Because the Westcore Colorado Tax-Exempt Fund intends to invest substantially
all of its assets in tax-exempt obligations of the State of Colorado or its
political subdivisions, shareholders who are subject to Colorado state income
tax will generally not be subject to such tax on dividends paid by the Fund to
the extent that the dividends are attributable to interest income of the Fund.
However, to the extent dividends are not attributable to exempt interest income,
such as distributions of short or long-term capital gain, they will not be
exempt from Colorado income tax.
There are no municipal income taxes in Colorado. Moreover, because shares of
the Westcore Funds are intangibles, they are not subject to Colorado property
tax. Shareholders of the Westcore Funds should consult their tax advisers about
other state and local tax consequences of their investment in the Fund.
-39-
<PAGE>
[Black and white photograph of mountain and trees]
PERFORMANCE REPORTING
This section will help you understand various terms that are commonly used to
describe a Fund's performance. You may see references to these terms in
newsletters, advertisements and in media articles. Newsletters, advertisements
and other publications may include comparisons of a Fund's performance with the
performance of various indices and investments for which reliable performance
data are available and to averages, performance rankings or other information
compiled by recognized mutual fund statistical services.
AGGREGATE TOTAL RETURN
- reflects income and capital appreciation/depreciation and establishes
a total percentage change in the value of an investment in a Fund over
a specified measuring period.
AVERAGE ANNUAL TOTAL RETURN
- represents the average annual percentage change in the value of an
investment in a Fund over a specified measuring period. It is
calculated by taking the aggregate total return for the measuring
period and determining what constant annual return would have produced
the same aggregate return. Average annual returns for more than one
year tend to smooth out variations in a Fund's return and are not the
same as actual annual results.
Both methods of calculating total return assume that you have reinvested
dividends made by a Fund during the period in Fund shares.
YIELD
- shows the rate of income a Fund earns on its investments as a
percentage of its share price. It is calculated by dividing the
Fund's net investment income for a 30-day period by the product of the
average daily number of shares entitled to receive dividends and the
Fund's NAV per share at the end of the 30-day period. The result is
then annualized. This represents the amount you would earn if you
remained invested in a Fund for a year and the Fund continued to have
the same yield for the year. Yield does not include changes in NAV.
TAX-EQUIVALENT YIELD
- of the Westcore Colorado Tax-Exempt Fund shows the level of the
taxable yield needed to produce an after-tax yield equivalent to the
Fund's tax-free yield. It is calculated by increasing the Fund's
yield by the amount necessary to reflect the payment of federal and
Colorado personal income taxes at a stated tax rate. The Fund's
tax-equivalent yield will always be higher than its yield.
Any fees charged by your Service Organization directly to your account in
connection with an investment in a Fund will not be included in the Fund's
calculations of yield and/or total return.
-40-
<PAGE>
Performance quotations of a Fund represent its past performance, and you should
not consider them representative of future results. The investment return and
principal value of an investment in a Fund will fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost. Because
performance will fluctuate, you cannot necessarily compare an investment in Fund
shares with bank deposits, savings accounts and similar investment alternatives
that often provide an agreed or guaranteed fixed yield for a stated period of
time.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-41-
<PAGE>
[Black and white photograph of mountain and trees]
MANAGEMENT OF THE FUNDS
BOARD OF TRUSTEES
The business and affairs of each Fund are managed under the direction of the
Trust's Board of Trustees. The SAI contains information about the Board of
Trustees.
INVESTMENT ADVISER
Denver Investment Advisors LLC ("Denver Investment Advisors") serves as the
investment adviser to the Funds. The Investment Adviser has its principal
offices at 1225 17th Street, 26th Floor, Denver, Colorado 80202. As of May 31,
1998, Denver Investment Advisors had approximately $ 12 billion in assets under
active management. In addition to the Trust, Denver Investment Advisors also
advises the Blue Chip Value Fund, Inc., a closed-end investment company
portfolio.
Subject to the overall authority of the Trust's Board of Trustees, Denver
Investment Advisors has agreed to provide a continuous investment program for
the Funds, including investment research and management. These management
responsibilities include, among other things, furnishing economic and
statistical information as requested by the Trust's trustees and officers. The
Investment Adviser makes investment decisions for the Funds and places orders
for all purchases and sales of the Funds' portfolio securities.
INVESTMENT PERSONNEL
TODGER ANDERSON, CFA, President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore MIDCO Growth
Fund since its inception. Mr. Anderson has been a portfolio manager with
Denver Investment Advisors and its predecessor, Denver Investment Advisors,
Inc., since 1975. He received his B.A. from Colby College and his M.B.A. from
the University of Denver. Mr. Anderson works with securities analysts who from
time to time purchase and sell specific securities under his supervision.
VARILYN K. SCHOCK, CFA, a Vice President and Director of Quantitative Strategies
with Denver Investment Advisors, has been primarily responsible for the
day-to-day management of Westcore Blue Chip Fund since 1991 and Westcore
Small-Cap Opportunity Fund since its inception. Ms. Schock has been with Denver
Investment Advisors and its predecessor, Denver Investment Advisors, Inc., since
1984 and has been a portfolio manager with the company since 1987. She received
her B.A. from the University of Denver.
MILFORD H. SCHULHOF, II, a Vice President of Denver Investment Advisors, has
been primarily responsible for the day-to-day management of Westcore Growth and
Income Fund since October 1995. Mr. Schulhof has been a Vice President and
portfolio manager with Denver Investment Advisors and its predecessor, Denver
Investment Advisors, Inc., since 1985. He received his B.S. from Drake
University and his M.B.A. from the University of Denver. Mr. Schulhof works
with securities analysts who from time to time purchase and sell specific
securities under his supervision.
-42-
<PAGE>
CHRISTIANNA WOOD, CFA, a Vice President of Denver Investment Advisors, is
primarily responsible for the day-to-day management of Westcore Mid-Cap Value
Fund. Ms. Wood has been a portfolio manager of small to midcap companies for
over 17 years, and has been with Denver Investment Advisors since 1996. Prior
to working at Denver Investment Advisors, Ms. Wood was a principal and portfolio
manager at the Burridge Group, an investment advisor for midcap stocks where she
worked from 1991 to 1996. She received her B.A. from Vassar College and her
M.B.A. from New York University.
JEROME R. POWERS, CFA, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore Long-Term Bond
and Intermediate-Term Bond Funds since October 1, 1997. Mr. Powers spent 2
years at GNA Corporation where he served as Vice President of Investments and
Senior Portfolio Manager. Prior to his experience at GNA Corporation, Mr.
Powers was employed at Northwestern Mutual Life Insurance Company where he left
as Vice President of Public Fixed Income. He received his B.B.A. from the
University of Minnesota, Duluth and received his M.M. in Finance from the J.L.
Kellogg Graduate School of Management at Northwestern University.
ROBERT O. LINDIG, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of the Westcore Colorado
Tax-Exempt Fund since its inception. Mr. Lindig has 34 years experience in the
institutional bond market. Prior to his employment with the Investment Adviser,
Mr. Lindig was Vice President and Trust Officer of First Interstate Bank of
Denver, N.A. Mr. Lindig received his B.A. from Dartmouth College and his M.B.A.
from Columbia University.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-43-
<PAGE>
[Black and white photograph of mountains and trees]
MANAGEMENT OF THE FUNDS (continued)
CO-ADMINISTRATORS
ALPS and Denver Investment Advisors serve as co-administrators to the Funds (the
"Administrators"). As Administrators, they have agreed to: assist in
maintaining the Funds' office; furnish the Funds with clerical and certain other
services required by them; compile data for and prepare notices and semi-annual
reports to the SEC; prepare filings with state securities commissions;
coordinate federal and state tax returns; monitor each Fund's expense accruals;
monitor compliance with each Fund's investment policies and limitations; and
generally assist in each Fund's operations. The Administrators are entitled to
receive a fee from each Fund for administrative services, computed daily and
payable monthly, at the aggregate annual rate of .30% of each Fund's average
daily net assets. The Administrators may voluntarily waive all or any portion
of their administration fees from time to time.
Pursuant to a separate agreement, ALPS has agreed to maintain the financial
accounts and records of each Fund and to compute the net asset value and certain
other financial information relating to each Fund. Pursuant to another
agreement, ALPS responds to certain shareholder inquiries and transaction
requests received via telephone.
The Trust has agreed to reimburse Denver Investment Advisors for costs incurred
by Denver Investment Advisors for providing recordkeeping and sub-accounting
services to persons who beneficially own shares of a Fund through omnibus
accounts ("Beneficial Shares"). The amount reimbursed with respect to a Fund
will not exceed the lesser of the costs actually borne by Denver Investment
Advisors or the effective rate for transfer agency services borne by a Fund
without taking into account such Beneficial Shares and applying such rate to
such Beneficial Shares. The Administrators are also authorized to make payments
from their administrative fees or other sources to persons for providing
services to a Fund or its shareholders.
TRANSFER AGENT
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02015,
provides the Funds with transfer agency services in return for compensation.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
Each Fund pays the Investment Adviser an advisory fee under the advisory
agreement. The fees are set forth below and are expressed as an annual
percentage of a Fund's average daily net assets.
The Investment Adviser may from time to time voluntarily waive all or any
portion of these fees and reimburse expenses of a Fund; however, it may modify
or discontinue this practice at any time.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-44-
<PAGE>
<TABLE>
<CAPTION>
Effective Advisory
Fee Schedule Contractual Fees for the Year
Advisory Fees Ended May 31, 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Westcore MIDCO Growth Fund .65% .65%
- -------------------------------------------------------------------------------
Westcore Blue Chip Fund .65% .58%
- -------------------------------------------------------------------------------
Westcore Growth and Income Fund .65% .13%
- -------------------------------------------------------------------------------
Westcore Small-Cap Opportunity Fund 1.00% .63%
- -------------------------------------------------------------------------------
Westcore Mid-Cap Value Fund .75% N/A
- -------------------------------------------------------------------------------
Westcore Long-Term Bond Fund .45% .19%
- -------------------------------------------------------------------------------
Westcore Intermediate-Term Bond Fund .45% .34%
- -------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund .50% .00%
- -------------------------------------------------------------------------------
</TABLE>
-45-
<PAGE>
OTHER INFORMATION CONCERNING THE TRUST AND ITS SHARES
Westcore Trust was originally organized as a Maryland corporation on January 11,
1982. It was reorganized as a Massachusetts business trust on December 10,
1985.
The Trust's Amended and Restated Declaration of Trust authorizes the Board of
Trustees to classify or reclassify any unissued shares of the Trust into one or
more classes of shares. Pursuant to such authority, the Board has authorized
the issuance of an unlimited number of shares representing interests in the
Funds. No other classes or series of shares are currently offered.
SHAREHOLDER MEETINGS
Westcore Trust does not presently intend to hold meetings of shareholders except
as required by the 1940 Act or other applicable law. Under the 1940 Act, the
Board of Trustees is required to call a meeting of shareholders for the purpose
of voting upon the removal of any trustee or trustees when requested in writing
to do so by the record holders of at least 10% of the outstanding shares. If a
shareholders meeting is held, you will be entitled to one vote for each full
share you hold and proportionate fractional votes for fractional shares you
hold. It is contemplated that the shareholders of each Fund will vote
separately by Fund on matters pertaining to its investment advisory agreement
and any changes in its fundamental investment limitations.
As of ________, 1998, Wells Fargo Bank and its affiliated banks possessed, on
behalf of their underlying customer accounts, voting or investment power with
respect to a majority of all of the outstanding shares of Westcore Trust;
therefore, under the 1940 Act, they may be deemed to be a controlling person of
the Trust.
YEAR 2000 RISKS
Like other investment companies and financial service providers, the Fund could
be adversely affected if the computer systems used by the Adviser and the Fund's
other service providers do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Issue." The Year 2000 Issue arises because most computer systems
were designed to only handle a two-digit year, not a four-digit year. When the
year 2000 begins, these computers may interpret "00" as the year 1900 and either
stop processing date-related computations or process them incorrectly. These
failures could have a negative impact on the handling of securities trades,
pricing and account services. The Adviser and Administrators are taking steps
to address the Year 2000 Issue with respect to the computer systems that they
use and to obtain assurance that comparable steps are being taken by the Fund's
other major service providers. As of the date of this Prospectus, it is not
anticipated that shareholders will experience negative effects on their
investment, or on the services provided in connection therewith, as a result of
the Year 2000 Issue. However, there can be no assurance that these steps will
be successful, or that interaction with other non-complying computer systems
will not adversely impact the Fund as a result of the Year 2000 Issue.
[Black and white photograph of mountain and trees]
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<PAGE>
INQUIRIES
Please write or call Westcore Trust at the address or telephone number listed on
the cover of this Prospectus with any inquiries you may have regarding the
Funds.
[Black and white photograph of mountain and trees]
SUPPLEMENTAL INFORMATION
INFORMATION ON INVESTMENT POLICIES AND ADDITIONAL RISK FACTORS
Denver Investment Advisors uses a range of different investments and investment
techniques in seeking to achieve a Fund's investment objective. All Funds do
not use all of the investments and investment techniques described in this
section. The Westcore MIDCO Growth, Blue Chip, Growth and Income, Small-Cap
Opportunity and Mid-Cap Value Funds are referred to collectively as the
"Westcore Equity Funds." The Westcore Long-Term Bond, Intermediate-Term Bond
and Colorado Tax-Exempt Funds are referred to collectively as the "Westcore Bond
Funds."
Municipal Obligations (Westcore Bond Funds)
Municipal Obligations include: (i) "general obligation" securities that are
secured by the issuer's full faith, credit and taxing power; (ii) revenue
securities that are payable only from the revenues derived from a particular
facility or other specific revenue source such as the user of the facility being
financed; (iii) "moral obligation" securities that are normally issued by
special purpose public authorities; and (iv) private activity bonds (such as
bonds issued by industrial development authorities) that are usually revenue
securities issued by or for public authorities to finance a privately operated
facility.
In many cases, the Internal Revenue Service has not ruled on whether the
interest received on a Municipal Obligation is tax-exempt, and, accordingly,
purchases of these securities are based on the opinion of bond counsel to the
issuers at the time of issuance. The Funds and the Investment Adviser rely on
these opinions and will not review the bases for them.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-47-
<PAGE>
SUPPLEMENTAL INFORMATION (CONTINUED)
Special Considerations Regarding Investment in Colorado Obligations
(Westcore Colorado Tax-Exempt Fund)
The Fund normally invests at least 65% of its total assets in Colorado
Obligations. If Colorado or any of its political subdivisions suffer serious
financial difficulties such that the ability to pay obligations might be
jeopardized, the ability of such entities to market their securities, and the
value of the Fund, could be adversely affected.
U.S. Government Obligations
(All Westcore Funds)
Each Fund may invest in obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities. Direct obligations of the U.S. government
such as Treasury bills, notes and bonds are supported by its full faith and
credit. Indirect obligations issued by federal agencies and
government-sponsored entities generally are not backed by the full faith and
credit of the U.S. Treasury. Some of these indirect obligations may be
supported by the right of the issuer to borrow from the Treasury; others are
supported by the discretionary authority of the U.S. government to purchase the
agency's obligations; still others are supported only by the credit of the
instrumentality.
Money Market Instruments
(All Westcore Funds)
Each Fund may invest from time to time in money market instruments such as bank
obligations, commercial paper and corporate bonds with remaining maturities of
13 months or less. Bank obligations include bankers' acceptances, certain
negotiable certificates of deposit and time deposits such as U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks. Commercial paper is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other borrowers.
Each Fund may invest in short-term funding agreements. A funding agreement is a
contract between an issuer and a purchaser that obligates the issuer to pay a
guaranteed rate of interest on a principal sum deposited by the purchaser.
Funding agreements will also guarantee the return of principal and may guarantee
a stream of payments over time. A funding agreement may have either a fixed
rate or variable interest rate that is based on an index and guaranteed for a
set time period. The Funds intend to invest only in funding agreements which
have a put feature which may be exercised on seven days' notice.
-48-
<PAGE>
Variable and Floating Rate Instruments
(Westcore Bond Funds)
These Funds may purchase variable and floating rate demand instruments,
including variable amount master demand notes, issued by corporations,
industrial development authorities and governmental entities.
Repurchase Agreements and Reverse Repurchase Agreements
(All Westcore Funds)
In a repurchase agreement, a Fund agrees to purchase portfolio securities
subject to the seller's agreement to repurchase them at a mutually agreed upon
date and price. Repurchase agreements involve the risk that the seller will
fail to repurchase the securities, as agreed. In that event, the Fund will bear
the risk of possible loss because of adverse market action or delays in
liquidating the underlying obligations. Repurchase agreements are considered to
be loans under the 1940 Act.
[Black and white photograph of mountain and trees]
Each Fund may borrow money for temporary purposes by entering into reverse
repurchase agreements. Under these agreements, a Fund sells portfolio
securities to financial institutions and agrees to buy them back later at an
agreed upon time and price. Reverse repurchase agreements involve the risk of
counterparty default and possible loss of collateral held by the counterparty.
Lower-Rated Securities
(All Westcore Equity Funds)
Investments in issuers of securities rated below investment grade (commonly
known as "junk bonds") are considered to be more speculative than securities
rated investment grade and higher. There are particular risks associated with
these securities, including: (a) the relative youth and growth of the market;
(b) their greater sensitivity to interest rate and economic changes, which could
negatively affect their value and the ability of issuers to make principal and
interest payments; (c) the relatively low trading market liquidity for the
securities, which may adversely affect the price at which they could be sold;
(d) a greater risk of default or price changes because of changes in the
issuer's creditworthiness; and (e) the adverse impact that legislation
restricting lower-rated securities may have on their market.
Securities Lending
(All Westcore Funds, other than Westcore Colorado Tax-Exempt Fund)
These Funds may lend their portfolio securities to institutional investors as a
means of earning additional income. Securities loans present risks of delay in
receiving collateral or in recovering the securities loaned or even a loss of
rights in the collateral if the borrower of the securities fails financially. A
loan will not be made if, as a result, the total amount of a Fund's outstanding
loans exceeds 30% of its total assets (including the value of the collateral for
the loan).
-49-
<PAGE>
Restricted Securities
(All Westcore Funds)
No Fund will knowingly invest more than 15% of the value of its net assets in
securities that are illiquid. Illiquid securities include repurchase
agreements, securities loans and time deposits that are not terminable within
seven days, certain municipal leases and certain securities that are not
registered under the securities laws. Pursuant to guidelines adopted by the
Board of Trustees, the Investment Adviser may determine that certain securities
that are not registered under the Securities Act of 1933, as amended, are not
illiquid and therefore are not subject to this 15% limitation. However, there
can be no assurance that a liquid market will exist for any security at a
particular time.
In addition, the purchase of such securities could have the effect of increasing
the level of illiquidity of the Funds during periods that qualified
institutional buyers become uninterested in purchasing these restricted
securities.
Convertible Securities
(All Westcore Funds, other than Westcore Colorado Tax-Exempt Fund)
These Funds may invest in convertible securities, including bonds and preferred
stocks, that may be converted into common stock at a specified price or
conversion ratio. The Funds use the same research-intensive approach and
valuation techniques for selecting convertible securities as are used for the
selection of common stocks.
The value of a convertible security is influenced by both interest rates and the
value of the underlying common stock. Investments in convertible securities,
including in particular those with lower ratings, involve the risk that the
securities, when converted, may be worth less than the prestated price.
Asset-Backed Securities
(Westcore Bond Funds, other than Westcore Colorado Tax-Exempt Fund)
These Funds may purchase asset-backed securities, which are securities backed by
installment sale contracts, credit card receivables or other assets. The yield
characteristics of asset-backed securities differ from traditional debt
securities. A major difference is that the principal amount of the obligations
may be prepaid at any time because the underlying assets (i.e., loans) generally
may be prepaid at any time. The prepayment rate is primarily a function of
current market rates and conditions. In periods of rising interest rates, the
rate of prepayment tends to increase. During periods of falling interest rates,
the reinvestment of prepayment proceeds by a Fund will generally be at a lower
rate than the rate on the prepaid obligation. Prepayments may also result in
some loss of a Fund's principal investment if any premiums were paid. As a
result of these yield characteristics, some high-yielding asset-backed
securities may have less potential for growth in value than conventional bonds
with comparable maturities. These characteristics may result in a higher level
of price volatility for these assets under certain market conditions.
Asset-backed securities are subject to greater risk of default during periods of
economic downturn than conventional debt instruments, and the holder frequently
has no recourse against the entity that originated the security. In addition,
the secondary market for certain asset-backed securities may not be as liquid as
the
-50-
<PAGE>
market for other types of securities, which could result in the Funds'
experiencing difficulty in valuing or liquidating such securities.
[Black and white photograph of mountain and trees]
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-51-
<PAGE>
[Black and white photograph of mountain and trees]
SUPPLEMENTAL INFORMATION
(CONTINUED)
Mortgage-Related Securities
(Westcore Bond Funds, other than Westcore Colorado Tax-Exempt Fund)
These Funds may invest in mortgage-related securities issued or guaranteed by
U.S. government agencies and private issuers. They may include mortgage
pass-through certificates, which provide the holder with a pro rata interest in
the underlying mortgages, and collateralized mortgage obligations ("CMOs"),
which provide the holder with a specified interest in the cash flow of a pool of
underlying mortgages or other mortgage-backed securities. Issuers of CMOs
frequently elect to be taxed as pass-through entities known as real estate
mortgage investment conduits ("REMICs"). CMOs are issued in multiple classes,
each with a specified fixed or floating interest rate and a final distribution
date.
Mortgage-related securities involve risks similar to those described under
"Asset-Backed Securities," including prepayment risks. In addition, CMOs may
exhibit more price volatility and interest rate risk than other types of
mortgage-related obligations.
REITs (All Westcore Funds, other than Westcore Colorado Tax-Exempt Fund)
The Funds may invest in equity real estate investment trusts ("REITs") and
mortgage REITs. Equity REITs invest directly in real property. Mortgage REITs
invest in mortgages on real property. The Westcore Bond Funds may invest in
fixed-income securities issued by REITs. The Westcore Equity Funds may invest
in equity securities issued by REITs.
REITs may be subject to certain risks associated with the direct ownership of
real estate including declines in the value of real estate, risks related to
general and local economic conditions, overbuilding and increased competition,
increases in property taxes and operating expenses, and variations in rental
income. Generally, increases in interest rates will decrease the value of high
yielding securities and increase the costs of obtaining financing, which could
decrease the value of the portfolio's investments. In addition, equity REITs
may be affected by changes in the value of the underlying property owned by the
trusts, while mortgage REITs may be affected by the quality of credit extended.
REITs are also subject to heavy cash flow dependency, defaults by borrowers,
self liquidation and the possibility of failing to qualify for tax-free
pass-through of income under the Internal Revenue Code and to maintain exemption
from the 1940 Act.
-52-
<PAGE>
Options and Futures
(All Westcore Funds, other than Westcore Colorado Tax-Exempt Fund)
These Funds may buy put options and call options and write covered call and
secured put options on securities and securities indices. A put option gives
the buyer the right to sell, and the writer the obligation to buy, the
underlying security at the stated exercise price at any time prior to the
expiration date of the option. Writing a secured put option means that a Fund
maintains in a segregated account with its custodian cash or U.S. Government
securities in an amount not less than the exercise price of the option at all
times during the option period. A call option gives the buyer the right to buy
the underlying security at the stated exercise price at any time prior to the
expiration of the option. Writing a covered call option means that a Fund owns
or has the right to acquire the underlying security, subject to call at the
stated exercise price at all times during the option period. Options involving
securities indices provide the holder with the right to make or receive a cash
settlement upon exercise of the option based on movements in the index. Options
purchased by a Fund will not exceed 5% of its net assets and options written by
a Fund will not exceed 25% of its net assets. All options will be listed on a
national securities' exchange and issued by the Options Clearing Corporation.
These Funds may invest to limited extent in futures contracts and options on
futures contracts in order to reduce their exposure to movements of security
prices pending investment, for hedging purposes or to maintain liquidity.
Futures contracts obligate a Fund, at maturity, to take or make delivery of
certain securities or the cash value of a contract or securities index. Each
Fund may also purchase and sell call and put options on futures contracts traded
on an exchange or board of trade.
-53-
<PAGE>
[Black and white photograph of mountain and trees]
In accordance with regulations of the Commodity Futures Trading Commission, a
Fund's commodities transactions must constitute bona fide hedging or other
permissible transactions. In addition, a Fund may not engage in commodities
transactions if the sum of the amount of initial margin deposits and premiums
paid for related options, other than for bona fide hedging transactions, would
exceed 5% of its assets (after certain adjustments). In connection with a
position in a futures contract or related option, a Fund will create a
segregated account of liquid high-grade assets or will otherwise cover its
position in accordance with SEC requirements.
Options trading and futures transactions are highly specialized activities and
carry greater than ordinary investment risks. The primary risks associated with
the use of options and futures contracts are: (1) options and futures may fail
as hedging techniques when the price movements of the securities underlying them
do not follow the price movements of the portfolio securities subject to the
hedge; (2) a Fund will likely be unable to control losses by closing its
position in these investments where a liquid secondary market does not exist;
(3) losses from investing in futures transactions because of unanticipated
market movements are potentially unlimited; and (4) gains and losses on
investments in options and futures depend on the Investment Adviser's ability to
correctly predict the direction of securities prices, interest rates and other
economic factors.
Foreign Currency Exchange Transactions
(All Westcore Equity Funds)
These Funds may buy and sell securities and receive amounts denominated in
currencies other than the U.S. dollar, and may enter into currency exchange
transactions from time to time. A Fund will purchase foreign currencies on a
"spot" or cash basis at the prevailing rate in the foreign currency exchange
market or enter into forward foreign currency exchange contracts. Under these
contracts the Fund would agree with a financial institution to purchase or sell
a stated amount of a foreign currency at a specified price, with delivery to
take place at a specified date in the future. Because there is a risk of loss
to a Fund if the other party does not complete the transaction, these contracts
will be entered into only with parties approved by the Fund's Board of Trustees.
A Fund may maintain "short" positions in forward foreign currency exchange
transactions whereby the Fund would agree to exchange currency that it currently
did not own for another currency at a future date and at a specified price.
This would be done in anticipation of a decline in the value of the currency
sold short relative to the other currency and not for speculative purposes. In
order to ensure that the short position is not used to achieve leverage with
respect to a Fund's investments, the Fund would establish with its custodian a
segregated account consisting of cash or certain liquid high-grade debt
securities equal in value to the market value of the currency involved.
When-Issued Purchases and Forward Commitments
(All Westcore Funds)
Each Fund may purchase or sell securities on a "when-issued" or "forward
commitment" basis which involves a commitment by the Fund to purchase or sell
particular securities with payment and delivery taking place at a future date.
These transactions permit a Fund to lock in a price or yield on a security it
owns or intends to
-54-
<PAGE>
purchase, regardless of future changes in interest rates. The Fund would bear
the risk, however, that the price or yield obtained in a transaction may be less
favorable than the price or yield available in the market when the delivery
occurs. Because a Fund is required to hold and maintain in a segregated account
until the settlement date cash, U.S. Government securities or liquid assets, in
an amount sufficient to meet the purchase price, the Fund's liquidity and
ability to manage its portfolio might be affected during periods in which its
commitments exceed 25% of the value of its assets. The Funds do not intend to
engage in when-issued purchases and forward commitments for speculative
purposes.
Securities Issued by Other Investment Companies
(All Westcore Funds)
Each Fund may invest in securities issued by other investment companies subject
to the requirements of applicable securities laws. When a Fund invests in
another investment company, it pays a pro rata portion of the advisory and other
expenses of that company as a shareholder of that company. These expenses would
be in addition to the Fund's own expenses.
-55-
<PAGE>
[Black and white photograph of mountain and trees]
Foreign Securities
(All Westcore Funds)
These Funds may invest in foreign securities. There are risks and costs involved
in investing in securities of foreign issuers (including foreign governments),
which are in addition to the usual risks inherent in U.S. investments.
Investments in foreign securities may involve higher costs than investments in
U.S. securities, including higher transaction costs as well as the imposition of
additional taxes by foreign governments. Foreign investments may involve
further risks associated with the level of currency exchange rates, less
complete financial information about the issuer, less market liquidity and
political instability. Future political and economic developments, the possible
imposition of withholding taxes on interest income, the possible seizure or
nationalization of foreign holdings, the possible establishment of exchange
controls or the adoption of other governmental restrictions might adversely
affect the payment of principal and interest on foreign obligations. Moreover,
foreign banks and foreign branches of domestic banks may be subject to less
stringent reserve requirements and to different accounting, auditing and
recordkeeping requirements.
Investments in foreign securities may be in the form of American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs") and similar securities.
These securities may not be denominated in the same currency as the securities
they represent. ADRs are receipts typically issued by a United States bank or
trust company, and EDRs are receipts issued by a European financial institution
evidencing ownership of the underlying foreign securities. Up to 25% of the
MIDCO Growth, Growth and Income, Blue Chip and Mid-Cap Value Funds' assets may
be invested in securities issued by foreign companies, either directly (if the
company is listed on a U.S. exchange) or indirectly through ADRs.
Stand-by Commitments
(Westcore Colorado Tax-Exempt Fund)
The Fund may acquire stand-by commitments under which a dealer agrees to
purchase certain Municipal Obligations at the Fund's option at a price equal to
their amortized cost value plus interest. These commitments will be used only
to assist in maintaining the Fund's liquidity and not for trading purposes.
Portfolio Turnover
(All Westcore Funds)
A Fund may sell a portfolio investment soon after it is purchased if the
Investment Adviser believes that a sale is consistent with the Fund's investment
objective. A high rate of portfolio turnover involves correspondingly greater
brokerage commission expenses, tax consequences (including the possible
realization of additional taxable capital gains and income) and other
transaction costs, which must be borne directly by the Fund involved and
ultimately by its shareholders.
-56-
<PAGE>
Risk Factors Associated with Derivative Instruments
(All Westcore Funds)
Each Fund may purchase certain "derivative" instruments as have been described
under various headings. Derivative instruments are instruments that derive
value from the performance of underlying assets, interest or currency exchange
rates, or indices, and include, but are not limited to, futures contracts,
options, forward currency contracts and structured debt obligations (including
collateralized mortgage obligations and other types of asset-backed securities
and various floating rate instruments, including inverse floaters).
Derivative instruments present, to varying degrees, market risk that the
performance of the underlying assets, exchange rates or indices will decline;
credit risk that the dealer or other counterparty to the transaction will fail
to pay its obligations; volatility and leveraging risk that, if interest or
exchange rates change adversely, the value of the derivative instrument will
decline more rapidly than the assets, rates or indices on which it is based;
liquidity risk that a Fund will be unable to sell a derivative instrument when
it wants because of lack of market depth or market disruption; pricing risk that
the value of a derivative instrument (such as an option) will not correlate
exactly to the value of the underlying assets, rates or indices on which it is
based or may be difficult to determine because of a lack of reliable objective
information and an established secondary market; and operations risk that loss
will occur as a result of inadequate systems and controls, human error or
otherwise. Many of these instruments are proprietary products that have been
recently developed by investment banking firms, and it is uncertain how they
will perform under different economics and interest rate scenarios.
- -------------------------------------------------------------------------------
-57-
<PAGE>
APPENDIX [BLACK AND WHITE PHOTOGRAPH OF MOUNTAIN AND TREES]
PRIOR PERFORMANCE OF INVESTMENT ADVISER FOR WESTCORE GROWTH AND INCOME FUND
On January 1, 1996, the name of Westcore's "Equity Income Fund" was changed
to "Growth and Income Fund." The name change reflected a change to a
growth and income investment objective and changes to investment policies
of the Fund. This section provides performance information for an account
managed by the Investment Adviser with growth and income objectives and
policies, prior to the date that such policy and objectives were
implemented for the Westcore Growth and Income Fund.
The table on page A-2 sets forth historical performance data of the
Investment Adviser for the only actual discretionary account managed by the
Investment Adviser during the periods indicated, that had investment
objectives, policies, strategies and risks substantially similar to those
of the Westcore Growth and Income Fund. For the periods prior to October
1, 1995, the performance reflects that of a non-fee paying commingling
account. For the three-month period ended December 31, 1995, performance
reflects that of an account which is a mutual fund. The performance has
been restated to reflect certain expenses, as set forth in footnote 2 to
the table.
The data is provided to illustrate the past performance of the Investment
Adviser in managing a substantially similar account as measured against a
specified market index and does not represent the performance of the
Westcore Growth and Income Fund. Investors should not consider this
performance data as an indication of future performance of the Westcore
Growth and Income Fund or of the Investment Adviser. Share prices and
investment returns will fluctuate reflecting market conditions, as well as
changes in company-specific fundamentals of portfolio securities. All
returns presented were calculated on a total return basis and include all
dividends and interest, accrued income and realized and unrealized gains
and losses. All returns reflect the deduction of custodial fees, if any,
and brokerage commissions and execution costs paid by the account, without
provision for federal or state income taxes. Securities transactions are
accounted for on the trade date and accrual accounting is utilized. Cash
and equivalents are included in performance returns. The monthly returns
of the account are calculated on a time-weighted rate of return that is
revalued whenever cash flows exceed $500. Quarterly and yearly returns are
calculated by geometrically linking the monthly and quarterly returns,
respectively. No leverage was used in the account. The return of the
mutual fund for the three months ended December 31, 1995 has been
calculated by the mutual fund. The use of a different methodology to
calculate performance could result in different performance data. The
performance presentation is not audited.
The commingled account whose performance is reflected below was not subject
to the same types of expenses to which the Westcore Growth and Income Fund
is subject nor to the diversification requirements, specific tax
restrictions and investment limitations imposed on the Westcore Growth and
Income Fund by the Investment Company Act or Subchapter M of the Internal
Revenue Code. Consequently, the performance results for the commingled
account could have been adversely affected if the account had been
regulated as an investment company under the federal securities laws.
The Investment Adviser's advisory fee schedule for growth and income
investing is .65% of assets. Additional information concerning fees
charged for investment services offered by the Investment
A-1
<PAGE>
Equity & Bond Funds Prospectus
- -------------------------------------------------------------------------------
Adviser is contained in Part II of the Investment Adviser's Form ADV which
is on file with the Securities and Exchange Commission and is available
upon request.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
A-2
<PAGE>
Appendix (continued)
INVESTMENT ADVISER'S GROWTH AND INCOME PERFORMANCE
<TABLE>
<CAPTION>
Assets Included in
Adviser's Investment Adviser's
Investment Adviser's Growth and Income Total Assets
Growth and Income Performance(3) Under Management(4) Standard & Poor's
Year(1) Performance(2) ($ thousands) ($ thousands) 500 Index(5)
<S> <C> <C> <C> <C>
1986 17.97% $68,227 $2,514,300 18.64%
1987 (0.92)% $57,193 $3,700,500 5.28%
1988 9.79% $49,750 $4,269,900 16.55%
1989 25.32% $49,554 $4,876,900 31.61%
1990 (3.81)% $42,455 $4,171,400 (3.05)%
1991 42.33% $58,368 $5,566,100 30.46%
1992 11.97% $63,106 $6,282,100 7.63%
1993 16.45% $72,620 $7,527,043 10.08%
1994 (4.22)% $69,021 $8,242,854 1.32%
1995 29.95% $25,125 $9,546,291 37.58%
Compounded Annual
Return For 5
Years Ended 1995 18.23% -- -- 16.59%
Compounded Annual
Return For 10
Years Ended 1995 13.58% -- -- 14.87%
</TABLE>
- ------------------------
(1) All periods are ended December 31.
(2) Annual total return is presented for each year and compounded annual return
is presented for each period, net of expenses. The performance has been
restated to reflect a total expense ratio of 1.15%, which is the expense
ratio that the Westcore Growth and Income Fund is expected to incur during
the current fiscal year and which reflects a management fee of .65% of net
assets. That expense ratio reflects voluntary fee waivers and/or expense
reimbursements by the administrators of the Westcore Growth and Income
Fund. These waivers and/or reimbursements may be modified or terminated at
any time.
(3) Assets whose performance is reflected in the Investment Adviser's growth
and income performance at December 31.
A-3
<PAGE>
(4) Assets under management of the Investment Adviser at December 31.
(5) Annual total return is presented for each year and compounded annual return
is presented for each period. The S&P 500 Index is an unmanaged Index
containing common stocks of 500 industrial, transportation, utility and
financial companies, regarded as generally representative of the U.S. stock
market. The Index reflects the investment of income dividends and capital
gain distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses or investing.
RATING CATEGORIES
MOODY'S INVESTORS SERVICE, INC.
Bond Rating Explanation
- -------------------------------------
Aaa Highest quality, smallest degree of investment risk.
Aa High quality; together with Aaa bonds, they compose the
high-grade bond group.
A Upper medium-grade obligations; some favorable
investment attributes.
Baa Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal payments appear
adequate for the present, but certain protective
elements may be lacking or may be unreliable over any
great length of time. Some speculative characteristics.
Ba More uncertain, with speculative elements. Questionable
protection of interest and principal payments.
B Lack characteristics of desirable investment;
potentially low assurance of timely interest and
principal payments or maintenance of other contract
terms over time.
Caa Poor standing, may be in default; elements of danger
with respect to principal or interest payments.
Ca Speculative in a high degree; may be in default.
C Lowest-rated; extremely poor prospects of ever
attaining investment standing.
D In default.
A-4
<PAGE>
Equity & Bond Funds Prospectus
- -------------------------------------------------------------------------------
STANDARD & POOR'S RATINGS GROUP, DIVISION OF MCGRAW HILL
Bond Rating Explanation
- ------------------------------------
AAA Highest rating; extremely strong capacity to pay
interest and repay principal.
AA High quality; very strong capacity to pay interest and
repay principal.
A Strong capacity to pay interest and repay principal;
somewhat more susceptible to the adverse effects of
changing circumstances and economic conditions.
BBB Adequate capacity to pay interest and repay principal;
normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances
more likely to lead to a weakened capacity to pay
interest and repay principal than for higher rated
bonds.
BB, B, Predominantly speculative with respect to the issuer's
capacity to meet required interest
CCC, and principal payments. BB - lowest degree of
speculation, C--the highest degree of
CC, C speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk
exposure to adverse conditions.
D In default.
- -------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
A-5
<PAGE>
WESTCORE FUNDS
370 17th Street
Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
www.westcore.com
Funds distributed by ALPS Mutual Funds Services, Inc., member NASD.
<PAGE>
[mountain logo]
Westcore Funds [Black and white photograph of mountain]
Westcore MIDCO Growth Fund Prospectus
<PAGE>
October 1, 1998
[mountain logo]
Westcore Funds
Prospectus For Westcore MIDCO Growth Fund
This Prospectus describes one mutual fund (the "Fund") offered by Westcore Trust
("Westcore" or the "Trust"). The Fund is a no-load investment. This permits
you to purchase and sell shares of the Fund without a sales charge. If you
enroll in our Automatic Investment Plan, you can open your account for as little
as $50 a month. Otherwise, the minimum initial investment is normally $1,000.
Denver Investment Advisors LLC ("Denver Investment Advisors" or the "Investment
Adviser") serves as investment adviser for the Fund. Denver Investment Advisors
and its predecessors have more than 40 years of investment management experience
and Denver Investment Advisors currently manages approximately $12 billion in
assets for clients such as corporations, insurance companies and individuals.
ALPS Mutual Funds Services, Inc. ("ALPS") serves as the Fund's distributor.
This Prospectus sets forth information that you should consider before
investing. Please read this prospectus and keep it for future reference. It
contains important information including how the Fund invests and shareholder
services available to you. Additional information is contained in a Statement
of Additional Information ("SAI"), dated October 1, 1998, on file with the
Securities and Exchange Commission (the "SEC"). You may obtain a free copy of
the SAI by writing or calling Westcore at the address or telephone number shown
on the back cover. The SAI is incorporated by reference into this Prospectus.
The SEC maintains a web site (http://www.sec.gov) that contains the SAI material
incorporated by reference, and other information regarding the Fund.
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.
[photograph of mountain]
-2-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
TABLE OF CONTENTS [black and white photograph of mountain]
Fund Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Specifics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . . .
Fundamental Investment Limitations. . . . . . . . . . . . . . . . . . . . .
How To Invest and Obtain Information. . . . . . . . . . . . . . . . . . . .
How To Open and Add to Your Account . . . . . . . . . . . . . . . . . . . .
How to Contact Westcore Funds . . . . . . . . . . . . . . . . . . . . . . .
Purchasing Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchanging Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeeming Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Account Policies. . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information on Telephone and Computer Service. . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions And Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Of Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inquiries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental Information. . . . . . . . . . . . . . . . . . . . . . . . . .
Information On Investment Policies And Additional Risk Factors. . . . . . .
-3-
<PAGE>
[mountain logo] WESTCORE FUNDS
Fund Information
Fund Highlights
This section provides you with a brief overview of the Westcore MIDCO Growth
Fund and summarizes the Fund's investment objective. A detailed discussion of
its investment objective, policies and risks begins on page __ and complete
information on how to purchase, exchange and redeem Fund shares begins on
page __.
Westcore MIDCO Growth Fund - seeks to maximize long-term capital appreciation by
investing primarily in medium-sized growth companies.
Expense Information
THE EXAMPLE ILLUSTRATES THE EFFECT OF EXPENSES AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
Westcore MIDCO Growth Fund
Shareholder Transaction Expenses None
Annual Operating Expenses
(as a percentage of average net assets)
Management Fees 0.65%
12b-1 Fees None
All Other Expenses 0.48%
Total Operating Expense 1.13%(1)
EXAMPLE: Assume you invest $1,000, the annual return on the Fund is 5%, and the
Fund's annual operating expenses remain as listed above. The example below
shows the operating expenses that you would indirectly bear as an investor in
the Fund.
-4-
<PAGE>
One Year $12
Three Years $36
Five Years $63
Ten Years $138
(1) The Administrators and Investment Adviser have advised the Trust that they
intend to waive fees or reimburse expenses with respect to the Fund so that
Total Operating Expenses will not exceed 1.15%.
-5-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
[black and white photograph of mountain]
The table and example at left show you the various costs and expenses you will
bear directly or indirectly as an investor in the Fund. Shareholder Transaction
Expenses are charges you pay when buying, exchanging or selling shares of the
Fund. The no-load Westcore MIDCO Growth Fund does not charge any Shareholder
Transaction Expenses. Annual Fund Operating Expenses, which are based on
amounts incurred during the most recent fiscal year, restated to reflect current
expenses, are paid out of the Fund's assets and include fees for portfolio
management, maintenance of shareholder accounts, general Fund administration,
shareholder servicing, accounting and other services.
If you own shares through certain Service Organizations (as described in the
section entitled "General Account Policies") you may pay account charges in
connection with the maintenance of your account at the Service Organization.
These account charges are in addition to the expenses shown above.
For more complete descriptions of shareholder transaction expenses and the
Fund's operating expenses, see "General Account Policies" and "Management of the
Fund" in this Prospectus and the financial statements and related notes included
in the SAI.
Financial Highlights
Westcore MIDCO Growth Fund
(For a Fund Share Outstanding Throughout the Periods Indicated.)
The table on page __ provides supplementary information to the Fund's
financial statements contained in the SAI and sets forth certain information
concerning the historic investment results of Fund shares. The financial
highlights are based on the financial statements of the Fund, which have been
audited by ______________, the Trust's independent auditors. You should read
the table together with the financial statements and related notes included
in the SAI. Further information about the performance of the Fund is
available in the Annual Report to Shareholders. You may obtain both the SAI
and the Annual Report to Shareholders free of charge by contacting ALPS or
Westcore Trust at 1-800-392-CORE (2673).
-6-
<PAGE>
[mountain logo] Westcore Funds
WESTCORE MIDCO GROWTH FUND PROSPECTUS
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
<CAPTION>
For the Year Ended May 31,*
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $9.82
Income From Investment Operations
Net investment income (loss) (0.15) (0.08) 0.00 0.00 0.04 0.06 0.07 0.24 0.19
Net realized and unrealized
gain (loss) on investments 1.19 6.58 1.56 1.34 2.48 1.84 3.16 1.32 2.52
Total income (loss) from
investment operation 1.04 6.50 1.56 1.34 2.52 1.90 3.23 1.56 2.71
Dividends and Distributions
to Shareholders
Dividends from net
investment income 0.00 0.00 0.00 0.00 0.00 (0.32) (0.08) (0.24) (0.10)
Distributions from net realized
gain on investments (3.02) (0.72) (0.53) (1.03) (1.11) (1.20) (0.72) (1.93) (0.25)
Return of capital 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00
Total dividends, distributions and
return of capital to shareholders (3.02) (0.72) (0.53) (1.04) (1.11) (1.52) (0.80) (2.17) (0.35)
Net asset value--end of period $20.92 $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18
Total return 5.27% 38.62% 10.05% 8.37% 18.04% 14.09% 30.44% 15.33% 28.46%
Ratios/Supplemental Data:
Net assets, end of
period (000 omitted) $590,008 $656,490 $401,760 $335,453 $231,595 $180,681 $131,420 $85,209 $81,948
Ratio of expenses to
average net assets 1.14% 1.08% 0.94% 0.84% 0.83% 0.80% 0.78% 0.83% 0.80%
Ratio of net investment income
(loss) to average net assets (0.70%) (0.42%) (0.03%) (0.09%) 0.04% 0.12% 0.58% 2.05% 1.21%
Ratio of expenses to average
net assets without fee waivers 1.14% 1.10% 0.96% 0.87% 0.85% 0.85% 0.88% 0.88% 0.85%
Ratio of net investment
income (loss) to average
net assets without fee waivers (0.71%) (0.44%) (0.05%) (0.12%) 0.02% 0.07% 0.48% 2.00% 1.16%
Portfolio turnover rate(1) 60.78% 62.83% 50.19% 52.05% 56.23% 48.17% 75.43% 86.62% 74.03%
Average commission rate(2) $.0466 -- -- -- -- -- -- -- --
</TABLE>
- -----------------------
(1) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1998, were $___________ and $___________, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30 for 1997 and Year ended May 29 for 1998.
-7-
<PAGE>
[mountain logo] WESTCORE FUNDS
Fund Specifics
Investment Objective and Policies
This section looks more closely at the Fund's investment objective, policies
and securities in which it invests. You should carefully consider your own
investment goals, time horizon and risk tolerance before investing in the
Fund. You should also carefully review the section entitled "Supplemental
Information-Information on Investment Policies and Additional Risk Factors"
for a more detailed discussion of the instruments in which the Fund may
invest and their associated risks. There can be no assurance that the Fund
will achieve its investment objective.
Upon notice to shareholders, the Fund's investment objective and policies may be
changed by the Trust's Board of Trustees without the approval of shareholders.
In the event of a change, you may want to consider whether the Fund remains a
suitable investment for you.
The Westcore MIDCO Growth Fund is designed for long-term investors who can
tolerate the risks associated with investments in common stocks. It is most
suitable for investors with a long-term investment horizon. The following
questions are designed to help you better understand an investment in the
Westcore MIDCO Growth Fund.
What is the Fund's investment objective and what are its primary investments?
Westcore MIDCO Growth Fund seeks to maximize long-term capital appreciation
(rather than current income) by investing primarily in common stocks. The
Investment Adviser uses fundamental research techniques to identify
medium-sized growth companies it believes to be attractive. The Investment
Adviser believes medium-sized companies' earnings may be greatly impacted by
factors such as new products and services, and more entrepreneurial
management. Medium-sized companies may also have better opportunities for
growth by gaining market share. In the Investment Adviser's view,
medium-sized company securities may tend to be less volatile than the
securities of smaller companies, while providing higher returns than larger
company stocks.
In what types of securities does the Fund invest?
The Investment Adviser selects securities for the Fund from an internally
defined universe of medium-sized companies. Under normal circumstances, at
least 65% of the value of the Fund's total assets will be invested as described
below. Companies selected meet the Adviser's standard for business outlook,
growth opportunities and valuation.
Westcore MIDCO Growth Fund, invests primarily in equity securities of medium
capitalization companies. As of _________, 1998, the median capitalization of
companies held by the Westcore MIDCO Growth Fund was $___ billion. The median
capitalization of the companies
-8-
<PAGE>
in the Westcore MIDCO Growth Fund can be expected to fluctuate over
time. Under normal market conditions, at least 65% of the value of the
Westcore MIDCO Growth Fund's total assets is invested in companies with
market capitalizations of $900 million to $14 billion at the time of purchase.
What are the other investment policies of the Fund?
The Fund may invest in options, futures, preferred stocks, warrants, foreign
currency transactions and fixed-income securities. The Fund may invest up to
25% of its total assets in securities which are below investment grade, whether
rated or unrated, and which are convertible into common stock. The Fund may
also invest, directly or indirectly up to 25% of its total assets in securities
issued by foreign companies. The Fund may invest in real estate investment
trusts ("REITs").
-9-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
The Fund may invest in short-term instruments such as U.S. Government
obligations, money market instruments, repurchase agreements and securities
issued by other investment companies (within the limits prescribed by the
Investment Company Act of 1940, as amended ("1940 Act")) and dollar denominated
debt obligations of foreign issuers including foreign corporations and
governments and municipal obligations. In addition, the Fund may borrow money
from banks and may enter into reverse repurchase agreements for temporary
purposes on a limited basis. The Fund may lend portfolio securities up to 30%
of its total assets (including the value of the collateral for the loans). The
Fund may hold uninvested cash reserves (which would not earn income) pending
investment, to meet anticipated redemption requests or during temporary
defensive periods.
What is the main risk of investing in an equity fund?
The fundamental risk associated with any equity fund is the risk that the value
of the stocks it holds might decrease. Stock values may fluctuate in response
to the activities of an individual company or in response to general market or
economic conditions. Historically, equity securities have provided greater
long-term returns and have entailed greater short-term risks than other
investment choices.
Although smaller or newer issuers are more likely to realize more substantial
growth than larger or more established issuers, they are more likely to suffer
more significant losses. Investments in such companies can be both more
volatile and more speculative.
For a discussion of risks related to such investments as lower rated securities
or "junk bonds," options and futures, foreign currency exchange transactions and
"derivative" instruments in general in which the Fund may invest, see
"Supplemental Information-Information on Investment Policies and Additional Risk
Factors" beginning on page __.
Is the Fund diversified and what does that mean?
The Fund is diversified. Diversification is a means of reducing risk by
investing the Fund's assets in a broad range of stocks or other securities in
various industries and economic sectors. Diversification does not provide
assurance against the possibility of loss.
How does the Fund try to reduce risk?
- Diversification of the Fund's assets reduces the effect of any single
holding on its overall portfolio value.
- The Fund may adjust the securities it holds to include issues that are
believed to involve less risk.
-10-
<PAGE>
- The Fund may use futures, options and similar instruments to attempt
to hedge its portfolio against disadvantageous movements in securities
prices and interest rates. The Fund may use various currency hedging
techniques, including forward currency contracts, to manage
exchange-rate risk when investing directly in foreign markets.
- To the extent that the Fund holds a large cash position, it may not
participate in market declines (or advances) to the same degree as a
fund that is more fully invested in common stocks.
What is meant by "market capitalization"?
Market capitalization is the most commonly used measure of the size and value of
a company. It is computed by multiplying the current market price of a share of
the company's stock by the total number of its shares outstanding.
-11-
<PAGE>
[mountain logo] WESTCORE FUNDS
What potential risks and rewards may I experience if I invest in the Fund?
An investment in the Fund presents the potential rewards and risks common to
securities investments. The Fund invests primarily in common stocks. Although
stocks historically have presented greater potential for capital appreciation
than debt obligations, they do not provide the same assurance of income and may
carry greater risk of loss.
The market value of debt obligations held by the Fund will also fluctuate,
normally rising when interest rates fall and falling when interest rates rise.
The value of some debt obligations may be more volatile than other types of
instruments.
The Fund may invest in foreign securities that are considered attractive by
Denver Investment Advisors. In addition to being more costly, foreign
securities may be subject to potentially adverse political, governmental and
economic developments and changes in foreign currency exchange rates.
The Fund may purchase certain derivative instruments that derive their value
from the performance of underlying assets, interest or currency exchange rates,
or indices. Derivative instruments present, to varying degrees, special market,
volatility, leveraging, liquidity, pricing and operations risks. See
"Supplemental Information - Risk Factors Associated with Derivative Instruments"
on page __.
The Fund may lend its securities and enter into repurchase agreements and
reverse repurchase agreements with banks and broker/dealers that could
experience financial difficulties and may make limited investments in illiquid
securities.
As the Fund's investment adviser, Denver Investment Advisors will evaluate the
rewards and risks presented by all securities purchased by the Fund and will
determine how they will be used in furtherance of the investment objective of
the Fund. It is possible, however, that Denver Investment Advisors' evaluations
will prove to be inaccurate and, even when accurate, it is possible that the
Fund will incur losses.
-12-
<PAGE>
Westcore Midco Growth Prospectus
Fundamental Investment Limitations
What are fundamental investment limitations?
Fundamental investment limitations are those investment limitations that the
Fund may not change without the approval of the holders of a majority of the
Fund's outstanding shares. Some are summarized below (a complete list is set
forth in the SAI).
The Westcore MIDCO Growth Fund may not:
- Purchase securities if more than 5% of the Fund's total assets will be
invested in the securities of any one issuer. However up to 25% of
the Fund's total assets may be invested without regard to this 5%
limitation. Certain investments such as U.S. Government securities
are not subject to this limitation.
- Make loans, except that the Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with
its investment objective and policies. The Fund may also lend
portfolio securities in an amount not exceeding 30% of its total
assets.
For purposes of the preceding limitation "total assets" includes the value of
the collateral for the securities loans.
The Fund will not purchase securities so long as its outstanding borrowings
(including reverse repurchase agreements) exceed 5% of its total assets.
If a percentage limitation or other statistical requirement is met at the time
the Fund makes an investment, a later change in the percentage because of a
change in the value of the Fund's portfolio securities generally will not
constitute a violation.
Please call the Trust at 1-800-392-CORE (2673) if you have any questions or need
any information.
ALPS Mutual Funds Services, Inc. is the distributor for the Trust and has its
principal office at:
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202.
-13-
<PAGE>
[mountain logo] WESTCORE FUNDS
HOW TO INVEST AND OBTAIN INFORMATION
This section tells you how to purchase, exchange and redeem your shares. It
also explains various services and features offered in connection with your
account. You may open an account and purchase shares of the Westcore Funds by
completing an Account Application and returning it to Westcore with your check
made payable to Westcore/SSB. You may obtain an Account Application by calling
1-800-392-CORE (2673).
How To Open and Add to Your Account
Please call Westcore Funds at 1-800-392-CORE (2673) if you have any questions
or need any information. ALPS Mutual Funds Services, Inc. is the distributor
for Westcore Funds and has its principal office at 370 Seventeenth Street,
Suite 3100, Denver, CO 80202.
How to Contact Westcore Funds
By Regular Mail:
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
By Express, Certified or Registered Mail:
Westcore Funds
c/o BFDS
66 Brooks Drive
Boston, MA 02184
By Telephone:
Investor Service Representative
Weekdays 7 a.m. to 6 p.m. Mountain Time
1-800-392-CORE (2673)
Automated Service Line
24 hours a day, seven days a week
1-800-392-CORE (2673)
By Computer:
Use your personal computer to access
WWW.WESTCORE.COM and the Westcore
TRANS@CTION Center 24 hours a day,
seven days a week.
-14-
<PAGE>
Purchasing Shares
By Mail If you are opening a new account:
Send a completed Account Application with a
check or money order made out to Westcore/SSB
and mail to Westcore Funds at the address above.
Please be sure to provide your Social Security or
taxpayer identification number on the application.
Westcore Funds are only available to U.S.
residents.
If you are adding to an existing account:
Complete the tear-off investment slip from your
last statement and send it with your check or
money order made out to Westcore/SSB to Westcore
Funds at the address above.
If you do not have an investment slip, please
send a written request, following the
instructions on pg.___ , along with the check or
money order made out to Westcore/SSB to Westcore
Funds, P.O. Box 8319, Boston, MA 02266-8319.
If you are purchasing shares in a retirement
account, please indicate whether the purchase is
a rollover or a current or prior year
contribution.
If you already have an existing account and you wish
to open a new account with identical registration
and account options in another Fund:
Send a written request, following the
instructions on pg.___, to Westcore Funds,
P.O. Box 8319, Boston, MA 02266-8319 referencing
the new Fund you would like to open. Include a
check or money order made out to Westcore/SSB.
By Telephone If you are adding to an existing account:
You can make purchases into Westcore Funds
accounts by calling 1-800-392-CORE (2673) and
speaking with an Investor Service Representative
during normal business hours or using the
Automated Service Line 24 hours a day. Authorize
-15-
<PAGE>
electronic transfers from your bank account on
your account application, or call us for the
appropriate form to add electronic transfer
authorization to your existing account.
See below for further information about the
Automated Telephone Service.
If you already have an existing account and you
wish to open a new account with identical
registration and account options in another Fund:
You can open a new account copying your existing
Westcore Funds account registration and account
options by calling 1-800-392-CORE (2673) and
speaking with an Investor Service Representative
during normal business hours or using the
Automated Service Line 24 hours a day. Authorize
electronic transfers from your bank account on
your account application, or call us for the
appropriate form to add electronic transfer
authorization to your existing account.
See below for further information about the
Automated Telephone Service.
By Automatic Investment Plan Complete the Automatic Investment Plan Section of
your new Account Application to have money
automatically withdrawn from your bank account
monthly, quarterly or annually (minimum is the
equivalent of at least $50 per month). Mail the
application to Westcore Funds at the address
above.
To add an Automatic Investment Plan to your
existing account, please call us for the
appropriate form.
By Computer If you are adding to an existing account:
You can make purchases into Westcore Funds
accounts by accessing the Westcore TRANS@CTION
Center at WWW.WESTCORE.COM 24 hours a day.
Authorize electronic transfers from your bank
account on your account application, or call us
for
-16-
<PAGE>
the appropriate form to add electronic
transfer authorization to your existing account.
See below for further information about the
Westcore TRANS@CTION Center.
If you already have an existing account and you wish
to open a new account with identical registration
and account options in another Fund:
You can open a new account copying your existing
Westcore Funds account registration and account
options by accessing the Westcore TRANS@CTION
Center at WWW.WESTCORE.COM 24 hours a day.
Authorize electronic transfers from your bank
account on your account application, or call us
for the appropriate form to add electronic
transfer authorization to your existing account.
See below for further information about the
Westcore TRANS@CTION Center.
By Wire If you are adding to an existing account:
You can make purchases into Westcore Funds
accounts by a wire transaction. Please call
1-800-392-CORE (2673) and speak with an Investor
Service Representative during normal business
hours for wiring instructions.
If you already have an existing account and you wish
to open a new account with identical registration
and account options in another Fund:
You can open a new account copying your existing
Westcore Funds account registration and account
options by calling 1-800-392-CORE (2673) and
an Investor Service Representative during normal
business hours.
In Person If you are opening a new account or adding to an
existing account:
-17-
<PAGE>
An Investor Service Representative will be happy
to assist you in person at 370 Seventeenth
Street, Suite 3100, Denver, CO 80202 during
normal business hours to open a new account or
add to an existing account.
Please make checks payable to Westcore/SSB in U.S. dollars and drawn on a bank
located in the U.S. You may not purchase shares by cash, credit card, third
party checks or checks drawn on foreign banks.
If a check does not clear your bank, the Funds reserve the right to cancel the
purchase. If the Funds are unable to debit your predesignated bank account on
the day of purchase, they may make additional attempts or cancel the purchase.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Funds (or their agents) have the
authority to redeem shares in your account(s) to cover any losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund. The Funds reserve the right to reject any order.
Exchanging Shares
You may exchange your Fund shares for shares of the other Funds or the
BlackRock Money Market Portfolio (1). Exchanges must meet the "Minimum
Investments" described on pg. ___. Exchanges between accounts will be
accepted only if the registrations are identical. If the shares you are
exchanging are held in certificate form, you must return the certificate to
Westcore Funds, P.O. Box 8319, Boston, MA 02266-8319, with your request or
prior to making any exchanges. You should read the Prospectus for the Fund
into which you are exchanging. Please remember an exchange represents the
sale of shares from one fund and the purchase of shares of another fund,
which may produce a taxable gain or loss in a non tax-deferred account. For
further information on the exchange privilege, please call a Westcore
Investor Service Representative at 1-800-392-CORE (2673).
By Mail If you are exchanging into an existing account:
- ----------------------
(1) BlackRock Money Market Portfolio (formerly the
Compass Capital Money Market Portfolio) is a no-load money market fund
advised by BlackRock Advisors Incorporated (formerly PNC Asset Management
Group, Inc.), sub-advised by BlackRock Institutional Management Corporation
(formerly PNC Institutional Management Corporation) and distributed by
BlackRock Distributors, Inc. (formerly Compass Distributors, Inc.).
-18-
<PAGE>
Please send a written request, following the
instructions on pg.___ , to Westcore Funds,
P.O. Box 8319, Boston, MA 02266-8319.
If you already have an existing account and you wish
to exchange into a new account with identical
registration and account options in another Fund:
Please send a written request, following the
instructions on pg.___ , to Westcore Funds,
P.O. Box 8319, Boston, MA 02266-8319.
By Telephone If you are exchanging into an existing account:
Your account will automatically have the
telephone exchange privilege, unless you
specifically decline this option on the
application or in writing. You can make exchanges
into Westcore Funds accounts by calling
1-800-392-CORE (2673) and speaking with an
Investor Service Representative during normal
business hours or using the Automated Service
Line 24 hours a day.
See below for further information about the
Automated Telephone Service.
If you already have an existing account and you wish
to exchange into a new account with identical
registration and account options in another Fund:
Your account will automatically have the
telephone exchange privilege, unless you
specifically decline this option on the
application or in writing. You can exchange into
a new account copying your existing Westcore
Funds account registration and account options by
calling 1-800-392-CORE (2673) and speaking with
an Investor Service Representative during normal
business hours or using the Automated Service
Line 24 hours a day.
See below for further information about the
Automated Telephone Service.
-19-
<PAGE>
By Automatic Exchange Plan Complete the Automatic Exchange Plan Section of
your new Account Application to have money
automatically exchanged between funds monthly,
quarterly or annually (minimum is the equivalent
of at least $50 per month). Mail the application
to Westcore Funds at the address above.
To add an Automatic Exchange Plan to your
existing account, please call us for the
appropriate form.
By Computer If you are exchanging into an existing account:
Your account will automatically have the computer
exchange privilege, unless you specifically
decline this option in writing. You can make
exchanges into Westcore Funds accounts by
accessing the Westcore TRANS@CTION Center at
WWW.WESTCORE.COM 24 hours a day.
See below for further information about the
Westcore TRANS@CTION Center.
If you already have an existing account and you wish
to exchange into a new account with identical
registration and account options in another Fund:
Your account will automatically have the computer
exchange privilege, unless you specifically
decline this option in writing. You can exchange
into a new account copying your existing Westcore
Funds account registration and account options by
accessing the Westcore TRANS@CTION Center at
WWW.WESTCORE.COM 24 hours a day.
See below for further information about the
Westcore TRANS@CTION Center.
In Person If you are exchanging into a new account or an
existing account:
-20-
<PAGE>
An Investor Service Representative will be happy to assist
you in person at 370 Seventeenth Street, Suite 3100, Denver,
CO 80202 during normal business hours to process an exchange
into a new account or between existing accounts.
Redeeming Shares
You may redeem your Fund shares on any business day which the New York Stock
Exchange is open. If you have any questions about how to redeem your shares,
please call a Westcore Investor Service Representative at 1-800-392-CORE
(2673).
Redemption proceeds generally will be sent by check to the shareholder(s) of
record at the address of record within seven business days after receipt of a
valid redemption request.
If you have authorized the wire redemption service, your redemption proceeds
will be wired directly into your designated bank account normally on the next
business day after receipt of a valid redemption request.
If you have authorized the electronic funds transfer service, your redemption
proceeds will be wired directly into your designated bank account normally on
the second business day after receipt of a valid redemption request.
If the shares being redeemed are held in certificate form, the certificate
must be returned with or before your redemption request.
If the shares being redeemed were purchased by check, telephone, computer or
through the Automatic Investment Plan, the Trust may delay the mailing of
your redemption check for up to 15 days from the day of purchase to allow the
purchase to clear.
By Mail Please send a written request, following the instructions on
pg.___ , to Westcore Funds, P.O. Box 8319, Boston,
MA 02266-8319.
By Telephone Your account will automatically have the telephone redemption
privilege, unless you specifically decline this option on the
application or in writing. You can make redemptions from
Westcore Funds accounts by calling 1-800-392-CORE (2673) and
speaking with an Investor Service Representative during normal
business hours or using the
-21-
<PAGE>
Automated Service Line 24 hours a day. Authorize electronic
transfers from your bank account on your account application,
or call us for the appropriate form to add electronic transfer
authorization to your existing account.
See below for further information about the Automated
Telephone Service.
By Systematic Complete the Systematic Withdrawal Plan Section of your new
Withdrawal Account Application or call 1-800-392-CORE (2673) for the
Plan appropriate form to have money automatically sent to your
bank account monthly, quarterly or annually in any
multiple of $50.
To add a Systematic Withdrawal Plan to your existing account,
please call us for the appropriate form.
Participation requires a minimum of $10,000 in a Fund in order
to initiate this plan.
By Computer Your account will automatically have the computer redemption
privilege, unless you specifically decline this option in
writing. You can make redemptions from Westcore Funds accounts
by accessing the Westcore TRANS@CTION Center at
WWW.WESTCORE.COM 24 hours a day. Authorize electronic
transfers from your bank account on your account application,
or call us for the appropriate form to add electronic transfer
authorization to your existing account.
See below for further information about the Westcore
TRANS@CTION Center.
By Wire Call 1-800-392-CORE (2673) during normal business hours or
write Westcore Funds, P.O. Box 8319, Boston, MA 02266-8319.
You will need to include proper written instructions as
described on
-22-
<PAGE>
pg__. There is a $1,000 minimum per transaction made by wire.
In Person An Investor Service Representative will be happy to assist you
in person at 370 Seventeenth Street, Suite 3100, Denver, CO
80202 during normal business hours to process a redemption
order.
General Account Policies
Westcore Funds may modify or terminate account policies, services and
features, but will not materially modify or terminate them without giving
shareholders 60 days' written notice.
<TABLE>
Minimum Investments Amount
<S> <C>
To open a new account $1,000
To open a new retirement account or certain other accounts 250
To open a new account with an automatic investment plan 0
To add to any type of account 50
</TABLE>
The Fund reserves the right to change the amount of these minimums from time
to time or to waive them in whole or in part for certain types of accounts.
Written Instructions
To process transactions in writing, your request should be sent to Westcore
Funds, P.O. Box 8319, Boston, MA 02266-8319 and must include the following
information:
- the name of the Fund(s)
- the account number(s)
- the amount of money or number of shares
- the name(s) on the account
- the signature(s) of all registered account owners (signature
guaranteed, if applicable)
- your daytime telephone number
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Additional Information on Telephone and Computer Service
Normal business hours to speak with an Investor Service Representative at
1-800-392-CORE (2673) are 7am - 6 pm Mountain Time, Monday through Friday.
Westcore Automated Telephone Service can be reached via 1-800-392-CORE (2673)
for 24 hour access to account and fund information, purchases, exchanges and
redemptions and ordering duplicate statements, tax forms or additional
checkbooks for the BlackRock Money Market Portfolio.
Visit our website at WWW.WESTCORE.COM to find out up-to-date information on
each of the Westcore Funds. In addition, you can access the Westcore
TRANS@CTION Center for 24 hour access to account information, purchases,
exchanges and redemptions.
All shareholders [except for certain accounts opened through Service
Organizations (as defined below) and certain retirement accounts] automatically
have access to Telephone Service and Westcore TRANS@CTION Center unless written
notification explicitly declining these services is received by Westcore Funds
at P.O. Box 8319, Boston, MA 02266-8319.
Shareholders can follow the instructions provided at the Automated Service
Line and Westcore TRANS@CTION Center to access these services using a
personal identification number(s).
Telephone and Computer redemptions are not available for shares held in
individual retirement accounts sponsored by the Funds. In addition,
telephone and computer exchanges and redemptions are not available for shares
held in accounts registered to business entities (i.e. corporations,
partnerships, sole proprietorships) or fiduciary entities (i.e. Uniform Gift
to Minor Account, etc.).
Each separate transaction type (purchases, exchange-in, exchange-out and
redemptions) via these services has a $25,000 daily maximum for transactions
processed by telephone and/or computer.
Purchases or Redemptions by Wire are not available using either the Automated
Service Line or Westcore TRANS@CTION Center.
You may choose to initiate certain transactions by telephone or computer.
Although Westcore Funds has designed procedures to enhance security,
including the use of 128-bit encryption through the Westcore TRANS@CTION
Center, testing the identity of the shareholder placing the order and sending
prompt written confirmation of transactions to the address of record,
shareholders may give up some level of security by choosing to purchase,
exchange or redeem shares by telephone or computer rather than by mail.
Westcore Funds and their agents will not be responsible for any losses
resulting from unauthorized telephone or computer transactions when
procedures are followed which are reasonably designed to confirm that
computer or telephone transaction request is genuine. It may be difficult to
reach the Funds by telephone or computer
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<PAGE>
during periods of unusual market activity. If this happens, you may redeem
your shares by mail as described in this Prospectus.
The Funds or their agents may, in case of emergency, temporarily suspend
telephone and computer transactions and other shareholder services.
Signature Guarantee
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized transfers. A signature
guarantee is not the same as a notarized signature. You can obtain a
signature guarantee from a bank or trust company, credit union, broker,
dealer, securities exchange or association, clearing agency or savings
association, as defined by federal law.
The guarantee must be an ink stamp or medallion that states "Signature(s)
Guaranteed" and must be signed in the name of the guarantor by an authorized
person with that person's title and the date. Westcore Funds may reject a
signature guarantee if the guarantor is not a member of or participant in a
signature guarantee program. Call your financial institution to see if they
have the ability to guarantee a signature.
Shareholders living abroad may acknowledge their signatures at an overseas
branch of a U.S. bank, member firm of a stock exchange or any foreign bank
having a branch office in the U.S.
To protect your accounts from fraud, the following transactions will require
a signature guarantee:
- Transferring ownership of an account.
- Redeeming more than $25,000 from your account.
- Redeeming by check payable to someone other than the account owner(s).
- Redeeming by check mailed to an address other than the address of
record.
- Redemption check mailed to an address which has been changed within
the last 30 days of the redemption request without a signature
guarantee.
The Funds reserve the right to require a signature guarantee under other
circumstances or to reject or delay a redemption on certain legal grounds.
Redemption of Low Balance Accounts
If your account balance falls below the required minimums presented on page
__ a letter will be sent advising you to either bring the value of the shares
held in the account up to the minimum or to establish an automatic investment
that is the equivalent of at least $50 per month. If action is not taken
within 90 days of the notice, the shares held in the account will be redeemed
and the proceeds will be sent by check to your address of record. We reserve
the right to increase the investment minimums.
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Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be
detrimental to the Fund.
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[mountain logo] WESTCORE FUNDS
Address Changes
To change the address on your account, call 1-800-392-CORE (2673) or send a
written request signed by all account owners. Include the name of the Fund,
the account number(s), the name(s) on the account and both the old address
and new address. Certain options may be suspended for 30 days following an
address change unless a signature guarantee is provided.
Registration Changes
To change the name on an account, the shares are generally transferred to a
new account. In some cases, legal documentation may be required. For more
information call 1-800-392-CORE (2673).
Share Certificates
The Funds will issue share certificates upon written request only. Share
certificates will not be issued until the shares have been held for at least
15 days and will not be issued for accounts that do not meet the minimum
investment requirements.
Quarterly Consolidated Statements and Shareholder Reports
Westcore Funds will send you a consolidated statement quarterly and a
confirmation after every transaction that affects your share balance or your
account registration with the exception of automatic investment plan
transactions and dividend reinvestment transactions. A statement with tax
information regarding the tax status of income dividends and capital gain
distributions will be mailed to you by January 31 of each year and filed with
the Internal Revenue Service.
Each year, we will send you an annual and a semi-annual report. The annual
report includes audited financial statements and a list of portfolio
securities as of the fiscal year end. The semi-annual report includes
unaudited financial statements for the first six months of the fiscal year,
as well as a list of portfolio securities at the end of the period. You will
also receive an updated prospectus at least once each year. Please read
these materials carefully, as they will help you understand your investments
in Westcore Funds. Duplicate mailings of Fund materials to shareholders who
reside at the same address may be eliminated.
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Price of Fund Shares
All purchases, redemptions and exchanges will be processed at the net asset
value ("NAV") next calculated after your request and payment, if required,
are received by the transfer agent or certain authorized broker-dealers or
designated intermediaries in proper form. The Fund's NAV is determined by
the Administrators as of the close of regular trading on the New York Stock
Exchange (the "NYSE"), currently 4:00 p.m. (Eastern time), on each day that
the NYSE is open. In order to receive a day's price, your order must be
received by the transfer agent or certain authorized broker-dealers or
designated intermediaries by the close of regular trading on the NYSE on that
day. If not, your request will be processed at the Fund's NAV at the close
of regular trading on the next day. To be in proper form, your order must
include your account number and must state the Fund shares you wish to
purchase, redeem or exchange.
In the case of participants in certain employee benefit plans, purchase
orders will be processed at the NAV next determined after the Service
Organization (as defined below) acting on their behalf receives the purchase
order.
The Trust has authorized certain broker-dealers to accept on its behalf
purchase orders made through a 'mutual fund supermarket.' Such authorized
broker-dealers may designate other intermediaries to accept purchase orders
on behalf of the Trust.
The Fund's NAV is calculated by dividing the total value of its investments
and other assets, less liabilities, by the total number of shares
outstanding. The Fund's investments are valued at market value or, when
market quotations are not readily available, at fair value as determined in
good faith by or under the direction of the Board of Trustees. Debt
securities with maturities of 60 days or less are valued at amortized cost,
which generally equals market value.
Accounts Opened Through A Service Organization
You may purchase or sell Fund shares through an account you have with Denver
Investment Advisors, any qualified broker/dealer, any bank or any other
institution (your "Service Organization"). Your Service Organization may
charge transaction fees on the purchase and/or sale of Fund shares and may
require different minimum initial and subsequent investments than Westcore
requires. Service Organizations may also impose charges, restrictions,
transaction procedures or cut-off times different from those applicable to
shareholders who invest in Westcore directly.
A Service Organization may receive fees from the Trust or Denver Investment
Advisors for providing services to the Trust or its shareholders. Such
services may include, but are not limited to, shareholder assistance and
communication, transaction processing and settlement, account set-up and
maintenance, tax reporting and accounting. In certain cases, a Service
Organization may elect to credit against the fees payable by its customers
all or a portion of the fees received from the Trust or Denver Investment
Advisors with respect to their customers' assets invested in the Trust. The
Service Organization, rather than you, may be the shareholder
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of record of your Fund shares. Westcore is not responsible for the failure
of any Service Organization to carry out its obligations to its customers.
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[mountain logo] WESTCORE FUNDS
Other Information
Distributions And Taxes
Distributions
The Fund's income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as income dividends. The Fund
realizes capital gains whenever it sells securities for a higher price than
it paid for them. Net realized long-term gains are paid to shareholders as
capital gain dividends. A dividend will reduce the net asset value of a Fund
share by the amount of the dividend on the ex-dividend date.
Distribution Schedule
When you open an account, all dividends and capital gains will be
automatically reinvested in the distributing Fund unless you specify on your
Account Application that you want to receive your distributions in cash or
reinvest them in another Fund. Income dividends and capital gain
distributions will be reinvested without a sales charge at the net asset
value on the ex-dividend date. You may change your distribution option at
any time by writing or calling 1-800-392-CORE (2673). The Fund distributes
income dividends and capital gain distribution in December only.
Taxes
As with any investment, you should consider the tax implications of an
investment in the Fund. The following briefly summarizes some of the
important tax considerations generally affecting the Fund and its
shareholders. You should consult your tax adviser with specific reference to
your own tax situation, including the applicability of any state and local
taxes. You will be advised at least annually regarding the federal tax
treatment of dividends paid to you.
Dividends paid by the Fund will generally be taxable to shareholders as
ordinary income and capital gains (which may be taxable at different rates
depending on the length of time the Fund held the relevant assets). You will
be subject to income tax on these distributions regardless whether they are
paid in cash or reinvested in additional shares.
You should note that if you purchase shares just prior to a distribution, the
purchase price will reflect the amount of the upcoming distribution, but you
will reflect the amount of the upcoming distribution, but you will be taxed
on the entire amount of the distribution received, even though, as an
economic matter, the distribution simply constitutes a return of your
capital. This is known as "buying into a dividend."
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<PAGE>
You will recognize taxable gain or loss on a sale, exchange or redemption of
your shares, including an exchange for shares of another Fund, based on the
difference between your tax basis in the shares and the amount you receive
for them. (To aid in computing your tax basis, you generally should retain
your account statements for the periods during which you held shares.) Any
loss realized on shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividends that were
received with respect to the shares.
The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
Performance Reporting
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in
newsletters, advertisements and in media articles. Newsletters,
advertisements and other publications may include comparisons of the Fund's
performance to the performance of various indices and investments for which
reliable performance data are available and to averages, performance rankings
or other information compiled by recognized mutual fund statistical services.
Aggregate total return - reflects income and capital
appreciation/depreciation and establishes a total percentage change in the
value of an investment in the Fund over a specified measuring period.
Average annual total return - represents the average annual percentage change
in the value of an investment in the Fund over a specified measuring period.
It is calculated by taking the aggregate total return for the measuring
period and determining what constant annual return would have produced the
same aggregate return. Average annual returns for more than one year tend to
smooth out variations in the Fund's return and are not the same as actual
annual results.
Both methods of calculating total return assume that you have reinvested
dividends made by the Fund during the period in Fund shares.
Any fees charged by your Service Organization directly to your account in
connection with an investment in the Fund will not be included in the Fund's
calculations of total return.
Performance quotations of the Fund represent its past performance, and you
should not consider them representative of future results. The investment
return and principal value of an investment in the Fund will fluctuate so
that your shares, when redeemed, may be worth more or less than their
original cost. Because performance will fluctuate, you cannot necessarily
compare an investment in Fund shares with bank deposits, savings accounts and
similar investment alternatives that often provide an agreed or guaranteed
fixed yield for a stated period of time.
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[mountain logo] WESTCORE FUNDS
Management Of Fund
Board of Trustees
The business and affairs of the Fund are managed under the direction of the
Trust's Board of Trustees. The SAI contains information about the Board of
Trustees.
Investment Adviser
Denver Investment Advisors serves as the investment adviser to the Fund. The
Investment Adviser has its principal offices at 1225 17th Street, 26th Floor,
Denver, Colorado 80202. As of March 31, 1998, Denver Investment Advisors had
approximately $12 billion in assets under active management. In addition to
the Trust, Denver Investment Advisors also advises the Blue Chip Value Fund,
Inc., a closed-end investment company portfolio.
Subject to the overall authority of the Trust's Board of Trustees, Denver
Investment Advisors has agreed to provide a continuous investment program for
the Fund, including investment research and management. These management
responsibilities include, among other things, furnishing economic and
statistical information as requested by the Trust's trustees and officers.
The Investment Adviser makes investment decisions for the Fund and places
orders for all purchases and sales of the Fund's portfolio securities.
Portfolio Manager, Westcore MIDCO Growth Fund
[black and white photograph of Todger Anderson]
Todger Anderson, CFA, President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of the Westcore MIDCO
Growth Fund since its inception. Mr. Anderson has been a portfolio manager
with Denver Investment Advisors and its predecessor, Denver Investment
Advisors, Inc., since 1975. He received his B.A. from Colby College and his
M.B.A. from the University of Denver. Mr. Anderson works with securities
analysts who from time to time purchase and sell specific securities under
his supervision.
Todger Anderson, CFA, Portfolio Manager, Westcore MIDCO Growth Fund.
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Westcore MIDCO Growth Fund Prospectus
Breakdown of Management Expenses and Expense Limits
Co-Administrators
ALPS and Denver Investment Advisors serve as co-administrators to the Fund
(the "Administrators"). As Administrators, they have agreed to: assist in
maintaining the Fund's office; furnish the Fund with clerical and certain
other services required by them; compile data for and prepare notices and
semi-annual reports to the SEC; prepare filings with state securities
commissions; coordinate federal and state tax returns; monitor the Fund's
expense accruals; monitor compliance with the Fund's investment policies and
limitations; and generally assist in the Fund's operations. The
Administrators are entitled to receive a fee from the Fund for administrative
services, computed daily and payable monthly, at the aggregate annual rate of
.30% of the Fund's average daily net assets. The Administrators may
voluntarily waive all or any portion of their administration fees from time
to time.
Pursuant to a separate agreement, ALPS has agreed to maintain the financial
accounts and records of the Fund and to compute the net asset value and
certain other financial information relating to the Fund. Pursuant to
another agreement, ALPS responds to certain shareholder inquiries and
transaction requests received via telephone.
The Trust has agreed to reimburse Denver Investment Advisors for costs
incurred by Denver Investment Advisors for providing recordkeeping and
sub-accounting services to persons who beneficially own shares of the Fund
through omnibus accounts ("Beneficial Shares"). The amount reimbursed with
respect to the Fund will not exceed the lesser of the costs actually borne by
Denver Investment Advisors or the effective rate for transfer agency services
borne by the Fund without taking into account such Beneficial Shares and
applying such rate to such Beneficial Shares. The Administrators are also
authorized to make payments from their administrative fees or other sources
to persons for providing services to the Fund or its shareholders.
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[mountain logo] WESTCORE FUNDS
Transfer Agent
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02015,
provides the Funds with transfer agency services in return for compensation.
The Fund pays the Investment Adviser an advisory fee under the advisory
agreement. The fee is set forth below and is expressed as an annual
percentage of the Fund's average daily net assets:
The contractual Advisory Fee for the Fee Schedule is .65%.
The Effective Advisory Fee for the Year Ended May 31, 1998 is .65%.
The Investment Adviser may from time to time voluntarily waive all or any
portion of these fees and reimburse expenses of the Fund; however, it may
modify or discontinue this practice at any time.
Other Information Concerning the Trust and its Shares
Westcore Trust was originally organized as a Maryland corporation on
January 11, 1982. It was reorganized as a Massachusetts business trust on
December 10, 1985.
The Trust's Amended and Restated Declaration of Trust authorizes the Board of
Trustees to classify or reclassify any unissued shares of the Trust into one
or more classes of shares. Pursuant to such authority, the Board has
authorized the issuance of an unlimited number of shares representing
interests in the Fund. No other classes or series of shares are currently
offered.
Shareholder Meetings
Westcore Trust does not presently intend to hold meetings of shareholders
except as required by the 1940 Act or other applicable law. Under the 1940
Act, the Board of Trustees is required to call a meeting of shareholders for
the purpose of voting upon the removal of any trustee or trustees when
requested in writing to do so by the record holders of at least 10% of the
outstanding shares. If a shareholders meeting is held, you will be entitled
to one vote for each full share you hold and proportionate fractional votes
for fractional shares you hold. It is contemplated that the shareholders of
the Fund will vote separately on matters pertaining to its investment
advisory agreement and any changes in its fundamental investment limitations.
As of _________, 1998, Wells Fargo Bank and its affiliated banks possessed,
on behalf of their underlying customer accounts, voting or investment power
with respect to a majority of all of the outstanding shares of Westcore
Trust; therefore, under the 1940 Act, may be deemed to be a controlling
person of the Trust.
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Year 2000 Risks
Like other investment companies and financial service providers, the Fund
could be adversely affected if the computer systems used by the Adviser and
the Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Issue". The Year 2000 Issue arises because
most computer systems were designed to only handle a two-digit year, not a
four-digit year. When the year 2000 begins, these computers may interpret
"00" as the year 1900 and either stop processing date-related computations or
process them incorrectly. These failures could have a negative impact on the
handling of securities trades, pricing and account services. The Adviser and
Administrators are taking steps to address the Year 2000 Issue with respect
to the computer systems that they use and to obtain assurance that comparable
steps are being taken by the Fund's other major service providers. As of the
date of this Prospectus, it is not anticipated that shareholders will
experience negative effects on their investment, or on the services provided
in connection therewith, as a result of the Year 2000 Issue. However, there
can be no assurance that these steps will be successful, or that interaction
with other non-complying computer systems will not adversely impact the Fund
as a result of the Year 2000 Issue.
Inquiries
Please write or call Westcore Trust at the address or telephone number listed
on the back cover of this Prospectus with any inquiries you may have
regarding the Fund.
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Westcore MIDCO Growth Fund Prospectus
Supplemental Information
Information On Investment Policies And Additional Risk Factors
Denver Investment Advisors uses a range of different investments and
investment techniques in seeking to achieve the Fund's investment objective.
U.S. Government Obligations
The Fund may invest in obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Direct obligations of the
U.S. government such as Treasury bills, notes and bonds are supported by its
full faith and credit. Indirect obligations issued by federal agencies and
government-sponsored entities generally are not backed by the full faith and
credit of the U.S. Treasury. Some of these indirect obligations may be
supported by the right of the issuer to borrow from the Treasury; others are
supported by the discretionary authority of the U.S. government to purchase
the agency's obligations; still others are supported only by the credit of
the instrumentality.
Money Market Instruments
The Fund may invest from time to time in money market instruments such as
bank obligations, commercial paper and corporate bonds with remaining
maturities of 13 months or less. Bank obligations include bankers'
acceptances, certain negotiable certificates of deposit and time deposits
such as U.S. dollar-denominated instruments issued or supported by the credit
of U.S. or foreign banks. Commercial paper is a short-term debt obligation
with a maturity ranging from 1 to 270 days issued by banks, corporations and
other borrowers.
Each Fund may invest in short-term funding agreements. A funding agreement
is a contract between an issuer and a purchaser that obligates the issuer to
pay a guaranteed rate of interest on a principal sum deposited by the
purchaser. Funding agreements will also guarantee the return of principal and
may guarantee a stream of payments over time. A funding agreement may have
either a fixed rate or variable interest rate that is based on an index and
guaranteed for a set time period. The Fund intends to invest only in funding
agreements which have a put feature which may be exercised on seven days'
notice.
Repurchase Agreements and Reverse Repurchase Agreements
In a repurchase agreement, the Fund agrees to purchase portfolio securities
subject to the seller's agreement to repurchase them at a mutually agreed
upon date and price. Repurchase agreements involve the risk that the seller
will fail to repurchase the securities, as agreed. In that event, the Fund
will bear the risk of possible loss because of adverse market action or
delays in liquidating the underlying obligations. Repurchase agreements are
considered to be loans under the 1940 Act.
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The Fund may borrow money for temporary purposes by entering into reverse
repurchase agreements. Under these agreements, the Fund sells portfolio
securities to financial institutions and agrees to buy them back later at an
agreed upon time and price. Reverse repurchase agreements involve the risk of
counterparty default and possible loss of collateral held by the counterparty.
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[mountain logo] WESTCORE FUNDS
Lower-Rated Securities
Investments in issuers of securities rated below investment grade (commonly
known as "junk bonds") are considered to be more speculative than securities
rated investment grade and higher. There are particular risks associated
with these securities, including: (a) the relative youth and growth of the
market; (b) their greater sensitivity to interest rate and economic changes
which could negatively affect their value and the ability of issuers to make
principal and interest payments; (c) the relatively low trading market
liquidity for the securities which may adversely affect the price at which
they could be sold; (d) a greater risk of default or price changes because of
changes in the issuer's creditworthiness; and (e) the adverse impact that
legislation restricting lower-rated securities may have on their market.
Securities Lending
The Fund may lend its portfolio securities to institutional investors as a
means of earning additional income. Securities loans present risks of delay
in receiving collateral or in recovering the securities loaned or even a loss
of rights in the collateral if the borrower of the securities fails
financially. A loan will not be made if, as a result, the total amount of
the Fund's outstanding loans exceeds 30% of its total assets (including the
value of the collateral for the loan).
Restricted Securities
The Fund will not knowingly invest more than 15% of the value of its net
assets in securities that are illiquid. Illiquid securities include
repurchase agreements, securities loans and time deposits that are not
terminable within seven days, certain municipal leases and certain securities
that are not registered under the securities laws. Pursuant to guidelines
adopted by the Board of Trustees, the Investment Adviser may determine that
certain securities that are not registered under the Securities Act of 1933,
as amended, are not illiquid and therefore are not subject to this 15%
limitation. However, there can be no assurance that a liquid market will
exist for any security at a particular time.
In addition, the purchase of such securities could have the effect of
increasing the level of illiquidity of the Fund during periods that qualified
institutional buyers become uninterested in purchasing these restricted
securities.
Convertible Securities
The Fund may invest in convertible securities, including bonds and preferred
stocks, that may be converted into common stock at a specified price or
conversion ratio. The Fund uses the same research-intensive approach and
valuation techniques for selecting convertible securities as are used for the
selection of common stocks.
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The value of a convertible security is influenced by both interest rates and
the value of the underlying common stock. Investments in convertible
securities, including in particular those with lower ratings, involve the
risk that the securities, when converted, may be worth less than the
prestated price.
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Westcore MIDCO Growth Fund Prospectus
REITs
The Fund may invest in equity securities of equity real estate investment trusts
("REITs") and mortgage REITs. Equity REITs invest directly in real property.
Mortgage REITs invest in mortgages on real property. REITs may be subject to
certain risks associated with the direct ownership of real estate including
declines in the value of real estate, risks related to general and local
economic conditions, overbuilding and increased competition, increases in
property taxes and operating expenses, and variations in rental income.
Generally, increases in interest rates will decrease the value of high yielding
securities and increase the costs of obtaining financing, which could decrease
the value of the portfolio's investments. In addition, equity REITs may be
affected by changes in the value of the underlying property owned by the trusts,
while mortgage REITs may be affected by the quality of credit extended. REITs
are also subject to heavy cash flow dependency, defaults by borrowers, self
liquidation and the possibility of failing to qualify for tax-free pass-through
of income under the Internal Revenue Code and to maintain exemption from the
1940 Act.
Options and Futures
The Fund may buy put options and call options and write covered call and secured
put options on securities and securities indices. A put option gives the buyer
the right to sell and the writer the obligation to buy the underlying security
at the stated exercise price at any time prior to the expiration date of the
option. Writing a secured put option means that the Fund maintains in a
segregated account with its custodian cash or U.S. Governmental securities in an
amount not less than the exercise price of the option at all times during the
option period. A call option gives the buyer the right to buy the underlying
security at the stated exercise price at any time prior to the expiration of the
option. Writing a covered call option means that the Fund owns or has the right
to acquire the underlying security subject to call at the stated exercise price
at all times during the option period. Options involving securities indices
provide the holder with the right to make or receive a cash settlement upon
exercise of the option based on movements in the index. Options purchased by
the Fund will not exceed 5% of its net assets, and options written by the Fund
will not exceed 25% of its net assets. All options will be listed on a national
securities exchange and issued by the Options Clearing Corporation.
The Fund may also invest to a limited extent in futures contracts and options on
futures contracts in order to reduce its exposure to movements of security
prices pending investment, for hedging purposes or to maintain liquidity.
Futures contracts obligate the Fund, at maturity, to take or make delivery of
certain securities or the cash value of a contract or securities index. The
Fund may also purchase and sell call and put options on futures contracts traded
on an exchange or board of trade.
In accordance with regulations of the Commodity Futures Trading Commission, the
Fund's commodities transactions must constitute bona fide hedging or other
permissible transactions. In
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<PAGE>
addition, the Fund may not engage in commodities transactions if the sum of the
amount of initial margin deposits and premiums paid for related options, other
than for bona fide hedging transactions, would exceed 5% of its assets (after
certain adjustments). In connection with a position in a futures contract or
related option, the Fund will create a segregated account of liquid, high-grade
assets or will otherwise cover its position in accordance with SEC requirements.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
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[mountain logo] WESTCORE FUNDS
Options trading and futures transactions are highly specialized activities and
carry greater than ordinary investment risks. The primary risks associated with
the use of options and futures contracts are: (1) options and futures may fail
as hedging techniques when the price movements of the securities underlying them
do not follow the price movements of the portfolio securities subject to the
hedge; (2) the Fund will likely be unable to control losses by closing its
position in these investments where a liquid secondary market does not exist;
(3) losses from investing in futures transactions because of unanticipated
market movements are potentially unlimited; and (4) gains and losses on
investments in options and futures depend on the Investment Adviser's ability to
correctly predict the direction of securities prices, interest rates and other
economic factors.
Foreign Currency Exchange Transactions
Because the Fund may buy and sell securities and receive amounts denominated in
currencies other than the U.S. dollar, it may enter into currency exchange
transactions from time to time. The Fund will purchase foreign currencies on a
"spot" or cash basis at the prevailing rate in the foreign currency exchange
market or enter into forward foreign currency exchange contracts. Under these
contracts the Fund would agree with a financial institution to purchase or sell
a stated amount of a foreign currency at a specified price, with delivery to
take place at a specified date in the future. Because there is a risk of loss
to the Fund if the other party does not complete the transaction, these
contracts will be entered into only with parties approved by the Fund's Board of
Trustees.
The Fund may maintain "short" positions in forward foreign currency exchange
transactions whereby the Fund would agree to exchange currency that it did not
own for another currency at a future date and at a specified price. This would
be done in anticipation of a decline in the value of the currency sold short
relative to the other currency and not for speculative purposes. In order to
ensure that the short position is not used to achieve leverage with respect to
the Fund's investments, the Fund would establish with its custodian a segregated
account consisting of cash or certain liquid high-grade debt securities equal in
value to the market value of the currency involved.
When-Issued Purchases and Forward Commitments
The Fund may purchase or sell securities on a "when-issued" or "forward
commitment" basis which involves a commitment by the Fund to purchase or sell
particular securities with payment and delivery taking place at a future date.
These transactions permit the Fund to lock in a price or yield on a security it
owns or intends to purchase, regardless of future changes in interest rates.
The Fund would bear the risk, however, that the price or yield obtained in a
transaction may be less favorable than the price or yield available in the
market when the delivery occurs. Because the Fund is required to hold and
maintain in a segregated account until the settlement date cash,
-43-
<PAGE>
U.S. Government securities or liquid assets, in an amount sufficient to meet the
purchase price, the Fund's liquidity and ability to manage its portfolio might
be affected during periods in which its commitments exceed 25% of the value of
its assets. The Fund does not intend to engage in when-issued purchases and
forward commitments for speculative purposes.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
Securities Issued by Other Investment Companies
The Fund may invest in securities issued by other investment companies subject
to the requirements of applicable securities laws. When the Fund invests in
another investment company, it pays a pro rata portion of the advisory and other
expenses of that company as a shareholder of that company. These expenses would
be in addition to the Fund's own expenses.
Foreign Securities
There are risks and costs involved in investing in securities of foreign issuers
(including foreign governments), which are in addition to the usual risks
inherent in U.S. investments. Investments in foreign securities may involve
higher costs than investments in U.S. securities, including higher transaction
costs as well as the imposition of additional taxes by foreign governments.
Foreign investments may involve further risks associated with the level of
currency exchange rates, less complete financial information about the issuer,
less market liquidity and political instability. Future political and economic
developments, the possible imposition of withholding taxes on interest income,
the possible seizure or nationalization of foreign holdings, the possible
establishment of exchange controls or the adoption of other governmental
restrictions might adversely affect the payment of principal and interest on
foreign obligations. Moreover, foreign banks and foreign branches of domestic
banks may be subject to less stringent reserve requirements and to different
accounting, auditing and recordkeeping requirements.
Investments in foreign securities may be in the form of American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs") and similar securities.
These securities may not be denominated in the same currency as the securities
they represent. ADRs are receipts typically issued by a United States bank or
trust company, and EDRs are receipts issued by a European financial institution
evidencing ownership of the underlying foreign securities. Up to 25% of the
Fund's assets may be invested in securities issued by foreign companies, either
directly (if the company's listed on a U.S. exchange) or indirectly through
ADRs.
Portfolio Turnover
The Fund may sell a portfolio investment soon after it is purchased if the
Investment Adviser believes that a sale is consistent with the Fund's investment
objective. A high rate of portfolio turnover involves correspondingly greater
brokerage commission expenses, tax consequences (including the possible
realization of additional taxable capital gains and income) and other
transaction costs, which must be borne directly by the Fund involved and
ultimately by its shareholders.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Risk Factors Associated with Derivative Instruments
The Fund may purchase certain "derivative" instruments as have been described
under various headings. Derivative instruments are instruments that derive
value from the performance of underlying assets, interest or currency exchange
rates, or indices, and include, but are not limited to, futures contracts,
options, forward currency contracts and structured debt obligations.
Derivative instruments present, to varying degrees, market risk that the
performance of the underlying assets, exchange rates or indices will decline;
credit risk that the dealer or other counterparty to the transaction will fail
to pay its obligations; volatility and leveraging risk that, if interest or
exchange rates change adversely, the value of the derivative instrument will
decline more rapidly than the assets, rates or indices on which it is based;
liquidity risk that the Fund will be unable to sell a derivative instrument when
it wants because of lack of market depth or market disruption; pricing risk that
the value of a derivative instrument (such as an option) will not correlate
exactly to the value of the underlying assets, rates or indices on which it is
based or may be difficult to determine because of a lack of reliable objective
information and an established secondary market; and operations risk that loss
will occur as a result of inadequate systems and controls, human error or
otherwise. Many of these instruments are proprietary products that have been
recently developed by investment banking firms, and it is uncertain how they
will perform under different economic and interest rate scenarios.
[mountain logo] WESTCORE FUNDS
Questions? Call 1-800-392-CORE (2673)
370 17th Street
Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
www.westcore.com
Funds distributed by ALPS Mutual Funds Services, Inc., member NASD.
-46-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
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-47-
<PAGE>
[mountain logo] WESTCORE FUNDS
370 17th Street
Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
www.westcore.com
Funds distributed by ALPS Mutual Funds Services,
Inc., member NASD
-48-
<PAGE>
WESTCORE TRUST
Statement of Additional Information
for
Westcore MIDCO Growth Fund
Westcore Blue Chip Fund
Westcore Growth and Income Fund
Westcore Small-Cap Opportunity Fund
Westcore Mid-Cap Value Fund
Westcore Long-Term Bond Fund
Westcore Intermediate-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
October 1, 1998
TABLE OF CONTENTS
Page
----
THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT OBJECTIVES AND POLICIES. . . . . . . . . . . . . . . . . .
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION. . . . . . . . . . . .
DESCRIPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL INFORMATION CONCERNING TAXES . . . . . . . . . . . . . . .
MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . . . . . . .
CUSTODIAN AND TRANSFER AGENT. . . . . . . . . . . . . . . . . . . . .
EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AUDITORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS. . . . . . . . . .
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B. . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . .FS-1
This Statement of Additional Information is meant to be read in
conjunction with the Funds' Prospectus dated October 1, 1998, as the same is
revised from time to time, and is incorporated by reference in its entirety
into the Prospectus. Because this Statement of Additional Information is not
itself a prospectus, no investment in shares of the Funds should be
1
<PAGE>
made solely based upon the information contained herein. Audited financial
statements for the Funds as of May 31, 1998 are attached hereto. Copies of
the Funds' Prospectus and financial statements may be obtained by calling
1-800-392-CORE (2673) or by writing ALPS Mutual Funds Services, Inc. at 370
Seventeenth Street, Suite 3100, Denver, Colorado 80202. Capitalized terms
used but not defined herein have the same meanings as in the Prospectus.
2
<PAGE>
THE TRUST
Westcore Trust (the "Trust") is a Massachusetts business trust
which was organized on December 10, 1985 as an open-end management investment
company. The Trust's predecessor was originally incorporated in Maryland on
January 11, 1982.
The Trust is authorized to issue separate classes of shares
representing interests in separate investment portfolios. This Statement
of Additional Information pertains to the Westcore MIDCO Growth Fund,
Westcore Blue Chip Fund, Westcore Growth and Income Fund, Westcore Small-Cap
Opportunity Fund, Westcore Mid-Cap Value Fund, Westcore Long-Term Bond Fund,
Westcore Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund
(each, a "Fund" and collectively, the "Funds"). The Westcore MIDCO Growth
Fund, Westcore Blue Chip Fund, Westcore Growth and Income Fund, Westcore
Mid-Cap Value Fund and Westcore Small-Cap Opportunity Fund are sometimes
referred to as the "Westcore Equity Funds." The Westcore Long-Term Bond
Fund, Westcore Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt
Fund are sometimes referred to as the "Westcore Bond Funds." For information
concerning any investment portfolios offered by the Trust, contact ALPS Mutual
Fund Services, Inc. ("ALPS") at 370 Seventeenth Street, Suite 3100, Denver,
Colorado 80202 or call 1-800-392-CORE (2673).
INVESTMENT OBJECTIVES AND POLICIES
The Prospectus for the Funds describes the Funds' investment
objectives. The following information supplements and should be read in
conjunction with the description of the investment objective and policies for
each Fund in the Prospectus.
PORTFOLIO TRANSACTIONS
Denver Investment Advisors LLC ("Denver Investment Advisors" or the
"Investment Adviser") serves as the investment adviser to the Funds pursuant
to an investment advisory agreement (the "Advisory Agreement").
Subject to the general supervision of the Trust's Board of Trustees
and the provisions of the Trust's Advisory Agreement relating to the Funds,
Denver Investment Advisors makes decisions with respect to and places orders
for all purchases and sales of portfolio securities for the Funds.
The annualized portfolio turnover rate for each Fund is calculated
by dividing the lesser of purchases or sales of portfolio securities for the
year by the monthly average value of the portfolio securities. The
calculation excludes all securities, including options, that have maturities
or expiration dates at the time of acquisition of one year or less.
Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may be affected by cash requirements for redemption of
shares and by requirements which enable the Funds to receive favorable tax
treatment. Portfolio turnover will not be a limiting factor in making
portfolio decisions, and each Fund may engage in short-term trading to
achieve its investment
3
<PAGE>
objective. It is estimated that the annual portfolio turnover rate of the
Westcore Mid-Cap Value Fund (a new portfolio) will not exceed 90 %.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. During the fiscal years
ended May 31, 1998, 1997 and 1996, the Funds paid the following amounts in
brokerage commissions:
BROKERAGE COMMISSIONS PAID
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
May 31, May 31, May 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Westcore MIDCO Growth Fund $ $ 742,296 $674,234
Westcore Blue Chip Fund 71,227 86,601
Westcore Growth and Income Fund 23,464 61,996
Westcore Intermediate-Term Bond Fund 0 2,343
Westcore Small-Cap Opportunity Fund 83,927 48,650
--------- --------- ---------
Aggregate Commissions $ $ 920,914 $ 873,824
--------- --------- ---------
--------- --------- ---------
</TABLE>
For the same periods the Westcore Long-Term Bond Fund and Westcore
Colorado Tax-Exempt Fund did not pay any brokerage commissions. During the
fiscal years ended May 31, 1998, 1997 and 1996, no brokerage commissions were
paid by any Funds to an affiliated broker of the Trust.
There is generally no stated commission in the case of portfolio
securities traded in the over-the-counter market, but the price includes an
undisclosed commission or mark-up. Securities purchased and sold by the
Funds are generally traded in the over-the-counter market on a net basis
(i.e., without commission) through dealers, or otherwise involve transactions
directly with the issuer of an instrument. Transactions in the
over-the-counter market are generally principal transactions with dealers and
the costs of such transactions involve dealer spreads rather than brokerage
commissions. With respect to over-the-counter transactions, Denver
Investment Advisors will normally deal directly with the dealers who make a
market in the securities involved, except in those circumstances where better
prices and execution terms are available elsewhere or as described below.
The cost of securities purchased from underwriters includes an underwriting
commission or concession, and the prices at which securities are purchased
from and sold to dealers include a dealer's mark-up or mark-down.
The Funds may participate, if and when practicable, in bidding for
the purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding
group. A Fund will engage in this practice, however, only
4
<PAGE>
when the Investment Adviser, in its sole discretion, believes such practice
to be otherwise in the Fund's interests.
The Advisory Agreement for the Funds provides that the Investment
Adviser will seek to obtain the best overall terms available in executing
portfolio transactions and selecting brokers or dealers. In assessing the
best overall terms available for any transaction, Denver Investment Advisors
will consider all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer, and the reasonableness of
the commission, if any, both for the specific transaction and on a continuing
basis. In addition, the Advisory Agreement authorizes Denver Investment
Advisors to cause any of the Funds to pay a broker-dealer that furnishes
brokerage and research services a higher commission than that charged by
another broker-dealer for effecting the same transaction, provided that
Denver Investment Advisors determines in good faith that the commission is
reasonable in relation to the value of the brokerage and research services
provided by the broker-dealer, viewed in terms of that particular transaction
or the overall responsibilities of Denver Investment Advisors to the Fund.
Such brokerage and research services might consist of reports and statistics
of specific companies or industries, general summaries of groups of stocks or
bonds and their comparative earnings and yields, or broad overviews of the
stock, bond and government securities markets and the economy.
Supplemental research information so received is in addition to,
and not in lieu of, services required to be performed by the Investment
Adviser and does not reduce the advisory fees payable by the Funds. The
trustees will periodically review the commissions paid by the Funds to
consider whether the commissions paid over representative periods of time
appear to be reasonable in relation to the benefits inuring to the Funds. It
is possible that certain of the supplementary research or other services
received will primarily benefit one or more other investment companies or
other accounts for which investment discretion is exercised by the Investment
Adviser. Conversely, a Fund may be the primary beneficiary of the research
or services received as a result of portfolio transactions effected for such
other account or investment company.
The Funds may from time to time purchase securities issued by the
Trust's regular broker/dealers (as defined in Rule 10b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") or their parents. As of
May 31, 1998, the Westcore Intermediate-Term Bond Fund held securities of the
Trust's regular broker/dealers (or their parents) that derive more than 15%
of their gross revenues from securities-related activities. As of that date,
the Fund's aggregate holdings of securities of _____________ was $_______.
Portfolio securities will not be purchased from or sold to (and
savings deposits will not be made in and repurchase and reverse repurchase
agreements will not be entered into with) the Investment Adviser, ALPS or an
affiliated person (as the term is defined in the 1940 Act) acting as
principal, except to the extent permitted by the Securities and Exchange
Commission (the "SEC"). However, Denver Investment Advisors is authorized in
allocating purchase and sale orders for portfolio securities to
broker/dealers and other financial institutions (including institutions that
are affiliated with the Investment Adviser or principal underwriter) to
5
<PAGE>
take into account the sale of Fund shares if Denver Investment Advisors
believes that the quality of the transaction and the amount of the commission
are comparable to those of other qualified brokerage firms. In addition, the
Westcore Colorado Tax-Exempt Fund will not purchase securities during the
existence of any underwriting group or related selling group of which ALPS,
the Investment Adviser, or any affiliated person of any of them, is a member,
except to the extent permitted by the SEC. In certain circumstances, the
Funds may be at a disadvantage because of these limitations in comparison with
other investment companies which have similar investment objectives but are
not subject to such limitations.
Investment decisions for each Fund are made independently from
those for the other Funds and investment companies and accounts advised or
managed by the Investment Adviser. Such other investment companies and
accounts also may invest in the same securities as the Funds. When a
purchase or sale of the same security is made at substantially the same time
on behalf of a Fund and another investment company or account, the available
securities will be allocated between the Fund and the other purchaser in a
manner which Denver Investment Advisors believes to be equitable to both. In
some instances, this may adversely affect the price paid or received by a
Fund or the size of the position obtained by or disposed of by the Fund. To
the extent permitted by law, Denver Investment Advisors may aggregate the
securities to be sold or purchased for a Fund with those to be sold or
purchased for other investment companies or accounts in executing
transactions.
MOODY'S AND S&P RATINGS
The ratings of ratings agencies represent their opinions as to the
quality of debt securities. It should be emphasized, however, that ratings
are general and are not absolute standards of quality, and debt securities
with the same maturity, interest rate and rating may have different yields
while debt securities of the same maturity and interest rate with different
ratings may have the same yield. Subsequent to purchase by a Fund, an issue
of debt securities may cease to be rated or its rating may be reduced below
the minimum rating required for purchase by a Fund. Denver Investment
Advisors will consider such an event in determining whether the Fund involved
should continue to hold the obligation.
The payment of principal and interest on most debt securities
purchased by the Funds will depend upon the ability of the issuers to meet
their obligations. An issuer's obligations under its debt securities are
subject to the provisions of bankruptcy, insolvency, and other laws affecting
the rights and remedies of creditors, such as the Federal Bankruptcy Code,
and laws, if any, which may be enacted by federal or state legislatures
extending the time for payment of principal or interest, or both, or imposing
other constraints upon enforcement of such obligations or, in the case of
governmental entities, upon the ability of such entities to levy taxes. The
power or ability of an issuer to meet its obligations for the payment of
interest and principal of its debt securities may be materially adversely
affected by litigation or other conditions.
MUNICIPAL OBLIGATIONS (WESTCORE BOND FUNDS)
6
<PAGE>
Municipal Obligations include "general obligation" securities,
"revenue" securities, private activity bonds and "moral obligation"
securities. General obligation securities are secured by the issuer's pledge
of its full faith, credit and taxing power. Revenue securities are payable
only from the revenues derived from a particular facility, the proceeds of a
special excise tax or another specific revenue source such as the user of the
facility being financed. Private activity bonds (E.G., bonds issued by
industrial development authorities) are issued by or on behalf of public
authorities to finance various privately-operated facilities. Such bonds are
included within the term "Municipal Obligations" only if the interest paid
thereon is exempt from regular federal income tax and, for the Westcore
Colorado Tax-Exempt Fund, not treated as a specific tax preference item under
the federal alternative minimum tax. Private activity bonds are in most cases
revenue securities and are not payable from the unrestricted revenues of the
issuer. The credit quality of such bonds is usually directly related to the
credit standing of the corporate user of the facility involved. Moral
obligation securities are normally issued by special purpose public
authorities. If the issuer is unable to meet its debt service obligations
from current revenues, it may draw on a reserve fund, the restoration of which
is a moral commitment but not a legal obligation of the state or municipality
which created the issuer.
Certain of the Municipal Obligations held by the Westcore Colorado
Tax-Exempt Fund may be insured as to the timely payment of principal and
interest. There is no guarantee, however, that the insurer will meet its
obligations in the event of the issuer's default. In addition, such
insurance will not protect against market fluctuations caused by changes in
interest rates and other factors.
Although the Westcore Colorado Tax-Exempt Fund will invest most of
its assets, under normal circumstances, in intermediate-term Municipal
Obligations, the Fund may also purchase short-term General Obligation Notes,
Tax Anticipation Notes, Bond Anticipation Notes, Revenue Anticipation Notes,
Tax-Exempt Commercial Paper, Construction Loan Notes and other forms of
short-term tax-exempt loans. Such instruments are issued with a short-term
maturity in anticipation of the receipt of tax funds, the proceeds of bond
placements or other revenues.
Within the types of Municipal Obligations described above there are
other categories, including municipal leases, which are often sold in the
form of certificates of participation. These obligations are issued by state
and local governments or authorities to finance the acquisition of equipment
and facilities. Certain of these obligations present the risk that a
municipality may not appropriate funds for the lease payments. Moreover,
lease obligations may be limited by municipal charter or other provisions
that do not permit acceleration of the lease obligation upon default.
Because certificates of participation are generally subject to redemption by
the issuing municipal entity under specified circumstances, they are not as
liquid or marketable as other types of Municipal Obligations and are
generally valued at par or less than par in the open market.
There are variations in the quality of Municipal Obligations both
within a particular classification and between classifications, and the
yields on Municipal Obligations depend upon a variety of factors, including
general money market conditions, the financial
7
<PAGE>
condition of the issuer, general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating
of the issue.
Payment on Municipal Obligations relating to certain projects may
be secured by mortgages or deeds of trust. In the event of a default,
enforcement of the mortgages or deeds of trust will be subject to statutory
enforcement procedures and limitations.
In the event of a foreclosure, collection of proceeds may be
delayed and may not be sufficient to pay the principal or accrued interest on
the defaulted Municipal Obligations.
STAND-BY COMMITMENTS (WESTCORE COLORADO TAX-EXEMPT FUND)
The Fund may acquire stand-by commitments with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, a dealer or
bank agrees to purchase from the Fund, at the Fund's option, specified
Municipal Obligations at a specified price. The amount payable to the Fund
upon its exercise of a stand-by commitment is normally (i) the Fund's
acquisition cost of the Municipal Obligations (excluding any accrued interest
which the Fund paid on their acquisition), less any amortized market premium
plus any amortized market or original issue discount during the period the
Fund owned the securities, plus (ii) all interest accrued on the securities
since the last interest payment date during that period. Stand-by
commitments may be sold, transferred or assigned by the Fund only with the
underlying instrument.
The Fund intends to enter into stand-by commitments only with
dealers, banks and broker-dealers which, in the Investment Adviser's opinion,
present minimal credit risks. The Fund's reliance upon the credit of these
dealers, banks and broker-dealers will be secured by the value of the
underlying Municipal Obligations that are subject to the commitment. In
evaluating the creditworthiness of the issuer of a stand-by commitment, the
Investment Adviser will review periodically the issuer's assets, liabilities,
contingent claims and other relevant financial information.
The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The acquisition of a stand-by commitment would not affect
the valuation or assumed maturity of the underlying Municipal Obligations,
which would continue to be valued in accordance with the Fund's normal method
of valuation. Stand-by commitments acquired by the Fund would be valued at
zero in determining net asset value.
8
<PAGE>
SPECIAL CONSIDERATIONS REGARDING INVESTMENTS IN COLORADO OBLIGATIONS
(WESTCORE COLORADO TAX-EXEMPT FUND)
The concentration of the Westcore Colorado Tax-Exempt Fund in
securities issued by governmental units of only one state exposes the Fund to
risks greater than those of a more diversified portfolio holding securities
issued by governmental units of different states and different regions of the
country.
The Fund believes the information summarized below describes some
of the more significant developments relating to securities of (i)
municipalities or other political subdivisions or instrumentalities of the
State of Colorado (the "State") which rely, in whole or in part, on AD
VALOREM real property taxes and other general funds of such municipalities or
political subdivisions or (ii) the State. The sources of such information
include the official publications of the State, as well as other publicly
available documents. The Fund has not independently verified any of the
information contained in such official publications and other publicly
available documents, but is not aware of any facts which would render such
information inaccurate.
ECONOMIC FACTORS. Based on data published by the State of Colorado, Office
of State Planning and Budgeting as presented in the COLORADO ECONOMIC
PERSPECTIVE, FOURTH QUARTER, FISCAL YEAR 1997, JUNE 20, 1997 (the "Economic
Report"), nearly 54% of non-agricultural employment in Colorado in 1996 was
concentrated in the retail and wholesale trade and service sectors,
reflecting the importance of tourism to the State's economy and of Denver as
a regional economic and transportation hub. The government and manufacturing
sectors followed as the next largest employment sectors in the State,
representing approximately 16.3% and 10.3%, respectively, of non-agricultural
employment in the State in 1996. The Office of Planning and Budgeting
projects similar concentrations for calendar years 1997 and 1998.
According to the Economic Report, the Colorado unemployment rate
remained unchanged with an average of 4.2% during both 1995 and 1996. Total
retail sales increased by 16.7% during 1996. Colorado continued to surpass
the employment growth rate of the U.S. with a 3.4% rate of growth for
Colorado in 1996, as compared with 2.0% for the nation as a whole. However,
the rate of job growth in Colorado is projected in the Economic Report to be
lower in 1997 than 1996 as a result of layoffs at various employers.
Personal income rose 6.8% in Colorado during 1996, as compared with
an increase of 5.5% for the nation as a whole.
RESTRICTIONS OF APPROPRIATIONS AND REVENUES. The State Constitution requires
that expenditures for any fiscal year not exceed revenues for such fiscal
year. By statute, the amount of State General Fund revenues available for
appropriation is based upon revenue estimates which, together with other
available resources, must exceed annual appropriations by the amount of the
unappropriated reserve (the "Unappropriated Reserve"). The Unappropriated
Reserve requirement for fiscal years 1991, 1992 and 1993 was set at 3% of
total appropriations from the
9
<PAGE>
General Fund. For fiscal years 1994 and thereafter, the Unappropriated
Reserve requirement has been set at 4%. In addition to the Unappropriated
Reserve, a constitutional amendment approved by Colorado voters in 1992
requires the State and each local government to reserve a certain percentage
of its fiscal year spending (excluding bonded debt service) for emergency use
(the "Emergency Reserve"). The minimum Emergency Reserve was set at 1% for
1993 and 2% for 1994 and has been set at 3% for 1995 and later years. For
fiscal year 1992 and thereafter, General Fund appropriations are also limited
by statute to an amount equal to the cost of performing certain required
reappraisals of taxable property plus an amount equal to the lesser of (i) 5%
of Colorado personal income or (ii) 106% of the total General Fund
appropriations for the previous fiscal year. This restriction does not apply
to any General Fund appropriations which are required as a result of a new
federal law, a final state or federal court order or moneys derived from the
increase in the rate or amount of any tax or fee approved by a majority of
the registered electors of the State voting at any general election. In
addition, the statutory limit on the level of General Fund appropriations may
be exceeded for a given fiscal year upon the declaration of a State fiscal
emergency by the State General Assembly.
According to the Economic Report, the fiscal year 1996 ending
General Fund balance was $368.5 million, which was $211.8 million over the
combined Unappropriated Reserve and Emergency Reserve requirements. The 1995
fiscal year ending General Fund balance was $488.5 million, or $262.4 million
over the required Unappropriated Reserve and Emergency Reserve. Based on
Economic Report estimates, the fiscal year 1997 ending General Fund balance
is expected to be approximately $386.3 million, or $220.3 million over the
required Unappropriated Reserve and Emergency Reserve.
On November 3, 1992, voters in Colorado approved a constitutional
amendment (the "Amendment") which, in general, became effective December 31,
1992, and restricts the ability of the State and local governments to
increase revenues and impose taxes. The Amendment applies to the State and
all local governments, including home rule entities ("Districts").
Enterprises, defined as government-owned businesses authorized to issue
revenue bonds and receiving under 10% of annual revenue in grants from all
Colorado state and local governments combined, are excluded from the
provisions of the Amendment.
The provisions of the Amendment are unclear and have required
judicial interpretation. Among other provisions, the Amendment requires
voter approval prior to tax increases, the imposition of a new tax, creation
of debt, or mill levy or valuation for assessment ratio increases or a change
of tax policy resulting in a net revenue gain. The Amendment also limits
increases in government spending and property tax revenues to specified
percentages. The Amendment requires that District property tax revenues
yield no more than the prior year's revenues adjusted for inflation, voter
approved changes, and (except with regard to school districts) local growth
in property values according to a formula set forth in the Amendment. School
districts are allowed to adjust property tax revenue levies for changes in
student enrollment. Pursuant to the Amendment, local government spending is
to be limited by the same formula as the limitation for property tax
revenues. The Amendment limits increases in expenditures from the State
General Fund and program revenues (cash funds) to the growth in inflation
plus the percentage change in State population in the prior calendar year.
The bases for
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initial spending and revenue limits were fiscal year 1992 spending and 1991
property taxes collected in 1992. The bases for spending and revenue limits
for all subsequent fiscal years is the prior fiscal year's spending and
property taxes collected in the prior calendar year. Debt service changes,
reductions and voter-approved revenue changes are excluded from the
calculation bases. The Amendment also prohibits new or increased real
property transfer tax rates, new State real property taxes and local District
income taxes.
Litigation concerning several issues relating to the Amendment has
been brought in the Colorado courts. The litigation has dealt with three
principal issues: (i) whether Districts can increase mill levies to pay debt
service on general obligation bonds without obtaining voter approval; (ii)
whether a multi-year lease-purchase agreement subject to annual appropriation
is an obligation which requires voter approval prior to execution of the
agreement; and (iii) what constitutes an "enterprise" which is excluded from
the provisions of the Amendment. In September 1994, the Colorado Supreme
Court held that Districts can increase mill levies to pay debt service on
voter approved general obligation bonds issued after the effective date of
the Amendment; in June 1995, the Colorado Supreme Court validated mill levy
increases to pay general obligation bonds issued prior to the Amendment
provided that such bonds or bonds issued to refund such bonds were voter
approved. In late 1994, the Colorado Court of Appeals held that multi-year
lease-purchase agreements subject to annual appropriation do not require
voter approval. The time to file an appeal in that case has expired.
Finally, in May 1995, the Colorado Supreme Court ruled that entities with the
power to levy taxes may not themselves be "enterprises" for purposes of the
Amendment; however, the Court did not address the issue of how valid
enterprises may be created. Many Colorado local governments interpret this
decision to mean that a government with taxing power cannot be an enterprise
but that a business activity (such as a utility) owned by such a government
can be. Additional litigation in the "enterprise" arena may be filed in the
future to clarify these issues. The Colorado Supreme Court has also decided
that voters can authorize a government to keep and spend all revenues
received in excess of the spending limits. Other aspects of the spending
limit are being litigated in district court actions.
According to the Economic Report, for fiscal year 1996, general
fund revenues (adjusted for cash funds that are exempt from the Amendment)
were $3,941.9 million and program revenues (cash funds) were $1,815.5
million, for revenues totaling $5,757.3 million. During calendar year 1995,
population and inflation grew at rates of 4.4% and 2.7%, respectively, for a
combined total limit of 7.1%. Accordingly, under the Amendment, increases in
State expenditures during the 1996 fiscal year could not exceed $6,166.1
million and the actual 1996 general fund and program revenues of $6,124.3
million were under the limit. The limitation for fiscal year 1997 is 5.5%
over revenues during the 1996 fiscal year; accordingly, 1997 fiscal year
revenues cannot exceed $6,528.5 million. Fiscal year 1997 revenues are
estimated to be approximately $140 million over the limitation. The
limitation for the 1998 fiscal year is currently projected to be 5.2% which
translates to a revenue limit of approximately $6,946.5 million for fiscal
year 1998. The State currently projects that revenues will exceed the
Amendment limitation for the foreseeable future. There will be a special
session of the legislature in October to determine how to refund the surplus
for fiscal year 1997. It is possible that in future legislative sessions
proposals to reform the state tax structure to minimize such
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surpluses may be considered. The State will have to refund, or obtain voter
approval to retain, the excess over the limitation in 1998.
There is also a statutory restriction on the amount of annual
increases in taxes that the various taxing jurisdictions in Colorado can levy
without electoral approval. This restriction does not apply to taxes levied to
pay general obligation debt.
COLORADO STATE FINANCES. As the State experienced revenue shortfalls in the
mid-1980s, it adopted various measures, including impoundment of funds by the
Governor, reduction of appropriations by the General Assembly, a temporary
increase in the sales tax, deferral of certain tax reductions and inter-fund
borrowings. According to State of Colorado Audited Finance Reports, under
generally accepted accounting principles, the State had unrestricted General
Fund ending balances at June 30 of approximately $133.3 million in fiscal year
1992, $326.8 million in fiscal year 1993, $320.4 million in fiscal year 1994,
$408.0 million in fiscal year 1995, and $368.5 million for fiscal year 1996.
For fiscal year 1996, the following tax categories generated the
following percentages of the State's $4,268.7 million total revenues (accrual
basis): individual income taxes represented 54.3% of gross fiscal year 1996
receipts; sales, use, and other excise taxes represented 33.2% of gross fiscal
year 1996 receipts; and corporate income taxes represented 4.8% of gross fiscal
year 1996 receipts. For fiscal year 1997, General Fund revenues of
approximately $4,645.8 million and appropriations of approximately
$4,553.2 million are projected. The percentages of General Fund revenue
generated by type of tax for fiscal year 1997 are not expected to be
significantly different from fiscal year 1996 percentages.
DEBT. Under its constitution, the State of Colorado is not permitted to
issue general obligation bonds secured by the full faith and credit of the
State. However, certain agencies and instrumentalities of the State are
authorized to issue bonds secured by revenues from specific projects and
activities. The State enters into certain lease transactions which are
subject to annual renewal at the option of the State. In addition, the State
is authorized to issue short-term revenue anticipation notes. Local
government units in the State are also authorized to incur indebtedness. The
major source of financing for such local government indebtedness is an AD
VALOREM property tax. In addition, in order to finance public projects,
local governments in the State can issue revenue bonds payable from the
revenues of a utility or enterprise or from the proceeds of an excise tax, or
assessment bonds payable from special assessments. Colorado local governments
can also finance public projects through leases which are subject to annual
appropriation at the option of the local government. Local governments in
Colorado also issue tax anticipation notes. The Amendment requires prior
voter approval for the creation of any multiple fiscal year debt or other
financial obligation whatsoever, except for refundings at a lower rate or
obligations of an enterprise.
Economic conditions in the State may have continuing effects on other
governmental units within the State (including issuers of the Colorado
obligations in the Fund), which, to varying degrees, have also experienced
reduced revenues as a result of recessionary conditions and other factors.
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U.S. GOVERNMENT OBLIGATIONS (ALL WESTCORE FUNDS)
Each Fund may invest in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. Examples of the types of
U.S. Government obligations that may be held by a Fund include, in addition
to U.S. Treasury bonds, notes and bills, the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association ("Fannie Mae"), General
Services Administration, Central Bank for Cooperatives, Federal Home Loan
Mortgage Corporation ("Freddie Mac"), Federal Intermediate Credit Banks and
Maritime Administration. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as those of the Government
National Mortgage Association, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Export-Import Bank of the
United States, are supported by the right of the issuer to borrow from the
Treasury; others, such as those of Fannie Mae are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of Freddie Mac are supported only
by the credit of the instrumentality. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law.
MONEY MARKET INSTRUMENTS (ALL WESTCORE FUNDS)
Each Fund may invest from time to time in "money market instruments"
such as bank obligations, commercial paper and corporate bonds with remaining
maturities of 13 months or less.
Bank obligations include bankers' acceptances, negotiable certificates
of deposit and non-negotiable time deposits, including instruments issued or
supported by the credit of U.S. or foreign banks. Although the Funds will
invest in obligations of foreign banks or foreign branches of U.S. banks only
where the Investment Adviser deems the instrument to present minimal credit
risks, these investments nevertheless entail risks that are different from those
of investments in domestic obligations of U.S. banks due to differences in
political, regulatory and economic systems and conditions. Investments in bank
obligations are limited to the obligations of financial institutions having more
than $1 billion in total assets at the time of purchase. Investments in the
obligations of foreign banks and foreign branches of U.S. banks will not exceed
20% and 25%, respectively, of each Fund's total assets at the time of purchase.
Commercial paper is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other borrowers.
Investments by a Fund in commercial paper and similar corporate obligations will
consist of issues that are rated within the highest rating category by one or
more Rating Agencies at the time of purchase and unrated paper determined by the
Investment Adviser at the time of purchase to be of comparable quality.
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For the Westcore Colorado Tax-Exempt Fund, investments in money
market instruments, together with investments in other instruments (such as
U.S. Government obligations and repurchase agreements) that are subject to
federal income tax, will not exceed 20% of the total assets of the Fund
except when made for temporary defensive purposes. The Westcore Colorado
Tax-Exempt Fund may also hold uninvested cash reserves which do not earn
income pending investment, during temporary defensive periods or if, in the
opinion of its Investment Adviser, suitable tax-exempt obligations are
unavailable. There is no percentage limitation on the amount of assets which
may be held uninvested by the Westcore Colorado Tax-Exempt Fund.
VARIABLE AND FLOATING RATE INSTRUMENTS (WESTCORE BOND FUNDS)
These Funds may purchase variable and floating rate obligations as
described in the Prospectus. The Investment Adviser will consider the earning
power, cash flows and other liquidity ratios of the issuers and guarantors of
such obligations and, if the obligation is subject to a demand feature, will
monitor the issuer's financial ability to meet payment on demand.
Variable and floating rate demand instruments acquired by a Fund may
include participations in Municipal Obligations purchased from and owned by
financial institutions, primarily banks. Participation interests provide a Fund
with a specified undivided interest (up to 100%) in the underlying obligation
and the right to demand payment of the unpaid principal balance plus accrued
interest on the participation interest from the institution upon a specified
number of days' notice, not to exceed thirty days. Each participation interest
is backed by an irrevocable letter of credit or guarantee of a bank that the
Investment Adviser has determined meets the prescribed quality standards for the
Fund. The bank typically retains fees out of the interest paid on the
obligation for servicing the obligation, providing the letter of credit and
issuing the repurchase commitment.
While there may be no active secondary market with respect to a
particular variable or floating rate instrument purchased by the Funds, the
Funds may, from time to time as specified in the instrument, demand payment in
full of the principal or may resell the instrument to a third party. The
absence of an active secondary market, however, could make it difficult for a
Fund to dispose of an instrument if the issuer defaulted on its payment
obligation or during periods that the Fund is not entitled to exercise its
demand rights, and the Fund could, for these or other reasons, suffer a loss.
Variable and floating rate instruments with no active secondary market will be
included in the calculation of a Fund's illiquid assets. See "Restricted
Securities."
REPURCHASE AGREEMENTS (ALL WESTCORE FUNDS)
A Fund will enter into repurchase agreements only with financial
institutions deemed to be creditworthy by the Investment Adviser, pursuant to
guidelines established by the Trust's Board of Trustees. During the term of any
repurchase agreement, the Investment Adviser will monitor the creditworthiness
of the seller and the seller must maintain the value of the securities subject
to the agreement and held by the Fund as collateral at 101% of the repurchase
price.
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Although the securities subject to repurchase agreements may bear
maturities exceeding 13 months, each Fund does not presently intend to enter
into repurchase agreements with deemed maturities in excess of seven days after
notice by the Fund. If in the future a Fund were to enter into repurchase
agreements with deemed maturities in excess of seven days, the Fund would do so
only if such investment, together with other illiquid securities, did not exceed
15% of the value of the Fund's net assets.
The repurchase price under repurchase agreements entered into by a
Fund generally equals the price paid by the Fund plus interest negotiated on the
basis of current short-term rates (which may be more or less than the rate on
the securities underlying the repurchase agreement). Securities subject to
repurchase agreements are held by the Funds' custodian or in the Federal
Reserve/Treasury book-entry system.
Repurchase agreements involve the risk that the seller will fail to
repurchase the securities, as agreed. In that event, the Fund will bear the
risk of possible loss due to adverse market action or delays in liquidating the
underlying obligations.
REVERSE REPURCHASE AGREEMENTS (ALL WESTCORE FUNDS)
When a Fund enters into a reverse repurchase agreement, it maintains
in a separate custodial account cash, U.S. Government obligations or other
liquid high-grade debt obligations that have a value at least equal to the
repurchase price.
Reverse repurchase agreements involve the risk that the value of
portfolio securities a Fund sells may decline below the price it must pay when
the transaction closes.
As reverse repurchase agreements are deemed to be borrowings by the
SEC, each Fund is required to maintain continuous asset coverage of 300%.
Should the value of a Fund's assets decline below 300% of borrowings, a Fund may
be required to sell portfolio securities within three days to reduce the Fund's
debt and restore 300% asset coverage.
LOWER-RATED SECURITIES (WESTCORE EQUITY FUNDS)
While any investment carries some risk, certain risks associated with
lower-rated securities (commonly referred to as "junk bonds") are different than
those for investment grade securities. The risk of loss through default is
greater because lower-rated securities are usually unsecured and are often
subordinate to an issuer's other obligations. If an issuer of a security held
by a Fund defaults, the Fund may incur additional expenses to seek recovery.
Additionally, the issuers of these securities frequently have high debt levels
and are thus more sensitive to difficult economic conditions, individual
corporate developments and rising interest rates. Consequently, the market
price of these securities may be quite volatile and may result in wider
fluctuations in a Fund's net asset value per share.
In certain circumstances it may be difficult to determine a security's
fair value due to a lack of reliable objective information. This may occur
where there is no established
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secondary market for the security or the security is thinly traded. As a
result, a Fund's valuation of a security and the price it is actually able to
obtain when it sells the security could differ.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may adversely affect the value and liquidity of
lower-rated securities held by the Funds, especially in a thinly-traded market.
Illiquid or restricted securities held by the Funds may involve special
registration responsibilities, liabilities, costs and valuation difficulties.
The ratings of Rating Agencies evaluate the safety of a lower-rated
security's principal and interest payments, but do not address market value
risk. Because the ratings of the Rating Agencies may not always reflect current
conditions and events, the Investment Adviser continuously monitors the issuers
of lower-rated securities held in a Fund's portfolio for their ability to make
required principal and interest payments. If a security undergoes a rating
revision, the Fund involved may continue to hold the security if the Investment
Adviser decides this is appropriate.
SECURITIES LENDING (ALL WESTCORE FUNDS OTHER THAN THE WESTCORE COLORADO
TAX-EXEMPT FUND)
Each of these Funds may lend its portfolio securities to institutional
investors as a means of earning additional income. Such loans must be
continuously secured by certain liquid, high-grade collateral equal at all times
to at least the market value of the securities loaned. Securities loans will be
made only to borrowers deemed by the Investment Adviser to present minimal
credit risks and when, in its judgment, the income to be earned from the loan
justifies the possible risks.
When a Fund lends its securities, it continues to receive interest or
dividends on the securities loaned and may simultaneously earn interest on the
collateral received from the borrower or from the investment of cash collateral
in readily marketable, high-quality, short-term obligations. Although voting
rights, or rights to consent, attendant to securities on loan pass to the
borrower, these loans may be called at any time and will be called if a material
event affecting the investment were to occur.
Collateral for such securities loans may include cash, securities of
the U.S. Government, its agencies or instrumentalities or an irrevocable letter
of credit issued by a bank which meets the investment standards of a Fund and
whose securities are eligible for purchase under the objectives, policies and
limitations of the Fund. There may be risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially.
RESTRICTED SECURITIES (ALL WESTCORE FUNDS)
No Fund will knowingly invest more than 15% of the value of its net
assets in securities that are illiquid. Securities that are not registered
under the Securities Act of 1933, as amended, but that may be purchased by
institutional buyers under Rule 144A are subject to this
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limitation unless the Investment Adviser under the supervision of the Board
determines that a liquid trading market exists.
Rule 144A allows for a broader institutional trading market for
securities otherwise subject to restriction on resale to the general public.
Rule 144A establishes a "safe harbor" from the registration requirements of the
Securities Act of 1933, as amended, for resales of certain securities to
qualified institutional buyers. The Investment Adviser believes that the market
for certain restricted securities such as institutional commercial paper may
expand further as a result of this regulation and the development of automated
systems for the trading, clearance and settlement of unregistered securities of
domestic and foreign issuers, such as the PORTAL System sponsored by the NASD.
The Investment Adviser monitors the liquidity of restricted
securities in each of the Funds' portfolios under the supervision of the
Board of Trustees. In reaching liquidity decisions, the Investment Adviser
will consider such factors as: (a) the frequency of trades and quotes for the
security; (b) the number of dealers wishing to purchase or sell the security
and the number of other potential purchasers; (c) dealer undertakings to make
a market in the security; and (d) the nature of the security and the nature
of the marketplace trades (E.G., the time needed to dispose of the security,
the method of soliciting offers and the mechanics of the transfer).
RIGHTS OFFERINGS AND WARRANTS TO PURCHASE (ALL WESTCORE FUNDS)
These Funds may participate in rights offerings and may purchase
warrants. These instruments are privileges enabling the owners to subscribe to
and purchase a specified number of shares of the issuing corporation at a
specified price during a specified period of time. Subscription rights normally
have a short life span to expiration. The purchase of rights or warrants
involves the risk that the Fund involved could lose the purchase value of a
right or warrant if the right to subscribe to additional shares is not exercised
prior to the expiration of the rights and warrants. Also, the purchase of
rights or warrants involves the risk that the effective price paid for them,
when added to the subscription price of the related security, may exceed the
value of the subscribed security's market price. This could occur when there is
no movement in the level of the underlying security.
ASSET-BACKED SECURITIES (WESTCORE BOND FUNDS, OTHER THAN THE WESTCORE COLORADO
TAX-EXEMPT FUND)
These Funds may purchase asset-backed securities issued by either
governmental or non-governmental entities which represent a participation in, or
are secured by and payable from, a stream of payments generated by particular
assets, most often a pool of assets similar to one another. Primarily, these
securities do not have the benefit of the same security interest in the
underlying collateral. Payment on asset-backed securities of private issues is
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty, or subordination. Assets generating such
payments will consist of such instruments as motor vehicle installment purchase
obligations and credit card receivables. Credit card receivables are generally
unsecured and the debtors are entitled to the protection of a number of state
and federal consumer laws, many of which have given debtors the right to set off
certain
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amounts owed on the credit cards, thereby reducing the balance due. The
Funds may also invest in other types of asset-backed securities that may be
available in the future.
The calculation of the average weighted maturity of asset-backed
securities is based on estimates of average life.
Asset-backed securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in an
underlying pool of assets, or as debt instruments, which are also known as
collateralized obligations, and are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and
issuing such debt. Asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. Payments of both
interest and principal on the securities are typically made monthly, thus in
effect "passing through" monthly payments made by the individual borrowers on
the assets that underlie the securities, net of any fees paid to the issuer or
guarantor of the securities.
Asset-backed securities are considered an industry for industry
concentration purposes.
In general, the collateral supporting asset-backed securities is of
shorter maturity than mortgage-related securities. Like other fixed-income
securities, when interest rates rise the value of an asset-backed security
generally will decline; however, when interest rates decline, the value of an
asset-backed security with prepayment features may not increase as much as that
of other fixed-income securities.
MORTGAGE-RELATED SECURITIES (WESTCORE BOND FUNDS, OTHER THAN THE WESTCORE
COLORADO TAX-EXEMPT FUND)
MORTGAGE BACKED SECURITIES GENERALLY. Mortgage backed securities held
by the Bond Funds represent an ownership interest in a pool of residential
mortgage loans. These securities are designed to provide monthly payments of
interest and principal to the investor. The mortgagor's monthly payments to his
lending institution are "passed-through" to an investor such as the Funds. Most
issuers or poolers provide guarantees of payments, regardless of whether or not
the mortgagor actually makes the payment. The guarantees made by issuers or
poolers are supported by various forms of credit, collateral, guarantees or
insurance, including individual loan, title, pool and hazard insurance purchased
by the issuers or poolers so that they can meet their obligations under the
policies. Mortgage backed securities issued by private issuers or poolers,
whether or not such securities are subject to guarantees, may entail greater
risk than securities directly or indirectly guaranteed by the U.S. Government.
Interests in pools of mortgage backed securities differ from other
forms of debt securities, which normally provide for periodic payment of
interest in fixed amounts with principal payments at maturity or specified call
dates. Instead, these securities provide a monthly payment which consists of
both interest and principal payments. In effect, these payments are a
"pass-through" of the monthly payments made by the individual borrowers on their
residential mortgage loans, net of any fees paid. Additional payments are
caused by repayments resulting
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from the sale of the underlying residential property, refinancing or
foreclosure net of fees or costs which may be incurred. Some mortgage backed
securities are described as "modified pass-through". These securities
entitle the holders to receive all interest and principal payments owed on
the mortgages in the pool, net of certain fees, regardless of whether or not
the mortgagors actually make the payments.
The Funds may purchase mortgage-related securities that are secured
by entities such as Government National Mortgage Association ("GNMA"), Fannie
Mae, Freddie Mac, commercial banks, trusts, financial companies, finance
subsidiaries of industrial companies, savings and loan associations, mortgage
banks and investment banks.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related
securities and among the securities that they issue. Mortgage-related
securities include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the timely payment of principal and
interest by GNMA and such guarantee is backed by the full faith and credit of
the United States. GNMA is a wholly-owned U.S. Government corporation within
the Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-related securities also include
Fannie Mae guaranteed Mortgage Pass-Through Certificates which are solely the
obligations of Fannie Mae, are not backed by or entitled to the full faith
and credit of the United States and are supported by the right of the issuer
to borrow from the Treasury. Fannie Mae is a government-sponsored
organization owned entirely by private stockholders. Fannie Mae guaranteed
Mortgage Pass-Through Certificates are guaranteed as to timely payment of
principal and interest by Fannie Mae. Mortgage-related securities include
Freddie Mac Mortgage Participation Certificates (also known as "PCs").
Freddie Mac is a corporate instrumentality of the United States, created
pursuant to an Act of Congress, which is owned entirely by Federal Home Loan
Banks. Freddie Mac PCs are not guaranteed and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie
Mac PCs entitle the holder to timely payment of interest, which is guaranteed
by Freddie Mac. Freddie Mac guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. When
Freddie Mac does not guarantee timely payment of principal, Freddie Mac may
remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no
event later than one year after it becomes payable.
UNDERLYING MORTGAGES. Pools consist of whole mortgage loans or
participations in loans. The majority of these loans are made to purchasers of
one to four family homes. The terms and characteristics of the mortgage
instruments are generally uniform within a pool but may vary among pools. For
example, in addition to fixed-rate, fixed-term mortgages, the Bond Funds may
purchase pools of variable rate mortgages ("VRM"), growing equity mortgages
("GEM"), graduated payment mortgages ("GPM") and other types where the principal
and interest payment procedures vary. VRM's are mortgages which reset the
mortgage's interest rate periodically with changes in open market interest
rates. To the extent that a Portfolio is actually invested in VRM's, its
interest income will vary with changes in the applicable interest rate on
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pools of VRM's. GPM and GEM pools maintain constant interest rates, with
varying levels of principal repayment over the life of the mortgage. These
different interest and principal payment procedures should not impact the
Portfolios' net asset value since the prices at which these securities are
valued will reflect the payment procedures.
All poolers apply standards for qualification to local lending
institutions which originate mortgages for the pools. Poolers also establish
credit standards and underwriting criteria for individual mortgages included in
the pools. In addition, some mortgages included in pools are insured through
private mortgage insurance companies.
Each Fund may invest in multiple class pass-through securities,
including CMOs and REMIC Certificates. These multiple class securities may
be issued or guaranteed by U.S. Government agencies or instrumentalities,
including GNMA, Fannie Mae and Freddie Mac, or issued by trusts formed by
private originators of, or investors in, mortgage loans. In general, CMOs
and REMICs are debt obligations of a legal entity that are collateralized by,
and multiple class pass-through securities represent direct ownership
interests in, a pool of residential mortgage loans or mortgage pass-through
securities (the "Mortgage Assets"), the payments on which are used to make
payments on the CMOs or multiple pass-through securities. Investors may
purchase beneficial interests in REMICs, which are known as "regular"
interests or "residual" interests, which in general are junior and more
volatile than regular interests. The Funds do not intend to purchase
residual interests. Pools created by non-governmental issuers generally
offer a higher rate of interest than government and government-related pools
because there are no direct or indirect government guarantees of payments in
the former pools. However, timely payment of interest and principal of these
pools is supported by various forms of insurance or guarantees, including
individual loan, title, pool and hazard insurance purchased by the issuer.
The insurance and guarantees are issued by governmental entities, private
insurers and the mortgage poolers. There can be no assurance that the
private insurers or mortgage poolers can meet their obligations under the
policies.
Although certain mortgage-related securities are guaranteed by a
third party or are otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If a Fund purchases a
mortgage-related security at a premium, that amount may be lost if there is a
decline in the market value of the security whether resulting from increases
in interest rates or prepayment of the underlying mortgage collateral. As
with other interest-bearing securities, the prices of such securities are
inversely affected by changes in interest rates. However, though the value
of a mortgage-related security may decline when interest rates rise, the
converse is not necessarily true because mortgages underlying securities are
prone to prepayment in periods of declining interest rates. For this and
other reasons, a mortgage-related security's maturity may be shortened by
unscheduled prepayments on underlying mortgages and, therefore, it is not
possible to accurately predict the security's return to a Fund.
Mortgage-related securities provide regular payments consisting of interest
and principal. No assurance can be given as to the return a Fund will
receive when these amounts are reinvested. The compounding effect from
reinvestment of monthly payments received by the Funds will increase their
respective yields to shareholders, compared to bonds that pay interest
semi-annually.
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CMOs may involve additional risks other than those found in other
types of mortgage-related obligations. During periods of rising interest rates,
CMOs may lose their liquidity as CMO market makers may choose not to repurchase,
or may offer prices, based on current market conditions, which are unacceptable
to the Fund based on the Fund's analysis of the market value of the security.
As new types of mortgage-backed securities are developed and offered
in the market, the Trust may consider making investments in such new types of
securities.
OPTIONS (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE COLORADO TAX-EXEMPT FUND)
Each Fund, other than the Westcore Colorado Tax-Exempt Fund, may
purchase put and call options and may write covered call and secured put
options issued by the Options Clearing Corporation which are traded
over-the-counter or are listed on a national securities exchange. Such
options may relate to particular securities or to various stock or bond
indexes, except that a Fund may not write covered call options on an index.
A Fund may also invest in index futures contracts and options on index
futures contracts for hedging purposes. A Fund may not purchase options or
purchase or sell futures contracts or options on futures contracts unless
immediately after any such transaction the aggregate amount of premiums paid
for put options and the amount of margin deposits on its existing futures
positions do not exceed 5% of its total assets. Purchasing options is a
specialized investment technique that may entail the risk of a complete loss
of the amounts paid as premiums to the writer of the option.
In order to close out call or put option positions, the Fund will be
required to enter into a "closing purchase transaction" -- the purchase of a
call or put option (depending upon the position being closed out) on the same
security with the same exercise price and expiration date as the option that it
previously wrote. When a portfolio security subject to a call option is sold, a
Fund will effect a closing purchase transaction to close out any existing call
option on that security. If a Fund is unable to effect a closing purchase
transaction, it will not be able to sell the underlying security until the
option expires or a Fund delivers the underlying security upon exercise.
By writing a covered call option, a Fund forgoes the opportunity to
profit from an increase in the market price of the underlying security above the
exercise price except insofar as the premium represents a profit. In addition,
a Fund is not able to sell the underlying security until the option expires or
is exercised or the Fund effects a closing purchase transaction by purchasing an
option of the same series. If a Fund writes a secured put option, it assumes
the risk of loss should the market value of the underlying security decline
below the exercise price of the option. The use of covered call and secured put
options will not be a primary investment technique of a Fund. If the Investment
Adviser is incorrect in its forecast for the underlying security or other
factors when writing options, a Fund would be in a worse position than it would
have been had the options not been written.
In contrast to an option on a particular security, an option on an
index provides the holder with the right to make or receive a cash settlement
upon exercise of the option. The amount of this settlement will be equal to the
difference between the closing price of the index at
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the time of exercise and the exercise price of the option expressed in
dollars, times a specified multiple.
When a Fund purchases a put or call option, the premium paid by it is
recorded as an asset of the Fund. When a Fund writes an option, an amount equal
to the net premium (the premium less the commission) received by the Fund is
included in the liability section of the Fund's statement of assets and
liabilities as a deferred credit. The amount of this asset or deferred credit
will be subsequently marked-to-market to reflect the current value of the option
purchased or written. The current value of the traded option is the last sale
price or, in the absence of a sale, the average of the closing bid and asked
prices. If an option purchased by a Fund expires unexercised, the Fund realizes
a loss equal to the premium paid. If a Fund enters into a closing sale
transaction on an option purchased by it, the Fund will realize a gain if the
premium received by the Fund on the closing transaction is more than the premium
paid to purchase the option, or a loss if it is less. If an option written by a
Fund expires on the stipulated expiration date or if a Fund enters into a
closing purchase transaction, it will realize a gain (or loss if the cost of a
closing purchase transaction exceeds the net premium received when the option is
sold) and the deferred credit related to such option will be eliminated. If an
option written by a Fund is exercised, the proceeds of the sale will be
increased by the net premium originally received and the Fund will realize a
gain or loss.
As noted in the Prospectus, there are several risks associated with
transactions in options on securities. For example, there are significant
differences between the securities and options markets which could result in an
imperfect correlation between the markets, causing a given transaction not to
achieve its objectives. In addition, a liquid secondary market for particular
options, whether traded over-the-counter or on a national securities exchange
("National Securities Exchange") may be absent for reasons which include the
following: there may be insufficient trading interest in certain options;
restrictions may be imposed by a National Securities Exchange on opening
transactions, closing transactions or both; trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; unusual or unforeseen circumstances may
interrupt normal operations on a National Securities Exchange; the facilities of
a National Securities Exchange or the Options Clearing Corporation may not at
all times be adequate to handle current trading volume; or one or more National
Securities Exchanges could, for economic or other reasons, decide or be
compelled at some future date to discontinue the trading of options (or a
particular class or series of options), in which event the secondary market on
that National Securities Exchange (or in that class or series of options) would
cease to exist, although outstanding options that had been issued by the Options
Clearing Corporation as a result of trades on that National Securities Exchange
would continue to be exercisable in accordance with their terms. A Fund will
likely be unable to control losses by closing its position where a liquid
secondary market does not exist. Moreover, regardless of how much the market
price of the underlying security increases or decreases, the option buyer's risk
is limited to the amount of the original investment for the purchase of the
option. However, options may be more volatile than their underlying securities,
and therefore, on a percentage basis, an investment in options may be subject to
greater fluctuation than an investment in the underlying securities.
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A decision as to whether, when and how to use options involves the
exercise of skill and judgment, and even a well-conceived transaction may be
unsuccessful to some degree because of market behavior or unexpected events.
FUTURES AND RELATED OPTIONS (WESTCORE EQUITY AND WESTCORE BOND FUNDS, OTHER
THAN THE WESTCORE COLORADO TAX-EXEMPT FUND)
These Funds may invest in futures contracts and related options
(including, but not limited to, interest rate futures contracts and index
futures contracts). For a detailed description of futures contracts and related
options, see Appendix B to this Statement of Additional Information.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS (WESTCORE EQUITY FUNDS)
A forward foreign currency exchange contract is an obligation by the
Fund to purchase or sell a specific currency at a specified price and future
date, which may be any fixed number of days from the date of the contract.
These contracts establish an exchange rate at a future date and are transferable
in the interbank market conducted directly between currency traders (usually
large commercial banks) and their customers. These contracts generally have no
deposit requirement and are traded at a net price without commission. Neither
spot transactions nor forward foreign currency exchange contracts eliminate
fluctuations in the prices of a Fund's portfolio securities or in foreign
exchange rates or prevent loss if the prices of these securities should decline.
Forward foreign currency exchange contracts allow a Fund to hedge the
currency risk of portfolio securities denominated in a foreign currency. This
technique permits the assessment of the merits of a security to be considered
separately from the currency risk. It is thereby possible to focus on the
opportunities presented by the security apart from the currency risk. Although
these contracts are of short duration, generally between one and twelve months,
they frequently are rolled over in a manner consistent with a more long-term
currency decision. Although foreign currency hedging transactions tend to
minimize the risk of loss due to a decline in the value of the hedged currency,
at the same time they tend to limit any potential gain that might be realized
should the value of the hedged currency increase. The precise matching of the
forward contract amounts and the value of the securities involved will not
generally be possible because the future value of these securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of currency market movements is extremely
difficult, and the successful execution of a hedging strategy is highly
uncertain.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (ALL WESTCORE FUNDS)
When a Fund agrees to purchase securities on a when-issued basis or
enters into a forward commitment to purchase securities, its custodian will set
aside cash or certain liquid high-grade debt obligations equal to the amount of
the purchase or the commitment in a separate account. Normally, the custodian
will set aside portfolio securities to meet this requirement.
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The market value of the separate account will be monitored and in the event
of a decline, the Fund will be required to place additional assets in the
separate account in order to ensure that the value of the account remains
equal to the amount of the Fund's commitments. In the case of a forward
commitment to sell portfolio securities, the Fund's custodian will hold the
portfolio securities themselves in a segregated account while the commitment
is outstanding.
The Funds will enter into these transactions only with the intention
of completing them and actually purchasing or selling the securities involved.
However, if deemed advisable as a matter of investment strategy, a Fund may
dispose of or renegotiate a commitment after it is entered into, and may sell
securities it has committed to purchase before those securities are delivered to
the Fund on the settlement date. In these cases the Fund may realize a capital
gain or loss.
When a Fund engages in when-issued and forward commitment
transactions, it relies on the other party to consummate the trade. Failure of
the other party to do so may result in the Fund's incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.
The value of the securities underlying a when-issued or forward
commitment transaction, and any subsequent fluctuations in their value, are
taken into account when determining a Fund's net asset value starting on the day
the Fund agrees to purchase the securities. The Fund does not earn interest on
the securities until they are paid for and delivered on the settlement date.
When a Fund makes a forward commitment to sell securities it owns, the proceeds
to be received upon settlement are included in the Fund's assets, and
fluctuations in the value of the underlying securities are not reflected in the
Fund's net asset value as long as the commitment remains in effect.
SECURITIES ISSUED BY OTHER INVESTMENT COMPANIES (ALL WESTCORE FUNDS)
Securities issued by other investment companies may be acquired by
the Funds within the limits prescribed by the 1940 Act. The Westcore
Colorado Tax-Exempt Fund may only invest in investment companies which invest
in high-quality, short-term taxable instruments or tax-exempt instruments and
which determine their net asset value per share on the amortized cost or
penny-rounding method.
INVESTMENT LIMITATIONS
A Fund may not change the following investment limitations without
the approval of a majority of the holders of the Fund's outstanding shares (as
defined under "Miscellaneous" below).
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No Fund may:
1. Purchase or sell real estate, except that each Fund may purchase
securities of issuers which deal in real estate and may purchase securities
which are secured by interests in real estate.
2. Purchase securities of companies for the purpose of exercising
control.
3. Acquire any other investment company or investment company
security except in connection with a merger, consolidation, reorganization or
acquisition of assets or where otherwise permitted by the 1940 Act.
4. Act as an underwriter of securities within the meaning of the
Securities Act of 1933, except insofar as the Fund might be deemed to be an
underwriter upon disposition of portfolio securities acquired within the
limitation on purchases of restricted securities and except to the extent that
the purchase of obligations directly from the issuer thereof in accordance with
the Fund's investment objective, policies and limitations may be deemed to be
underwriting.
5. Write or sell put options, call options, straddles, spreads, or
any combination thereof, except for transactions in options on securities,
futures contracts and options on futures contracts. (This exception does not
apply to the Westcore Colorado Tax-Exempt Fund.)
6. Borrow money or issue senior securities, except that each Fund
may borrow from banks and enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time of
such borrowing; or mortgage, pledge or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of a Fund's total assets at the
time of such borrowing. No Fund will purchase securities while its borrowings
(including reverse repurchase agreements) in excess of 5% of its total assets
are outstanding. Securities held in escrow or separate accounts in connection
with a Fund's investment practices described in this Statement of Additional
Information or the Prospectus are not deemed to be pledged for purposes of this
limitation.
None of the Westcore Equity or Westcore Bond Funds may:
1. Purchase securities of any one issuer (other than securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities) if, immediately after such purchase, more than 5% of the
value of the Fund's total assets would be invested in the securities of such
issuer, or more than 10% of the issuer's outstanding voting securities would
be owned by the Fund or the Trust, except that up to 25% of the value of the
Fund's total assets may be invested without regard to these limitations.
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2. Make loans, except that each Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an amount
not exceeding 30% of its total assets.
3. Purchase securities on margin, make short sales of securities or
maintain a short position, except that (a) this investment limitation shall not
apply to each Fund's transactions in futures contracts and related options, and
(b) each Fund may obtain short-term credit as may be necessary for the clearance
of purchases and sales of portfolio securities.
4. Purchase or sell commodity contracts, or invest in oil, gas or
mineral exploration or development programs, except that each Fund may, to the
extent appropriate to its investment objective, purchase publicly traded
securities of companies engaging in whole or in part in such activities, and may
enter into futures contracts and related options.
5. Purchase any securities that would cause 25% or more of the
Fund's total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry, provided that (a) there is no limitation with respect to obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
(b) wholly-owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of the parents; and (c) utilities will be divided according to their
services, for example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry.
For purposes of limitation No. 2 above, "total assets" includes the
value of the collateral for the securities loans.
The Westcore Colorado Tax-Exempt Fund may not:
1. Invest less than 80% of its net assets in securities the interest
on which is exempt from federal income tax, except during periods of unusual
market conditions. For purposes of this investment limitation, securities the
interest on which is treated as a specific tax preference item under the federal
alternative minimum tax are considered taxable.
2. Make loans, except that the Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies.
3. Purchase securities of any one issuer if, immediately after such
purchase, more than 5% of the value of the Fund's total assets would be invested
in the securities of such issuer, except that (a) up to 50% of the value of the
Fund's total assets may be invested without regard to this 5% limitation
provided that no more than 25% of the value of the Fund's total assets are
invested in the securities of any one issuer and (b) this 5% limitation does not
apply to securities issued or guaranteed by the U.S. Government, its agencies,
authorities, instrumentalities or political subdivisions. For purposes of this
limitation, a security is considered to be issued by the governmental entity (or
entities) whose assets and revenues back the security, or, with respect to a
private activity bond that is backed only by the assets and
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revenues of a nongovernmental user, such nongovernmental user. In certain
circumstances, the guarantor of a guaranteed security may also be considered
to be an issuer in connection with such guarantee, except that a guarantee of
a security shall not be deemed to be a security issued by the guarantor when
the value of all securities issued and guaranteed by the guarantor, and owned
by the Fund, does not exceed 10% of the value of the Fund's total assets.
4. Purchase any securities, except securities issued (as defined in
the preceding investment limitation) or guaranteed by the United States, any
state, territory or possession of the United States, the District of Columbia or
any of their authorities, agencies, instrumentalities or political
sub-divisions, which would cause 25% or more of the value of the Fund's total
assets at the time of purchase to be invested in the securities of issuers
conducting their principal business activities in the same industry.
5. Purchase securities on margin, make short sales of securities or
maintain a short position, except that the Fund may obtain short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities.
6. Purchase or sell commodity contracts (including futures
contracts) or invest in oil, gas or mineral exploration or development programs,
except that the Fund may, to the extent appropriate to its investment objective,
purchase publicly traded securities of companies engaging in whole or in part in
such activities.
NET ASSET VALUE
The net asset value per share of each Fund is calculated as set
forth in the Prospectus and is calculated separately from the net asset value
of the other Funds. For purposes of such calculation, "assets belonging to"
a Fund consist of the consideration received upon the issuance of shares of
the particular Fund together with all income, earnings, profits and proceeds
derived from the investment thereof, including any proceeds from the sale,
exchange, or liquidation of such investments, any funds or payments derived
from any reinvestment of such proceeds, and a portion of any general assets
of the Trust not belonging to a particular investment portfolio that are
allocated to that Fund by the Trust's Board of Trustees. The Board of
Trustees may allocate such general assets in any manner it deems fair and
equitable. Each Fund is charged with the direct liabilities and expenses of
that Fund and with a share of the general liabilities and expenses of the
Trust. Allocations of general assets and general liabilities and expenses of
the Trust to a particular Fund will be made in accordance with generally
accepted accounting principles. Subject to the provisions of the Declaration
of Trust, determinations by the Board of Trustees as to the direct and
allocable liabilities, and the allocable portion of any general assets, with
respect to a particular Fund are conclusive.
Securities that are traded on a recognized stock exchange are valued
at the last sale price occurring prior to the close of regular trading on the
New York Stock Exchange (currently 4:00 Eastern Time). Securities for which
there were no transactions are valued at the mean of the bid and asked prices.
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Securities that are traded on the NASDAQ National Market and the
over-the-counter market, where last sales prices are available are valued at the
last sales price. If no last sale price is available, then the securities are
valued at the mean of the bid and asked prices.
Foreign securities that are traded on a foreign stock exchange are
valued at the official closing price on the principal exchange. Instances where
the official closing price is not available, the foreign securities are valued
at the last sale price occurring prior to the valuation time determined by a
portfolio pricing service approved by the Board of Trustees to value such types
of securities.
Long-term instruments, including corporate, government and
mortgage-backed securities, having a remaining maturity of greater than 60 days
are valued at the evaluated mean between the bid and ask prices as determined on
the valuation date by a portfolio pricing service approved by the Board of
Trustees to value such types of securities.
Municipal securities are valued at the evaluated bid price as
determined on the valuation date by a portfolio pricing service approved by the
Board of Trustees to value such types of securities.
Restricted securities, securities for which market quotations are not
readily available from the portfolio pricing service, and other assets are
valued at fair value by the Co-Administrators under the supervision of the Board
of Trustees. In computing net asset value, the Co-Administrators will "mark to
market" the current value of a Fund's open futures contracts and options.
Securities have a remaining maturity of 60 days or less are valued at amortized
cost which approximates market value.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares in the Funds are sold on a continuous basis by ALPS.
Under the 1940 Act, a Fund may suspend the right of redemption or
postpone the date of payment for shares during any period when (a) trading on
the New York Stock Exchange (the "Exchange") is restricted by applicable rules
and regulations of the SEC; (b) the Exchange is closed for other than customary
weekend and holiday closings; (c) the SEC has by order permitted such
suspension; or (d) an emergency exists as determined by the SEC. (The Funds may
also suspend or postpone the recordation of the transfer of their shares upon
the occurrence of any of the foregoing conditions.)
Each Fund may redeem shares involuntarily if it appears appropriate to
do so in light of its responsibilities under the 1940 Act or to reimburse the
Fund for any loss sustained by reason of the failure of a shareholder to make
full payment for shares purchased by the shareholder or to collect any charge
relating to a transaction effected for the benefit of a shareholder which is
applicable to Fund shares as provided in the Prospectus from time to time.
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The Trust has filed an election pursuant to Rule 18f-1 under the 1940
Act which provides that each portfolio of the Trust is obligated to redeem
shares solely in cash up to $250,000 or 1% of such portfolio's net asset value,
whichever is less, for any one shareholder within a 90-day period. Any
redemption beyond this amount may be made in proceeds other than cash.
A Fund may make payment for redemption in securities or other property
if it appears appropriate to do so in light of the Fund's responsibilities under
the 1940 Act. Shareholders who receive a redemption in kind may incur
additional costs when they convert the securities or property received to cash
and may receive less than the redemption value of their shares, particularly
where the securities are sold prior to maturity.
RETIREMENT PLANS -- ALL WESTCORE FUNDS
INDIVIDUAL RETIREMENT ACCOUNTS. The Trust has available a plan
(the "Regular IRA") for use by individuals with compensation for services
rendered (including earned income from self-employment) who wish to use
shares of the Funds as a funding medium for individual retirement saving.
However, except for rollover contributions, an individual who has attained,
or will attain, age 70 1/2 before the end of the taxable year may only
contribute to a Regular IRA for his or her nonworking spouse under age 70 1/2.
Distribution of an individual's Regular IRA assets (and earnings thereon)
before the individual attains age 59 1/2 will (with certain exceptions)
result in an additional 10% tax on the amount included in the individual's
gross income. Earnings on amounts contributed to the Regular IRA are not
subject to federal income tax until distributed.
The Trust also has available a Roth Individual Retirement Account
("Roth IRA") for retirement saving for use by individuals with compensation
for services rendered. A single individual with adjusted gross income of up
to $110,000 may contribute to a Roth IRA (for married couples filing jointly,
the adjusted gross income limit is $160,000), and contributions may be made
even after the Roth IRA owner has attained age 70 1/2. Contributions to a
Roth IRA are not deductible. Earnings on amounts contributed to a Roth IRA,
however, are not subject to federal income tax when distributed if the
distribution is a "qualified distribution" (the Roth IRA has been held for at
least five years beginning with the first tax year for which a contribution
was made to the Roth IRA and the distribution is due to the account owner's
attainment of age 59 1/2, disability or death, or for qualified first-time
homebuyer expenses). A non-qualified distribution of an individual's Roth
IRA assets (and the earnings thereon) will (with certain exceptions) result
in an additional 10% tax on the amount included in the individual's gross
income.
The Trust permits certain employers (including self-employed
individuals) to make contributions to employees' Regular IRAs if the employer
establishes a Simplified Employee Pension ("SEP") plan and/or a Salary
Reduction SEP ("SARSEP"). Although SARSEPs may not be established after
1996, employers may continue to make contributions to SARSEPs established
before January 1, 1997, under the pre-1997 federal tax law. A SEP permits an
employer to make discretionary contributions to all of its employees' Regular
IRAs (employees who have not met certain eligibility criteria may be
excluded) equal to a uniform percentage of each employees' compensation
(subject to certain limits). If an employer
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(including a self-employed individual) established a SARSEP before
January 1, 1997, employees may defer a percentage of their compensation --
pre-tax -- to Regular IRAs (subject to certain limits). The Code provides
certain tax benefits for contributions by an employer, pursuant to a SEP and/or
SARSEP, to an employee's Regular IRA. For example, contributions to an
employee's Regular IRA pursuant to a SEP and/or SARSEP are deductible (subject
to certain limits) and the contributions and earnings thereon are not taxed
until distributed.
The Trust also has available a plan (the "Education IRA") for use by
individuals who wish to use shares of the Funds as a funding medium to save for
a child's qualified higher-education expenses. An Education IRA is actually an
educational savings account and not a retirement account. An individual who
meets certain income limitations may make nondeductible contributions to an
Education IRA on behalf of any child who is under age 18. However, the
aggregate of all contributions to all Education IRAs for each child is $500 per
year (or as otherwise permitted under federal tax law). Contributions to the
Education IRA grow tax-free. Withdrawals are not subject to federal income tax
if used for qualified higher-education expenses such as room, board and tuition,
and if the child's qualified higher education expenses for the year are at least
as great as the amount of the withdrawals for that year. Distribution of the
earnings in the Education IRA which are not used for qualified higher-education
expenses will (with certain exceptions) result in an additional 10% tax on the
amount includible in gross income. Any balance remaining in the Education IRA
when the child attains age 30 must generally be distributed to the child and
will be includible in the child's gross income.
SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES OF SMALL EMPLOYERS. The
Trust also has available a simplified tax-favored retirement plan for employees
of small employers (a "SIMPLE IRA Plan"). If an employer establishes a SIMPLE
IRA Plan, contributions under the Plan are made to eligible employees' SIMPLE
individual retirement accounts ("SIMPLE IRAs"). Each eligible employee may
choose to defer a percentage of his or her pre-tax compensation to the
employee's SIMPLE IRA. The employer must generally make an annual matching
contribution to the SIMPLE IRA of each eligible employee equal to the employee's
salary reduction contributions, up to a limit of 3 percent of the employee's
compensation. Alternatively, the employer may make an annual non-discretionary
contribution to the SIMPLE IRA of each eligible employee equal to 2 percent of
each employee's compensation. As with contributions to an employee's IRA
pursuant to a SEP and/or SARSEP, the Code provides tax benefits for
contributions by an employer, pursuant to a SIMPLE IRA Plan, to an employee's
SIMPLE IRA. For example, contributions to an employee's SIMPLE IRA are
deductible (subject to certain limits) and the contributions and earnings
thereon are not taxed until distributed.
In the SIMPLE IRA Plan and the Regular, Roth and Education IRAs,
distributions of net investment income and capital gains will be automatically
reinvested.
The foregoing brief descriptions are not complete or definitive
explanations of the SIMPLE IRA Plan, the Education IRA or the Regular or Roth
IRA available for investment in the Funds. Any person who wishes to establish a
retirement plan account may do so by contacting an Investor Service
Representative at 1-800-392-CORE (2673). The complete Plan
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documents and applications will be provided to existing or prospective
shareholders upon request, without obligation. The Trust recommends that
investors consult their attorneys or tax advisors to determine if the
retirement programs described herein are appropriate for their needs.
DESCRIPTION OF SHARES
The Trust is a Massachusetts business trust. Under the Trust's
Declaration of Trust, the beneficial interest in the Trust may be divided into
an unlimited number of full and fractional transferable shares. The Amended and
Restated Declaration of Trust authorizes the Board of Trustees to classify or
reclassify any unissued shares of the Trust into one or more additional classes
by setting or changing in any one or more respects, their respective
designations, preferences, conversion or other rights, voting powers,
restrictions, limitations, qualifications and terms and conditions of
redemption. Pursuant to such authority, the Board of Trustees has authorized
the issuance of twenty-four classes of shares, each class representing interests
in a separate investment portfolio. The Trustees may similarly classify or
reclassify any particular class of shares into one or more series. Currently,
there are eight classes of shares being offered.
Each share of the Trust has no par value, represents an equal
proportionate interest in a Fund, and is entitled to such dividends and
distributions of the income earned on the Fund's assets as are declared at the
discretion of the Trustees. Shares of the Funds have no preemptive rights and
only such conversion or exchange rights as the Board of Trustees may grant in
its discretion. When issued for payment as described in the Prospectus, a
Fund's shares will be fully paid and nonassessable by the Trust. In the event
of a liquidation or dissolution of the Trust or an individual Fund, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based upon
the relative net asset values of the Trust's respective investment portfolios,
of any general assets not belonging to any particular portfolio which are
available for distribution. Shareholders of a Fund are entitled to participate
in the net distributable assets of the Fund on liquidation, based on the number
of shares of the Fund they hold.
Shareholders of the Funds will vote together in the aggregate and not
separately on a Fund-by-Fund basis, except as otherwise required by law or when
the Board of Trustees determines that the matter to be voted upon affects only
the interests of the shareholders of a particular Fund. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted to the holders of the
outstanding voting securities of an investment company such as the Trust shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each Fund affected by the matter. A
Fund is affected by a matter unless it is clear that the interests of each Fund
in the matter are substantially identical or that the matter does not affect any
interest of the Fund. Under the Rule, the approval of an investment advisory
agreement or any change in a fundamental investment policy would be effectively
acted upon with respect to a Fund only if approved by a majority of the
outstanding shares of such Fund. However, the Rule also provides that the
ratification of the appointment of independent public accountants, the approval
of principal underwriting contracts and the election
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of trustees may be effectively acted upon by shareholders of the Trust voting
without regard to particular Funds.
There will normally be no meetings of shareholders for the purpose of
electing trustees unless and until such time as less than a majority of the
trustees holding office have been elected by shareholders, at which time the
trustees then in office will call a shareholders meeting for the election of
trustees. Shares of the Trust have noncumulative voting rights and,
accordingly, the holders of more than 50% of the Trust's outstanding shares
(irrespective of class) may elect all of the trustees. The Amended and Restated
Declaration of Trust provides that meetings of the shareholders of the Trust
shall be called by the Trustees upon the written request of shareholders owning
at least 10% of the outstanding shares entitled to vote. Except as set forth
above, the Trustees shall continue to hold office and may appoint successor
trustees.
The Amended and Restated Declaration of Trust authorizes the Board of
Trustees, without shareholder approval (unless otherwise required by applicable
law), to: (a) sell and convey the assets belonging to a class of shares to
another management investment company for consideration which may include
securities issued by the purchaser and, in connection therewith, to cause all
outstanding shares of such class to be redeemed at a price which is equal to
their net asset value and which may be paid in cash or by distribution of the
securities or other consideration received from the sale and conveyance; (b)
sell and convert the assets belonging to a class of shares into money and, in
connection therewith, to cause all outstanding shares of such class to be
redeemed at their net asset value; or (c) combine the assets belonging to a
class of shares with the assets belonging to one or more other classes of shares
if the Board of Trustees reasonably determines that such combination will not
have a material adverse effect on the shareholders of any class participating in
such combination and, in connection therewith, to cause all outstanding shares
of any such class to be redeemed or converted into shares of another class of
shares at their net asset value. However, the exercise of such authority may be
subject to certain restrictions under the 1940 Act. The Board of Trustees may
authorize the termination of any class of shares after the assets belonging to
such class have been distributed to its shareholders.
ADDITIONAL INFORMATION CONCERNING TAXES
The following summarizes certain additional tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' Prospectus. No attempt is made to present a detailed explanation of
the tax treatment of the Funds or their shareholders, and the discussion here
and in the Funds' Prospectus are not intended as a substitute for careful tax
planning and is based on tax laws and regulations which are in effect on the
date hereof; such laws and regulations may be changed by legislative or
administrative action. Investors should consult their tax advisors with
reference to their own situation.
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, and to distribute out its income to
shareholders each year, so that the Fund itself generally will be relieved of
federal income and excise taxes. If the Fund were to fail to so qualify: (1)
the Fund would be taxed at regular corporate rates without any deduction for
distributions to shareholders; and (2) shareholders would be taxed as if they
32
<PAGE>
received ordinary dividends, although corporate shareholders could be eligible
for the dividends received deduction.
ADDITIONAL FEDERAL TAX CONSIDERATIONS FOR THE WESTCORE COLORADO TAX-EXEMPT FUND
As described above and in the Prospectus, the Westcore Colorado
Tax-Exempt Fund is designed to provide investors with income exempt from
regular federal income tax and Colorado personal income tax. See above for
general federal income tax considerations. The Fund is not intended to
constitute a balanced investment program and is not designed for investors
seeking capital appreciation or maximum tax-exempt income irrespective of
fluctuations in principal. Shares of the Fund would not be suitable for
tax-exempt institutions and may not be suitable for retirement plans qualified
under Section 401 of the Code, H.R. 10 plans and IRAs, because such plans and
accounts are generally tax-exempt and, therefore, not only would not gain any
additional benefit from the Fund's dividends being tax-exempt, but those
dividends would be ultimately taxable to the beneficiaries when distributed to
them. In addition, the Fund may not be an appropriate investment for entities
which are "substantial users" of facilities financed by private activity bonds
or "related persons" thereof. "Substantial user" is defined under Treasury
Regulations to include a non-exempt person who regularly uses a part of such
facilities in his trade or business and whose gross revenues derived with
respect to the facilities financed by the issuance of bonds are more than 5%
of the total revenues derived by all users of such facilities, or who occupies
more than 5% of the usable area of such facilities or for whom such facilities
or a part thereof were specifically constructed, reconstructed or acquired.
"Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners and an S Corporation and its
shareholders.
In accordance with the Code, the Fund intends to distribute
substantially all of its net tax-exempt income (such distributions are known as
"exempt-interest dividends") and investment company taxable income (if any) each
taxable year. Exempt-interest dividends may be treated by shareholders as items
of interest excludable from their gross income under Section 103(a) of the Code.
The percentage of total dividends paid by the Fund with respect to any taxable
year which qualify as exempt-interest dividends will be the same for all
shareholders receiving dividends during the year. In order for the Fund to pay
exempt-interest dividends with respect to any taxable year, among other things,
at least 50% of the aggregate value of the Fund's portfolio at the close of each
quarter of its taxable year must consist of exempt-interest obligations. After
the close of its taxable year, each Fund will notify each shareholder of the
portion of the dividends paid by the Fund to the shareholder with respect to
such year which constitutes an exempt-interest dividend. However, the aggregate
amount of dividends so designated cannot exceed the excess of the amount of
interest exempt from tax under Section 103 of the Code received by the Fund
during the taxable year over any amounts disallowed as deductions under Sections
265 and 171(a)(2) of the Code.
If a shareholder holds Fund shares for six months or less, any loss on
the sale or exchange of those shares will be disallowed to the extent of the
amount of exempt-interest dividends received with respect to the shares. The
Treasury Department, however, is authorized to issue regulations reducing the
period to not less than the greater of 31 days or the period
33
<PAGE>
between regular distributions where the investment company regularly distributes
at least 90% of its net tax-exempt interest. No such regulations had been
issued as of the date of this Statement of Additional Information.
If the Fund should hold certain private activity bonds issued after
August 7, 1986, shareholders must include, as an item of tax preference, the
portion of dividends paid by the Fund that is attributable to interest on such
bonds in their federal alternative minimum taxable income for purposes of
determining liability (if any) for the alternative minimum tax applicable to
individuals and corporations. Corporate shareholders must also take all
exempt-interest dividends into account in determining certain adjustments for
federal alternative minimum tax purposes. Shareholders receiving Social
Security benefits should note that all exempt-interest dividends will be taken
into account in determining the taxability of such benefits.
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
The names of the trustees and officers of the Trust, their ages, addresses,
principal occupations during the past five years and other affiliations are set
forth below:
Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
- ---------------------- --------- ------------------
JACK D. HENDERSON, 71(1) Chairman, Attorney, Jack D. Henderson, Self-
1600 Broadway Trustee Employed Attorney-at-Law since
Suite 1410 1995; prior thereto partner of the
Denver, Colorado 80202 law firm of Clanahan, Tanner,
Downing & Knowlton, P.C., Denver,
Colorado from April 1989 through
October 1995; Trustee of Pacifica
Funds Trust through August 1996;
Trustee, Pacific American Fund
through September 1994.
McNEIL S. FISKE, 65 Chairman of the Board, MacCourt
P.O. Box 6154 Trustee Products; Director, Scientific
Littleton, Colorado Software Corporation through
80121 December 31, 1994.
JAMES B. O'BOYLE, 70 Trustee Business Consultant; Trustee of
6115 West Mansfield Pacific American Fund through
Avenue, #239 September 1994.
Denver, Colorado 80235
ROBERT L. STAMP, 66 Trustee Prior to April 1995, Vice President
6855 So. Depew Street of Finance, Treasurer and Assistant
Littleton, Colorado Secretary, The Gates Corporation;
80128 Vice President, The
34
<PAGE>
Gates Rubber
Company; Trustee of Pacific
American Fund through September
1994.
LYMAN E. SEELY, 80 Trustee Director of OECO since May 1983;
14795 Northeast Director of McCall Oil and Chemical
Lawnview Circle Co. since 1983; Director of Great
Aurora, Oregon 97002 Western Chemical Co. since 1983.
KENNETH V. PENLAND, 56 Chairman and Chief Executive
Denver Investment President Officer, Denver Investment Advisors
Advisors LLC LLC (and its predecessor) since
1225 17th Street-26th Fl. March 1983; Chairman, Blue Chip
Denver, Colorado 80202 Value Fund.
JASPER R. FRONTZ, 29 Treasurer Treasurer, Blue Chip Value Fund,
Denver Investment Inc. since November 1997; Director
Advisors LLC of Mutual Fund Administration,
1225 17th Street-26th Denver Investment Advisors LLC
Fl. since June 1997; Fund Controller,
Denver, Colorado 80202 ALPS Mutual Funds Services, Inc.
from September 1995 through June
1997; Senior Accountant, Deloitte &
Touche LLP from September 1991
through August 1995.
CHAD S. CHRISTENSEN, 28 Assistant Vice President, ALPS Mutual Funds
ALPS Mutual Funds Treasurer Services, Inc. since April 1998;
Services, Inc. Stonebridge Growth Fund, Inc. Vice-
370 17th Street President and Stonebridge
Suite 3100 Aggressive Growth Fund, Inc. Vice
Denver, Colorado 80202 President since August 1997; Vice
President and Director of Mutual
Fund Operations since April 1998
and Fund Controller of ALPS Mutual
Funds Services, Inc., since March
1996; Senior Accountant for Ernst
and Young LLP from July 1994
through March 1996; Auditor for
KPMG Peat Marwick LLP from
September 1992 through June 1994.
35
<PAGE>
W. BRUCE McCONNEL, III, Secretary Partner of the law firm of Drinker
55 Biddle & Reath LLP, Philadelphia,
Drinker Biddle & Reath Pennsylvania.
LLP
1345 Chestnut Street
Philadelphia,
Pennsylvania
19107-3496
- ---------------------
(1) Mr. Henderson is considered to be an "interested person" of the Trust as
defined in the 1940 Act.
_________________
The trustees are responsible for major decisions relating to each
Fund's objective, policies and techniques. The trustees also supervise the
operation of the Funds by their officers and review the investment decisions of
the officers although they do not actively participate on a regular basis in
making such decisions.
Each trustee receives an annual fee of $12,000 plus $500 for each
Board and Board Committee meeting attended and reimbursement of expenses
incurred in attending meetings. The Chairman of the Board is entitled to
receive an additional $4,000 per annum for services in such capacity. The
following chart provides certain information about the trustee fees paid by the
Trust for the fiscal year ended May 31, 1998:
36
<PAGE>
@@
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ACCRUED AGGREGATE
NAME OF PERSON/ COMPENSATION FROM AS PART OF FUND COMPENSATION FROM
POSITION THE TRUST EXPENSES THE FUND COMPLEX*
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
JACK D. HENDERSON, $ $0 $
Chairman
- --------------------------------------------------------------------------------
McNEIL S. FISKE, $ ** $0 $
Trustee
- --------------------------------------------------------------------------------
JAMES B. O'BOYLE, $ $0 $
Trustee
- --------------------------------------------------------------------------------
ROBERT L. STAMP, $ ** $0 $
Trustee
- --------------------------------------------------------------------------------
LYMAN E. SEELY, $ $0 $
Trustee
- --------------------------------------------------------------------------------
</TABLE>
* Fund Complex includes funds with a common investment adviser or an adviser
which is an affiliated person.
** All of this amount has been deferred at the election of Messrs. Fiske and
Stamp. The total amount of deferred compensation (including interest)
accrued for Mr. Fiske and Mr. Stamp during the fiscal year ended May 31,
1998 is $ ________ and $ ________ , respectively, which includes
$_______ and $_______, respectively, of compensation (plus interest) in
addition to regular annual and per meeting fees.
Each trustee is entitled to participate in the Trust's Deferred
Compensation Plan (the "Plan"). Under the Plan, a trustee may elect to have his
deferred fees treated as if they had been invested by the Trust at a money
market fund rate of return or at a rate based on the performance of Trust shares
and the amount paid to the trustees under the Plan will be determined based upon
the performance of such investments. Deferral of trustees' fees will not
obligate the Trust to retain the services of any trustee or obligate a portfolio
to any level of compensation to the trustee. The Trust may invest in underlying
securities without shareholder approval.
Denver Investment Advisors, of which Mr. Penland, President of the
Trust, is a member, and Mr. Frontz, Treasurer of the Trust, is Director of
Mutual Fund Administration, receives compensation as Adviser and
co-administrator. ALPS Mutual Funds Services, Inc., of which Mr. Christensen is
an employee, receives compensation as co-administrator , bookkeeping and pricing
agent , and shareholder telephone servicing agent to the Trust and serves as
distributor to the Trust.
Drinker Biddle & Reath LLP, of which Mr. McConnel, Secretary of the
Trust, is a partner, receives legal fees as counsel to the Trust. The trustees
and officers of the Trust, as a group, owned less than 1% of the outstanding
shares of each Fund as of _______________________ 1998.
37
<PAGE>
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. However, the Amended and Restated Declaration of Trust provides
that shareholders shall not be subject to any personal liability in connection
with the assets of the Trust for the acts or obligations of the Trust, and that
every note, bond, contract, order or other undertaking made by the Trust shall
contain a provision to the effect that the shareholders are not personally
liable thereunder. The Amended and Restated Declaration of Trust provides for
indemnification out of the trust property of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder and not
because of his or her acts or omissions or some other reason. The Amended and
Restated Declaration of Trust also provides that the Trust shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Trust, and shall satisfy any judgment thereon. Thus, the risk
of a shareholder's incurring financial loss on account of shareholder liability
is limited to circumstances in which the Trust itself would be unable to meets
its obligations.
The Amended and Restated Declaration of Trust further provides that
all persons having any claim against the trustees or the Trust shall look solely
to the Trust property for payment; that no trustee, officer or agent of the
Trust shall be personally liable for or on account of any contract, debt, tort,
claim, damage, judgment or decree arising out of or connected with the
administration or preservation of the Trust property or the conduct of any
business of the Trust; and that no trustee shall be personally liable to any
person for any action or failure to act except by reason of his or her own bad
faith, willful misfeasance, gross negligence or reckless disregard of his or her
duties as trustee. With the exception stated, the Amended and Restated
Declaration of Trust provides that a trustee is entitled to be indemnified
against all liabilities and expense reasonably incurred by him in connection
with the defense or disposition of any proceeding in which he may be involved or
with which he may be threatened by reason of his being or having been trustee,
and that the trustees will indemnify representatives and employees of the Trust
to the same extent that trustees are entitled to indemnification.
INVESTMENT ADVISER
Denver Investment Advisors serves as investment adviser to the Funds
pursuant to an Advisory Agreement. In the Advisory Agreement, the Investment
Adviser has agreed to provide a continuous investment program for each Fund and
to pay all expenses incurred by it in connection with its advisory activities,
other than the cost of securities and other investments, including brokerage
commissions and other transaction charges, if any, purchased or sold for the
Funds.
As indicated in the Prospectus, Denver Investment Advisors permits
investment and other personnel to purchase and sell securities for their own
accounts, including securities that may be held by the Funds, in accordance with
Denver Investment Advisors' policy regarding personal investing by principals,
officers and employees of Denver Investment Advisors. The
38
<PAGE>
Denver Investment Advisors' policy requires all principals, officers and
employees to pre-clear all transactions in securities not otherwise exempt
under the policy. In addition to pre-clearance, the policy subjects
principals, officers and employees of Denver Investment Advisors to various
trading restrictions and reporting obligations. All reportable transactions
are reviewed for compliance with Denver Investment Advisors' policy. The
provisions of the policy are administered by and subject to exceptions
authorized by Denver Investment Advisors.
The following table summarizes the advisory fees paid by the Funds and
any advisory fee waivers for the last three fiscal years of each Fund:
39
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 31, 1998 May 31, 1997 May 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Advisory Waiver of Advisory Waiver of Advisory Waiver of
Fund Name Fees Fees Fees Fees Fees Fees
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund $ $ $3,834,365 $0 $3,558,326 $0
Westcore Blue Chip Fund 375,645 26,418 339,161 59,499
Westcore Growth and 62,280 82,796 129,876 49,319
Income Fund
Westcore Small-Cap 197,026 114,504 36,740 136,791
Opportunity Fund
Westcore Long-Term 65,709 39,100 102,736 32,618
Bond Fund
Westcore Intermediate-Term 253,825 74,356 350,333 58,864
Bond Fund
Westcore Colorado 0 89,049 0 56,823
Tax-Exempt Fund
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For the fiscal years ended May 31, 1998, 1997 and 1996, the investment advisers
reimbursed additional expenses for the Funds as follows:
<TABLE>
Year Ended Year Ended Year Ended
Fund Name May 31, 1998 May 31, 1997 May 31, 1996
--------- ------------ ------------ ------------
<S> <C> <C> <C>
Westcore Small-Cap
Opportunity Fund $ $0 $0
Westcore Colorado
Tax-Exempt Fund $ $0 $22,238
</TABLE>
40
<PAGE>
Denver Investment Advisors also performs investment advisory services
for the Blue Chip Value Fund, Inc., a closed-end investment company portfolio.
Investment decisions for each account managed by Denver Investment Advisors,
including the Funds, are made independently from those for any other account
that is or may in the future become managed by Denver Investment Advisors or its
affiliates. If, however, a number of accounts managed by Denver Investment
Advisors are contemporaneously engaged in the purchase or sale of the same
security, the available securities or investments may be allocated in a manner
believed by Denver Investment Advisors to be equitable to each account. In some
cases, this procedure may adversely affect the price paid or received by a Fund
or the size of the position obtainable for or disposed of by a Fund.
Each account managed by Denver Investment Advisors has its own
investment objective and policies and is managed accordingly by a particular
portfolio manager or team of portfolio managers. As a result, from time to time
two or more different managed accounts may pursue divergent investment
strategies with respect to investments or categories of investments.
The current Advisory Agreement became effective on October 1, 1995,
and the current Advisory Agreement for the Westcore Mid-Cap Value Fund became
effective on ________________ 1998. Each Advisory Agreement is effective for
its first two years and thereafter will continue in effect from year to year
so long as such continuance is approved annually by a majority of the Funds'
Trustees who are not parties to the Advisory Agreement or interested persons
of any such party, and by either a majority of the outstanding voting shares
or the trustees of the Funds. The Advisory Agreement i) may be terminated
without the payment of any penalty by the Fund or Denver Investment Advisors
on 60 days' written notice; ii) terminates automatically in the event of its
assignment; and iii) generally, may not be amended without the approval by
vote of a majority of the outstanding voting securities of such Fund.
The Agreement provides that the Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Funds in connection with its performance of services pursuant to the Advisory
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Investment Adviser
in the performance of its duties or from its reckless disregard of its duties
and obligations under the Advisory Agreement.
Denver Investment Advisors, as co-administrator, also provides
administrative services to the Funds pursuant to an Administration Agreement and
has agreed to pay all expenses incurred by it in connection with its
administrative activities.
DISTRIBUTOR
ALPS acts as the distributor of the Funds' shares pursuant to a
Distribution Agreement with the Trust (the "Distributor"). Shares are sold on a
continuous basis by ALPS as agent of the Funds, and ALPS has agreed to use its
best efforts to solicit orders for the sale of Fund shares, although it is not
obliged to sell any particular amount of shares. As Distributor,
41
<PAGE>
ALPS pays the cost of printing and distributing prospectuses to persons who
are not shareholders of the Funds (excluding preparation and printing
expenses necessary for the continued registration of the Funds' shares) and
of printing and distributing all sales literature. ALPS is not entitled to
any compensation for its services as Distributor. For the fiscal years ended
May 31, 1998, 1997 and 1996, ALPS received $________, $0 and $10,614.23
respectively, in underwriting commissions with respect to all the investment
portfolios offered by the Trust.
ADMINISTRATORS, BOOKKEEPING AND PRICING AGENT
ALPS and Denver Investment Advisors, as co-administrators (the
"Administrators"), provide administrative services to the Funds as described in
the Prospectus pursuant to an Administration Agreement, and have agreed to pay
all expenses they incur in connection with their administrative activities.
Under the Administration Agreement, the Administrators are not liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of the agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Administrators in the performance of their duties or from their reckless
disregard of their duties and obligations under the agreement. Prior to the
current Administration Agreement, which became effective on October 1, 1995,
ALPS served as sole Administrator to the Funds.
In addition to the services it provides as co-administrator, ALPS has
agreed, pursuant to a separate Bookkeeping and Pricing Agreement, to maintain
the financial accounts and records of the Funds and to compute the net asset
value and certain other financial information of the Funds. Under the
Bookkeeping and Pricing Agreement, ALPS is not liable for any error of judgment
or mistake of law or for any loss suffered by the Funds, except for a loss
resulting from willful misfeasance, bad faith or negligence on the part of ALPS
in the performance of its duties under the Agreement.
42
<PAGE>
The following table summarizes the administration fees paid by the
Funds and any administration fee waivers for the last three fiscal years:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 31, 1998 May 31, 1997 May 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Administration Waiver Administration Waiver Administration Waiver
Fund Name Fees of Fees Fees of Fees Fees of Fees
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund $ $ $1,769,707 $0 $1,230,673 $0
Westcore Blue Chip Fund 183,360 2,179 133,355 4,948
Westcore Growth and Income Fund 60,140 6,818 52,174 4,873
Westcore Small-Cap Opportunity Fund 86,687 6,753 39,056 1,806
Westcore Long-Term Bond Fund 65,598 4,181 58,951 3,520
Westcore Intermediate-Term Bond Fund 210,838 7,950 178,366 10,539
Westcore Colorado Tax-Exempt Fund 17,320 36,072 467 24,766
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the services it provides as distributor, co-administrator
and bookkeeping and pricing agent, ALPS has agreed, pursuant to a separate
Telephone and Service Agreement, to receive and accept orders for the
purchase, redemption and transfer of shares and deliver the appropriate
documentation thereof to the transfer agent. Under the Telephone and Service
Agreement, ALPS is not liable for any error of judgment or mistake of law or
for any loss suffered by the Funds except for a loss resulting from
misfeasance, bad faith or negligence on the part of ALPS in the performance
of its duties or from reckless disregard by it of its obligations and duties
under this Agreement. No fees were paid under the Telephone and Service
Agreement during the last three fiscal years ended May 31, 1996 and May 31,
1997, however, ALPS was paid $15,000 in fees under that Agreement for the
fiscal year ended May 31, 1998.
43
<PAGE>
CUSTODIAN AND TRANSFER AGENT
BNY Western Trust Company (the "Custodian") serves as custodian of the
assets of each of the Funds pursuant to a custody agreement (the "Custody
Agreement"). Under the Custody Agreement, the Custodian has agreed to hold the
Funds' assets in safekeeping and collect and remit the income thereon, subject
to the instructions of each Fund. The Custodian may, at its own expense, open
and maintain a custody account or accounts on behalf of any Fund with other
banks or trust companies, provided that the Custodian shall remain liable for
the performance of all of its duties under the Custody Agreement notwithstanding
any delegation.
Currently, for its services as custodian, the Custodian is entitled to
receive compensation based on the market value of all assets in aggregate and
pro-rated monthly: $.00075 on the first $25 million of assets; and $.0005 on
assets in excess of $25 million. In addition, the Custodian is entitled to
certain transaction charges at the rate of $12 for each book-entry
transaction, $20 for each physical security transaction, and $8 for each
paydown transaction. The Custodian is also entitled to $15 for each wire cash
transfer, and to reimbursement for its out-of-pocket expenses in connection
with the above services. In addition, the Custodian is entitled to receive
$5,000 per year for custodial services in connection with securities lending
activities. Prior to December 1, 1997, Wells Fargo Bank, N.A. served as
custodian to the Trust. For the fiscal years ended May 31, 1996, 1997 and
1998, the custodian was paid custodial fees and waived custodial fees in the
following amounts:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 31, 1998 May 31, 1997 May 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Custodial Waiver of Custodial Waiver of Custodial Waiver of
Name of Fund Fee Paid Fees Fee Paid Fees Fee Paid Fees
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund $ $ 18,065 $ 44,673 $131,399 $131,399
Westcore Blue Chip Fund 3,829 8,072 24,180 24,180
Westcore Growth and
Income Fund 2,706 3,097 22,966 22,966
Westcore Small-Cap
Opportunity Fund 2,977 3,722 18,793 18,793
Westcore Long-Term
Bond Fund 1,684 3,233 14,196 14,196
Westcore Intermediate-Term
Bond Fund 3,578 9,822 30,844 30,844
Westcore Colorado
Tax-Exempt Fund 1,422 2,171 8,353 8,353
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
44
<PAGE>
State Street Bank and Trust Company ("State Street") serves as Transfer Agent
for each Fund. As Transfer Agent, State Street has, among other things, agreed
to: (a) issue and redeem shares of the Funds; (b) make dividend and other
distributions to shareholders of the Funds; (c) effect transfers of shares;
(d) mail communications to shareholders of the Funds, including reports to
shareholders, dividend and distribution notices, and proxy materials for
meetings of shareholders; and (e) maintain shareholder accounts. Under the
Transfer Agency Agreement, State Street receives from the Trust a fee based upon
each shareholder account and is reimbursed for out-of-pocket expenses.
EXPENSES
Operating expenses borne by the Funds include taxes, interest, fees and
expenses of its trustees and officers, SEC fees, state securities
qualification fees, advisory fees, administrative fees, charges of the Funds'
custodian, shareholder services agent and accounting services agent, certain
insurance premiums, outside auditing and legal expenses, costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
existing shareholders, costs of shareholder reports and meetings and any
extraordinary expenses. The Funds also pay for brokerage fees, commissions
and other transaction charges (if any) in connection with the purchase and
sale of portfolio securities.
AUDITORS
______________________________________________________________________________,
serves as independent auditors for the Funds. The financial statements
contained herein are so included in reliance upon the report of
___________________ given upon their authority as experts in accounting and
auditing.
COUNSEL
Drinker Biddle & Reath LLP (of which Mr. McConnel, Secretary of the Trust, is
a partner), 1345 Chestnut Street, Philadelphia, Pennsylvania 19107-3496,
serves as counsel to the Trust and will pass upon certain legal matters
relating to the Funds.
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS
From time to time, the yields, tax-equivalent yields, effective yields and
the total return of a Fund may be quoted in advertisements, shareholder
reports or other communications to shareholders. Performance information is
generally available by calling ALPS at 1-800-392-CORE (2673).
45
<PAGE>
YIELD CALCULATIONS - WESTCORE BOND FUNDS
Each yield is calculated by dividing the net investment income per share (as
described below) earned by a Fund during a 30-day (or one month) period by
the net asset value per share on the last day of the period and annualizing
the result on a semi-annual basis by adding one to the quotient, raising the
sum to the power of six, subtracting one from the result and then doubling
the difference. A Fund's net investment income per share earned during the
period is based on the average daily number of shares outstanding during the
period entitled to receive dividends and includes dividends and interest
earned during the period minus expenses accrued for the period, net of
reimbursements. This calculation can be expressed as follows:
a-b 6
Yield = 2 [(----- + 1) - 1]
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = net asset value per share on the last day of the period.
For the purpose of determining net investment income earned during the period
(variable "a" in the formula), dividend income on equity securities held by a
Fund is recognized by accruing 1/360 of the stated dividend rate of the
security each day that the security is in the Fund. Interest earned on any
debt obligations held by a Fund is calculated by computing the yield to
maturity of each obligation held by the Fund based on the market value of the
obligation (including actual accrued interest) at the close of business on
the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued
interest), and dividing the result by 360 and multiplying the quotient by the
market value of the obligation (including actual accrued interest) in order
to determine the interest income on the obligation for each day of the
subsequent month that the obligation is held by the Fund. For purposes of
this calculation, it is assumed that each month contains 30 days. The
maturity of an obligation with a call provision is the next call date on
which the obligation reasonably may be expected to be called or, if none, the
maturity date. With respect to debt obligations purchased at a discount or
premium, the formula generally calls for amortization of the discount or
premium. The amortization schedule will be adjusted monthly to reflect
changes in the market values of such debt obligations.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with
46
<PAGE>
original issue discount but which have discounts based on current market
value that exceed the then-remaining portion of the original issue discount
(market discount), the yield to maturity is the imputed rate based on the
original issue discount calculation. On the other hand, in the case of
tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that are less than the
then-remaining portion of the original issue discount (market premium), the
yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed obligations which are
expected to be subject to monthly payments of principal and interest ("pay
downs"), (a) gain or loss attributable to actual monthly pay downs are
accounted for as an increase or decrease to interest income during the
period; and (b) a Fund may elect either (i) to amortize the discount and
premium or the remaining security, based on the cost of the security, to the
weighted average maturity date, if such information is available, or to the
remaining term of the security, if any, if the weighted average date is not
available, or (ii) not to amortize discount or premium on the remaining
security.
Undeclared earned income will be subtracted from the net asset value per
share (variable "d" in the formula). Undeclared earned income is the net
investment income which, at the end of the base period, has not been declared
as a dividend, but is reasonably expected to be and is declared as a dividend
shortly thereafter.
Based on the foregoing calculations, the yields of the Funds for the 30-day
period ended May 31, 1998 were as follows:
<TABLE>
<CAPTION>
Fund 30-Day Yield 30-Day Yield
------ (before fee waivers) (after fee waivers)
-------------------- -------------------
<S> <C> <C>
Westcore Long-Term
Bond Fund % %
Westcore Intermediate-Term
Bond Fund % %
Westcore Colorado
Tax-Exempt Fund % %
</TABLE>
"TAX-EQUIVALENT" YIELD CALCULATIONS - WESTCORE COLORADO TAX-EXEMPT FUND
The Fund's "tax-equivalent" yield is computed by: (a) dividing the portion
of the Fund's yield that is exempt from both federal and Colorado state
income taxes by one minus a stated combined federal and state income tax
rate; (b) dividing the portion of the Fund's yield that is exempt from
federal income tax only by one minus a stated federal income tax rate, and
(c) adding the figures resulting from (a) and (b) above to that portion, if
any, of the Fund's yield that is not exempt from federal income tax.
47
<PAGE>
Based on the foregoing calculations, the yield and tax-equivalent yield of
the Fund for the 30-day period ended May 31, 1998 (after fee waivers) were
_____% and _____%, respectively, and before fee waivers were ___% and ___%,
respectively.
Tax-Equivalent Yield is based upon the combined state and federal tax rate
assumptions of 33% (assuming a 28% federal tax rate and a 5% Colorado tax
rate) for the Westcore Colorado Tax-Exempt Fund.
TOTAL RETURN CALCULATIONS
Each Fund computes its average annual total returns by determining the
average annual compounded rates of return during specified periods that
equate the initial amount invested to the ending redeemable value of such
investment. This is done by dividing the ending redeemable value of a
hypothetical $1,000 initial payment by $1,000 and raising the quotient to a
power equal to one divided by the number of years (or fractional portion
thereof) covered by the computation and subtracting one from the result.
This calculation can be expressed as follows:
ERV 1/n
T = [(----------) -1]
P
Where: ERV= ending redeemable value at the end of the period covered by
computation of a hypothetical $1,000 payment made at the
beginning of the period.
P= hypothetical initial payment of $1,000.
n= period covered by the computation, expressed in terms of
years.
The Funds compute their aggregate total return by determining the aggregate
rates of return during specified periods that likewise equate the initial
amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
ERV
T = [(------- 1)]
P
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period and includes all recurring fees
charged by the Trust to all shareholder accounts. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete
48
<PAGE>
redemption of the hypothetical investment and the deduction of all
nonrecurring charges at the end of the period covered by the computations.
Based on the foregoing calculations, the average annual total return (after
fee waivers) for the year ended May 31, 1998, for the five year period ended
May 31, 1998 and for the periods since commencement of the Funds' respective
operations were as follows:
<TABLE>
<CAPTION>
Fund Year Five Ten Years Since Inception
Ended Years Ended Ended to
May 31, May 31, May 31, May 31,
1998 1998 1998 1998
-------- ------------ -------- ---------------
<S> <C> <C> <C> <C>
Westcore MIDCO Growth
Fund(1) % % % %
Westcore Blue Chip % % % %
Fund(2)
Westcore Growth and % % % %
Income Fund(2)(5)
Westcore Small-Cap % N/A N/A %
Opportunity Fund(3)
Westcore Long-Term % % % %
Bond Fund(2)
Westcore Intermediate- % % % %
Term Bond Fund(2)
Westcore Colorado % % N/A %
Tax-Exempt Fund(4)
</TABLE>
- --------------------
(1) Commenced Operations on August 1, 1986.
(2) Commenced Operations on June 1, 1988.
(3) Commenced Operations on December 28, 1993.
(4) Commenced Operations on June 1, 1991.
(5) The Westcore Growth and Income Fund was formerly known as the Equity
Income Fund. The Fund's name was changed on January 1, 1996 to reflect
a different objective and policies. Prior to January 1, 1996, the
Fund's objective was to seek reasonable income through investments in
income-producing securities. On January 1, 1996, the Fund's objective
was revised to seek long-term total return through capital appreciation
and current income through investments in equity securities. A new
portfolio manager has managed the Fund since October 1995. Past
performance is not intended to be indicative or representative of future
performance.
The Funds may also from time to time include in advertisements, sales
literature, communications to shareholders and other materials (collectively,
"Materials") a total return
49
<PAGE>
figure that more accurately compares a Fund's performance with other measures
of investment return. For example, in comparing a Fund's total return with
data published by Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc. or Weisenberger Investment Company Service, or with the
performance of an index, a Fund may calculate its aggregate total return for
the period of time specified in the Materials by assuming the investment of
$10,000 in shares of a Fund and assuming the reinvestment of all dividends
and distributions. Percentage increases are determined by subtracting the
initial value of the investment from the ending value and by dividing the
remainder by the beginning value.
The Funds may also from time to time include discussions or illustrations of
the effects of compounding in Materials. "Compounding" refers to the fact
that, if dividends or other distributions on an investment in a Fund are paid
in the form of additional shares of the Fund, any future income or capital
appreciation of the Fund would increase the value, not only of the original
investment, but also of the additional shares received through reinvestment.
As a result, the value of the investment in the Fund would increase more
quickly than if dividends or other distributions had been paid in cash.
In addition, the Funds may also include in Materials discussions and/or
illustrations of the potential investment goals of a prospective investor,
investment management strategies, techniques, policies or investment
suitability of a Fund (such as value investing, market timing, dollar cost
averaging, asset allocation, constant ratio transfer, automatic account
rebalancing, the advantages and disadvantages of investing in tax-deferred
and taxable investments), economic conditions, the relationship between
sectors of the economy and the economy as a whole, various securities
markets, the effects of inflation and historical performance of various asset
classes, including but not limited to, stocks, bonds and Treasury securities.
From time to time, Materials may summarize the substance of information
contained in shareholder reports (including the investment composition of a
Fund), as well as the views of the adviser as to current market, economic,
trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to a Fund. The materials may also refer to or describe the types
of clients the Investment Adviser advises, and describe the Investment
Adviser's method of operation, internal work environment, procedure and
philosophy. The Funds may also include in Materials charts, graphs or
drawings which compare the investment objective, return potential, relative
stability and/or growth possibilities of the Funds and/or other mutual funds,
or illustrate the potential risks and rewards of investment in various
investment vehicles, including but not limited to, stocks, bonds, Treasury
securities and shares of a Fund and/or other mutual funds. Materials may
include a discussion of certain attributes or benefits to be derived by an
investment in a Fund and/or other mutual funds, shareholder profiles and
hypothetical investor scenarios, timely information on financial management,
tax and retirement planning and investment alternatives to certificates of
deposit and other financial instruments. Such Materials may include symbols,
headlines or other material which highlight or summarize the information
discussed in more detail therein.
50
<PAGE>
MISCELLANEOUS
As used in this Statement of Additional Information and the Funds'
Prospectus, a "majority of the outstanding shares" of a Fund or a class of
shares means, with respect to the approval of an investment advisory
agreement, a distribution plan or as a change in a fundamental investment
policy, the lesser of (1) 67% of the shares of the particular Fund or class
represented at a meeting at which the holders of more than 50% of the
outstanding shares of such Fund or class are present in person or by proxy,
or (2) more than 50% of the outstanding shares of such Fund or class.
As of __________, 1998, the following shareholders owned more than 5% of the
outstanding shares of the Funds listed below:
<TABLE>
<CAPTION>
WESTCORE MIDCO GROWTH FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
WESTCORE BLUE CHIP FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
WESTCORE GROWTH AND INCOME FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
WESTCORE SMALL-CAP OPPORTUNITY FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
WESTCORE LONG-TERM BOND FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
51
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
WESTCORE COLORADO TAX-EXEMPT FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
<S> <C> <C> <C> <C>
</TABLE>
- ------------------
* All above-listed shares of the Westcore MIDCO Growth Fund, Westcore Blue
Chip Fund, Westcore Growth and Income Fund, Westcore Small-Cap Opportunity
Fund, Westcore Long-Term Bond Fund, Westcore Intermediate-Term Bond Fund and
Westcore Colorado Tax-Exempt Fund were owned of record by the owners named
above, except to the Trust's knowledge where also owned beneficially as
indicated above.
52
<PAGE>
APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's ("S&P") commercial paper rating is a current assessment
of the likelihood of timely payment of debt having an original maturity of no
more than 365 days. The following summarizes the rating categories used by
Standard and Poor's for commercial paper:
"A-1" - Obligations are rated in the highest category indicating that the
obligor's capacity to meet its financial commitment is strong. Within this
category, certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitment on
these obligations is extremely strong.
"A-2" - Obligations are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations rated
"A-1". However, the obligor's capacity to meet its financial commitment on
the obligation is satisfactory.
"A-3" - Obligations exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
"B" - Obligations are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its
financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.
"C" - Obligations are currently vulnerable to nonpayment and are dependent on
favorable business, financial, and economic conditions for the obligor to
meet its financial obligation.
"D" - Obligations are in payment default. The "D" rating category is used
when payments on an obligation are not made on the date due, even if the
applicable grace period has not expired, unless S&P believes such payments
will be made during such grace period. The "D" rating will also be used upon
the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.
Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually senior debt obligations not having an original maturity in
excess of one year, unless explicitly noted. The following summarizes the
rating categories used by Moody's for commercial paper:
A-1
<PAGE>
"Prime-1" - Issuers (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability
will often be evidenced by many of the following characteristics: leading
market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance
on debt and ample asset protection; broad margins in earnings coverage of
fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources
of alternate liquidity.
"Prime-2" - Issuers (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is
maintained.
"Prime-3" - Issuers (or supporting institutions) have an acceptable ability
for repayment of senior short-term debt obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability
in earnings and profitability may result in changes in the level of debt
protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
"Not Prime" - Issuers do not fall within any of the Prime rating categories.
The three rating categories of Duff & Phelps for investment grade commercial
paper and short-term debt are "D-1," "D-2" and "D-3." Duff & Phelps employs
three designations, "D-1+," "D-1" and "D-1-," within the highest rating
category. The following summarizes the rating categories used by Duff &
Phelps for commercial paper:
"D-1+" - Debt possesses the highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment. Liquidity
factors are excellent and supported by good fundamental protection factors.
Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity factors
are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty of timely payment. Liquidity factors
and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
"D-3" - Debt possesses satisfactory liquidity and other protection factors
qualify issues as investment grade. Risk factors are larger and subject to
more variation. Nevertheless, timely payment is expected.
A-2
<PAGE>
"D-4" - Debt possesses speculative investment characteristics. Liquidity is
not sufficient to insure against disruption in debt service. Operating
factors and market access may be subject to a high degree of variation.
"D-5" - Issuer has failed to meet scheduled principal and/or interest
payments.
Fitch IBCA short-term ratings apply to debt obligations that have time
horizons of less than 12 months for most obligations, or up to three years
for U.S. public finance securities. The following summarizes the rating
categories used by Fitch IBCA for short-term obligations:
"F1" - Securities possess the highest credit quality. This designation
indicates the strongest capacity for timely payment of financial commitments
and may have an added "+" to denote any exceptionally strong credit feature.
"F2" - Securities possess good credit quality. This designation indicates a
satisfactory capacity for timely payment of financial commitments, but the
margin of safety is not as great as in the case of securities rated "F1".
"F3" - Securities possess fair credit quality. This designation indicates
that the capacity for timely payment of financial commitments is adequate;
however, near-term adverse changes could result in a reduction to
non-investment grade.
"B" - Securities possess speculative credit quality. this designation
indicates minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic
conditions.
"C" - Securities possess high default risk. This designation indicates that
the capacity for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
"D" - Securities are in actual or imminent payment default.
Thomson BankWatch short-term ratings assess the likelihood of an untimely
payment of principal and interest of debt instruments with original
maturities of one year or less. The following summarizes the ratings used by
Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's highest category
and indicates a very high likelihood that principal and interest will be paid
on a timely basis.
"TBW-2" - This designation represents Thomson BankWatch's second-highest
category and indicates that while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of safety
is not as high as for issues rated "TBW-1."
A-3
<PAGE>
"TBW-3" - This designation represents Thomson BankWatch's lowest
investment-grade category and indicates that while the obligation is more
susceptible to adverse developments (both internal and external) than those
with higher ratings, the capacity to service principal and interest in a
timely fashion is considered adequate.
"TBW-4" - This designation represents Thomson BankWatch's lowest
rating category and indicates that the obligation is regarded as
non-investment grade and therefore speculative.
CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - An obligation rated "AAA" has the highest rating assigned
by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.
"AA" - An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.
"A" - An obligation rated "A" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rated categories. However, the obligor's capacity to
meet its financial commitment on the obligation is still strong.
"BBB" - An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
"BB," "B," "CCC," "CC" and "C" - Debt is regarded as having
significant speculative characteristics. "BB" indicates the least degree of
speculation and "C" the highest. While such obligations will likely have
some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
"BB" - Debt is less vulnerable to non-payment than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment on
the obligation.
"B" - Debt is more vulnerable to non-payment than obligations rated
"BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation.
A-4
<PAGE>
Adverse business, financial or economic conditions will likely impair the
obligor's capacity or willingness to meet its financial commitment on the
obligation.
"CCC" - Debt is currently vulnerable to non-payment, and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
"CC" - An obligation rated "CC" is currently highly vulnerable to
non-payment.
"C" - The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued.
"D" - An obligation rated "D" is in payment default. This rating
is used when payments on an obligation are not made on the date due, even if
the applicable grace period has not expired, unless S & P believes that such
payments will be made during such grace period. "D" rating is also used upon
the filing of a bankruptcy petition or the taking of similar action if
payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
"r" - This rating is attached to highlight derivative, hybrid, and
certain other obligations that S & P believes may experience high volatility
or high variability in expected returns due to non-credit risks. Examples of
such obligations are: securities whose principal or interest return is
indexed to equities, commodities, or currencies; certain swaps and options;
and interest-only and principal-only mortgage securities. The absence of an
"r" symbol should not be taken as an indication that an obligation will
exhibit no volatility or variability in total return.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in "Aaa" securities or
A-5
<PAGE>
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to
be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations, (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of
characteristics of desirable investment; "Caa" are of poor standing; "Ca"
represents obligations which are speculative in a high degree; and "C"
represents the lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be
in default.
Con. (---) - Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience,
(c) rentals which begin when facilities are completed, or (d) payments to
which some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination of
basis of condition.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's
believes possess the strongest investment attributes are designated by the
symbols, Aa1, A1, Baa1, Ba1 and B1.
The following summarizes the long-term debt ratings used by Duff &
Phelps for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality.
The risk factors are negligible, being only slightly more than for risk-free
U.S. Treasury debt.
"AA" - Debt is considered of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
A-6
<PAGE>
"BBB" - Debt possesses below-average protection factors but such
protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these
ratings is considered to be below investment grade. Although below
investment grade, debt rated "BB" is deemed likely to meet obligations when
due. Debt rated "B" possesses the risk that obligations will not be met when
due. Debt rated "CCC" is well below investment grade and has considerable
uncertainty as to timely payment of principal, interest or preferred
dividends. Debt rated "DD" is a defaulted debt obligation, and the rating
"DP" represents preferred stock with dividend arrearages.
To provide more detailed indications of credit quality, the "AA,"
"A," "BBB," "BB" and "B" ratings may be modified by the addition of a plus
(+) or minus (-) sign to show relative standing within these major
categories.
The following summarizes the ratings used by Fitch IBCA for
corporate and municipal bonds:
"AAA" - Bonds considered to be investment grade and of the highest
credit quality. These ratings denote the lowest expectation of investment
risk and are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is very unlikely to
be adversely affected by foreseeable events.
"AA" - Bonds considered to be investment grade and of very high
credit quality. These ratings denote a very low expectation of investment
risk and indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.
"A" - Bonds considered to be investment grade and of high credit
quality. These ratings denote a low expectation of investment risk and
indicate strong capacity for timely payment of financial commitments. This
capacity may, nevertheless, be more vulnerable to adverse changes in
circumstances or in economic conditions than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of good credit
quality. These ratings denote that there is currently a low expectation of
investment risk. The capacity for timely payment of financial commitments is
adequate, but adverse changes in circumstances and in economic conditions are
more likely to impair this category.
"BB" - Bonds considered to be speculative. These ratings indicate
that there is a possibility of credit risk developing, particularly as the
result of adverse economic changes over time; however, business or financial
alternatives may be available to allow financial commitments to be met.
Securities rated in this category are not investment grade.
A-7
<PAGE>
"B" - Bonds are considered highly speculative. These ratings
indicate that significant credit risk is present, but a limited margin of
safety remains. Financial commitments are currently being met; however,
capacity for continued payment is contingent upon a sustained, favorable
business and economic environment.
"CCC", "CC", "C" - Bonds have high default risk. Capacity for
meeting financial commitments is reliant upon sustained, favorable business
or economic developments. "CC" ratings indicate that default of some kind
appears probable, and "C" ratings signal imminent default.
"DDD," "DD" and "D" - Bonds are in default. Securities are not
meeting obligations and are extremely speculative. "DDD" designates the
highest potential for recovery on these securities, and "D" represents the
lowest potential for recovery.
To provide more detailed indications of credit quality, the Fitch
IBCA ratings from and including "AA" to "B" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standing within these major
rating categories.
Thomson BankWatch assesses the likelihood of an untimely repayment
of principal or interest over the term to maturity of long term debt and
preferred stock which are issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The
following summarizes the rating categories used by Thomson BankWatch for
long-term debt ratings:
"AAA" - This designation represents the highest category assigned
by Thomson BankWatch to long-term debt and indicates that the ability to
repay principal and interest on a timely basis is extremely high.
"AA" - This designation indicates a very strong ability to repay
principal and interest on a timely basis with limited incremental risk
compared to issues rated in the highest category.
"A" - This designation indicates that the ability to repay
principal and interest is strong. Issues rated "A" could be more vulnerable
to adverse developments (both internal and external) than obligations with
higher ratings.
"BBB" - This designation represents Thomson BankWatch's lowest
investment-grade category and indicates an acceptable capacity to repay
principal and interest. Issues rated "BBB" are, however, more vulnerable to
adverse developments (both internal and external) than obligations with
higher ratings.
"BB," "B," "CCC," and "CC," - These designations are assigned by
Thomson BankWatch to non-investment grade long-term debt. Such issues are
regarded as having speculative characteristics regarding the likelihood of
timely payment of principal and interest. "BB" indicates the lowest degree
of speculation and "CC" the highest degree of speculation.
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"D" - This designation indicates that the long-term debt is in
default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may
include a plus or minus sign designation which indicates where within the
respective category the issue is placed.
MUNICIPAL NOTE RATINGS
A Standard and Poor's rating reflects the liquidity concerns and
market access risks unique to notes due in three years or less. The
following summarizes the ratings used by Standard & Poor's Ratings Group for
municipal notes:
"SP-1" - The issuers of these municipal notes exhibit a strong
capacity to pay principal and interest. Those issues determined to possess
very strong characteristics are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.
"SP-3" - The issuers of these municipal notes exhibit speculative
capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG") and variable rate
demand obligations are designated Variable Moody's Investment Grade ("VMIG").
Such ratings recognize the differences between short-term credit risk and
long-term risk. The following summarizes the ratings by Moody's Investors
Service, Inc. for short-term notes:
"MIG-1"/"VMIG-1" - This designation denotes best quality, enjoying
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
"MIG-2"/"VMIG-2" - This designation denotes high quality, with
margins of protection ample although not so large as in the preceding group.
"MIG-3"/"VMIG-3" - This designation denotes favorable quality, with
all security elements accounted for but lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
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"MIG-4"/"VMIG-4" - This designation denotes adequate quality,
carrying specific risk but having protection commonly regarded as required of
an investment security and not distinctly or predominantly speculative.
"SG" - This designation denotes speculative quality and lack of
margins of protection.
Fitch IBCA and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.
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APPENDIX B
As stated in the Prospectus, all Westcore Funds, other than the Westcore
Colorado Tax-Exempt Fund may enter into futures contracts and options for
hedging purposes. Such transactions are described in this Appendix.
I. INTEREST RATE FUTURES CONTRACTS.
USE OF INTEREST RATE FUTURES CONTRACTS. Bond prices are established in
both the cash market and the futures market. In the cash market, bonds are
purchased and sold with payment for the full purchase price of the bond being
made in cash, generally within five business days after the trade. In the
futures market, only a contract is made to purchase or sell a bond in the
future for a set price on a certain date. Historically, the prices for bonds
established in the futures markets have tended to move generally in the
aggregate in concert with the cash market prices and have maintained fairly
predictable relationships. Accordingly, the Funds may use interest rate
futures as a defense, or hedge, against anticipated interest rate changes and
not for speculation. As described below, this would include the use of
futures contract sales to protect against expected increases in interest
rates and futures contract purchases to offset the impact of interest rate
declines.
The Funds presently could accomplish a similar result to that which it
hopes to achieve through the use of futures contracts by selling bonds with
long maturities and investing in bonds with short maturities when interest
rates are expected to increase, or conversely, selling short-term bonds and
investing in long-term bonds when interest rates are expected to decline.
However, because of the liquidity that is often available in the futures
market the protection is more likely to be achieved, perhaps at a lower cost
and without changing the rate of interest being earned by the Funds, through
using futures contracts.
DESCRIPTION OF INTEREST RATE FUTURES CONTRACTS. An interest rate
futures contract sale would create an obligation by a Fund, as seller, to
deliver the specific type of financial instrument called for in the contract
at a specific future time for a specified price. A futures contract purchase
would create an obligation by a Fund, as purchaser, to take delivery of the
specific type of financial instrument at a specific future time at a specific
price. The specific securities delivered or taken, respectively, at
settlement date, would not be determined until at or near that date. The
determination would be in accordance with the rules of the exchange on which
the futures contract sale or purchase was made.
Although interest rate futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery of
securities. Closing out a futures contract sale is effected by a Fund
entering into a futures contract purchase for the same aggregate amount of
the specific type of financial instrument and the same delivery date. If the
price of the sale exceeds the price of the offsetting purchase, a Fund is
immediately paid the difference and thus realizes a
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gain. If the offsetting purchase price exceeds the sale price, a Fund pays
the difference and realizes a loss. Similarly, the closing out of a futures
contract purchase is effected by the Fund entering into a futures contract
sale. If the offsetting sale price exceeds the purchase price, a Fund
realizes a gain, and if the purchase price exceeds the offsetting sale price,
a Fund realizes a loss.
Interest rate futures contracts are traded in an auction environment on
the floors of several exchanges - principally, the Chicago Board of Trade and
the Chicago Mercantile Exchange and the New York Futures Exchange. The Fund
would deal only in standardized contract's on recognized exchanges. Each
exchange guarantees performance under contract provisions through a clearing
corporation, a nonprofit organization managed by the exchange membership.
A public market now exists in futures contracts covering various
financial instruments including long-term Treasury Bonds and Notes;
Government National Mortgage Association (GNMA) modified pass-through
mortgage-backed securities; three-month Treasury Bills; and ninety-day
commercial paper. A Fund may trade in any futures contract for which there
exists a public market, including, without limitation, the foregoing
instruments.
II. STOCK INDEX FUTURES CONTRACTS.
GENERAL. A stock index assigns relative values to the stocks included
in the index and the index fluctuates with changes in the market values of
the stocks included. Some stock index futures contracts are based on broad
market indexes, such as the Standard & Poor's 500 or the New York Stock
Exchange Composite Index. In contrast, certain exchanges offer futures
contracts on narrower market indexes, such as the Standard & Poor's 100 or
indexes based on an industry or market segment, such as oil and gas stocks.
Futures contracts are traded on organized exchanges regulated by the
Commodity Futures Trading Commission. Transactions on such exchanges are
cleared through a clearing corporation, which guarantees the performance of
the parties to each contract.
A Fund will sell index futures contracts in order to offset a decrease
in market value of its securities that might otherwise result from a market
decline. A Fund may do so either to hedge the value of its portfolio as a
whole, or to protect against declines, occurring prior to sales of
securities, in the value of the securities to be sold. Conversely, a Fund
will purchase index futures contracts in anticipation of purchases of
securities. In a substantial majority of these transactions, a Fund will
purchase such securities upon termination of the long futures position, but a
long futures position may be terminated without a corresponding purchase of
securities.
In addition, a Fund may utilize stock index futures contracts in
anticipation of changes in the composition of its holdings. For example, in
the event that a Fund expects to narrow the range of industry groups
represented in its holdings it may, prior to making purchases of the actual
securities, establish a long futures position based on a more restricted
index, such as an index comprised of securities of a particular industry
group. A Fund may also sell futures contracts in connection with this
strategy, in order to protect against the possibility that the value
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of the securities to be sold as part of the restructuring of its portfolio
will decline prior to the time of sale.
III. FUTURES CONTRACTS ON FOREIGN CURRENCIES.
A futures contract on foreign currency creates a binding obligation on one
party to deliver, and a corresponding obligation on another party to accept
delivery of, a stated quantity of a foreign currency, for an amount fixed in
U.S. dollars. Foreign currency futures may be used by a Fund to hedge
against exposure to fluctuations in exchange rates between the U.S. dollar
and other currencies arising from multinational transactions.
IV. MARGIN PAYMENTS.
Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract.
Initially, a Fund will be required to deposit with the broker or in a
segregated account with a Fund's custodian an amount of cash or cash
equivalents, the value of which may vary but is generally equal to 10% or
less of the value of the contract. This amount is known as initial margin.
The nature of initial margin in futures transactions is different from that
of margin in security transactions in that futures contract margin does not
involve the borrowing of funds by the customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good
faith deposit on the contract which is returned to a Fund upon termination of
the futures contract assuming all contractual obligations have been
satisfied. Subsequent payments, called variation margin, to and from the
broker, will be made on a daily basis as the price of the underlying
instrument fluctuates making the long and short positions in the futures
contract more or less valuable, a process known as "marking-to-market." For
example, when a Fund has purchased a futures contract and the price of the
contract has risen in response to a rise in the underlying instruments, that
position will have increased in value and a Fund will be entitled to receive
from the broker a variation margin payment equal to that increase in value.
Conversely, where a Fund has purchased a futures contract and the price of
the futures contract has declined in response to a decrease in the underlying
instruments, the position would be less valuable and a Fund would be required
to make a variation margin payment to the broker. At any time prior to
expiration of the futures contract, Denver Investment Advisors may elect to
close the position by taking an opposite position, subject to the
availability of a secondary market, which will operate to terminate a Fund's
position in the futures contract. A final determination of variation margin
is then made, additional cash is required to be paid by or released to a
Fund, and a Fund realizes a loss or gain.
V. RISKS OF TRANSACTIONS IN FUTURES CONTRACTS.
There are several risks in connection with the use of futures by a Fund as
a hedging device. One risk arises because of the imperfect correlation between
movements in the price of the future and movements in the price of the
securities which are the subject of the hedge. The
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price of the future may move more than or less than the price of the
securities being hedged. If the price of the future moves less than the
price of the securities which are the subject of the hedge, the hedge will
not be fully effective but, if the price of the securities being hedged has
moved in an unfavorable direction, a Fund would be in a better position than
if it had not hedged at all. If the price of the securities being hedged has
moved in a favorable direction, this advantage will be partially offset by
the loss on the future. If the price of the future moves more than the price
of the hedged securities, a Fund involved will experience either a loss or
gain on the future which will not be completely offset by movements in the
price of the securities which are the subject of the hedge. To compensate
for the imperfect correlation of movements in the price of securities being
hedged and movements in the price of futures contracts, a Fund may buy or
sell futures contracts in a greater dollar amount than the dollar amount of
securities being hedged if the volatility over a particular time period of
the prices of such securities has been greater than the volatility over such
time period of the future, or if otherwise deemed to be appropriate by Denver
Investment Advisors. Conversely, a Fund may buy or sell fewer futures
contracts if the volatility over a particular time period of the prices of
the securities being hedged is less than the volatility over such time period
of the futures contract being used, or if otherwise deemed to be appropriate
by Denver Investment Advisors. It is also possible that, where a Fund has
sold futures to hedge its portfolio against a decline in the market, the
market may advance and the value of securities held by a Fund may decline.
If this occurred, a Fund would lose money on the future and also experience a
decline in value in its portfolio securities.
Where futures are purchased to hedge against a possible increase in the
price of securities or a currency before a Fund is able to invest its cash
(or cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline instead; if a Fund then concludes not to
invest in securities or options at that time because of concern as to
possible further market decline or for other reasons, a Fund will realize a
loss on the futures contract that is not offset by a reduction in the price
of securities purchased.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the futures and
the securities being hedged, the price of futures may not correlate perfectly
with movement in the cash market due to certain market distortions. Rather
than meeting additional margin deposit requirements, investors may close
futures contracts through off-setting transactions which could distort the
normal relationship between the cash and futures markets. Second, with
respect to financial futures contracts, the liquidity of the futures market
depends on participants entering into off-setting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced thus producing
distortions. Third, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements
in the securities market. Therefore, increased participation by speculators
in the futures market may also cause temporary price distortions. Due to the
possibility of price distortion in the futures market, and because of the
imperfect correlation between the movements in the cash market and movements
in the price of futures, a correct forecast of general market trends or
interest rate movements by Denver Investment Advisors may still not result in
a successful hedging transaction over a short time frame.
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Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Funds
intend to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a
liquid secondary market on any exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures investment position, and in the event of adverse
price movements, the Funds would continue to be required to make daily cash
payments of variation margin. However, in the event futures contracts have
been used to hedge portfolio securities, such securities will not be sold
until the futures contract can be terminated. In such circumstances, an
increase in the price of the securities, if any, may partially or completely
offset losses on the futures contract. However, as described above, there is
no guarantee that the price of the securities will in fact correlate with the
price movements in the futures contract and thus provide an offset on a
futures contract.
Further, it should be noted that the liquidity of a secondary market in
a futures contract may be adversely affected by "daily price fluctuation
limits" established by commodity exchanges which limit the amount of
fluctuation in a futures contract price during a single trading day. Once
the daily limit has been reached in the contract, no trades may be entered
into at a price beyond the limit, thus preventing the liquidation of open
futures positions. The trading of futures contracts is also subject to the
risk of trading halts, suspensions, exchange or clearing house equipment
failures, government intervention, insolvency of a brokerage firm or clearing
house or other disruptions of normal trading activity, which could at times
make it difficult or impossible to liquidate existing positions or to recover
excess variation margin payments.
Successful use of futures by the Funds is also subject to Denver
Investment Advisor's ability to predict correctly movements in the direction
of the market. For example, if a Fund has hedged against the possibility of a
decline in the market adversely affecting securities held in its portfolio
and securities prices increase instead, a Fund will lose part or all of the
benefit to the increased value of its securities which it has hedged because
it will have offsetting losses in its futures positions. In addition, in
such situations, if a Fund has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. Such sales of
securities may be, but will not necessarily be, at increased prices which
reflect the rising market. A Fund may have to sell securities at a time when
it may be disadvantageous to do so.
VI. OPTIONS ON FUTURES CONTRACTS.
The Funds may purchase options on the futures contracts described above.
A futures option gives the holder, in return for the premium paid, the right
to buy (call) from or sell (put) to the writer of the option a futures
contract at a specified price at any time during the period of the option.
Upon exercise, the writer of the option is obligated to pay the difference
between the cash value of the futures contract and the exercise price. Like
the buyer or seller of a futures contract, the holder, or writer, of an
option has the right to terminate its position prior to the scheduled
expiration of the option by selling, or purchasing, an option of the same
series, at which time the person entering into the closing transaction will
realize a gain or loss.
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Investments in futures options involve some of the same considerations
that are involved in connection with investments in futures contracts (for
example, the existence of a liquid secondary market). In addition, the
purchase or sale of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value
of the option purchased. Depending on the pricing of the option compared to
either the futures contract upon which it is based, or upon the price of the
securities being hedged, an option may or may not be less risky than
ownership of the futures contract or such securities. In general, the market
prices of options can be expected to be more volatile than the market prices
on the underlying futures contract. Compared to the purchase or sale of
futures contracts, however, the purchase of call or put options on futures
contracts may frequently involve less potential risk to the Funds because the
maximum amount at risk is the premium paid for the options (plus transaction
costs). The writing of an option on a futures contract involves risks
similar to those risks relating to the sale of futures contracts. Although
permitted by their fundamental investment policies, the Funds do not
currently intend to write futures options during the current fiscal year, and
will not do so in the future absent any necessary regulatory approvals.
VII. ACCOUNTING TREATMENT.
Accounting for futures contracts and options will be in accordance with
generally accepted accounting principles.
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PART C - OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) To be filed by Amendment.
(b) Exhibits.
(1) (a) Amended and Restated Declaration of Trust of the Registrant
dated November 19, 1987 is incorporated herein by reference to
Exhibit (1) to Post-Effective Amendment No. 21 to Registrant's
Registration Statement.
(b) Amendment to Amended and Restated Declaration of Trust of the
Registrant dated July 16, 1990 is incorporated herein by
reference to Exhibit (1)(b) to Post-Effective Amendment No. 23
to Registrant's Registration Statement ("Post-Effective
Amendment No. 23").
(2) (a) Registrant's Amended and Restated Code of Regulations is
incorporated by reference to Exhibit 2(a) to Post-Effective
Amendment No. 45.
(3) None.
(4) (a) Specimen copy of share certificate for Class A Shares is
incorporated herein by reference to Exhibit No. 4 to
Post-Effective Amendment No. 7.
(b) Specimen copy of form of share certificate is incorporated
herein by reference to Exhibit No. 4(b) to Post-Effective
Amendment No. 34 to Registrant's Registration Statement.
(5) (a) Amended and Restated Advisory Agreement dated October 1, 1995
between Registrant and Denver Investment Advisors LLC relating
to Registrant's Cash Reserve Fund (which has not yet commenced
operations), Colorado Tax-Exempt Fund, Growth and Income Fund
(formerly the Equity Income Fund), Intermediate-Term Bond Fund,
Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund (formerly
the Modern Value Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 5(b) to Post-Effective
Amendment No. 44.
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(b) Form of Addendum No. 1 to Amended and Restated Advisory
Agreement relating to the Mid-Cap Value Fund is filed herewith.
(6) (a) Amended and Restated Distribution Agreement dated as of October
1, 1997 between Registrant and ALPS Securities, Inc. relating to
Registrant's MIDCO Growth Fund, Blue Chip Fund (formerly the
Modern Value Equity Fund), Growth and Income Fund (formerly the
Equity Income Fund), Intermediate-Term Bond Fund, and Long-Term
Bond Fund is incorporated by reference to Exhibit 6 (a) to
Post-Effective Amendment No. 46.
(i) Form of Amendment No. 1 to Distribution Agreement
relating to the Mid-Cap Value Fund is filed herewith.
(b) Form of Broker/Dealer Selling Agreement is incorporated herein
by reference to Exhibit No. 6(c) to Post-Effective Amendment No.
14.
(c) Form of Bank Agreement is incorporated herein by reference to
Exhibit No. 6(d) to Post-Effective Amendment No. 14.
(7) (a) Westcore Trust Deferred Compensation Plan (as Amended and
Restated Effective June 22, 1998) is filed herewith.
(8) (a) Custody Agreement dated January 22, 1997 between Registrant and
Wells Fargo Bank, N.A. relating to Registrant's MIDCO Growth
Fund, Blue Chip Fund (formerly the Modern Value Equity Fund),
Growth and Income Fund (formerly the Equity Income Fund),
Intermediate-Term Bond Fund, Long-Term Bond Fund, Colorado
Tax-Exempt Fund and Small-Cap Opportunity Fund is incorporated
by reference to Exhibit 8 (a) to Post-Effective Amendment No.
46.
(b) Consent to Assignment of Custody Agreement between BNY Western
Trust Company and Westcore Trust dated as of August 13, 1997 is
incorporated by reference to Exhibit 8 (b) to Post-Effective
Amendment No. 46.
(c) Form of Amendment No. 1 to Custody Agreement relating to the
Mid-Cap Value Fund is filed herewith.
(9) (a) Administration Agreement dated as of October 1, 1995 between
Registrant, Denver Investment Advisors LLC, and ALPS Mutual
Funds Services, Inc. relating to Registrant's Cash Reserve Fund,
Colorado Tax-Exempt Fund, Growth and Income Fund (formerly the
Equity Income Fund), Intermediate-Term Bond Fund, Long-
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Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund (formerly the
Modern Value Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(a) of Post-Effective
Amendment No. 45.
(i) Form of Amendment No. 1 to Administration Agreement
relating to the Mid-Cap Value Fund is filed herewith.
(b) Amended and Restated Transfer Agency and Service Agreement dated
January 4, 1993 as amended from the Transfer Agency and Service
Agreement dated June 1, 1992 between Registrant and State Street
Bank and Trust Company relating to Registrant's Blue Chip Fund
(formerly the Modern Value Equity Fund), Growth and Income Fund
(formerly the Equity Income Fund), MIDCO Growth Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund and Colorado
Tax-Exempt Fund is incorporated herein by reference to Exhibit
9(f) to Post-Effective Amendment No. 36.
(i) Amendment No. 1 dated as of December 28, 1993 relating to
Registrant's Small-Cap Opportunity Fund is incorporated
herein by reference to Exhibit 9(c)(i) to Post-Effective
Amendment No. 38.
(ii) Amendment No. 2 dated as of November 1, 1994 is
incorporated herein by reference to Exhibit 9(c) (ii) to
Post-Effective Amendment No. 44.
(iii) Revised Fee Schedule to Transfer Agency Agreement dated
as of December 26, 1995 is filed herewith.
(iv) Form of Amendment No. 3 to Amended and Restated Transfer
Agency Agreement relating to the Mid-Cap Value Fund is
filed herewith.
(c) Amended and Restated Bookkeeping and Pricing Agreement dated
June 1, 1998 between Registrant and ALPS Mutual Funds Services,
Inc. relating to Registrant's Colorado Tax-Exempt Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund, Blue Chip
Fund, Growth and Income Fund, MIDCO Growth Fund and Small-Cap
Opportunity Fund is filed herewith.
(i) Form of Amendment No. 1 to Amended and Restated
Bookkeeping and Pricing Agreement relating to the Mid-Cap
Value Fund is filed herewith.
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(d) Indemnification Agreement dated July 17, 1995 between Registrant
and First Interstate Bancorp is incorporated herein by reference
to Exhibit 9(h) to Post-Effective Amendment No. 44.
(e) (i) Operating Agreement dated as of November 27, 1995 between
Charles Schwab & Co., Inc. and Westcore Trust relating to
the Cash Reserve Fund, Colorado Tax-Exempt Fund, Growth
and Income Fund (formerly the Equity Income Fund),
Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO
Growth Fund, Blue Chip Fund (formerly the Modern Value
Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(e) to
Post-Effective Amendment No. 45.
(a) Order Placement Procedures Amendment to the
Operating Agreement between Charles Schwab & Co.,
Inc. and Westcore Trust dated as of December 1,
1997 relating to the Cash Reserve Fund, Colorado
Tax-Exempt Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund and Small-Cap
Opportunity Fund is filed herewith.
(b) Charles Schwab & Company, Inc. Side Letter
Agreement to Order Placement Procedures Amendment
dated as of December 22, 1997 among Westcore
Trust, Denver Investment Advisors LLC and Boston
Financial Data Services, Inc., relating to the
Cash Reserve Fund, Colorado Tax-Exempt Fund,
Growth and Income Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund and Small-Cap Opportunity Fund is filed
herewith.
(ii) Institutional Services Agreement dated as of November 27,
1995 between Charles Schwab & Co. and Westcore Trust
relating to the Cash Reserve Fund, Colorado Tax-Exempt
Fund, Growth and Income Fund (formerly the Equity Income
Fund), Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund (formerly the Modern
Value Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(e) to
Post-Effective Amendment No. 45.
(iii) Retail Services Agreement dated as of March 26, 1996
among Westcore Trust, Denver Investment Advisors LLC
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and Charles Schwab & Co., Inc. relating to the Cash
Reserve Fund, Colorado Tax-Exempt Fund, Growth and Income
Fund (formerly the Equity Income Fund), Intermediate-Term
Bond Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund (formerly the Modern Value Equity Fund) and
Small-Cap Opportunity Fund is incorporated by reference
to Exhibit 9(e) to Post-Effective Amendment No. 45.
(c) Amendment to Services Agreement dated as of July
1, 1998 among Westcore Trust, Denver Investment
Advisors LLC and Charles Schwab & Co. relating to
the Cash Reserve Fund, Colorado Tax-Exempt Fund,
Growth and Income Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund and Small-Cap Opportunity Fund is filed
herewith.
(iv) Side Letter dated as of March 5, 1996 among ALPS Mutual
Fund Services, Inc., Denver Investment Advisors LLC,
State Street Bank & Trust Company and Westcore Trust
relating to the Cash Reserve Fund, Colorado Tax-Exempt
Fund, Growth and Income Fund (formerly the Equity Income
Fund), Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund (formerly the Modern
Value Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(e) to
Post-Effective Amendment No. 45.
(v) Retirement Plan Order Processing Amendment dated as of
February 15, 1996 to the Operating Agreement among
Charles Schwab & Co., Inc., the Charles Schwab Company
and Westcore Trust relating to the Cash Reserve Fund,
Colorado Tax-Exempt Fund, Growth and Income Fund
(formerly the Equity Income Fund), Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip
Fund (formerly the Modern Value Equity Fund) and
Small-Cap Opportunity Fund is incorporated by reference
to Exhibit 9(e) to Post-Effective Amendment No. 45.
(vi) Confidentiality Agreement dated as of March 26, 1996
between Charles Schwab & Co., Inc. and Denver Investment
Advisors LLC relating to the Cash Reserve Fund, Colorado
Tax-Exempt Fund, Growth and Income Fund (formerly the
Equity Income Fund), Intermediate-
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Term Bond Fund, Long-Term Bond Fund, MIDCO Growth Fund,
Blue Chip Fund (formerly the Modern Value Equity Fund)
and Small-Cap Opportunity Fund is incorporated by
reference to Exhibit 9(e) to Post-Effective Amendment No.
45.
(vii) Transaction Charges Amendment to Services Agreement dated
as of July 1, 1997 is incorporated by reference to
Exhibit 9 (e) to Post-Effective Amendment No. 46.
(f) (i) DST FAN WEB Services Agreement dated as of August 1, 1997
among DST Systems, Inc., Westcore Trust and Denver
Investment Advisors LLC is incorporated by reference to
Exhibit 9 (f) to Post-Effective Amendment No. 46.
(ii) Indemmnification Agreement dated as of August 1, 1997
between Denver Investment Advisors LLC and Westcore Trust
is incorporated by reference to Exhibit 9 (f) to
Post-Effective Amendment No. 46.
(g) Shareholder Service Agreement dated as of July 1, 1996 between
Wells Fargo Bank, N.A. and Westcore Trust is incorporated by
reference to Exhibit 9 (g) to Post-Effective Amendment No. 46.
(h) Agency Trading Agreement dated as of May 19, 1997 among Bank of
Oklahoma, N.A., its affiliate Alliance Trust Company, N.A. and
Westcore Trust is incorporated by reference to Exhibit 9 (h) to
Post-Effective Amendment No. 46.
(i) Shareholder Service Agreement dated as of November 22, 1996
among First Trust Corporation, Denver Investment Advisors LLC
and Westcore Trust is incorporated by reference to Exhibit 9 (i)
to Post-Effective Amendment No. 46.
(j) Agency Trading Agreement dated as of July 15, 1997 among
Westcore Trust, ALPS Mutual Funds Services, Inc., Boston
Financial Data Services, Inc. and Financial Administrative
Services Corporation relating to the Colorado Tax-Exempt Fund,
Growth and Income Fund, Intermediate-Term Bond Fund, Long-Term
Bond Fund, MIDCO Growth Fund, Blue Chip Fund and Small-Cap
Opportunity Fund is filed herewith.
(k) Agency Trading Agreement dated as of January 2, 1998 among
Westcore Trust, ALPS Mutual Funds Services, Inc., Boston
Financial Data Services, Inc. and Wachovia Operational Services
C-6
<PAGE>
Corporation relating to the Colorado Tax-Exempt Fund, Growth and
Income Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund and Small-Cap Opportunity Fund
is filed herewith.
(l) Securities Lending Agency Client Agreement dated as of March 27,
1998 between Westcore Trust and PaineWebber Incorporated
relating to the Growth and Income Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is filed herewith.
(m) Service Agreement dated as of November 10, 1997 among Westcore
Trust, ALPS Mutual Funds Services, Inc., Denver Investment
Advisors LLC and PaineWebber Incorporated relating to the
Colorado Tax-Exempt Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO Growth
Fund, Blue Chip Fund and Small-Cap Opportunity Fund is filed
herewith.
(n) Omnibus Account Services Agreement dated as of February 26, 1998
among Westcore Trust, Denver Investment Advisors LLC and
National Investors Services Corp. relating to the Colorado
Tax-Exempt Fund, Growth and Income Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is filed herewith.
(o) Side Letter appointing Smith Barney Inc. as Agent dated as of
October 6, 1997 between Westcore Trust and Smith Barney Inc.
relating to the Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO
Growth Fund, Blue Chip Fund and Small-Cap Opportunity Fund is
filed herewith.
(p) Form of Telephone and Service Agreement between Westcore Trust
and ALPS Mutual Fund Services, Inc. relating to the Colorado
Tax-Exempt Fund, Growth and Income Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is filed herewith.
(10) Opinion of counsel that shares are validly issued, fully paid and
non-assessable to be filed by Amendment..
(11) (a) Consent of Drinker Biddle & Reath LLP.
(b) Consent of Deloitte & Touche LLP to be filed by Amendment.
C-7
<PAGE>
(12) None.
(13) (a) Form of Purchase Agreement between Westcore Trust and ALPS Mutual
Funds Services, Inc. relating to the Mid-Cap Value Fund is filed
herewith.
(14) (a) Prototype Westcore IRA Application, Custodial Account Statement
and Disclosure Statement is filed herewith.
(b) Prototype Trust Consultants Inc. 401k Plan and Engagement Letter
is incorporated herein by reference to Exhibit 14(b) to
Post-Effective Amendment No. 45.
(15) None.
(16) Schedule for Computation of Performance Quotations for Small-Cap
Opportunity Fund is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 40. Schedule for Computation of
Performance Quotations for Colorado Tax-Exempt Fund is incorporated
herein by reference to Exhibit (16) to Post-Effective Amendment No.
29. Schedule for Computation of Performance Quotations for remaining
portfolios incorporated herein by reference to Exhibit (16) to
Post-Effective Amendment No. 23.
(17) To be Filed by Amendment.
(18) None.
(19) Powers of Attorney and Certificate of Secretary certifying resolution
authorizing signature by powers of attorney are filed herewith under
Rule 483(b) under the Securities Act of 1933.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by its Board of Trustees. Certain of
Registrant's trustees serve on the board of directors/trustees of certain other
registered investment companies. (See "Management of the Fund - Directors and
Officers" in Part B hereof).
Item 26. NUMBER OF HOLDERS OF SECURITIES
As of June 19, 1998:
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Class B Shares
(MIDCO Growth Fund) 6108
Class G Shares
C-8
<PAGE>
(Long-Term Bond Fund) 233
Class H Shares
(Intermediate-Term Bond Fund) 339
Class I Shares
(Blue Chip Fund) 1063
Class J Shares
(Growth and Income Fund) 700
Class S Shares
(Colorado Tax-Exempt Fund) 192
Class X Shares
(Small-Cap Opportunity Fund) 1034
</TABLE>
Item 27. INDEMNIFICATION
The trustees are indemnified by First Interstate Bancorp ("FIB"), generally
against damages arising out of (i) claims by any person that implementation of
the Agreement and Plan of Reorganization between Pacifica Funds Trust
("Pacifica") and Westcore Trust (the "Plan") constitutes breach or violation of
certain agreements with ALPS Mutual Funds Services, Inc.; and (ii) certain
untrue or alleged untrue statements of material facts or omissions or alleged
omissions of material facts in information furnished by or on behalf of FIB,
intended for use in certain proxy materials or amendments or supplements to the
Registrant's registration statement relating to the Plan.
Under the Plan, Pacifica has agreed to assume certain liabilities of the
Registrant, including certain obligations of the Registrant to indemnify the
Registrant's Trustees acting in their capacity as such with respect to any claim
alleging any breach of fiduciary duty with respect to transactions contemplated
by the Plan or otherwise to the fullest extent permitted by law and the
Registrant's Declaration of Trust as in effect on the date of such Plan.
The trustees are indemnified by Denver Investment Advisors LLC generally
against damages arising out of or resulting from use of the Internet financial
access network ("FAN") made available by DST Systems, Inc. The FAN is a
computer and software system which provides an interface between the Internet
and public data network service providers and the Registrant's transfer agent
for the purposes of communication shareholder data and information and/or
transaction requests.
Indemnification of Registrant's trustees, officers and controlling
persons against any and all claims, demands, liabilities and expenses arising
from dissemination of untrue material fact or omission of such material fact by
ALPS is provided for in Section 1.10 of the
C-9
<PAGE>
Amended and Restated Distribution Agreement incorporated herein by reference as
Exhibit 6(a).
Indemnification of Registrant's trustees, officers, employees, agents
and controlling persons against any and all losses, claims, damages, liabilities
and expenses arising out of negligence or willful misconduct by Wells Fargo Bank
N.A. ("Wells"), violation by Wells of applicable law, breach by Wells of
material provisions of the Agreement, and breach by Wells of a representation,
warranty or covenant in the Agreement is provided for in Section 15(a) of the
Shareholder Service Agreement incorporated herein by reference as Exhibit 9(g).
Indemnification of Registrant's trustees, officers, employees, agents
and certain affiliates against any loss, cost, damage, expense and liability
arising from any actual negligent act, omission, intentional misconduct,
material breach of agreement, failure to timely and properly transmit orders and
instructions and cancellation or correction of orders by Bank of Oklahoma
("BOK"), or discrepancies in balances maintained by BOK is provided for in
Section 12(a) of the Agency Trading Agreement incorporated herein by reference
as Exhibit 9(h).
Indemnification of Registrant's officers, directors, partners,
trustees, members, shareholders, employees and agents by Financial
Administrative Services Corporation ("FASCorp") against any loss, cost, damage,
expense, liability or claim including, without limitations, reasonable legal
fees and other out-of-pocket costs of defending against any loss, cost, damage,
expense, liability or claim, relating to any actual negligent act or omission,
act of intentional misconduct, material breach of any representations,
warranties and covenants, failure to timely and properly transmit orders and
instructions, cancellation or subsequent correction of any orders and
instructions or discrepancies between Participant and Plan balances maintained
by FASCorp and the balances maintained by Registrant is provided for in Section
12(a) of the Agency Trading Agreement filed herewith as Exhibit 9 (j).
Indemnification of Registrant's officers, directors, partners,
trustees, members, shareholders, employees and agents against any loss, cost,
damage, expense, liability or claim by Wachovia Operational Services Corporation
arising out of any actual negligent act, omission, act of intentional
misconduct, material breach of any of the representations, warranties,
covenants, failure to timely and properly transmit orders and instructions,
cancellation or subsequent corrections of any orders and instructions
transmitted, or discrepancies in balances maintained by Wachovia and account
balances maintained by the Trust is provided for in Section 12(a) of the Agency
Trading Agreement filed herewith as Exhibit 9 (k).
Indemnification of Registrant's principal underwriter against certain
losses is provided for in Section 1.9 of the Distribution Agreement incorporated
herein by reference as Exhibits 6(a). Indemnification of Registrant's
Bookkeeping and Pricing Agent against certain losses is provided for in Section
6 of the Amended and Restated Bookkeeping and Pricing Agreement included as
Exhibit 9(c). Registrant has obtained from a major insurance carrier a
trustees' and officers' liability policy covering certain types of errors and
omissions. Registrant will not pay an insurance premium for insurance coverage
which indemnifies for any act for
C-10
<PAGE>
which Registrant itself cannot indemnify. In addition, Section 9.3 of the
Registrant's Amended and Restated Declaration of Trust dated November 19, 1987,
incorporated herein by reference as Exhibit 1, provides as follows:
(a) INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND EMPLOYEES.
The Trust shall indemnify each of its Trustees against all
liabilities and expenses (including amounts paid in
satisfaction of judgments, in compromise, as fines and
penalties, and as counsel fees) reasonably incurred by him
in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, in
which he may be involved or with which he may be threatened,
while as a Trustee or thereafter, by reason of his being or
having been such a Trustee except with respect to any matter
as to which he shall have been adjudicated to have acted in
bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties, provided that as to any matter
disposed of by a compromise payment by such person, pursuant
to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided
unless the Trust shall have received a written opinion from
independent legal counsel approved by the Trustees to the
effect that if either the matter of willful misfeasance,
gross negligence or reckless disregard of duty, or the
matter of bad faith had been adjudicated, it would in the
opinion of such counsel have been adjudicated in favor of
such person. The rights accruing to any person under these
provisions shall not exclude any other right to which he may
be lawfully entitled, provided that no person may satisfy
any right of indemnity or reimbursement hereunder except out
of the property of the Trust. The Trustees may make advance
payments in connection with the indemnification under this
Section 9.3, provided that the indemnified person shall have
given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he is not entitled
to such indemnification.
The Trustees shall indemnify representatives and employees of the
Trust to the same extent that Trustees are entitled to indemnification pursuant
to this Section 9.2.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the
C-11
<PAGE>
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Section 9.6 of the Registrant's Amended and Restated Declaration of
Trust dated November 19, 1987, incorporated herein by reference as Exhibit 1,
also provides for the indemnification of shareholders of the Registrant.
Section 9.6 states as follows:
9.6 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
being or having been an [sic] Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets belonging to the classes of Shares owned by
such Shareholder to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust shall, upon request by the
Shareholder, assume the defense of any claim made against any Shareholder for
any act or obligations of the Trust and satisfy any judgment thereon from such
assets.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
To Registrant's knowledge, none of the directors or senior executive
officers of Denver Investment Advisors LLC, except those set forth below, is, or
has been at any time during Registrant's past two fiscal years, engaged in any
other business, profession, vocation or employment of a substantial nature. Set
forth below are the names and principal businesses of the directors and certain
of the senior executive officers of Denver Investment Advisors LLC who are or
have been engaged in any other business, profession, vocation or employment of a
substantial nature during the past two years.
DENVER INVESTMENT ADVISORS LLC
<TABLE>
<CAPTION>
Position
With Other
Denver Investment Business Type of
Name Advisors LLC Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Jeff Adams Manager/Vice President None N/A
Todger Anderson Executive Manager/President President of Blue Chip Value Fund, Investment Company;
Inc.; Tokyo Inc. Restaurant
Terri Baldwin Vice President None N/A
Leo Beserra Vice President None N/A
Glen Cahill Vice President None N/A
C-12
<PAGE>
Position
With Other
Denver Investment Business Type of
Name Advisors LLC Connections Business
- ---- ------------ ----------- --------
Will Chester Vice President None N/A
Mary Ellen Cox Vice President None N/A
Kathleen Duggan Vice President None N/A
Janet Gardiner Vice President None N/A
Les Garrison Vice President None N/A
Caleb F. Gates, Jr. Vice President None N/A
Dean Graves Vice President None N/A
Grafton Jhung Vice President None N/A
Doug Kidd Vice President None N/A
Dennis Larkin Manager/Vice President None N/A
Robert O. Lindig Vice President Director of Hamilton Manufacturing Manufacturing
Corp. Company
Alex Lock Vice President None N/A
Larry Luchini Manager/Vice President None N/A
JoAnn Nearents Vice President None N/A
Kenneth V. Penland Executive Manager/Chairman Chairman of the Board of Blue Chip
Value Fund, Inc. Investment Company
Charlotte Petersen Vice President None N/A
Jerome Powers Vice President None N/A
Gerald Peterson Vice President None N/A
Varilyn Schock Vice President Vice President of Blue Chip Value
Fund, Inc. Investment Company
Mil Schulhof Vice President None N/A
Tom Stevens Vice President None N/A
Christianna Wood Vice-President None N/A
</TABLE>
Item 29. PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as the distributor for the
Registrant and the following investment companies: Financial Investors Trust,
Stonebridge Growth Fund, Inc., Stonebridge Aggressive Growth Fund, Inc., First
Funds Trust, Midcap SPDR Trust, SPDR Trust, and DIAMONDS Trust.
C-13
<PAGE>
(b) To the best of Registrant's knowledge, the directors and executive
officers of ALPS Mutual Funds Services, Inc., are as follows:
Positions and Positions and
Name and Principal Offices with Offices with
Business Address ALPS Registrant
- ---------------- ---- ----------
W. Robert Alexander Chairman of the Board None
and Secretary
Arthur J. L. Lucey President and Director None
James V. Hyatt General Counsel None
Thomas A. Carter Chief Financial Officer None
Edmund Burke Executive Vice President None
Chad Christensen Vice-President Assistant
Treasurer
Jeremy May Vice-President None
William Paston Vice President None
Chris Woessner Director None
Rick Pederson Director None
The principal business address for each of the above directors and
executive officers is 370 Seventeenth Street, Suite 3100, Denver, Colorado
80202.
(c) None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Denver Investment Advisors LLC, 1225 17th Street, 26th Floor,
Denver, Colorado 80202 (records relating to its function as
investment adviser for Registrant's Colorado Tax-Exempt Fund,
MIDCO Growth Fund, Blue Chip Fund (formerly the Modern Value
Equity Fund), Long-Term Bond Fund, Small-Cap Opportunity Fund,
Growth and Income Fund (formerly the Equity Income Fund),
Intermediate-Term Bond Fund) and Mid-Cap Value Fund.
C-14
<PAGE>
(2) ALPS Mutual Funds Services, Inc., 370 Seventeenth Street, Suite
3100, Denver, Colorado 80202 (records relating to its functions
as distributor, administrator and bookkeeping and pricing agent
for each of Registrant's investment portfolios).
(3) State Street Bank and Trust Company, 225 Franklin Street, Boston,
MA 02110 (records relating to its functions as transfer agent for
each of the Registrant's investment portfolios).
(4) Drinker Biddle & Reath LLP, Philadelphia National Bank Building,
1345 Chestnut Street, Philadelphia, Pennsylvania 19107-3496
(Registrant's Declaration of Trust, Code of Regulations and
Minute Books).
(5) BNY Western Trust Company (a subsidiary of Bank of New York), 90
Washington Street, 22nd Floor, New York, NY 10286 (records
relating to its functions as custodian for each of the
Registrant's investment portfolios).
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a
prospectus is delivered, a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
C-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant has
duly caused this Post-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Denver, and State of Colorado, on the 16th day of July, 1998.
WESTCORE TRUST
Registrant
By: /s/ Kenneth V. Penland
-----------------------
Kenneth V. Penland
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment to Registrant's Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
- --------- ----- ----
*/s/ Jack D. Henderson
- -------------------------
Jack D. Henderson Chairman of the
Board of Trustees July 16, 1998
*/s/ McNeil S. Fiske
- -------------------------
McNeil S. Fiske Trustee July 16, 1998
*/s/ James B. O'Boyle
- -------------------------
James B. O'Boyle Trustee July 16, 1998
*/s/ Robert L. Stamp
- -------------------------
Robert L. Stamp Trustee July 16, 1998
*/s/ Lyman Seely
- -------------------------
Lyman Seely Trustee July 16, 1998
*/s/ Kenneth V. Penland President (Principal
- ------------------------- Executive Officer) July 16, 1998
Kenneth V. Penland
*/s/ Jasper Frontz
- -------------------------
Jasper Frontz Treasurer (Principal July 16, 1998
Financial Officer and
Chief Accounting Officer)
*By: /s/ Kenneth V. Penland
----------------------
Kenneth V. Penland
Attorney-in-fact
C-16
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(5)(b) Form of Addendum to the Advisory Agreement.
(6)(a)(i) Form of Amendment to the Distribution Agreement.
(7)(a) Westcore Trust Deferred Compensation Plan.
(8)(c) Form of Amendment to Custody Agreement.
(9)(a)(i) Form of Amendment to Administration Agreement.
(9)(b)(iii) Revised Fee Schedule to Transfer Agency Agreement dated as
of December 26, 1995.
(9)(b)(iv) Form of Amendment to Transfer Agency Agreement.
(9)(c) Bookkeeping and Pricing Agreement dated as of June 1, 1998.
(9)(c)(i) Form of Amendment to Bookkeeping and Pricing Agreement.
(9)(e)(i)(a) Order Placement Procedures Amendment to the Operating
Agreement with Schwab dated as of December 1,1997.
(9)(e)(i)(b) Schwab Side Letter Agreement to Order Placement Procedures
Amendment dated as of December 22, 1997.
(9)(e)(iii)(c) Amendment to Services Agreement with Schwab dated as of July
1, 1998.
(9)(j) FASCorp Agency Trading Agreement dated as of July 15, 1997.
(9)(k) Wachovia Agency Trading Agreement dated as of January 2,
1998.
(9)(l) PaineWebber Securities Lending Agency Client Agreement dated
as of March 27, 1997.
(9)(m) PaineWebber Service Agreement dated as of November 10, 1997.
(9)(n) Omnibus Account Services Agreement with NISC dated as of
February 26, 1998.
(9)(o) Smith Barney Agent Agreement dated as of October 6, 1997.
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(9)(p) Form of Telephone and Service Agreement with ALPS
Mutual Fund Services, Inc.
(11)(a) Consent of Drinker Biddle & Reath LLP.
(13)(a) Form of Purchase Agreement.
(14)(a) Prototype Westcore IRA Application, Custodial Account
Statement and Disclosure Statement.
(19) Secretary's Certificate.
(19) Powers of Attorney.
<PAGE>
ADDENDUM NO. 1 TO AMENDED AND
RESTATED INVESTMENT ADVISORY AGREEMENT
This Addendum No. 1, dated as of the ____ day of __________, 1998, is
entered into between WESTCORE TRUST (the "Trust"), a Massachusetts business
trust and DENVER INVESTMENT ADVISORS LLC, a Colorado limited liability company,
located in Denver, Colorado (the "Adviser").
WHEREAS, the Trust and the Adviser have entered into an Advisory
Agreement dated as of October 1, 1995 (the "Advisory Agreement"), pursuant to
which the Trust appointed the Adviser to act as investment adviser to the Trust
for its Cash Reserve Fund, Colorado Tax-Exempt Fund, Equity Income Fund,
Intermediate-Term Bond Fund, Small-Cap Opportunity Fund, MIDCO Growth Fund,
Long-Term Bond Fund and Blue Chip Fund (the "Funds").
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Trust establishes one or more additional investment portfolios with
respect to which it desires to retain the Adviser to act as the investment
adviser under the Advisory Agreement, the Company shall so notify the Adviser in
writing, and if the Investment Adviser is willing to render such services it
shall notify the Trust in writing.
WHEREAS, the Trust has notified the Adviser that it has established
one new portfolio, namely the Mid-Cap Value Fund and that it desires to retain
the Adviser to act as the investment adviser therefor, and the Adviser has
notified the Trust that it is willing to serve as investment adviser for the
Mid-Cap Value Fund;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as
investment adviser to the Trust for the Mid-Cap Value Fund for the period and on
the terms set forth in the Advisory Agreement. The Adviser hereby accepts such
appointment and agrees to render the services set forth in the Advisory
Agreement for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses assumed
pursuant to the Advisory Agreement with respect to the Mid-Cap Value Fund, the
Trust will pay the Adviser and the Adviser will accept as full compensation
therefor fees, computed daily and paid monthly, based on the net assets of the
Mid-Cap Value Fund considered separately on a per-Fund basis, at the
<PAGE>
annual rate of .75% of the net assets of the Mid-Cap Value Fund.
3. CAPITALIZED TERMS. From and after the date hereof, the term
"Fund" as used in the Advisory Agreement shall be deemed to include the Mid-Cap
Value Fund. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Advisory Agreement.
4. MISCELLANEOUS. Except to the extent supplemented hereby, the
Advisory Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date and year first above written.
WESTCORE TRUST
By:
-----------------------------
Title:
--------------------------
DENVER INVESTMENT ADVISORS LLC
By:
-----------------------------
Title:
--------------------------
-2-
<PAGE>
AMENDMENT NO. 1
TO THE DISTRIBUTION AGREEMENT
Amendment dated as of ___________________, 1998 to the Amended and
Restated Distribution Agreement (the "Agreement") dated as of October 1, 1997
between Westcore Trust, a Massachusetts business trust (the "Trust"), and ALPS
Mutual Funds Services, Inc. ("ALPS").
BACKGROUND
1. ALPS serves as the distributor for certain of the Trust's
portfolios pursuant to the Agreement.
2. The Trust desires to employ ALPS as its distributor for the
Mid-Cap Value Fund (the "Fund"), on the terms and for the compensation set forth
in the Agreement and ALPS agrees to provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoint ALPS to act as
distributor for the Fund for the period and on the terms set forth in the
Agreement and ALPS accepts such appointment for said period and on said terms,
and agrees to provide the services set forth in the Agreement and in return for
the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By:
------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
------------------------------
<PAGE>
WESTCORE TRUST
DEFERRED COMPENSATION PLAN
[AS AMENDED AND RESTATED EFFECTIVE JUNE 22, 1998]
<PAGE>
WESTCORE TRUST
DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 22, 1998)
The Westcore Trust Deferred Compensation Plan (the "Plan"), a
nonqualified unfunded deferred compensation plan, was adopted by the Board of
Trustees (the "Board") on December 11, 1989, to allow members of the Board to
defer all or a portion of the compensation earned by the Trustee for his
services as Trustee. The Plan is hereby amended and restated effective June 22,
1998.
1. ELIGIBILITY. Each Trustee of the Board of Westcore Trust (the
"Trust") shall be eligible to participate in the Plan.
2. TERMS OF PARTICIPATION
(a) A Trustee may elect to participate in the Plan by filing a
Deferred Compensation Agreement (the "Agreement") with the Treasurer of the
Trust (the "Treasurer") in the form attached hereto and incorporated by
reference herein. A Trustee's deferrals will commence as of the date of the
Board's meeting that immediately follows the date the Agreement is filed with
the Treasurer or the Trustee can elect to begin deferrals as of the Board
meeting in which the Trustee is elected by filing a special election form of the
Agreement with the Treasurer before that Board meeting.
(b) Participation in the Plan will continue until the Trustee
furnishes WRITTEN NOTICE to the Treasurer that the Trustee terminates his
participation in the Plan or until such time as the Trust terminates the Plan
pursuant to Section 6 below. Termination by a Trustee shall be made by written
notice delivered or mailed to the Treasurer (or his delegate) no later than
December 31 of the calendar year preceding the calendar year in which such
termination is to take effect.
(c) A Trustee who has terminated his participation may
subsequently elect to participate in the Plan by filing a new Agreement in
accordance with subsection (a) above.
(d) A Trustee may alter the amount of deferral for any future
calendar year, and/or elect a different method by which he will receive amounts
deferred for future calendar years, if the Trustee and the Trust enter into a
new Agreement on or before December 31 of the calendar year preceding the
calendar year for which the new Agreement is to take effect. For each new
Agreement which changes the method of receipt of deferred amounts, a new record
account (the "Deferred Compensation Account" or "Account") will be established
for the Trustee.
<PAGE>
3. DEFERRED COMPENSATION ACCOUNT. While a Trustee participates in
the Plan pursuant to an Agreement, all deferred compensation payable by the
Trust for the Trustee's services shall be credited to the Trustee's Deferred
Compensation Account ("Account") under the applicable Agreement. A Trustee
shall allocate amounts in his Account(s) among the investment options available
under the Plan by submitting a written request to the Treasurer (or his
delegate) on such form as may be required by the Treasurer prior to the date
deferrals are scheduled to begin. The Board shall specify from time to time the
investment options available under the Plan. The Trustee may request that the
investment allocation of his Account, including past as well as future
deferrals, be changed by submitting a written request to the Treasurer (or his
delegate) on such form as may be required by the Treasurer, or by telephoning
the Treasurer (or his delegate). Such changes shall become effective as soon as
administratively feasible after the Treasurer (or his delegate) receives such
request.
The Trustee's Account(s) will be credited daily with any income,
gains, and losses that would have been realized if amounts equal to the deferred
amounts had been invested in accordance with the Trustee's allocation election
on the date such deferred amounts were credited to the Trustee's Account(s).
For this purpose, any amounts that would have been received, had amounts been
invested as described above, from a chosen investment option will be treated as
if reinvested in that option on the date such amounts would have been received.
4. DISTRIBUTION. As of January 31 of the year immediately following
the year in which the Trustee ceases to be a Trustee, the total amount credited
to the Trustee's Account under the applicable Agreement shall be distributed to
the Trustee (or upon his death, to his designated beneficiary) in accordance
with one of the alternatives set forth below:
(i) one single-sum payment; or
(ii) any number of annual installments (as calculated in the
following paragraph) for a period of two to 10 years. Installments shall be
paid annually as of January 31 until the balance in the Trustee's Account is
exhausted.
Selection of an alternative shall be made at the time the Trustee
executes the Agreement. Except as provided in the following paragraph, the
amount of each installment payment, other than the final payment, shall be equal
to 1/n multiplied by the balance in the Trustee's Account as of the previous
December 31, where "n" equals the number of payments yet to be made. The final
payment will equal the balance in the Trustee's Account as of the final January
31 payment date. For example, if payments are to be made in 10 annual
installments commencing on January 31, 2000, the first payment will be equal to
1/10th of the December 31, 1999 balance in the Account, and the following year's
payment would be equal to 1/9th of the December 31, 2000 balance.
-2-
<PAGE>
If the balance in the Trustee's Account as of the date of the
first scheduled payment is less than $2,000, the Trust shall instead pay such
amount in a single sum as of that date. Further, the Trustee may not select a
period of time which will cause an annual payment to be less than $1,000.
Notwithstanding the foregoing, in the event the Trustee ceases to be a Trustee
of the Trust and becomes a proprietor, officer, partner, or employee of, or
otherwise becomes affiliated with, any business or entity that is in competition
with the Trust, or becomes employed by any governmental agency having
jurisdiction over the affairs of the Trust, the Trust reserves the right at the
sole discretion of the Board to make an immediate single-sum payment to the
Trustee in an amount equal to the balance in the Trustee's Account at that time.
Notwithstanding the preceding two paragraphs, the Trust may at
any time make a single-sum payment to the Trustee (or surviving beneficiary)
equal to a part or all of the balance in the Trustee's Account upon a showing of
an unforeseeable (i.e., unanticipated) financial emergency caused by an event
beyond the control of the Trustee (or surviving beneficiary) which would result
in severe financial hardship to the Trustee (or surviving beneficiary) if such
payment were not made. The determination of whether such emergency exists shall
be made at the sole discretion of the Board (with the Trustee requesting the
payment not participating in the discussion or the decision). The amount of the
payment shall be limited to the amount necessary to meet the financial
emergency, and any remaining balance in the Trustee's Account shall thereafter
be paid at the time and in the manner otherwise set forth in this Section.
If there is no beneficiary designation in effect at the Trustee's
death or the designated beneficiary is dead at the Trustee's death, any amounts
in the Trustee's Account shall be paid in a single sum to the Trustee's estate.
If the designated beneficiary dies after beginning to receive installment
payments, any amounts payable from the Trustee's Account shall be paid in a
single sum to the beneficiary's estate at the beneficiary's death.
5. DESIGNATION OF BENEFICIARY. A Trustee may designate in writing
any person or legal entity as his beneficiary to receive any amounts payable
from his Account(s) upon his death. If the Trustee should die without
effectively designating a surviving beneficiary, his beneficiary shall be his
estate.
6. AMENDMENT AND TERMINATION OF THE PLAN. The Board reserves the
right to amend or terminate the Plan by a Board resolution. Any such amendment
or termination shall be effective at the end of the calendar year during which
notification is given to each participating Trustee. A written notice of any
such amendment or termination shall be mailed by first class mail, addressed to
the Trustee's last known address, or delivered by any other means, which is
acknowledged in writing by the Trustee, no later than the date on which the
amendment or termination is to take effect. The balance in the Trustee's
Account(s) shall remain subject to the provisions of the Plan and distribution
will not be accelerated because of the termination of the Plan.
-3-
<PAGE>
7. NON-ASSIGNABILITY. The right of the Trustee or any other person
to receive payments under this Plan or any Agreement hereunder shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Trustee or
any beneficiary.
8. MISCELLANEOUS.
(a) NO FUNDING. The Trust shall not be required to fund or
secure in any way its obligations hereunder. Nothing in the Plan or in any
Agreement hereunder and no action taken pursuant to the provisions of the Plan
or of any Agreement hereunder shall be construed to create a trust or a
fiduciary relationship of any kind. Payments under the Plan and any Agreement
hereunder shall be made when due from the general assets of the Trust. Neither
a Trustee nor his designated beneficiary shall acquire any interest in such
assets by virtue of the Plan or any Agreement hereunder. This Plan constitutes
a mere promise by the Trust to make payments in the future, and to the extent
that a Trustee or his designated beneficiary acquires a right to receive any
payment from the Trust under the Plan, such right shall be no greater than the
right of any unsecured general creditor of the Trust. The Trust intends for
this Plan to be unfunded for tax purposes and for the purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
(b) INTERPRETATION. The Board shall have full power and
authority to interpret, construe, and administer this Plan and any Agreement
hereunder and its interpretation and construction thereof, and actions
hereunder, including any valuation of the Trustee's Account(s), or the amount or
recipients of the payment to be made therefrom, shall be binding and conclusive
on all persons for all purposes. The Board shall not be liable to any person
for any action taken or omitted in connection with the interpretation and
administration of this Plan and any Agreement hereunder unless attributable to
its own willful misconduct or lack of good faith.
(c) WITHHOLDING. To the extent required by law, the Trust shall
withhold federal or state income or employment taxes from any payments under the
Plan or any Agreement hereunder and shall furnish the Trustee (or beneficiary)
and the applicable governmental agency or agencies with such reports,
statements, or information as may be required in connection with such payments.
(d) INCAPACITY OF PAYEE. If the Board shall find that any
person to whom any payment is payable under this Plan or any Agreement hereunder
is unable to care for his affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been made by a duly
appointed guardian, committee or other legal representative) may be paid to the
spouse, a parent, a brother or sister, or to any person deemed by the Board to
have incurred expense for the person who is otherwise entitled to payment, in
such manner and proportions as the Board may determine. Any such payment shall
serve to
-4-
<PAGE>
discharge the liability of the Trust under this Agreement to make payment to the
person who is otherwise entitled to payment.
(e) EXPENSES. All expenses incurred in administering this Plan
and any Agreement hereunder shall be paid by the Trust.
(f) NO ADDITIONAL RIGHTS. Nothing in this Plan or any Agreement
hereunder shall be construed as conferring any right on the part of the Trustee
to be or remain a Trustee of the Trust or to receive any particular amount of
Trustee's fees.
(g) BINDING NATURE. This Plan and any Agreement hereunder shall
be binding upon, and inure to the benefit of, the Trust, its successors and
assigns, and each Trustee and his heirs, executors, administrators, and legal
representatives.
(h) GOVERNING LAW. This Plan and any Agreement hereunder shall
be governed by and construed under the laws of the State of Colorado.
(i) EFFECTIVE DATE. This amended and restated Plan shall be
effective as of June 22, 1998.
BOARD OF TRUSTEES OF
WESTCORE TRUST
Date: June 22, 1998 By: /s/ Jack H. Henderson
---------------------
-5-
<PAGE>
WESTCORE TRUST
DEFERRED COMPENSATION AGREEMENT
This Agreement is entered into this ______ day of ______, ____,
between Westcore Trust (the "Trust") and ______________ (the "Trustee").
WHEREAS, the Trustee will be rendering valuable services to the Trust
as a member of the Board of Trustees (the "Board"), and the Trust is willing to
accommodate the Trustee's desire to be compensated for such services on a
deferred basis;
NOW, THEREFORE, the parties hereto agree as follows:
1. With respect to services performed by the Trustee for the Trust
on and after ____________ __, 199_, the Trustee shall defer _____
percent [INSERT WHOLE NUMBER FROM ONE TO 100] of the amounts
otherwise payable to the Trustee for serving as a Trustee. The
deferred compensation shall be credited to a book reserve
maintained by the Trust in the Trustee's name, together with
credited amounts in the nature of income, gains, and losses (the
"Account"). The Account maintained for the Trustee shall be paid
to the Trustee on a deferred basis in accordance with the terms
of this Agreement.
2. The Trust shall credit the Trustee's Account as of the day such
amount would be paid to the Trustee if this Agreement were not in
effect. Such Account shall be valued on a daily basis, and the
Trustee shall receive a written accounting of his Account balance
at the end of each calendar quarter.
The Trustee may request that all or a portion of the amount in
his Account be allocated among one or more of the investment
options offered by the Board under the Westcore Trust Deferred
Compensation Plan (the "Plan"). The initial allocation request
may be made at the time of enrollment. Once made, an investment
allocation request shall remain in effect for all future amounts
allocated to the Trustee's Account until changed by the Trustee.
The Trustee may change his investment allocation for past
deferrals and future deferrals by submitting a written request to
the Treasurer of the Trust (the "Treasurer") (or his delegate) on
such form as may be required by the Treasurer or by telephoning
the Treasurer (or his delegate). Such changes shall become
effective as soon as administratively feasible after the
Treasurer (or his delegate) receives such request. Although the
Trust intends to invest the amounts in the Trustee's Account
according to the Trustee's requests, the Trust reserves the right
to
-6-
<PAGE>
invest the amounts in the Trustee's Account without regard to
such requests. However, the investment return on the amounts
credited to the Trustee's Account shall be the same as the
investment return on the investment option(s) in which he elects
investment, regardless of whether the Trustee's elections are
actually implemented. In the absence of any investment election
by a Trustee, amounts credited to the Trustee's Account will be
treated as having been invested in the BlackRock Money Market
Fund for purposes of determining the investment return on the
amounts.
Title to and beneficial ownership of any assets, whether cash or
investments, which the Trust may use to pay benefits hereunder,
shall at all times remain in the Trust, and the Trustee and any
designated beneficiary shall not have any property interest
whatsoever in any specific assets of the Trust.
3. As of January 31 of the calendar year immediately following the
calendar year in which the Trustee ceases to be a Trustee, the
Trust (subject to the terms of the Plan) shall: [CHECK ONE]
/ / pay the Trustee (or his beneficiary) a single-sum amount
equal to the balance in the Trustee's Account on that date;
or
/ / commence making annual payments to the Trustee (or his
beneficiary) for a period of ___ [INSERT A WHOLE NUMBER FROM
TWO THROUGH 10] years.
If the second box is selected, subsequent installments shall be
paid as of January 31 of each succeeding calendar year in
approximately equal annual installments as adjusted and computed
by the Trust in accordance with the terms of the Plan, with the
final payment equaling the then remaining balance in the
Trustee's Account.
4. In the event the Trustee dies before payments have commenced or
been completed under Section 3, the Trust shall make payment in
accordance with Section 3 to the Trustee's designated
beneficiary, whose name, address, and Social Security number are:
-----------------------------------
-----------------------------------
-----------------------------------
-2-
<PAGE>
-----------------------------------
If there is no beneficiary designation in effect at the Trustee's
death or the designated beneficiary predeceases the Trustee, any
amounts in the Trustee's Account shall be paid in a single sum to
the Trustee's estate. If the designated beneficiary dies after
beginning to receive installment payments, any amounts payable
from the Trustee's Account shall be paid in a single sum to the
beneficiary's estate at the beneficiary's death.
5. This Agreement shall remain in effect with respect to the
Trustee's compensation for services performed as a Trustee of the
Trust in all future years unless terminated on a prospective
basis IN WRITING in accordance with the terms of the Plan. The
Trustee may subsequently elect to defer his compensation by
executing a new Deferred Compensation Agreement. If a new
Agreement is entered into which changes the manner in which
deferred amounts will be distributed, a new Trustee's Account
will be established for purposes of crediting deferrals, income,
gains, and losses under the new Agreement. Any new Agreement
shall relate solely to compensation for services performed after
the new Agreement becomes effective and shall not alter the terms
of this Agreement with respect to the deferred payment of
compensation for services performed during any calendar year in
which this Agreement was in effect. Notwithstanding the
foregoing, the Trustee may at any time amend the beneficiary
designation hereunder by written notice to the Board.
6. This Agreement constitutes a mere promise by the Trust to make
benefit payments in the future, and the right of any person to
receive such payments under this Agreement shall be no greater
than the right of any unsecured general creditor of the Trust.
The Trust and Trustee intend for this Agreement to be unfunded
for tax purposes and for the purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended.
7. Any written notice to the Trust referred to in this Agreement
shall be made by mailing or delivering such notice to the Trust
c/o Jasper R. Frontz, Denver Investment Advisors LLC, 1225 17th
Street, 26th Floor, Denver, Colorado 80202 to the attention of
the Treasurer with a copy to ALPS Mutual Funds Services, Inc.,
Attention: Chad S. Christensen, 370 17th Street, Suite 3100,
Denver, Colorado 80202. Any written notice to the Trustee
referred to in this Agreement shall be made by mailing such
notice to the Trustee at his last known address, or by any other
means which is acknowledged by the Trustee in writing.
-3-
<PAGE>
8. This Agreement is subject to all of the terms contained in the
Plan as attached hereto and incorporated by reference herein.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
WESTCORE TRUST
By:
------------------------------
Title:
---------------------------
, TRUSTEE
--------------------
---------------------------------
(Signature of Trustee)
-5-
<PAGE>
WESTCORE TRUST DEFERRED COMPENSATION PLAN
[AS AMENDED AND RESTATED EFFECTIVE JUNE 22, 1998]
TRUSTEE ACCOUNT ALLOCATION REQUEST
I hereby request to have my Account(s) under the Westcore Trust
Deferred Compensation Plan invested (or deemed to be invested) in the
following investment options, and in the percentages indicated, as soon as
administratively feasible. This request supersedes any prior requests I have
made with respect to such Plan, and applies to amounts deferred in the past
under the Plan as well as to future deferrals. I hereby agree to assume all
risks in connection with the investment performance of the amounts which are
invested (or deemed to be invested) in accordance with this election.
<TABLE>
<CAPTION>
Percentage
Invested Investment Option
-------- -----------------
<S> <C>
--------- Westcore MIDCO Growth Fund
--------- Westcore Blue Chip Fund
--------- Westcore Small-Cap Opportunity Fund
--------- Westcore MidCap Value Fund (WHEN AVAILABLE)
--------- Westcore Growth and Income Fund
--------- Westcore Intermediate-Term Bond Fund
--------- Westcore Long-Term Bond Fund
--------- Westcore Colorado Tax-Exempt Bond Fund
--------- BlackRock Money Market Fund
100%
---------
---------
</TABLE>
DATED: , 1998
------------ ---- --------------------------
Trustee
<PAGE>
WESTCORE TRUST
DEFERRED COMPENSATION AGREEMENT
(FOR USE BY INDIVIDUAL BEFORE ELECTION AS TRUSTEE)
(SPECIAL ELECTION FORM OF AGREEMENT)
This Agreement is entered into this ______ day of ______, ____,
between Westcore Trust (the "Trust") and ______________ (the "Trustee").
WHEREAS, the Trustee expects to be elected a member of the Board of
Trustees (the "Board") and, following such election, will be rendering valuable
services to the Trust as a member of such Board;
WHEREAS, the Trust is willing to accommodate the Trustee's desire to
be compensated for such services on a deferred basis;
NOW, THEREFORE, the parties hereto agree as follows:
1. With respect to services expected to be performed by the Trustee
for the Trust on and after ____________ __, ____, the Trustee
shall defer _____ percent [INSERT WHOLE NUMBER FROM ONE TO 100]
of the amounts otherwise payable to the Trustee for serving as a
Trustee. The deferred compensation shall be credited to a book
reserve maintained by the Trust in the Trustee's name, together
with credited amounts in the nature of income, gains, and losses
(the "Account"). The Account maintained for the Trustee shall be
paid to the Trustee on a deferred basis in accordance with the
terms of this Agreement.
2. The Trust shall credit the Trustee's Account as of the day such
amount would be paid to the Trustee if this Agreement were not in
effect. Such Account shall be valued on a daily basis, and the
Trustee shall receive a written accounting of his Account balance
at the end of each calendar quarter.
The Trustee may request that all or a portion of the amount in
his Account be allocated among one or more of the investment
options offered by the Board under the Westcore Trust Deferred
Compensation Plan (the "Plan"). The initial allocation request
may be made at the time of enrollment. Once made, an investment
allocation request shall remain in effect for all future amounts
allocated to the Trustee's Account until changed by the Trustee.
The Trustee may change his investment allocation for past
deferrals and future deferrals by submitting a written request to
the Treasurer of the Trust (the "Treasurer") (or his
<PAGE>
delegate) on such form as may be required by the Treasurer or by
telephoning the Treasurer (or his delegate). Such changes shall
become effective as soon as administratively feasible after the
Treasurer (or his delegate) receives such request. Although the
Trust intends to invest the amounts in the Trustee's Account
according to the Trustee's requests, the Trust reserves the right
to invest the amounts in the Trustee's Account without regard to
such requests. However, the investment return on the amounts
credited to the Trustee's Account shall be the same as the
investment return on the investment option(s) in which he elects
investment, regardless of whether the Trustee's elections are
actually implemented. In the absence of any investment election
by a Trustee, amounts credited to the Trustee's Account will be
treated as having been invested in the BlackRock Money Market
Fund for purposes of determining the investment return on the
amounts.
Title to and beneficial ownership of any assets, whether cash or
investments, which the Trust may use to pay benefits hereunder,
shall at all times remain in the Trust, and the Trustee and any
designated beneficiary shall not have any property interest
whatsoever in any specific assets of the Trust.
3. As of January 31 of the calendar year immediately following the
calendar year in which the Trustee ceases to be a Trustee, the
Trust (subject to the terms of the Plan) shall: [CHECK ONE]
/ / pay the Trustee (or his beneficiary) a single-sum amount
equal to the balance in the Trustee's Account on that date;
or
/ / commence making annual payments to the Trustee (or his
beneficiary) for a period of ___ [INSERT A WHOLE NUMBER FROM
TWO THROUGH 10] years.
If the second box is selected, subsequent installments shall
be paid as of January 31 of each succeeding calendar year in
approximately equal annual installments as adjusted and
computed by the Trust in accordance with the terms of the
Plan, with the final payment equaling the then remaining
balance in the Trustee's Account.
4. In the event the Trustee dies before payments have commenced or
been completed under Section 3, the Trust shall make payment in
accordance with Section 3 to the Trustee's designated
beneficiary, whose name, address, and Social Security number are:
-------------------------------
-2-
<PAGE>
-------------------------------
-------------------------------
-------------------------------
If there is no beneficiary designation in effect at the Trustee's
death or the designated beneficiary predeceases the Trustee, any
amounts in the Trustee's Account shall be paid in a single sum to
the Trustee's estate. If the designated beneficiary dies after
beginning to receive installment payments, any amounts payable
from the Trustee's Account shall be paid in a single sum to the
beneficiary's estate at the beneficiary's death.
5. This Agreement shall remain in effect with respect to the
Trustee's compensation for services performed as a Trustee of the
Trust in all future years unless terminated on a prospective
basis IN WRITING in accordance with the terms of the Plan. The
Trustee may subsequently elect to defer his compensation by
executing a new Deferred Compensation Agreement. If a new
Agreement is entered into which changes the manner in which
deferred amounts will be distributed, a new Trustee's Account
will be established for purposes of crediting deferrals, income,
gains, and losses under the new Agreement. Any new Agreement
shall relate solely to compensation for services performed after
the new Agreement becomes effective and shall not alter the terms
of this Agreement with respect to the deferred payment of
compensation for services performed during any calendar year in
which this Agreement was in effect. Notwithstanding the
foregoing, the Trustee may at any time amend the beneficiary
designation hereunder by written notice to the Board.
6. This Agreement constitutes a mere promise by the Trust to make
benefit payments in the future, and the right of any person to
receive such payments under this Agreement shall be no greater
than the right of any unsecured general creditor of the Trust.
The Trust and Trustee intend for this Agreement to be unfunded
for tax purposes and for the purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended.
-3-
<PAGE>
7. Any written notice to the Trust referred to in this Agreement
shall be made by mailing or delivering such notice to the Trust
c/o Jasper R. Frontz, Denver Investment Advisors LLC, 1225 17th
Street, 26th Floor, Denver, Colorado 80202 to the attention of
the Treasurer with a copy to ALPS Mutual Funds Services, Inc.,
Attention: Chad S. Christensen, 370 17th Street, Suite 3100,
Denver, Colorado 80202. Any written notice to the Trustee
referred to in this Agreement shall be made by mailing such
notice to the Trustee at his last known address, or by any other
means which is acknowledged by the Trustee in writing.
8. This Agreement is subject to all of the terms contained in the
Plan as attached hereto and incorporated by reference herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
WESTCORE TRUST
By:
----------------------------------
Title:
-------------------------------
, TRUSTEE
---------------------------
-------------------------------------
(Signature of Trustee)
-4-
<PAGE>
WESTCORE TRUST
Amendment No. 1 to
CUSTODY AGREEMENT
, 1998
-------------
BNY Western Trust Company
90 Washington Street
22nd Floor
New York, NY 10286
Dear Sirs:
This letter is to confirm that the undersigned, Westcore Trust (the
"Trust"), a Massachusetts business trust, appoints BNY Western Trust Company
("BNY") to act as custodian of the property belonging to its Mid-Cap Value
Fund on the terms and conditions set forth in the Custody Agreement
("Agreement") between the Trust and Wells Fargo Bank, N.A. as assumed by BNY
Western Trust Company, a subsidiary of Bank of New York, dated as of January
22, 1997, and for the compensation as agreed upon in writing from time to
time by the trust and BNY. Please sign below to accept this appointment and
to agree that the Agreement is hereby amended to provide that BNY shall act
as the Custodian for the Trust's Mid-Cap Value Fund in accordance with the
foregoing.
Very truly yours,
WESTCORE TRUST
By:
----------------------------
Name:
Title:
Accepted:
BNY Western Trust Company,
a subsidiary of Bank of New York
By:
--------------------------
Name:
Title:
<PAGE>
AMENDMENT NO. 1
TO THE ADMINISTRATION AGREEMENT
Amendment dated as of _______________, 1998 to the Administration
Agreement (the "Agreement") dated as of October 1, 1995 between Westcore Trust,
a Massachusetts business trust (the "Trust"), Denver Investment Advisors LLC
("DIA") and ALPS Mutual Funds Services, Inc. ("ALPS").
BACKGROUND
1. DIA and ALPS serve as the co-administrators for certain of the
Trust's portfolios pursuant to the Agreement.
2. The Trust desires to employ DIA and ALPS as its co-administrators
for the Mid-Cap Value Fund (the "Fund"), on the terms and for the compensation
set forth in the Agreement and DIA and ALPS agree to provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints DIA and ALPS to act as
co-administrators for the Fund for the period and on the terms set forth in the
Agreement and DIA and ALPS accept such appointment for said period and on said
terms, and agree to provide the services set forth in the Agreement and in
return for the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By:
-------------------------------
DENVER INVESTMENT ADVISORS LLC
By:
------------------------------
ALPS MUTUAL FUND SERVICES, INC.
By:
------------------------------
<PAGE>
Fee Information for Service as
Plan, Transfer, and Dividend Disbursing Agent
ALPS Mutual Fund Services as Administrator
For WESTCORE Funds
ANNUAL FUND BASE FEE
$140,000 for 7 fund complex
$ 18,000 for each additional cusip
Entire base fee to be applied proportionately according to
the number of accounts on record of each fund
Annual Account Services Charges $14.00
Closed Account Fee $ 1.50
Fees are billable on a monthly basis at the rate of 1/12 of the annual fee. A
charge is made for an account in the month that an account opens or closes.
ACTIVITY BASED FEES
New Account Setup $ 4.00
Telephone Calls $ 2.50
OUT-OF-POCKET EXPENSES
Out-of-Pocket Expenses include but are not limited to: Confirmation statements,
checks, certificates, postage, forms, telephone, microfilm, microfiche, year-end
forms and expenses incurred at the specific direction of the Fund.
IRA FEES
Annual Maintenance $10.00
WESTCORE FUNDS STATE STREET BANK & TRUST CO.
By: /s/Kenneth V. Penland By: /s/Michael Tobin
------------------------- -------------------------
Title: President Title: Vice President
----------------------- ----------------------
Date: December 26, 1995 Date: January 3, 1996
----------------------- ----------------------
<PAGE>
AMENDMENT NO. 3
TO AMENDED AND RESTATED TRANSFER AGENCY
AND SERVICE AGREEMENT
Amendment dated as of , 1998 to the Amended and Restated
Transfer Agency and Service Agreement dated as of January 4, 1993 (the
"Agreement") between Westcore Trust, a Massachusetts business trust (the
"Trust") and State Street Bank and Trust Company, a Massachusetts trust company
("State Street").
BACKGROUND
1. STATE STREET serves as the transfer agent for certain of the Trust's
portfolios pursuant to the Agreement.
2. The Trust desires to employ STATE STREET as its transfer agent for the
Mid-Cap Value Fund (the "Fund") on the terms and for the compensation set forth
in the Agreement and STATE STREET agrees to provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints STATE STREET to act as transfer
agent for the Fund for the period and on the terms set forth in the Agreement
and STATE STREET accepts such appointment for said period and on said terms, and
agrees to provide the services set forth in the Agreement and in return for the
compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall remain in
full force and effect as modified hereby.
In WITNESS WHEREOF, the parties have hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first dated below.
WESTCORE TRUST
By:
--------------------------------------
Date:
STATE STREET BANK AND TRUST COMPANY
By:
--------------------------------------
Date:
<PAGE>
- --------------------------------------------------------------------------------
BOOKKEEPING AND PRICING AGREEMENT
BETWEEN
WESTCORE TRUST
AND
ALPS MUTUAL FUNDS SERVICES, INC.
- --------------------------------------------------------------------------------
<PAGE>
BOOKKEEPING AND PRICING AGREEMENT
AGREEMENT made this 1st day of June, 1998, between Westcore Trust, a
business trust established under the laws of the Commonwealth of Massachusetts
(the "Fund") and ALPS Mutual Funds Services, Inc., a Colorado corporation having
its principal office at 370 17th Street, Suite 3100, Denver, Colorado 80202
(the "Agent").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940 presently consisting of the following
portfolios: Blue Chip Fund, Growth and Income Fund, MIDCO Growth Fund, Small
Cap Opportunity Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund and
Colorado Tax-Exempt Fund; each of such investment portfolios and any additional
investment portfolios that may be established by the Fund is referred to herein
individually as a "Portfolio" and collectively as the "Portfolios"; and
WHEREAS, ALPS Mutual Funds Services, Inc. provides certain fund accounting
services to investment companies; and
WHEREAS, the Fund desires to appoint the Agent as agent to perform certain
bookkeeping and pricing services for the Portfolios on behalf of the Fund, and
the Agent has indicated its willingness to so act, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. AGENT APPOINTED BOOKKEEPING AND PRICING AGENT. The Fund hereby
appoints the Agent as bookkeeping and pricing agent for the Portfolios and the
Agent agrees to provide the services contemplated herein upon the terms and
conditions hereinafter set forth.
2. DEFINITIONS. In this Agreement the terms below have the following
meanings:
(a) AUTHORIZED PERSON. Authorized Person means any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of
the Fund by appropriate resolution of the Board of Trustees of the
Fund. The Fund will at all times maintain on file with the Agent
certification, in such form as may be acceptable to the Agent, of (i)
the names and signatures of the Authorized Person(s) and (ii) the
names of the members of the Board of Trustees of the Fund, it being
understood that upon the occurrence of any change in the information
set forth in the most recent certification on file (including without
limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Fund will
provide a new or amended certification setting forth the change. The
Agent will be entitled to rely upon any Proper Instruction (defined
below) which has been signed by person(s) named in the most recent
certification.
(b) PROPER INSTRUCTIONS. Proper Instructions means any request,
instruction or certification signed by one or more Authorized Persons.
Oral instructions will be
2
<PAGE>
considered Proper Instructions if the Agent reasonably believes them
to have been given by an Authorized Person and they are promptly
confirmed in writing to the address for notice, e-mail or facsimile
set forth below. Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices as
agreed upon by the parties hereto.
3. DUTIES OF THE AGENT. The Agent agrees to provide or to arrange to
provide at its expense the following services for the Fund:
(a) Maintain separate accounts for each Portfolio, all as directed from
time to time by Proper Instructions;
(b) Timely calculate and transmit to NASDAQ each Portfolio's daily net
asset value and public offering price (such determinations to be made
in accordance with the provisions of the Fund's Amended and Restated
Declaration of Trust and the then-current prospectuses and statements
of additional information relating to the Portfolios, and any
applicable resolutions of the Board of Trustees of the Fund) and
promptly communicate such values and prices to the Fund and the Fund's
transfer agent;
(c) Maintain and keep current all books and records of the Fund as
required by Section 31 and the rules thereunder under the 1940 Act
("Section 31") in connection with the Agent's duties hereunder. The
Agent shall comply with all laws, rules and regulations applicable to
the performance of its obligations hereunder. Without limiting the
generality of the foregoing, the Agent will prepare and maintain the
following records upon receipt of information in proper form from
Authorized Persons of the Fund:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend records
(iv) Purchase and sales - portfolio securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
(vii) Broker ledger
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Securities and monies borrowed or loaned and collateral
therefore
(xii) Foreign currency journals
(xiii) Trial balances
(d) Provide the Fund and its investment adviser(s) with daily Portfolio
values, net asset values and other statistical data for each Portfolio
as requested from time to time.
3
<PAGE>
(e) Compute the net income, exempt interest income and capital gains of
each Portfolio for dividend purposes in accordance with relevant
prospectus policies and resolutions of the Board of Trustees of the
Fund.
(f) Provide the Fund and its investment adviser(s) with information
necessary to print the semi-annual and annual financial statements to
be furnished to shareholders of each Portfolio and all raw financial
data necessary for the timely preparation of tax returns, Form N-SAR,
prospectus updates, Rule 24f-2 filings and proxy statements.
(g) Provide facilities, information and personnel to accommodate annual
audits and any audits with the Trust's independent accountants or
examinations conducted by the Securities and Exchange Commission or
other governmental entities.
(h) Provide audited financial statements regarding the Agent on an annual
basis, as requested. Such audits shall be conducted by an independent
accounting firm mutually agreed upon by the Agent and the Fund.
(i) Furnish to the Fund at the end of every month, and at the close of
each quarter of the Fund's fiscal year, a list of the portfolio
securities and the aggregate amount of cash in the Portfolios.
(j) Assist in the preparation of certain reports, audits of accounts, and
other matters of like nature, as reasonably requested from time to
time by the Fund.
(k) Related to the securities lending program, ALPS will compare the prior
day market price of each security on loan to the current day
collateral. If this results in a position being under-collateralized,
ALPS will report such fact to the securities lending agent.
The Agent shall for all purposes be deemed to be an independent contractor
and shall, unless otherwise expressly authorized, have no authority to act for
or represent the Fund in any way or otherwise be deemed an agent of the Fund.
4. SUBCONTRACTORS. It is understood that the Agent may from time to time
at its expense delegate the performance of all or a portion of its obligations
under this Agreement to one or more persons (hereinafter "subcontractor(s)") as
the Agent may believe to be particularly fit to assist it in the performance of
this Agreement. The Agent shall provide oversight over any subcontractor(s) who
shall in turn provide services pursuant to an agreement with the Agent approved
by a resolution of the Board of Trustees of the Fund. Any agreement entered
into between the Agent and a subcontractor shall acknowledge that the agreement
is for the benefit of the Fund, that the subcontractor shall be directly liable
and responsible to the Fund for the performance of its obligations thereunder,
and that the Fund may therefore enforce its rights directly against the
subcontractor. Notwithstanding such delegation, the Agent shall continue to be
directly liable to the Fund for the performance of any subcontractor's
obligations under such Agreement.
4
<PAGE>
5. INSTRUCTIONS TO THE AGENT. The Agent shall promptly take all
appropriate steps necessary to carry out or comply with any Proper Instructions
received from the Fund.
6. AGENT COMPENSATION. In consideration for the services to be performed
by the Agent, the Agent shall be entitled to receive from the Fund such
compensation and reimbursement for all reasonable out-of-pocket expenses as may
be agreed upon from time to time between the Agent and the Fund in advance and
in writing. The Fund agrees to pay the Agent compensation as described in the
schedule attached as Exhibit A. It is agreed that fees set forth in Exhibit A
may be increased with not less than 60 days written notice upon written
agreement of the parties.
7. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If Agent is in doubt as to any action it should
or should not take, Agent shall request directions or advice,
including Proper Instructions, from the Fund.
(b) Advice of Counsel. If Agent shall be in doubt as to any question of
law pertaining to any action it should or should not take, Agent shall
request advice from the Fund's counsel at the Fund's expense or from
counsel of its own choosing at its own expense (being understood that
it may be necessary for Agent to consult its own counsel due to
conflict of interest issues which may be raised by Fund counsel.)
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Proper Instructions Agent receives from the Fund and the
advice Agent receives from counsel, Agent shall inform the Fund of the
conflict and seek resolution.
8. LIABILITY OF THE AGENT.
(a) The Agent may rely upon the written advice of counsel for the Fund and
the Fund's independent accountants, and upon oral or written
statements of brokers and other persons reasonably believed by the
Agent in good faith to be expert in the matters upon which they are
consulted and, for any actions reasonably taken in good faith reliance
upon such advice or statements and without negligence, the Agent
shall not be liable to anyone.
(b) Nothing herein contained shall be construed to protect the Agent
against any liability to the Fund or its security holders to which the
Agent would otherwise be subject by reason of willful misfeasance, bad
faith or negligence in the performance of its duties.
(c) Except as may otherwise be provided by applicable law, neither the
Agent nor its shareholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such
persons harmless from and against, any liability for and any damages,
expenses or losses incurred by reason of the
5
<PAGE>
inaccuracy of factual information furnished to the Agent or any
subcontractor(s) by an Authorized Person of the Fund.
(d) The Agent shall ensure that it or any subcontractors have and maintain
Errors and Omissions Insurance for the services rendered under this
Agreement of at least $1 million (provided the Board of Trustees of
the Fund may by resolution approve some lesser amount). The Agent
shall provide to the Fund annually upon request a certificate from the
appropriate errors and omissions insurance carrier(s) certifying that
such Errors and Omissions Insurance is in full force and effect.
9. REPORTS. Whenever, in the course of performing its duties under this
Agreement, the Agent determines, on the basis of information supplied to the
Agent by the Fund or its authorized agents, that a violation of applicable law
has occurred or that, to its knowledge, a possible violation of applicable law
may have occurred or, with the passage of time, would occur, the Agent shall
promptly notify the Fund and its counsel.
10. ACTIVITIES OF THE AGENT. The services of the Agent under this
Agreement are not to be deemed exclusive, and the Agent shall be free to render
similar services to others so long as its services hereunder are not impaired
thereby.
11. ACCOUNTS AND RECORDS. The accounts and records maintained by the
Agent shall be the property of the Fund, and shall be surrendered to the Fund
promptly upon receipt of Proper Instructions from the Fund in the form in which
such accounts and records have been maintained or preserved. The Agent agrees
to maintain a back-up set of accounts and records of the Fund (which back-up set
shall be updated on at least a weekly basis) at a location other than that where
the original accounts and records are stored. The Agent shall assist the Fund,
the Fund's independent auditors, or, upon approval of the Fund, any regulatory
body, in any requested review of the Fund's accounts and records, and reports by
the Agent or its independent accountants concerning its accounting system and
internal auditing controls will be open to such entities for audit or inspection
upon reasonable request. There shall be no additional fee for these services.
The Agent shall preserve the accounts and records as they are required to be
maintained and preserved by Section 31.
12. CONFIDENTIALITY. The Agent agrees that it will, on behalf of itself
and its officers and employees, treat all transactions contemplated by this
Agreement, and all other information germane thereto, as confidential and not to
be disclosed to any person except as may be authorized by the Fund in Proper
Instructions.
13. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date hereof. Upon the effectiveness of this
Agreement, the existing Bookkeeping and Pricing Agreement between the Fund and
ALPS Mutual Funds Services, Inc. dated June 1, 1992 shall be deemed to be
terminated by the consent of the parties. Either party may terminate this
Agreement, without penalty, upon sixty (60) days prior written notice to the
other.
6
<PAGE>
Upon termination of this Agreement, the Agent shall deliver to the
Fund or as otherwise directed in Proper Instructions (at the expense of the
Fund, unless such termination is for breach of this Agreement by the Agent) all
records and other documents made or accumulated in the performance of its duties
or the duties of any subcontractor(s) for the Fund hereunder.
14. ASSIGNMENT. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without the
prior written consent of the Agent, or by the Agent without the prior written
consent of the Fund; provided further, that no agreement with any
subcontractor(s) contemplated hereunder shall be entered into, terminated,
amended, assigned or permitted to be assigned without the prior written consent
of the Fund.
15. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, and the 1940 Act and the rules thereunder. To the extent that
the laws of the Commonwealth of Massachusetts conflict with the 1940 Act or such
rules, the latter shall control.
16. NAMES. The names "Westcore Trust" and "Trustees of Westcore Trust"
refer respectively to the Trust created and the Trustees as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 as amended July 16, 1990
and as may be further amended from time to time which is hereby referred to and
a copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
17. AMENDMENTS TO THIS AGREEMENT. This Agreement may only be amended by
the parties in writing.
18. NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Agent:
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 3100
Denver, Colorado 80202
Attn: Chad S. Christensen
Fax: (303) 623-7850
e-mail: [email protected]
[email protected]
7
<PAGE>
To the Fund:
Westcore Trust
c/o W. Bruce McConnel, III, Esq.
Drinker, Biddle & Reath LLP
1345 Chestnut Street
Philadelphia, Pennsylvania 19107
19. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WESTCORE TRUST
By /s/Kenneth V. Penland
------------------------------------
ATTEST: /s/Jasper R. Frontz
-------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By /s/Thomas A. Carter
-------------------------------------
ATTEST: /s/Chad S. Christensen
- ---------------------------------
8
<PAGE>
EXHIBIT A
The fees payable to ALPS for the duration of this contract shall be:
1) The greater of:
a) $2,250.00 per fund per month
b) 2.9 basis points of daily net assets
2) $1.00 per day per loan for each security on loan.
NOTES
- - Fees are calculated and paid on a monthly basis.
- - Out-of-pocket expenses include:
- pricing
- corporation actions and reorganization data
- paper/binders/phone/fax charges of not more than $125.00 per month per
fund
- incremental assets associated with the record keeping for options,
futures and foreign securities
9
<PAGE>
AMENDMENT NO. 1
TO THE AMENDED AND RESTATED
BOOKKEEPING AND PRICING AGREEMENT
Amendment dates as of , 1998 to the Amended and
Restated Bookkeeping and Pricing Agreement (the "Agreement") dated as of June 1,
1998 between Westcore Trust, a Massachusetts business trust (the "Trust"), and
ALPS Mutual Funds Services, Inc. ("ALPS").
BACKGROUND
1. ALPS serves as the bookkeeping and pricing agent for certain of
the Trust's portfolios pursuant to the Agreement.
2. The Trust desires to employ ALPS as its bookkeeping and pricing
agent for the Mid-Cap Value Fund (the "Fund"), on the terms and for the
compensation set forth in the Agreement and ALPS agrees to provide such
services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints ALPS to act as
bookkeeping and pricing agent for the Fund for the period and on the terms set
forth in the Agreement and ALPS accepts such appointment for said period and on
said terms, and agrees to provide the services set forth in the Agreement and in
return for the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By:
------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
------------------------------
<PAGE>
ORDER PLACEMENT PROCEDURES AMENDMENT
TO THE OPERATING AGREEMENT
This Order Placement Procedures Amendment ("Amendment") is made as of
December 1, 1997, by and between Charles Schwab & Co., Inc. ("Schwab"), a
California corporation; and each registered investment company ("Fund Company")
executing this Amendment on its own behalf and on behalf of each of the series
or classes of shares ("Fund(s)"), which are parties to an Operating Agreement
with Schwab, made as of November 27, 1995, as amended thereafter ("Operating
Agreement"). This Amendment amends the Operating Agreement. In the event that
there are no Funds, then the term "Fund(s)" shall mean "Fund Company."
Capitalized terms used, but not defined, in this Amendment shall have the
respective meanings given to them in the Operating Agreement.
WHEREAS, Schwab and Fund Company, on its own behalf and on behalf of
the Funds, have entered into the Operating Agreement pursuant to which shares of
the Funds are made available for purchase and redemption by Schwab's brokerage
customers through Schwab's Mutual Fund Marketplace-Registered Trademark-
("MFMP"); and
WHEREAS, Schwab and Fund Company desire to amend the Operating
Agreement to authorize Schwab to receive customer orders for purchase and
redemption of Fund shares on each business day up until the time at which the
Fund prices its shares, and to transmit those orders to the Fund or its transfer
<PAGE>
agent or another Fund-designated agent (each of the three is individually
referred to herein as the "Order Accepter"), as appropriate, after the time at
which the Fund prices its shares, subject to the terms and conditions of this
Amendment.
NOW THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties hereto agree as follows:
1. AUTHORIZATION TO RECEIVE ORDERS. Fund Company hereby designates
and authorizes Schwab to receive purchase and redemption orders in proper form
("Orders") from Schwab customers on the Fund's behalf for purposes of Rule
22c-1, so that any such Schwab customer will receive the share price next
computed by the Fund after the time at which such customer places its order with
Schwab, as more specifically provided in this Amendment.
2. SUB-DESIGNEES OF SCHWAB. Fund Company further agrees that Schwab
may designate and authorize such intermediaries as it deems necessary,
appropriate or desirable, pursuant to such terms as are consistent with this
Amendment ("Sub-Designees"), to receive orders from their customers on the
Fund's behalf for purposes of Rule 22c-1, so that any such customer will receive
the share price next computed by the Fund after the time at which such customer
places its order with the intermediary, as more specifically provided in this
Amendment. Schwab shall be liable to Fund Company and the Funds for the
observance of the terms of this Amendment by the Sub-Designee.
3. RECEIPT AND TRANSMISSION OF ORDERS. Schwab agrees
-2-
<PAGE>
that, except as set forth in Section 4b below, (a) Orders received by Schwab or
a Sub-Designee prior to the close of the New York Stock Exchange (generally,
4:00 p.m. Eastern Time) ("Market Close") on any Business Day will be transmitted
by Schwab to the Order Accepter by 8:00 p.m. Eastern Time on the same Business
Day ("Day 1 Trades"); and (b) Orders received by Schwab or Sub-Designees after
Market Close on any Business Day will be transmitted by Schwab to the Order
Accepter by 8:00 p.m. Eastern Time on the next Business Day ("Day 2 Trades").
4. FUND'S PRICING OF ORDERS.
a. Fund Company agrees that, except as set forth in Section 4b
below, Day 1 Trades will be effected at the net asset value of each Fund's
shares ("Net Asset Value") calculated as of Market Close on Day 1, provided such
trades are received by the Order Accepter by 8:00 p.m. Eastern Time on Day 1;
and Day 2 Trades will be effected at the Net Asset Value calculated as of Market
Close on Day 2, provided such trades are received by the Order Accepter by 8:00
p.m. Eastern Time on Day 2. Fund Company agrees that, consistent with the
foregoing, Day 1 Trades will have been received by the Fund prior to Market
Close on Day 1, and Day 2 Trades will have been received by the Fund prior to
Market Close on Day 2, for all purposes, including, without limitation,
effecting distributions.
b. Notwithstanding Sections 3 and 4a above, Fund Company agrees
that, if Schwab is prevented from transmitting Day 1 Trades to the Order
Accepter by 8:00 p.m. Eastern Time on Day 1
-3-
<PAGE>
due to unforeseen circumstances, such as computer system failures, natural
catastrophes, or other emergencies or human error, then Schwab may transmit such
Day 1 Trades by 9:30 a.m. Eastern Time on Day 2, and such Day 1 Trades will be
effected at the Net Asset Value calculated as of Market Close on Day 1, provided
that Schwab notifies the Order Accepter of such contingency prior to 8:00 p.m.
Eastern Time on Day 1.
5. SETTLEMENT. In accordance with the Operating Agreement, Schwab
and Fund Company will settle Day 1 Trades on Day 2 and will settle Day 2 Trades
on Day 3.
6. REPRESENTATIONS AND WARRANTIES.
a. Fund Company represents and warrants that each Fund's board
of directors or board of trustees has authorized the Fund Company and each Fund
to enter into this Amendment, or will ratify the action of the Fund Company and
each Fund of entering into this Amendment within four months after the date of
this Amendment.
b. Fund Company represents and warrants that it will cause each
Fund's board of directors or board of trustees thereafter periodically to review
the terms of this Amendment.
c. Fund Company represents and warrants that the person signing
this Amendment on its behalf and on behalf of each Fund is an officer so
authorized to execute this Amendment.
d. Schwab represents and warrants that Schwab's internal control
structure over the processing and transmission of Orders for Fund transactions
is suitably designed to prevent
-4-
<PAGE>
or detect on a timely basis Orders received after Market Close from being
aggregated with Orders received before Market Close, and to minimize errors that
could result in late transmission of Orders to the Funds under Section 4b above.
e. Schwab represents and warrants that it will cause an
independent public accountant or other qualified independent party annually to
review Schwab's internal controls and prepare a written report to Schwab
concerning their adequacy for the obligations undertaken by Schwab under this
Amendment.
f. Schwab represents and warrants that it will also require each
Sub-Designee to retain an independent public accountant or other qualified
independent party annually to review Sub-Designee's internal controls and
prepare a written report to Schwab and the Sub-Designee concerning their
adequacy for the obligations undertaken by Sub-Designee as set forth in this
Amendment.
g. Schwab represents and warrants that, upon its receipt of its
internal control report and those of any Sub-Designee, described in Sections 6d
and 6e respectively, it will make them available to Fund Company or any Fund
upon request.
7. PROSPECTUS DISCLOSURE. Fund Company shall ensure that the
prospectus of each Fund adequately discloses that (i) the Fund has authorized
one or more brokers to accept on its behalf purchase and redemption orders; (ii)
that such brokers are authorized to designate other intermediaries to accept
purchase and redemption orders on the Fund's behalf; (iii) that the Fund
-5-
<PAGE>
will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order; and (iv) that customer orders will be priced at the Fund's Net Asset
Value next computed after they are accepted by an authorized broker or the
broker's authorized designee. This disclosure may be contained in the statement
of additional information of the Fund ("SAI") if the SAI is incorporated into
the prospectus. If adequate disclosure is not currently contained in the
prospectus (including any incorporated SAI), then it may be added at the next
regular printing of the prospectus, provided such printing occurs within a
reasonable time after the date of this Amendment.
8. EFFECTIVENESS. This Amendment shall become effective 10 days
after written notice by Schwab to Fund Company.
9. EFFECT OF AMENDMENT. This Amendment is intended to amend and
supplement the provisions of the Operating Agreement. In the event of a
conflict between the provisions of this Amendment and the provisions of the
Operating Agreement, the provisions of this Amendment shall control. All other
provisions of the Operating Agreement shall remain in full force and effect.
-6-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by a duly
authorized representative of the parties hereto.
CHARLES SCHWAB & CO., INC. WESTCORE TRUST, on its own behalf and on
behalf of each Fund
By: /s/ Fred Potts
----------------------------
Fred Potts
Vice President/Mutual Funds By: /s/ Kenneth V. Penland
--------------------------
Operations Administration
Name: Kenneth V. Penland
Date: 1/6/98 Title: President
Date: 12/19/97
-7-
<PAGE>
As of December 22, 1997
WESTCORE TRUST
c/o ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
Boston Financial Data Services Inc.
225 Franklin Street
Boston, MA 02110
Denver Investment Advisors LLC
1225 17th Street - 26th Floor
Denver, CO 80202
Re: The Order Placement Procedures Amendment ("Amendment") dated as of
December 1, 1997 between Charles Schwab & Co., Inc., ("SCHWAB") AND
Westcore Trust (the "Trust")
----------------------------------------------------------------------
Dear Sirs:
The Amendment referred to above requires the Trust to adhere to
certain requirements and procedures which will be accomplished through you, as
the Trust's service providers. By your signatures below, please signify that
you will adhere to the requirements and procedures set forth in the Amendment,
including, without limitation, as indicated on the attachment hereto.
Also, by Denver Investment Advisors LLC's ("DIA") signature below, DIA
signifies that DIA will request internal control reports from Schwab and its
sub-designees as available as described in Section 6(g) of the Amendment and
will provide them promptly to the Board for review.
The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby referred
to and copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of
<PAGE>
the Trust must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
Yours truly,
Westcore Trust
By: /s/ Jack D. Henderson
------------------------
Jack D. Henderson
Title: Vice President
Agreed and Accepted:
Denver Investment Advisors LLC
By: /s/ Kenneth V. Penland
--------------------------
Name: Kenneth V. Penland
Title: President
Boston Financial Data Services, Inc.,
as Transfer Agent
By:/s/ Mary Ann McHugh
-----------------------------
Name: Mary Ann McHugh
Title: Group Manager
-2-
<PAGE>
Certain Duties under Schwab Order Placement Procedures Amendment
For which Service Providers Acknowledge Responsibility
------------------------------------------------------------------------
Boston Financial Data Services Inc. ("BFDS") will comply with the
procedures as to receipt and transmission of orders, pricing of orders and
settlement of orders set forth in Sections 3,4 and 5 of the Amendment.
<PAGE>
AMENDMENT TO SERVICES AGREEMENT
This Amendment is made as of July 1, 1998, by and between Charles Schwab &
Co., Inc. ("Schwab"), a California corporation, Denver Investment Advisors LLC
("Fund Affiliate"), and each registered investment company ("Fund Company")
executing this Amendment on its own behalf and on behalf of each of its series
or classes of shares ("Fund(s)") which are parties to a Services Agreement with
Schwab, made as of March 26, 1996, as amended thereafter ("Services Agreement").
This Amendment amends the Services Agreement. Fund Affiliate and Fund Company
are collectively referred to herein as "Fund Parties." All capitalized terms
used in this Amendment and not defined herein shall have the same meaning
ascribed to them in the Services Agreement.
WHEREAS, Fund Parties wish Schwab to continue to perform recordkeeping,
shareholder communications, and other services on behalf of the Funds as set
forth in the Services Agreement;
WHEREAS, Schwab is willing to continue to perform such services for the
Funds on the terms and conditions set forth in the Services Agreement as amended
herein;
WHEREAS, the parties wish to amend Exhibit B to the Services Agreement to
set forth a different Fee; and
WHEREAS, the parties wish to amend Schedule II to the Services Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Exhibit B to the Services Agreement shall be deleted in its entirety
and the Exhibit B attached hereto shall be inserted in lieu thereof.
2. Schedule II to the Services Agreement shall be deleted in its entirety
and the Schedule II attached hereto shall be inserted in lieu thereof.
<PAGE>
3. Except as specifically set forth herein, all other provisions of the
Services Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
CHARLES SCHWAB & CO., INC. WESTCORE TRUST, on its own behalf
and on behalf of each Fund
By: /s/Dennis P. Clark By: /s/Jack D. Henderson
------------------------------ -----------------------------
Dennis P. Clark Name: Jack D. Henderson
Vice President ----------------------------
Mutual Funds Title: Vice President
----------------------------
Date: 5-10-98 Date: 5/13/98
----------------------------- ----------------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/Kenneth V. Penland
-----------------------------
Name: Kenneth V. Penland
----------------------------
Title: Chairman
----------------------------
Date: 5/13/98
----------------------------
<PAGE>
EXHIBIT B
CALCULATION OF FEE
1. The following terms shall have the meanings defined below:
a. "DAILY VALUE" shall mean the net asset value of a Fund's shares
reported by such Fund to the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ").
b. "EXCLUDED SHARES" shall mean (i) shares held in a Schwab
brokerage account prior to the effective date of this Agreement as to the Fund,
and (ii) shares first held in a Schwab brokerage account after the termination
of this Agreement as to the Fund.
c. "ORIGINAL QUALIFYING SHARES" shall mean all shares of a Fund
which were held in Schwab brokerage accounts as of June 30, 1998, and which
continue to be held in Schwab brokerage accounts on the date the shares are
valued, but which are not Excluded Shares.
d. "SUBSEQUENT QUALIFYING SHARES" shall mean all shares of a Fund
which were held in Schwab brokerage accounts as of July 1, 1998, and which
continue to be held in Schwab brokerage accounts on the date the shares are
valued, but which are not Excluded Shares.
e. "ORIGINAL FEE RATE" shall mean the fee rate to be applied to
Original Qualifying Shares, as set forth below.
f. "SUBSEQUENT FEE RATE" shall mean 35 basis points per annum.
2. The Original Fee Rate is determined based on the aggregate Daily Value
of Original Qualifying Shares of all Funds listed on Schedule I, as amended from
time to time, as of the prior review date. The review dates are December 31 and
June 30. The Original Fee Rate is effective from the next business day
following the review date up to and including the next review date. The
Original Fee Rates are as follows:
<TABLE>
<CAPTION>
Aggregate Daily Value of Original
Qualifying Shares Original Fee Rate
- ------------------------------------ ------------------------------------
<S> <C>
Up to and including $500 million 35 basis points per annum
Over $500 million and up to and
Including $1.5 billion 30 basis points per annum
Over $1.5 billion 25 basis points per annum
</TABLE>
3. The rate scale for Original Qualifying Shares is not intended to
produce a "blended rate." Rather, once a threshold is reached, the rate
applicable to all Original Qualifying Shares will be applied to all Original
Qualifying Shares. Thus, if as of a review date, the
<PAGE>
aggregate Daily Value of Original Qualifying Shares of all Funds is $501
million, the Original Fee Rate will be 30 basis points (to be applied to the
aggregate Daily Value of Original Qualifying shares until the next review date).
4. The fee shall be calculated by adding the aggregate Daily Value of
Original Qualifying Shares multiplied by the Original Fee Rate, plus the Daily
Value of Subsequent Qualifying Shares multiplied by the Subsequent Fee Rate.
The fee shall be calculated daily and paid monthly in arrears.
5. No adjustments will be made to the net asset values to correct errors
in the net asset values reported to NASDAQ for any day unless such error is
corrected and the corrected net asset value per share is reported to Schwab
before 5 o'clock, p.m., San Francisco time, on the first business day after the
day to which the error relates.
6. At the request of Fund Parties, Schwab shall provide, on each business
day, a statement detailing the average Daily Value of (i) Original Qualifying
Shares, and (ii) Subsequent Qualifying Shares of each Fund and the amount of the
fee for each Fund. As soon as practicable after the end of the month, Schwab
shall also provide to Fund Parties an invoice for the amount of the fee due for
each Fund. In the calculation of such fee, Schwab's records shall govern unless
an error can be shown in the number of shares used in this calculation.
7. Fund Parties shall pay Schwab the fee within thirty (30) days after
Fund Parties' receipt of such statement. Such payment shall be by wire
transfer, unless the amount thereof is less than $250. Such wire transfers
shall be separate from wire transfers of redemption proceeds or distributions
under the Operating Agreement. Amounts less than $250 may, at Fund Parties'
discretion, be paid by check.
<PAGE>
SCHEDULE II
TO THE SERVICES AGREEMENT
<TABLE>
<CAPTION>
ORIGINAL QUALIFYING SHARES FEE RATE
-----------------------------------
<S> <C> <C> <C>
Fund Company:
Westcore Trust 0.00% 0.00% 0.00%
Fund Affiliate:
Denver Investment Advisors LLC 0.35% 0.30% 0.25%
---- ---- ----
Total 0.35% 0.30% 0.25%
<CAPTION>
SUBSEQUENT
QUALIFYING
SHARES FEE
RATE
----------
<S> <C>
Fund Company:
Westcore Trust 0.00%
Fund Affiliate:
Denver Investment Advisors LLC 0.35%
----
Total 0.35%
</TABLE>
<PAGE>
AGENCY TRADING AGREEMENT
This Agreement is made and entered into this 15th day of July, 1997 by and
between Financial Administrative Services Corporation ("FASCorp"), a
Colorado corporation having its principal office and place of business at
8515 East Orchard Road, Englewood, Colorado, 80111 and Westcore Trust, a
Massachusetts Business Trust having its principal office and place of
business at 370 17th Street, Suite 2700, Denver, Colorado 80202 ("Fund
Company") executing this Agreement, on its own behalf and on behalf of each
of the series or classes of shares, if any, listed on Schedule I, as
amended from time to time (such series or classes being referred to as the
"Fund(s)"), and ALPS Mutual Funds Services, Inc. ("ALPS") a Colorado
Corporation having its principal office and place of business at 370 17th
Street, Suite 2700 Denver, Colorado, 80202 and Boston Financial Data
Services, Inc. ("BFDS") a Massachusetts Corporation having its principal
office and place of business at Two Heritage Drive, Quincy, Massachusetts,
02171. Fund Company and ALPS and BFDS are collectively referred to herein
as "Fund Company and Fund Affiliates".
WHEREAS ALPS is the co-administrator for the Funds, the
<PAGE>
principal underwriter or distributor for the Funds and the bookkeeping and
pricing agent for the Funds;
WHEREAS BFDS performs transfer agency functions for the Funds;
WHEREAS FASCorp, a third party administrative company, has contractually
agreed to provide participant recordkeeping and other administrative
services to certain tax qualified employee benefit plans and tax-exempt
trusts in which plan assets are held (individually, the "Plan" and
collectively, the "Plans");
WHEREAS the Fund Company and Fund Affiliates wish to have FASCorp perform
certain recordkeeping, shareholder communication, and other services for
each Fund;
WHEREAS, the Fund Company desires to have FASCorp serve as the Fund
Company's limited agent to receive and transmit orders and instructions and
otherwise facilitate the purchase, exchange and redemption of shares of the
Funds (the "Shares") on behalf of the Plans through one or more accounts
(not to exceed one per Plan) in each Fund (individually, an "Account" and
collectively, the "Accounts"), subject to the terms and conditions of this
Agreement;
-2-
<PAGE>
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties hereto agree as follows.
1. APPOINTMENT OF FASCORP
The Fund Company hereby appoints FASCorp as agent for the limited purpose
of accepting orders and instructions with respect to Shares purchased,
exchanged or redeemed by the Plans. FASCorp hereto accepts its appointment
on the terms and conditions set forth herein.
2. PRICING INFORMATION
ALPS will furnish, or cause to be furnished, to FASCorp on each business
day that the New York Stock Exchange is open for business ("Business Day")
with: (i) net asset value information as of the close of trading on the
New York Stock Exchange or as at such other time at which a Fund's net
asset value is calculated as specified in such Fund's prospectus ("Close of
Trading"); and (ii) in the case of Funds the principal purpose of which is
the generation of interest income, the daily accrual or interest rate
factor (mil rate). ALPS shall use reasonable efforts to provide such
information to FASCorp by 7:00 p.m. Eastern Time ("ET") on the same
Business Day.
-3-
<PAGE>
3. ORDERS FOR PURCHASE, REDEMPTION, OR EXCHANGE
FASCorp, as agent of the Fund Company, shall (i) receive from, or on behalf
of, Participants or Plan Representatives as of the Close of Trading on each
Business Day (the "Trade Date") (based solely upon the receipt of orders
and instructions from such Participants or Plan Representatives prior to
the Close of Trading on any such Business Day) orders and instructions for
the purchase, redemption or exchange of Shares held by the Plans, and (ii)
upon receipt of any such orders and instructions, communicate to BFDS and
transmit to BFDS orders and instructions to purchase, exchange or redeem
Shares for specified Accounts. On each business day, FASCorp shall
aggregate and calculate the net purchase and redemption amounts for such
orders for each Account and communicate such net aggregate amounts to BFDS
prior to 9:00 a.m. ET on the Business Day next succeeding the Trade Date.
All communications herein shall be by facsimile or other form of written
electronic transmission. If provided in the applicable shareholder's
account application, dividends, capital gains, and other distributions will
be automatically reinvested on payable date at net asset value in
accordance with each Fund's then current prospectus.
-4-
<PAGE>
4. SETTLEMENT
(a) Purchases. FASCorp or its affiliates will transmit the purchase price of
each purchase order to BFDS in accordance with written instructions
provided by the Fund Company to FASCorp for the applicable Fund by wire
transfer prior to 1:00 p.m. ET, on the next Business Day following the
Trade Date. FASCorp agrees that if it fails to (i) wire the purchase price
to BFDS before such 1:00 p.m. ET deadline or (ii) provide BFDS with a
Federal Funds wire system reference number evidencing the wire transfer of
the purchase price to BFDS prior to such 1:00 p.m. ET deadline, it will
indemnify and hold harmless the Fund Company and BFDS from any liabilities,
costs and damages either may suffer as a result of such failure. The cost
associated with any delayed wire is the responsibility of FASCorp.
(b) Redemptions. BFDS will use its best efforts to transmit to FASCorp the
proceeds of all redemption orders placed by FASCorp by 1:00 p.m. ET on the
Business Day immediately following the Trade Date by wire transfer on that
Business Day. Should a Fund need to extend the settlement on a trade, Fund
Company will contact FASCorp to discuss the extension. For purposes of
determining the length of settlement, the Fund Company agrees to treat the
Accounts the same as it treats other direct shareholders of the Funds.
Each wire transfer of redemption proceeds shall
-5-
<PAGE>
indicate, on the Fed Funds wire system, the amount thereof attributable to
each Fund; provided, however, that if the number of entries would be too
great to be transmitted through the Federal Funds wire system, BFDS shall,
on the day the wire is sent, fax such entries to FASCorp or if possible,
send via direct or indirect systems access.
Redemption wires should be sent to:
ABA #
Credit to #
For Further Credit to Account Number
Fax supplements should be sent to:
5. PARTICIPANT RECORDKEEPING
Recordkeeping and other administrative services to a Plan and Plan
Participants shall be the responsibility of FASCorp and shall not be the
responsibility of BFDS. BFDS will recognize, as determined by FASCorp,
each Plan or all Plans, as the case may be, as a single shareholder and as
an unallocated account in the Funds, and, in any event, BFDS will not
maintain separate accounts for Plan Participants.
-6-
<PAGE>
6. FUND INFORMATION
FASCorp will perform a trade reconciliation to ensure that Plan and Account
assets are in balance. FASCorp shall notify BFDS of any differences
between the Plan and/or Participant balances maintained by FASCorp and the
Account(s) balances maintained by the Fund Company within two (2) Business
Days of receipt of the Fund Company's confirmation. FASCorp and BFDS shall
determine and take, to the extent applicable, appropriate corrective
actions with respect to any such differences. ALPS will notify FASCorp via
facsimile or telephonic communication facilities of the record date, the
ex-date along with reinvest price and payable date of all Fund
distributions (dividends and capital gains).
-7-
<PAGE>
7. PROSPECTUS, PROXIES AND RELATED MATERIALS
ALPS shall provide Fund prospectuses, proxy materials, periodic Fund
reports and other similar materials that are required by law to be sent to
shareholders, in such quantities and at such times as FASCorp shall
reasonably request. FASCorp hereby expressly acknowledges that FASCorp,
and not ALPS, shall be responsible for the delivery of any such
prospectuses, reports and materials to Plan Participants or Plan
Representatives, as the case may be. FASCorp shall promptly deliver any
such prospectuses, reports and materials to Plan Participants or Plan
Representatives, as the case may be after delivery thereof by ALPS.
FASCorp will tabulate votes of Plan Shares remitted by the Plan
Participants or the Plan Representative, as the case may be. FASCorp will
then forward these voting instructions to the Fund Company as directed by
the Plan. FASCorp, in its capacity as agent hereunder (and its agents),
shall not in any way recommend action in connection with, or interfere with
the solicitation of, such proxy votes.
8. MAINTENANCE OF RECORDS; PLAN INFORMATION; ACCESS
Each party shall maintain and preserve all records, as required by law, in
connection with providing services hereunder and in making Shares available
to the Plans.
-8-
<PAGE>
Except as otherwise provided hereunder, FASCorp shall provide copies of all
records relating to the Plans, Participants and Funds as may reasonably be
requested by the Fund Company to enable the Fund Company, the Funds or
their representatives to comply with any request of the Fund Company's
internal or external auditors, any governmental agency or similar entity,
to otherwise enable it to comply with all applicable state or Federal laws
or to enable the Fund Company to fulfill its obligations and perform its
duties hereunder and under applicable law, regulation and administrative
rule or procedure.
To the extent required under the 1940 Act, and the rules thereunder,
FASCorp agrees that records maintained by it hereunder are the property of
the Funds and will be preserved, maintained and made available in
accordance with the 1940 Act.
Upon reasonable notice by the Fund Company to FASCorp, FASCorp shall make
available during normal business hours such of FASCorp's facilities and
premises employed in connection with the performance of FASCorp's duties
and responsibilities under this Agreement for reasonable visitation,
inspection and auditing by the Fund Company or a Fund, or any person
retained by the Fund Company or a Fund for such purposes as may be
necessary or desirable to
-9-
<PAGE>
evaluate the quality of the duties and responsibilities performed by
FASCorp pursuant hereto. Any costs associated with such visitation,
inspection or audit will be borne by the Fund Company.
This Section 8 shall survive termination of this Agreement.
9. COMPLIANCE WITH LAWS
At all times the Fund Company and Fund Affiliates and FASCorp shall comply
with all laws, rules and regulations, to the extent applicable, by virtue
of entering into this Agreement or otherwise.
10. REPRESENTATIONS WITH RESPECT TO THE FUNDS
FASCorp shall not make, nor shall it allow its affiliates to make
representations concerning a Fund or Shares, except those contained in (i)
the then current prospectus of a Fund, (11) current sales literature
created by or on behalf of the Funds, or (iii) current sales literature
created by FASCorp which has been submitted to, and approved in writing, by
the Funds or their agents prior to the use or distribution of such sales
literature by FASCorp, its affiliates or agents.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS
FASCorp represents, warrants, and covenants that:
-10-
<PAGE>
(a) it has full power and authority under applicable law, the governing
Plan documents and from the appropriate Plan Representative(s), and has
taken all action necessary, to enter into and perform its obligations and
duties under this Agreement, and that by doing so it will not breach or
other wise impair any other agreement or understanding with any other
person, corporation or other entity; this Agreement constitutes its legal,
valid and binding obligation and is enforceable against it in accordance
with its terms; no consent or authorization of, filing with or other act by
or in respect of any governmental authority, is required in connection with
the execution, delivery, performances, validity or enforceability of this
Agreement;
(b) it will timely disclose to Plan Representatives or Plan Participants,
as the case may be, the arrangement provided for in this Agreement;
(c) it is registered, shall register or is exempt from registration as a
transfer agent pursuant to Section 17A of the Securities and Exchange Act
of 1934, as amended (the "1934 Act") (it being understood by the parties
hereto that failure on the part of FASCorp to so register, if not exempt
from registration, will constitute a material breach of this Agreement 30
days after the effective date of this Agreement or such earlier date on
which such failure constitutes violation of applicable law or regulation);
if required under applicable regulations, FASCorp will amend its TA-1 to
-11-
<PAGE>
disclose its appointment hereunder as a limited purpose recordkeeping agent
to the Fund Company;
(d) all purchases, redemptions and exchanges orders and instructions
received by it on any Business Day and transmitted to the Fund Company for
processing pursuant to this Agreement will have been received and time
stamped prior to the Close of Trading on such Business Day;
(e) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agreement shall be effected in accordance with each Fund's then
current prospectus;
(f) it will comply with all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder;
(g) the receipt of any fees by FASCorp directly or indirectly relating to
the purchase, exchange or redemption of the Funds has been reviewed by
legal counsel to FASCorp and will not constitute a "prohibited transaction"
as such term is defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, and Section 4975 of the Internal Revenue
Code of 1986, as amended, for which an exemption is not available, and is
not otherwise prohibited by any other applicable law, governing instrument
or court order; and
(h) it will promptly notify the Fund Company in the event that it is
unable, for any reason, to perform any of its duties or obligations under
this Agreement or there is a
-12-
<PAGE>
material failure to comply, with the representation made herein above.
Each of the Fund Companies and Fund Affiliates represents, warrants, and
covenants as to itself only and not jointly that:
(a) it has full power and authority under applicable law, and has taken
all action necessary, to enter into and perform its duties and obligations
under this Agreement and that by doing so it will not breach or otherwise
impair any other agreement or understanding with any other person,
corporation or other entity;
(b) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agreement shall be effected in accordance with each Fund's then
current prospectus.
(c) it will comply with all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder; and
(d) it will promptly notify FASCorp in the event that it is unable, for
any reason, to perform any of its duties or obligations under this
Agreement or there is a material failure to comply with the representations
made herein above.
The Fund Company represents, warrants and covenants as to itself only that
the Funds are registered as investment companies under the 1940 Act and
Fund Shares are registered
-13-
<PAGE>
under the Securities Act of 1933, as amended.
12. INDEMNIFICATION
(a) FASCorp shall indemnify and hold harmless each of the Fund affiliates,
the Fund Company and their respective officers, directors, partners,
trustees, members, shareholders, employees and agents ("Indemnitees")
against any loss, cost, damage, expense, liability or claim including,
without limitations, reasonable legal fees and other out-of-pocket costs of
defending against any such loss, cost, damage, expense, liability or claim,
suffered by all or any of such Indemnitees to the extent arising out of, or
relating to, (i) any actual negligent act or omission or act of intentional
misconduct by FASCorp or its agents relating to this Agreement or the
services rendered hereunder (ii) a material breach of any of the
representations, warranties and covenants made hereunder, (iii) the failure
to timely and properly transmit orders and instructions to the Fund Company
(or its affiliates), (iv) cancellation or subsequent correction of any
orders and instructions transmitted to the Fund Company (or its
affiliates), or (v) discrepancies between Participant and Plan balances
maintained by FASCorp and the Account(s) balances maintained by the Fund
Company (or its affiliates) due to errors caused by FASCorp.
-14-
<PAGE>
(b) Each of Fund Company and each Fund Affiliate, as to itself only, shall
indemnify and hold harmless FASCorp, its affiliates, and their respective
officers, directors, partners, trustees, members, shareholders, employees
and agents ("Indemnitees") against any loss, cost, damage, expense,
liability or claim including, without limitations, reasonable legal fees
and other out-of-pocket costs of defending against any such loss, cost,
damage, expense, liability or claim, suffered by all or any of such
Indemnitees to the extent arising out of, or relating to, (i) its own or
its agents' actual negligent act or omission or act of intentional
misconduct relating to this Agreement or the services rendered hereunder,
or (ii) any material breach of any of its own representations, warranties
and covenants made hereunder, or (iii) discrepancies between Participant
and Plan balances maintained by FASCorp and the Account(s) balances
maintained by the Fund Company (or its affiliates) due to errors caused by
the Fund Company (or its affiliates).
-15-
<PAGE>
13. FEES AND EXPENSES
Each party shall bear all expenses incidental to the performance of its
duties and obligations under this Agreement. Each Fund shall pay the cost
of registration of its Shares with the Securities and Exchange Commission
and in any state where required. The cost of preparing and printing
prospectuses, proxy materials, periodic Fund reports and other similar
materials that are required law to be sent to shareholders generally shall
be paid by the applicable Fund, and the cost of distributing such items to
Plan Participants or Plan Representatives shall be borne by FASCorp, the
Plans or Plan Representatives, as the case may be. FASCorp shall not be
entitled to any fee from the Fund Company pursuant to this Agreement.
-16-
<PAGE>
14. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time by any party hereto upon
thirty (30) days prior written notice to the other party hereto or upon
such shorter notice as is required by law, order or regulatory or
self-regulatory authority with jurisdiction over the terminating party or
at such time as the parties hereto may agree to in writing.
Notwithstanding the foregoing, this Agreement may be terminated immediately
either (i) upon a material breach by any party hereto not cured within
thirty (30) days after notice from another party hereto, or (ii) with
respect to a Plan, upon the termination of services by FASCorp to any such
Plan. The provisions of Section 12 shall survive any termination of this
Agreement.
15. NOTICE
Each notice required by this Agreement shall be given in writing and
delivered personally or mailed by certified mail or courier service, or
sent through electronic or telephonic facilities, to the intended recipient
thereof at the following address or such other address as one party may
give written notice to the other party:
If to FASCorp, to:
If to the Fund Company, to: 370 17th Street, Suite 2700,
Denver, Colorado 80202-5627
-17-
<PAGE>
If to ALPS, to: Attn: Westcore Funds, 370 17th Street,
Suite 2700, Denver, Colorado 80202-5627
If to BFDS, to: Attn: Westcore Funds, Two Heritage Drive,
Quincy, Massachusetts, 02171
A notice given in accordance with this Section 15 shall be deemed given upon
actual receipt by the intended recipient thereof.
16. CONFIDENTIALITY
Except as otherwise provided under this Agreement, all notifications,
reports, books, records, data and other information supplied by one party
to the other in connection with this Agreement (collectively,
"Information") shall remain the property of the party supplying such
information and, except at otherwise provided hereunder, shall be kept
confidential by the other party; provided, however, that copies of any such
information may be retained by a party to the extent required by applicable
law, court order, or the reasonable internal policies of a party.
FASCorp and the Fund Company and Fund Affiliates acknowledge and understand
the competitive value and confidential nature of internal, non-public
financial and business information of the other parties hereto. The
parties hereto also understand that the information is to be considered as
confidential, proprietary and trade secrets of each other
-18-
<PAGE>
party and its affiliates. Each of FASCorp, the Fund Company and Fund
Affiliate agree to use its best efforts (the same being not less than that
employed to protect their own confidential and proprietary information) to
safeguard such information and to prevent the unauthorized, negligent or
inadvertent use or disclosure thereof. Except as otherwise provided
hereunder, neither FASCorp nor the Fund Company or any Fund Affiliate
shall, without the prior written approval of an officer of another affected
party, directly or indirectly, disclose information to any person or
business entity except for a limited number of employees of each party (or
their respective affiliates) on a need-to-know basis. Notwithstanding
anything in this Agreement to the contrary, the parties hereto (or their
respective affiliates) may disclose any such information: (a) as may be
legally required by a court or governmental agency or entity: (b) which is
or becomes available to the general public through no act of, failure to
act by, or fault of, the disclosing party (or its affiliates); (c) which is
subsequently disclosed to a party hereto (or its affiliates) on a
non-confidential basis by a third party not having a confidential
relationship with another party hereto (or its affiliates) which rightfully
acquired such information; or (d) as independently developed by a party
hereto (or its affiliates).
-19-
<PAGE>
17. COMPLETE AGREEMENT
This Agreement contains the full and complete understanding of the parties
with respect to the subject matter hereof and supersedes all prior
representations, promises, statements, arrangements, agreements, warranties
and understandings among the parties with respect to the subject matter
hereof, whether oral or written, express or implied.
18. MODIFICATION AND WAIVER
This Agreement may be modified or amended, and its terms may be waived,
only by a writing signed by each of the parties hereto; provided, however,
Exhibit A hereto may be amended in writing, without the need for signatures
of the parties hereto, by the fund Company's delivery of an amended Exhibit
A to FASCorp at least thirty (30) days in advance of the effective date of
any such amended Exhibit A, provided that this Agreement shall immediately
cease to apply with respect to any Fund at such time as shares of such Fund
are no longer offered to the public (except that this Agreement shall
continue to apply with respect to accounts in such Fund created, and to
purchases and redemptions of such Fund made prior to cessation of public
offering).
Any valid waiver of a provision set forth herein shall not constitute a
waiver of any other provision of this Agreement. In addition, any such
waiver shall constitute a
-20-
<PAGE>
present waiver of such provision only and shall not constitute a permanent,
future waiver of such provision.
19. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall
be an original but all of which together shall constitute one and the same
instrument.
20. ASSIGNMENT
This Agreement shall not be assigned by a party hereto without the prior
written consent of the other parties hereto.
21. HEADINGS
The headings of this Agreement are for reference only and shall not
otherwise affect the interpretation or construction hereof.
-21-
<PAGE>
22. NON-EXCLUSIVITY
Each of the parties hereto acknowledges and agrees that this Agreement and
the arrangement described herein are intended to be non-exclusive and that
each of the parties is free to enter into similar agreements and
arrangements with other entities. FASCorp further acknowledges that
nothing contained herein shall prohibit the Fund Company or any affiliate
of either from providing administrative, sub-accounting, trustee,
recordkeeping or similar or related services to any employee benefit plan
(including a Plan) or from soliciting any such plan or sponsor thereof to
enter into any arrangement with the Fund Company or any affiliate of either
for such service.
23. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts, without giving effect to the
principles of conflicts of law thereof.
-22-
<PAGE>
24. MASSACHUSETTS BUSINESS TRUST
The Names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 which is hereby
referred to and a copy of which is on file at the office of State Secretary
of the Commonwealth of Massachusetts and the principal office of the
Company. The obligations of "Westcore Trust" entered into in the name or
on behalf thereof by any of the Trustees, shareholders, or representatives
of the Trust personally, but bind only the Trust Property, and all persons
dealing with any class of shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against
the Trust.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly
authorized officers as of the date first written above.
By: Westcore Trust
Name: /s/ Jasper Frontz
------------------------
Title: Treasurer
------------------------
By: ALPS Mutual Funds Services, Inc.
-23-
<PAGE>
Name: /s/ James V. Hyatt
------------------------
Title: General Counsel
------------------------
By: Boston Financial Data Services, Inc.
Name: /s/ Mary Ann McHugh
-----------------------------
Title: Operations Group Manager
-----------------------------
By: FASCorp
Name: /s/ Miles Edwards
------------------------
Title: Assistant Vice President
------------------------
-24-
<PAGE>
AGENCY TRADING AGREEMENT
This Agreement is made as of January 2, 1998, between Wachovia Operational
Services Corporation ("Wachovia"), each registered investment company ("Fund
Company") executing this Agreement, on its own behalf and on behalf of each of
the series or classes of shares, if any, listed on Schedule I, as amended from
time to time (such series or classes being referred to as the "Fund(s)"), and
Fund Affiliate (defined below) that has executed this Agreement. Fund Company
and Fund Affiliate are collectively referred to herein as "Fund Parties". In
the event that there are no series or classes of shares listed on Schedule I,
the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or administrator
for the Funds, (ii) the principal underwriter or distributor for the Funds,
(iii) a transfer agent for the Funds or (iv) a bookkeeping and pricing agent for
the Funds.
WHEREAS Fund Parties wish to have Wachovia perform certain recordkeeping,
shareholder communication, and other services for each Fund.
<PAGE>
Recital
WHEREAS, Wachovia acts as trustee or custodian of certain tax-qualified employee
benefit plans and tax-exempt trusts in which plan assets are held (individually,
the "Plan", and collectively, the "Plans"), and invests and reinvests Plan
assets as directed by one or more investment advisors, a Plan sponsor or an
administrative committee, as the case may be, of each Plan (a "Plan
Representative"), or upon the direction of Plan participants ("Participants");
WHEREAS, Wachovia provides certain recordkeeping and other services for the
Plans, including processing of orders and instructions for the investment and
reinvestment of Plan assets in each Plan's investment options;
WHEREAS, Wachovia and the Fund Company desire to facilitate the purchase,
exchange and redemptions of shares of the Funds (the "Shares") on behalf of the
Plans through one or more accounts (not to exceed one per Plan) in each Fund
(individually, an "Account" and collectively, the "Accounts"), subject to the
terms and conditions of this Agreement; and
WHEREAS, the Fund Company and Wachovia desire Wachovia to serve as the Fund
Company's agent to receive and transmit orders and instructions regarding the
purchase, exchange and redemption of Shares, subject to the terms and conditions
of this Agency
-2-
<PAGE>
Trading Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties hereto agree as follows.
1. APPOINTMENT OF WACHOVIA
The Fund Company hereby appoints Wachovia as agent for the limited purpose
of accepting orders and instructions with respect to Shares purchased,
exchanged or redeemed by the Plans. Wachovia hereby accepts its
appointment on the terms and conditions set forth herein.
-3-
<PAGE>
2. PRICING INFORMATION
The Fund Company will furnish, or caused to be furnished, to Wachovia on
each business day that the New York Stock Exchange is open for business
("Business Day") with: (i) net asset value information as of the close of
trading on the New York Stock Exchange or as at such other time at which a
Fund's net asset value is calculated as specified in such Fund's prospectus
("Close of Trading"); and (ii) in the case of Funds the principal purpose
of which is the generation of interest income, the daily accrual or
interest rate factor (mil rate). The Fund Company shall use best efforts
to provide such information to Wachovia by 7:00 p.m. Eastern Time on the
same Business Day via 1-800-392-2673 and to provide a fax to Wachovia by
7:00 p.m. ET on the same Business Day.
-4-
<PAGE>
3. ORDERS FOR PURCHASE, REDEMPTION, OR EXCHANGE
Wachovia, as agent of the Fund Company, shall (i) receive from, or on
behalf of, Participants or Plan Representatives for acceptance as of the
Close of Trading on each Business Day (the "Trade Date") (based solely upon
the receipt of orders and instructions from such Participants or Plan
Representatives prior to the Close of Trading on any such Business Day)
orders and instructions for the purchase, redemption on exchange of Shares
held by the Plans, and (ii) upon acceptance of any such orders and
instructions, communicate such acceptance to the Fund Company and transmit
to the Fund Company orders and instructions to purchase, exchange or redeem
Shares for specified Accounts. On each business day, Wachovia shall
aggregate and calculate the net purchase and redemption amounts for such
orders for each Account and communicate such net aggregate amounts to the
Fund Company prior to 9:00 a.m. ET on the Business Day next succeeding the
Trade Date. All communications herein shall be by facsimile or other form
of written electronic transmission. If provided in the applicable
shareholder's account application, dividends, capital gains, and other
distributions will be automatically reinvested on payable date at net asset
value in accordance with each Fund's then current prospectus.
-5-
<PAGE>
4. SETTLEMENT
(a) Purchases. Wachovia will use its best efforts to transmit the
purchase price of each purchase order to the Fund Company in accordance
with written instructions provided by the Fund Company to Wachovia for the
applicable Fund by wire transfer prior to 1:00 p.m. ET, on the next
Business Day following the Trade Date. Wachovia agrees that if it fails to
(i) wire the purchase price to the Fund Company before such 1:00 p.m. ET
deadline or (ii) provide the Fund Company with a Federal Funds wire system
reference number evidencing the wire transfer of the purchase price to the
Fund Company prior to such 1:00 p.m. ET deadline. The cost associated with
any delayed wire is the responsibility of Wachovia (b) Redemptions. The
Fund Company will use its best efforts to transmit to Wachovia the proceeds
of all redemption orders placed by Wachovia by 1:00 p.m. ET on the Business
Day immediately following the Trade Date by wire transfer on that Business
Day. Should a Fund need to extend the settlement on a trade, the Fund
Company will contact Wachovia to discuss the extension. For purposes of
determining the length of settlement, the Fund Company agrees to treat the
Accounts the same as it treats other direct shareholders of the Funds.
Each wire transfer of redemption proceeds shall indicate, on the Fed Funds
wire system, the amount thereof attributable to each Fund; provided,
however, that if the number of entries would be too great to be transmitted
through the Federal Funds wire
-6-
<PAGE>
system, the Fund Company shall, on the day the wire is sent, fax such
entries to Wachovia or if possible, send via direct or indirect systems
access. The cost associated with any delayed wire is the responsibility of
the Fund Affiliate sending the wire.
REDEMPTION WIRES SHOULD BE SENT TO:
Wachovia Bank, N.A.
301 N. Main Street
Winston-Salem, NC 27150
Institutional Trust Checking Account/Day I Wire
ABA #053100494
Credit to Account #8735-105698
Contact: Bill McKinnis (910) 770-0506
FAX SUPPLEMENTS SHOULD BE SENT TO: 910-770-4677
Attention: Richard Gough or Chris Grew
-7-
<PAGE>
5. PARTICIPANT RECORDKEEPING
Recordkeeping and other administrative services to a Plan and Plan
Participants shall be the responsibility of Wachovia and shall not be the
responsibility of the Fund Company. The Fund Company will recognize, as
determined by Wachovia, each Plan or all Plans, as the case may be, as a
single shareholder and as an unallocated account in the Funds, and, in any
event, the Fund Company will not maintain separate accounts for Plan
Participants.
6. FUND INFORMATION
The Fund Company will provide to Wachovia via U.S. Mail a confirmation
statement reflecting any purchase, exchange and redemption activity the
next Business Day after the transaction trade date. Any such report will
reflect the number of Shares purchased, exchange or redeemed, the price per
Share and the dollar amounts.
Wachovia will perform a trade reconciliation to ensure that Plan and
Account assets are in balance. Wachovia shall notify the Fund Company of
any differences between the Plan and/or Participant balances maintained by
Wachovia and the Account(s) balances maintained by the Fund Company within
two (2) Business Days of receipt of the Fund Company's report. Wachovia
and the Fund Company shall determine and take, to the extent applicable,
appropriate corrective
-8-
<PAGE>
actions with respect to any such differences. Upon the reasonable request
of Wachovia, the Fund Company will notify Wachovia in writing by electronic
or telephonic communication facilities of (i) the ex-date of all Fund
distributions (dividends and capital gains) and (ii) the reinvestment of
Shares as of payable date of any such distribution.
7. PROSPECTUS, PROXIES AND RELATED MATERIALS
The Fund Company shall provide Fund prospectuses, proxy materials, periodic
Fund reports and other similar materials that are required by law to be
sent to shareholders, in such quantities and at such times as Wachovia
shall reasonably request. Wachovia hereby expressly acknowledges that
Wachovia, and not the Fund Company, shall be responsible for the delivery
of any such prospectuses, reports and materials to Plan Participants or
Plan Representatives, as the case may be. Wachovia shall promptly deliver
any such prospectuses, reports and materials to Plan Participants or Plan
Representatives, as the case may be after delivery thereof by the Fund
Company.
Wachovia will vote Plan Shares as directed by Plan Participants or Plan
Representatives, as the case may be. Wachovia, in its capacity as Service
Provider hereunder, (and its agents), shall not in any way recommend action
in
-9-
<PAGE>
connection with, or interfere with the solicitation of, such proxy votes.
8. MAINTENANCE OF RECORDS; PLAN INFORMATION; ACCESS
Each party shall maintain and preserve all records, as required by law, in
connection with providing services hereunder and in making Shares available
to the Plans. Except as otherwise provided hereunder, Wachovia shall
provide copies of all records relating to the Plans, Participants and Funds
as may reasonably be requested by the Fund Company to enable the Fund
Company, the Funds or their representatives to comply with any request of
the Fund Company's internal or external auditors, any governmental agency
or similar entity, to otherwise enable it to comply with all applicable
state or Federal laws or to enable the Fund Company to fulfill its
obligations and perform its duties hereunder.
To the extent required under the 1940 Act, and the rules thereunder,
Wachovia agrees that records maintained by it hereunder are the property of
the Funds and will be preserved, maintained and made available in
accordance with the 1940 Act.
Upon reasonable notice by the Fund Company to Wachovia, Wachovia shall make
available during normal business hours
-10-
<PAGE>
such of Wachovia's facilities and premises employed in connection with the
performance of Wachovia's duties and responsibilities under this Agency
Trading Agreement for reasonable visitation, inspection and auditing by the
Fund Company or a Fund, or any person retained by the Fund Company or a
Fund for such purposes as may be necessary or desirable to evaluate the
quality of the duties and responsibilities performed by Wachovia pursuant
hereto.
This Section 8 shall survive termination of this Agreement.
9. COMPLIANCE WITH LAWS
At all times the Fund Company and Wachovia shall comply with all laws,
rules and regulations, to the extent applicable, by virtue of entering into
this Agency Trading Agreement or otherwise.
-11-
<PAGE>
10. REPRESENTATIONS WITH RESPECT TO THE FUNDS
Wachovia shall not make, nor shall it allow its affiliates to make
representations concerning a Fund or Shares, except those contained (i) the
then current prospectus of a Fund, (iii) current sales literature created
by or on behalf of the Funds, or (iii) current sales literature created by
Wachovia which has been submitted to, and approved in writing, by the Funds
or their agents prior to the use or distribution of such sales literature
by Wachovia, its affiliates or agents.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS
Wachovia represents, warrants, and covenants that:
(a) it has full power and authority under applicable law and from the
appropriate Plan Representative(s), and has taken all action necessary, to
enter into and perform its obligations and duties under this Agency Trading
Agreement, and that by doing so it will not breach or otherwise impair any
other agreement or understanding with any other person, corporation or
other entity; this Agency Trading Agreement constitutes its legal, valid
and binding obligation and is enforceable against it in accordance with its
terms; no consent or authorization of, filing with or other act by or in
respect of any governmental authority, is required in connection with the
execution, delivery, performances, validity or enforceability of this
Agency Trading Agreement,
-12-
<PAGE>
(b) it will timely disclose to Plan Representatives or Plan Participants,
as the case may be, the arrangement provided for in this Agency Trading
Agreement;
(c) it is registered, shall register or is exempt from registration as a
transfer agent pursuant to Section 17A of the Securities and Exchange Act
of 1934, as amended (the "1934 Act") (it being understood by the parties
hereto that failure on the part of Wachovia to so if not exempt from
registration, will constitute a material breach of this Agency Trading
Agreement 30 days after the effective date of this Agency Trading Agreement
or such earlier date on which such failure constitutes violation of
applicable law or regulation); if required under applicable regulations,
Wachovia will amend its TA-1 to disclose its appointment hereunder as a
limited purpose co-transfer agent to the Fund Company;
(d) it is a national bank chartered by the Federal Reserve Board;
(e) all purchases, redemptions and exchanges orders and instructions
received by it on any Business Day and transmitted to the Fund Company for
processing pursuant to this Agency Trading Agreement have been received
prior to the Close of Trading on such Business Day;
(f) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agency Trading Agreement shall be effected in accordance with each
Fund's then current
-13-
<PAGE>
prospectus;
(g) it will comply with all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder;
(h) the receipt of any fees by the Wachovia directly or indirectly
relating to the purchase, exchange or redemption of the Funds has been
reviewed by legal counsel to Wachovia and will not constitute a "prohibited
transaction" as such term is defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, and Section 4975 of the
Internal Revenue Code of 1986, as amended, for which an exemption is not
available, and is not otherwise prohibited by any other applicable law,
governing instrument or court order; and
(i) it will promptly notify the Fund Company in the event that it is
unable, for any reason, to perform any of its duties or obligations under
this Agency Trading Agreement or there is a material failure to comply with
in the representation made herein above.
Each of the Fund Company and Fund Affiliate represents, warrants, and
covenants as to itself only and not jointly that:
(a) it has full power and authority under applicable law, and has taken
all action necessary, to enter into and perform its duties and obligations
under this Agency Trading
-14-
<PAGE>
Agreement and that by doing so it will no breach or otherwise impair any
other agreement or understanding with any other person, corporation or
other entity;
(b) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agency Trading Agreement shall be effected in accordance with each
Fund's then current prospectus.
(c) it will comply all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder; and
(d) it will promptly notify Wachovia in the event that it is unable, for
any reason, to perform any of its duties or obligations under this Agency
Trading Agreement or there is a material failure to comply with the
representations made herein above.
The Fund Company represents, warrants and covenants as to itself only that
the Funds are registered as investment companies under the 1940 Act and
Fund Shares are registered under the Securities Act of 1933, as amended;
12. INDEMNIFICATION
(a) Wachovia shall indemnify and hold harmless the Fund Company, each of
the Fund Affiliates and their respective officers, directors, partners,
trustees, members, shareholders, employees and agents ("Indemnitees")
against
-15-
<PAGE>
any loss, cost, damage, expense, liability or claim including, without
limitations, reasonable legal fees and other out-of-pocket costs of
defending against any such loss, cost, damage, expense, liability or claim,
suffered by all or any of such Indemnitees to the extent arising out of, or
relating to, (i) any actual negligent act or omission or act of intentional
misconduct by Wachovia or its agents relating to this Agency Trading
Agreement or the services rendered hereunder (ii) a material breach of any
of the representations, warranties and covenants made hereunder, (iii) the
failure to timely and property transmit orders and instructions to the Fund
Company (or its affiliates), (iv) cancellation or subsequent correction of
any orders and instructions transmitted to the Fund Company (or its
affiliates), or (v) discrepancies between Participant and Plan balances
maintained by Wachovia and the Account(s) balances maintained by the Fund
Company (or its affiliates) due to errors caused by Wachovia.
(b) Fund Company and each Fund Affiliate shall indemnify and hold harmless
Wachovia and its respective officers, directors, partners, trustees,
shareholders, employees and agents ("Indemnitees") against any loss, cost,
damage, expense, liability or claim including, without limitations,
reasonable legal fees and other out-of-pocket costs of defending against
any such loss, cost, damage, expense, liability or claim, suffered by all
or any of such
-16-
<PAGE>
Indemnitees to the extent arising out of, or relating to, (i) any actual
negligent act or omission or act of intentional misconduct by itself or its
own agents performing duties under this Agency Trading Agreement or the
services rendered hereunder, or (ii) a material breach of any of the
representations, warranties and covenants made hereunder.
(c) In performing its respective duties under this Agency Trading
Agreement, each party hereto shall comply with all applicable federal and
state securities laws and regulations and (i) Westcore Trust and each Fund
Affiliate shall fully indemnify Wachovia for any claims or liabilities
suffered by Wachovia or its officers, directors, trustees, employees or
agents (including reasonable legal fees and other out-of-pocket costs of
defending against any such claim or liability or reasonable costs incurred
enforcing this right of indemnification), arising from non-compliance by
itself only with any such laws or regulations and (ii) Wachovia shall fully
indemnify Westcore Trust, and each Fund Affiliate for any claims or
liabilities suffered by any such party or its respective officers arising
from noncompliance by Wachovia or regulators with any such law.
13. FEES AND EXPENSES
Each party shall bear all expenses incidental to the performance of its
duties and obligations under this Agency
-17-
<PAGE>
Trading Agreement. Each Fund shall pay the cost of registration of its
Shares with the Securities and Exchange Commission and in any state where
required. The cost of preparing and printing prospectuses, proxy
materials, periodic Fund reports and other similar materials that are
required by law to be sent to shareholders generally shall be paid by the
applicable Fund, and the cost of distributing such items to Plan
Participants or Plan Representatives shall be borne by Wachovia, the Plans
or Plan Representatives, as the case may be.
Wachovia shall not be entitled to any fee from the Fund Company pursuant to
this Agency Trading Agreement.
14. TERMINATION OF AGREEMENT
This Agency Trading Agreement may be terminated at any time by any party
hereto upon thirty (30) days prior written notice to the other party hereto
or upon such shorter notice as is required by law, order or regulatory or
self-regulatory authority with jurisdiction over the terminating party or
at such time as the parties hereto may agree to in writing.
Notwithstanding the foregoing, this Agency Trading Agreement may be
terminated immediately either (i) upon a material breach by any party
hereto not cured within thirty (30) days after notice from another party
hereto or (ii) with respect to a Plan, upon the termination of services by
-18-
<PAGE>
Wachovia to any such Plan. The provisions of Section 12 shall survive any
termination of this Agency Trading Agreement.
15. NOTICE
Each notice required by this Agency Trading Agreement shall be given in
writing and delivered personally or mailed by certified mail or courier
service, or sent through electronic or telephonic facilities, to the
intended recipient thereof at the following address or such other address
as one party may give written notice to the other party:
If to Wachovia, to: Wachovia Operational
Services Corporation
301 N. Main Street
Winston-Salem, NC 27150
Attention: Richard Gough
or Chris Grew
(NC-31073)
If to the Fund Company, to: ALPS Mutual Funds
Services, Inc.
370 17th Street,
Suite 3100
Denver, CO 80202-5627
A notice given in accordance with this Section 15 shall be deemed given
upon actual receipt by the intended recipient thereof.
-19-
<PAGE>
16. CONFIDENTIALITY
Except as otherwise provided under this Agency Trading Agreement, all
notifications, reports, books, records, data and other information supplied
by one party to the other in connection with this Agency Trading Agreement
(collectively, "Information") shall remain the property of the party
supplying such information and, except at otherwise provided hereunder,
shall be kept confidential by the other party; provided, however, that
copies of any such information may be retained by a party to the extent
required by applicable law, court order, or the reasonable internal
polices of a party.
Wachovia and the Fund Company and Fund Affiliates acknowledge and
understand the competitive value and confidential nature of internal,
non-public financial and business information of the other parties hereto.
The parties hereto also understand that the information is to be considered
as confidential, proprietary and trade secrets of each other party and its
affiliates. Wachovia and the Fund Company and Fund Affiliates agree to use
their best efforts (the same being not less than that employed to protect
their own confidential and proprietary information) to safeguard such
information and to prevent the unauthorized, negligent or inadvertent use
or disclosure thereof. Except as otherwise provided hereunder, neither
Wachovia nor the Fund Company and Fund Affiliates shall, without the prior
written
-20-
<PAGE>
approval of an officer of another affected party, directly or indirectly,
disclose information to any person or business entity except for a limited
number of employees of each party (or their respective affiliates) on a
need-to-know basis. Notwithstanding anything in this Agency Trading
Agreement to the contrary, the parties hereto (or their respective
affiliates) may disclose any such information: (a) as may be legally
required by a court or governmental agency or entity; (b) which is or
becomes available to the general public through no act of, failure to act
by, or fault of, the disclosing party (or its affiliates); (c) which is
subsequently disclosed to a party hereto (or its affiliates) on a
non-confidential basis by a third party not having a confidential
relationship with another party hereto (or its affiliates) which rightfully
acquired such information, or (d) as independently developed by a party
hereto (or its affiliates).
17. COMPLETE AGREEMENT
This Agency Trading Agreement contains the full and complete understanding
of the parties with respect to the subject matter hereof and supersedes all
prior representations, promises, statements, arrangements, agreements,
warranties and understandings among the parties with respect to the subject
matter hereof, whether oral or written, express or implied.
-21-
<PAGE>
18. MODIFICATION AND WAIVER
This Agency Trading Agreement may be modified or amended, and its terms may
be waived, only by a writing signed by each of the parties hereto;
provided, however, Schedule I hereto may be amended in writing, without the
need for signatures of the parties hereto, by the fund Company's delivery
of an amended Schedule I to Wachovia at least thirty (30) days in advance
of the effective date of any such amended Schedule I, provided that this
Agreement shall immediately cease to apply with respect to any Fund at such
time as shares of such Fund are no longer offered to the public (except
that this Agreement shall continue to apply with respect to accounts in
such Fund created, and to purchases and redemptions of such Fund made prior
to cessation of public offering).
Any valid waiver of a provision set forth herein shall not constitute a
waiver of any other provision of this Agency Trading Agreement. In
addition, any such waiver shall constitute a present waiver of such
provision only and shall not constitute a permanent, future waiver of such
provision.
-22-
<PAGE>
19. COUNTERPARTS
This Agency Trading Agreement may be executed in several counterparts, each
of which shall be an original but all of which together shall constitute
one and the same instrument.
20. ASSIGNMENT
This Agency Trading Agreement shall not be assigned by a party hereto
without the prior written consent of the other parties hereto except that
the Agreement may be assigned to a successor Fund Affiliate for the Funds,
or any of them, if one is appointed without the consent of the other
parties hereto.
21. HEADINGS
The headings of this Agency Trading Agreement are for reference only and
shall not otherwise affect the interpretation or construction hereof.
22. NON-EXCLUSIVITY
Each of the parties hereto acknowledges and agrees that this Agency Trading
Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities. Wachovia further
acknowledges that nothing contained herein shall prohibit the Fund Company
or any affiliate of either from providing
-23-
<PAGE>
administrative, sub-accounting, trustee, recordkeeping or similar or
related services to any employee benefit plan (including a Plan) or from
soliciting any such plan or sponsor thereof to enter into any arrangement
with the Fund Company or any affiliate of either for such service.
23. GOVERNING LAW
This Agency Trading Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without
giving effect to the principles of conflicts of law thereof.
-24-
<PAGE>
24. MASSACHUSETTS BUSINESS TRUST
The Names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 which is hereby
referred to and a copy of which is on file at the office of State Secretary
of the Commonwealth of Massachusetts and the principal office of the
Company. The obligations of "Westcore Trust" entered into in the name or
on behalf thereof by any of the Trustees, shareholders, or representatives
of the Trust personally, but bind only the Trust Property, and all persons
dealing with any class of shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against
the Trust.
-25-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agency Trading Agreement
by their duly authorized officers as of the date first written above.
By: Wachovia Operational Services Corporation
Name: /s/ Gene Oehler
-----------------------------------
Title: Vice President
----------------------------------
By: Westcore Trust
Name: /s/ Jasper R. Frontz
-----------------------------------
Title: Treasurer
----------------------------------
By: ALPS Mutual Funds Services, Inc.
Name: /s/ Thomas A. Carter
-----------------------------------
Title: Chief Financial Officer
----------------------------------
By: Boston Financial Data Services, Inc.
Name: /s/ Jennifer Amenddare
-----------------------------------
Title: Client Service Officer
----------------------------------
-26-
<PAGE>
SCHEDULE I
TO THE AGENCY TRADING AGREEMENT
Westcore MIDCO Growth Fund*
*Indicates that Fund is a "no-load" or "no sales charge" Fund as defined in
Section 26 of the NASD's Rules of Fair Practice.
Westcore Trust
--------------------------------
Name of Fund Company
By: /s/ Jasper R. Frontz
-----------------------------
Name: Jasper R. Frontz
---------------------------
Title: Treasurer
--------------------------
Date: December 23, 1997
---------------------------
Acknowledged by: Accepted by
ALPS Mutual Funds Services Inc. Wachovia Operational Services Corporation
- ------------------------------- -------------------------------------------
Name of Fund Affiliate
By:/s/ Thomas A. Carter By: /s/ Gene Oehler
------------------------ ---------------------------
Name: Thomas A. Carter Name: Gene Oehler
---------------------- --------------------------
Title:Chief Financial Officer Title:Vice President
----------------------- -------------------------
Date: February 27, 1998 Date: December 23, 1997
------------------------ -------------------------
-27-
<PAGE>
SECURITIES LENDING AGENCY CLIENT AGREEMENT
THIS AGREEMENT is made as of the 27th day of March, 1998, by and
between Westcore Trust and each of its Funds listed as Clients on Exhibit 1 to
this Agreement (each a "Client") and PaineWebber Incorporated ("PWI").
Capitalized terms not otherwise defined shall have the meanings set forth in
Section 13.
Each Client and PWI, intending to be legally bound, agree as follows:
1. APPOINTMENT OF PWI; TERMS OF LOANS.
a. (1) Each Client hereby authorizes and appoints PWI, and PWI
agrees to act, as Client's agent to effect Loans of Available Securities to
Eligible Borrowers and to provide related administrative services to Client, all
pursuant to the terms and conditions of this Agreement. No Loan shall be made
if, as a result, more than 30% of any Fund's total assets (as PWI is advised of
such amount by Client from time to time) would be subject to securities loans.
During the term of this Agreement, PWI may from time to time, in its sole
discretion, contact Eligible Borrowers on behalf of any Client and lend
Available Securities belonging to that Client ("Lending Client") to those
Eligible Borrowers.
(2) The initial Eligible Borrowers for each Client are
listed on Exhibit 2 hereto. Exhibit 2 may be amended by PWI from time to time,
PROVIDED, however, that no such amendment adding an Eligible Borrower shall be
effective with respect to any Client unless approved by that Client, and
PROVIDED FURTHER, that PWI shall amend Exhibit 2 to delete any Eligible Borrower
with respect to any Client promptly following written notice from that Client
directing PWI to do so. In connection with the addition of an Eligible
Borrower, at Client's request. PWI shall provide Client with a copy of the most
recent publicly available financial statement of such borrower as furnished by
the Borrower to PWI.
b. Each Loan shall be made pursuant to an agreement ("Borrowing
Agreement") substantially in a form attached as Schedule A hereto or in such
other form as may be approved by from time to time by Client. The form of the
Borrowing Agreement used with respect to a Loan made on behalf of any Client
shall not be amended by PWI in any material respect except with the prior
written consent of that Client. PWI shall disclose fully to Eligible Borrowers
that PWI acts as agent for its clients and not as principal.
c. Each Loan shall be terminable by PWI on behalf of Lending
Client or the Borrower upon notice to the other party. At its sole discretion,
PWI may notify any Borrower of the termination of any Loan at any time. PWI
will notify the Borrower of the termination of any Loan on the same day that it
is directed to terminate the Loan by Lending Client if PWI receives such
direction by the Termination Notice Time on a Business Day; if the direction to
terminate is received by PWI after the Termination Notice Time, PWI will notify
the Borrower of the termination of the Loan on the next Business Day. In the
case of notice by PWI, the termination date so established will be no later
than: (i) in the case of Loans of Government Securities, the same Business Day
as such notice, (ii) in the case of Foreign Securities, the standard settlement
date for trades of the Loaned Securities entered into on the date of such notice
in the principal market for such securities, or (iii) in all other cases, the
third Business Day following such notice.
2. Authority of PWI with Respect to Loans.
a. PWI is hereby authorized:
(1) to make, execute, acknowledge and deliver Borrowing
Agreements and any and all other documents or agreements of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to effect a transfer of Available Securities to Eligible Borrowers
pursuant to a Borrowing Agreement or to complete any Loan; and
<PAGE>
(2) to exercise all of the rights of Lending Client under
the Borrowing Agreement and to do all acts, whether or not expressly authorized,
which it may deem reasonably necessary or proper for the protection of the
Collateral held thereunder.
b. Each Client acknowledges and agrees that:
(1) Client shall direct its Custodian to take such
actions as are necessary or appropriate to enable PWI to perform its obligations
hereunder or under any Borrowing Agreement;
(2) PWI shall have full discretion regarding the selection
of the particular Eligible Borrowers to whom Loans of Available Securities may
be made and as to the selection of the particular Available Securities loaned
pursuant to any Loan;
(3) there is no assurance that Loans will be made at any
time;
(4) PWI may perform securities lending activities for other
clients of PWI, including clients that are, or that are advised or managed by,
its Affiliates, and PWI may allocate securities lending opportunities among any
or all of its clients using such reasonable methods as PWI may follow from time
to time; and
(5) Client waives the right to vote Loaned Securities or to
provide any consent or take any similar action with respect to any Loaned
Securities. Notwithstanding the foregoing, under the terms of the Borrowing
Agreement. Client shall be entitled to receive any payment made in respect of
any consent solicitation with respect to its Loaned Securities.
c. If an installment, call or rights issue becomes payable on,
or in respect of any, Loaned Securities, PWI shall use reasonable efforts to
ensure that any timely instructions from Lending Client are complied with, but
PWI shall not be required to make any payment unless Lending Client has first
provided funds to make such payment.
3. COLLATERAL; RESPONSIBILITIES OF PWI AND CLIENT.
a. Under the terms of each Loan, Borrower shall be required to
transfer to the Client Account, at or before the inception of the Loan.
Eligible Collateral having a Market Value (determined as of the close of trading
on the preceding Business Day) at least equal to 105% of the Market Value of any
Loaned Securities that are Foreign Securities and 102% of all other Loaned
Securities (the "Required Collateral Level").
b. PWI shall determine the Market Value of the Loaned
Securities and the Collateral for each Loan on each Business Day. Under the
terms of each Loan, if at any time the Market Value of the Eligible Collateral
for any Loan decreases to 100% or less of the Market Value of the Loaned
Securities, the Borrower shall be required to transfer to the Client Account, on
or before the next Business Day, additional Eligible Collateral sufficient to
increase the Market Value of the Eligible Collateral to at least the Required
Collateral Level.
c. PWI shall transfer any Collateral received by it with
respect to Loans for that Client to its Client Account. If PWI receives such
Collateral prior to 3:00 p.m., Eastern time (or, in the case of cash Collateral,
5:00 p.m., Eastern time), such transfer shall be made on the same Business Day
that the Collateral is transferred to PWI; if such Collateral received later
than that time, such transfer shall be made on the next Business Day.
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d. Unless otherwise agreed by Client and PWI, PWI shall invest,
or shall arrange for the investment of, all cash Collateral in accordance with
the Investment Guidelines. All investments of cash Collateral shall be for the
account of the Lending Client and shall be solely at the Lending Client's risk.
To the extent consistent with the Investment Guidelines, cash Collateral may be
invested in repurchase agreements with PWI or in investment companies or other
commingled accounts advised or managed by PWI or its Affiliates, and Client
consents to the retention by PWI and its Affiliates of any advisory or other
fees paid by such accounts. If PWI arranges for cash Collateral to be invested
by an investment manager or adviser (other than PWI but including any advisory
Affiliate of PWI) approved in writing by Client, Client will be responsible for
any investment management or advisory fees charged by that investment manager or
adviser.
e. PWI shall give appropriate and timely directions to Lending
Client or its Custodian with respect to the transfer and re-transfer of any and
all Loaned Securities, Collateral maintained in the Client Account and payments,
distributions and proceeds thereon or thereof, and if the Collateral is
maintained in the Client Account, with respect to the payment of any loan
rebates to Borrowers, and each Lending Client will cause its Custodian to timely
execute such directions.
f. In the event of any default by any Borrower in respect of
any Loan, PWI shall be responsible for notifying the Lending Client, and PWI
shall take any and all actions in accordance with the Borrowing Agreement
necessary or appropriate to protect the interest of the Lending Client in
respect of the Loan, including without limitation, liquidating or, if the
Collateral is maintained in the Client Account, directing Lending Client or its
Custodian to liquidate, the Collateral.
g. Except as provided in paragraph (h), PWI shall arrange for
an amount equal to any interest, dividends or other distributions paid on Loaned
Securities to be credited to the appropriate Client Account.
h. Non-cash distributions on Loaned Securities in the nature of
stock splits or stock dividends shall be added to the Loan and become Loaned
Securities; PROVIDED that a Lending Client may, by giving PWI ten (10) Business
Days' notice prior to the date of such non-cash distribution, direct PWI to
request that the Borrower deliver such non-cash distributions to its Client
Account, in which case PWI shall arrange for such non-cash distribution to be
credited to that Client Account as soon as practicable.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. Each Client represents, warrants and covenants as follows:
(1) this Agreement constitutes the legal, valid and
binding obligation of Client, enforceable against it in accordance with its
terms except as enforcement may be limited by bankruptcy, insolvency or similar
laws, or by equitable principles relating to or limiting Creditors' rights
generally;
(2) the execution, delivery and performance by Client of
this Agreement, execution of each Borrowing Agreement by PWI on behalf of
Client, and PWI's entering into Loans under Borrowing Agreements on behalf of
Client, have been duly and validly authorized by Client, and Loans made in
accordance with the terms hereof will comply with all laws and regulations,
including those of securities regulatory and self-regulatory organizations,
applicable to Client;
(3) Client owns, and will own at the time that any Loan is
outstanding, all Available Securities free and clear of any lien or encumbrance,
and no Available Securities have been, or will at the time of any Loan have
been, sold;
(4) Client has made its own determination as to the tax
treatment of any
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dividends, remuneration or other funds received hereunder;
(5) Client and any party serving as an investment adviser
to Client have approved the lending of the Available Securities, have determined
that each of the Eligible Borrowers, the Eligible Collateral and the Investment
Guidelines (as the same may be amended pursuant to the terms hereof) are
appropriate for Loans by Client hereunder and have directed PWI to comply with
the same, and have determined that lending the Available Securities in
accordance with the terms hereof is an appropriate activity for Client,
consistent with its investment objectives and policies;
(6) the Available Securities are not "plan assets" within
the meaning of ERISA, or if the Available Securities are such plan assets, a
Loan of the Available Securities to an Eligible Borrower would not constitute a
prohibited transaction for purposes of ERISA; and
(7) no Loan of the Available Securities will violate any
statute, regulation, rule, order, judgment or agreement binding on Client or any
of its assets.
b. PWI represents, warrants and covenants to each Client as
follows:
(1) this Agreement constitutes a legal, valid and binding
obligation of PWI, enforceable against it in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or similar laws, or by
equitable principles relating to or limiting creditors' rights generally;
(2) the execution, delivery and performance by PWI of this
Agreement and of each Borrowing Agreement, and PWI's entering into Loans under
Borrowing Agreements on behalf of Client, have been duly and validly authorized
by PWI, and Loans made in accordance with the terms hereof will comply with all
laws and regulations relating to the lending of securities and applicable to PWI
as lending agent; and
(3) PWI has the power to execute and deliver this
Agreement, to enter into the transactions contemplated hereby and to perform its
obligations hereunder, and it has taken all necessary action to authorize such
execution, delivery and performance.
c. Each of the above representations and warranties shall be
deemed made and repeated for all purposes at and as of all times when any Loan
entered into under the Borrowing Agreement is outstanding.
d. Each Client and PWI agree that, under the terms of this
Agreement, Client and its investment adviser, if any, retain ultimate authority
with respect to lending Client's securities and have directed PWI to lend
Available Securities in accordance with the terms hereof. Each Client and PWI
further agree that PWI is not, and shall not be considered to be, solely by
virtue of its role hereunder, an investment adviser for Client.
5. STATEMENTS; RECORDS. PWI shall maintain current and accurate
records of the Loans as required by applicable regulations and shall provide
each Client with monthly statements detailing all deliveries and receipts of
Loaned Securities and Collateral, all transactions in the Client Account made at
the direction of PWI, all fees received and income earned from the Collateral
and Loaned Securities, all fees and other amounts paid to each Borrower or
others, and such other information as Client may reasonably request all on a
Fund-by-Fund basis.
6. COMPENSATION OF PWI. In consideration of the services to be
provided by PWI hereunder, PWI shall be entitled to compensation as set forth in
Exhibit 4. PWI is hereby authorized to charge such compensation and
reimbursements against and collect the same from the revenues derived from
securities
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lending activities or to direct the Custodian to pay PWI such compensation and
reimbursements on a monthly basis, within 10 business days after the end of each
month. The fees paid to PWI hereunder are solely in consideration of securities
lending services rendered by it and are in addition to any other fees or
compensation to which it may be entitled for services rendered for Client under
other agreements.
7. MODIFICATION AND TERMINATION OF AGREEMENT.
a. This Agreement is a continuing agreement and shall remain in
full force and effect until terminated in accordance with this Section. This
Agreement may be modified or terminated with respect to any Client at any time
upon mutual written agreement of PWI and that Client, expressly referring to
this Agreement and indicating an intention to effect such modification or
termination. This Agreement also may be terminated at any time by PWI or any
Client upon ninety (90) days prior written notice to the other party.
b. Following any termination of this Agreement but only with
respect to the Client or Clients with respect to which such termination is
effective, PWI shall:
(1) immediately cease making new Loans;
(2) terminate, as promptly as possible, any outstanding
Loans, but shall continue to administer any such outstanding Loans as necessary
to effect their termination, including, without limitation, (A) the return to
Borrowers of Collateral on Loans as to which Loaned Securities are returned to
PWI or to the Client Account and as to which the Borrower is not in default, and
(B) the coordination of the liquidation of Collateral, all in the manner and on
the terms permitted under the Borrowing Agreements and deemed necessary or
appropriate by PWI; and
(3) remit and deliver, or arrange for remittance and
delivery, to the Client Account all securities, earnings and other items due to
each Lending Client.
c. Regardless of any agreement as to, or the receipt of any
notice of, termination and the cessation of lending, this Agreement shall not
entirely terminate with respect to any Lending Client until all Loans have been
closed, all Collateral liquidated or returned, all deliveries and remittances
due the Client have been made, and all final reports required hereunder have
been made.
8. STANDARD OF CARE; INDEMNIFICATION.
a. Subject to the requirements of ERISA with respect to Loans
involving "plan assets" within the meaning of ERISA, PWI shall not be liable for
any loss or damage suffered or incurred by any Client in connection with any
Loan or the administration and operation of PWI's securities lending program,
whether or not resulting from any act or omission to act hereunder or otherwise,
unless and except to the extent such loss or damage has been determined by a
final judgment or order of a court of competent jurisdiction to have arisen out
of PWl's own gross negligence or willful misconduct. Notwithstanding anything
in this Agreement to the contrary, PWI shall not be liable to any Client for any
consequential, special or indirect losses or damages which the Client may incur
or suffer by or as a consequence of PWI's performance of, or failure to perform,
the services to be provided hereunder, whether or not the likelihood of such
losses or damages was known by PWI, nor shall PWI be liable for any losses or
damages resulting from PWI's having complied with the Investment Guidelines or
with any other directions from, or requirements of, the Client.
b. PWI shall not be liable to any Client for any investment
losses with respect to cash Collateral that comply with the Collateral
Guidelines. Each Client authorizes PWI to charge the Client Account for any
amounts payable by such Client pursuant to this Section 8(b).
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c. Client shall indemnify PWI and hold it harmless from and
against any and all liability, loss, damages and claims, including attorneys'
fees and all other expenses reasonably incurred in its defense, to which PWI
shall be subjected by reason of its actions, or failure to act, in either case
taken in good faith pursuant to this Agreement, except that this indemnity shall
not apply: to the extent that PWI's actions or failure to act resulted from
PWI's negligence or willful misconduct.
9. GOVERNING LAW; JURISDICTION. This Agreement shall be construed
in accordance with the laws of the State of New York without giving effect to
the conflict of laws principles thereof.
10. MISCELLANEOUS.
a. If Exhibit 1 specifies that a party identified thereon as a
Client is acting on behalf of one or more of its portfolios, series, sub-trusts
or sub-accounts (each, a "portfolio") that are also identified on Exhibit 1,
each such portfolio shall be deemed to be a Client for all purposes under this
Agreement.
b. Notwithstanding any other provision of this Agreement, the
parties agree that, if more than one Client (including any portfolio) is
identified on Exhibit 1:
(1) the relationships and agreements set forth in this
Agreement between each Client and PWI shall be several, separate and distinct
from those between any other Client and PWI, to the same effect as if that
Client had executed a separate agreement in the form hereof with PWI; and
(2) the assets and liabilities of each Client are separate
and distinct from the assets and liabilities of each other Client, and no Client
shall be liable or shall be charged for any debt, obligation or liability of any
other Client under this Agreement.
c. With respect to each Client that is a business trust, notice
is hereby given that this instrument is executed on behalf of the trustees of
Client as trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees or shareholders of Client
individually but are binding solely upon the assets and property of Client. The
names "Westcore Trust" and "Trustees of Westcore Trust" refer respectively to
the Trust created and the Trustees as trustees but not individually or
personally, acting from time to time under an Amended and Restated Declaration
of Trust dated November 19, 1987, which is hereby referred to and a copy of
which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Westcore Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
d. In the event any provision of this Agreement shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Agreement, and this Agreement shall be
construed and enforced as if such illegal or invalid provision had never been
contained herein.
e. This Agreement (including the exhibits and schedules
attached hereto) constitutes the entire agreement between the parties and
supersedes any prior agreements between the parties with respect to the subject
matter hereof. This Agreement shall not be assigned by either party without the
prior written consent of the other party.
11. NOTICES. All notices, reports and statements shall be mailed,
sent by express delivery service, or facsimile transmitted to the parties at the
following addresses and facsimile telephone numbers and
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shall be effective upon receipt thereof:
TO PWI:
Address:
PaineWebber Incorporated
265 Franklin Street
Boston, Massachusetts 02110
Attention: Global Portfolio Lending
Fax: (617) 439-8215
TO CLIENT:
Address: Westcore Trust
Suite 3100
370 Seventeenth Street
Denver, Colorado 80202
Attention: Treasurer
Fax: (303) 623-7850
12. SECURITIES INVESTORS PROTECTION ACT OF 1970 NOTICE.
EACH CLIENT IS HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS OF
THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT CLIENT WITH
RESPECT TO THE LOAN OF SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL
DELIVERED TO CLIENT MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF BORROWER'S
OBLIGATION IN THE EVENT THE BORROWER FAILS TO RETURN THE SECURITIES.
13. DEFINITIONS. For the purposes hereof:
a. "Affiliate" shall mean any entity which controls, is
controlled by, or is under common control with another entity.
b. "Available Securities" shall mean with respect to any Client
and on any date, those securities held or maintained in its Client Account,
other than those securities that Client has designated by written notice to PWI
as not being available for Loans.
c. "Borrower" shall mean, with respect to any Loan, the party
that is a borrower under a Borrowing Agreement.
d. "Borrowing Agreement" shall have the meaning set forth in
Section 1.
e. "Business Day" shall mean any day other than a day on which
the New York Stock Exchange, Inc. is closed for trading; PROVIDED, however, that
for purposes of the notice required to terminate any Loan, "Business Day" shall
have the meaning established under the related Borrowing Agreement.
f. "Client Account" shall mean, with respect to any Client, the
account specified in Exhibit 3.
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g. "Collateral" shall mean all securities and other items of
property pledged as collateral for a Loan.
h. "Collateral Guidelines" shall mean, with respect to any
Client, the guidelines for Eligible Collateral and for the investment of cash
Collateral set forth in Exhibit 5.
i. "Custodian" shall mean, with respect to any Client, the
entity identified as such in Exhibit 3.
j. "Eligible Borrower" shall mean, with respect to any Client
and on any date, any entity to which Available Securities may be loaned on
behalf of that Client, as listed in Exhibit 2, as the same may be amended from
time to time by PWI.
k. "Eligible Collateral" shall mean, with respect to any
Lending Client and subject to such limitations as are specified in the
Collateral Guidelines. Collateral consisting of (i) cash; (ii) Government
Securities; (iii) Letters of Credit; and (iv) such other securities, instruments
or investment property specified in the Collateral Guidelines.
l. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may now or hereafter be amended.
m. "Foreign Securities" shall mean securities that are
denominated in a currency other than United States dollars and that are
principally cleared and settled outside of the United States.
n. "Government Securities" shall mean government securities as
defined in Section 3(a)(42)(A)-(C) of the Securities Exchange Act of 1934, as
amended.
o. "Lending Client" shall have the meaning set forth in Section
1.
p. "Letter of Credit" shall mean an irrevocable, unconditional,
stand-by letter of credit, in form and substance satisfactory to the Lending
Client, issued by a bank (not affiliated with the Borrower under the related
Loan) listed in the Collateral Guidelines.
q. "Loan" shall mean a loan of Available Securities pursuant to
this Agreement.
r. "Loaned Securities" shall mean, with respect to any Loan,
the securities loaned by PWI on behalf of a Lending Client.
s. "Market Value" shall have the meaning assigned in the
applicable Borrowing Agreement.
t. "Required Collateral Level" shall have the meaning set forth
in Section 3(a).
u. "Termination Notice Time" shall mean: (i) with respect to a
direction by Client to PWI to terminate a Loan of Foreign or Government
Securities, 9:45 a.m., Eastern time, on a Business Day; and (ii) with respect to
a direction by Client to PWI to terminate any other Loan, 11:30 a.m., Eastern
time, on a Business Day.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereto duly authorized effective as of
the day and year first above written.
PAINWEBBER INCORPORATED
BY: /s/ Denise E. Karabots
-------------------------
NAME: Denise E. Karabots
TITLE: First Vice President
EACH CLIENT LISTED ON EXHIBIT 1
BY: /s/ Kenneth V. Penland
----------------------------
NAME: Kenneth V. Penland
--------------------------
TITLE: President
-------------------------
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EXHIBIT 1
(LISTING OF CLIENTS)
Westcore Small-Cap Opportunity Fund
Westcore MIDCO Growth Fund
Westcore Blue Chip Fund
Westcore Growth and Income Fund
Westcore Intermediate-Term Bond Fund
Westcore Long-Term Bond Fund
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EXHIBIT 2
(ELIGIBLE BORROWERS)
The Following list of Eligible Borrowers applies to all Clients:
ELIGIBLE BORROWER
ABN Amro (USA) Inc.
Bear Stearns & Co. Inc.
BT Securities Corp.
CIBC Wood Gundy
CS First Boston Corp.
Daiwa Securities Inc.
Dean Witter Reynolds Inc.
Donaldson, Lufkin & Jenrette Securities Corp.
Dresdner Securities (USA) Inc.
Deutsche Bank
Goldman Sachs & Co.
Morgan Securities Inc.
Lehman Brothers Inc.
Merrill Lynch & Co.
Morgan Stanley Group Inc.
Nomura Securities International
PaineWebber Inc.
Prudential Securities, Inc.
Salomon Brothers Inc.
Spear, Leeds & Kellogg
Swiss Bank Corp Capital Markets Inc.
Smith Barney Inc.
UBS Securities Inc.
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EXHIBIT 3
(CLIENT ACCOUNT AND CUSTODIAN INFORMATION)
The following are the Client Accounts and, where applicable, the Custodian for
each Client:
Client Account Name of Custodian
-------------- -----------------
The Bank of New York
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EXHIBIT 4
(COMPENSATION SCHEDULE)
PWI Fee: 30% of the Spread (if cash Collateral) or of the Fee Paid By Borrower
(if non-cash Collateral)
Method of Calculation - Example:
Cash Collateral
- ---------------
Annual Investment Rate 8%
Annual Rate of Rebate to Borrower (negotiated) 6%
Spread 2%
Income
Days Income on PWI to
Loan Size Open Investment* Rebate Spread Fee Client
- --------- ---- ----------- ------ ------ --- ------
$500,000 8 $888.89 $666.67 $222.22 $66.67 $155.55
*Formula: Loan Value x Annual Investment Rate x # Days Open
-------------------------------------------------
360
Non-Cash Collateral
- -------------------
Annual Borrower Fee Rate (negotiated) 1.5%
Income
Days Fee Paid by PWI to
Loan Size Open Borrower** Fee Client
- --------- ---- ---------- --- ------
$500,000 8 $166.66 $50.00 $116.66
** Computation: Loan Value x Annual Fee Rate x # Days Open
------------------------------------------
360
In addition, each Client will reimburse PWI for all clearing corporation,
transit or other transactional costs and expenses incurred by PWI and agreed to
by Client in connection with the transfer or re-transfer of Loaned Securities or
Collateral to or from the Client Account.
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EXHIBIT 5
(COLLATERAL GUIDELINES)
1. For each Lending Client, Collateral shall be held (check appropriate box):
/ /1 by PWI for the account of Lending Client;
/X/ in the Client Account.
2. For each Client, Eligible Collateral shall include:
A. Cash in the following currencies:
Yes No
--- --
(i) U.S. Dollars /X/ / /4
(ii) Other:___________ / /5 /X/
B. Government Securities /X/ / /8
C. Letters of Credit /X/ / /10
Letters of credit may be issued
by the following banks:
Banks that have been approved by Client
---------------------------------------
D. Other investments, as follows: / /11 / /12
See Attached
____________________________
____________________________
____________________________
3. For each Client, cash Collateral may be invested in as follows:
____________________________
____________________________
____________________________
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ATTACHMENT E
PERMITTED TYPES OF COLLATERAL
Any of the following may constitute collateral for loans:
1. Cash (which may be reinvested in accordance with the investment
guidelines set forth below);
2. Securities issued or guaranteed by the United States government
or any agency or instrumentality thereof ("U.S. government securities"); or
3. Irrevocable letters of credit in favor of PaineWebber issued by
banks that are independent of the relevant borrowers and that have been
approved by Client.
INVESTMENT GUIDELINES FOR CASH COLLATERAL
Cash collateral may be invested in accordance with these guidelines.
"Portfolio," as used in these guidelines means the cash collateral received by
PaineWebber for securities loans to a particular Fund within Westcore Trust
(i.e., the requirements below apply on a Fund-by-Fund basis).
MATURITY STRUCTURE
The maximum final maturity of any one security will be 13 months; at least 20%
of the portfolio will have a maturity of 1 day. Commercial paper will have a
maximum maturity of 270 days; repurchase agreements will have a maximum maturity
of 7 days.
PERMISSIBLE INVESTMENTS
Maximum %
of Portfolio Special Instructions
------------ --------------------
Asset-Backeds 2(a)7 eligible 50% bond funds only
Bankers Acceptances 25%
Certificates of Deposit 50%
Commercial Paper 100%
Euro Time Deposits 50%
Funding Agreements - 7 day put 35%
Repurchase Agreements (Treasury only) 100% 101% minimum collateralization
U.S. Corporate Debt Securities 50%
U.S. Treasuries and Agencies 100%
Money Market Funds 100%
Yankee Debt 25% bond funds only
QUALITY
Securities with maturities greater than one year must have a minimum credit
rating of "AA" or its equivalent as rated by any nationally recognized
statistical rating organizations ("NRSROs") from which it receives a rating.
Securities with maturities less than one year must have a minimum credit rating
of "A1," "P1" or its equivalent as rated by any NRSROs from which it receives a
rating. List of eligible issuers (or, for Asset Backed securities, sponsors) of
each type of investment described above must be approved in advance by Denver
Investment Advisors ("DIA").
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DIVERSIFICATION
The maximum amount that any portfolio can invest or hold in the securities of
any single issuer, other than U.S. Treasuries and Agencies, is 1.5% of the value
of the total assets of the related Fund.
All securities must be U.S. dollar denominated. All securities domestic only,
except that Euro Time Deposits, Yankee Bankers' Acceptances, Yankee Certificates
of Deposit and Yankee Debt (including commercial paper) are permitted for Funds
other than Blue Chip Fund but will not aggregate more than 50% of any portfolio.
Unless PaineWebber is otherwise notified by DIA, all foreign securities must be
held in custody by the relevant Fund's U.S. custodian without the use of a
foreign sub-custodian or securities depository.
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SCHEDULE A
(FORM(S) OF BORROWING AGREEMENT)
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SECURITIES LOAN AGREEMENT
(BORROWER)
SECURITIES LOAN AGREEMENT dated as of _____________, 199_, by and between
PAINEWEBBER INCORPORATED, as agent for the Accounts (in such capacity and not in
its individual capacity, PaineWebber Incorporated is hereinafter referred to as
"Lender"), and ______________ ("Borrower") setting forth the terms and
conditions under which Lender, on behalf of one or more Accounts identified in
accordance with Section 1.3 may, from time to time, arrange for loans to
Borrower of certain securities held in the Accounts against a pledge of
collateral. References to Lender in this Agreement refer only to Lender in its
representative capacity as agent for the Accounts and in no case shall be
construed so as to render Lender liable as principal. Capitalized terms not
otherwise defined herein shall have the meanings provided in Section 29.
Lender and Borrower, intending to be legally bound, agree as follows:
1. LOANS OF SECURITIES.
1.1 Subject to the terms and conditions of this Agreement, either
party hereto may, from time to time, orally seek to initiate a transaction
whereby Lender will lend securities to Borrower (each, a "Loan"). The
parties shall agree orally on the terms of each Loan, which shall be subject
to the terms and conditions of this Agreement and which shall include: (a)
the date of commencement of the Loan ("Loan Commencement Date"); (b) a
description (including the identity of the issuer) and the amount of the
Loaned Securities; (c) the account to which the Loaned Securities are to be
transferred; (d) the terms of compensation (including any applicable rebate);
(e) the types of Collateral acceptable for the Loan; and (f) the account or
accounts to which the cash and non-cash Collateral for the Loan are to be
transferred. These terms may be amended during the term of the Loan upon
mutual agreement of the parties, provided that any amendment is consistent
with the terms of this Agreement.
1.2 Each Loan shall be evidenced by Lender's books and records
pertaining to such loans, as maintained by Lender in the regular course of
its business, which shall represent presumptive evidence thereof except for
manifest error or willful misconduct. Lender shall send Borrower monthly
statements of outstanding Loans showing Loan activity. Borrower agrees to
examine such statements promptly and to advise Lender of any errors or
exceptions. Borrower's failure to so advise Lender within ten (10) days after
delivery of any such statement shall be deemed to be Borrower's admission of
the accuracy and correctness of the contents thereof, and Borrower shall be
fully bound thereby. The foregoing shall not be construed to prevent the
parties hereto from mutually agreeing to amend or correct such statements if
there has been manifest error in the preparation of the statements.
1.3 Lender shall, periodically or when a material change in Lender's
Accounts takes place, furnish to the Borrower a list of Accounts on whose
behalf Lender is authorized to effect Loans as agent. With respect to any
Loan, the identity of the Account shall be promptly furnished to Borrower
upon its request or upon the occurrence of a Default involving such Account,
provided, however, that Lender shall furnish such identity automatically with
respect to any Loan of the assets of any ERISA Plan.
1.4 Notwithstanding anything to the contrary contained in this
Agreement with respect to when a Loan commences, a Loan hereunder shall not
occur until the Loaned Securities and the Collateral therefor have been
transferred in accordance with Section 16.
1.5 WITHOUT WAIVING ANY RIGHTS GIVEN TO LENDER HEREUNDER, IT IS
UNDERSTOOD AND AGREED THAT THE PROVISIONS OF THE SECURITIES INVESTOR
PROTECTION ACT OF 1970 MAY NOT PROTECT LENDER WITH RESPECT TO LOANED
SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL DELIVERED TO LENDER
MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF BORROWER'S OBLIGATIONS IN
THE
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EVENT BORROWER FAILS TO RETURN THE LOANED SECURITIES.
2. TRANSFER OF LOANED SECURITIES.
2.1 On the Loan Commencement Date (but in no event prior to the
transfer to the account or accounts designated by Lender of Collateral in the
amount required pursuant to Section 3), Lender shall arrange for the transfer
of the Loaned Securities to Borrower.
2.2 Borrower agrees that the completion of a transfer of Loaned
Securities to it pursuant to a Loan shall constitute its acceptance and
receipt thereof, and each such acceptance and receipt shall be deemed to
constitute a representation by Borrower that, as of the date of such
transfer, (a) all representations and warranties by Borrower herein are true
and correct, as if made on and as of such date, (b) no Default hereunder has
occurred and is continuing, and (c) except as otherwise theretofore disclosed
to Lender in writing, there has been no material adverse change in the
financial condition or business of Borrower or any direct or indirect parent
of Borrower since the date of the most recent financial statements of
Borrower provided to Lender hereunder and that, where Borrower is a
registered broker-dealer under the Exchange Act, it is in compliance with
Rule 15c3-1 thereunder.
3. TRANSFER OF COLLATERAL.
3.1 Prior to, or concurrently with, the transfer of the Loaned
Securities to Borrower. Borrower shall transfer to the account or accounts
designated by Lender, Collateral having a Market Value in an amount equal to
the Required Value.
3.2 The Collateral transferred by Borrower to the account or accounts
designated by Lender in respect of any Loan, as adjusted pursuant to Section
8, shall be security for Borrower's obligations in respect of such Loan and
for any other obligations of Borrower hereunder, and Borrower hereby pledges,
assigns and grants to Lender, as agent for the Account, a continuing first
priority security interest in, and a lien upon, the Collateral, which shall
attach upon the transfer of the Loaned Securities to Borrower and which shall
cease with respect to any item of Collateral upon its being re-transferred to
Borrower. In addition to all the rights and remedies given to Lender as
agent hereunder, Lender, as agent for the Account, shall have all the rights
and remedies of a secured party under the UCC.
3.3 Lender may transfer or arrange for the transfer of the Collateral
for any Loan to the related Account and the Account may use or invest the
Collateral, if such Collateral consists of cash, at the risk, and for the
benefit, of the Account, which shall bear all losses with respect thereto.
If the Collateral consists of securities, an Account that is a securities
broker or dealer may pledge, repledge, hypothecate, rehypothecate, lend,
relend, sell or otherwise transfer the Collateral and commingle the
Collateral with other collateral or with its own assets. Borrower
irrevocably appoints Lender as its attorney-in-fact for the purpose of doing
or performing any act or thing (including, without limitation, executing any
document) and taking all other steps as may be required to enable Lender or
the Account to transfer any Collateral to a third party or to otherwise
realize upon any Collateral.
3.4 Provided that Borrower is not in Default hereunder, upon the
transfer to the account or accounts designated by Lender of all Loaned
Securities in respect of a Loan and the payment of all Loan Fees due upon
termination of such Loan, Lender shall transfer (or cause the related Account
to transfer) to Borrower the Collateral relating to such Loan. Lender's sole
obligation to Borrower in respect of the Collateral is to return or arrange
for the return of such to Borrower pursuant to this Section 3.4 and Section
5.4.
3.5 If Borrower transfers Collateral in respect of a Loan to the
account or accounts designated by Lender and Lender does not transfer or
arrange for the transfer of the Loaned Securities to Borrower, Borrower
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shall have the absolute right to the immediate return of the Collateral; and if
Lender transfers or arranges for the transfer of Loaned Securities to Borrower
and Borrower does not transfer Collateral to the account or accounts designated
by Lender as required under Section 3.1, Lender shall have the absolute right to
the immediate return of the Loaned Securities.
3.6 Borrower may, upon reasonable notice to Lender and with Lender's
consent (which shall not be unreasonably withheld), substitute Collateral for
Collateral securing any Loan; PROVIDED, HOWEVER, that such substituted
Collateral shall: (a) consist only of cash, securities or other property
that would be acceptable Collateral in accordance with this Agreement; and
(b) have a Market Value that, when added to the Market Value of the remaining
Collateral for such Loan, is equal to or in excess of the Required Value.
Substituted Collateral shall constitute Collateral for all purposes hereunder.
3.7 Collateral shall be allocated to Loans as follows:
3.7.1 Except as provided in the following sentence, Collateral
transferred by Borrower in connection with a specific Loan shall be allocated
to such Loan; provided, that if Collateral is received on the same day for
more than one Loan, the Lender shall arrange for the allocation of such
Collateral to each Loan then being made so that each such Loan is secured by
not less than the Required Value of Collateral acceptable for such Loan. Any
Collateral received with respect to a Loan in excess of the Required Value
for such Loan may be held as collateral security for all Loans made to
Borrower at any time without being allocated to any one Loan or, in the sole
discretion of Lender, may be allocated at any time to any Loan or Loans then
outstanding hereunder. All allocations of Collateral shall be marked in
Lender's books and records, which shall be presumptive evidence of such
allocations.
3.7.2 Lender shall have the right, at its sole election, at any time
and from time to time, to allocate or reallocate any Collateral delivered
pursuant to the terms hereof to or among any outstanding Loan or Loans.
3.7.3 It is expressly understood and agreed by the parties hereto that
no allocation of Collateral to any Loan or liabilities due to any Account
pursuant to the terms hereof shall in any way affect the ability of Lender to
apply such Collateral to the satisfaction of any obligation of Borrower
hereunder upon any Default hereunder, regardless of the Loan or Account to
which such obligation relates, and that all Collateral at any time given
hereunder shall constitute collateral security for all the Borrower's
obligations to Lender or the Accounts hereunder without distinction of any
kind and upon any Default hereunder may be applied to any such obligation or
obligations as Lender in its sole discretion may elect.
3.8 No later than seven days prior to the scheduled expiration date
of any Letter of Credit supporting Borrower's obligations hereunder, Borrower
shall deliver an extension of the expiration of such Letter of Credit or
replace such Letter of Credit by providing Lender with a substitute Letter of
Credit or other acceptable Collateral in an amount at least equal to the
amount of the Letter of Credit for which it is substituted.
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4. LOAN AND CASH COLLATERAL FEES.
4.1 With respect to any Loan for which the Collateral consists of
Government Securities or Letters of Credit and with respect to such other
Loans as may be agreed upon by the parties, Borrower shall pay Lender a Loan
Fee ("Loan Fee") based on the par value of those Loaned Securities which are
debt instruments and on the Market Value at the time of the Loan of those
Loaned Securities which are equity securities, as adjusted by any subsequent
marks to market pursuant to Section 8, from the Loan Commencement Date to,
but not including, the earlier of the date that securities identical to the
Loaned Securities are returned to Lender upon a termination of the Loan or
the date that securities identical to the Loaned Securities are purchased for
the account of Lender pursuant to Section 12. The rate of the Loan Fee
applicable to all Loaned Securities for any particular day shall be the rate
agreed upon by the parties prior to and from time to time during each Loan.
All such accrued Loan Fees shall be paid by the Borrower to Lender, as agent
for the Account, by the earlier of (a) the tenth Business Day of the calendar
month next following the calendar month during which such Loan Fees accrued
and (b) the date as of which this Agreement is terminated.
4.2 Unless otherwise agreed, with respect to any Loan as to which the
Collateral consists of cash, the Lender's compensation shall consist of the
right to use and invest the cash Collateral in accordance with Section 3.3.
In consideration of the right to use and invest any such cash Collateral, the
Lender agrees to pay the borrower a cash collateral fee (the "Cash Collateral
Fee") computed daily for each Loan and based on the amount of Cash Collateral
delivered with respect to Such Loan. The amount of the Cash Collateral Fee
shall be computed from the Loan Commencement Date to, but not including, the
earlier of the date that securities identical to the Loaned Securities are
returned to the account or accounts designated by Lender upon a termination
of the Loan and the date that securities identical to the Loaned Securities
are purchased for the account of Lender pursuant to Section 12. The amount
of the Cash Collateral Fee for any particular day shall be computed by
multiplying (a) the amount of Cash Collateral by (b) the annual Cash
Collateral Fee rate agreed upon by the parties prior to and from time to time
during each Loan and (c) by the fraction 1/360. All accrued Cash Collateral
Fees shall be paid by the Lender to the Borrower or its agent by the earlier
of (a) the tenth Business Day following the receipt by the Lending Agent from
the Borrower of an invoice in the calendar month next following the calendar
month during which such Cash Collateral Fees accrued and (b) the date as of
which this Agreement is terminated.
4.3 Notwithstanding the foregoing, all Loan Fees shall be payable by
Borrower immediately in the event of a Default hereunder by Borrower, and all
Cash Collateral Fees shall be payable immediately by Lender in the Event of a
Default hereunder by Lender. Cash Collateral Fees shall cease to accrue upon
the occurrence of a Default hereunder by Borrower, and Loan Fees shall cease
to accrue upon the occurrence of a Default hereunder by Lender.
5. TERMINATION OF THE LOAN.
5.1 Each Loan shall be terminable by either party by demand made in
accordance with this Section 5.
5.2 Except with respect to Loans of Foreign Securities, Borrower may
terminate a Loan on any Business Day by giving notice to Lender prior to the
Termination Notice Time and transferring the Loaned Securities to Lender by
the close of business on the corresponding date specified in such notice.
With respect to Loans of Foreign Securities, such termination notice must be
received by Lender before 11:00 a.m., Eastern time, on the second Business
Day preceding the termination date.
5.3 Lender may terminate a Loan on any termination date established
by notice given to Borrower prior to the close of business on any Business
Day. The termination date so established shall be a date no earlier than the
standard settlement date for trades of the Loaned Securities entered into on
the date of such notice, which
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date shall, unless Borrower and Lender agree to the contrary, be (a) in the case
of Government Securities, at Lender's discretion the same day or the next
Business Day following such notice; (b) in the case of Foreign Securities, the
standard settlement date in the principal market for such securities; or (c) in
all other cases, the third Business Day following such notice.
5.4 On or prior to the termination date of any Loan, Borrower shall
transfer the Loaned Securities to or at the direction of Lender, whereupon
Lender shall transfer, or cause the Account to transfer, the Collateral (as
adjusted pursuant to Section 8) to Borrower pursuant to Section 3.4.
6. RIGHTS OF BORROWER IN RESPECT OF THE LOANED SECURITIES. Until a
Loan is terminated in accordance herewith and except as set forth in Sections
7.1 and 7.2 hereof, Borrower shall have all of the incidents of ownership of
the Loaned Securities, including the right to exercise any rights and
transfer the Loaned Securities to others. Notwithstanding the above, the
Borrower shall remit to the account or accounts as designated by Lender any
payment made to the Borrower in respect of any consent solicitation with
respect to the Loaned Securities.
7. DIVIDENDS, DISTRIBUTIONS. ETC.
7.1 Lender as agent for the Account shall be entitled to receive all
distributions made on or in respect of the Loaned Securities which are not
otherwise received by Lender, to the full extent it would be so entitled if
the Loaned Securities had not been lent to Borrower, including, but not
limited to: (a) all property (including cash dividends and all other
distributions of cash or property), (b) stock dividends and bonus issues, (c)
securities received as a result of split-ups of the Loaned Securities and
distributions in respect thereof, (d) interest payments, (e) all rights to
purchase additional securities, and (f) payments upon maturity or other
redemption.
7.2 Any cash distributions made on, or in respect of, the Loaned
Securities, that Lender as agent for the Account is entitled to receive
pursuant to Section 7.1, shall be paid by the transfer by Borrower of cash
(denominated in the currency of issue for the Loaned Securities, unless
otherwise agreed) to the account or accounts designated on the date such cash
distribution is made by the issuer, in an amount equal to such cash
distributions (subject to the provisions of Section 7.4), so long as Lender
is not then in Default. Non-cash distributions received by Borrower in
respect of the Loaned Securities shall be added to the Loaned Securities
(unless otherwise directed by Lender) and shall be considered such for all
purposes, except that if the Loan has terminated, Borrower shall forthwith
deliver the same to Lender.
7.3 (a) Borrower shall be entitled to receive all cash distributions
made on, or in respect of, non-cash Collateral which are not otherwise
received by Borrower, to the full extent it would be so entitled if the
Collateral had not been transferred by Borrower. Any distributions of cash
made on or in respect of such Collateral which Borrower is entitled to
receive hereunder shall be paid by the transfer of cash (denominated in the
currency of issue of the non-cash Collateral, unless otherwise agreed) by
Lender to Borrower upon the date of receipt by Lender or the Account thereof,
in an amount equal to such cash distribution (subject to the provisions of
Section 7.4), so long as Borrower is not then in Default.
(b) Borrower shall be entitled to receive all non-cash
distributions made on or in respect of non-cash Collateral the payment dates
for which are during the term of the Loan and which are not otherwise
received by Borrower, to the full extent it would be so entitled if the
Collateral had not been transferred by Borrower. Any distributions made on
or in respect of such Collateral which Borrower is entitled to receive
hereunder shall be paid by or at the direction of Lender to Borrower
promptly, so long as Borrower is not in Default at the time of such receipt.
7.4 (a) If (i) Borrower is required to make a payment (a "Borrower
Payment") with respect to cash distributions on Loaned Securities under
Sections 7.1 and 7.2 ("Securities Distributions") or (ii) Lender is
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required to make a payment (a "Lender Payment") with respect to cash
distributions on Collateral under Section 7.3. ("Collateral Distributions"),
and (ii) Borrower, Lender or their respective custodians, as the case may be
("Payor"), shall be required by law to collect any withholding or other tax,
duty, fee, levy or charge required to be deducted or withheld from such Borrower
Payment or Lender Payment ("Tax"), then Payor shall pay such additional amounts
as may be necessary in order that the net amount of the Borrower Payment or
Lender Payment received by Lender or Borrower, as the case may be ("Payee")
after payment of such Tax equals the net amount of the Securities Distribution
or Collateral Distribution that could have been received by the Payee if such
Securities Distribution or Collateral Distribution had been paid directly to the
Payee; provided, however, that any Borrower Payment shall also take into account
(and Borrower shall pay such additional amounts as reflect) the value (as
specified in a notice by Lender to Borrower) to the Account of any tax refund or
reclaim to which such Account would otherwise have been entitled had the Loaned
Securities not been loaned.
(b) Each party shall supply to the other notice of such tax
information as may be requested by the other to enable it to effect the
Borrower Payment or Lender Payment in the required amount, computed as per
the immediately preceding paragraphs of this Section 7. Borrower represents
that, as of the Loan Commencement Date, no Tax would be imposed on any cash
distribution paid to it with respect to Collateral for any Loan, unless
Borrower has given notice to the contrary to Lender (specifically the rate at
which such Tax would be imposed), and that Borrower will notify Lender of any
change that occurs during the term of a Loan in the rate of any Tax that
would be imposed on any such cash distribution.
7.5 To the extent that, under the provisions of Sections 7.1 through
7.4, a transfer of cash or other property by Borrower would give rise to a
Margin Excess or a transfer of cash or other property by Lender would give
rise to a Margin Deficit, Borrower or Lender, as the case may be, shall not
be obligated to make such transfer but, in lieu thereof, shall immediately
credit the amounts that would have been transferable under such Sections to
the account of Lender or Borrower, as the case may be.
7.6 Borrower and Lender agree that, on the Business Day following the
record date for the cash distribution relating to any Borrower or Lender
Payment, Lender will notify Borrower that Lender will charge or credit (as
appropriate) Borrower's account for such Borrower or Lender Payment on the
date the payment is payable by Borrower or Lender pursuant to Section 7.2 or
7.3 hereof, and Lender will effect such charge or credit on such date;
PROVIDED, HOWEVER, that no failure on the part of Lender to provide such
notice or to effect such charge or credit shall affect the parties'
respective rights and obligations under Section 7.1, 7.2 or 7.3.
8. MARK TO MARKET MARGIN.
8.1 In the event that at the close of trading on any Business Day the
Market Value of the Collateral for any Loan shall be, in the case of Loaned
Securities that are Foreign Securities, 104% or less of the Market Value of
such Loaned Securities, or in the case of other Loaned Securities, 101% or
less of the Market Value of the Loaned Securities, Borrower shall
immediately, and without notice or demand from Lender, transfer additional
Collateral to the account or accounts designated by Lender so that the Market
Value of such additional Collateral, when added to the Market Value of the
other Collateral for such Loan, shall equal or exceed the Required Value.
8.2 In addition to the rights of Lender under Section 8.1, in the
event that at the close of trading on any Business Day the Market Value of
Collateral for a Loan shall be less than the Required Value (a "Margin
Deficit"), Lender may, by notice (which may be oral) to Borrower, demand that
Borrower transfer to Lender additional Collateral so that the Market Value of
such additional Collateral, when added to the Market Value of all other
Collateral for such Loan, shall equal or exceed the Required Value. Unless
otherwise agreed, such transfer shall be made in accordance with Lender's
instructions by no later than the close of business on the day of demand if
such demand is made prior to 11:00 a.m. New York time on a Business Day;
otherwise such transfer shall be made on the next Business Day; PROVIDED,
HOWEVER, that any such transfer of additional Collateral comprised of
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Foreign Securities may be made on the next Business Day. If the additional
Collateral to be posted is intended to be through adjustment of a Letter of
Credit previously delivered to Lender as Collateral, Borrower agrees to cause
the issuing bank to amend the original Letter of Credit by delivery of an
amended Letter of Credit to Lender within the applicable time period described
in the preceding sentence.
8.3 In the event that at the close of trading on any Business Day the
Market Value of all Collateral for a Loan shall be greater than the Required
Value (a "Margin Excess"), Borrower may, by notice (which may be oral) to
Lender, demand that Lender transfer to Borrower such amount of the Collateral
selected by Borrower so that the Market Value of the Collateral for such
Loan, after deduction of such amount, shall not exceed the Required Value.
Unless otherwise agreed, such transfer shall be made in accordance with
Borrower's instructions by no later than 3:00 p.m. New York time on the day
of demand if such demand is made prior to 11:00 a.m. New York time on a
Business Day; otherwise such transfer shall be made on the next Business Day;
PROVIDED, HOWEVER, that any such transfer of Collateral comprised of Foreign
Securities may be made on the next Business Day. If Lender is requested to
return to Borrower a portion of any security constituting Collateral,
Borrower shall, at the oral request of Lender, take all such action as is
necessary to cause such security to be reissued in such denominations as are
required to permit such a partial return, and in such case Lender shall not
be obligated to return Collateral hereunder unless and until such action has
been taken and may make required returns of Collateral hereunder by returning
such securities in such amounts as are, as nearly as practicable. equal to
but not greater than the required return. The return to Borrower of
securities the Market Value of which on the date on which the requirement to
return the same was established was then sufficient to comply with such
requirement of return shall be in full compliance with this Agreement and a
full discharge of Lender's obligation to make such return, notwithstanding
the fact that, at the date of such return the Market Value of any such
securities may have declined. Where Collateral is in the form of a Letter of
Credit, Lender agrees to promptly consent to a reduction in the undrawn
balance of the Letter of Credit sufficient to eliminate the Margin Excess,
provided that Borrower delivers to Lender all amended Letter of Credit within
the time period described in the second sentence of this Section 8.3.
8.4 Borrower and Lender may agree, with respect to one or more Loans
hereunder, to mark the values to market pursuant to Sections 8.1 and 8.2 by
valuing the Loaned Securities lent and the Collateral given in respect
thereof on an Account-by-Account basis.
9. REPRESENTATIONS OF THE PARTIES HERETO. The parties hereby make
the following representations and warranties:
9.1 Each party hereto represents and warrants that (a) it has the
power to execute and deliver this Agreement, to enter into the Loans
contemplated hereby and to perform its obligations hereunder; (b) it has
taken all necessary action to authorize such execution, delivery and
performance; and (c) this Agreement constitutes a legal, valid and binding
obligation enforceable against it in accordance with its terms (in the case
of Lender, solely in its capacity as agent for the Account or Accounts whose
securities are the subject of a Loan or Loans).
9.2 Each party hereto represents and warrants that the execution,
delivery and performance by it of this Agreement and each Loan hereunder will
at all times comply with all applicable laws and regulations including those
of applicable securities regulatory and self-regulatory organizations (in the
case of Lender, solely in its capacity as agent for the Account or Accounts
whose securities are the subject of a Loan or Loans).
9.3 Each party hereto represents and warrants that it has not relied
on the other for any tax or accounting advice concerning this Agreement
(except as expressly provided herein) and has made its own determination as
to the tax and accounting treatment of any Loan and any dividends,
remuneration or other funds received hereunder.
9.4 Borrower represents and warrants that all Loans will comply with
the applicable regulations of
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the Board of Governors of the Federal Reserve System governing margin lending
("Margin Regulations") and, without limiting the generality of the foregoing,
that it (or any party to whom it relends the Loaned Securities) is borrowing or
will borrow the Loaned Securities for the purpose of making delivery of such
securities in the case of short sales, failure to receive securities required to
be delivered or other similar situations or as otherwise permitted pursuant to
the applicable Margin Regulations.
9.5 Borrower represents and warrants that it has, or will have at the
time of transfer to the account or accounts designated by Lender of any
Collateral hereunder (other than Letters of Credit), the right to grant to
Lender a first priority security interest therein subject to the terms and
conditions hereof. As to Collateral consisting of Letters of Credit
transferred to the account or accounts designated by Lender hereunder,
Borrower represents and warrants that Lender shall have full unencumbered
title thereto.
9.6 Lender represents and warrants that the Account for which it is
acting in any Loan shall have represented and warranted to it that the Loaned
Securities transferred to Borrower shall be free and clear of any lien or
encumbrance at the time of transfer, and Borrower represents and warrants to
Lender that all Loaned Securities returned hereunder shall be free and clear
of any lien or encumbrance at the time of such return.
9.7 Lender represents and warrants that as to each Account, the
Account has represented and warranted to it that the Account has duly
authorized Lender, as agent, to execute and deliver this Agreement on its
behalf, and to enter into Loans on its behalf.
9.8 Notwithstanding any other provision of this Agreement, each of
the representations and warranties set out in Section 2.2 and in this Section
9 shall be deemed made and repeated for all purposes at the time that any
Loan is made and to be in effect as of all times when Borrower's obligations
with respect to any Loan remain outstanding.
10. COVENANTS.
10.1 Financial information shall be delivered as follows:
10.1.1 If Borrower is not a broker-dealer registered under the Exchange
Act, it covenants as follows: Upon execution of this Agreement, Borrower
shall deliver to the Lender Borrower's and any parent company's most recent
available financial information, including (without limitation) the most
recent available audited and unaudited statements of Borrower's and any
parent company's financial condition that Borrower or such parent company is
required to provide to any Governmental agency or self regulatory body. As
long as any Loan is outstanding under this Agreement, Borrower will promptly
deliver to Lender all such financial information that is subsequently
available, and any other financial information or statements that Lender may
reasonably request.
10.1.2 If Borrower is a broker-dealer registered under the Exchange Act,
it covenants as follows: Upon execution of this Agreement, Borrower shall
deliver to Lender the most recent statements of Borrower required to be
furnished to Borrower's customers by Rule 17a-5(c) and (d) under the Exchange
Act. As long as any Loan is outstanding under this Agreement, Borrower shall
promptly deliver to Lender all such statements subsequently required to be
furnished to Borrower's customers by such Rule (or any successor thereto).
Upon execution of this Agreement, Borrower shall also deliver to Lender
Borrower's and any parent company's most recent financial information
otherwise available to its shareholders, the SEC, or the public as the case
may be, including (without limitation) the most recent available audited and
unaudited statements of Borrower's or any parent company's financial
condition and any report or notice required by Rules 17a-5(a)(2)(i) and (ii)
and 17a-11 under the Exchange Act. As long as any Loan is outstanding under
this Agreement, Borrower will promptly deliver to the Lender all such
financial information that is subsequently available.
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10.2 Borrower shall be liable as principal with respect to its
obligations hereunder.
10.3 Borrower shall at all times in respect of each Loan effected
pursuant hereto maintain Collateral having a Market Value at least equal to
the Required Value.
10.4 Borrower agrees to cause every Letter of Credit delivered by it
and constituting Collateral hereunder to be renewed or replaced by Collateral
(including, without limitation, a renewal or replacement Letter of Credit)
satisfactory to Lender at least seven days prior to the scheduled expiration
date of such Letter of Credit.
10.5 Borrower shall give Lender prompt notice of the occurrence of any
development in the business affairs of Borrower that has resulted in, or
which in Borrower's reasonable judgment could result in, a material adverse
effect on the ability of Borrower to perform its obligations under this
Agreement. Any such notice shall set forth, in reasonable detail, a
description of the event which has occurred and of the action, if any, that
Borrower proposes to take with respect thereto. Borrower will forward to
Lender a copy of any order, decree, determination, instruction or other
written evidence received by it of or with respect to any matter referred to
in the first sentence of this subparagraph 10.5.
10.6 Borrower and Lender hereby agree and acknowledge that (a) each
Loan hereunder is a "securities contract," as such term is defined in Section
741(7) of Title 11 of the United States Code (the "Bankruptcy Code"), (b)
each and every transfer of funds, securities and other property under this
Agreement and each Loan hereunder is a "settlement payment" or a "margin
payment," as such terms are used in Sections 362(b)(6) and 546(e) of the
Bankruptcy Code, and (c) the rights given to Borrower and Lender hereunder
upon a Default by the other constitute the right to cause the liquidation of
a securities contract and the right to set off mutual debts and claims in
connection with a securities contract, as such terms are used in Sections 555
and 362(b) (6) of the Bankruptcy Code. Each party hereto further agrees and
acknowledges that if Borrower or an Account is an "insured depository
institution," as such term is defined in the Federal Deposit Insurance Act,
as amended ("FDIA"), then each Loan hereunder is a "securities contract" and
"qualified financial contract," as such terms are defined in the FDIA and any
rules, orders or policy statements thereunder.
10.7 Borrower will, from time to time, do and perform any and all acts
and execute any and all further instruments reasonably requested by Lender
more fully to effect the purposes of this Agreement and the pledge of the
Collateral hereunder, including, without limitation, the execution and filing
of financing statements and continuation statements relating to the
Collateral Lender the provisions of the UCC.
10.8 Borrower will notify Lender promptly upon the occurrence of any
change of control with respect to Borrower or if Borrower enters into an
agreement providing for such a change of control. For purposes of this
paragraph, a "change of control" shall occur if Borrower consolidates or
amalgamates with or merges with or into, or transfers all or substantially
all of its assets to another entity, or if any person or entity acquires
directly or indirectly the beneficial ownership of equity securities having
the power to elect a majority of the board of directors of Borrower or
otherwise acquires directly or indirectly the power to control the policy
making decisions of Borrower.
11. EVENTS OF DEFAULT. All Loans between Borrower and Lender may, at
the option of the non-defaulting party exercised by notice to the defaulting
party, (which option shall be deemed to have been exercised, even if no
notice is given, immediately upon the occurrence of an event specified in
Section 11.6 below), be terminated immediately upon the occurrence of any one
or more of the following events (individually, a "Default"):
11.1 Any Loaned Securities shall not be transferred to Lender on the
termination date of the Loan as required by Section 5;
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11.2 Any Collateral shall not be transferred to Borrower as required
by Section 3.5 and Section 5;
11.3 Borrower shall fail to comply with the obligation to replace an
expiring Letter of Credit under Section 10.4 and such default is not cured
within one Business Day after notice of such failure to Borrower;
11.4 Borrower or Lender shall fail to transfer Collateral as required
by Section 8;
11.5 Borrower or Lender shall fail to make the payment of
distributions as required by Section 7 and such default is not cured within
one Business Day after notice of such failure to Borrower or Lender, as the
case may be;
11.6 (a) Lender or Borrower shall commence as debtor any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law, or seek the appointment of a receiver,
conservator, trustee, custodian or similar official for such person or any
substantial part of its property, or (b) any such case or proceeding shall be
commenced against Lender or Borrower, or another shall seek such an
appointment, or any application shall be filed against such person for a
protective decree under the provisions of the Securities Investor Protection
Act ("SIPA"), which (i) is consented to or not timely contested by such
party, (ii) results in the entry of an order for relief, such an appointment,
the issuance of such a protective decree or the entry of an order having a
similar effect, or (iii) is not dismissed within 15 days, or, (c) Lender or
Borrower shall make a general assignment for the benefit of creditors, or (d)
Lender or Borrower shall admit in writing its inability to pay its debts as
they become due;
11.7 Lender or Borrower shall have been suspended or expelled from
membership or participation in any securities exchange or association or
other self-regulatory organization to whose rules it is subject or if it is
suspended from dealing in securities by any governmental agency or regulatory
body;
11.8 Lender or Borrower shall have its license, charter, or other
authorization necessary to conduct a material portion of its business
withdrawn, suspended or revoked by any applicable government or agency or
regulatory body thereof;
11.9 Any representation made or deemed to be made by a party in
respect of this Agreement or any Loan or Loans made hereunder shall be
incorrect or untrue in any material respect during the term of any Loan
hereunder;
11.10 Borrower or Lender (a) fails to provide to the other party
reasonable assurances of its ability to perform its obligations hereunder or
under any Loan within 24 hours after request therefor is made in good faith
by the requesting party; (b) notifies the other, orally or in writing, of its
inability to or its intention not to perform its obligations hereunder; or
(c) otherwise disaffirms, rejects or repudiates any of its obligations
hereunder;
11.11 Borrower or Lender (a) shall fail to perform any material
obligation under this Agreement not specifically set forth in this Section
11, including but not limited to the payment of fees as required by Section
4, and the payment of transfer taxes as required by Section 14(b) shall have
received notice of such failure from the non-defaulting party, and (c) shall
not have cured such failure by the next day after such notice on which a
transfer of funds, Loaned Securities or Collateral, as the case may be, could
be effected pursuant to Section 16.4 hereof; or
11.12 A party to this Agreement ("X") consolidates or amalgamates with,
or merges into, or transfers all or substantially all of its assets to
another entity and (a) the resulting, surviving or transferee entity has not
assumed all the obligations of X under this Agreement pursuant to an
agreement reasonably satisfactory to the other party or (b) the financial
condition of the resulting, surviving or transferee entity is, in the
judgment of the other party, materially weaker than that of X prior to such
transaction.
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12. LENDER'S REMEDIES.
12.1 If:
(a) any Default shall occur in respect of which Borrower is the
defaulting party; or
(b) Lender becomes obligated to return, or is otherwise deprived of its
rights to, any Loaned Securities after their return to Lender, or Lender is
in any way required to pay their value or any related sum over, as a result
of any bankruptcy, insolvency, liquidation, reorganization, or other
similar proceeding relating to Borrower or pursuant to any legal
requirement, including without limitation any laws relating to so-called
"preferences" or preferential payments,
Lender shall have the right, in addition to any other remedies provided herein
or under applicable law or in equity and without further notice to Borrower:
(a) to purchase, in a commercially reasonable time and manner (taking
into consideration the nature of the market for the Loaned Securities), a
like amount of the Loaned Securities ("Replacement Securities") in the
principal market for such securities; or
(b) to sell any Collateral in the principal market for such Collateral
in a commercially reasonable time and manner (taking into consideration the
nature of the market for the Collateral) or to treat the Loaned Securities
as having been purchased by Borrower at a purchase price equal to the
Market Value thereof on the day of the Default (or on the date of the event
referred to in (b) above, as the case may be); and
(c) to apply and set off the Collateral (including, any amounts drawn
under a Letter of Credit supporting any Loan) and any proceeds thereof
against the payment of the purchase price for any Replacement Securities
and any amounts due Lender under Sections 4, 7, 14 and 17 hereof. Lender
may also apply the Collateral and any proceeds thereof to any other
obligation of Borrower under this Agreement, including Borrower's
obligations with respect to distributions paid to Borrower (and not
forwarded to Lender) in respect of Loaned Securities.
In the event that Lender exercises such rights, Borrower's obligation to return
a like amount of Loaned Securities shall terminate.
12.2 In the event that the purchase price of Replacement Securities,
plus any and all amounts due to Lender hereunder, exceeds the Market Value of
the Collateral on the date the Replacement Securities are purchased, Borrower
shall be liable to Lender for the amount of such excess, together with
interest on such excess at a per annum rate that, in the case of purchases of
Foreign Securities, is equal to LIBOR plus two (2%) percent, and in the case
of purchases of any other securities and all other amounts due to Lender
hereunder, that is equal to the Fed Funds Rate plus two (2%) percent, in each
case as such rates fluctuate from day to day, from the date of such purchase
until the date of payment of such excess. Lender shall have, and Borrower
hereby grants to Lender, as security for Borrower's obligation to pay such
excess, a security interest in any property of Borrower (including, without
limitation, the Collateral) then held by Lender or the Account and a right of
setoff against such property and against any other amount payable by Lender
to Borrower. The purchase price of securities purchased under this Section
12 shall include, and the proceeds of any sale of Collateral shall be
determined after the deduction of, broker's fees, taxes and commissions and
all other reasonable costs, fees and expenses related to such purchase or
sale or to the exercise of Lender's remedies including, without limitation,
reasonable legal fees and expenses. Upon the satisfaction of all obligations
hereunder, any remaining Collateral shall be returned to Borrower.
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13. BORROWER'S REMEDIES.
13.1 In the event of any Default involving Lender or an Account under
Section 11 hereof, Borrower shall have the right, in addition to any other
remedies provided herein or under applicable law or in equity and without
further notice to Lender:
(a) to purchase, in a commercially reasonable time and manner (taking
into consideration the nature of the market for the Collateral), a like
amount of Collateral ("Replacement Collateral") in the principal market for
such Collateral, or
(b) to sell a like amount of Loaned Securities in the principal market
for such Loaned Securities in a commercially reasonable time and manner
(taking, into consideration the nature of the market for the Loaned
Securities) or to treat the Collateral as having been purchased by Lender
at a purchase price equal to the Market Value thereof on the day of the
Default and
(c) to apply and set off the Loaned Securities and any proceeds thereof
against the payment of the purchase price for any Replacement Collateral,
Lender's obligation to return any cash or other Collateral and any amounts
due Lender under Sections 4, 7 and 17 hereof. Borrower may also apply the
Loaned Securities and any proceeds thereof to any other obligation of
Lender or the Account under this Agreement, including Lender's obligations
with respect to distributions paid to Lender (and not forwarded to
Borrower) in respect of Collateral.
In the event that Borrower exercises such rights, Lender's obligation to return
a like amount of Collateral shall terminate; PROVIDED, HOWEVER, that, where
Collateral consists of a Letter of Credit, upon the exercise or deemed exercise
by Borrower of its termination rights under Section 11, Lender shall immediately
return the Letter of Credit to Borrower, and Borrower shall return to Lender the
Loaned Securities or an amount equal to the net proceeds from the sale (or
deemed sale) of the Loaned Securities in the manner described above, reduced by
any other amounts owed by the Account to Borrower.
13.2 In the event that the sales price received from such Loaned
Securities is less than the purchase price of Replacement Collateral (plus
the amount of any cash and the Market Value of any other Collateral not
replaced by Borrower on the date that the Loaned Securities are sold, and all
amounts due to Borrower hereunder), the Account shall be liable to Borrower
for the amount of such deficiency, together with interest on such deficiency
at a per annum rate that, in the case of Collateral consisting of Foreign
Securities, is equal to LIBOR plus two (2%) percent, and in the case of
Collateral consisting of any other securities and all other amounts due to
Borrower hereunder, that is equal to the Fed Funds Rate plus two (2%)
percent, in each case as such rates fluctuate from day to day, from the date
of such sale until the date of payment of such deficiency. Borrower shall
have, and Lender as agent for the Account hereby grants to Borrower, as
security for the Account's obligation to pay such excess, a security interest
in any property of the Account (including, without limitation, the Loaned
Securities) then held by Borrower and a right of setoff against such property
and against any other amount payable by Borrower to Lender in respect of such
Account arising hereunder. The purchase price of any Replacement Collateral
purchased under this Section 13 shall include, and the proceeds of any sale
of any Loaned Securities shall be determined after the deduction of, broker's
fees, taxes and commissions and all other reasonable costs, fees and expenses
related to such purchase or sale or to the exercise of Borrower's remedies
including, without limitation reasonable legal fees and expenses. Upon the
satisfaction of all the Account's obligations hereunder, any remaining Loaned
Securities (or remaining net cash proceeds from sale or deemed sale thereof)
shall be returned to Lender.
14. TRANSFER TAXES AND COSTS. All transfer taxes, stamp duties and
fees and similar charges with respect to any transfers hereunder of Loaned
Securities or Collateral shall be paid by Borrower. Borrower
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covenants and agrees that it shall ensure that this Agreement and all
instruments of transfer in respect of any Loaned Securities or Collateral shall
have been stamped in accordance with all applicable laws.
15. MARKET VALUE.
15.1 If the principal market for the securities to be valued is a
national securities exchange in the United States, their Market Value shall
be determined by their last sale price on such exchange on the preceding
Business Day or, if there was no sale on that day, by the last sale price on
the next preceding Business Day on which there was a sale on such exchange,
all as quoted on the consolidated tape or if not quoted on the consolidated
tape, then as quoted by such exchange.
15.2 If the principal market for the securities to be valued is the
over-the-counter market, their Market Value shall be determined as follows.
If the securities are quoted on the Nasdaq stock market (Nasdaq), their
Market Value shall be the closing sale price on Nasdaq on the preceding
Business Day or, if the securities are issues for which last sale prices are
not quoted on Nasdaq, the closing bid price on such day. If the securities
to be valued are not quoted on Nasdaq, their Market Value shall be the
highest bid quotation as quoted in or by any of The Wall Street Journal, the
National Quotation Bureau pink sheets, or a recognized, independent pricing
source chosen by the Lender. If the securities to be valued are Government
Securities, their Market Value shall be the closing bid as quoted by any
recognized, independent pricing service chosen by the Lender or, if not
available from such a service, as quoted in The Wall Street Journal. In each
case, if the relevant quotation did not exist on such day, then the relevant
quotation on the next preceding Business Day on which there was such a
quotation shall be the Market Value.
15.3 Unless otherwise agreed, if the securities to be valued are
Foreign Securities, their Market Value shall be determined as of the close of
business on the preceding Business Day in accordance with market practice in
the principal market for such securities.
15.4 Market Value shall include, where applicable, accrued interest to
the extent not already included therein (other than any interest transferred
to the other party pursuant to Section 7).
15.5 With respect to Collateral consisting of cash, Market Value as of
any date shall be the face amount thereof held by Lender at the time of
determination and, with respect to Collateral consisting of Letters of
Credit, Market Value as of any date shall be the undrawn balance thereof
which Lender may at such time draw thereunder except that if, in the judgment
of Lender, the creditworthiness of the issuer of any Letter of Credit has
been or may be impaired, then, upon notice to Borrower, the Market Value of
such Letter of Credit shall be zero.
15.6 Unless otherwise agreed, where the Loaned Securities in respect
of a Loan are denominated in a currency other than the currency in which the
related Collateral is denominated the currency which shall be applicable for
purposes of determining Market Value shall be the Currency in which the
Collateral is denominated (the "Contractual Currency"), and all Loaned
Security not denominated in the Contractual Currency shall be converted into
a Contractual Currency equivalent based on the most current spot rate of
exchange quoted by the independent source of exchange rates as notified to
Borrower by Lender upon Borrower's request. Such notification may be oral.
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16. TRANSFERS.
16.1 All transfers of securities hereunder shall be by (a) physical
delivery of certificates representing such securities together with duly
executed stock and bond transfer powers, as the case may be, with signatures
guaranteed by a bank or a member firm of the New York Stock Exchange, Inc.,
(b) transfer on the books of a Clearing Organization, (c) transfer on the
books of a financial or securities intermediary in accordance with the UCC or
(d) such other means as Borrower and Lender may agree. In every transfer of
securities hereunder, the transferor shall take all steps necessary (i) to
effect a "transfer" under Section 8-313 of the UCC or any amended version of
Article 8 of the UCC that may hereafter be in effect, with respect to
transfers governed by Revised Article 8, to give the transferee control of
the transferred securities within the meaning of Revised Article 8 Section
8-106; and (ii) to provide the transferee with comparable rights under any
applicable foreign law or regulation.
16.2 All transfers of cash Collateral hereunder shall be by (a) wire
transfer in immediately available, freely transferable funds or (b) such
other means as Borrower and Lender may agree. All other transfers of cash
hereunder shall be made in accordance with the preceding sentence or by
delivery of same day funds.
16.3 All transfers of a Letter of Credit from Borrower to Lender shall
be made by physical delivery of the Letter of Credit to Lender. Transfer of
a Letter of Credit from Lender to Borrower shall be made by causing such
Letter of Credit to be returned or by causing the amount of such Letter of
Credit to be reduced to the amount required after such transfer.
16.4 A transfer of securities, cash or Letters of Credit may be
effected under this Section 16 on any day except (a) a day on which the
transferee is closed for business at its address set forth on the signature
page hereof or (b) a day on which a Clearing Organization or wire transfer
system is closed, if the facilities of such Clearing Organization or wire
transfer system are required to effect such transfer. Each transfer of
securities or cash shall be made to the account specified by the party to
whom such transfer is to be made.
17. CONTRACTUAL CURRENCY.
17.1 Unless otherwise agreed, each payment of cash under this
Agreement (except as provided in Section 7.2) shall be made in the
Contractual Currency. Notwithstanding the foregoing, the payee of any such
payment may, at its option, accept tender thereof in any other currency;
PROVIDED, HOWEVER, that, to the extent permitted by applicable law, the
obligation of the payor to make such payment will be discharged only to the
extent of the amount of Contractual Currency that such payee may, consistent
with normal banking procedures, purchase with such other currency (after
deduction of any premium and costs of exchange) on the banking day next
succeeding its receipt of such currency.
17.2 If for any reason the amount of the Contractual Currency received
under Section 17.1, including amounts received after conversion of any
recovery under any judgment or order expressed in a currency other than the
Contractual Currency, falls short of the amount in the Contractual Currency
due in respect of this Agreement, the party required to make the payment will
(unless a Default has occurred and such party is the non defaulting party),
as a separate and independent obligation and to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall.
17.3 If for any reason the amount in the Contractual Currency received
under Section 17.1 exceeds the amount in the Contractual Currency due in
respect of this Agreement, then the party receiving the payment will (unless
a Default has occurred and such party is the non-defaulting party) refund
promptly the amount of such excess.
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18. OBLIGATIONS TO BE SEPARATE. Each and every obligation, liability
or undertaking of an Account with respect to any Loan shall be solely an
obligation, liability or undertaking of, and binding upon, the Account for
which such Loan is made and shall be payable solely from the available assets
of such Account. No such obligation, liability or undertaking shall be
binding upon or affect any other Account or, in the case of an Account that
is a portfolio or series of an investment company registered as such under
the Investment Company Act of 1940 be binding, upon or affect any assets of
any other portfolio or series of such investment company. Neither
PaineWebber Incorporated (in its individual capacity) nor any Affiliate
thereof shall have any liability to Borrower whatsoever in respect of any
Loan, it being understood and agreed that Borrower shall have recourse solely
to the Account in the event of the occurrence of a Default involving the
Account.
19. ERISA. If any of the securities transferred to Borrower
hereunder for any Loan have been or shall be obtained, directly or
indirectly, from or using the assets of any Plan, Lender shall so notify
Borrower in writing upon the execution of this Agreement or upon initiation
of the Loan under Section 1.1. If Lender so notifies Borrower, then Borrower
and Lender shall conduct the Loan in accordance with the terms and conditions
of Department of Labor Prohibited Transaction Exemption 81-6 (46 Fed. Reg.
7527, January 23, 1981; as amended, 52 Fed. Reg. 18754, May 19, 1987), or any
successor thereto, unless Borrower certifies that neither it nor any of its
Affiliates is a party-in-interest to the Plan for purposes of ERISA. If a
Loan is to be conducted in accordance with Prohibited Transaction Exemption
81-6, then Borrower represents and warrants to Lender that it is either (a) a
bank subject to federal or state supervision, (b) a broker-dealer registered
under the Exchange Act or (c) exempt from registration under Section 15(a)(1)
of the Exchange Act as a dealer in exempted government securities (as defined
in Section 3(a)(12) of the Exchange Act) and (d) neither it nor any affiliate
(as defined in Prohibited Transaction Exemption 81-6) of Borrower has any
discretionary authority or control with respect to the investment of the
assets of the Plan involved in the Loan or renders investment advice (within
the meaning of 29 C.F.R. Section 2510.3-21(c)) with respect to the assets of
the Plan involved in the Loan. For purposes hereof, "Plan" shall mean (a)
any "employee benefit plan" as defined in Section 3(3) of ERISA which is
subject to Part 4 of Subtitle B of Title I of such Act; (b) any "plan" as
defined in Section 4975(e)(1) of the Internal Revenue Code of 1986; or (c)
any entity the assets of which are deemed to be assets of any such "employee
benefit plan" or "plan" by reason of the Department of Labor's plan asset
regulation, 29 C.F.R. Section 2510.3-101.
20. INDEMNIFICATION. Borrower agrees to indemnify and hold harmless
Lender and the Account (including the directors and officers of any Account
which is a corporation or business trust, and the sponsor and fiduciaries of
any Account which is a Plan) from any and all damages, losses, liabilities,
claims, costs and expenses (including attorneys' fees) which Lender or the
Account may incur or suffer arising in any way out of the use by Borrower of
Loaned Securities or any failure of Borrower to deliver Loaned Securities in
accordance herewith or to otherwise comply with the terms of this Agreement,
PROVIDED, HOWEVER, that this indemnification shall extend to consequential
losses or damages only to the extent that the same are caused by Borrower's
gross negligence or willful misconduct.
21. CALCULATIONS. Except as provided in Section 8.1, all
determinations of the Market Value of securities, Collateral, or other
property or amounts for any purpose under this Agreement shall be made in
good faith by Lender.
22. LIMITATION OF LIABILITY. With respect to each Account that has
represented to the Lender that it is a business trust, notice is hereby given
that this instrument is executed by Lender as agent on behalf of the Trustees
of each such Account as Trustees and not individually and that the
obligations of such Account under this instrument are not binding upon any of
the Trustees or shareholders of such Account individually but are binding
only upon the assets and property of each such Account.
23. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
giving effect to the conflict of laws principles thereof. Borrower hereby
irrevocably consents to the exclusive jurisdiction of any state or Federal
court located in New York, New York,
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and consents that all service of process shall be sent by (a) same-day messenger
service, or (b) nationally recognized overnight courier service directed to
Borrower at Borrower's address set forth below for notices, and service so made
will be deemed to be completed (a) at the time of deposit with the messenger
service or (b) on the Business Day after deposit with such courier; provided,
that nothing contained in this Agreement will prevent Lender from bringing any
action, enforcing any award or judgment or exercising any rights against
Borrower individually, against any security or against any property of Borrower
within any other county, state or nation. Lender and Borrower agree that the
venue provided above is the most convenient forum for both Lender and Borrower,
and Borrower waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.
24. WAIVER OF JURY TRIAL: ARBITRATION. EACH OF THE BORROWER AND
LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. BORROWER AND LENDER ACKNOWLEDGE THAT
THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. Any dispute or controversy
between the parties relating to or arising out of this Agreement or any Loan
shall be referred to and settled by arbitration pursuant to the Constitution
and Rules of The New York Stock Exchange, Inc., in New York City, New York,
except that any dispute or controversy arising out of an event under Section
11.6 above shall not be referred to arbitration. Borrower acknowledges that
it has read and understood all the provisions of this Agreement, including
the waiver of jury trial, and has been advised by counsel as necessary or
appropriate.
25. WAIVER. The failure of either party to exercise any remedy or to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right
thereafter to exercise any of its remedies or to insist upon strict adherence
to that term or any other term of this Agreement. All waivers in respect of
a Default must be in writing.
26. REMEDIES. All remedies hereunder and all obligations with
respect to any Loan shall survive the termination of the relevant Loan,
return of Loaned Securities or Collateral and termination of this Agreement.
The parties agree that, in the event that Lender fails to enforce any of its
rights or remedies hereunder, such rights and remedies may be enforced
against Borrower by the Account.
27. NOTICES AND OTHER COMMUNICATIONS. Except as otherwise provided
in this Agreement, all notices, demands, and other communications hereunder
shall be sufficient if made in writing and delivered or transmitted (as the
case may be) by registered mail, facsimile, telex, or courier, or by
telephone promptly confirmed in writing and delivered or transmitted as
aforesaid, to the intended recipient at the addresses (or to the numbers) set
forth on the signature page hereof. Notices shall be effective upon receipt.
28. MISCELLANEOUS. This Agreement constitutes the entire agreement
between the parties hereto, other than any agreement between the parties that
specifies that it relates specifically to loans of securities of a particular
Account or group of Accounts. This Agreement shall not be assigned by either
party (either directly or indirectly as a result of a merger, consolidation
or other reorganization) without the prior written consent of the other
party. Subject to the foregoing, this Agreement shall be binding upon and
shall enure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns. This Agreement may be terminated by
either party upon giving written notice to the other, subject only to
fulfillment of any obligations then outstanding. This Agreement shall not be
modified, except by an instrument in writing specifically referring hereto,
signed by the party against whom enforcement is sought.
29. DEFINITIONS. For the purposes hereof:
29.1 "Account" means, with respect to any Loan, the account for which
Lender is acting as agent in
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making the Loan.
29.2 "Affiliate" shall mean any entity which controls, is controlled
by, or is under common control with another entity.
29.3 "Bankruptcy Code" shall have the meaning set forth in Section 10.6.
29.4 "Borrower" shall have the meaning set forth in the introduction.
29.5 "Borrower Payment" shall have the meaning set forth in Section 7.4.
29.6 "Business Day" shall mean, with respect to any Loan hereunder,
any day (other than a Saturday or Sunday) recognized as a settlement day in
the principal market in which the Loaned Securities are traded, PROVIDED,
HOWEVER, that for the purposes of computing Market Value in Section 15,
"Business Day" shall mean a day on which regular trading occurs in the
principal market for the securities whose value is being determined.
Notwithstanding the foregoing, for purposes of marking to market in Section
8, "Business Day" shall mean any day (other than a Saturday or Sunday) (a) on
which regular trading occurs in the principal market for any Loaned
Securities or for any Collateral consisting of securities under any
outstanding Loan or (b) on which transfers of cash Collateral may be effected
by Lender and Borrower (or any nominee or agent thereof).
29.7 "Cash Collateral Fee" shall have the meaning set forth in
Section 4.2.
29.8 "Clearing Organization" shall mean The Depository Trust
Company, Participants Trust Company or if agreed to by Borrower and Lender,
such other clearing agency at which Borrower (or Borrower's agent) and Lender
(or Lender's agent) maintain accounts, or a book entry system maintained by a
Federal Reserve Bank.
29.9 "Collateral" shall mean: (a) all cash, Government Securities and
all other marketable securities or Letters of Credit that Borrower and Lender
agree shall be acceptable as collateral, whether now owned or hereafter
acquired, which are transferred to Lender pursuant to Sections 3 or 8; (b)
all accounts in which such property is deposited and all securities,
instruments or other investment property in which any cash collateral is
invested or reinvested; and (c) any payments, distributions and proceeds of
the foregoing. For purposes of the return of Collateral by Lender or
purchase or sale of securities in connection with the exercise of Lender's or
Borrower's remedies, such term shall include securities of the same issuer,
class and quantity as the Collateral initially transferred by Borrower to
Lender.
29.10 "Collateral Distributions" shall have the meaning set forth in
Section 7.4.
29.11 "Contractual Currency" shall mean: (a) with respect to any
payment in respect of a distribution under Section 7, the currency in which
the underlying distribution was made; (b) with respect to any return of cash,
the currency in which the underlying transfer of cash was made; (c) with
respect to any other payment of cash in connection with a Loan, United States
dollars or such other currency as may be agreed upon by Borrower and Lender;
and (d) for purposes of determining Market Value of Loaned Securities and
Collateral in respect of a Loan in which the Loaned Securities and the
Collateral are denominated in different currencies, the currency in which the
Collateral is denominated.
29.12 "Default" shall have the meaning set forth in Section 11.
29.13 "Fed Funds Rate" shall mean the rate of interest (expressed as an
annual rate), as published in Federal Reserve Statistical Release H.15 (519)
or any publication substituted therefor, charged for federal funds (dollars
in immediately available funds borrowed by banks on an overnight unsecured
basis) on that day or, if that
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day is not a banking day in New York City, on the next preceding banking day.
29.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974.
29.15 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
29.16 "Foreign Securities" shall mean securities that are denominated
in a currency other than United States Dollars and that are principally
cleared and settled outside of the United States.
29.17 "Government Securities" shall mean government securities as
defined in Section 3(a)(42)(A)-(C) of the Exchange Act.
29.18 "Lender" shall have the meaning set forth in the introduction.
29.19 "Lender Payment" shall have the meaning set forth in Section 7.4.
29.20 "Letter of Credit" shall mean an irrevocable, unconditional,
stand-by letter of credit, in form and substance satisfactory to Lender,
issued by a bank (not affiliated with Borrower) which is acceptable to Lender
and is insured by the Federal Deposit Insurance Corporation or is a foreign
bank that has filed an agreement with the Board of Governors of the Federal
Reserve System on Form FR T-2 (or any successor).
29.21 "LIBOR" shall mean for any date, the offered rate for deposits in
U.S. dollars for a period of three months which appears on the Reuters Screen
LIBOR page as of 11:00 A.M., London time, on such date (or, if at least two
such rates appear, the arithmetic mean of such rates).
29.22 "Loan" shall have the meaning set forth in Section 1.1.
29.23 "Loan Fee" shall have the meaning set forth in Section 4.1.
29.24 "Loaned Securities" shall mean any security (as defined in the
Exchange Act) that is transferred in a Loan until such security (or an
identical security) is transferred back to Lender hereunder, except that if
any new or different security shall be exchanged for any Loaned Security by
recapitalization, merger, consolidation or other corporate action, such new
or different security shall, effective upon such exchange, be deemed to
become a Loaned Security in substitution for the former Loaned Security for
which such exchange is made. For purposes of the return of Loaned Securities
by Borrower or purchase or sale of securities in connection with the exercise
of Lender's or Borrower's remedies hereunder, such term shall include
securities of the same issuer, class and quantity as the Loaned Securities,
as adjusted pursuant to the preceding sentence.
29.25 "Margin Deficit" and "Margin Excess" shall have the meanings set
forth in Sections 8.2 and 8.3, respectively.
29.26 "Margin Regulations" shall have the meaning set forth in
Section 9.4.
29.27 "Market Value" shall mean market value determined in accordance
with Section 15.
29.28 "Plan" shall have the meaning set forth in Section 18.
29.29 "Required Value" shall mean, as of any date of determination, the
following percentage of the Market Value of the Loaned Securities: (a) in the
case of Foreign Securities, 105%; and (b) in the case of all other Loaned
Securities, 102%.
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29.30 "Revised Article 8" shall mean the Uniform Commercial Code,
Revised Article 8, Investment Securities (with Conforming and Miscellaneous
Amendments to Articles 1, 3, 4, 5, 9 and 10), 1994 Official Text, as
incorporated by reference in 31 C.F.R. Part 357.
29.31 "Securities Distributions" shall have the meaning set forth in
Section 7.4.
29.32 "SIPA" shall have the meaning set forth in Section 11.6.
29.33 "Tax" shall have the meaning set forth in Section 7.4.
29.34 "Termination Notice Time" shall mean, with respect to a notice to
Lender to terminate a Loan: (a) with respect to a Loan of Government
Securities, 9:45 a.m., Eastern time on a Business Day; (b) with respect to a
Loan of Foreign Securities, 11:00 a.m., Eastern time on the second Business
Day preceding the termination date; and (c) with respect to any other Loan,
11:00 a.m., Eastern time, on a Business Day.
29.35 "Transfer" or "transfer" of cash, securities or Letters of Credit
by Lender to Borrower or by Borrower to Lender shall mean a transfer effected
in accordance with Section 16.
29.36 "UCC" shall mean the Uniform Commercial Code in effect in the
State of New York, as the same may be amended from time to time.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Address for Notices: PAINEWEBBER INCORPORATED, in
its capacity as agent for Accounts(s)
265 Franklin Street and not in its individual capacity
15th Floor
Boston, Massachusetts 02110 By:
-------------------------------------
Attn: Global Portfolio Lending
Facsimile No.: (617) 439-8215 Name:
Telephone No.: (617) 439-8556 -------------------------------------
Title:
-------------------------------------
Address for Notices: -------------------------------------
as Borrower
- --------------------------- By:
- --------------------------- -------------------------------------
- ---------------------------
Name:
Attn: -------------------------------------
----------------------
Title:
Facsimile No.: -------------------------------------
-------------
Telephone No.:
-------------
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SERVICE AGREEMENT
This Service Agreement ("Agreement") is entered into as of November 10,
1997, by and among PaineWebber Incorporated, a Delaware corporation
("PaineWebber") and Denver Investment Advisors LLC, a Colorado Limited Liability
Corporation ("Co-Administrator" or "DIA"), ALPS Mutual Fund Services, Inc., a
Colorado corporation ("Distributor"), and Westcore Trust, a Massachusetts
Business Trust (the "Trust"), each on its own behalf and Westcore Trust on
behalf of each of the registered investment companies listed on Exhibit A (such
registered investment companies and the specific series or classes of shares
listed in Exhibit A being referred to as the "Fund(s)").
RECITALS
1. PaineWebber is the sponsor of a mutual fund advisory program
("Program") on behalf of certain clients of PaineWebber. Clients of PaineWebber
who participate in the Program are referred to in this Agreement as "Program
Clients";
2. Program Clients may purchase the shares of certain proprietary and
nonproprietary open-end management investment companies;
3. Distributor is the principal underwriter and distributor for the
Funds, each of which is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940 ("1940 Act"), and offers for sale shares of the Funds, which
may include shares issued in separate series or classes;
4. DIA acts as co-administrator of the Trust's Funds;
5. PaineWebber and Distributor each wish to allow shares of the Funds
("Shares") to be sold to Program Clients at net asset value, subject to the
terms and conditions of this Agreement; and
6. PaineWebber and Distributor each wish to allow Shares that Program
Clients have purchased outside the Program, to be brought within the Program,
subject to the terms and conditions of this Agreement.
THEREFORE, in consideration of the foregoing and the mutual promises
contained in this Agreement, the parties agree as follows:
1. CERTAIN DEFINED TERMS. As used in this Agreement, the term "Prospectus"
means a Fund's current statutory prospectus and the term "Statement of
Additional Information" or "SAI" means a Fund's current statement of additional
information, whether in paper format or electronic format, each as included in
the Fund's currently effective registration statement (or post-effective
amendment thereto) filed with the SEC pursuant to the Securities Act of 1933
<PAGE>
("1933 Act"). The terms "Prospectus" and "SAI" include any information that the
Fund files with the SEC under the 1933 Act as a supplement to such prospectus or
statement of additional information, respectively. "Business Day" shall mean
any day that the New York Stock Exchange is open for trading.
2. SALE OF SHARES. (a) PaineWebber may, in its sole discretion, make
available to its Program Clients Shares of any or all of the Funds listed on
Exhibit A. Distributor will offer Shares to Program Clients, as PaineWebber
may request. PaineWebber will have the right to discontinue the use of any
Funds in the Program at any time.
(b) Distributor and each Fund agree that all transactions involving Shares
that are effected pursuant to this Agreement will be made (i) without any
initial sales charges, loads, transaction fees, contingent deferred sales loads,
or any fee charged to exchange one Fund's Shares for Shares of another Fund, and
(ii) no minimum amount will be required to make an additional purchase or
redemption of Shares (whether by direct investment or exchange). However,
Program Clients will continue to be subject to the Funds' requirements regarding
minimum initial investments and other provisions of the Funds' prospectus.
(c) PaineWebber will not receive any discount, commission or other
concession with respect to any such sales, but will be entitled to receive
service fees as set forth in Section 5 hereof.
(d) With regard to each transaction in Shares for, and any services
provided to, a Program Client: (i) except as provided in Section 2(f) below,
PaineWebber will act solely as agent for its client, and in no circumstances
will PaineWebber be authorized by this Agreement to act as agent for Distributor
or for any Fund; (ii) PaineWebber will initiate transactions only upon its
client's order; (iii) Distributor will effect transactions only upon receiving
instructions from PaineWebber as agent for its client; (iv) as between
PaineWebber and its client, the client will have full beneficial ownership of
all Shares; and (v) each transaction will be for the client's account and not
for PaineWebber's own account.
(e) PaineWebber agrees to make Shares available to its Program Clients
only at their net asset value per share, as determined in accordance with the
Fund's Prospectus and SAI. PaineWebber assumes no responsibility or liability
for the determination of that net asset value or the total price.
(f) Distributor, on behalf of each Fund, hereby appoints PaineWebber as
each Fund's agent for the limited purpose of accepting orders of purchase and
redemption by Program Clients and receipt by PaineWebber shall therefore
constitute receipt by the Fund of such orders for purposes of determining the
net asset value at which such orders will be executed.
(g) PaineWebber and each Fund or its transfer, shareholder servicing
and/or other
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agent has entered into a separate written agreement to facilitate the
transmission of information regarding such accounts through the NETWORKING
system of the National Securities Clearing Corporation ("NSCC") (that agreement
and any exhibits thereto, the "NETWORKING Agreement"). The parties agree that
each such account will be maintained through the NSCC's NETWORKING system at
matrix level 3.
(h) Unless required by a Fund's Prospectus or by any applicable federal or
state law, rule, or regulation, certificates evidencing Shares will not be
available, and any transaction in Shares will be effected and evidenced by
book-entry on the records maintained by the Fund's transfer agent. If
PaineWebber clients submit share certificates for transfer into Program
accounts, PaineWebber will deposit such certificates, properly endorsed, with
the Fund or its agent in accordance with the NETWORKING Agreement, applicable
NSCC rules and procedures, and any other procedures that the parties may agree
upon from time to time.
(i) Except as specifically set forth herein, nothing in this Agreement
will be deemed or construed to make PaineWebber a partner, employee,
representative, or agent of Distributor or any Fund or to create a partnership,
joint venture, syndicate, or association between or among said parties. Neither
this Agreement nor the performance of the services of the parties hereunder will
be considered to constitute an exclusive arrangement by either party.
3. PROGRAM CLIENTS. (a) Co-Administrator agrees to notify PaineWebber
promptly of any change to any Fund's Prospectus or SAI that changes the
requirements for offering the Shares to Program Clients at net asset value.
(b) PaineWebber will maintain with the Fund's shareholder servicing agent
separate accounts for each Program Client who purchases Shares pursuant to this
Agreement.
(c) Distributor and each Fund acknowledge that the identities of Program
Clients and any other clients of PaineWebber (including any retirement plans),
information about those clients, and all computer programs and procedures
developed by PaineWebber or its agents in connection with their operations
constitute PaineWebber's valuable property. Distributor and each Fund hereby
agree that should they or their affiliates come into possession of any list or
compilation of the identities of or other information about PaineWebber's
clients, or any other property of PaineWebber, its affiliates or agents,
Distributor and each Fund and their affiliates will hold such information or
property in confidence and refrain from using, disclosing, or distributing any
such information or other property except (i) with PaineWebber's prior written
consent, or (ii) as required by law, regulation, or judicial process.
Distributor and each Fund acknowledge that any breach of the foregoing
agreements would result in immediate and irreparable harm to the other party for
which there would be no adequate remedy at law and agrees that in the event of
such a breach, the nonbreaching party will be entitled to equitable relief by
way of temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate. Any reports or records
related to the Program or to PaineWebber clients that PaineWebber may provide to
Distributor or the Funds or any of
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their affiliates from time to time constitute the proprietary information of
PaineWebber; each Fund, Distributor and their affiliates shall hold such
information in confidence and shall refrain from using, disclosing, or
distributing any of such information, except with PaineWebber's prior written
consent or as required by law, regulation or judicial process.
4. SERVICES TO BE PROVIDED BY PAINEWEBBER. Pursuant to this Agreement,
PaineWebber will render or cause to be rendered ongoing services to, and
maintenance of shareholder accounts for Program Clients who hold Shares. These
services may include but are not limited to:
(a) providing Program Clients with Fund Prospectuses, SAIs, educational
publications and other Fund information;
(b) helping Program Clients to complete Fund forms and to designate and
update dividend options, account designations, and mailing addresses;
(c) processing telephonic, mail and in-person inquiries regarding the
Funds;
(d) researching and providing historical activity information about Shares
for periods prior to client's entry into Program;
(e) coordinating bank-to-bank wire transfers in connection with
transactions in Shares, on transfers for which no separate fee is
charged to Program Clients; and
(f) providing such other assistance and support to Program Clients as the
parties may agree upon from time to time.
In no event shall such services include investment advice.
5. COMPENSATION. (a) As compensation for providing the services described in
Section 4 hereof, Co-Administrator (or any successor as permitted pursuant to
this Agreement) will pay PaineWebber a service fee, which will be calculated and
accrued as .25% per annum of the value of the average monthly assets in the
Program that are invested in each Fund, to be computed and paid on a monthly
basis. No compensation will be payable hereunder by the Funds.
(b) For any communication to Fund shareholders that PaineWebber makes on
behalf of Distributor pursuant to this Agreement, Distributor will provide
PaineWebber with copies of the communications in amounts as PaineWebber may
reasonably request and Distributor will reimburse PaineWebber for all reasonable
out-of-pocket expenses that PaineWebber incurs in mailing such shareholder
communications, including the cost of any mailing agent. In addition,
Distributor will reimburse PaineWebber for any reasonable out-of-pocket costs it
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<PAGE>
incurs to receive, tabulate and transmit proxies.
(c) Upon execution of an amendment pursuant to Section 11 of this
Agreement, the parties may change or discontinue any fee schedule or agree on a
revised schedule. With respect to services provided after the effective date of
any change in or discontinuance of a fee schedule, any fees will be allowable or
payable to PaineWebber only in accordance with such change, discontinuance, or
termination. Services provided before the effective date of any such change,
discontinuance, or termination will be subject to the fee schedule that was in
effect at the time the services were provided.
6. INFORMATION RELATING TO THE FUNDS. (a) No person is authorized to make
any representations concerning shares of a Fund that are inconsistent with the
Fund's currently effective registration statement, including exhibits thereto,
or in the offering documents, sales literature, and marketing materials
described in Section 6(b) below. PaineWebber assumes no responsibility or
liability for the representations contained in such registration statement or
other materials not produced by PaineWebber or any of its affiliates.
(b) PaineWebber will furnish, or cause to be furnished, to Distributor or
its designee any offering documents, sales literature, and marketing materials
(including materials disseminated through radio, television, or other electronic
media) in which Distributor, any Fund, its investment adviser or subadviser, if
any, is named, except that PaineWebber may use advertising, promotional, and
other written materials relating to the availability of Shares through the
Program if that material refers to the Funds or the Distributor only insofar as
it includes the names of particular Funds and indicates that they are available
to Program Clients or indicates generally that PaineWebber makes available to
its clients certain funds distributed by Distributor.
(c) PaineWebber will furnish or cause to be furnished to Distributor sales
material required to be furnished pursuant to section 6(b) of this Agreement at
least five Business Days prior to use, except that if an item of sales material
has already been reviewed by Distributor and then is revised solely with respect
to statistical data relating to the Funds, PaineWebber will furnish that
material or cause it to be furnished to Distributor at least three days prior to
use.
(d) No sales material that must be submitted to Distributor or its
designee pursuant to section 6(b) or 6(c) of this Agreement shall be used if the
Distributor or its designee objects to such use within five Business Days after
receipt of such material (or, with respect to previously reviewed material that
is being revised solely with respect to statistical data on the Funds, within
three Business Days), provided however, that such consent shall not be
unreasonably withheld. Advertising and promotional materials for the Program
also may refer generally to the availability of Shares at net asset value, "no
load," or "load waived;" provided that such materials also reflect that Program
Clients will be charged an account management fee in connection with their
participation in the Program.
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(e) Distributor acknowledges that Distributor, the Funds or any of their
affiliates may provide information about the Funds to CDA Investment
Technologies, Inc. ("CDA") for publication on the CDA information system.
Distributor will review for completeness and accuracy any and all such
information as it appears on the CDA system. PaineWebber assumes no
responsibility or liability for information about the Funds available on the CDA
system.
7. COMPLIANCE WITH REGISTRATION REQUIREMENTS. Distributor and the Trust
hereby represent and warrant that each Fund's Shares have been registered or
qualified for sale under the federal securities laws and that appropriate notice
filings or other qualifications have been made under the securities laws of
those states and jurisdictions in which Distributor or the Trust has advised
PaineWebber that such Shares may be offered and sold, and that each Fund's
registration statement complies in all material respects with applicable
regulatory and disclosure requirements. PaineWebber will not process purchase
orders for Fund Shares on behalf of its customers who reside in a particular
state if Trust or Distributor has advised PaineWebber, in connection with state
securities laws, not to do so. Absent written notice to the contrary,
PaineWebber will assume that shares of each Fund are registered in every state
and jurisdiction that requires registration prior to sale. Distributor agrees
to comply with the Understanding Regarding the Accuracy, Completeness and
Circumstances of Providing Written Materials, attached hereto as Exhibit B, and
hereby makes the representations, warranties, and covenants set forth therein
which shall be deemed to continue throughout the term of this Agreement.
PaineWebber agrees to comply with all applicable federal and state laws and
regulations relating to the services provided hereunder, and PaineWebber
acknowledges and agrees that neither Distributor, Co-Administrator, Trust nor
the Funds are responsible for PaineWebber's compliance with such applicable
laws. No registration filing with or consent of any governmental authority is
necessary for the performance of the duties of PaineWebber under this Agreement.
8. NOTIFICATION OF ELECTION. Each Fund hereby represents and warrants that it
has filed a notification of election on Form N-18F-1 notifying the SEC that it
has committed to pay in cash all requests for redemption by any shareholder of
record subject to the limitations set forth in rule 18f-1 under the 1940 Act.
9. AUTHORIZATION. (a) Distributor represents and warrants to PaineWebber
that the person executing this Agreement on behalf of Distributor is duly
authorized to execute and deliver this Agreement on behalf of Distributor.
(b) Each Fund represents and warrants to PaineWebber that the person
executing this Agreement on behalf of each Fund is duly authorized to execute
and deliver this Agreement on behalf of each Fund.
(c) PaineWebber represents and warrants that it and the persons executing
this
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Agreement on its behalf are duly authorized to execute and deliver this
Agreement on behalf of PaineWebber.
10. INDEMNIFICATION. (a) Distributor will indemnify and hold harmless
PaineWebber, each director, officer, employee, and agent of PaineWebber, and
each person who is or may be deemed to be controlling, controlled by or under
common control with PaineWebber from and against any and all direct and indirect
claims, damages, losses, liabilities, or expenses (including the reasonable
costs of investigation and reasonable attorney's fees) resulting from (i) the
willful misconduct or negligence, as measured by industry standards, of
Distributor, its agents and employees, in the performance of, or failure to
perform, its obligations under this Agreement; (ii) any violation of any law,
rule, or regulation relating to the registration or qualification of shares of a
Fund, except to the extent such violation results from the willful misconduct or
negligence, as measured by industry standards, of PaineWebber; (iii) any untrue
statement, or alleged untrue statement, of a material fact contained in any
Fund's registration statement or any offering documents, sales literature, or
marketing materials that Distributor, a Fund or any of their affiliates provide
to PaineWebber or to CDA, or any omission, or alleged omission, to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (iv) any breach or violation of the representations,
warranties, or covenants set forth in Exhibit B hereto; PROVIDED, HOWEVER, that
Distributor will not be liable for indemnification hereunder to the extent that
any claim, damage, loss, liability, or expense results from the willful
misconduct or negligence, as measured by industry standards, of PaineWebber or
its affiliates. Such right of indemnification will survive the termination of
this Agreement.
(b) PaineWebber will indemnify and hold harmless Distributor and each
director, officer, employee, and agent of Distributor and each person who is or
may be deemed to be controlling, controlled by or under common control with
Distributor, from and against any and all direct and indirect claims, damages,
losses, liabilities, or expenses (including the reasonable costs of
investigation and reasonable attorney's fees) resulting from (i) the willful
misconduct or negligence, as measured by industry standards, of PaineWebber, its
agents and employees, in the performance of, or failure to perform, its
obligations under this Agreement, (ii) any untrue statement, or alleged untrue
statement, of a material fact contained in offering documents, sales literature,
or marketing materials that PaineWebber or any of its affiliates produces and
provides to Program Clients who are Fund shareholders, or any omission, or
alleged omission, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) the failure to
timely and properly transmit orders and instructions to the Funds or their
affiliates, or (iv) cancellation or subsequent correction of any orders and
instructions transmitted to the Funds (or their affiliates); PROVIDED, HOWEVER,
that PaineWebber will not be liable for indemnification hereunder to the extent
that any claim, damage, loss, liability, or expense results from the willful
misconduct or negligence, as measured by industry standards, of Distributor,
Co-Administrator, or Trust or their affiliates. This right of indemnification
will survive the termination of this Agreement.
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(c) If any action, suit, or proceeding is initiated against any party
indemnified hereunder ("Indemnified Party") with respect to which such party
intends to seek indemnification, the Indemnified Party will notify the other
party ("Indemnifying Party") of such action, suit, or proceeding promptly after
service of the summons or other first legal process. Such notice will be given
by a means of prompt delivery that provides confirmation of receipt to the
address detailed below under Section 14. The failure of the Indemnified Party
so to notify the Indemnifying Party will relieve the Indemnifying Party of its
indemnity obligation with respect to that action, suit, or proceeding to the
extent that such omission results in the forfeiture of substantive rights or
defenses by the Indemnifying Party; failure to give prompt notice will not
relieve the Indemnifying Party of any liability that it otherwise may have to
the Indemnified Party. The Indemnifying Party will be entitled to assume the
defense of such action, suit, or proceeding with counsel reasonably satisfactory
to the Indemnified Party. If the Indemnifying Party elects to assume the
defense thereof and retains counsel, the Indemnified Party will bear the fees
and expenses of any additional counsel retained by it, unless (1) the employment
of counsel by the Indemnified Party has been authorized in writing by the
Indemnifying Party, (2) the Indemnified Party has reasonably concluded that
there may be legal defenses available to it or other Indemnified Parties that
are different from, or in addition to those available to the Indemnifying Party
(in which case the Indemnifying Party will not have the right to direct the
defense of such action on behalf of the Indemnified Party) or (3) the
Indemnifying Party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees and expenses of
counsel will be at the expense of the Indemnifying arty or Parties. All such
fees and expenses will be reimbursed promptly as they are incurred. An
Indemnifying Party will not be liable for any settlement of any action or claim
effected without its written consent, or, in connection with any proceeding or
related proceeding in the same jurisdiction, for the fees and expenses of more
than one separate counsel for all indemnified parties, except to the extent
provided herein. The Indemnifying Party will keep the Indemnified Party
informed of all material developments and events relating to such action, suit,
or proceeding. If the Indemnifying Party does not elect to assume the defense,
the Indemnifying Party will reimburse the Indemnified Party for the reasonable
fees and expenses of any counsel retained by it, which fees and expenses will be
payable to the Indemnified Party at such intervals as the parties may determine
or upon the Indemnifying Party's receipt of a bill related thereto.
(d) In no case shall the indemnification provided in this Section 10 be
available to protect any person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its or his obligations or duties hereunder, or
by reason of its or his reckless disregard of its or his obligations and duties
hereunder.
11. AMENDMENTS. This Agreement may be amended only by an instrument in writing
signed by each party.
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12. DURATION AND TERMINATION OF AGREEMENT. (a) This Agreement will continue in
effect unless terminated as provided herein. A party may terminate this
Agreement without cause by giving the other party at least sixty (60) days'
written notice of its intention to terminate. This Agreement will terminate
automatically in the event of its "assignment" (as defined in the 1940 Act).
The termination of this Agreement with respect to any given Fund will not cause
its termination with respect to any other Fund.
(b) In the event that (i) an application for a protective decree under the
provisions of the Securities Investor Protection Act of 1970 is filed against a
party; (ii) a party files a petition in bankruptcy or a petition seeking similar
relief under any bankruptcy, insolvency, or similar law, or a proceeding is
commenced against a party seeking such relief; (iii) a party is found by the
SEC, the National Association of Securities Dealers ("NASD"), or any other
federal or state regulatory agency or authority to have violated any applicable
federal or state law, rule, or regulation arising out of its activities in
connection with this Agreement; or (iv) a Fund rescinds or removes any authority
or approval necessary for Distributor to enter into this Agreement, this
Agreement will terminate effective immediately upon notice of termination by the
other party. Each party agrees to notify the other promptly in the event of any
such filing, finding of violation, or other action under this subparagraph.
(c) The failure of a party to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement at a
later date for the same or another cause; PROVIDED, HOWEVER, that any
termination for an event specified in Section 12(b) above must occur within 120
days of the date on which the terminating party receives notice of the
applicable filing or finding of violation.
(d) After the date of termination of this Agreement (the "Termination
Date"), the compensation described in Section 5 hereof will continue to be due
with respect to any Shares held by PaineWebber clients pursuant to the Program
on the Termination Date for so long as such shares are held in a Program account
and PaineWebber continues to provide the services described in Section 4 hereof
(other than services relating to shares purchased after the Termination Date).
PaineWebber agrees that, in the event of termination of the Agreement as
provided in this Section 12, it shall provide Co-Administrator with such reports
and certificates as Co-Administrator may reasonably request as necessary to
determine that the continued payment of compensation has been calculated in
accordance with this Agreement.
(e) If PaineWebber permits a client that withdraws from the Program to
move Shares held in the Program to a PaineWebber brokerage account or to a
different PaineWebber advisory program, the payment of compensation by the
Co-Administrator to PaineWebber with respect to such shares shall be governed by
the dealer agreement between Co-Administrator and PaineWebber or, in the case of
an advisory program, by the agreement between Co-Administrator and PaineWebber
that relates to that advisory program.
13. ARBITRATION. In the event of a dispute with respect to this Agreement that
the parties are
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<PAGE>
unable to resolve themselves, such dispute will be settled by arbitration before
arbitrators sitting in the Borough of Manhattan, New York, New York in
accordance with the then existing NASD Code of Arbitration Procedure ("NASD
Code"). The arbitrators will act by majority decision, and their award may
allocate attorneys' fees and arbitration costs between the parties. Their award
will be final and binding between the parties, and such award may be entered as
a judgment in any court of competent jurisdiction. The parties agree that, to
the extent permitted by the NASD Code, the arbitrators will be selected from the
securities industry.
14. NOTICES. Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given under this Agreement will be given in
writing and delivered by personal service, by postage prepaid mail -- return
receipt requested, by overnight carrier or by facsimile machine or a similar
means of same or next day delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices to PaineWebber will
be given or sent to PaineWebber at its offices at 1285 Avenue of the Americas,
15th Floor, New York, NY 10019, Attention: Brendan Boyle, Director of Mutual
Fund Sales and Marketing, Copy to: Victoria Schonfeld, General Counsel,
Mitchell Hutchins Asset Management Inc., 1285 Avenue of the Americas, 18th
Floor, New York, NY 10019.
All notices to Distributor will be given or sent to: ALPS Mutual Fund Services,
Inc., 370 Seventeenth Street, Suite 3100, Denver, CO 80202.
All notices to Co-Administrator will be given or sent to: Denver Investment
Advisors LLC, 1225 Seventeenth Street, 26h Floor, Denver, CO 80202.
All notices to Trust will be given or sent to: Westcore Trust, 370 Seventeenth
Street, Suite 3100, Denver, CO 80202.
Each party may change the address to which notices will be sent by giving notice
to the other party in accordance with this Section 14.
15. MISCELLANEOUS. (a) This Agreement will be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of choice of laws.
(b) If any provision of this Agreement is held or made invalid by a court
or regulatory agency decision, statute, rule or otherwise, the remainder of the
Agreement will continue to be valid and enforceable.
(c) The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Amended and
Restated Declaration of Trust dated November 19, 1987 as amended July 16, 1990
and as may be further amended from time
-10-
<PAGE>
to time which is hereby referred to and a copy of which is on file at the office
of the State Secretary of the Commonwealth of Massachusetts and the principal
office of the Trust. The obligations of "Westcore Trust" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property, and all persons dealing with any class of shares of the
Trust must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
The captions in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions of the Agreement or
otherwise affect their meaning or interpretation.
-11-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date set
forth above by a duly authorized representative of the parties hereto:
(PLEASE PRINT OR TYPE)
ALPS Mutual Funds Services, Inc.
By:/s/ Edmund J. Burke
------------------------------
Name: Edmund J. Burke
Title: Senior Vice President
Denver Investment Advisors LLC
By:/s/ Kenneth V. Penland
------------------------------
Name: Kenneth V. Penland
Title: Chairman
Westcore Trust
On behalf of the Funds listed on Exhibit A to this Agreement
By:/s/ Jack D. Henderson
------------------------------
Name: Jack D. Henderson
Title: Vice President
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, NY 10019
By:/s/ Brendon Boyle
------------------------------
Name: Brendon Boyle
Title: Sr. Vice President
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<PAGE>
EXHIBIT A
Distributor is the principal underwriter and distributor for each of the
following Funds that are parties to the Agreement:
(INSERT FUND NAMES HERE; PLEASE TYPE)
Westcore MIDCO Growth Fund
Westcore Growth and Income Fund
Westcore Blue Chip Fund
Westcore Small-Cap Opportunity Fund
Westcore Intermediate-Term Bond Fund
Westcore Long-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
<PAGE>
EXHIBIT B
UNDERSTANDING REGARDING THE
ACCURACY, COMPLETENESS AND CIRCUMSTANCES OF PROVIDING
WRITTEN MATERIALS
PaineWebber Incorporated and its affiliates ("PaineWebber") have a formal
policy relating to all offering documents, sales literature, and marketing
materials (1) of outside mutual fund products made available through
PaineWebber's Program, including all such materials distributed or made
available by you. All such materials must be up-to-date as of the time they are
distributed or made available by you to PaineWebber personnel, including, but
not limited to, PaineWebber's employees, agents and representatives. In
addition, for all such materials that you distribute or make available to
PaineWebber personnel, you represent, warrant and covenant now and for such
materials in the future that:
1. PUBLIC MATERIALS: All materials intended for public dissemination
which are distributed or made available by you to PaineWebber personnel have
been submitted to and cleared by the United States Securities and Exchange
Commission or the National Association of Securities Dealers, Inc., as
appropriate for use by an NASD member, and comply with applicable laws, rules
and regulations.
2. "INTERNAL USE ONLY" MATERIALS: No material will be distributed or
made available to PaineWebber personnel which is intended for "internal" or
"broker use only."
3. CONTINUING COMPLIANCE: You acknowledge that the distribution to
PaineWebber personnel of the above-referenced materials that are not in
compliance with the above statements is strictly prohibited, and you acknowledge
that PaineWebber is relying on you fulfilling your obligations and agreements
hereunder. Further, you will take all reasonable actions to prevent the
distribution to PaineWebber personnel of any such materials that are
inconsistent with these representations.
- --------------------
(1) Sales literature, marketing materials and "Internal Use Only" documents
include, but are not limited to: broker-dealer kits; brochures;
newsletters; advertisements; documents regarding sales promotions or
contests; questions and answer sheets; scripts; speech outlines or other
public presentations; prospecting or solicitation letters; slide
presentations; audiotapes and videotapes; columns prepared for outside
publications; reprints or excerpts from published materials; and any
documents or materials adapted from the above materials.
<PAGE>
OMNIBUS ACCOUNT SERVICES AGREEMENT
AGREEMENT entered into as of 2/26/98, by and amount Westcore Trust, Denver
Investment Advisors LLC. (Company) and National Investors Services Corp.,
(NISC).
As used in this Agreement, the following terms shall have the following
meanings, unless a different meaning is clearly required by the context:
CLIENT-SHAREHOLDERS shall mean those clients of NISC who maintain an interest in
an omnibus account with one or more Funds registered in the name of "National
Investors Services Corp." and who receive services from NISC under this
Agreement.
FUNDS - SHALL INCLUDE WESTCORE TRUST, A MASSACHUSETTS BUSINESS TRUST, AND THE
INVESTMENT PORTFOLIOS THEREOF SET FORTH ON THE ATTACHED LIST.
In consideration of the mutual covenants herein contained, the parties agree as
follows:
1. NISC agrees to perform certain services for the
Client-shareholders as more particularly set forth below. NISC represents
and warrants that it has and will continue at all times to have the
necessary facilities, systems, equipment and personnel to perform its
services hereunder in a business-like and competent manner and to comply
with any applicable laws, rules and regulations related to the services to
be provided under this Agreement, including the maintenance and
preservation of all records and registrations required by any applicable
laws, rules and regulations.
2. NISC represents and warrants that all Client-shareholders are
aware that they are transacting business with NISC and not the Funds or the
Company, and that they will look only to NISC and not the Funds or the
Company for resolution of problems or discrepancies in their accounts.
3. NISC agrees that it will establish with the Funds one or more
omnibus accounts registered in NISC's name for Client-shareholders in the
Funds, and will perform various services for the Client-shareholders in
those accounts, including without limitation; establishing and maintaining
records of Client-shareholders' accounts; processing purchase and
redemption transactions; confirming Client-shareholder transactions;
answering routine client inquiries regarding the Fund; assistance to
Client-shareholders in changing dividend options, account designations and
<PAGE>
addresses; withholding taxes on non-resident alien accounts; disbursing
income dividends and capital gains distributions; reinvesting dividends and
distributions; preparing and delivering to Client-shareholders, and state
and Federal authorities, including the United States Internal Revenue
Service, such information respecting dividends and distributions paid by
the Funds as may be required by law, rule or regulation; withholding on
dividends and distributions as may be required by state or Federal
authorities from time to time; and such other services as the Funds or the
Company may reasonably request.
4. NISC shall maintain all Client-shareholder records, consistent
with requirements of all applicable laws, rules and regulations. NISC
shall provide copies of written communications regarding the Funds to or
from such Client-shareholders, and other materials. NISC shall make
available (if requested) to the Funds records or communications necessary
to determine the number of Client-shareholders in each NISC omnibus
account. If, at any time, the Funds or the Company determines that NISC's
practices, procedures or controls are inadequate, written notice of such
inadequacy shall be given to NISC and NISC shall have 15 days plus any
additional time which the Funds or the Company may provide to correct its
practices, procedures or controls. In the event such practices, procedures
or controls are not adequately corrected by NISC, the Company shall have
the right to immediately terminate this Agreement. Nothing in this
Agreement shall impose upon the Fund or the Company obligation to review
NISC's practices, procedures and controls.
5. The official records of transactions of NISC's omnibus account and
the number of shares in such omnibus accounts shall be as determined by the
Funds. NISC shall be solely responsible for any discrepancies between its
omnibus accounts and the Client-shareholder accounts and for the
maintenance of all records regarding the Client-shareholders, the
Client-shareholders' transactions, and the Client-shareholders' interest in
the omnibus accounts.
6. NISC is solely responsible for the reconciliation of customer
accounts with its omnibus account at the Funds. If any such reconciliation
indicates any unexplained reconciling item or items, the Funds agree to
assist NISC in resolving any discrepancies.
7. While NISC will provide the services to its Client-shareholders as
described in this Agreement, it is understood that NISC will not be acting
as a transfer agent for the Funds.
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<PAGE>
8. Each of the Company and the Funds represents and warrants that it
will not knowingly use any information relating to Client-shareholders
received pursuant to this Agreement and not made available to the Company
through other sources to solicit or otherwise attempt to sell products to
Client-shareholders.
9. For the services and facilities described in this Agreement the
Company will pay a fee to NISC after the end of each month at an annual
rate of 0.25% of the average aggregate daily net asset value of shares of
the Funds in accounts for which NISC provides services pursuant to this
Agreement. However, no fee will be due with respect to any shares held in
NISC accounts prior to the effective date of this Agreement. NISC agrees
that it will disclose the fees payable hereunder to the
Client-shareholders.
In computing NISC's fee for a given month, one-twelfth of the
applicable fee rate set forth in Schedule A shall be applied to the average
aggregate daily net asset value of shares of the applicable Funds in
accounts for which NISC provides services for the month in question. For
the month in which this Agreement becomes effective or terminates, there
shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month.
Except as otherwise agreed in writing with the Company or the
Funds with respect to specific expenditures by NISC, NISC shall be solely
responsible for all costs and expenses of providing services under this
Agreement.
10. With regard to all the services provided to its
Client-shareholders by NISC, NISC is an independent contractor, is solely
responsible for its actions or inactions, and is not and does not have
authority to act as an agent of the Company or the Funds. NISC is solely
responsible to its Client-shareholders and agrees that at all times,
including after termination of this Agreement, it will be responsible for
all complaints and inquiries from its Client-shareholders relating to
NISC's actions or inactions under this Agreement or relating to the
Client-shareholders' accounts during the period in which this Agreement was
in effect.
11. The Funds will be responsible for any loss, claim, demand or
liability arising from any untrue statement of a material fact contained in
the Funds' prospectus or arising out of any omission to state a material
fact required to be stated therein to make such statements not misleading,
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<PAGE>
provided, however, that the Company shall be responsible to the extent that
any such loss, claim, demand or liability arises from any such statement
provided by or any such omission relating to the Company, and provided
further that NISC shall be responsible to the extent that any such loss,
claim, demand or liability arises form any such statement provided by or
any such omission relating to the Company, and provided further that NISC
shall be responsible to the extent that any such loss, claim, demand or
liability arises from any such statement provided by or any such omission
relating to NISC. Each party shall notify the other parties of any claim
for which another party may bear responsibility under this Paragraph and
such other party or parties shall be entitled to assume the defense of any
such claim, in which event the party or parties not assuming the defense
shall bear the cost of such additional counsel as they select. No party
will settle or compromise any claim for which another party may bear
responsibility under this Paragraph without the prior written consent of
such other party or parties unless such other party or parties have
declined to assume the defense of any such claim. This Paragraph shall
survive the termination of the Agreement.
12. NISC shall provide such security as is necessary to prevent
unauthorized use of any on-line computer facilities (if applicable).
13. NISC acknowledges that the Company and the Funds may enter into
similar agreements with others without the consent of NISC.
14. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder shall not be
affected thereby.
15. This Agreement supersedes all prior services agreements among the
parties relating to Funds.
16. This Agreement shall become effective as of the date it is
accepted by NISC, and will continue in effect until terminated in writing
upon sixty (60) days prior notice by either party to the other; provided,
that NISC shall be entitled to receive all fees it has earned up to and
including the effective date of the termination.
17. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
18. Whenever notice is required under this Agreement, it shall be
given in writing by registered mail to the Company or the Funds at 1225
17TH STREET, 26TH FLOOR,
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<PAGE>
DENVER, CO 80217; and to NISC AT 55 WATER STREET, 32ND FLOOR, NEW YORK, NY
10041, ATTENTION, PETER A. WIGGER, EXECUTIVE VICE PRESIDENT.
19. Neither NISC or any of its officers, employees or agents are
authorized to make any references to or representations concerning the
Funds except those contained in the Funds' then current prospectuses and
statement of additional information, copies of which will be supplied by
Company to NISC, or in such supplemental literature or advertising as may
be authorized by the Funds or its distributor in writing.
20. NISC will furnish the Funds or their designees with such
information as it or they may reasonably request (including, without
limitation, periodic certifications confirming the provision to NISC
Client-shareholders of the services described in this Agreement, as
amended, and blue sky reports at least monthly), and will otherwise
cooperate with the Funds and their designees (including, without
limitation, any auditors designated by the Funds), in connection with the
preparation of reports to the Funds' Board of Trustees concerning this
Agreement, as amended, and the monies paid or payable by the Funds pursuant
hereto, as well as any other reports or filings that may be required by
law.
21. NISC represents, warrants and agrees that: (i) the services
provided by NISC under this Agreement, as amended, will in no event be
primarily intended to result in the sale of shares' of the Funds; (ii) NISC
will notify its Client-shareholders in writing that Fund shares can be
purchased directly from the Funds without the payment of a transaction fee;
and (iii) NISC will comply, at all times, with all applicable Federal and
state securities laws.
22. The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby
referred to and a copy of which is on file at the office of the State
Secretary of the Commonwealth of Massachusetts and at the principal office
of the Trust. The obligations of "Westcore Trust" entered into in the name
or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any
of the Trustees, shareholders, or representatives of the Trust personally,
but bind only the Trust Property, and all persons dealing with any class of
shares of the Trust must look solely to the Trust
-5-
<PAGE>
Property belonging to such class for the enforcement of any claims against
the Trust.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
their respective corporate seals to be affixed as of the date first above
written by their respective officers hereunto duly authorized.
Westcore Trust
ATTEST: BY:
/s/ Steve Wine /s/ Jack H. Henderson
- --------------------------------- -----------------------
Steve Wine Jack H. Henderson
Director of Mutual Fund Vice President
Administration
ATTEST: BY:
/s/ Sandra Stewart /s/ Peter A. Wigger
- --------------------------------- -----------------------
Sandra Stewart Peter A. Wigger
First Vice President Executive
NISC Vice President
NISC
ATTEST: BY:
/s/ Steve Wine /s/ Kenneth V. Penland
- --------------------------------- -----------------------
Steve Wine Kenneth V. Penland
Director of Mutual Fund Chairman
Administration Company
-6-
<PAGE>
OMNIBUS ACCOUNT SERVICE AGREEMENT
LIST OF PARTICIPATING FUNDS:
Westcore:
Midco
Blue Chip
Growth & Income
Small Cap Value
Intermediate Bond
Long Term Bond
Colorado Tax Exempt
-7-
<PAGE>
Westcore Trust
c/o ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
as of October 6, 1997
Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
RE: APPOINTMENT OF SMITH BARNEY AS AGENT OF WESTCORE TRUST ("TRUST")
Dear Sirs:
The Trust hereby appoints Smith Barney Inc. ("Smith Barney") as the agent
of each portfolio of the Trust for the limited purpose of accepting instructions
for the purchase, redemption and exchange of Trust shares by clients of Smith
Barney, and receipt by Smith Barney shall constitute receipt by the Trust for
purpose of determining the net asset value at which such orders will be
executed, on the terms set forth in the Participation Agreement dated October 6,
1997 between Smith Barney and Denver Investment Advisors LLC.
The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby referred
to and copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
<PAGE>
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
By your signature below, please indicate that you accept such appointment
on such terms.
Yours truly,
Westcore Trust
By: /s/ Jasper R. Frontz
------------------------
Name: Jasper R. Frontz
Title: Treasurer
Agreed and Accepted by:
Smith Barney Inc.
By: /s/ Anne Gray
------------------
Name: Anne Gray
Title: S.V.P.
as of October 6, 1997
<PAGE>
TELEPHONE AND SERVICE AGREEMENT
AGREEMENT made as of the 3RD day of AUGUST, 1998, by and between Westcore
Trust, a Massachusetts business trust, having its principal office and place of
business at 370 17th Street, Suite 3100, Denver, Colorado 80202 (the "Trust"),
and ALPS Mutual Funds Services, Inc., a Colorado corporation having its
principal office and place of business at 370 17th Street, Suite 3100, Denver,
Colorado 80202 ("ALPS");
WHEREAS, the Trust, ALPS and Denver Investment Advisors LLC ("DIA") have
entered into an Administration Agreement dated as of October 1, 1995 (the
"Administration Agreement") pursuant to which ALPS provides services for the
Trust as co-administrator; and
WHEREAS, the Trust desires to appoint ALPS to provide additional services
as its telephone servicing agent, and ALPS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree:
Article 1. TERMS OF APPOINTMENT; DUTIES OF ALPS
1.01 Subject to the terms and conditions set forth in
this Agreement, the Trust hereby appoints ALPS, and ALPS agrees, to act as its
telephone servicing agent for the Trust's authorized and issued shares of
beneficial interest (the "Shares") of any portfolio (each, a "Fund") of the
Trust, in connection with responding to inquiries from shareholders of the Trust
("Shareholders").
1.02 ALPS will perform the following services in accordance with the
Trust's prospectus or prospectuses as they are in effect from time to time:
(a) Receive and accept orders for the purchase of Shares and input this
information directly into the transfer agency system for processing on
the same business day for orders received prior to market close and
next business day for orders received after market close;
(b) Receive and accept orders for the redemption of Shares and input this
information directly into the transfer agency system for processing on
the same business day for orders received prior to market close and
next business day for orders received after market close;
(c) Provide general information about the Funds;
<PAGE>
(d) Receive and accept orders and instructions for maintenance of account
information on shareholder accounts; and
(e) Maintain a telephone recording system that records all orders and
instructions. ALPS shall maintain these records in accordance with
applicable federal and state regulations.
1.03 ALPS will perform services hereunder in accordance with such written
procedures as may be developed from time to time by ALPS, DIA and (in
appropriate circumstances) the transfer agent of the Trust (the "Transfer
Agent"). The Transfer Agent may continue to perform some of these services, and
is expected to continue to deal directly with servicing agents that maintain
omnibus accounts for their shareholders pursuant to agreements with the Trust or
DIA.
Article 2. FEES AND EXPENSES
2.01 For the performance by ALPS pursuant to this Agreement, the Trust
will pay ALPS the fees set forth in Schedule A hereto. Such fees and
out-of-pocket expenses and advances identified under Section 2.02 below may be
changed from time to time by written agreement between the Trust and ALPS.
2.02 In addition to the fee paid under Section 2.01
above, the Trust will reimburse ALPS for out-of-pocket expenses, including but
not limited to postage, forms, telephone, microfilm and microfiche.
2.03 The Trust shall pay all fees and reimburse expenses within thirty
days following the receipt of the proper invoices.
Article 3. REPRESENTATIONS AND WARRANTIES OF ALPS
ALPS represents and warrants to the Trust that:
3.01 It is a company duly organized and existing and in good standing
under the laws of the State of Colorado.
3.02 It is duly qualified to carry on its business in the State of
Colorado.
3.03 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
-2-
<PAGE>
3.05 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
Article 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to ALPS that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.02 It is empowered under applicable laws and by its Trust Indenture and
Code of Regulations to enter into and perform this Agreement.
4.03 All Trust proceedings required by said Trust Indenture and Code of
Regulations have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act
of 1933, as amended, is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Trust being offered for sale.
Article 5. PROPRIETARY AND CONFIDENTIAL INFORMATION
5.01 ALPS agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Funds and prior, present or potential Shareholders
(and clients of Shareholders), and not to use such records and information for
any purpose other than in performing responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Trust, except
as may be required by law.
5.02 The Trust agrees that all books, records, information and data
pertaining to the business of ALPS 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.
Article 6. LIMITATION OF LIABILITY; INDEMNIFICATION
6.01 ALPS shall not be responsible for, and the Trust shall indemnify and
hold ALPS harmless from and against, any and all
-3-
<PAGE>
losses, damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributable to:
(a) all actions taken or omitted to be taken by ALPS pursuant to this
Agreement, provided that such actions are taken in good faith and
without negligence or willful misconduct;
(b) the Trust's lack of good faith, negligence or willful misconduct which
arises out of the breach of any covenant, representation or warranty
of the Trust hereunder;
(c) the good faith reliance on or use by ALPS of written information,
records and documents or services which (i) are received or relied
upon by ALPS and furnished to it or performed by or on behalf of the
Trust, and (ii) have been prepared, maintained and/or performed by the
Trust or any other authorized person or firm on behalf of the Trust;
and
(d) the reliance on, or the carrying out by ALPS of, any instructions or
requests of the Trust
6.02 At any time ALPS may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ALPS under this
Agreement, and ALPS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the written opinion of such counsel
(provided such counsel is reasonably satisfactory to the Trust). ALPS shall be
protected and indemnified in acting upon any paper or document furnished by or
on behalf of the Trust, 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 ALPS by machine readable input, telex, CRT
data entry or other similar means authorized by the Trust, and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from the Trust.
6.03 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.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for
-4-
<PAGE>
which the Trust may be required to indemnify ALPS, ALPS shall promptly notify
the Trust of such assertion, and shall keep the Trust advised with respect to
all developments concerning such claim. The Trust shall have the option to
participate with ALPS in the defense of such claim or to defend against said
claim in its own name or in the name of ALPS. ALPS shall in no case confess any
claim or make any compromise in any case in which the Trust may be required to
indemnify ALPS except with the Trust's prior written consent.
6.05 ALPS shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to insure the accuracy of all services
performed 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 employees.
Article 7. COVENANTS OF ALPS
7.01 ALPS shall establish and maintain facilities and procedures
reasonably acceptable to the Trust.
7.02 Alps shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable, as required by
applicable laws, rules and regulations. To the extent required by Section 31 of
the Investment Company Act of 1940, as amended, and the rules thereunder, ALPS
agrees that all such records prepared or maintained by ALPS relating to the
services to be performed by ALPS hereunder are the property of the Trust and
will be preserved, maintained and made available in accordance with such Section
and rules, and will be surrendered promptly to the Trust on and in accordance
with its request. Additionally, ALPS will make available to the Trust and its
authorized representatives records maintained by ALPS pursuant to this Agreement
for reasonable inspection, use and audit, and will take all reasonable action to
assist the Trust's independent accountants in rendering their opinion.
Article 8. TERMINATION OF AGREEMENT
8.01 This Agreement may be terminated by either party upon sixty (60) days
written notice to the other.
8.02 Should the Trust exercise its right to terminate, other than as a
result of a breach of this Agreement by ALPS, out-of-pocket and other reasonable
expenses associated with the movement of records and material that ALPS incurs
will be borne by the Trust in an amount not to exceed $5,000.
-5-
<PAGE>
Article 9. ASSIGNMENT
9.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
Article 10. AMENDMENT
10.01 This Agreement may be amended only by a written agreement executed
by both parties and authorized or approved by a resolution of the Board of
Directors of the Trust.
Article 11. COLORADO LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Colorado.
Article 12. ENTIRE AGREEMENT
12.01 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.
Article 13. COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto in any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
Article 14. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
14.01 The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby referred
to and copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust
-6-
<PAGE>
Property, and all persons dealing with any class of shares of the Trust must
look solely to the Trust Property belonging to such class for the enforcement of
any claims against the Trust.
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 above written.
WESTCORE TRUST
By:
-----------------------------
Name: Kenneth V. Penland
Title: President
ALPS MUTUAL FUNDS SERVICES, INC.
By:
-----------------------------
Name: Edmund Burke
Title: Executive Vice President
-7-
<PAGE>
SCHEDULE A
The Trust shall pay ALPS a monthly base fee at the annual rate of $15,000
per year during the term of the Agreement, PROVIDED, however, that the entire
base fee for the initial year shall be paid when ALPS begins to provide services
under the Agreement.
In addition, the Trust shall pay ALPS a monthly fee at the annual rate of
$2.00 for each shareholder account (as calculated by the Transfer Agent) that is
open during the immediately preceding month.
In addition, the Trust shall pay ALPS a fee of $2.50 for each telephone
call received by ALPS from a Shareholder or prospective Shareholder in
connection with services rendered by ALPS pursuant to the Agreement.
-8-
<PAGE>
CONSENT OF COUNSEL
We hereby consent to use of our name and to the reference to our firm
under the caption "Counsel" in the Statement of Additional Information that is
included or incorporated by reference in Post-Effective Amendment No. 47 to the
Registration Statement (No. 2-75677) on Form N-1A under the Securities Act of
1933, as amended, of Westcore Trust. This consent does not constitute a consent
under Section 7 of the Securities Act of 1933, as amended, and in consenting to
the use of our name and the references to our firm under such caption we have
not certified any part of the Registration Statement and do not otherwise come
within the categories of persons whose consent is required under Section 7 or
the rules and regulations of the Securities and Exchange Commission thereunder.
/s/ Drinker Biddle & Reath LLP
------------------------------
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
Dated: July 15, 1998
<PAGE>
PURCHASE AGREEMENT
Westcore Trust, a Massachusetts business trust (the "Trust"), and ALPS
Mutual Funds Services, Inc. a Colorado corporation ("ALPS"), hereby agree with
each other as follows:
1. The Trust hereby offers ALPS and ALPS hereby purchases one (1)
Class Z share representing a beneficial interest in the Trust's Mid-Cap Value
Fund, at a purchase price of $ per share. ALPS hereby acknowledges purchase
of the Share and the Trust hereby acknowledges receipt from ALPS of funds in the
amount of $ in full payment for the Share.
2. ALPS represents and warrants to the Trust that the Share is being
acquired for investment purposes and not with a view to the distribution
thereof.
3. The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated November 19, 1987 which is hereby referred to and a copy of which is
on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Westcore Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the Trust property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust property belonging to such class for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day of , 1998.
WESTCORE TRUST
By:
---------------------------------
----------------------
By:
---------------------------------
<PAGE>
Rep Name: ________________ NC ________________
- --------------------------------------------------------------------------------
WESTCORE FUNDS REGULAR IRA AND ROTH IRA APPLICATION/ADOPTION AGREEMENT
- --------------------------------------------------------------------------------
I, the person signing this Application/Adoption Agreement (hereinafter called
the "Depositor"), establish an Individual Retirement Account (IRA), which is
either a Regular IRA or a Roth IRA, (the "Account") as indicated below, with
State Street Bank and Trust Company as the Custodian ("the Custodian"). A
Regular IRA operates under Internal Revenue Code section 408(a). A Roth IRA
operates under Internal Revenue Code Section 408A. I agree to the terms of my
Account which are contained in the applicable provisions of the booklet titled
WESTCORE FUNDS REGULAR IRA/ROTH IRA INFORMATION and this Application/Adoption
Agreement. I certify the accuracy of the information in this
Application/Adoption Agreement. My Account will be effective upon acceptance by
Custodian.
1 DEPOSITOR INFORMATION
- --------------------------------------------------------------------------------
FIRST NAME MIDDLE INITIAL LAST NAME
- --------------------------------------------------------------------------------
ADDRESS
- --------------------------------------------------------------------------------
CITY STATE ZIP
- --------------------------------------------------------------------------------
SOCIAL SECURITY NUMBER
- --------------------------------------------------------------------------------
DATE OF BIRTH
- --------------------------------------------------------------------------------
DAYTIME TELEPHONE NUMBER
2 IRA ELECTION
INSTRUCTIONS: Please select the appropriate type of IRA you would like to open
(Regular or Roth) listed below:
/ / Regular IRA PLEASE SELECT ONE:
/ / INDIVIDUAL ACCOUNT
/ / SPOUSAL ACCOUNT
Contribution for tax year:_______________________
/ / TRANSFER - From existing Regular IRA from current Custodian or Trustee.
/ / ROLLOVER - Distribution received by you from another IRA or your
Employer Retirement Plan.
/ / IRA to IRA
/ / Employer Retirement Plan to IRA
/ / DIRECT ROLLOVER - Distribution directly from your Employer Retirement
Plan.
/ / SEP IRA - Contribution for tax year:___________
/ / Roth IRA PLEASE SELECT ONE:
/ / INDIVIDUAL ACCOUNT
/ / SPOUSAL ACCOUNT
Contribution for tax year:_______________________
/ / CONVERSION - existing Westcore Regular IRA to a Westcore Roth IRA.
Current Regular IRA Account No.________________
Amount Converted:
/ / All
/ / Part (SPECIFY HOW MUCH):$___________
/ / ROLLOVER OR TRANSFER
/ / from existing REGULAR IRA with another custodian or trustee
to a Westcore Roth IRA.
/ / from existing ROTH IRA with another custodian or trustee to a
Westcore Roth IRA.
Date existing Roth IRA was originally opened:________.
Indicate whether any amount in the existing Roth IRA represents
amounts converted or transferred from a Regular IRA into such
other Roth IRA: / / Yes / / No
If yes, date of the most recent conversion or transfer into such
other Roth IRA:______________________
3 INVESTMENTS
Invest contributions to my Account as follows:
Fund Name Amount or %
- --------------------------------------------------------------------------------
200-WESTCORE MIDCO GROWTH FUND $________ ______%
204-WESTCORE BLUE CHIP FUND $________ ______%
195-WESTCORE GROWTH AND INCOME FUND $________ ______%
208-WESTCORE SMALL-CAP OPPORTUNITY FUND $________ ______%
213-WESTCORE LONG-TERM BOND FUND $________ ______%
198-WESTCORE INTERMEDIATE-TERM BOND FUND $________ ______%
189-BLACKROCK MONEY MARKET PORTFOLIO $________ ______%
TOTAL $________ ______%
I acknowledge that I have sole responsibility for my investment choices and that
I have received a current prospectus for each Fund I select. I have read the
prospectus(es) of the Fund(s) selected before investing.
4 DESIGNATION OF BENEFICIARY
I hereby make the following designation of beneficiary in accordance with the
provisions in the Custodial Agreement for Regular IRAs and Roth IRAs (as
applicable).
IF YOU NAME MULTIPLE PRIMARY OR CONTINGENT BENEFICIARIES, PLEASE LIST THEM ON A
SEPARATE SHEET. PLEASE INCLUDE ALL INFORMATION REQUESTED BELOW FOR EACH
ADDITIONAL BENEFICIARY, AS WELL AS YOUR NAME, ADDRESS AND PHONE NUMBER.
YOUR BENEFICIARY:
- --------------------------------------------------------------------------------
FIRST NAME MIDDLE INITIAL LAST NAME
- --------------------------------------------------------------------------------
RELATIONSHIP
- --------------------------------------------------------------------------------
DATE OF BIRTH SOCIAL SECURITY NUMBER
Note: Unless otherwise indicated, Westcore Funds will assume equal beneficiary
distribution if more than one beneficiary is designated. The sum of the
percentages for all Primary Beneficiaries and all Contingent Beneficiaries must
each equal 100%.
SPOUSAL CONSENT (FOR COMMUNITY PROPERTY STATES)
By signing below, I hereby consent to give to my spouse any interest I may have
in the funds deposited in this account and agree that you may pay the money in
my spouse's IRA as directed above.
Note: It is your responsibility to determine if this section applies. Please
consult legal counsel, if necessary.
- --------------------------------------------------------------------------------
SPOUSE'S NAME (PLEASE PRINT)
X
- --------------------------------------------------------------------------------
SIGNATURE OF SPOUSE DATE
X
- --------------------------------------------------------------------------------
SIGNATURE OF WITNESS DATE
5 Automatic Investment Plan (OPTIONAL)
A / / YES (Please complete the following.) / / No
I hereby authorize Westcore and/or its Custodian to electronically debit my
personal checking or savings account on the designated dates to purchase shares
in the following Fund(s) in the amount indicated at the Net Asset Value
determined on that day and invest in my IRA established with this application.
(INVESTMENT MUST BE EQUIVALENT TO AT LEAST $50 PER MONTH.)
<PAGE>
Fund Name Amount
200-WESTCORE MIDCO GROWTH FUND $__________
204-WESTCORE BLUE CHIP FUND $__________
195-WESTCORE GROWTH AND INCOME FUND $__________
208-WESTCORE SMALL-CAP OPPORTUNITY FUND $__________
213-WESTCORE LONG-TERM BOND FUND $__________
198-WESTCORE INTERMEDIATE-TERM BOND FUND $__________
189-BLACKROCK MONEY MARKET PORTFOLIO $__________
Please indicate type of account:
/ / Checking / / Savings
Please make my investment:
/ / Monthly / / Quarterly / / Annually
on or about the ________________________ day of the month.
All contributions will be for current year unless noted otherwise.
NOTE: YOU MUST SIGN THE BANK AUTHORIZATION IN SECTION 5B AND ATTACH TO THIS
FORM A VOIDED CHECK OR SAVINGS DEPOSIT SLIP FOR THE BANK ACCOUNT TO BE DEBITED.
B Bank Authorization
- --------------------------------------------------------------------------------
BANK NAME
- --------------------------------------------------------------------------------
BANK ABA OR ROUTING NUMBER (THE NINE-DIGIT NUMBER AT THE BOTTOM LEFT CORNER OF
YOUR CHECK.)
- --------------------------------------------------------------------------------
BANK ACCOUNT NUMBER
I authorize you, the above named bank, to debit my account for amounts drawn by
Westcore Trust and/or its Custodian acting as my agent. I agree that your
rights in respect to each withdrawal shall be the same as if it were a check
drawn upon you and signed by me. This authority shall remain in effect until I
revoke it in writing and you receive it. I agree that you shall incur no
liability when honoring any such check.
I further agree that you will incur no liability to me if you dishonor any such
withdrawal. This will be so even though such dishonor results in the forfeiture
of investment.
- --------------------------------------------------------------------------------
BANK ACCOUNT HOLDER'S NAME
- --------------------------------------------------------------------------------
BANK ACCOUNT HOLDER'S SIGNATURE DATE
6 TELEPHONE EXCHANGE (OPTIONAL)
/ / Telephone exchange is available on all new accounts. If you DO NOT
want this option, please check this box.
7 CERTIFICATIONS AND SIGNATURE
I, the undersigned account owner, certify that I am of legal age and have the
power and the authority to establish this Regular/Roth IRA and select the
privileges requested. I acknowledge that I have received, read and understand
the Regular/Roth IRA Custodial Agreement and Disclosure Statement. I hereby
adopt the Custodial Agreement which is incorporated by reference. I understand
that the requirements for a valid transfer to a Regular and Roth IRA are complex
and that I have the responsibility for complying with all requirements and for
the tax results of any such transfer. I also understand that inaccurate or
incorrect information may result in adverse tax consequences or IRS penalties.
(Consult your financial or tax adviser if you have any questions about how
opening a Regular or Roth IRA will affect your financial and tax situation.)
I agree that to the extent that reasonable procedures have been employed to
determine the genuineness of telephone instructions, that Westcore Funds, the
Custodian, ALPS Mutual Funds Services, Inc., Denver Investment Advisors LLC or
any of their subsidiaries, affiliates, officers, directors, or employees will
not be liable for any loss, claim, expense, or cost, and agree to indemnify the
same from any losses and damages, for acting upon any instructions, including
telephone exchanges and redemptions (if so indicated) and inquiries, believed
genuine. "Reasonable procedures" might include, for example, recording
instructions, providing written confirmation of transactions or requiring a form
of personal identification prior to acting on instructions received by
telephone. Accordingly, the undersigned, as a result of this policy, may bear
the risk of fraudulent telephone redemption transactions. Shares of the funds
are not bank deposits, and are not insured by the FDIC. This account is subject
to the terms of the prospectus, as amended from time to time.
UNDER PENALTY OF PERJURY, I CERTIFY THAT 1) THE SOCIAL SECURITY NUMBER SHOWN ON
THIS FORM IS CORRECT (OR THAT I AM WAITING FOR A NUMBER TO BE ISSUED TO ME) AND,
2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (a) I AM EXEMPT FROM BACKUP
WITHHOLDING, OR (b) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(IRS) THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS, OR (c) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER
SUBJECT TO BACKUP WITHHOLDING. YOU MUST CROSS OUT ITEM (2), ABOVE, IF YOU HAVE
BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
X
- --------------------------------------------------------------------------------
YOUR SIGNATURE DATE
If the Depositor is a minor under the laws of the Depositor's state of
residence, a parent or guardian must also sign the Application/Adoption
Agreement here. Until the Depositor reaches the age of majority, the parent or
guardian will exercise the powers and duties of the Depositor.
- --------------------------------------------------------------------------------
NAME OF PARENT OR GUARDIAN RELATIONSHIP
X
- --------------------------------------------------------------------------------
SIGNATURE OF PARENT OR GUARDIAN DATE
8 CUSTODIAL ACCEPTANCE: FOR WESTCORE USE ONLY
CUSTODIAN ACCEPTANCE: State Street Bank and Trust Company will accept
appointment as Custodian of the Depositor's Account. However, this Agreement is
not binding upon the Custodian until the Depositor has received a statement of
the transaction. Receipt by the Depositor of a confirmation of the purchase of
the Fund shares indicated will serve as notification of State Street Bank and
Trust Company acceptance of appointment as Custodian of the Depositor's Account.
STATE STREET BANK AND TRUST COMPANY CUSTODIAN
By
-----------------------------------------------------------------------------
DATE
RETAIN A PHOTOCOPY OF THE COMPLETED APPLICATION/ADOPTION AGREEMENT FOR YOUR
RECORDS.
<PAGE>
WESTCORE FUNDS INSTRUCTIONS FOR OPENING YOUR REGULAR IRA OR ROTH IRA
Please read carefully the applicable sections of the IRA Disclosure
Statement, Custodial Agreement, Application/Adoption Agreement, and the
prospectus(es) for any Fund(s) you are considering. Consult your financial or
tax adviser if you have any questions about how opening a Regular IRA or Roth
IRA will affect your financial and tax situation.
The Westcore Regular IRA/Roth IRA Kit contains information and forms for
both Regular IRAs and Roth IRAs. However, you may use the Application/Adoption
Agreement to establish only one Regular IRA or one Roth IRA; separate
Application/Adoption Agreements must be completed if you want to establish
multiple (Roth or Regular) IRA accounts. Forms can be photocopied or you may
call 1-800-392-CORE (2673) to request more forms.
COMPLETING THE REGULAR IRA AND ROTH IRA APPLICATION/ADOPTION AGREEMENT
1. DEPOSITOR INFORMATION
Please print the identifying information where requested on the
Application/Adoption Agreement.
2. IRA ELECTION
Select the appropriate type of IRA you would like to open (Regular or
Roth).
Regular IRA
Check the box to specify the type of Regular IRA you are opening.
INDIVIDUAL ACCOUNT - An individual can contribute up to a maximum of $2,000 per
year.
SPOUSAL ACCOUNT - An individual can contribute, out of their own compensation or
earned income (if self-employed), up to a maximum of $2,000 per year to a
separate Regular IRA for their spouse.
TRANSFER - If you are transferring an IRA directly from another IRA custodian or
trustee, please check this box. Please complete the IRA Transfer of Assets
Form.
ROLLOVER - If you are reinvesting a distribution that you have taken receipt of
from another IRA or an Employer Retirement Plan, please check this box. Please
indicate whether the funds being rolled over were from another IRA or from an
Employer Retirement Plan.
DIRECT ROLLOVER - If this is a distribution coming directly from your Employer
Retirement Plan, please check this box. Please complete the IRA Transfer of
Assets Form.
SEP IRA - If you intend to use this Account in connection with a SEP Plan or
grandfathered SARSEP Plan established by your employer, please check this box.
Roth IRA
Check the box to specify the type of Roth IRA you are opening. (Contributions
for the tax year 1997 will not be accepted.)
INDIVIDUAL ACCOUNT - An individual can contribute up to a maximum of $2,000 per
year.
SPOUSAL ACCOUNT - An individual can contribute, out of their own compensation or
earned income (if self-employed), up to a maximum of $2,000 per year to a
separate Roth IRA for their spouse.
CONVERSION - If you are converting an existing Westcore Regular IRA into a Roth
IRA please check this box. Conversion of an existing Regular IRA will result in
inclusion of taxable amounts in the existing Regular IRA on your income tax
return.
ROLLOVER OR TRANSFER - Please indicate whether you are making a rollover or
transfer from an existing Regular IRA with another custodian or trustee to a
Westcore Roth IRA or a rollover or transfer from an existing Roth IRA with
another custodian or trustee to a Westcore Roth IRA. If this is a transfer,
please complete the Transfer of Assets Form.
<PAGE>
NOTE - If a conversion, rollover or transfer from a Regular IRA to a Roth IRA is
being made, only amounts converted, rolled over or transferred during the same
tax year will be accepted in a single Roth IRA. A separate Roth IRA must be
established to hold such amounts from a different tax year. Annual
contributions may never be deposited in a Roth IRA holding such converted,
rolled over or transferred amounts.
3. INVESTMENTS
Indicate your investment choices.
4. DESIGNATION OF BENEFICIARY
Designate your Beneficiary here. (FOR COMMUNITY PROPERTY STATES, SPOUSAL
WAIVER MUST BE SIGNED IF BENEFICIARY IS OTHER THAN YOUR SPOUSE. PLEASE LIST
MULTIPLE BENEFICIARIES ON A SEPARATE SHEET.)
5. AUTOMATIC INVESTMENT PLAN
You can establish the Westcore Automatic Investment Plan on your IRA
account. Through this program, you authorize Westcore to debit your bank
checking or savings account for regular (usually monthly) purchases of shares
into your Westcore IRA account. Please attach a voided check or savings deposit
slip for the bank account to be debited.
6. TELEPHONE EXCHANGE
Check this box if you DO NOT want the telephone exchange option.
7. CERTIFICATIONS AND SIGNATURE
Sign and date the Application/Adoption Agreement.
TRANSFER OF ASSETS FORM
If you are transferring assets from an existing IRA or are performing a direct
rollover, please be sure to complete the Transfer of Assets Form found on the
reverse side of the instructions. This form instructs your current custodian to
transfer your account as you specify. Westcore Funds will handle all the
details of the transfer process for you.
CUSTODIAN FEES
The custodian fees for maintaining your IRA are listed in the FEES AND EXPENSES
section of Part Three of the Disclosure Statement in the Westcore Regular
IRA/Roth IRA Booklet. If you are paying by check, enclose a check for a correct
amount payable as specified below. If you do not pay by check, the correct
amount will be taken from your account.
PROPER DOCUMENTATION
Check to be sure you have properly completed all necessary forms and enclose a
check for the Custodian's fees (UNLESS BEING WITHDRAWN FROM YOUR ACCOUNT) and a
check for the first contribution to your Regular or Roth IRA (IF APPLICABLE).
Your Regular IRA or Roth IRA cannot be accepted without the properly completed
documents or the Custodian fees.
All checks should be payable to:
Westcore/SSB
Send the completed forms and check(s) in the enclosed postage-paid envelope or
mail to:
<PAGE>
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
(Transfer of Assets Form located on reverse side.)
<PAGE>
WESTCORE FUNDS REGULAR IRA/ROTH IRA TRANSFER OF ASSETS FORM
Complete this form if you are transferring assets from an existing IRA or are
performing a direct rollover.
1. NAME AND ADDRESS OF DEPOSITOR
- --------------------------------------------------------------------------------
FIRST NAME MIDDLE INITIAL LAST NAME
- --------------------------------------------------------------------------------
STREET
- --------------------------------------------------------------------------------
CITY STATE ZIP
- --------------------------------------------------------------------------------
DAYTIME TELEPHONE SOCIAL SECURITY NUMBER
2. IDENTIFICATION OF RECEIVING ACCOUNT
This is a transfer to a Westcore Funds:
/ / Regular IRA* / / Roth IRA**
* You may not transfer from a Roth IRA to a Regular IRA or a simplified
employee pension (SEP) IRA. Transfers to a Regular IRA or SEP IRA may be
made from another Regular IRA or SEP IRA, qualified employer plan, 403(b)
arrangement, or a SIMPLE IRA account (but not until at least 2 years after
the first contribution to your SIMPLE IRA account).
** Transfers to a Roth IRA are possible only from another Roth IRA or from a
Regular IRA, not from other types of tax-deferred accounts. A transfer
from a Regular IRA will trigger federal income tax on the taxable amount
transferred from the Regular IRA. Note: If a conversion, rollover or
transfer from a Regular IRA to a Roth IRA is being made, only amounts
converted, rolled over or transferred during the same tax year will be
accepted in a single Roth IRA. A separate Roth IRA must be established to
hold such amounts from a different tax year. Annual contributions may not
be deposited in a Roth IRA holding such converted, rolled over or
transferred amounts.
3. INSTRUCTIONS TO PRESENT IRA CUSTODIAN OR TRUSTEE (COMPLETED BY DEPOSITOR)
- --------------------------------------------------------------------------------
NAME OF CURRENT CUSTODIAN/TRUSTEE
- --------------------------------------------------------------------------------
STREET
- --------------------------------------------------------------------------------
CITY STATE ZIP
- --------------------------------------------------------------------------------
TELEPHONE
Existing Account Number: _______________________________________________________
<PAGE>
Please transfer assets from the above account to Westcore Funds. Transfer
should be in cash according to the following conditions:
/ / Transfer the total amount in my account.
/ / Transfer $_____________ or _____________% and retain the balance.
/ / Transfer all securities except those Westcore Funds indicated, which are to
be transferred in-kind.
/ / Transfer proceeds of my CD upon maturity. Maturity Date: _____________.
Note: If you are transferring a CD upon maturity, you must send us this form at
least two, but not more than four weeks prior to maturity date.
Make check payable to Westcore/SSB FBO:
- --------------------------------------------------------------------------------
(Your name here)
4. INVESTMENT INSTRUCTIONS FOR WESTCORE IRA ACCOUNT
(Depositor - check one box and complete if necessary)
/ / Invest the transferred amount in accordance with the investment
instructions in the Application/Adoption Agreement for my Westcore Funds
Individual Retirement Custodial Account.
/ / Invest the transferred amount as follows: (See next column)
Existing Westcore Account Number - (if applicable)
------------------------
Fund Name Amount or %
200 - WESTCORE MIDCO GROWTH FUND $________ _______%
204 - WESTCORE BLUE CHIP FUND $________ _______%
195 - WESTCORE GROWTH AND INCOME FUND $________ _______%
208 - WESTCORE SMALL-CAP OPPORTUNITY FUND $________ _______%
213 - WESTCORE LONG-TERM BOND FUND $________ _______%
198 - WESTCORE INTERMEDIATE-TERM BOND FUND $________ _______%
189 - BLACKROCK MONEY MARKET PORTFOLIO $________ _______%
TOTAL $________ _______%
I acknowledge that I have sole responsibility for my investment choices and that
I have received and read a current prospectus for each Fund I select. I
understand that the requirements for a valid transfer to a Regular IRA and a
Roth IRA are complex and that I have the responsibility for complying with all
requirements and for the tax results of any such transfer. I also understand
that inaccurate or incorrect information may result in adverse tax consequences
or IRS penalties. (Consult your financial or tax adviser if you have any
questions about how opening a Regular or Roth IRA will affect your financial and
tax situation.)
5. SIGNATURE OF DEPOSITOR
The undersigned certifies to the present IRA custodian or trustee that the
undersigned has established a successor Individual Retirement Custodial Account
meeting the requirements of Internal Revenue Code Section 408 (a), 408 (p) or
408A (as the case may be) to which assets will be transferred, and certifies to
Westcore Funds that the IRA from which assets are being transferred meets the
requirements of Internal Revenue Code Section 408(a), 408(p) or 408A (as the
case may be).
- --------------------------------------------------------------------------------
SIGNATURE OF DEPOSITOR DATE
SIGNATURE GUARANTEE (only if required by current Custodian or Trustee)
- --------------------------------------------------------------------------------
NAME OF BANK OR DEALER FIRM
- --------------------------------------------------------------------------------
SIGNATURE OF OFFICER AND TITLE
<PAGE>
Place signature guarantee stamp here:
6. ACCEPTANCE BY NEW CUSTODIAN
(COMPLETE BY STATE STREET BANK AND TRUST COMPANY AS CUSTODIAN.)
State Street Bank and Trust Company as Custodian agrees to accept transfer of
the above amount for deposit to the Depositor's Westcore Funds Individual
Retirement Custodial Account, and requests the liquidation and transfer of
assets as indicated above.
By______________________________________________________________________________
DATE
RETAIN A PHOTOCOPY OF THE COMPLETED TRANSFER OF ASSETS FORM FOR YOUR RECORDS.
<PAGE>
WESTCORE FUNDS
G NEWS ABOUT 1998 IRA CHANGES
A SUMMARY OF WHAT YOU NEED TO KNOW ABOUT NEW IRA ALTERNATIVES.
IMPORTANT UPDATE ON 1998 IRAS
BETTER RESEARCH MAKES THE DIFFERENCE.
THE NEW REGULAR IRA
The new federal tax law enhanced the flexibility and tax advantages or
individual retirement accounts (IRAs). Generally speaking, the
changes to the rules for existing IRAs - referred to as Regular IRAs -
improve your ability to access IRA accounts for college and home
purchase expenses, and expand your ability to deduct amounts
contributed to your Regular IRA.
THE NEW ROTH IRA
The new tax law also creates a new type of IRA called the Roth IRA.
Using a Roth IRA, you may be able to contribute (on a non-tax
deductible basis) up to $2,000 per year or convert funds from an
existing Regular IRA. Dividends and growth on amounts in a Roth IRA
accumulate tax-free. Also, qualifying withdrawals are TAX-FREE,
offering you the unique benefit of being able to withdraw dividends
and growth without any federal income tax. (State income tax rules
may vary.)
AVAILABILITY
The new IRA options are available starting January 1, 1998. Until
then, your current Regular IRA will be operated in accordance with the
old rules, and contributions for 1997 can be made under the old rules
until April 15, 1998.
THIS SUMMARY PROVIDES YOU WITH A GENERAL EXPLANATION OF THE NEW LAWS.
FOR MORE INFORMATION, OR HELP IN DETERMINING WHICH IRA OPTIONS MIGHT
BE RIGHT FOR YOU, YOU SHOULD CONSULT YOUR OWN TAX ADVISER OR FINANCIAL
PLANNER.
<PAGE>
CHANGES TO REGULAR IRAS
Under the current law, a 10% penalty is assessed against withdrawals from an IRA
before age 59 1/2, with certain exceptions. The new law adds two new
exceptions: (1) withdrawals used to pay higher education expenses, including
tuition, fees, books, supplies, and (for students attending half-time or more)
room and board, or (2) withdrawals unused within 120 days to cover costs
incurred by qualified first-time homebuyers for acquisition costs (up to a
$10,000 lifetime cap per individual). Qualified first-time homebuyers are
individuals (plus their spouses, if married) who have not owned a principal
residence for the two years prior to the withdrawal. (NOTE: These exceptions
apply to the 10% tax only. These withdrawals are still subject to applicable
income tax.)
In addition, under the new law, the adjusted gross income ("AGI") phase-out
range for making deductible contributions to IRAs by active participants in
employer plans will increase. For single taxpayers, the phase-out ranges go up
to $30,000-$40,000 for 1998, and gradually increase to $50,000 -$60,000 in 2005.
For married joint filers, the phase-out ranges go up to $50,000-$60,000 for 1998
and gradually increase to $80,000-$100,000 in 2007.
Also, beginning in 1998, an individual will not be treated as an active
participant in an employer-sponsored plan merely because his/her spouse is an
active participant. (NOTE: The non-active participant spouse's eligibility to
make deductible contributions will phase out at AGI between $150,000 and
$160,000.)
NEW ROTH IRA
Starting with 1998, individual taxpayers (even those over 70 1/2) will be able
to contribute up to $2,000 (or 100% compensation, if less) annually to a Roth
IRA. Contributions to a Roth IRA are not tax deductible; however dividends and
growth on your account accumulate TAX-FREE while held in the Roth IRA.
Contribution limits are not reducted if you are an active participant in an
employer-sponsored plan, but the amount that may be contributed is phased out
for AGI levels from $95,000 to $110,000 for single taxpayers, and for AGI levels
from $150,000 to $160,000 for married joint filers. Amounts contributed by you
may always be withdrawn from a Roth IRA without federal income tax or penalties.
In addition, withdrawals of amounts representing dividends or growth made after
5 years of Roth IRA participation and made after age 59 1/2, or because of death
or disability, or for qualifying first-time homebuyer expenses ARE NOT SUBJECT
TO FEDERAL INCOME TAX.
As long as the IRA owner is living, there are no minimum distribution
requirements, so owners may maintain their Roth IRAs beyond the age of 70 1/2.
If you (and your spouse, if married) have an AGI of $100,000 or less, you may
convert or rollover all or any part of an existing Regular IRA to a Roth IRA.
The amount converted or rolled over is included as income in the year of the
rollover or conversion, but is not subject to the 10% withdrawal penalty, if you
are under age 59 1/2. If you convert or rollover amounts from your Regular IRAs
to Roth IRAs during 1998, the tax liability is spread out over the four-year
period running from 1998 to 2001.
<PAGE>
A GUIDE TO 1998 IRA CHANGES
The table below highlights and summarizes the changes to Regular IRAs and the
new Roth IRA.
<TABLE>
<CAPTION>
CHARACTERISTICS REGULAR IRA ROTH IRA
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELIGIBILITY - Individuals (and their spouses) who receive - Individuals (and their spouses) who receive
compensation. compensation.
- Individuals age 70 1/2 and over may NOT - No age stipulations - Individuals age 70 1/2
contribute. and over MAY contribute.
- ------------------------------------------------------------------------------------------------------------------------------------
TAX TREATMENT OF - Subject to limitations, contributions are - No deduction permitted for amounts
CONTRIBUTIONS deductible. contributed.
- Deductibility depends on income level for
individuals who are active participants in
an employer-sponsored retirement plan.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTIONS LIMITS - Individuals may contribute up to $2,000 - Individuals may generally contribute up to
annually (or 100% of compensation, if $2,000 annually (or 100% of compensation,
less). if less).
- Overall limit for contributions to all - Ability to contribute phases out at income
IRAs (Regular and Roth combined) is levels of $95,000 to $110,000 (individual
$2,000 annually (or 100% of taxpayer) and $150,000 to $160,000 (married
compensation, if less). taxpayers).
- Overall limit for contributions to all IRAs
(Regular and Roth combined) is $2,000 annually
(or 100% of compensation, if less).
- ------------------------------------------------------------------------------------------------------------------------------------
EARNINGS - Earnings and interest are not taxed when - Earnings and interest are not taxed when
received by your IRA. received by your IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
ROLLOVER/ - Individuals may roll over amounts held in - Rollovers from other Roth IRAs or Regular
CONVERSIONS employer-sponsored retirement arrangements IRAs only.
(401(k), SEP IRA, etc.) tax-free to Regular - Amounts rolled over (or converted) from
IRA another Regular IRA are subject to income tax
in the year rolled over or converted.
- Tax on amounts rolled over or converted in
1998 is spread over four-year period (1998-
2001).
- ------------------------------------------------------------------------------------------------------------------------------------
WITHDRAWALS - Total (principal + earnings) taxable as - Not taxable as long as qualified
income in year withdrawn (except for any distribution --generally, account open for
prior non-deductible contributions). 5 years, and age 59 1/2.
- Minimum withdrawals MUST begin after age - Minimum withdrawals NOT required after age
70 1/2. 70 1/2.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
.WESTCORE FUNDS
Better research makes the difference.
For questions about the new 1998 IRA changes, please call 1-800-392-CORE (2673)
to speak with a Westcore Investor Service Representative.
This brochure is just a summary and does not cover all the tax rules. Also,
these rules are new and there are no IRS rulings and regulations addressing many
issues. Please consult your tax adviser or the IRS for advice on your personal
situation.
This material must be accompanied or preceded by a prospectus. Please read it
carefully before you invest or send money.
Funds distributed by ALPS Mutual Fund Services, Inc. member NASD.
<PAGE>
1998
MORE CHOICES
MORE FLEXIBILITY
WESTCORE FUNDS
Westcore Funds
370 17th Street, Suite 3100
Denver, CO 80202
1-800-392-CORE
WWW.WESTCORE.COM
<PAGE>
WESTCORE FUNDS
Regular IRA/Roth IRA Information
<PAGE>
EFFECTIVE JANUARY 1, 1998
Better research makes the difference.
[INSERT PICTURE]
Crestone Mountains and Great Sand Dunes National Monument, San Luis Valley,
Colorado
<PAGE>
Establishing an individual Retirement Account (IRA) is one of the most important
steps you can take toward planning for a financially secure future. By making
regular annual contributions to your IRA, you can create a nest egg for
retirement while putting your assets to work on a tax-deferred basis.
Changes to federal tax law in 1997 have made the IRA an even more flexible
investment and savings vehicle. Among the changes is the creation of the Roth
Individual Retirement Account (Roth IRA), which was available for use after
January 1, 1998. Under a Roth IRA, the earnings and interest on an individual's
nondeductible contributions grow without being taxed, and distributions may be
tax-free under certain circumstances. Most taxpayers (expect for those with
very high income levels) will be eligible to contribute to a Roth IRA. A Roth
IRA can be used instead of a Regular IRA, to replace an existing Regular IRA, or
complement a Regular IRA you wish to continue maintaining.
Taxpayers with adjusted gross income of up to $100,000 are eligible to convert
existing IRAs into Roth IRAs. The details on conversion are found in the
description of Roth IRAs in this booklet.
Congress also made significant changes to Regular IRAs. First, Congress
increased the income levels at which IRA holders who participate in employer-
sponsored retirement plans can make deductible Regular IRA contributions. Also
the rules for deductible contributions by an IRA holder whose spouse is a
participant in an employer-sponsored retirement plan have been liberalized.
Second, the 10% penalty tax for premature withdrawals (before age 59 1/2 ) will
no longer apply in the case of withdrawals to pay certain higher education
expenses or certain first-time homebuyer expenses.
This booklet provides detailed information about Roth IRAs and about changes
that have been made to Regular IRAs. The instructions and forms you will need
to open a new Regular or Roth IRA, to transfer from another IRA to a Westcore
IRA, or to convert a Regular IRA to a Roth IRA are enclosed with this booklet.
You may use the Westcore IRA Application/Adoption Agreement to establish only
one Regular IRA or one Roth IRA; separate Application/Adoption Agreements must
be completed if you want to establish multiple (Roth or Regular) IRA accounts.
All forms can be photocopied, or you can call 1-800-392-CORE (2673) to request
more forms.
TABLE OF CONTENTS
DISCLOSURE STATEMENT
PART ONE-
Basic rules and benefits that are specifically applicable to your Regular
IRA
PART TWO-
Basic rules and benefits that are specifically applicable to your Roth IRA
PART THREE -
Important rules and information applicable to all IRAs
Custodial Agreement with State Street Bank and Trust Company
PART ONE -
Provisions specifically applicable to Regular IRAs
PART TWO -
Provisions specifically applicable to Roth IRAs
PART THREE -
Provisions applicable to all IRAs (Regular and Roth)
IRA Application/Adoption Agreement and Transfer Form -
-7-
<PAGE>
The Regular IRA and the Roth IRA - which is best for you?
With a Regular IRA, an individual can contribute up to $2,000 per year and may
be able to deduct the contribution from taxable income, reducing income taxes.
Taxes on investment growth and dividends are deferred until the money is
withdrawn. Withdrawals are taxed as additional ordinary income when received.
Nondeductible contributions, if any, are withdrawn tax free. Withdrawals before
age 59 1/2 are assessed a 10% penalty in addition to income tax, unless an
exception applies.
With a Roth IRA, the contribution limits are essentially the same as Regular
IRAs, but there is no tax deduction for contributions. All dividends and
investment growth in the account are tax-free. Most important with a Roth IRA:
there is NO INCOME TAX on qualified withdrawals from your Roth IRA.
Additionally, unlike a Regular IRA, there is no prohibition on making
contributions to Roth IRAs after turning age 70 1/2, and there's no requirement
that you begin making minimum withdrawals at that age.
Since we cannot tell you which kind of IRA is right for you, we suggest that you
consult with your accountant, lawyer or other tax adviser, or with a qualified
financial planner, to determine whether you should open a Regular or Roth IRA or
convert any or all of an existing Regular IRA to a Roth IRA. Your tax adviser
can also advise you as to the state tax consequences that may affect whether a
Regular or Roth IRA is right for you.
The information contained in this booklet is intended to provide you with the
basic information and material you will need if you decide whether a Regular or
Roth IRA is better for you, or if you want to convert an existing Regular IRA to
a Roth IRA. The table on page 3 summarizes some of the major differences
between a Regular IRA and a Roth IRA.
SEPs and SIMPLEs
The Westcore Regular IRA may be used in connection with a simplified employee
pension (SEP) plan maintained by your employer. To establish a Regular IRA as
part of your Employer's SEP plan, complete the Adoption Agreement for a Regular
IRA, indicating in the proper box that the IRA is part of a SEP plan. A Roth
IRA should NOT be used in connection with a SEP plan.
A Roth IRA may NOT be used as part of an employer SIMPLE IRA plan. A Regular
IRA may be used, but only after an individual has been participating for two or
more years (for the first two years, only a special SIMPLE IRA may be used).
SIMPLE IRA plans were added by the 1996 tax law to provide an easy and
inexpensive way for small employers to provide retirement benefits for their
employees. If you are interested in a SIMPLE IRA plan at your place of
employment, call or write to the number or address given on back cover of this
booklet.
Other Points to Note
The Disclosure Statement in this booklet provides you with a basic information
that you should know about Westcore Regular IRAs and Roth IRAs. The Disclosure
Statement provides general information about the governing rules for these IRA
and the benefits and features offered through each type of IRA. However, the
Westcore/State Street Bank and Trust Company Adoption Agreement and the
Custodial Agreement are the primary documents controlling the terms and
conditions of your personal Westcore Regular or Roth IRA, and these shall govern
in the case of any difference with the Disclosure Statement.
YOU or YOUR when used throughout this booklet refer to the person for whom the
Westcore Regular or Roth IRA is established. A Regular IRA is any non-Roth IRA
offered by Westcore or any other financial institution
-8-
<PAGE>
Major Differences Between a Regular IRA and a Roth IRA IRA Information
<TABLE>
<CAPTION>
Characteristics Regular IRA Roth IRA
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Eligibility / / Individuals (and their spouses) who receive / / Individuals (and their spouses) who receive
compensation compensation
/ / Individuals age 70 1/2 and over MAY NOT / / Individuals age 70 1/2 and over MAY
contribute contribute
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Treatment of / / Subject to limitations, contributions are / / No deduction permitted for amounts
Contributions deductible contributed
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution Limits / / Individuals may contribute up to $2,000 / / Individuals may generally contribute up to
annually (or 100% of compensation, if less) $2,000 (or 100% of compensation, if less)
/ / Deductibility depends on income level for / / Ability to contribute phases out at income
individuals who are active participants in levels of $95,000 to $110,000 (individual
an employer-sponsored retirement plan. taxpayers) and $150,000 to $160,000 (married
taxpayers)
/ / Overall limit for contributions to ALL IRAs
(Regular and Roth combined) is $2,000 annually
(or 100% of compensation, if less)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings / / Earnings and interest are not taxed when / / Earnings and interest are not taxed when
received by your IRA received by your IRA
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover/Conversion / / Individuals may roll over amounts held in / / Rollovers from other Roth IRAs or Regular
employ-sponsored retirement arrangements IRAs ONLY
(401(k), SEP IRA, etc.) tax free to / / Amounts rolled over (or converted) from another
Regular IRA Regular IRA are subject to income tax in the
year rolled over or converted.
/ / Tax on amounts rolled over or converted in 1998
is spread over four-year period (1998-2001)
- ------------------------------------------------------------------------------------------------------------------------------------
Withdrawals / / Total (principal + earnings) taxable as / / Not taxable as long as QUALIFIED DISTRIBUTION
income in year withdrawn (except for any --generally, account open for 5 years, and
prior non-deductible contributions). age 59 1/2.
/ / Minimum withdrawals must begin after age / / Minimum withdrawals NOT REQUIRED after age
70 1/2 70 1/2
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE>
PART ONE: DESCRIPTION OF REGULAR IRAS
Special Note
Part One of the Disclosure Statement describes the rules applicable to
Regular IRAs beginning January 1, 1998. IRAs described in these pages are
called "Regular IRAs" to distinguish them from the new "Roth IRAs" first
available starting in 1998. Roth IRAs are described in Part Two of this
Disclosure Statement.
For Regular IRA contributions for 1997 (including contributions made up to
April 15, 1998, but designated as contributions for 1997), there are different
rules for determining the deductibility of your contribution on your federal tax
return. For contributions for 1997, the "active participant" limits on
deductibility (described below) apply if either spouse is an active participant
in an employer-sponsored plan. Also, the adjusted gross income ("AGI") levels
for partially deductible or nondeductible Regular IRA contributions (described
below) are lower for 1997 ($25,000 for single taxpayers, with no deduction if
your AGI is above $35,000; and $40,000 for married taxpayers filing jointly,
with no deduction if your AGI is above $50,000). Also, the exceptions to the
10% early withdrawal penalty for withdrawals to pay certain higher education or
first-time homebuyer expenses do not apply to withdrawals in 1997.
This Part One of the Disclosure Statement describes Regular IRAs. It does
not describe Roth IRAs, a new type of IRA available starting in 1998.
Contributions to a Roth IRA are not deductible (regardless of your AGI), but
withdrawals that meet certain requirements are not subject to federal income
tax, so that dividends and investment growth on amounts held in the Roth IRA can
escape federal income tax. Please see Part Two of this Disclosure Statement if
you are interested in learning more about Roth IRAs.
Regular IRAs described in this Disclosure Statement may be used as part of
a simplified employee pension (SEP) plan maintained by your employer. Under a
SEP, your employer may make contributions to your Regular IRA, and these
contributions may exceed the normal limits on Regular IRA contributions. This
Disclosure Statement does not describe IRAs established in connection with a
SIMPLE IRA program maintained by your employer. Employer provide special
explanatory materials for accounts established as part of a SIMPLE IRA program.
Regular IRAs may be used in connection with a SIMPLE IRA program, but for the
first two years of participation a special SIMPLE IRA (not a Regular IRA) is
required.
Your Regular IRA
This Part One contains information about your Regular Individual Retirement
Custodial Account, with State Street Bank and Trust Company as Custodian. A
Regular IRA gives you several tax benefits. Earnings on the assets held in your
Regular IRA are not subject to federal income tax until withdrawn by you. You
may be able to deduct all or part of your Regular IRA contribution on your
federal income tax return. State income tax treatment of your Regular IRA may
differ from federal treatment; ask your state tax department or your personal
tax adviser for details.
Be sure to read Part Three of this Disclosure Statement for important
additional information, including information on how to revoke your Regular IRA,
investments and prohibited transactions, fees and expenses, and certain tax
requirements.
Eligibility
WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR A REGULAR IRA?
You are eligible to establish and contribute to a Regular IRA for a year
if:
- You received compensation (or earned income if you are self-employed)
during the year for personal services you rendered. If you received
taxable alimony, this is treated like compensation for IRA purposes.
-10-
<PAGE>
- You did not reach age 70 1/2 during the year.
CAN I CONTRIBUTE TO A REGULAR IRA FOR MY SPOUSE?
For each year before the year when your spouse attains age 70 1/2, you can
contribute to a separate Regular IRA for your spouse, regardless of whether your
spouse had any compensation or earned income in that year. This is called a
"spousal IRA." To make a contribution to a Regular IRA for your spouse, you
must file a joint tax return for the year with your spouse. For a spousal IRA,
your spouse must set up a different Regular IRA, separate from yours, to which
you contribute.
Contributions
WHEN CAN I MAKE CONTRIBUTIONS TO A REGULAR IRA?
You may make a contribution to your existing Regular IRA or establish a new
Regular IRA for a taxable year by the due date (not including any extensions)
for your federal income tax return for the year. Usually this is April 15 of
the following year.
HOW MUCH CAN I CONTRIBUTE TO MY REGULAR IRA?
For each year when you are eligible (see previous page), you can contribute
up to the lesser of $2,000 or 100% of your compensation (or earned income, if
you are self-employed). However, under the tax laws, all or a portion of your
contribution may not be deductible.
If you and your spouse have spousal Regular IRAs, each spouse may
contribute up to $2,000 annually to his or her IRA as long as the combined
compensation of both spouses for the year (as shown on your joint income tax
return) is at least $4,000. If the combined compensation of both spouses is
less than $4,000, the spouse with the higher amount of compensation may
contribute up to $2,000 or 100% of their spouse's compensation amount, if less.
The spouse with the lower compensation amount may contribute any amount up to
100% of their compensation plus any excess of the other spouse's compensation
over the other spouse's IRA contribution. However, the maximum contribution to
either spouse's Regular IRA is $2,000 for the year.
If you (or your spouse) establish a new Roth IRA and make contributions to
both your Regular IRA and a Roth IRA, the combined limit on contributions to
both your (or your spouse's) Regular IRA and Roth IRA for a single calendar year
is $2,000.
HOW DO I KNOW IF MY CONTRIBUTION IS TAX DEDUCTIBLE?
The deductibility of your contribution depends upon whether you are an
active participant in any employer-sponsored retirement plan. If you are not an
active participant, the entire contribution to your Regular IRA is deductible.
If you are an active participant in an employer-sponsored plan, your
Regular IRA contribution may still be completely or partly deductible on your
tax return. This depends on the amount of your income (see tables on page 6).
Similarly, the deductibility of a contribution to a Regular IRA for your
spouse depends upon whether your spouse is an active participant in any
employer-sponsored retirement plan. If your spouse is not an active
participant, the contribution to your spouse's Regular IRA will be deductible.
If your spouse is an active participant, the Regular IRA contribution will be
completely, partly or not deductible, depending upon your combined income.
An exception to the preceding rules applies to high-income married
taxpayers, where one spouse is an active participant in an employer-sponsored
retirement plan and the other spouse is not. A contribution to the non-active
participant spouse's Regular IRA will be only partly deductible at an adjusted
gross income level on the joint tax return of $150,000, and the deductibility
will be phased out as described below over the next $10,000 so that there will
be no deduction at all with an adjusted gross income level of $160,000 or
higher.
-11-
<PAGE>
HOW DO I DETERMINE MY OR MY SPOUSE'S "ACTIVE PARTICIPANT" STATUS?
Your (or your spouse's) Form W-2 should indicate if you (or your spouse)
were an active participant in an employer-sponsored retirement plan for a year.
If you have a question, you should ask your employer or the plan administrator.
In addition, regardless of income level, your spouse's "active participant"
status will not affect the deductibility of your contributions to your Regular
IRA if you and your spouse file separate tax returns for the taxable year and
you lived apart at all times during the taxable year.
WHAT ARE THE DEDUCTION RESTRICTIONS FOR ACTIVE PARTICIPANTS?
If you (or your spouse) are an active participant in an employer plan
during a year, the contribution to your Regular IRA (or your spouse's Regular
IRA) may be completely, partly or not deductible depending upon your filing
status and your amount of adjusted gross income (AGI). If AGI is any amount up
to the lower limit, the contribution is deductible. If your AGI falls between
the lower limit and the upper limit, the contribution is partly deductible. If
your AGI falls above the upper limit, the contribution is not deductible.
-12-
<PAGE>
Deductibility For Active Participants - 1998
<TABLE>
<CAPTION>
If You Are Single If You Are Married, Filing Jointly Then Your Regular IRA Contribution Is
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Up to lower limit ($30,000 for 1998) Up to lower limit (50,000 for 1998) Fully deductible
- ------------------------------------------------------------------------------------------------------------------------------------
More than lower limit but less than upper More than lower limit but less than upper Partly deductible
limit ($40,000 for 1998) limit ($60,000 for 1998)
- ------------------------------------------------------------------------------------------------------------------------------------
Upper limit or more Upper limit or more Not deductible
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE LOWER LIMIT AND THE UPPER LIMIT WILL CHANGE FOR 1999 AND LATER YEARS. THE
LOWER LIMIT AND UPPER LIMIT FOR THESE YEARS ARE SHOWN IN THE FOLLOWING TABLE.
SUBSTITUTE THE CORRECT LOWER LIMIT AND UPPER LIMIT IN THE TABLE ABOVE TO
DETERMINE DEDUCTIBILITY IN ANY PARTICULAR YEAR. (NOTE: IF YOU ARE MARRIED BUT
FILING SEPARATE RETURNS, YOUR LOWER LIMIT IS ALWAYS ZERO AND YOUR UPPER LIMIT IS
ALWAYS $10,000).
Table of Lower and Upper Limits
<TABLE>
<CAPTION>
Year Single Married Filing Jointly
- --------------------------------------------------------------------------------
Lower Limit Upper Limit Lower Limit Upper Limit
<S> <C> <C> <C> <C>
1999 $31,000 $41,000 $51,000 $61,000
2000 $32,000 $42,000 $52,000 $62,000
2001 $33,000 $43,000 $53,000 $63,000
2002 $34,000 $44,000 $54,000 $64,000
2003 $40,000 $50,000 $60,000 $70,000
2004 $45,000 $55,000 $65,000 $75,000
2005 $50,000 $60,000 $70,000 $80,000
2006 $50,000 $60,000 $75,000 $85,000
2007 and later $50,000 $60,000 $80,000 $100,000
</TABLE>
-13-
<PAGE>
HOW DO I CALCULATE MY DEDUCTION IF I FALL IN THE "PARTLY DEDUCTIBLE" RANGE?
If your AGI falls in the partly deductible range, you must calculate the
portion of your contribution that is deductible. To do this, multiply your
contribution by a fraction. The numerator is the amount by which your AGI
exceeds the lower limit (for 1998: $30,000 if single, or $50,000 if married,
filing jointly). The denominator is $10,000 (note that the denominator for
married joint filers is $20,000 starting in 2007). Subtract this from your
contribution and then round down to the nearest $10. The deductible amount is
the greater of the amount calculated or $200 (provided you contribute at least
$200). If your contribution was less than $200, then the entire contribution is
deductible.
For example, assume that you make a $2,000 contribution to your Regular IRA
in 1998, a year in which you are an active participant in your employer's
retirement plan. Also assume that your AGI is $57,555 and you are married,
filing jointly. You would calculate the deductible portion of your contribution
this way:
1. The amount by which your AGI exceeds the lower limit of the party-
deductible range:
($57,555-$50,000) = $7,555
2. Divide this by $10,000: $ 7,555 = 0.7555
-------
$10,000
3. Multiply this by your contribution limit:
0.7555 x $2,000 = $1,511
4. Subtract this from your contribution:
($2,000 - $1,551) = $489
5. Round this down to the nearest $10: = $480
6. Your deductible contribution is the greater of this amount or $200.
Even though part or all of your contribution is not deductible, you may
still contribute to your Regular IRA (and your spouse may contribute to your
spouse's Regular IRA) up to the limit on contributions. When you file your tax
return for the year, you must designate the amount of non-deductible
contributions to your Regular IRA for the year. See IRS Form 8606.
HOW DO I DETERMINE MY AGI?
AGI is your gross income minus those deductions that are available to all
taxpayers even if they don't itemize. Instructions on calculating your AGI are
provided with your income tax Form 1040 or 1040A.
WHAT HAPPENS IF I CONTRIBUTE MORE THAN ALLOWED TO MY REGULAR IRA?
The maximum contribution you can make to a Regular IRA generally is $2,000
or 100% of compensation or earned income, whichever is less. Any amount
contributed to the IRA above the maximum is considered an "excess contribution."
The excess is calculated using your contribution limit, not the deductible
limit. An excess contribution is subject to excise tax of 6% for each year it
remains in the IRA.
HOW CAN I CORRECT AN EXCESS CONTRIBUTION?
Excess contributions may be corrected without paying a 6% penalty. To do
so, you must withdraw the excess and any earnings on the excess before the due
date (including extensions) for filing your federal income tax for the year for
which you made the excess contribution. A deduction should not be taken for any
excess contribution. Earnings on the amount withdrawn must also be withdrawn.
The earnings must be included in your income for the tax year for which the
contribution was made and may be subject to a 10% premature withdrawal tax if
you have not reached age 59 1/2.
WHAT HAPPENS IF I DON'T CORRECT THE EXCESS CONTRIBUTION BY THE TAX RETURN DUE
DATE?
Any excess contribution withdrawn after the tax return due date (including
any extensions) for the year for which the contribution was made will be subject
to the 6% excise tax. There will be an additional 6% excise tax for each year
the excess remains in your account.
-14-
<PAGE>
Under limited circumstances, you may correct an excess contribution after tax
filing time by withdrawing the excess contribution (leaving the earnings in the
account). This withdrawal will not be includable in income nor will it be
subject to any premature withdrawal penalty if (1) your contributions to all
Regular IRAs do not exceed $2,000 and (2) you did not take a deduction for the
excess amount (or you file an amended return (Form 1040X), which removes the
excess deduction).
HOW ARE EXCESS CONTRIBUTIONS TREATED IF NONE OF THE PRECEDING RULES APPLY?
Unless an excess contribution qualifies for the special treatment outlined
above, the excess contribution and any earnings on it withdrawn after tax filing
time will be includable in taxable income and may be subject to a 10% premature
withdrawal penalty. No deduction will be allowed for the excess contribution
for the year in which it is made.
Excess contributions may be corrected in a subsequent year to the extent
that you contribute less than your maximum amount. As the prior excess
contribution is reduced or eliminated, the 6% excise tax will become
correspondingly reduced or eliminated for subsequent tax years. Also, you may
be able to take an income tax deduction for the amount of excess that was
reduced or eliminated, depending on whether you would be able to take a
deduction if you had instead contributed the same amount.
ARE THE EARNINGS ON MY REGULAR IRA FUNDS TAXED?
Any dividends on or growth of the investments held in your Regular IRA are
generally exempt from federal income taxes and will not be taxed until withdrawn
by you, unless the tax exempt status of your Regular IRA is revoked (this is
described in Part Three of this Disclosure Statement).
IRA DISCLOSURE STATEMENT: PART ONE
Transfers/Rollovers
CAN I TRANSFER OR ROLL OVER A DISTRIBUTION I RECEIVE FROM MY EMPLOYER'S
RETIREMENT PLAN INTO A REGULAR IRA?
Almost all distributions from employer plans or 403(b) arrangements (for
employees of tax-exempt employers) are eligible for rollover to a Regular IRA.
The main exceptions are
/ / payments over the lifetime or life expectancy of the participant (or
participant and a designated beneficiary),
/ / installment payments for a period of 10 years or more,
/ / required distributions (generally the rules require distributions
starting at age 70 1/2 or for certain employees starting at
retirement, if later), and
/ / payments of employee after-tax contributions.
If you are eligible to receive a distribution from a tax-qualified retirement
plan as a result of, for example, termination of employment, plan discontinuance
or retirement, all or part of the distribution may be transferred directly into
your Regular IRA. This is called a "direct rollover." Or, you may receive the
distribution and make a regular rollover to your Regular IRA within 60 days. By
making a direct rollover or a regular rollover, you can defer income taxes on
the amount rolled over until you subsequently make withdrawals from your IRA.
The maximum amount you may roll over is the amount of employer
contributions and earnings distributed. You may not roll over any after-tax
employee contributions you made to the employer retirement plan. If you are
over age 70 1/2 and are required to take minimum distributions under the tax
laws, you may not roll over any amount required to be distributed to you under
the minimum distribution rules. Also, if you are receiving periodic payments
over your or your and your designated beneficiary's life expectancy or for a
period of at least 10 years, you may not roll over these payments. A rollover
to a Regular IRA must be completed within 60 days after the distribution from
the employer retirement plan to be valid.
NOTE: A qualified plan administrator or 403(b) sponsor MUST WITHHOLD 20% OF
YOUR DISTRIBUTION for federal income
-15-
<PAGE>
taxes UNLESS you elect a DIRECT ROLLOVER. Your plan or 403(b) sponsor is
required to provide you with information about direct and traditional rollovers
and withholding taxes before you receive your distribution and must comply with
your directions to make a direct rollover.
The rules governing rollovers are complicated. Be sure to consult your tax
adviser or the IRS if you have a question about rollovers.
ONCE I HAVE ROLLED OVER A PLAN DISTRIBUTION INTO A REGULAR IRA, CAN I
SUBSEQUENTLY ROLL OVER INTO ANOTHER EMPLOYER'S QUALIFIED RETIREMENT PLAN?
Yes. Part or all of an eligible distribution received from a qualified
plan may be transferred from the Regular IRA holding it to another qualified
plan. However, the IRA must have no assets other than those which were
previously distributed to you from the qualified plan. Specifically, the IRA
cannot contain any contributions by you (or your spouse). Also, the new
qualified plan must accept rollovers. Similar rules apply to Regular IRAs
established with rollovers from 403(b) arrangements.
CAN I MAKE A TRADITIONAL ROLLOVER FROM MY REGULAR IRA TO ANOTHER REGULAR IRA?
You may make a rollover from one Regular IRA to another Regular IRA you
have or you establish to receive the rollover. Such a rollover must be
completed within 60 days after the withdrawal from your first Regular IRA.
After making a traditional rollover from one Regular IRA to another, you must
wait a full year (365 days) before you can make another such rollover.
(However, you can instruct a Regular IRA custodian to transfer amounts directly
to another Regular IRA custodian; such a direct transfer does not count as a
rollover.)
WHAT HAPPENS IF I COMBINE ROLLOVER CONTRIBUTIONS WITH MY NORMAL CONTRIBUTIONS IN
ONE IRA?
If you wish to make both a normal annual contribution and a rollover
contribution, you may wish to open two separate Regular IRAs by completing two
Adoption Agreements and two sets of forms. You should consult a tax adviser
before making your annual contribution to the IRA you established with rollover
contributions (or make a rollover contribution to the IRA to which you make your
annual contributions). This is because combining your annual contributions and
rollover originating from an employer plan distribution would prohibit the
future rollover out of the IRA into another qualified plan. If despite this,
you still wish to combine a rollover contribution and the IRA holding your
annual contributions, you should establish the account as a Regular IRA on the
Adoption Agreement (not a Rollover IRA or Direct Rollover IRA) and make the
contributions to that account.
HOW DO ROLLOVERS AFFECT MY CONTRIBUTION OR DEDUCTION LIMITS?
Rollover contributions, if properly made, do not count toward the maximum
contribution. Also, rollovers are not deductible and they do not affect your
deduction limits as described above.
WHAT ABOUT CONVERTING MY REGULAR IRA TO A ROTH IRA?
The rules for converting a Regular IRA to a new Roth IRA, or making
rollover from a Regular IRA to a new Roth IRA, are described in Part Two of this
Disclosure Statement.
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<PAGE>
Withdrawals
WHEN CAN I MAKE WITHDRAWALS FROM MY REGULAR IRA?
You may withdraw from your Regular IRA at any time. However, withdrawals
before age 59 1/2 may be subject to a 10% penalty tax in addition to regular
income taxes (see next column).
WHEN MUST I START MAKING WITHDRAWALS?
If you have not withdrawn your entire IRA by the April 1 following the year
in which you reach 70 1/2, you must make minimum withdrawals in order to avoid
penalty taxes. The rule allowing certain employees to postpone distributions
from an employer qualified plan until actual retirement (even if this is after
age 70 1/2) does not apply to Regular IRAs.
The minimum withdrawal amount is determined by dividing the balance in your
Regular IRA (or IRAs) by your life expectancy or the combined life expectancy of
you and your designated beneficiary. The minimum withdrawal rules are complex.
Consult your tax adviser for assistance.
The penalty tax is 50% of the difference between the minimum withdrawal
amount and your actual withdrawals during a year. The IRS may waive or reduce
the penalty tax if you can show that your failure to make the required minimum
withdrawals was due to reasonable cause and you are taking reasonable steps to
remedy the problem.
HOW ARE WITHDRAWALS FROM MY REGULAR IRA TAXED?
Amounts withdrawn by you are includable in your gross income in the taxable
year that you receive them, and are taxable as ordinary income. Lump sum
withdrawals from a Regular IRA are not eligible for averaging treatment
currently available to certain lump sum distributions from qualified employer
retirement plans.
Since the purpose of a Regular IRA is to accumulate funds for retirement,
your receipt or use of any portion of your Regular IRA before you attain age
59 1/2 generally will be considered as an early withdrawal and subject to a 10%
penalty tax.
The 10% penalty tax for early withdrawal will not apply if:
/ / The distribution is a result of your death or disability.
/ / The purpose of the withdrawal is to pay certain higher education
expenses for yourself or your spouse, child or grandchild. Qualifying
expenses include tuition, fees, books, supplies and equipment required
for attendance at a post-secondary educational institution. Room and
board expenses may qualify if the student is attending at least half-
time.
/ / The withdrawal is used to pay eligible first-time homebuyer expenses.
These are the costs of purchasing, building or rebuilding a principal
residence (including customary settlement, financing or closing
costs). The purchaser may be you, your spouse, or a child,
grandchild, parent or grandparent of you or your spouse. An
individual is considered a "first-time homebuyer" if the individual
(or the individual's spouse, if married) did not have an ownership
interest in a principal residence during the two-year period
immediately preceding the acquisition in question. The withdrawal
must be used for eligible expenses within 120 days after the
withdrawal. (If there is an unexpected delay, or cancellation of the
home acquisition, a withdrawal may be redeposited as a rollover.)
There is a lifetime limit on eligible first-time homebuyer expenses of
$10,000 per individual.
/ / The distribution is one of a scheduled series of substantially equal
periodic payments for your life or life expectancy (or the joint lives
or life expectancies of you and your beneficiary). If there is an
adjustment to the scheduled series of payments, the 10% penalty tax
may apply. The
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10% penalty will not apply if you make no change in the series of
payments until the end of five years or until you reach age 59 1/2,
whichever is later. If you make a change before then, the penalty
will apply. For example, if you begin receiving payments at age 50
under a withdrawal program providing for substantially equal payments
over your life expectancy, and at age 58 you elect to receive the
remaining amount in your Regular IRA in a lump-sum, the 10% penalty
tax will apply to the lump sum and to the amounts previously paid to
you before age 59 1/2.
/ / The distribution does not exceed the amount of your deductible medical
expenses for the year (generally speaking, medical expenses paid
during a year are deductible if they are greater than 7 1/2% of your
adjusted gross income for that year).
/ / The distribution does not exceed the amount you paid for health
insurance coverage for yourself, your spouse and dependents. This
exception applies only if you have been unemployed and received
federal or state unemployment compensation payments for at least 12
weeks; this exception applies to distributions during the year in
which you received the unemployment compensation and during the
following year, but not to any distributions received after you have
been reemployed for at least 60 days.
HOW ARE NONDEDUCTIBLE CONTRIBUTIONS TAXED WHEN THEY ARE WITHDRAWN?
A withdrawal of nondeductible contributions (not including earnings) will
be tax free. However, if you made both deductible and nondeductible
contributions to your Regular IRA, then each distribution will be treated as
partly a return of your nondeductible contributions (not taxable) and partly a
distribution of deductible contributions and earnings (taxable). The nontaxable
amount is the portion of the amount withdrawn that bears the same ratio as your
total nondeductible Regular IRA contributions to the total balance of all your
Regular IRAs (including rollover IRAs and SEPs, but not including Roth IRAs).
For example, assume that you made the following Regular IRA contributions:
<TABLE>
<CAPTION>
Year Deductible Nondeductible
- --------------------------------------------------------------------------------
<S> <C> <C>
1995 $2,000
1996 $2,000
1997 $1,000 $1,000
1998 $1,000
- --------------------------------------------------------------------------------
$5,000 $2,000
</TABLE>
In addition, assume that your Regular IRA has total investment earnings through
1998 of $1,000. During 1998 you withdraw $500. Your total account balance as
of 12/31/98 is $7,500 as shown below.
<TABLE>
<S> <C>
Deductible Contributions $5,000
Nondeductible Contributions $2,000
Earnings on IRA $1,000
Less 1998 Withdrawal $ 500
- --------------------------------------------------------------------------------
Total Account Balance as of 12/31/98 $7,500
</TABLE>
To determine the nontaxable portion of your 1998 withdrawal, the total 1998
withdrawal ($500) must be multiplied by a fraction. The numerator of the
fraction is the total of all nondeductible contributions remaining in the
account before the 1998 withdrawal ($2,000). The denominator is the total
account balance as of 12/31/98 ($7,500) plus the 1998 withdrawal ($500) or
$8,000. The calculation is:
Total Remaining
NONDEDUCTIBLE CONTRIBUTIONS $2,000 x $500 = $125
------
Total Account Balance $8,000
Thus, $125 of the $500 withdrawal in 1998 will not be included in your
taxable income. The remaining $375 will be taxable for 1998. In addition, for
future calculations the remaining nondeductible contribution total will be
$2,000 minus $125, or $1,875.
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<PAGE>
A loss in your Regular IRA investment may be deductible. You should
consult your tax adviser for further details on the appropriate calculation for
this deduction if applicable.
IS THERE A PENALTY TAX ON CERTAIN LARGE WITHDRAWALS OR ACCUMULATIONS IN MY IRA?
Earlier tax laws imposed a "success" penalty equal to 15% of withdrawals
from all retirement accounts (including IRAs, 401 (k) or other employer
retirement plans, 403 (b) arrangements and others) in a year exceeding a
specified amount (initially $150,000 per year). Also, there was a 15% estate
tax penalty on excess accumulations remaining in IRAs and other tax-favored
arrangements upon your death. These 15% penalty taxes have been repealed.
IMPORTANT: PLEASE SEE PART THREE, WHICH CONTAINS IMPORTANT INFORMATION
APPLICABLE TO ALL WESTCORE FUNDS IRAS.
IRA DISCLOSURE STATEMENT: PART TWO
Special Note
Part Two of the Disclosure Statement describes the rules generally
applicable to Roth IRAs beginning January 1, 1998.
Roth IRAs are a new kind of IRA available for the first time in 1998.
Contributions to a Roth IRA for 1997 are not permitted. Contributions to a Roth
IRA are not tax-deductible, but withdrawals that meet certain requirements are
not subject to federal income taxes. This makes the dividends on and growth of
the investments held in your Roth IRA tax-free for federal income tax purposes
if the requirements are met.
Regular IRAs, which have existed since 1975, are still available.
Contributions to a Regular IRA may be tax-deductible. Earnings and gains on
amounts while held in a Regular IRA are tax-deferred. Withdrawals are subject
to federal income tax (except for prior after-tax contributions which may be
recovered without additional federal income tax).
Part Two does not describe Regular IRAs. If you wish to review information
about Regular IRAs, please see Part One of this Disclosure Statement.
The Disclosure Statement also does not describe IRAs established in
connection with a SIMPLE IRA program or a Simplified Employee Pension (SEP) plan
maintained by your employer. Roth IRAs may not be used in connection with a
SIMPLE IRA program or a SEP plan.
Your Roth IRA
Your Roth IRA gives you several tax benefits. While contributions to a
Roth IRA are not deductible, dividends on and growth of the assets held in your
Roth IRA are not subject to federal income tax. Withdrawals by you from your
Roth IRA are excluded from your income for federal income tax purposes if
certain requirements (described on page 15) are met. State income tax treatment
of your Roth IRA may differ from federal treatment; ask your state tax
department or your personal tax adviser for details.
Be sure to read Part Three of this Disclosure Statement for important
additional information, including information on how to revoke your Roth IRA,
investments and prohibited transactions, fees and expenses and certain tax
requirements.
Eligibility
WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR A ROTH IRA?
Starting with 1998, you are eligible to establish and contribute to a Roth
IRA for a year if you received compensation (or earned income if you are self-
employed) during the year for personal services you rendered. If you received
taxable alimony, this is treated like compensation for IRA purposes.
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<PAGE>
In contrast to a Regular IRA, with a Roth IRA you may continue making
contributions after you reach age 70 1/2.
CAN I CONTRIBUTE TO A ROTH IRA FOR MY SPOUSE?
Starting with 1998, if you meet the eligibility requirements you can not
only contribute to your own Roth IRA, but also to a separate Roth IRA for your
spouse out of your compensation or earned income, regardless of whether your
spouse had any compensation or earned income in that year. This is called a
"spousal Roth IRA." To make a contribution to a Roth IRA for your spouse, you
must file a joint tax return for the year with your spouse. For a spousal Roth
IRA, your spouse must set up a different Roth IRA, separate from yours, to which
you contribute.
Of course, if your spouse has compensation or earned income, your spouse
can establish his or her own Roth IRA and make contributions to it in accordance
with the rules and limits described in this Part Two of this Disclosure
Statement.
Contributions
WHEN CAN I MAKE CONTRIBUTIONS TO A ROTH IRA?
You may make a contribution to your Roth IRA or establish a new Roth IRA
for a taxable year by the due date (not including any extensions) for your
federal income tax return for the year. Usually this is April 15 of the
following year. For example, you will have until April 15, 1999, to establish
and make a contribution to a Roth IRA for 1998.
CAUTION: Since Roth IRAs are available starting January 1, 1998, you may not
make a contribution by April 15, 1998, to a Roth IRA for 1997.
HOW MUCH CAN I CONTRIBUTE TO MY ROTH IRA?
For each year when you are eligible (see previous page), you can contribute
up to the lesser of $2,000 or 100% of your compensation (or earned income, if
you are self-employed).
Annual contributions may be made only to a Roth IRA annual contribution
account which does not contain converted or transferred funds form a Regular
IRA.
Your Roth IRA limit is reduced by any contributions for the same year to a
Regular IRA. For example, assuming you have at least $2,000 in compensation or
earned income, if you contribute $500 to your Regular IRA for 1998 your maximum
Roth IRA contribution for 1998 will be $1,500.
If you and your spouse have spousal Roth IRAs, each spouse may contribute
up to $2,000 annually to his or her Roth IRA as long as the combined
compensation of both spouses for the year (as shown on your joint income tax
return) is at least $4,000. If the combined compensation of both spouses is
less than $4,000, the spouse with the higher amount of compensation may
contribute up to $2,000 or 100% of their compensation amount, if less. The
spouse with the lower compensation amount may contribute any amount up to 100%
of their compensation plus any excess of the other spouse's compensation over
the other spouse's Roth IRA contribution. However, the maximum contribution to
either spouse's Roth IRA is $2,000 for the year.
As noted above, the spousal Roth IRA limits are reduced by any
contributions for the same calendar year to a Regular IRA maintained by you or
your spouse.
For taxpayers with high income levels, the contribution limits may be
reduced (see next column).
ARE CONTRIBUTIONS TO A ROTH IRA TAX DEDUCTIBLE?
Contributions to a Roth IRA are not deductible. This is a major difference
between Roth IRAs and Regular IRAs. Contributions to a Regular IRA may be
deductible on your federal income tax return,
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<PAGE>
depending on whether or not you are an active participant in an employer-
sponsored plan and on your income level.
ARE THE EARNINGS ON MY ROTH IRA FUNDS TAXED?
Any dividends on or growth of investments held in your Roth IRA are
generally exempt from federal income taxes and will not be taxed until withdrawn
by you, unless the tax-exempt status of your Roth IRA is revoked. If the
withdrawal qualifies as a tax-free withdrawal (see page 15), amounts reflecting
earnings or growth of assets in your Roth IRA will not be subject to federal
income tax.
WHICH IS BETTER, A ROTH IRA OR A REGULAR IRA?
This will depend upon your individual situation. A Roth IRA may be better
if you are an active participant in an employer-sponsored plan and your adjusted
gross income is too high to make a deductible IRA contribution (but not too high
to make a Roth IRA contribution). Also, the benefits of a Roth IRA vs. a
Regular IRA may depend upon a number of other factors, including your current
income tax bracket vs. your expected income tax bracket when you make
withdrawals from your IRA, whether you expect to be able to make nontaxable
withdrawals from your Roth IRA (see page 15), how long you expect to leave your
contributions in the IRA, how much you expect the IRA to earn in the meantime,
and possible future tax law changes.
Consult a qualified tax or financial adviser for assistance on these
questions.
ARE THERE ANY RESTRICTIONS ON CONTRIBUTIONS TO MY ROTH IRA?
Taxpayers with very high income levels may not be able to contribute to a
Roth IRA at all, or their contribution may be limited to an amount less than
$2,000. This depends upon your filing status and the amount of your adjusted
gross income (AGI). The table on page 13 shows how the contribution limits are
restricted.
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<PAGE>
Roth IRA Contribution Limits
If You Are If You Are Married, Then You
Single Taxpayer Filing Jointly May Make
----------------------------------------------------------------
Adjusted Up to Up to Full
Gross $95,000 $150,000 contribution
Income ----------------------------------------------------------------
More than $95,000 More than $150,000 Reduced contribution
but less than but less than
$110,000 $160,000 (see explanation below)
----------------------------------------------------------------
$110,000 $160,000 Zero
and up and up (No Contribution)
----------------------------------------------------------------
NOTE: IF YOU ARE A MARRIED TAXPAYER FILING SEPARATELY, YOUR MAXIMUM ROTH IRA
CONTRIBUTION LIMIT PHASES OUT OVER THE FIRST $15,000 OF ADJUSTED GROSS INCOME.
IF YOUR AGI IS $15,000 OR MORE YOU MAY NOT CONTRIBUTE TO A ROTH IRA FOR THE
YEAR. (NOTE: PENDING LEGISLATION, CONGRESS MAY REDUCE THIS NUMBER FROM $15,000
TO $10,000. CONSULT YOUR TAX ADVISER OR THE IRS FOR THE LATEST DEVELOPMENTS.)
HOW DO I CALCULATE MY LIMIT IF I FALL IN THE "REDUCED CONTRIBUTION" RANGE?
If your AGI falls in the reduced contribution range, you must calculate
your contribution limit. To do this, multiply your normal contribution limit
($2,000 or your compensation, if less) by a fraction. The numerator is the
amount by which your AGI exceeds the lower limit of the reduced contribution
range ($95,000 if single, or $150,000 if married filing jointly). The
denominator is $15,000 (single taxpayers) or $10,000 (married filing jointly).
Subtract this from your normal limit and then round down to the nearest $10.
The contribution limit is the greater of the amount calculated or $200.
For example, assume that your AGI for the year is $157,555 and you are
married, filing jointly. You would calculate your Roth IRA contribution limit
as illustrated.
1. The amount by which your AGI exceeds the lower limit of the reduced
contribution deductible range:
($157,555 - $150,000) = $ 7,555
2. Divide this by $10,000: $ 7,555
-------
$10,000 = 0.7555
3. Multiply this by $2,000 (or your compensation for the year, if less):
0.7555 x $2,000 = $1,511
4. Subtract this from your $2,000 limit:
($2,000 - $1,551) = $489
5. Round this down to the nearest $10 = $480
6. Your contribution limit is the greater of this amount or $200.
Remember, your Roth IRA contribution limit of $2,000 is reduced by any
contributions for the same year to a Regular IRA. If you fall in the reduced
contribution range, the reduction formula applies to the Roth IRA contribution
limit left after subtracting your contribution for the year to a Regular IRA.
HOW DO I DETERMINE MY AGI?
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<PAGE>
AGI is your gross income minus those deductions that are available to all
taxpayers even if they don't itemize. Instructions to calculate your AGI are
provided with your income tax Form 1040 or 1040A.
There are two additional rules when calculating AGI for purposes of Roth
IRA contribution limits. First, if you are making a deductible contribution for
the year to a Regular IRA, your AGI is reduced by the amount of the deduction.
Second, if you are converting a Regular IRA to a Roth IRA in a year (see next
column), the amount includable in your income as a result of the conversion is
not considered AGI when computing your Roth IRA contribution limit for the year.
(Note: A bill pending in Congress might affect the first rule- consult
your tax adviser or the IRS for the latest developments.)
WHAT HAPPENS IF I CONTRIBUTE MORE THAN ALLOWED TO MY ROTH IRA?
The maximum contribution you can make to a Roth IRA generally is $2,000 or
100% of compensation or earned income, whichever is less. As noted above, your
maximum is reduced by the amount of any contribution to a Regular IRA for the
same year and may be further reduced depending on your AGI. Any amount
contributed to the Roth IRA above the maximum is considered an "excess
contribution."
An excess contribution is subject to excise tax of 6% for each year it
remains in the Roth IRA.
HOW CAN I CORRECT AN EXCESS CONTRIBUTION?
Excess contributions may be corrected without paying a 6% penalty. To do
so, you must withdraw the excess and any earnings on the excess before the due
date (including extensions) for filing your federal income tax return for the
year for which you made the excess contribution. Earnings on the amount
withdrawn must also be withdrawn. The earnings must be included in your income
for the tax year for which the contribution was made and may be subject to a 10%
premature withdrawal tax if you have not reached age 59 1/2 (unless an exception
to the 10% penalty tax applies).
WHAT HAPPENS IF I DON'T CORRECT THE EXCESS CONTRIBUTION BY THE TAX RETURN DUE
DATE?
Any excess contribution withdrawn after the tax return due date (including
any extensions) for the year for which the contribution was made will be subject
to the 6% excise tax. There will be an additional 6% excise tax for each year
the excess remains in your account.
Unless an excess contribution qualities for the special treatment outlined
above, the excess contribution and any earnings on it withdrawn after tax filing
time will be includable in taxable income and may be subject to a 10% premature
withdrawal penalty.
You may reduce the excess contributions by making a withdrawal equal to the
excess. Earnings need not be withdrawn. To the extent that no earnings are
withdrawn, the withdrawal will not be subject to income taxes or possible
penalties or premature withdrawals before age 59 1/2. Excess contributions may
also be corrected in a subsequent year to the extent that you contribute less
than your Roth IRA contribution limit for the subsequent year. As the prior
excess contribution is reduced or eliminated, the 6% excise tax will become
correspondingly reduced or eliminated for subsequent tax years.
Conversion of Existing Regular IRA
Can I convert an existing Regular IRA into a Roth IRA?
Yes, starting in 1998 you can convert an existing Regular IRA into a Roth
IRA if you meet the adjusted gross income (AGI) limits described below.
Conversion may be accomplished either by establishing a Roth IRA and then
transferring the amount in your Regular IRA you wish to convert to the new Roth
IRA. Or, if you want to convert an existing Westcore Regular IRA with State
Street
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<PAGE>
Bank as custodian to a Westcore Roth IRA, you may give us directions to convert.
You are eligible to convert a Regular IRA to a Roth IRA if, for the year of
the conversion, your AGI is $100,000 or less. The same limit applies to married
and single taxpayers, and the limit is not indexed to cost-of-living increases.
Married taxpayers are eligible to convert a Regular IRA to a Roth IRA only if
they file a joint income tax return; married taxpayers filing separately are not
eligible to convert.
NOTE: No contributions other than Roth IRA conversion contributions made during
the same tax year may be deposited in a single Roth IRA conversion account.
CAUTION: You should be extremely cautious in converting an existing IRA into a
Roth IRA early in a year if there is any possibility that your AGI for the year
will exceed $100,000. Although a bill pending in Congress would permit you to
transfer amounts back to your Regular IRA if your AGI exceeds $100,000 under the
current rules, if you have already converted during a year and you turn out to
have more than $100,000 of AGI, there may be adverse tax results for you.
Consult your tax adviser or the IRS for the latest developments.
WHAT ARE THE TAX RESULTS FROM CONVERTING?
The taxable amount in your Regular IRA you convert to a Roth IRA will be
considered taxable income on your federal income tax return for the year of the
conversion. All amounts in a Regular IRA are taxable except for your prior non-
deductible contributions to the Regular IRA.
If you make the conversion during 1998, the taxable income is spread over
four years. In other words, you would include one quarter of the taxable amount
on your federal income tax return for 1998, 1999, 2000 and 2001.
PART TWO: DESCRIPTION OF ROTH IRAS - CONTINUED
SHOULD I CONVERT MY REGULAR IRA TO A ROTH IRA?
Only you can answer this question, in consultation with your tax or
financial advisors. A number of factors, including the following, may be
relevant. Conversion may be advantageous if you expect to leave the converted
funds on deposit in your Roth IRA for at least five years and to be able to
withdraw the funds under circumstances that will not be taxable (see next
column). The benefits of converting will also depend on whether you expect to
be in the same tax bracket when you withdraw from your Roth IRA as you are now.
Also, conversion is based upon an assumption that Congress will not change the
tax rules for withdrawals from Roth IRAs in the future, but this cannot be
guaranteed.
Transfers/Rollovers
CAN I TRANSFER OR ROLL OVER A DISTRIBUTION I RECEIVE FROM MY EMPLOYER'S
RETIREMENT PLAN INTO A ROTH IRA?
Distributions from qualified employer-sponsored retirement plans or 403(b)
arrangements (for employees of tax-exempt employers) are not eligible for
rollover or direct transfer to a Roth IRA. However, in certain circumstances it
may be possible to make a direct rollover of an eligible distribution to a
Regular IRA and then to convert the Regular IRA to Roth IRA (see above).
Consult your tax or financial advisor for further information on this
possibility.
Can I make a rollover from my Roth IRA to another Roth IRA?
You may make a rollover from one Roth IRA to another Roth IRA you have or
you establish to receive the rollover. Such a rollover must be completed within
60 days after the withdrawal from your first Roth IRA. After making a rollover
from one Roth IRA to another, you must wait a full year (365 days) before you
can make another such
-24-
<PAGE>
rollover. (However, you can instruct a Roth IRA custodian to transfer amounts
directly to another Roth IRA custodian; such a direct transfer does not count
as a rollover.)
HOW DO ROLLOVERS AFFECT MY ROTH IRA CONTRIBUTION LIMITS?
Rollover contributions, if properly made, do not count toward the maximum
contribution. Also, you may make a rollover from one Roth IRA to another even
during a year when you are not eligible to contribute to a Roth IRA (for
example, because your AGI for that year is too high).
Withdrawals
WHEN CAN I MAKE WITHDRAWALS FROM MY ROTH IRA?
You may withdraw from your Roth IRA at any time. If the withdrawal meets
the requirements discussed below, it is tax free. This means that you pay no
federal income tax even though the withdrawal includes earnings or gains on your
contributions while they were held in your Roth IRA.
WHEN MUST I START MAKING WITHDRAWALS?
There are no rules on when you must start making withdrawals from your Roth
IRA or on minimum required withdrawal amounts for any particular year during
your lifetime. Unlike Regular IRAs, you are not required to start making
withdrawals from a Roth IRA by the April 1 following the year in which you reach
age 70 1/2.
After your death, there are IRS rules on the timing and amount of
distributions. In general, the amount in your Roth IRA must be distributed by
the end of the fifth year after your death. However, distributions to a
designated beneficiary that begin by the end of the year following the year of
your death and that are paid over the life expectancy of the beneficiary satisfy
the rules. Also, if your surviving spouse is your designated beneficiary, the
spouse may defer the start of distributions until you would have reached age
70 1/2 had you lived.
WHAT ARE THE REQUIREMENTS FOR A TAX-FREE WITHDRAWAL?
To be tax free, a withdrawal from your IRA must meet two requirements.
First, the Roth IRA must have been open for 5 or more years before the
withdrawal. Second, at least one of the following conditions must be satisfied.
/ / You are age 59 1/2 or older when you make the withdrawal.
/ / The withdrawal is made by your beneficiary after you die.
/ / You are disabled (as defined in IRS rules) when you make the
withdrawal.
/ / You are using the withdrawal to cover eligible first-time home-buyer
expenses. These are the costs of purchasing, building or rebuilding a
principal residence (including customary settlement, financing or
closing costs). The purchaser may be you, your spouse or a child,
grandchild, parent or grandparent of you or your spouse. An
individual is considered a "first-time homebuyer" if the individual
(or the individual's spouse, if married) did not have an ownership
interest in a principal residence during the two-year period
immediately preceding the acquisition in question. The withdrawal
must be used for eligible expenses within 120 days after the
withdrawal (if there is an unexpected delay, or cancellation of the
home acquisition, a withdrawal may be redeposited as a rollover).
There is a lifetime limit on eligible first-time homebuyer expenses of
$10,000 per individual.
For a Roth IRA that you set up with amounts rolled over or converted from a
Regular IRA, the 5-year period begins with the year in which the conversion or
rollover was made. (Note: A bill pending in Congress might affect this rule -
consult your tax adviser or the IRS for the latest developments.)
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For a Roth IRA that you started with a normal contribution, the 5-year period
starts with the year for which you make the initial normal contribution.
HOW ARE WITHDRAWALS FROM MY ROTH IRA TAXED IF THE TAX-FREE REQUIREMENTS ARE NOT
MET?
If the qualified withdrawal requirements are not met, a withdrawal
consisting of your own prior contribution amounts to your Roth IRA will not be
considered taxable income in the year you receive it, nor will the 10% penalty
apply. To the extent that the nonqualified withdrawal consists of dividends or
gains while your contributions were held in your Roth IRA, the withdrawal is
includable in your gross income in the taxable year you receive it, and may be
subject to the 10% withdrawal penalty. All amounts withdrawn from your Roth IRA
are considered withdrawals of your contributions until you have withdrawn the
entire amount you have contributed. After that, all amounts withdrawn are
considered taxable withdrawals of dividends and gains.
Note that, for purposes of determining what portion of any distribution is
includable in income, all of your Roth IRA accounts are considered as one single
account. Amounts withdrawn from any one Roth IRA account are deemed to be
withdrawn from contributions first. Since all your Roth IRAs are considered to
be one account for this purpose, withdrawals from Roth IRA accounts are not
considered to be from earnings or interest until an amount equal to all
contributions made to all of an individual's Roth IRA accounts is withdrawn.
The following example illustrates this:
A single individual contributes $1,000 a year to his Westcore Roth IRA
account and $1,000 a year to the Brand X Roth IRA account over a period of ten
years. At the end of 10 years, his account balances are as follows:
Principal Contributions Earnings
- --------------------------------------------------------------------------------
Westcore Roth IRA $10,000 $10,000
Brand X Roth IRA $10,000 $10,000
- --------------------------------------------------------------------------------
Total $20,000 $20,000
At the end of 10 years, this person has $40,000 in both Roth IRA accounts,
of which $20,000 represents his contributions (aggregated) and $20,000
represents his earnings (aggregated). This individual, who is 40, withdraws
$15,000 from his Brand X Roth IRA (not a qualified withdrawal). We look to the
aggregate amount of all principal contributions - in this case $20,000 - to
determine if the withdrawal is from contributions, and thus nontaxable. In this
example, there is no ($0) taxable income as a result of this withdrawal because
the $15,000 withdrawal is less than the total amount of aggregated contributions
($20,000). If this individual then withdrew $15,000 from his Westcore Roth IRA,
$5,000 would not be taxable (the remaining aggregate contributions) and $10,000
would be treated as taxable income for the year of the withdrawal, subject to
regular income taxes and the 10% premature withdrawal penalty (unless an
exception applies).
NOTE: If passed, a bill currently pending in Congress will
change the rules and the results discussed above. Under the
proposed legislation, in general, separate Roth IRAs
established for annual contributions and conversions for
separate years are not aggregated as explained above to
determine the tax on withdrawals. See your tax adviser for
more information and the latest developments. Taxable
withdrawals of dividends and gains from a Roth IRA are
treated as ordinary income. Withdrawals of taxable amounts
from a Roth IRA are not eligible for averaging treatment
currently available to certain lump sum distributions from
qualified employer-sponsored retirement plans, nor are such
withdrawals eligible for taxable gains tax treatment.
Your receipt of any taxable withdrawal from your Roth IRA before you attain
age 59 1/2 generally will be considered as an early withdrawal and subject to a
10% penalty tax.
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The 10% penalty tax for early withdrawal will not apply if any of the
following exceptions applies:
/ / The withdrawal is a result of your death or disability.
/ / The withdrawal is one of a scheduled series of substantially equal
periodic payments for your life or life expectancy (or the joint lives
or life expectancies of you and your beneficiary).
If there is an adjustment to the scheduled series of payments, the 10% penalty
tax will apply. For example, if you begin receiving payments at age 50 under a
withdrawal program providing for substantially equal payments over your life
expectancy, and at age 58 you elect to withdraw the remaining amount in your
Roth IRA in a lump-sum, the 10% penalty tax will apply to the lump sum and to
the amounts previously paid to you before age 59 1/2 to the extent they were
includable in your taxable income.
/ / The withdrawal is used to pay eligible higher education expenses.
These are expenses for tuition, fees, books, and supplies required to
attend an institution for post-secondary education. Room and board
expenses are also eligible for a student attending at least half-time.
The student may be you, your spouse, or your child or grandchild.
However, expenses that are paid for with a scholarship or other
educational assistance payment are not eligible expenses.
/ / The withdrawal is used to cover eligible first time home-buyer
expenses (as described in the discussion of tax-free withdrawals).
/ / The withdrawal does not exceed the amount of your deductible medical
expenses for the year (generally speaking, medical expenses paid
during a year are deductible if they are greater than 7 1/2% of your
adjusted gross income for that year).
/ / The withdrawal does not exceed the amount you paid for health
insurance coverage for yourself, your spouse and dependents. This
exception applies only if you have been unemployed and received
federal or state unemployment compensation payments for at least 12
weeks; this exception applies to distributions during the hear in
which you received the unemployment compensation and during the
following year, but not to any distributions received after you have
been reemployed for at least 60 days.
WHAT ABOUT THE 15 PERCENT PENALTY TAX?
The rule imposing a 15% penalty tax on very large withdrawals from tax-
favored arrangements (including IRA's, 403(b) arrangements and qualified
employer-sponsored plans), or on excess amounts remaining in such tax-favored
arrangements at your death, has been repealed. This 15% tax no longer applies.
IMPORTANT: The discussion of the tax rule for Roth IRAs in this Disclosure
Statement is based upon the best available information. However, Roth IRAs are
new under the tax laws, and the IRS has not issued regulations or rulings on the
operation and tax treatment of Roth IRA accounts. Also, if enacted, legislation
now pending in Congress will change some of the rules. Therefore, you should
consult your tax adviser for the latest developments or for advice about how
maintaining a Roth IRA will affect your personal tax or financial situation.
Also, please see Part Three, which contains important information
applicable to ALL Westcore Funds IRAs.
PART THREE: RULES FOR ALL IRAS (REGULAR AND ROTH)
GENERAL INFORMATION
IRA Requirements
All IRAs must meet certain requirements. Contributions generally must be
made in cash. The IRA trustee or custodian must be a bank or other person who
has been approved by the Secretary of the Treasury. Your contributions may not
be invested in life insurance or collectibles or be commingled with other
property except in a common
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trust or investment fund. Your interest in the account must be nonforfeitable
at all times. You may obtain further information on IRAs from any district
office of the Internal Revenue Service.
MAY I REVOKE MY IRA?
You may revoke a newly established Regular or Roth IRA at any time within
seven days after the date on which you receive this Disclosure Statement. A
Regular or Roth IRA established more than seven days after the date of your
receipt of this Disclosure Statement may not be revoked.
To revoke your Regular or Roth IRA, mail or deliver a written notice of
revocation to the Custodian at the address which appears at the end of this
Disclosure Statement. Mailed notice will be deemed given on the date that it is
postmarked (or, if sent by certified or registered mail, on the date of the
certification or registration). If you revoke your Regular or Roth IRA within
the seven-day period, you are entitled to a return of the entire amount you
originally contributed into your Regular or Roth IRA, without adjustment for
such items as sales charges, administrative expenses or fluctuations in market
value.
INVESTMENTS
HOW ARE MY IRA CONTRIBUTIONS INVESTED?
You control the investment and reinvestment of contributions to your
Regular or Roth IRA. Investments must be in one or more of the Fund(s)
available from time to time as listed in the Adoption Agreement for your Regular
or Roth IRA or in an investment selection form provided with your Adoption
Agreement or from the Fund Distributor or Service Company. You direct the
investment of your IRA by giving your investment instructions to the Distributor
or Service Company for the Fund(s). Since you control the investment of your
Regular or Roth IRA, you are responsible for any losses; neither the Custodian,
the Distributor nor the Service Company has any responsibility for any loss or
diminution in value occasioned by your exercise of investment control.
Transactions for your Regular or Roth IRA will generally be at the applicable
public offering price or net asset value for shares of the Fund(s) involved next
established after the Distributor or the Service Company (whichever may apply)
receives proper investment instructions from you; consult the current prospectus
for the Fund(s) involved for additional information.
Before making any investment, read carefully the current prospectus for any
Fund you are considering as an investment for your Regular IRA or Roth IRA. The
prospectus will contain information about the Fund's investment objectives and
policies, as well as any minimum initial investment or minimum balance
requirements and any sales, redemption or other charges.
Because you control the selection of investments for your Regular or Roth
IRA and because mutual fund shares fluctuate in value, the growth in value of
your Regular or Roth IRA cannot be guaranteed or projected.
ARE THERE ANY RESTRICTIONS ON THE USE OF MY IRA ASSETS?
The tax-exempt status of your Regular or Roth IRA will be revoked if you engage
in any of the prohibited transactions listed in Section 4975 of the tax code.
Upon such revocation, your Regular or Roth IRA is treated as distributing its
assets to you. The taxable portion of the amount in your IRA will be subject to
income tax (unless, in the case of a Roth IRA, the requirements for a tax-free
withdrawal are satisfied). Also, you may be subject to a 10% penalty tax on the
taxable amount as a premature withdrawal if you have not yet reached the age of
59 1/2.
Any investment in a collectible (for example, rare stamps) by your Regular
or Roth IRA is treated as a withdrawal; the only exception involves certain
types of government-sponsored coins or certain types of precious metal bullion.
WHAT IS A PROHIBITED TRANSACTION?
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Generally, a prohibited transaction is any improper use of the assets in
your Regular or Roth IRA. Some examples of prohibited transactions are:
/ / Direct or indirect sale or exchange of property between you and your
Regular or Roth IRA.
/ / Transfer of any property from your Regular or Roth IRA to yourself or
from yourself to your Regular or Roth IRA.
Your Regular or Roth IRA could lose its tax-exempt status if you use all or
part of your interest in your Regular or Roth IRA as security for a loan or
borrow any money from your Regular or Roth IRA. Any portion of your Regular or
Roth IRA used as security for a loan will be treated as a distribution in the
year in which the money is borrowed. This amount may be taxable and you may
also be subject to the 10% premature withdrawal penalty on the taxable amount.
FEES AND EXPENSES
CUSTODIAN'S FEES
The following fees are charged by the Custodian for maintaining either a Regular
IRA or a Roth IRA:
/ / Annual Maintenance Fee per mutual fund: $10.00
/ / Termination, Rollover, or transfer of Account to Successor Custodian:
$10.00
GENERAL FEE POLICIES
/ / Fees may be paid by you directly, or the Custodian may deduct them
from your Regular or Roth IRA.
/ / Fees may be changed upon 30 days written notice to you.
/ / The full annual maintenance fee will be charged for any calendar year
during which you have a Regular or Roth IRA with us. This fee is not
prorated for periods of less than one full year.
/ / If provided for in this Disclosure Statement or the Adoption
Agreement, termination fees are charged when your account is closed
whether the funds are distributed to you are transferred to a
successor custodian or trustee.
/ / The Custodian may charge you for its reasonable expenses for services
not covered by its fee schedule.
OTHER CHARGES
/ / There may be sales or other charges associated with the purchase or
redemption of shares of a Fund in which your Regular IRA or Roth IRA is
invested. Before investing, be sure to read carefully the current
prospectus of any Fund you are considering as an investment for your
Regular IRA or Roth IRA for a description of applicable charges.
TAX MATTERS
WHAT IRA REPORTS DOES THE CUSTODIAN ISSUE?
The Custodian will report all withdrawals to the IRS and the recipient on
the appropriate form. For reporting purposes, a direct transfer of assets to a
successor custodian or trustee is not considered a withdrawal.
The Custodian will report to the IRS the year-end value of your account and
the amount of any rollover (including conversions of a Regular IRA to a Roth
IRA) or regular contribution made during a calendar year, as well as the tax
year for which a contribution is made. Unless the Custodian receives an
indication from you to the contrary, it will treat any amount as contribution
for the tax year in which it is received. It is most important that a
contribution between January and April 15th for the prior year be clearly
designated as such.
WHAT TAX INFORMATION MUST I REPORT TO THE IRS?
You must file Form 5329 with the IRS for each taxable year for which you
made an excess contribution or you take a premature withdrawal that is subject
to the 10% penalty tax, or you withdraw less than the minimum amount required
from your Regular IRA. If your beneficiary fails to make required minimum
withdrawals from your
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Regular or Roth IRA after your death, your beneficiary may be subject to an
excise tax and be required to file Form 5329.
For Regular IRAs, you must also report each nondeductible contribution to
the IRS by designating it a nondeductible contribution on your tax return. Use
Form 8606. In addition, for any year in which you make a nondeductible
contribution or take a withdrawal, you must include additional information on
your tax return. The information required includes: (1) the amount of your
nondeductible contributions for that year; (2) the amount of withdrawals from
Regular IRAs in that year; (3) the amount by which your total nondeductible
contributions for all the years exceed the total amount of your distributions
previously excluded from gross income; and (4) the total value of all your
Regular IRAs as of the end of the year. If you fail to report any of this
information, the IRS will assume that all your contributions were deductible.
This will result in the taxation of the portion of your withdrawals that should
be treated as a nontaxable return of your nondeductible contributions.
WHICH WITHDRAWALS ARE SUBJECT TO WITHHOLDING?
ROTH IRA
Federal income tax will be withheld at a flat rate of 10% of any taxable
withdrawal from your Roth IRA, unless you elect not to have tax withheld.
Withdrawals from a Roth IRA are not subject to the mandatory 20% income tax
withholding that applies to most distributions from qualified plans or 403(b)
accounts that are not directly rolled over to another plan or IRA.
REGULAR IRA
Federal income tax will be withheld at a flat rate of 10% from any
withdrawal from your Regular IRA, unless you elect not to have tax withheld.
Withdrawals from a Regular IRA are not subject to the mandatory 20% income tax
withholding that applies to most distributions from qualified plans or 403(b)
accounts that are not directly rolled over to another plan or IRA.
ACCOUNT TERMINATION
You may terminate your Regular IRA or Roth IRA at any time after its
establishment by sending a completed withdrawal form (or other withdrawal
instructions in a form acceptable to the Custodian), or a transfer authorization
form, to:
Westcore Funds IRA c/o State Bank and Trust Company
P.O. Box 8319
Boston, MA 02266-8319
Your Westcore Regular IRA or Roth IRA will terminate upon the first to
occur of the following:
/ / The date your properly executed withdrawal form or instructions (as
described above) withdrawing your total Regular IRA or Roth IRA
balance is received and accepted by the Custodian or, if later, the
termination date specified in the withdrawal form.
/ / The date the Regular IRA or Roth IRA ceases to qualify under the tax
code. This will be deemed a termination.
/ / The transfer of the Regular IRA or Roth IRA to another
custodian/trustee.
/ / The rollover of the amounts in the Regular IRA or Roth IRA to another
custodian/trustee.
Any outstanding fees must be received prior to such a termination of your
account.
The amount you receive from your IRA upon termination of the account will
be treated as a withdrawal, and thus the rules relating to Regular IRA or Roth
IRA withdrawals will apply. For example, if the IRA is terminated before you
reach age 59 1/2, the 10% early withdrawal penalty may apply to the taxable
amount you receive.
IRA DOCUMENTS
REGULAR IRA
The terms contained in Articles I to VII of Part One of the State Street
Bank and Trust Company Individual Retirement Custodial Account document have
been promulgated by the IRS in Form 5305-A for use in establishing a Regular IRA
Custodial Account that meets the requirements of Code Section 408(a) for a valid
Regular IRA. This
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IRS approval relates only to the form of Articles I to VII and is not an
approval of the merits of the Regular IRA or of any investment permitted by the
Regular IRA.
ROTH IRA
The terms contained in Articles I to VII of Part Two of the State Street
Bank and Trust Company Individual Retirement Account Custodial Agreement have
been promulgated by the IRS in Form 5305-RA for use in establishing a Roth IRA
Custodial Account that meets the requirements of the Code Section 408A for a
valid Roth IRA. This IRS approval relates only to the form of Articles I to VII
and is not an approval of the merits of the Roth IRA or of any investment
permitted by the Roth IRA.
Based on our legal advice relating to current tax laws and IRS meetings,
Westcore and State Street Bank and Trust Company believes that the use of an
Individual Retirement Account Information Booklet such as this, containing
information and documents for both a Regular IRA or a Roth IRA, will be
acceptable to the IRA. However, if the IRS makes a ruling, or if Congress
enacts legislation, regarding the use of different documentation, Westcore will
forward to you new documentation for your Regular IRA or a Roth IRA (as
appropriate) for you to read and, if necessary, an appropriate new Adoption
Agreement to sign. By adopting a Regular IRA or a Roth IRA using these
materials, you acknowledge this possibility and agree to this procedure if
necessary. In all cases, to the extent permitted Westcore will treat your IRA
as being opened on the date your account was opened using the Adoption Agreement
in this Booklet.
ADDITIONAL INFORMATION
For additional information, you may write to the following address or call
the following telephone number.
Westcore Funds
370 17th Street, Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
STATE STREET BANK AND TRUST COMPANY IRA CUSTODIAL AGREEMENT: PART ONE
PART ONE: PROVISIONS APPLICABLE TO REGULAR IRAS
The following provisions of Articles I to VII are in the form promulgated by the
Internal Revenue Service in Form 5305-A for use in establishing an individual
retirement custodial account.
Article I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code or an
employer contribution to a simplified employee pension plan as described in
section 408(k).
Article II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
Article III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled
with other property except in a common trust fund or common investment
fund (within the meaning of section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
Article IV
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1. Notwithstanding any provisions of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account
shall be made in accordance with the following requirements and shall
otherwise comply with section 408(a)(6) and Proposed Regulations
section 1.408-8, including the incidental death benefit provision of
Proposed Regulations section 1.401(a)(9)-2, the provisions of which
are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse
under paragraph 4, other than in the case of a life annuity, life
expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Depositor and the surviving spouse and shall
apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date,
the April 1 following the calendar year end in which the Depositor
reaches age 70 1/2. By that date, the Depositor may elect, in a
manner acceptable to the Custodian, to have the balance in the
custodial account distributed in:
(a) A single-sum payment.
(b) An Annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last
survivor expectancy of the Depositor and his or her designated
beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in
accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of
the Depositor or, if the Depositor has not so elected, at the
election of the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over
the life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following
the year of the Depositor's death. If, however, the
beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of
the year in which the Depositor would have turned age
70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun
on the Depositor's required beginning date, even though payments
may actually have been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover
contributions may be accepted in the account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the
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Depositor's entire interest in the custodial account as the close of
business on December 31 of the preceding year by the life expectancy
of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies.) In the
case of the distributions under paragraph 3, determine the initial
life expectancy (or joint life and last survivor expectancy) using the
attained ages of the Depositor and designated beneficiary as of their
birthdays in the year the Depositor reaches age 70 1/2. In the case of
a distribution in accordance with paragraph 4(b)(ii), determine life
expectancy using the attained age of the designated beneficiary as of
the beneficiary's birthday in the year distributions are required to
commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This
method permits an individual to satisfy these requirements by taking
from one individual retirement account the amount required to satisfy
the requirement for another.
Article V
1. The Depositor agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required under
section 408(i) and Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and the related
regulations will be invalid.
Article VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear on the Adoption
Agreement.
IRA CUSTODIAL AGREEMENT: PART TWO
PART TWO: PROVISIONS APPLICABLE TO ROTH IRAS
The following provisions of Articles I to VII are in the form promulgated by the
Internal Revenue Service in Form 5305-RA for use in establishing a Roth
Individual Retirement Custodial Account.
Article I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section
408A(e), the Custodian will accept only cash contributions and only up
to a maximum amount of $2,000 for any tax year of the Depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the
same tax year will be accepted.
Article Ia
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single Depositor, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married Depositor who files jointly, between AGI of $150,000 and $160,000;
and for a married Depositor who files separately, between $0 and $10,000. In
case of a conversion, the Custodian will not accept IRA Conversion Contributions
in a tax year if the Depositor's AGI for that tax year exceeds $100,000 or if
the Depositor is married and files a separate return. Adjusted gross income is
defined in section 408A(c)(3) and does not include IRA Conversion Contributions.
Article II
The Depositor's interest in the balance in the custodial accounts is
nonforfeitable.
Article III
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1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled
with other property except in a common trust fund or common investment
fund (within the meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by
section 408(m)(3), which provides an exception for certain gold,
silver, and platinum coins, coins issued under the laws of any state,
and certain bullion.
Article IV
1. If the Depositor dies before his or her entire interest is distributed
to him or her and the Depositor's surviving spouse is not the sole
beneficiary, the entire remaining interest will, at the election of
the Depositor or, if the Depositor has not so elected, at the election
of the beneficiary or beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(b) Be distributed over the life expectancy of the designated
beneficiary starting no later than December 31 of the year
following the year of the Depositor's death.
If distributions do not begin by the date described in (b), distribution method
(a) will apply.
2. In the case of distribution method 1(b) above, to determine the
minimum annual payment for each year, divide the Depositor's entire
interest in the trust as of the close of business on December 31 of
the preceding year by the life expectancy of the designated
beneficiary using the attained age of the designated beneficiary as of
the beneficiary's birthday in the year distributions are required to
commence and subtract 1 for each subsequent year.
3. If the Depositor's spouse is the sole beneficiary on the Depositor's
date of death, such spouse will then be treated as the Depositor.
Article V
1. The Depositor agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required under
sections 408(i) and 408A(d)(3)(E), and Regulations section 1.408-5 and
1.408-6, and under guidance published by the Internal Revenue Service.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
Article VII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance.
Other amendments may be made with the consent of the persons whose signatures
appear on the Adoption Agreement.
PART THREE: PROVISIONS APPLICABLE TO BOTH REGULAR IRAS AND ROTH IRAS
Article VIII
1. As used in this Article VIII the following terms have the following
meanings:
"Account" or "Custodial Account" means the individual retirement account
established using the terms of either Part One or Part Two and, in either event,
Part Three of this State Street Bank and Trust Company Individual Retirement
Account Custodial Agreement and the Adoption Agreement signed by the Depositor.
The Account may be a Regular Individual Retirement Account or a Roth Individual
Retirement Account, as specified by the Depositor. See Section 24 on page 26.
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"Custodian" means State Street Bank and Trust Company.
"Fund" means any registered investment company which is advised, sponsored
or distributed by Sponsor; provided, however, that such a mutual fund or
registered investment company must be legally offered for sale in the state of
the Depositor's residence.
"Distributor" means the entity which has a contract with the Fund(s) to
serve as distributor of the shares of such Fund(s).
In any case where there is no Distributor, the duties assigned hereunder to
the Distributor may be performed by the Fund(s) or by an entity that has a
contract to perform management or investment advisory services for the Fund(s).
"Service Company" means any entity employed by the Custodian or the
Distributor, including the transfer agent for the Fund(s), to perform various
administrative duties of either the Custodian or the Distributor.
In any case where there is no Service Company, the duties assigned
hereunder to the Service Company will be performed by the Distributor (if any)
or by an entity specified in the second preceding paragraph.
"Sponsor" means Westcore Funds.
2. The Depositor may revoke the Custodial Account established hereunder
by mailing or delivering a written notice of revocation to the
Custodian within seven days after the Depositor receives the
Disclosure Statement related to the Custodial Account. Mailed notice
is treated as given to the Custodian on date of the postmark (or on
the date of Post Office certification or registration in the case of
notice sent by certified or registered mail). Upon timely revocation,
the Depositor's initial contribution will be returned, without
adjustment for administrative expenses, commissions or sales charges,
fluctuations in market value of other changes.
The Depositor may certify in the Adoption Agreement that the Depositor
received the Disclosure Statement related to the Custodial Account at least
seven days before the Depositor signed the Adoption Agreement to establish the
Custodian Account, and the Custodian may rely upon such certification.
3. All contributions to the Custodial Account shall be invested and
reinvested in full and fractional shares of one or more Funds. Such
investments shall be made in such proportions and/or in such amounts
as Depositor from time to time in the Adoption Agreement or by other
written notice to the Service Company (in such form as may be
acceptable to the Service Company) may direct.
The Service Company shall be responsible for promptly transmitting all
investment directions by the Depositor for the purchase or sale of shares of one
or more Funds hereunder to the Funds' transfer agent for execution. However, if
investment directions with respect to the investment of any contribution
hereunder are not received from the Depositor as required or, if received, are
unclear or incomplete in the opinion of the Service Company, the contribution
will be returned to the Depositor, or will be held uninvested (or invested in a
money market fund if available) pending clarification or completion by the
Depositor, in either case without liability for interest or for loss of income
or appreciation. If any other directions or other orders by the Depositor with
respect to the sale or purchase of shares of one or more Funds for the Custodial
Account are unclear or incomplete in the opinion of the Service Company, the
Service Company will refrain from carrying out such investment directions or
from executing any such sale or purchase, without liability for loss of income
or for appreciation or depreciation of any asset, pending receipt of
clarification or completion from the Depositor.
All investment directions by Depositor will be subject to any minimum initial
or additional investment or minimum balance rules applicable to a Fund as
described in its prospectus.
All dividends and capital gains or other distributions received on the shares
of any Fund held in the Depositor's Account shall be (unless received in
additional shares) reinvested in full and fractional shares of such Fund (or of
any other Fund offered by the Sponsor, if so directed).
4. Subject to the minimum initial or additional investment, minimum
balance and other exchange rules applicable to a Fund, the Depositor
may at any time direct the Service Company to exchange all or a
specified portion of the shares of a Fund in the Depositor's Account
for shares and fractional
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shares of one or more other Funds. The Depositor shall give such
directions by written notice acceptable to the Service Company, and
the Service Company will process such directions as soon as
practicable after receipt thereof (subject to the second paragraph of
Section 3 of this Article VIII).
5. Any purchase or redemption of shares of a Fund for or from the
Depositor's Account will be effected at the public offering price or
net asset value of such Fund (as described in the then effective
prospectus for such Fund) next established after the Service Company
has transmitted the Depositor's investment directions to the transfer
agent for the Fund(s).
Any purchase, exchange, transfer or redemption of shares of a Fund for or
from the Depositor's Account will be subject to any applicable sales, redemption
or other charge as described in the then effective prospectus for such Fund.
6. The Service Company shall maintain adequate records of all purchases
or sales of shares of one or more Funds for the Depositor's Custodial
Account. Any account maintained in connection herewith shall be in
the name of the Custodian for the benefit of the Depositor. All
assets of the Custodial Account shall be registered in the name of the
Custodian or of a suitable nominee. The books and records of the
Custodian shall show that all such investments are part of the
Custodial Account.
The Custodian shall maintain or cause to be maintained adequate records
reflecting transactions of the Custodial Account. In the discretion of the
Custodian, records maintained by the Service Company with respect to the Account
hereunder will be deemed to satisfy the Custodian's recordkeeping
responsibilities therefor. The Service Company agrees to furnish the Custodian
with any information the Custodian requires to carry out the Custodian's
recordkeeping responsibilities.
7. Neither the Custodian nor any other party providing services to the
Custodial Account will have any responsibility for rendering advice
with respect to the investment and reinvestment of Depositor's
Custodial Account, nor shall such parties be liable for any loss or
diminution in value which results from Depositor's exercise of
investment control over his Custodial Account. Depositor shall have
and exercise exclusive responsibility for and control over the
investment of the assets of his Custodial Account, and neither
Custodian nor any other such party shall have any duty to question his
directions in that regard or to advise him regarding the purchase,
retention or sale of shares of one or more Funds for the Custodial
Account.
8. The Depositor may in writing appoint an investment advisor with
respect to the Custodian Account on a form acceptable to the Custodian
and the Service Company. The investment advisor's appointment will be
in effect until written notice to the contrary is received by the
Custodian and the Service Company. While an investment advisor's
appointment is in effect, the investment advisor may issue investment
directions or may issue orders for the sale or purchase of shares of
one or more Funds to the Service Company, and the Service Company will
be full protected in carrying out such investment directions or orders
to the same extent as if they had been given by the Depositor.
The Depositor's appointment of any investment advisor will also be deemed to
be instructions to the Custodian and the Service Company to pay such investment
advisor's fees to the investment advisor from the Custodial Account hereunder
without additional authorization by the Depositor or the Custodian.
9. Distribution of the assets of the Custodial Account shall be made at
such time and in such form as Depositor (or the Beneficiary if
Depositor is deceased) shall elect by written order to the Custodian.
Depositor acknowledges that any distribution of a taxable amount from
the Custodial Account (except for distribution on account of
Depositor's disability or death, return of an "excess contribution"
referred to in Code Section 4973, or a "rollover" from this Custodial
Account) made earlier than age 59 1/2 may subject Depositor to an
"additional tax on early distributions" under Code Section 72(t)
unless an exception to such additional tax is applicable. For that
purpose, Depositor will be considered disabled if Depositor can prove,
as provided in Code Section 72(m)(7), that Depositor is unable to
engage in any substantial gainful
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activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or be of long-
continued and indefinite duration. It is the responsibility of the
Depositor (or the Beneficiary) by appropriate distribution
instructions to the Custodian to insure that any applicable
distribution requirements of Code Section 401(a)(9) and Article IV
above are met. If the Depositor (or Beneficiary) does not direct the
Custodian to make distributions from the Custodial Account by the time
that such distributions are required to commence in accordance with
such distribution requirements, the Custodian (and Service Company)
shall assume that the Depositor (or Beneficiary) is meeting the
minimum distribution requirements from another individual retirement
arrangement maintained by the Depositor (or Beneficiary) and the
Custodian and Service Company shall be fully protected in so doing.
The Depositor (or the Depositor's surviving spouse) may elect to
comply with the distribution requirements in Article IV using the
recalculation of life expectancy method, or may elect that the life
expectancy of the Depositor and/or the Depositor's surviving spouse,
as applicable, will not be recalculated; any such election may be in
such form as the Depositor (or surviving spouse) provides (including
the calculation of minimum distribution amounts in accordance with a
method that does not provide for recalculation of the life expectancy
of one or both of the Depositor and surviving spouse and instructions
for withdrawals to the Custodian in accordance with such method).
Notwithstanding paragraph 2 of Article IV, unless an election to have
life expectancies recalculated annually is made by the time
distributions are required to begin, life expectancies shall not be
recalculated. Neither the Custodian nor any other party providing
services to the Custodian Account assumes any responsibility for the
tax treatment of any distribution from the Custodial Account; such
responsibility rests solely with the person ordering the distribution.
10. The Custodian assumes (and shall have) no responsibility to make any
distribution except upon the written order of Depositor (or
Beneficiary if Depositor is deceased) containing such information as
the Custodian may reasonably request. Also, before making any
distribution or honoring any assignment of the Custodial Account,
Custodian shall be furnished with any and all applications,
certificates, tax waivers, signature guarantees and other documents
(including proof of any legal representative's authority) deemed
necessary or advisable by Custodian, but Custodian shall not be
responsible for complying with any order or instruction which appears
on its face to be genuine, or for refusing to comply if not satisfied
it is genuine, and Custodian has no duty of further inquiry. Any
distributions from the Account may be mailed, first-class postage
prepaid, to the last known address of the person who is to receive
such distribution, as shown on the Custodian's records, and such
distribution shall to the extent thereof completely discharge the
Custodian's liability for such payment.
11. (a) The term "Beneficiary" means the person or persons designated as
such by the "designating person" (as defined below) on a form
acceptable to the Custodian for use in connection with the
Custodial Account, signed by the designating person, and filed
with the Custodian. The form may name individuals, trusts,
estates, or other entities as either primary or contingent
beneficiaries. However, if the designation does not effectively
dispose of the entire Custodial Account as of the time
distribution is to commence, the term "Beneficiary" shall then
mean the designating person's estate with respect to the assets
of the custodial Account not disposed of by the designation form.
The form last accepted by the Custodian before such distribution
is to commence, provided it was received by the Custodian (or
deposited in the U.S. mail or with a reputable delivery service)
during the designating person's lifetime, shall be controlling
and, whether or not fully dispositive of the Custodial Account,
thereupon shall revoke all such forms previously filed by that
person. The term "designating person" means Depositor during
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his/her lifetime; and after Depositor's death, it also means
Depositor's spouse, but only if the spouse elects to treat the
Custodial Account as the spouse's own Custodial Account in
accordance with the applicable provisions of the code.
(b) When and after distributions from the Custodial Account to
Depositor's Beneficiary commence, all rights and obligations
assigned to Depositor hereunder shall inure to, and be enjoyed
and exercised by, Beneficiary instead of Depositor.
12. (a) The Depositor agrees to provide information to the Custodian at
such time and in such manner as may be necessary for the
Custodian to prepare any reports required under Section 408(i) or
Section 408(d)(3)(E) of the Code and the regulations thereunder
or otherwise.
(b) The Custodian or the Service Company will submit reports to the
Internal Revenue Service and the Depositor at such time and
manner and containing such information as is prescribed by the
Internal Revenue Service.
(c) The Depositor, Custodian and Service Company shall furnish to
each other such information relevant to the Custodial Account as
may be required under the Code and any regulations issued or
forms adopted by the Treasury Department thereunder or as may
otherwise be necessary for the administration of the Custodial
Account.
(d) The Depositor shall file any reports to the Internal Revenue
Service which are required of him by law (including Form 5329),
and neither the Custodian nor Service Company shall have any duty
to advise Depositor concerning or monitor Depositor's compliance
with such requirement.
13. (a) Depositor retains the right to amend this Custodial Account
document in any respect at any time, effective on a stated date
which shall be at least 60 days after giving written notice of
the amendment (including its exact terms) to Custodian by
registered or certified mail, unless Custodian waives notice as
to such amendment. If the Custodian does not wish to continue
serving as such under this Custodial Account document as to
amended, it may resign in accordance with Section 17 on page 25.
(b) Depositor delegates to the Custodian the Depositor's right so to
amend, provided (i) the Custodian does not change the investments
available under this Custodial Agreement and (ii) the Custodian
amends in the same manner all agreements comparable to this one,
having the same custodian, permitting comparable investments, and
under which such power has been delegated to it; this includes
the power to amend retroactively if necessary or appropriate in
the opinion of the Custodian in order to conform this Custodial
Account to pertinent provisions of the Code and other laws or
successor provisions of law, to obtain a governmental ruling that
such requirements are met, to adopt a prototype or master form of
agreement in substitution for this Agreement, or as otherwise may
be advisable in the opinion of the Custodian. Such an amendment
by the Custodian shall be communicated in writing to Depositor,
and Depositor shall be deemed to have consented thereto unless,
within 30 days after such communication to Depositor is mailed,
Depositor either (i) gives Custodian a written order for a
complete distribution or transfer of the Custodial Account, or
(ii) removes the Custodian and appoints a successor under
Section 17.
Pending the adoption of any amendment necessary or desirable
to conform this Custodial Account document to the requirements of
any amendment to any applicable provision of the Internal Revenue
Code or regulations of rulings thereunder, the Custodian and the
Service Company may operate the Depositor's Custodial Account in
accordance with such requirements to the extent that the
Custodian and/or
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the Service Company deem necessary to preserve the tax benefits
of the Account.
(c) Notwithstanding the provisions of subsections (a) and (b) above,
no amendment shall increase the responsibilities or duties of
Custodian without its prior written consent.
(d) This Section 13 shall not be construed to restrict the
Custodian's right to substitute fee schedules in the manner
provided by Section 16 on page 25, and no such substitution shall
be deemed to be an amendment of this Agreement.
14. (a) Custodian shall terminate the Custodial Account if this Agreement
is terminated or if, within 30 days (or such longer time as
Custodian may agree) after resignation or removal of Custodian
under Section 17, Depositor or Sponsor, as the case may be, has
not appointed a successor which has accepted such appointment.
Termination of the Custodial Account shall be effected by
distributing all assets thereof in a single payment in cash or in
kind to Depositor, subject to Custodian's right to reserve funds
as provided in Section 17.
(b) Upon termination of the Custodian Account, this custodial account
document shall have no further force and effect (except for
Sections 15(f), 17(b) and (c) hereof which shall survive the
termination of the Custodial Account and this document), and
Custodian shall be relieved from all further liability hereunder
or with respect to the Custodial Account and all assets thereof
so distributed.
15. (a) In its discretion, the Custodian may appoint one or more
contractors or service providers to carry out any of its
functions and may compensate them from the Custodial Account for
expenses attendant to those functions. In the event of such
appointment, all rights and privileges of the Custodian under
this Agreement shall pass through to such contractors or service
providers who shall be entitled to enforce them as if a named
party.
(b) The Service Company shall be responsible for receiving all
instructions, notices, forms and remittances from Depositor and
for dealing with or forwarding the same to the transfer agent for
the Fund(s).
(c) The parties do not intend to confer any fiduciary duties on
Custodian or Service Company (or any other party providing
services to the Custodial Account), and none shall be implied.
Neither shall be liable (or assume any responsibility)for the
collection of contributions, proper amount, time or tax treatment
of any contribution to the Custodial Account or the propriety of
any contributions under this Agreement, or the purpose, time,
amount (including any minimum distribution amount), tax treatment
or propriety of any distribution hereunder, which matters are the
sole responsibility of Depositor and Depositor's Beneficiary.
(d) Not later than 60 days after the close of each calendar year (or
after the Custodian's resignation or removal), the Custodian or
Service Company shall file with Depositor a written report or
reports reflecting the transactions effected by it during such
period and the assets of the Custodial Account at its close.
Upon the expiration of 60 days after such a report is sent to
Depositor (or Beneficiary), the Custodian or Service Company
shall be forever released and discharged from all liability and
accountability to anyone with respect to transactions shown in or
reflected by such report except with respect to any such acts or
transactions as to which Depositor shall have filed written
objections with the Custodian or Service Company within such 60-
day period.
(e) The Service Company shall deliver, or cause to be delivered, to
Depositor all notices, prospectuses, financial statements and
other reports to shareholders, proxies and proxy soliciting
materials relating to the shares of the Fund(s) credited to the
Custodial
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Account. No shares shall be voted, and no other action shall be
taken pursuant to such documents, except upon receipt of adequate
written instructions from Depositor.
(f) Depositor shall always fully indemnify Service Company,
Distributor, the Fund(s), Sponsor and Custodian and save them
harmless from any and all liability whatsoever which may arise
either (i) in connection with this Agreement and the matters
which it contemplates, except that which arises directly out of
the Service Company's, Distributor's, Fund's, Sponsor's or
Custodian's bad faith, gross negligence or willful misconduct;
(ii) with respect to making or failing to make any distribution,
other than for failure to make distribution in accordance with an
order therefor which is in full compliance with Section 10, or
(iii) actions taken or omitted in good faith by such parties.
Neither Service Company nor Custodian shall be obligated or
expected to commence or defend any legal action or proceeding in
connection with this Agreement or such matters unless agreed upon
by that party and Depositor, and unless fully indemnified for so
doing to that party's satisfaction.
(g) The Custodian and Service Company shall each be responsible
solely for performance of those duties expressly assigned to it
in this Agreement, and neither assumes any responsibility as to
duties assigned to anyone else hereunder or by operation of law.
(h) The Custodian and Service Company may each conclusively rely upon
and shall be protected in acting upon any written order from
Depositor or Beneficiary, or any investment adviser appointed
under Section 8, or any other notice, request, consent,
certificate or other instrument or paper believed by it to be
genuine and to have been properly executed, and so long as it
acts in good faith, in taking or omitting to take any other
action in reliance thereupon. In addition, Custodian will carry
out the requirements of any apparently valid court order relating
to the Custodial Account and will incur no liability or
responsibility for so doing.
16. (a) the Custodian, in consideration of it services under this
Agreement, shall receive the fees specified on the applicable fee
schedule. The fee schedule originally applicable shall be the
one specified in the Adoption Agreement or Disclosure Statement,
as applicable. The Custodian may substitute a different fee
schedule at any time upon 30days' written notice to Depositor.
The Custodian shall also receive reasonable fees for any services
not contemplated by any applicable fee schedule and either deemed
by it to be necessary or desirable or requested by Depositor.
(b) Any income, gift, estate and inheritance taxes of any kind
whatsoever, including transfer taxes incurred in connection with
the investment or reinvestment of the assets of the Custodial
Account, that may be levied or assessed in respect to such
assets, and all other administrative expenses incurred in
connection with the Custodial Account, that may be levied or
assessed in respect to such assets, and all other administrative
expenses incurred by the Custodian in the performance of its
duties (including fees for legal services rendered to it in
connection with the Custodial Account) shall be charged to the
Custodial Account. If the Custodian is required to pay any such
amount, the Depositor (or Beneficiary) shall promptly upon notice
thereof reimburse the Custodian.
(c) All such fees and taxes and other administrative expenses charged
to the Custodial Account shall be collected either from the
amount of any contribution or distribution to or from the
Account, or (at the option of the person entitled to collect such
amounts) to the extent possible under the circumstances by the
conversion into cash of sufficient shares of one or more Funds
held in the Custodial Account (without liability for any loss
incurred thereby). Notwithstanding the
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foregoing, the Custodian or Service Company may make demand upon
the Depositor for payment of the amount of such fees, taxes and
other administrative expense. Fees which remain outstanding
after 60 days may be subject to a collection charge.
17. (a) Upon 30 days' prior written notice to the Custodian, Depositor or
Sponsor, as the case may be, may remove it from its office
hereunder. Such notice, to be effective, shall designate a
successor custodian and shall be accompanied by the successor's
written acceptance. The Custodian also may at any time resign
upon 30 days' prior written notice to Sponsor, whereupon the
Sponsor shall notify the Depositor (or Beneficiary) and shall
appoint a successor to the Custodian. In connection with its
resignation hereunder, the Custodian may, but is not required to,
designate a successor custodian by written notice to the Sponsor
or Depositor (or Beneficiary), and the Sponsor or Depositor (or
beneficiary) will be deemed to have consented to such successor
unless the Sponsor or Depositor (or Beneficiary) designates a
different successor custodian and provides written notice thereof
together with such a different successor's written acceptance by
such date as the Custodian specifies in its original notice to
the Sponsor or Depositor (or Beneficiary) (provided that the
Sponsor or Depositor (or Beneficiary) will have a minimum of 30
days to designate a different successor).
(b) The successor custodian shall be a bank, insured credit union, or
other person satisfactory to the Secretary of the Treasury under
Code Section 408(a)(2). Upon receipt by Custodian of written
acceptance by its successor of such successor's appointment,
Custodian shall transfer and pay over to such successor the
assets of the Custodial Account and all records (or copies
thereof) of Custodian pertaining thereto, provided that the
successor custodian agrees not to dispose of any such records
without the Custodian's consent. Custodian is authorized,
however, to reserve such sum of money or property as it may deem
advisable for payment of all its fees, compensation, costs, and
expenses, or for payment of any other liabilities constituting a
charge on or against the assets of the Custodial Account or on or
against the Custodian, with any balance of such reserve remaining
after the payment of all such items to be paid over to the
successor custodian.
(c) Any Custodian shall not be liable for the acts or omissions of
its predecessor or its successor.
PROVISIONS APPLICABLE TO BOTH REGULAR IRAS AND ROTH IRAS: PART THREE
18. References herein to the "Internal Revenue Code" or "Code" and
sections thereof shall mean the same as amended from time to time,
including successors to such sections.
19. Except where otherwise specifically required in this Agreement, any
notice from Custodian to any person provided for in this Agreement
shall be effective if sent by first-class mail to such person at that
person's last address on the Custodian's records.
20. Depositor or Depositor's Beneficiary shall not have the right or power
to anticipate any part of the Custodial Account or to sell, assign,
transfer, pledge or hypothecate any part thereof. The Custodial
Account shall not be liable for the debts of Depositor or Depositor's
Beneficiary or subject to any seizure, attachment, execution or other
legal process in respect thereof except to the extent required by law.
At no time shall it be possible for any part of the assets of the
Custodial Account to be used for or diverted to purposes other than
for the exclusive benefit of the Depositor or his/her Beneficiary
except to the extent required by law.
21. When accepted by the Custodian, this Agreement is accepted in and
shall be construed and administered in accordance with the laws of the
state where the principal offices of the Custodian are located. Any
action involving the Custodian
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brought by any other party must be brought in a state or federal court
in such state.
If in the Adoption Agreement, Depositor designates that the Custodial
Account is a Regular IRA, this Agreement is intended to qualify under
Code Section 408(a) as an individual retirement Custodial Account and
to entitle Depositor to the retirement savings deduction under Code
Section 219 if available. If in the Adoption Agreement Depositor
designates that the Custodial Account is a Roth IRA, this Agreement is
intended to qualify under Code Section 408A as a Roth individual
retirement Custodial Account and to entitle Depositor to the tax-free
withdrawal of amounts from the Custodial Account to the extent
permitted in such Code section.
If any provision hereof is subject to more than one interpretation or
any term used herein is subject to more than one construction, such
ambiguity shall be resolved in favor of that interpretation or
construction which is consistent with the intent expressed in
whichever of the two preceding sentences is applicable. However, the
Custodian shall not be responsible for whether or not such intentions
are achieved through use of this Agreement, and Depositor is referred
to Depositor's attorney for any such assurances.
22. Depositor should seek advice from Depositor's attorney regarding the
legal consequences (including but not limited to federal and state tax
matters) of entering into this Agreement, contributing to the
Custodial Account, and ordering Custodian to make distributions from
the Account. Depositor acknowledges that Custodian and Service
Company (and any company associated therewith) are prohibited by law
from rendering advice.
23. If any provision of any document governing the Custodial Account
provides for notice, instructions or other communications from one
party to another in writing, to the extent provided for in the
procedures of the Custodian, Service Company or another party, any
such notice, instructions or other communications may be given by
telephonic, computer, other electronic or other means, and requirement
for written notice will be deemed satisfied.
24. The legal documents governing the Custodial Account are as follows:
(a) If in the Adoption Agreement the Depositor designated the
Custodial Account as a Regular IRA under Code Section 408(a), the
provisions of Part One and Part Three of this Agreement and the
provisions of the Adoption Agreement are the legal documents
governing the Depositor's Custodial Account.
(b) If in the Adoption Agreement the Depositor designated the
Custodial Account as a Roth IRA under Code Section 408A, the
provisions of Part two and Part Three of this Agreement and the
provisions of the Adoption Agreement are the legal documents
governing the Depositor's Custodial Account.
(c) In the Adoption Agreement the Depositor must designate the
Custodian Account as either a Roth IRA or a Regular IRA, and a
separate account will be established for such IRA. One Custodial
Account may not serve as a Roth IRA and a Regular IRA (through
the use of subaccounts or otherwise).
25. Articles I through VII of Part One of this Agreement are in the form
promulgated by the Internal Revenue Service as Form 5305-A. It is
anticipated that, if and when the Internal Revenue Service promulgates
changes to Form 5305-A, the Custodian will amend this Agreement
correspondingly.
Articles I through VII of Part Two of this Agreement are in the
form promulgated by the Internal Revenue Service as Form 5305-RA.
It is anticipated that, if and when the Internal Revenue Service
promulgates changes to Form 5305-RA, the Custodian will amend this
Agreement correspondingly.
The Internal Revenue Service has endorsed the use of documentation
permitting a Depositor to establish either a Regular IRA or Roth
IRA (but not both using a single Adoption Agreement), and this
Investment Kit complies with the requirements of the IRS guidance
for such use. If the Internal Revenue Service subsequently
determines that such
-42-
<PAGE>
an approach is not permissible, or that the use of a "combined"
Adoption Agreement does not establish a valid Regular IRA or a Roth
IRA (as the case may be), the Custodian will furnish the Depositor
with replacement documents and the Depositor will if necessary sign
such replacement documents. Depositor acknowledges and agrees to
such procedures and to cooperate with Custodian to preserve the
intended tax treatment of the Account.
26. If the Depositor maintains an Individual Retirement Account under Code
section 408(a), Depositor may convert or transfer such other IRA to a
Roth IRA under Code section 408A using the terms of this Agreement and
the Adoption Agreement by completing and executing the Adoption
Agreement and giving suitable directions to the Custodian and the
custodian or trustee of such other IRA. Alternatively, the Depositor
may convert or transfer such other IRA to a Roth IRA by use of a reply
card or by telephonic, computer or electronic means in accordance with
procedures adopted by the Custodian or Service Company intended to
meet the requirements of Code section 408A, and the Depositor will be
deemed to have executed the Adoption Agreement and adopted the
provisions of this Agreement and the Adoption Agreement in accordance
with such procedures.
27. The Depositor acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her Account is
invested and the Individual Retirement Account Disclosure Statement
related to the Account. The Depositor represents under penalties of
perjury that his or her Social Security number (or other Taxpayer
Identification Number) as stated in the Adoption Agreement is correct.
-43-
<PAGE>
WESTCORE TRUST
CERTIFICATE OF SECRETARY
The undersigned, being the duly elected and acting Secretary of
Westcore Trust, a Massachusetts Business Trust (the "Trust"), does hereby
certify that the following resolution was duly adopted by the Board of Trustees
of the Trust at a meeting held on May 13, 1998 at which a quorum was present and
acting throughout and that such resolution has not been amended, modified or
rescinded and remains in full force and effect on the date hereof:
FURTHER RESOLVED, that each of the officers of the Trust who may be
required to execute any amendments to the Trust's Registration Statement
be, and each of them hereby is, authorized to execute a power of attorney
appointing W. Bruce McConnel, III, Kenneth V. Penland and Jack D.
Henderson, and either of them, his true and lawful attorney and agent, with
power of substitution or resubstitution, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended, and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof,
in connection with the filing and effectiveness of the Trust's Registration
Statement and of any and all amendments (including post-effective
amendments) to the Trust's Registration Statement on Form N-1A pursuant to
either of said acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name
and on behalf of such officer as an officer of the Trust any and all such
amendments filed with the Securities and Exchange Commission under either
of said acts, and any other instruments or documents related thereto, said
acts of said attorney and agents or either of them by virtue of said
appointment being hereby ratified and approved.
Westcore Trust
July 16, 1998 /s/W. Bruce McConnel, III
-------------------------
W. Bruce McConnel, III
Secretary
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jack D. Henderson, whose signature appears below, does hereby constitute
and appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them,
his true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Jack D. Henderson
-----------------------
Jack D. Henderson
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
McNeil S. Fiske, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, Kenneth V. Penland and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ McNeil S. Fiske
---------------------
McNeil S. Fiske
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
James B. O'Boyle, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, Kenneth V. Penland and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ James B. O'Boyle
-----------------------
James B. O'Boyle
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Robert L. Stamp, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, Kenneth V. Penland and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Robert L. Stamp
-----------------------
Robert L. Stamp
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Lyman Seely, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, Kenneth V. Penland and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Lyman Seely
--------------------
Lyman Seely
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jasper Frontz, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland, Jack D. Henderson and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Jasper Frontz
------------------
Jasper Frontz
Date: July 16, 1998
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Kenneth V. Penland, whose signature appears below, does hereby constitute
and appoint Jack D. Henderson and W. Bruce McConnel, III, his true and lawful
attorney and agent, with power of substitution or resubstitution, to do any and
all acts and things and to execute any and all instruments which said attorney
and agent may deem necessary or advisable or which may be required to enable
Westcore Trust, a Massachusetts business trust (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933, as
amended, ("Acts") and any rules, regulations, or requirements of the Securities
and Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorney and agent shall do or cause to be done by virtue thereof.
/s/ Kenneth V. Penland
-----------------------
Kenneth V. Penland
Date: July 16, 1998
