<PAGE>
As filed with the Securities and Exchange Commission on September 30, 1999
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. 50 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /X/
ACT OF 1940
AMENDMENT NO. 51 /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
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103-6996
(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)
/X/ on October 1, 1998 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on July 16, 1999 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.
<PAGE>
Title of Securities being registered: Shares of Beneficial Interest.
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.
-2-
<PAGE>
[FRONT COVER]
[MOUNTAIN LOGO]
WESTCORE FUNDS
EQUITY & BOND FUNDS PROSPECTUS
[Black and white photograph of mountain and trees]
October 1, 1999
WESTCORE EQUITY FUNDS
Westcore MIDCO Growth Fund
Westcore Growth and Income Fund
Westcore Blue Chip Fund
Westcore Mid-Cap Opportunity Fund
Westcore Small-Cap Opportunity 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.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUNDS' SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
[MOUNTAIN LOGO] WESTCORE FUNDS Better research makes the difference.
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October 1, 1999
[Black and white photograph of mountains and trees]
TABLE OF CONTENTS
PAGES
RISK/RETURN SUMMARY............................................................1
Westcore Equity Funds..........................................................1
Westcore Bond Funds............................................................3
Bar Charts and Performance Tables..............................................5
Fees and Expenses of the Funds.................................................9
TYPES OF INVESTMENT RISK......................................................11
HOW TO INVEST AND OBTAIN INFORMATION..........................................18
How to Contact Westcore Funds.................................................18
Purchasing Shares.............................................................19
Exchanging Shares.............................................................21
Redeeming Shares..............................................................22
Additional Information on Telephone and Online Service........................23
General Account Policies......................................................24
Distributions and Taxes.......................................................27
Management of the Funds.......................................................29
Financial Highlights..........................................................31
APPENDIX ....................................................................A-1
Prior Performance of Investment Adviser for Westcore Growth and Income Fund..A-1
Bond Rating Categories.......................................................B-1
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370 Seventeenth Street - Suite 3100 - Denver, Colorado 80202 -
1-800-392-CORE (2673)
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
RISK/RETURN SUMMARY
WESTCORE EQUITY FUNDS
THE WESTCORE EQUITY FUNDS are designed for long-term investors seeking
capital appreciation who can tolerate the risks associated with investments in
common stocks.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE EQUITY FUNDS?
WESTCORE GROWTH FUNDS:
WESTCORE MIDCO GROWTH FUND - long-term capital appreciation by
investing primarily in medium-sized growth companies.
WESTCORE GROWTH AND INCOME FUND - long-term total return by investing
in equity securities selected for their growth potential and
income-producing abilities.
WESTCORE VALUE FUNDS:
WESTCORE BLUE CHIP FUND - long-term total return by investing in stocks
of large, well-established companies whose stocks appear to be
undervalued.
WESTCORE MID-CAP OPPORTUNITY FUND - long-term capital appreciation by
investing primarily in medium-sized companies whose stocks appear to be
undervalued.
WESTCORE SMALL-CAP OPPORTUNITY FUND - long-term capital appreciation
primarily through investments in companies with small capitalizations
whose stocks appear to be undervalued.
Upon notice to shareholders, each fund's investment objective may be changed by
the Trust's Board of Trustees without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE EQUITY FUNDS?
WESTCORE GROWTH FUNDS: emphasize investments in companies that have the
potential to grow their earnings faster than the general economy.
The portfolio managers of the Growth Funds work with a team of analysts who
perform intensive research to identify companies in businesses and economic
sectors with attractive growth prospects. Each analyst focuses on specific
industries' products, services and competitive environments. To identify
attractive stocks for the Growth Funds, they study a company's business by
analyzing its financial information, industry, markets and competitors,
frequently visiting their operations and/or interviewing management.
Generally, a company is considered for a Fund if the portfolio managers
believe the company's management team has the ability to execute their
business plans and increase market share with innovative products or
services, strong balance sheets and/or the access to money to finance their
growth. Stocks may be sold when conditions have changed and the company's
prospects are no longer attractive.
WESTCORE MIDCO GROWTH FUND invests primarily in the common stock of
medium-sized companies. Medium-sized companies may benefit from factors
such as new products and services and more entrepreneurial management.
These companies may also have better opportunities for growth by
increasing their shares of the markets they serve.
Under normal circumstances, the Fund invests at least 65% of its assets
in common stocks of companies whose market capitalizations, at the time
of purchase, are between $500 million and $14 billion.
WESTCORE GROWTH AND INCOME FUND invests primarily in the common stock
of large- and medium-sized companies. The Fund may invest up to 25% of
its total assets in bonds convertible into common stock, which provide
greater income while maintaining similar characteristics of common
stocks. This Fund is designed to outperform
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Questions? Call 1-800-392-CORE (2673) 1
<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
the total return of the S&P 500 Index while seeking comparable dividend
levels and risk.
WESTCORE VALUE FUNDS: emphasize investments in companies that are undervalued
and have improving business prospects due to strong company and industry
dynamics.
The portfolio managers research historical data using computer power
and mathematical techniques to identify characteristics of companies whose stock
prices increased more than the general market in the past. They have developed
and continue to enhance proprietary computer models from this data to identify
companies with the potential for price appreciation. The process uncovers
companies that appear to be undervalued based on factors such as low
price-to-earnings, low price-to-cash flow and low price-to-book value ratios. In
addition, the model incorporates factors such as earnings and price momentum,
which assist in the timing of purchase and sell decisions. Companies that meet
this criteria are then researched by the Funds' portfolio managers for signs of
solid or improving businesses, such as new products or services, innovative
management and improving growth prospects. A Fund may sell a stock when the
model indicates it is no longer undervalued or its fundamental business changes.
The following describes our three Value Funds, which execute this strategy for
the large-, medium- and small-company universes.
WESTCORE BLUE CHIP FUND invests in approximately 50 large,
well-established companies whose stocks appear to be undervalued. Large
companies may benefit from attributes such as market dominance,
substantial financial resources and the opportunity to be global
leaders in their industries. These characteristics may result in
increased stability for the company and a lower-risk investment for the
Fund.
WESTCORE MID-CAP OPPORTUNITY FUND invests primarily in medium-sized
companies whose stocks appear to be undervalued. Medium-sized companies
may benefit from factors such as new products and services and more
entrepreneurial management. These companies may also have better
opportunities for growth by increasing their shares of the markets they
serve.
Under normal market conditions, at least 65% of the value of this
Fund's total assets is invested in companies with market
capitalizations of $500 million to $14 billion at the time of purchase.
WESTCORE SMALL-CAP OPPORTUNITY FUND invests primarily in small
companies with unrecognized potential whose stocks appear to be
undervalued. Small companies may benefit from factors such as new
products and services and more entrepreneurial management. Small
company stocks may have higher return/risk potential than larger
company stocks.
Under normal market conditions, at least 65% of the value of this
Fund's total assets is invested in companies with market
capitalizations of $2.5 billion or less at the time of purchase.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE EQUITY FUNDS?
As with any equity fund, the value of your investment will fluctuate
over short, or even extended periods of time in response to overall movements in
the stock market (market risk). In addition, each of the Equity Funds is subject
to the additional risk that the particular types of stocks held by the Fund will
underperform other stocks and may decline in value (management risk). Therefore,
you could lose money by investing in the Equity Funds.
Westcore Small-Cap Opportunity Fund is subject to the additional risk
that the stocks of smaller and newer issuers can be more volatile and more
speculative for reasons such as lack of financial resources, product
diversification and competitive strengths of larger companies. Therefore the
value of this Fund may be more volatile.
An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
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2
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
WESTCORE BOND FUNDS
THE WESTCORE BOND FUNDS are designed for long-term investors seeking
current income who can tolerate the risks associated with investing in bonds.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE BOND FUNDS?
WESTCORE LONG-TERM BOND FUND - long-term total rate of return by
investing primarily in investment-grade bonds.
WESTCORE INTERMEDIATE-TERM BOND FUND - current income with less
volatility of principal than funds with longer maturities by investing
primarily in investment-grade bonds.
WESTCORE COLORADO TAX-EXEMPT FUND - income exempt from both federal and
Colorado state personal income taxes by emphasizing insured Colorado
municipal bonds with intermediate maturities.
Upon notice to shareholders, each Fund's investment objective may be changed by
the Trust's Board of Trustees without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE BOND FUNDS?
WESTCORE INTERMEDIATE-TERM BOND FUND and WESTCORE LONG-TERM BOND FUND
invest primarily in investment-grade bonds -- those rated in the top four rating
categories by nationally recognized rating agencies such as Moody's or Standard
and Poor's. The dollar-weighted average quality is expected to be "A" or better.
An "A" rating typically is the third highest of four investment-grade
categories, and includes upper medium-grade bonds with strong capacity to pay
interest or repay principal. Westcore Intermediate-Term Bond Fund maintains an
average dollar-weighted maturity of between 3 and 6 years and Westcore Long-Term
Bond Fund at least 10 years.
The Funds emphasize corporate bonds, which may generate more income
than government securities. Corporate bonds also provide opportunities for the
portfolio manager and analysts' research to identify companies with stable or
improving credit characteristics, which may result in price appreciation. In
addition, the Funds invest in other securities, including REITs and
mortgage-backed and asset-backed bonds, which may also offer higher interest
yield than government bonds. The attractiveness of REITs and corporate,
mortgage- and asset-backed bonds relative to government bonds is monitored to
determine the target weightings for each sector. The combination of valuation
and a disciplined credit research process is the basis for buy/sell decisions.
WESTCORE COLORADO TAX-EXEMPT FUND invests at least 80% of its assets in
bonds 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 ("Tax-Exempt Obligations"). The Fund normally will invest at least
65% of its total assets in Colorado Obligations. The Fund maintains an average
dollar-weighted maturity of between 7 and 10 years.
The investment adviser invests in Colorado municipal bonds that are
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 municipal bonds rated at the time of purchase in the
fourth highest investment-grade category. The fourth category is the lowest
investment-grade category, and these obligations have speculative
characteristics. The Fund may invest in unrated bonds if the portfolio manager
determines they are comparable in quality to instruments that meet the Fund's
rating requirements.
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Questions? Call 1-800-392-CORE (2673) 3
<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
The portfolio manager's strategy emphasizes quality. To fully
understand the issuers' ability to generate revenues or levy taxes in order to
meet their obligations, the portfolio manager and a team of analysts researches
the financial condition of various counties, public projects, school districts
and taxing authorities whose bonds the Fund owns or may purchase. The Fund holds
bonds from all areas of the state to reduce the risk to the portfolio of any one
local economy that is suffering. The portfolio manager enhances the quality of
the Fund by investing at least 75% of the assets in bonds where the risk of
interest and principal payment default is protected by a third-party insurer.
ALL WESTCORE BOND FUNDS
If the rating on 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 Fund's best interest to do so.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE BOND FUNDS?
Although bond funds may fluctuate less in value than equity funds, bond
fund returns and yields will vary. Therefore you could lose money by investing
in the Bond Funds.
A principal risk of investing in bond funds is that the value of these
securities will fall if interest rates rise (interest rate risk). Generally, the
value of a fixed-income portfolio will decrease when interest rates rise, which
means the Fund's net asset value (NAV) will likewise decrease. Another principal
risk associated with bond funds is credit risk, which is the risk that an issuer
will be unable to make principal and interest payments when due.
A general decline in interest rates may result in prepayments of
certain obligations the Funds will acquire. These prepayments may require the
Fund to reinvest at a lower rate of return. They may also reduce the Fund's
share price, because the value of those securities may depreciate or may not
appreciate as rapidly as debt securities, which cannot be prepaid.
The Westcore Colorado Tax-Exempt Fund is subject to the additional
risk that it concentrates its investments in instruments issued by or on
behalf of the state of Colorado. Due to the level of investment in municipal
obligations issued by the state of Colorado and its political subdivisions,
the performance of the Fund will be closely tied to the economic and
political conditions in the state of Colorado. Therefore, an investment in
the Fund may be riskier than an investment in other types of municipal bond
funds. Also, the Fund's performance may be dependent upon fewer securities
than is the case with a less concentrated portfolio, such as a national
tax-exempt fund. The Westcore Colorado Tax-Exempt Fund is not diversified.
An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
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4
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
BAR CHARTS AND
PERFORMANCE TABLES The bar charts and tables provide indication of
risk of investing in the Funds by showing changes
in the Funds' performance from year to year and by
showing how the Funds' average annual returns for
one, five and ten years compare with those of a
widely recognized, unmanaged index of common stock
or bond prices, as appropriate. The bar charts and
performance tables assume reinvestment of dividends
and distributions. The Funds' past performance does
not necessarily indicate how they will perform in
the future. No performance is included for the
Mid-Cap Opportunity Fund, as it has been in
operation for less than one full calendar year.
WESTCORE MIDCO GROWTH FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPH]
<TABLE>
<CAPTION>
89 90 91 92 93 94 95 96 97 98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
29.17 4.42 67.04 6.45 17.47 -1.01 27.42 16.99 14.89 10.40
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was 11.84%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 1 `91 28.82%
WORST QUARTER: Q 3 `98 -18.75%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
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<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(AUGUST 1, 1986)
<S> <C> <C> <C> <C>
WESTCORE MIDCO GROWTH FUND 10.40% 13.35% 18.08% 15.27%
RUSSELL MIDCAP GROWTH 17.87% 17.33% 17.30% 15.04%
</TABLE>
The Russell Midcap Growth Index measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The Russell Midcap companies are comprised of the 800 smallest companies in the
Russell 1000 Index, which represents approximately 26% of the total market
capitalization of the Russell 1000 Index.
WESTCORE GROWTH AND INCOME FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPH]
<TABLE>
<CAPTION>
89 90 91 92 93 94 95 96 97 98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
26.36 -2.80 31.21 4.96 11.33 -8.39 22.45 23.25 27.25 6.63
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was 11.99%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 4 `98 19.59%
WORST QUARTER: Q 3 `98 -16.81%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE GROWTH AND INCOME FUND 6.63% 13.40% 13.44% 12.77%
S&P 500 INDEX 28.58% 24.05% 19.20% 18.94%
</TABLE>
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally
considered representative of the U.S. stock market. The Index is heavily
weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks. The S&P 500 Index figures do not reflect any fees or expenses. Investors
cannot invest directly in the Index.
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Questions? Call 1-800-392-CORE (2673) 5
<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
WESTCORE BLUE CHIP FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPHIC]
<TABLE>
<CAPTION>
89 90 91 92 93 94 95 96 97 98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20.55 -0.26 34.48 2.04 12.43 0.36 36.43 21.24 30.92 17.88
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was 6.80%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 4 `98 20.31%
WORST QUARTER: Q 3 `90 -15.63%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
( JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE BLUE CHIP FUND 17.88% 20.69% 16.94% 15.72%
S&P 500 INDEX 28.58% 24.05% 19.20% 18.94%
</TABLE>
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally
considered representative of the U.S. stock market. The Index is heavily
weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks. The S&P 500 Index figures do not reflect any fees or expenses. Investors
cannot invest directly in the Index.
WESTCORE SMALL-CAP OPPORTUNITY FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPHIC]
<TABLE>
<CAPTION>
94 95 96 97 98
<S> <C> <C> <C> <C>
0.33 29.48 25.58 27.78 -5.73
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was -3.70%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 3`97 15.95%
WORST QUARTER: Q 3`98 -20.56%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
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<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE INCEPTION
(DECEMBER 28, 1993)
<S> <C> <C> <C>
WESTCORE SMALL-CAP OPPORTUNITY FUND -5.73% 13.91% 14.43%
RUSSELL 2000 INDEX -2.57% 11.87% 11.87%
</TABLE>
The Russell 2000 Index is an unmanaged index of the smallest 2,000 companies in
the Russell 3000 Index, as ranked by total market capitalization. The Russell
2000 is widely regarded in the industry as an index that accurately reflects the
universe of small capitalization stocks. The Russell 2000 Index figures do not
reflect any fees or expenses. Investors cannot invest directly in this Index.
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6
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
WESTCORE LONG-TERM BOND FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPHIC]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
15.69 5.14 19.44 8.93 15.92 -7.13 26.69 0.74 13.95 10.21
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was -5.72%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 2 `89 9.62%
WORST QUARTER: Q 1 `96 -5.04%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
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<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE LONG-TERM BOND FUND 10.21% 8.27% 10.56% 10.57%
LEHMAN BROTHERS LONG-TERM 11.76% 9.12% 11.30% 11.47%
GOVERNMENT/CORPORATE BOND INDEX
</TABLE>
The Lehman Brothers Long-Term Government/Corporate Bond Index is an unmanaged
index comprised of U.S. Treasury issues, publicly issued debt of U.S. Government
agencies, corporate debt guaranteed by the U.S. Government and all publicly
issued, fixed-rate, nonconvertible investment-grade dollar-denominated,
SEC-registered corporate debt. The Index includes bonds with maturities of ten
years or longer. The Lehman Brothers Long-Term Government/Corporate Bond Index
figures do not reflect any fees or expenses. Investors cannot invest directly in
this Index.
30-DAY YIELD AS OF MAY 31, 1999: 5.87%
CURRENT YIELD INFORMATION: For current yield information please call
1-800-392-CORE (2673).
WESTCORE INTERMEDIATE-TERM BOND FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPHIC]
<TABLE>
<CAPTION>
89 90 91 92 93 94 95 96 97 98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11.23 1.57 20.23 7.14 9.87 -3.38 15.01 3.79 8.25 6.47
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was -0.35%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 2 `89 6.12%
WORST QUARTER: Q 1 `94 -2.62%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE INTERMEDIATE-TERM BOND FUND 6.47% 5.86% 7.83% 7.76%
LEHMAN BROTHERS INTERMEDIATE-TERM 8.42% 6.59% 8.51% 8.42%
GOVERNMENT/CORPORATE BOND INDEX
</TABLE>
The Lehman Brothers Intermediate-Term Government/Corporate Bond Index is an
unmanaged index comprised of U.S. Treasury issues, publicly issued debt of U.S.
Government agencies, corporate debt guaranteed by the U.S. Government and all
publicly issued, fixed-rate, nonconvertible investment-grade dollar-denominated,
SEC-registered corporate debt. The Lehman Brothers Intermediate
Government/Corporate Bond Index figures do not reflect any fees or expenses.
Investors cannot invest directly in this Index.
30-DAY YIELD AS OF MAY 31, 1999: 5.81%
CURRENT YIELD INFORMATION: For current yield information please call
1-800-392-CORE (2673).
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Questions? Call 1-800-392-CORE (2673) 7
<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
WESTCORE COLORADO TAX-EXEMPT FUND
CALENDAR YEAR TOTAL RETURNS AS OF 12/31(%)
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[GRAPHIC]
<TABLE>
<CAPTION>
92 93 94 95 96 97 98
<S> <C> <C> <C> <C> <C> <C>
8.08 9.89 -3.24 13.03 4.29 7.35 5.59
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was -1.84%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 1 `95 5.18%
WORST QUARTER: Q 1 `94 -3.64%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE INCEPTION
(JUNE 1, 1991)
<S> <C> <C> <C>
WESTCORE COLORADO TAX-EXEMPT FUND 5.59% 5.27% 6.67%
LEHMAN BROTHERS 10-YEAR TAX-EXEMPT 6.76% 6.35% 7.98%
BOND INDEX
</TABLE>
The Lehman Brothers 10-Year Tax-Exempt Bond Index is an unmanaged index that
tracks the performance of municipal bonds with remaining maturities of 10 years
or less. The Lehman Brothers 10-Year Tax-Exempt Bond Index figures do not
reflect any fees or expenses. Investors cannot invest directly in this Index.
<TABLE>
<CAPTION>
30-DAY TAX
30-DAY YIELD AS EQUIVALENT YIELD
OF MAY 31, 1999 AS OF MAY 31, 1999*
--------------- -------------------
<S> <C> <C>
30-Day Yields as of May 31, 1999: 3.83% 5.58%
</TABLE>
CURRENT YIELD INFORMATION: For current yield information please call
1-800-392-CORE (2673).
* Tax-Equivalent Yield is based upon the effective combined state and federal
tax rate assumptions of 31.42% (assuming a 28% federal tax rate and a 4.75%
Colorado tax rate).
- --------------------------------------------------------------------------------
8
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
FEES AND EXPENSES OF THE FUNDS
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
<TABLE>
<CAPTION>
EQUITY FUNDS BOND FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Growth and Blue Mid-Cap Small-Cap Long-Term Intermediate- Colorado
Growth Income Chip Opportunity Opportunity Bond Term Bond Tax-Exempt
Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder None None None None None None None None
Fees (fees paid
directly from
your investment)
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management 0.65% 0.65% 0.65% 0.75% 1.00% 0.45% 0.45% 0.50%
Fees (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution
(12b-1) Fees None None None None None None None None
- -----------------------------------------------------------------------------------------------------------------------------------
Other 0.54% 1.10% 0.60% 4.58% 0.63% 0.77% 0.56% 0.59%
Expenses (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Annual
Fund Operating 1.19% 1.75% 1.25% 5.33% 1.63% 1.22% 1.01% 1.09%
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Fee Waiver
and Expense (0.04)% (0.60)% (0.10)% (4.08)% (0.33)% (0.27)% (0.16)% (0.44)%
Reimbursement(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Annual
Fund Operating 1.15% 1.15% 1.15% 1.25% 1.30% 0.95% 0.85% 0.65%
Expenses(1)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Funds' Adviser and Administrators have contractually agreed to
waive a portion of the investment advisory and/or administration fees and/or to
reimburse other expenses for the MIDCO Growth, Growth and Income, Blue Chip,
Mid-Cap Opportunity, Small-Cap Opportunity, Long-Term Bond, Intermediate-Term
Bond and Colorado Tax-Exempt Funds until at least May 31, 2000, so that Net
Annual Fund Operating Expenses will be no more than 1.15%, 1.15%. 1.15%, 1.25%,
1.30%, 0.95%, 0.85% and 0.65% for each Fund, respectively, for the current
fiscal year. You will be notified if these waivers and/or reimbursements are
discontinued after that date resulting in a material change in the expense
ratio.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 9
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUNDS
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUNDS FOR THE TIME PERIODS
INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS AND
THAT NET ANNUAL OPERATING EXPENSES FOR ONE YEAR AND GROSS ANNUAL OPERATING
EXPENSES FOR ADDITIONAL YEARS SET FORTH IN THE TABLE ON PAGE 9 ARE INCURRED. THE
EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE
FUNDS' OPERATING EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE
HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS YOUR COSTS WOULD BE:
<TABLE>
<CAPTION>
EQUITY FUNDS BOND FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Growth and Blue Mid-Cap Small-Cap Long-Term Intermediate- Colorado
Income Income Chip Opportunity Opportunity Bond Term Bond Tax-Exempt
Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
One Year $117 $117 $117 $127 $132 $97 $87 $66
- -----------------------------------------------------------------------------------------------------------------------------------
Three Years 378 551 396 1,591 514 387 321 347
- -----------------------------------------------------------------------------------------------------------------------------------
Five Years 654 948 686 2,644 886 670 550 601
- -----------------------------------------------------------------------------------------------------------------------------------
Ten Years 1,442 2,060 1,510 5,245 1,930 1,476 1,235 1,327
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
TYPES OF INVESTMENT RISK
The principal risks of investing in each Fund are described previously
in this prospectus. The following list provides more detail about some of those
risks, along with information on additional types of risks that may apply to the
Funds. Risks associated with particular types of investments each Fund makes are
described in this section and in the Statement of Additional Information
referred to on the back page.
GENERAL RISKS OF INVESTING IN EACH OF THE FUNDS
CREDIT RISK - Bond Funds and, to the extent they invest in fixed-income
securities, Equity Funds
The risk that an issuer will be unable to make principal and interest
payments when due is known as "credit risk." U.S. government securities are
generally considered to be the safest type of investment in terms of credit
risk. Tax-Exempt 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.
Securities rated below investment grade are particularly subject to
credit risk. These securities are predominantly speculative and are commonly
referred to as "junk bonds." To the extent a Fund purchases or holds convertible
or other securities that are below investment grade, a greater risk exists as to
the timely repayment of the principal of, and the timely payment of interest or
dividends on, such securities.
Ratings published by rating agencies 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.
INTEREST RATE RISK - Bond Funds and, to the extent they invest in fixed-income
securities, Equity Funds
Generally, a fixed-income security will increase 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.
Changes in interest rates may also extend or shorten the duration of
certain types of instruments, such as asset-backed securities, thereby affecting
their value and the return on your investment. Zero coupon securities, including
stripped securities in which the Bond Funds (other than the Colorado Tax-Exempt
Fund) may invest are subject to greater interest-rate risk than many of the more
typical fixed-income securities.
A bond fund's average dollar-weighted maturity is a measure of how the
fund will react to interest-rate changes. 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.
LIQUIDITY RISK - ALL FUNDS
Certain securities may be difficult or impossible to sell at the time
and price that the Fund would like. A Fund may have to lower the price, sell
other securities instead or forego an investment opportunity, any of which could
have a negative effect on fund management or performance. This risk applies, for
example, to variable and floating rate demand notes; variable amount demand
securities and restricted securities that the Funds may purchase; short-term
funding agreements that each Fund may purchase; and the futures contracts in
which each Fund (other
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 11
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
than the Colorado Tax-Exempt Fund) may engage. Illiquid securities also include
repurchase agreements, securities loans and time deposits with
notice/termination dates of greater than seven days, certain municipal leases
and certain securities subject to trading restrictions because they are not
registered under the Securities Act of 1933. There may be no active secondary
market for these securities. Each Fund may invest up to 15% of its net assets at
the time of purchase, in securities that are illiquid. A domestically traded
security that is not registered under the Securities Act of 1933 will not be
considered illiquid if the Adviser determines that an adequate investment
trading market exists for that security. However, there can be no assurance that
a liquid market will exist for any security at a particular time. Because
illiquid and restricted securities may be difficult to sell at an acceptable
price, they may be subject to greater volatility and may result in a loss to a
Fund.
MANAGEMENT RISK - ALL FUNDS
A strategy that the Adviser uses may fail to produce the intended
results. The particular securities and types of securities a Fund holds may
underperform other securities and types of securities. There can be no assurance
a Fund will achieve its investment objective. Certain policies of each Fund,
which may not be changed without a shareholder vote, are described in the
Statement of Additional Information.
MARKET RISK - ALL FUNDS
The value of the securities in which a Fund invests may go up or down
in response to the prospects of individual companies and/or general economic
conditions. Price changes may be temporary or last for extended periods.
OTHER TYPES OF INVESTMENTS - ALL FUNDS
This prospectus describes each Fund's principal investment strategies,
and the types of securities in which each Fund principally invests. Each Fund
may, from time to time, make other types of investments and pursue other
investment strategies in support of its overall investment goal. These
supplemental investment strategies - and the risk involved - are described in
detail in the Statement of Additional Information, which is referred to on the
back cover of this prospectus.
PORTFOLIO TURNOVER RISKS - ALL FUNDS
The Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater expenses, which must be
borne by a Fund and its shareholders. It may result in higher short-term capital
gains taxable to shareholders. These gains are taxable at higher rates than
long-term capital gains. Frequent trading could also mean higher brokerage
commissions and other transaction costs, which could reduce the Fund's return.
See "Financial Highlights" for the Funds' historical portfolio turnover rates.
The Westcore MIDCO Growth Fund had a portfolio turnover rate over
100% in the year ended May 31, 1999.
TEMPORARY DEFENSIVE POSITIONS -- ALL WESTCORE FUNDS
Each Fund may, from time to time, take temporary defensive positions
that are inconsistent with its principal investment strategies in attempting to
respond to adverse market, economic, political or other conditions. Such
investments include various short-term instruments. If any Fund takes temporary
position at the wrong time, the position would have an adverse impact on that
Fund's performance. The Fund may not achieve its investment objective. The Funds
reserve the right to invest all of their assets in temporary defensive
positions.
ADDITIONAL RISKS THAT APPLY TO INVESTMENTS IN CERTAIN OF THE FUNDS
EXTENSION RISKS - BOND FUNDS
This is the risk that an issuer will exercise its right to pay
principal on an obligation held by a Fund (such as a mortgage- or asset-backed
security) later than expected. This may happen when there is a rise in interest
rates. These events may lengthen the duration and potentially reduce the value
of these securities.
- --------------------------------------------------------------------------------
12
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
PREPAYMENT RISK - BOND FUNDS
This is the risk that an issuer will exercise its right to pay
principal on an obligation held by a Fund (such as a mortgage- or asset-backed
security) earlier than expected. This may happen when there is a decline in
interest rates. These events may make a Fund unable to recoup its initial
investment and may result in reduced yields.
SMALL-CAP STOCK RISK - SMALL-CAP OPPORTUNITY FUND
Smaller capitalization stocks involve greater risks than those
associated with larger, more established companies. Small company stocks may be
subject to more abrupt or erratic price movements, for reasons including that
the stocks are traded in lower volume and that the issuers are more sensitive to
changing conditions and have less certain growth prospects. Also, there are
fewer market makers for these stocks and wider spreads between quoted bid and
asked prices in the over-the-counter market for these stocks. Small-cap stocks
tend to be less liquid, particularly during periods of market disruption. There
normally is less publicly available information concerning these securities.
Small companies in which the Funds may invest may have limited product lines,
markets or financial resources, or may be dependent on a small management group.
In particular, investments in unseasoned companies present risks considerably
greater than investments in more established companies.
TAX RISK - COLORADO TAX-EXEMPT FUND
This Fund may be more adversely impacted by changes in tax rates and
policies than the other Funds. Because interest income on municipal obligations
is normally not subject to regular federal income taxation, the attractiveness
of municipal obligations in relation to other investment alternatives is
affected by changes in federal income tax rates applicable to, or the continuing
federal income tax-exempt status of, such interest income. Any proposed or
actual changes in such rates or exempt status, therefore, can significantly
affect the demand for and supply, liquidity and marketability of municipal
obligations, which, in turn, could affect a Fund's ability to acquire and
dispose of municipal obligations at desirable yield and price levels.
YEAR 2000 RISKS - ALL FUNDS
Like other investment companies and financial service providers, the Funds 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 handle 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, none of whom are affiliated
with the Adviser or Administrators. 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. In addition,
the issuers of securities the Fund owns could have Year 2000 problems. For
instance, the issuers' ability to make timely payments of dividends or interest
and principal or to continue their operations or services may be impaired by the
inadequate preparation of computer systems for the Year 2000. This may adversely
affect the market values of securities of specific issuers or of securities
generally, which, in turn, could impact the Fund's performance. Also, it is
possible that the normal operations of the Funds will in any event
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 13
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
be disrupted significantly by the failure of communications and public utility
companies, governmental entities, financial processors or others to perform
their services as a result of the Year 2000 Issue.
Year 2000 risks may be greater for foreign issuers than domestic
issuers.
ADDITIONAL RISKS THAT APPLY TO PARTICULAR TYPES OF INVESTMENTS
ASSET-BACKED SECURITIES - BOND FUNDS, OTHER THAN 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 falling interest
rates, the rate of prepayment tends to increase, and 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 market for other types of securities, which could result in the
Funds' experiencing difficulty in valuing or liquidating such securities.
CONVERTIBLE SECURITIES - ALL FUNDS, OTHER THAN COLORADO TAX-EXEMPT FUND
These Funds may invest in convertible securities, including bonds and
preferred stocks, which 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 specified price.
MORTGAGE-RELATED SECURITIES - INTERMEDIATE-TERM AND LONG-TERM BOND FUNDS
The Westcore Intermediate-Term and Long-Term Bond Funds may invest in
mortgage-backed securities (including collateralized mortgage obligations) that
represent pools of mortgage loans assembled for sale to investors by various
governmental agencies and government-related organizations, such as the
Government National Mortgage Association, the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation. Mortgage-backed
securities provide a monthly payment consisting of interest and principal
payments. Additional payments may be made out of unscheduled repayments of
principal resulting from the sale of the underlying residential property,
refinancing or foreclosure, net of fees or costs that may be incurred.
Prepayments of principal on mortgage-backed securities may tend to increase due
to refinancing of mortgages as interest rates decline. To the extent that the
Fund purchases mortgage-backed securities at a premium, mortgage foreclosures
and prepayments of principal by mortgagors (which may be made at any time
without penalty) may result in some loss of the Fund's principal investment to
the extent of the premium paid. The yield of a Fund that invests in
mortgage-backed securities may be affected by the Fund's need to reinvest
prepayments at higher or lower rates than the original investment.
- --------------------------------------------------------------------------------
14
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
Other mortgage-backed securities are issued by private companies,
generally originators of and investors in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers and
special-purpose entities. These private mortgage-backed securities may be
supported by U.S. Government mortgage-backed securities or some form of
non-government credit enhancement. Mortgage-backed securities may be affected by
prepayments of principal on the underlying loans, which generally increase as
interest rates decline; as a result, when interest rates decline, holders of
these securities normally do not benefit from appreciation in market value to
the same extent as holders of other non-callable debt securities. Further, an
issuer of an obligation may exercise its right to pay principal on the
obligation later than expected. This is more likely to happen when interest
rates rise. These events may lengthen the duration and reduce the value of these
obligations. Duration is the average time it takes to receive expected cash
flows (discounted to their present value) on a particular fixed-income
instrument. In addition, like other debt securities, the values of
mortgage-related securities, including government-related mortgage pools,
generally will fluctuate in response to market interest rates.
OTHER INVESTMENT COMPANIES - ALL FUNDS
The Funds may invest their cash balances in other investment companies
that invest in high quality, short-term debt securities. A pro rata portion of
the other investment companies' expenses will be borne by the Fund's
shareholders.
INITIAL PUBLIC OFFERINGS - ALL WESTCORE EQUITY FUNDS
Each of the Equity Funds may invest a portion of its assets in
securities of companies offering shares in IPOs. Because IPO shares frequently
are volatile in price, the Funds may hold IPO shares for a very short period of
time. This may increase the turnover of the Funds' portfolio and may lead to
increased expenses to the Funds, such as commissions and transaction costs. By
selling shares, a Fund may realize taxable gains it will subsequently distribute
to shareholders. In addition, the market for IPO shares can be speculative
and/or inactive for extended periods of time. There is no assurance that a Fund
will be able to obtain allocations of IPO shares. The limited number of shares
available for trading in some IPOs may make it more difficult for the Fund to
buy or sell significant amounts of shares without an unfavorable impact on
prevailing prices. Investors in IPO shares can be affected by substantial
dilution in the value of their shares, by sales of additional shares and by
concentration of control in existing management and principal shareholders.
The Funds' investments in IPO shares may include the securities of
unseasoned companies (companies with less than three years of continuous
operations), which presents risks considerably greater than common stocks of
more established companies. These companies may have limited operating histories
and their prospects for profitability may be uncertain. These companies may be
involved in new and evolving businesses and may be vulnerable to competition and
changes in technology, markets and economic conditions. They may be more
dependent on key managers and third parties and may have limited product lines.
REITS - ALL FUNDS, OTHER THAN THE COLORADO TAX-EXEMPT FUND
The Funds may invest in securities issued by equity and mortgage REITs,
which are real estate investment trusts. 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,
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 these
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 heavily dependent on
cash flow and are subject to the risk that borrowers may default.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 15
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS - ALL 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.
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.
SECURITIES LENDING - ALL FUNDS, OTHER THAN 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).
TAX-EXEMPT OBLIGATIONS - COLORADO TAX-EXEMPT FUND
Tax-exempt obligations in which the Westcore Colorado Tax-Exempt Fund
invests 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 tax-exempt 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 Fund and the Adviser rely on
these opinions and will not review the bases for them.
The Fund concentrates its investments in Colorado obligations. If
Colorado or any of its political subdivisions were to suffer serious financial
difficulties that might jeopardize the ability to pay its obligations, the value
of the Fund could be adversely affected.
U.S. GOVERNMENT OBLIGATIONS - ALL FUNDS
The Funds 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.
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16
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE FUNDS SPECTRUM
The spectrum below shows the Adviser's 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 Growth and Income Fund _______________
Westcore Blue Chip Fund _______________
Westcore Mid-Cap Opportunity Fund _______________
Westcore Small-Cap Opportunity Fund _______________
Westcore Long-Term Bond Fund _______________
Westcore Intermediate-Term Bond Fund ______________
Westcore Colorado Tax-Exempt Fund ______________
</TABLE>
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 17
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
HOW TO INVEST AND OBTAIN INFORMATION
<TABLE>
<CAPTION>
HOW TO CONTACT WESTCORE FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
IN PERSON BY REGULAR MAIL BY EXPRESS, CERTIFIED OR REGISTERED MAIL BY TELEPHONE
[PERSON GRAPHIC] [LETTER GRAPHIC] [PLANE GRAPHIC] [TELEPHONE GRAPHIC]
<S> <C> <C> <C>
1-800-392-CORE (2673):
Westcore Funds Westcore Funds Westcore Funds
370 17th Street, Suite P.O. Box 8319 C/O BFDS WESTCORE INVESTOR SERVICES
3100 Boston, MA 02266- 66 Brooks Drive Weekdays: 7 a.m. to 6 p.m. mountain
Denver, CO 80202 8319 Boston, MA 02184 time
-----------------------------
WESTCORE AUTOMATED SERVICE LINE
24 hours a day, seven days a week
- Access account information
- Place automatic transactions
- Order duplicate statements, tax
forms or additional checkbooks for
the BlackRock Money Market
Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------
ONLINE
[COMPUTER GRAPHIC]
<S>
www.westcore.com:
WESTCORE
TRANS@CTION CENTER
24 hours a day, seven
days a week
- Access account
information
- Place automatic
transactions
- ---------------------------------
</TABLE>
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18
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
HOW TO PURCHASE, EXCHANGE AND REDEEM
This section explains how to purchase, exchange and redeem your Westcore shares.
It also explains various services and features offered in connection with your
account. Please call us at 1-800-392-CORE (2673) if you have any questions or to
obtain a New Account Application.
<PAGE>
PURCHASING SHARES
You may purchase additional shares through any of the options below or in person
at the location listed on page 18. In addition, if you are an existing
shareholder, you may open a new account with identical registration and account
options in another fund offered by this prospectus by any of these methods.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
BY MAIL BY TELEPHONE BY ONLINE ACCESS
[LETTER GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC]
<S> <C> <C>
OPENING A NEW ACCOUNT If you are an existing If you are an existing
Read this prospectus. shareholder, you may shareholder, you may
purchase additional shares purchase additional shares
Send a completed application with your by telephone. online.
check and mail to appropriate address.
Call 1-800-392-CORE (2673) Access the 24-hour Westcore
ADDING TO YOUR EXISTING ACCOUNT to speak with an Investor Trans@ction Center located
Complete the tear-off investment slip Service Representative from at www.westcore.com.
from your last statement and mail with 7 a.m. to 6 p.m. mountain
your check to the appropriate address. time or use the 24-hour
Westcore Automated Service
Or, send your check and a written request Line.
following instructions on page 24 and
mail to the appropriate address.
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For more information on automatic telephone and online
transactions, please see "Additional Information on
Telephone and Online Service" on page 23.
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<CAPTION>
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BY AUTOMATIC BY WIRE
INVESTMENT PLAN [WIRE GRAPHIC]
[CALENDAR GRAPHIC]
<S> <C>
Complete the Automatic Investment You may purchase Westcore shares
Plan Section on your application by wire transfer from your bank
to have money automatically account to your Westcore account.
withdrawn from your bank account There is a $1,000 minimum for
monthly, quarterly or annually. purchases by wire.
The minimum automatic investment To place a purchase by wire,
must be the equivalent of at least please call 1-800-392-CORE (2673)
$50 per month. to speak with an Investor Service
Representative from 7 a.m. to 6
To add this option to your p.m. mountain time.
account, please call
1-800-392-CORE (2673) or access WIRE TO:
www.westcore.com for the State Street Bank
appropriate form. ABA #011000028
DDA #99046344
ATTN: Custody and Shareholder
Services
Fund Name
Your Account Number
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19
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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IMPORTANT NOTES ON PURCHASING SHARES:
- - When you purchase shares, your request will be processed at the next net
asset value (NAV) calculated after your order is received and accepted.
- - Please make your check payable to Westcore Funds in U.S. dollars drawn on a
U.S. bank.
- - Cash, credit card, third-party checks or checks drawn on foreign banks will
not be accepted for purchases.
- - If you are purchasing shares in a retirement account, please indicate
whether the purchase is a rollover or a current or prior-year contribution.
- - After receipt of your order by wire, telephone or online, your bank account
will be debited the next business day for wire transfers and the second
business day for electronic fund transfers.
- - If a check does not clear your bank, Westcore reserves the right to cancel
the purchase.
- - If Westcore is unable to debit your predesignated bank account on the day
of purchase, they may make additional attempts or cancel the purchase.
- - Westcore reserves the right to reject any order.
- - 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. Westcore (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 Westcore.
<TABLE>
<CAPTION>
INVESTMENT MINIMUMS
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AMOUNT
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<S> <C>
To open a new account $1,000
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To open a new retirement or certain other accounts $250
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To open an Automatic Investment Plan account $0
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To add to any type of account $50
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</TABLE>
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20
<PAGE>
EQUITY AND BOND FUNDS PROSPECTUS
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EXCHANGING SHARES
You may exchange your Westcore shares for shares of other Westcore Funds offered
in this prospectus or the BlackRock Money Market Portfolio* through any of the
options below. You may also place an exchange in person at the location listed
on page 18. In addition, if you are an existing shareholder, you may exchange
into a new account copying your existing account registration and options by any
of these methods.
* BlackRock Money Market Portfolio is a no-load money market fund advised by
BlackRock Advisors, Inc., sub-advised by BlackRock Institutional Management
Corporation and distributed by BlackRock Distributors, Inc.
<TABLE>
<CAPTION>
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BY MAIL BY TELEPHONE BY ONLINE ACCESS AUTOMATICALLY
[MAIL GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC] [CALENDAR GRAPHIC]
<S> <C> <C> <C>
Send a written request following Call 1-800-392-CORE (2673) to Access the 24-hour Westcore Call 1-800-392-CORE (2673) to
instructions on page 24 and mail speak with an Investor Service Trans@ction Center located at receive instructions for
to the appropriate address. Representative from 7 a.m. to 6 www.westcore.com. automatically exchanging shares
p.m. mountain time or use the between funds on a monthly,
24-hour Westcore Automated quarterly or annual basis.
Service Line.
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For more information on automatic telephone and online
transactions, please see "Additional Information on
Telephone and Online Service" on page 23.
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</TABLE>
Important notes on exchanging shares:
- - Exchanges must meet the minimum investment requirements described on
page 20.
- - Exchanges between accounts will be accepted only if registrations are
identical.
- - If the shares you are exchanging are held in certificate form, the
certificate must be returned with or before your exchange request.
- - Please be sure to read the prospectus for the Fund into which you are
exchanging.
- - An exchange represents the sale of shares from one fund and the purchase of
shares of another fund. This may produce a taxable gain or loss in your
non-tax-deferred account.
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Questions? Call 1-800-392-CORE (2673) 21
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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REDEEMING SHARES
You may redeem your Westcore shares by any of the options below or in person at
the location listed on page 18.
<TABLE>
<CAPTION>
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BY MAIL BY TELEPHONE BY ONLINE ACCESS
[LETTER GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC]
<S> <C> <C>
Send a written request If you are an existing If you are an existing
following instructions on shareholder, you may shareholder, you may redeem
page 24 and mail to the redeem your shares by your shares online.
appropriate address. telephone.
Access the 24-hour Westcore
Call 1-800-392-CORE Trans@ction Center located
(2673) to speak with an at www.westcore.com.
Investor Service
Representative from 7 a.m.
to 6 p.m. mountain time or
use the 24-hour Westcore
Automated Service Line.
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For more information on automatic telephone and online
transactions, please see "Additional Information on
Telephone and Online Service" on page 23.
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<CAPTION>
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BY SYSTEMATIC WITHDRAWAL BY WIRE
PLAN [WIRE GRAPHIC]
[CALENDAR GRAPHIC]
<S> <C>
You may redeem shares You may redeem Westcore
automatically (in any multiple of shares by wire transfer from
$50) monthly, quarterly or your Westcore account to your
annually. bank account.
A systematic withdrawal plan There is a $1,000 minimum and
may be established if the shares you must have established bank
in your Fund are worth at least instructions to place wire
$10,000. redemptions.
To add this option to your
account, please call 1-800-392- To arrange a wire redemption,
CORE (2673) or access please call 1-800-392-CORE
www.westcore.com for the (2673) to speak with an Investor
appropriate form. Service Representative from 7
a.m. to 6 p.m. mountain time.
To add bank instructions to your
account, please call 1-800-392-
CORE (2673) or access
www.westcore.com for the
appropriate form.
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</TABLE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
Important notes on redeeming shares:
- - You may redeem your Westcore shares on any business day that the New York
Stock Exchange is open.
- - Generally, redemption proceeds will be sent by check to the shareholders'
address of record within seven days after receipt of a valid redemption
request.
- - A wire transfer will be sent directly into your designated bank account the
next business day after receipt of your order, and an electronic funds
transfer will be sent the second business day after receipt of your order.
- - If the shares you are redeeming are held in certificate form, you must
return the certificate with or before your redemption request.
- - If the shares you are redeeming were purchased by check, telephone,
computer or through the Automatic Investment Plan, Westcore may delay the
mailing of your redemption check for up to 15 days from the day of purchase
to allow the purchase to clear.
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22
<PAGE>
ADDITIONAL INFORMATION ON TELEPHONE AND ONLINE SERVICE
- - All shareholders (except for certain accounts opened through Service
Organizations and certain retirement accounts) are automatically
granted automatic telephone and online transaction privileges unless
they decline them explicitly on their account application or in writing
to Westcore Funds.
- - Shareholders can follow the instructions provided at the Westcore
Automated Service Line and Westcore Trans@ction Center to access these
services using a personal identification number.
- - Automatic telephone and online purchases and redemptions are completed
by electronic funds transfer from your bank account to your Westcore
Account. (Wire transfer is not available for automatic telephone or
online transactions.) To establish this privilege, please complete the
"Bank Instructions" section of your account application. You may also
call 1-800-392-CORE (2673) or access www.westcore.com for the
appropriate form.
- - Automatic telephone and online REDEMPTIONS are not available for IRA,
business or fiduciary accounts. In addition, automatic telephone and
online EXCHANGES are not available for business or fiduciary accounts.
- - There is a $25,000 daily maximum for each account for each separate
type of automatic telephone and online transaction (purchases,
exchange-in, exchange-out and redemptions).
- - It may be difficult to reach the Funds by telephone or online during
periods of unusual market activity. If this happens, you may transact
on your account by mail as described in this prospectus.
- - The Funds or their agents may, in case of emergency, temporarily
suspend telephone and online transactions and other shareholder
services.
SECURITY ISSUES
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. However, shareholders may give up some level of security by
choosing to transact by telephone or online rather than by mail.
Westcore Funds has designed procedures to confirm that telephone and online
transaction requests are genuine. Westcore Funds and their agents will not be
responsible for any losses resulting from unauthorized telephone or online
transactions when these procedures are followed, and Westcore has a reasonable
belief that the transaction is genuine.
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Questions? Call 1-800-392-CORE (2673) 23
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[Mountain Logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
GENERAL ACCOUNT POLICIES
Westcore Funds may modify or terminate account policies, services and features,
but, subject to the Funds' right to limit account activity or redeem
involuntarily as described below, will not materially modify or terminate them
without giving shareholders 60 days' written notice. The Funds reserve the right
to modify the general account policies 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.
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.
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 that 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 19,
a letter will be sent advising you to either bring the value of the shares held
in the account up to the minimum or 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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24
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
Limit on Account Activity
Because excessive account transactions can disrupt management of the Funds and
increase the Funds' cost for all shareholders, Westcore reserves the right to
refuse a share purchase and/or revoke an investor's exchange privilege at any
time.
Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to engage
in activities that 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. Certain
registration changes may have tax implications. Please contact your tax adviser.
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, with the
exception of automatic investment plan transactions and dividend reinvestment
transactions, a confirmation after every transaction that affects your share
balance or your account registration. 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.
Price of Fund Shares
All purchases, redemptions and exchanges will be processed at the net asset
value (NAV) next calculated after your request is received in good order by the
transfer agent or certain authorized broker-dealers, other institutions 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
(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
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Questions? Call 1-800-392-CORE (2673) 25
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
on the next business 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 and certain other investors, purchase and redemption orders will
be processed at the NAV next determined after the Service Organization (as
defined below) acting on their behalf receives the purchase or redemption order.
Westcore has authorized certain broker-dealers and other institutions to accept
on its behalf purchase and redemption orders made through a `mutual fund
supermarket'. Such authorized institutions may designate other intermediaries to
accept purchase and redemption orders on behalf of Westcore.
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 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.
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26
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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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.
<TABLE>
<CAPTION>
Distribution Schedule
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Income Dividends Capital Gains
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Funds Declared and Generally declared and
paid quarterly* paid in December
- ------------------------------------------------------------------------------------------------------------------
Bond Funds Declared and Generally 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 Taxes
Each year, the Funds distribute all or substantially all of its taxable
income, including its net capital gain (the excess of long-term capital gain
over short-term capital loss). Distributions attributable to the net capital
gain of a Fund will be taxable to you as long-term capital gain, regardless of
how long you have held your shares. Other Fund distributions (other than
exempt-interest dividends, discussed on the following page) will generally be
taxable as ordinary income. You will be subject to income tax on Fund
distributions regardless whether they are paid in cash or reinvested in
additional shares. You will be notified annually of the tax status of
distributions to you.
You should note that if you purchase shares just before a distribution,
the purchase price will reflect the amount of the upcoming distribution. You
will incur taxes on the entire amount of the distribution received, even though,
as an economic matter, you did not participate in these gains and the
distribution simply constitutes a return of capital. This is known as "buying
into a dividend." It is generally not to your advantage to purchase shares just
before a distribution.
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 on the shares.
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Questions? Call 1-800-392-CORE (2673) 27
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
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 Westcore Colorado Tax-Exempt Fund anticipates that substantially
all of its income dividends will be "exempt interest dividends," which are
exempt from federal income taxes. However, some dividends will be taxable, such
as dividends that are derived from occasional taxable investments, and
distributions of short- and long-term capital gains.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Westcore Colorado Tax-Exempt Fund generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by
the Westcore Colorado Tax-Exempt Fund may constitute an item of tax preference
for purposes of determining federal alternative minimum tax liability.
Exempt-interest dividends will also be considered along with other adjusted
gross income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
If you receive an exempt-interest dividend with respect to any share
and the share is held by you for six months or less, any loss on the sale or
exchange of the share will be disallowed to the extent of such dividend amount.
The foregoing is only a summary of certain tax considerations under
current law, which may be subject to change in the future. Shareholders who are
nonresident aliens, foreign trusts or estates, or foreign corporations or
partnerships may be subject to different United States federal income tax
treatment. You should consult your tax adviser for further information regarding
federal, state, local and/or foreign tax consequences relevant to your specific
situation.
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 (except to the limited
extent that Colorado may exempt all investment income from state 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.
State and Local Taxes
Shareholders may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply, however, to the
portions of each Fund's distributions, if any, that are attributable to interest
on Federal Securities or interest on securities of the particular state or
localities within the state. Shareholders should consult their tax advisers
regarding the tax status of distributions in their state and locality.
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28
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Denver Investment Advisors LLC, with principal offices at 1225 17th Street, 26th
Floor, Denver, Colorado 80202, serves as the investment adviser to the Funds.
The Adviser was organized in 1994. It is owned by the principal officers and
employees of its predecessor firm. As of May 31, 1999, it had approximately
$10.5 billion in assets under active management, including $732 million for nine
investment company portfolios.
Denver Investment Advisors provides a continuous investment program for the
Funds, including investment research and management. The Adviser makes
investment decisions for the Funds and places orders for all purchases and sales
of the Funds' portfolio securities.
MANAGEMENT EXPENSES
For the fiscal year ended May 31, 1999, each Fund paid the Adviser an advisory
fee. The fees are set forth below and are expressed as an annual percentage of a
Fund's average daily net assets.
<TABLE>
<CAPTION>
Effective Advisory Fees for the
Fee Schedule fiscal Year Ended May 31, 1999
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<S> <C>
Westcore MIDCO Growth Fund .61%
- -------------------------------------------------------------------------------------------
Westcore Growth and Income Fund .09%
- -------------------------------------------------------------------------------------------
Westcore Blue Chip Fund .56%
- -------------------------------------------------------------------------------------------
Westcore Mid-Cap Opportunity Fund .75%*
- -------------------------------------------------------------------------------------------
Westcore Small-Cap Opportunity Fund .69%
- -------------------------------------------------------------------------------------------
Westcore Long-Term Bond Fund .21%
- -------------------------------------------------------------------------------------------
Westcore Intermediate-Term Bond Fund .31%
- -------------------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund .00%
- -------------------------------------------------------------------------------------------
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</TABLE>
* The Mid-Cap Opportunity Fund has operated for less than a full fiscal
year. The fee stated represents the maximum advisory fee.
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. Mr. Anderson works with other securities analysts of the Adviser who from
time to time purchase and sell specific securities under his supervision.
VARILYN K. SCHOCK, CFA, a Vice President and the 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.
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. Mr. Schulhof works with other securities
analysts of the Adviser who from time to time purchase and sell specific
securities under his supervision.
CHRISTIANNA WOOD, CFA, a Vice President of Denver Investment Advisors, is
primarily responsible for the day-to-day management of Westcore Mid-Cap
Opportunity Fund. Ms. Wood has been a portfolio manager of small- to mid-cap
companies for over 17 years, and has been with Denver Investment Advisors since
1996.
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Questions? Call 1-800-392-CORE (2673) 29
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
JEROME R. POWERS, CFA, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore
Intermediate-Term Bond and Long-Term Bond Funds since October 1, 1997. He has
been with the Adviser since 1997 and has been active in the management of fixed-
income securities for 18 years.
THOMAS B. STEVENS, CFA, 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 May 28, 1999. Mr. Stevens has 29 years' experience in the
institutional bond market and has been with the Adviser since 1986.
CO-ADMINISTRATORS
ALPS Mutual Fund Services, Inc. and Denver Investment Advisors serve as
co-administrators to the Funds and receive fees in such capacity. 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.
- --------------------------------------------------------------------------------
30
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLES ARE INTENDED TO HELP YOU UNDERSTAND EACH
FUND'S FINANCIAL PERFORMANCE FOR THE PAST 5 YEARS OR, IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS. CERTAIN INFORMATION REFLECTS FINANCIAL
RESULTS FOR A SINGLE FUND SHARE. THE TOTAL RETURNS IN THE TABLE REPRESENT
THE RATE THAT AN INVESTOR WOULD HAVE EARNED OR LOST ON AN INVESTMENT IN
EACH FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS). THIS
INFORMATION HAS BEEN AUDITED BY DELOITTE & TOUCHE LLP, WHOSE REPORT, ALONG
WITH THE FUNDS' FINANCIAL STATEMENTS, ARE INCLUDED IN THE ANNUAL REPORT,
WHICH IS AVAILABLE UPON REQUEST.
WESTCORE MIDCO GROWTH FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $20.54 $20.92 $22.90 $17.12 $16.09
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) (0.23) (0.17) (0.15) (0.08) 0.00
Net realized and unrealized
gain/(loss) on investments 2.22 3.03 1.19 6.58 1.56
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 1.99 2.86 1.04 6.50 1.56
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income 0.00 0.00 0.00 0.00 0.00
Distributions from net realized (2.50) (3.24) (3.02) (0.72) (0.53)
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.50) (3.24) (3.02) (0.72) (0.53)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.03 $20.54 $20.92 $22.90 $17.12
TOTAL RETURN 11.87% 15.10% 5.27% 38.62% 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $277,924 $565,293 $590,008 $656,490 $401,760
Ratio of expenses to average
net assets 1.15% 1.13% 1.14% 1.08% 0.94%
Ratio of expenses to average
net assets without fee waivers 1.19% 1.13% 1.14% 1.10% 0.96%
Ratio of net income/(loss) to
average net assets (0.63%) (0.71%) (0.70%) (0.42%) (0.03%)
Ratio of net investment
income/(loss) to average net (0.68%) (0.71%) (0.71%) (0.44%) (0.05%)
assets without fee waivers
Portfolio turnover rate (1) 116.46% 75.79% 60.78% 62.83% 50.19%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$472,523,632 and $816,019,036, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 31
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE GROWTH AND INCOME FUND (1)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999(3) 1998 1997 1996 1995
------- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $13.74 $13.03 $12.32 $10.50 $10.62
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.00(4) 0.01 0.07 0.15 0.20
Net realized and unrealized
gain/(loss) on investments 0.66 2.54 2.19 2.57 0.15
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.66 2.55 2.26 2.72 0.35
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.01) (0.07) (0.11) (0.24) (0.21)
Distributions from net realized (2.09) (1.77) (1.44) (0.66) (0.26)
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.10) (1.84) (1.55) (0.90) (0.47)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.30 $13.74 $13.03 $12.32 $10.50
TOTAL RETURN 6.25% 20.74% 19.71% 27.25% 3.73%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $12,789 $15,160 $20,725 $25,387 $27,029
Ratio of expenses to average
net assets 1.15% 1.15% 1.15% 1.22% 1.17%
Ratio of expenses to average
net assets without fee waivers 1.75% 1.71% 1.56% 1.51% 1.22%
Ratio of net income/(loss) to
average net assets 0.02% 0.40% 0.75% 1.34% 2.09%
Ratio of net investment
income/(loss) to average net (0.58%) (0.16%) 0.33% 1.05% 2.04%
assets without fee waivers
Portfolio turnover rate (2) 72.59% 41.40% 39.80% 88.31% 81.14%
- ------------------------------------------------------------------------------------------------------------------------------------
</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) 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 period ended May 28, 1999, were
$9,324,065 and $11,974,565, respectively.
(3) Per share amounts calculated based on the average shares outstanding during
the period.
(4) Less than $.005 per share.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
- --------------------------------------------------------------------------------
32
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE BLUE CHIP FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $18.81 $18.15 $17.41 $14.70 $12.70
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.04 0.13 0.19 0.25 0.23
Net realized and unrealized
gain/(loss) on investments 1.07 4.66 3.65 4.03 2.12
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 1.11 4.79 3.84 4.28 2.35
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.07) (0.14) (0.22) (0.27) (0.16)
Distributions from net realized (2.62) (3.99) (2.88) (1.30) (0.19)
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.69) (4.13) (3.10) (1.57) (0.35)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.23 $18.81 $18.15 $17.41 $14.70
TOTAL RETURN 7.42% 29.53% 24.28% 30.48% 19.03%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $69,354 $72,477 $66,450 $68,286 $52,545
Ratio of expenses to average
net assets 1.15% 1.15% 1.15% 1.10% 1.01%
Ratio of expenses to average
net assets without fee waivers 1.25% 1.23% 1.21% 1.25% 1.06%
Ratio of net income/(loss) to
average net assets 0.19% 0.60% 1.02% 1.52% 1.78%
Ratio of net investment
income/(loss) to average net 0.09% 0.52% 0.97% 1.38% 1.73%
assets without fee waivers
Portfolio turnover rate (1) 73.39% 48.50% 43.47% 65.11% 61.72%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$48,287,791 and $55,786,517, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 33
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE MID-CAP OPPORTUNITY FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ---------------------------
- ---------------------------------------------------------------
1999
----
- ---------------------------------------------------------------
<S> <C>
Net asset value
beginning of the period $10.00
- ---------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) (0.01)
Net realized and unrealized
gain/(loss) on investments 1.06
- ---------------------------------------------------------------
Total income/(loss) from 1.05
investment operations
- ---------------------------------------------------------------
DISTRIBUTIONS
- ---------------------------------------------------------------
Dividends from net investment
income 0.00
Distributions from net realized
gain on investments 0.00
- ---------------------------------------------------------------
Total distributions 0.00
- ---------------------------------------------------------------
Net asset value, end of period $11.05
TOTAL RETURN 10.50%
- ---------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $2,585
Ratio of expenses to average
net assets 1.25%**
Ratio of expenses to average
net assets without fee waivers 5.33%**
Ratio of net income/(loss) to
average net assets (0.11%)**
Ratio of net investment
income/(loss) to average net (4.19%)**
assets without fee waivers
Portfolio turnover rate (1) 71.65%
- ---------------------------------------------------------------
</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 period ended May 28, 1999, were
$4,245,771 and $1,737,775 respectively.
* Year ended May 28 for 1999.
** Annualized
- --------------------------------------------------------------------------------
34
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE SMALL-CAP OPPORTUNITY FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $26.71 $23.87 $21.35 $15.95 $14.97
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.08 0.01 0.03 0.04 0.09
Net realized and unrealized
gain/(loss) on investments (5.35) 6.83 3.37 5.86 1.11
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from (5.27) 6.84 3.40 5.90 1.20
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.05) (0.03) (0.02) (0.06) (0.10)
Distributions from net realized (1.21) (3.97) (0.86) (0.44) (0.12)
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.26) (4.00) (0.88) (0.50) (0.22)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.18 $26.71 $23.87 $21.35 $15.95
TOTAL RETURN (19.72%) 30.40% 16.28% 37.49% 8.15%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $88,635 $61,069 $35,962 $23,951 $9,703
Ratio of expenses to average
net assets 1.30% 1.30% 1.30% 1.30% 1.27%
Ratio of expenses to average
net assets without fee waivers 1.63% 1.66% 1.69% 2.20% 2.77%
Ratio of net income/(loss) to
average net assets 0.37% 0.03% 0.11% 0.24% 0.61%
Ratio of net investment
income/(loss) to average net 0.04% (0.33%) (0.28%) (0.67%) (0.89%)
assets without fee waivers
Portfolio turnover rate (1) 82.47% 78.48% 77.73% 47.83% 59.17%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$107,762,418 and $65,207,999, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended May
28 for 1999.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673) 35
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE LONG-TERM BOND FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $10.36 $9.67 $9.59 $9.87 $9.22
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.57 0.60 0.62 0.61 0.59
Net realized and unrealized
gain/(loss) on investments (0.43) 0.96 0.26 (0.27) 0.66
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.14 1.56 0.88 0.34 1.25
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.57) (0.60) (0.63) (0.62) (0.60)
Distributions from net realized (0.06) (0.27) (0.17) 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.63) (0.87) (0.80) (0.62) (0.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.87 $10.36 $9.67 $9.59 $9.87
TOTAL RETURN 1.21% 16.63% 9.40% 3.41% 14.37%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $21,789 $18,466 $20,160 $25,070 $33,440
Ratio of expenses to average
net assets 0.95% 0.95% 0.95% 0.90% 0.94%
Ratio of expenses to average
net assets without fee waivers 1.22% 1.23% 1.15% 1.07% 0.99%
Ratio of net income/(loss) to
average net assets 5.47% 5.87% 6.37% 6.07% 6.54%
Ratio of net investment
income/(loss) to average net 5.21% 5.58% 6.18% 5.90% 6.49%
assets without fee waivers
Portfolio turnover rate (1) 15.97% 11.05% 27.76% 33.10% 25.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$7,158,147 and $3,218,902, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999
- --------------------------------------------------------------------------------
36
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE INTERMEDIATE-TERM BOND FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $10.51 $10.23 $10.10 $10.27 $10.02
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.61 0.61 0.60 0.60 0.58
Net realized and unrealized
gain/(loss) on investments (0.24) 0.28 0.13 (0.17) 0.27
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.37 0.89 0.73 0.43 0.85
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.61) (0.61) (0.60) (0.60) (0.60)
Distributions from net realized 0.00 0.00 0.00 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.61) (0.61) (0.60) (0.60) (0.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.27 $10.51 $10.23 $10.10 $10.27
TOTAL RETURN 3.54% 8.88% 7.43% 4.26% 8.93%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $41,155 $50,159 $63,169 $83,039 $97,619
Ratio of expenses to average
net assets 0.85% 0.85% 0.85% 0.81% 0.77%
Ratio of expenses to average
net assets without fee waivers 1.01% 0.98% 0.97% 0.92% 0.80%
Ratio of net income/(loss) to
average net assets 5.72% 5.77% 5.81% 5.78% 5.86%
Ratio of net investment
income/(loss) to average net 5.57% 5.65% 5.68% 5.67% 5.83%
assets without fee waivers
Portfolio turnover rate (1) 24.68% 23.45% 27.47% 71.97% 60.86%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$10,907,758 and $19,558,326, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE 37
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
WESTCORE COLORADO TAX-EXEMPT FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
---------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $11.06 $10.78 $10.61 $10.70 $10.52
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income/(loss) 0.47 0.50 0.50 0.52 0.52
Net realized and unrealized
gain/(loss) on investments (0.05) 0.28 0.17 (0.10) 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.42 0.78 0.67 0.42 0.72
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income (0.47) (0.50) (0.50) (0.51) (0.54)
Distributions from net realized 0.00 0.00 0.00 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.47) (0.50) (0.50) (0.51) (0.54)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.01 $11.06 $10.78 $10.61 $10.70
TOTAL RETURN 3.80% 7.32% 6.46% 3.97% 7.16%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $45,506 $31,501 $21,348 $13,992 $10,792
Ratio of expenses to average
net assets 0.53% 0.50% 0.50% 0.44% 0.42%
Ratio of expenses to average
net assets without fee waivers 1.09% 1.17% 1.21% 1.43% 1.62%
Ratio of net income/(loss) to
average net assets 4.21% 4.54% 4.73% 4.87% 5.03%
Ratio of net investment
income/(loss) to average net 3.65% 3.87% 4.02% 3.88% 3.83%
assets without fee waivers
Portfolio turnover rate (1) 12.12% 24.94% 30.78% 10.23% 3.15%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999, were
$19,692,877 and $4,530,137, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999
- --------------------------------------------------------------------------------
38
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
APPENDIX I
PRIOR PERFORMANCE OF INVESTMENT ADVISER FOR GROWTH AND INCOME INVESTING
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 the Investment
Adviser's growth and income-investing composite.
The table on page A-2 includes historical performance data of the
Investment Adviser for the only actual discretionary accounts 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 commingled account.
For the period from October 1, 1995, through June 30, 1997, performance
reflects that of the Growth and Income Fund. Subsequent to June 30, 1997,
the performance also includes that of separately managed account(s) advised
by the Investment Adviser. The Investment Adviser's Growth and Income
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 Adviser in
managing substantially similar accounts 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. The performance presentation is not audited.
The commingled account and separately managed accounts whose performance is
reflected on the following page 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 and
separately managed accounts could have been adversely affected if the
accounts 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 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-1
<PAGE>
[Mountain Logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
INVESTMENT ADVISER'S GROWTH AND INCOME PERFORMANCE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Growth Assets Included in
and Income Fund Investment Adviser's Growth
(formerly Westcore Adviser's Growth and Income
Equity Income and Income Performance(1) Standard & Poor's
Year(1) Fund)(2) Performance(2) ($ thousands) 500 Index(3)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1989 26.36% 25.53% $49,554 31.61%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1990 (2.80)% (3.67)% $42,455 (3.05)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1991 31.21% 42.51% $58,368 30.46%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1992 4.96% 12.09% $63,106 7.63%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1993 11.33% 16.55% $72,620 10.08%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1994 (8.39%) (4.29)% $69,021 1.32%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1995 22.45% 29.53% $25,125 37.58%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1996 23.25% 22.85% $20,294 26.00%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1997 27.25% 27.84% $41,203 33.36%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1998 6.63% 8.74% $42,000 28.58%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1999 11.99% 10.28% $47,097 12.38%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Compounded
Annual Return For
5 Years Ended
June 30, 1999 17.37% 20.00% -- 27.85%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Compounded
Annual Return For
10 Years Ended
June 30, 1999 13.18% 16.42% -- 18.77%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All periods are ended December 31 (and assets are provided at that date)
except 1999 figures are for period ended (and assets at) June 30, 1999,
and are not annualized.
(2) Annual total return is presented for each year ended December 31 except
for period ended June 30, 1999, and compounded annual return is presented
for each period, net of expenses. The performance of the Westcore Growth
and Income Fund reflects voluntary fee waivers and/or expense
reimbursements by the adviser and administrators of the Westcore Growth
and Income Fund. These waivers and/or reimbursements may be modified or
terminated. The Investment Adviser's Growth and Income performance has
been restated so that each year's expenses reflect total expenses (before
waivers) that were applicable to the Westcore Growth and Income Fund for
the fiscal year ended immediately following that year.
(3) Annual total return is presented for each year ended December 31 except
for period ended June 30, 1999, 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.
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A-2
<PAGE>
EQUITY & BOND FUNDS PROSPECTUS
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[Black and white photograph of mountain and trees]
APPENDIX II
BOND 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; may be in default.
Con Bonds for which the security depends upon completion of
some act; rated conditionally.
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
CCC, capacity to meet required interest and principal
CC, C payments. BB - lowest degree of speculation, C -
highest degree of speculation. Quality and protective
characteristics outweighed by large uncertainties or
major risk exposure to adverse conditions.
D In default.
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Questions? Call 1-800-392-CORE (2673) B-1
<PAGE>
[Mountain Logo] WESTCORE FUNDS
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[BACK COVER]
WHERE TO FIND MORE INFORMATION
More Fund information is available to you upon request and without charge:
ANNUAL AND SEMI-ANNUAL REPORT
The Annual and Semi-Annual Reports provide additional information about the
Funds' investments, performance and portfolio holdings. The Annual Report also
contains a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI includes additional information about the Funds' investment policies,
organization and management. It is legally part of this prospectus (it is
incorporated by reference).
Investors can get free copies of the Funds' Annual Report, Semi-Annual Report or
SAI. They may also request other information about the Funds and make
shareholder inquiries.
Write to:
Westcore Funds
370 17th Street
Suite 3100
Denver, CO 80202
By phone:
1-800-392-CORE (2673)
E-mail: www.westcore.com
Information about the Funds (including the Funds' SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, DC. Information about the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. Reports and other information
about the Funds are available on the SEC's Internet site at www.sec.gov. Copies
of this information may be obtained, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC, Washington, DC 20549-6009.
The Westcore Funds Investment Company Act File No. is 811-3373
Funds distributed by ALPS Mutual Funds Services, Inc., member NASD.
WC110
<PAGE>
[FRONT COVER]
[MOUNTAIN LOGO]
WESTCORE FUNDS
PROSPECTUS
October 1, 1999
WESTCORE FUNDS
Westcore International Equity Fund
Westcore Small-Cap Growth Fund
Westcore Select Fund
-------------------------------------------------------------
Westcore Funds are managed by Denver Investment Advisors LLC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUNDS' SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGES
<S> <C>
RISK/RETURN SUMMARY
Westcore Funds............................................................. 1
Fees and Expenses of the Funds............................................. 4
TYPES OF INVESTMENT RISK
HOW TO INVEST AND OBTAIN INFORMATION
How to Contact Westcore Funds.............................................. 6
Purchasing Shares..........................................................13
Exchanging Shares..........................................................15
Redeeming Shares...........................................................17
General Account Policies...................................................18
Additional Information on Telephone Service................................19
Distributions and Taxes....................................................21
Management of the Funds....................................................22
</TABLE>
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RISK/RETURN SUMMARY
WESTCORE INTERNATIONAL EQUITY FUND
The Westcore International Equity Fund is designed for investors
seeking long-term growth of capital and who can tolerate the risks
associated with investments in international common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE INTERNATIONAL EQUITY FUND?
WESTCORE INTERNATIONAL EQUITY FUND seeks long-term growth of capital
primarily through investments in international companies.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE INTERNATIONAL EQUITY
FUND?
WESTCORE INTERNATIONAL EQUITY FUND invests primarily in the common
stock of international companies of all sizes. Under normal
circumstances, the Fund invests at least 65% of its assets in common
stocks of foreign companies in at least five different developed
countries. However, at times the Fund may invest in fewer than five
developed countries or even a single developed country.
The portfolio manager emphasizes those developed countries that appear
strongest from a macro-economic view based on the investment adviser's
analysis. Within each country, the manager performs intensive research
to identify companies in businesses and economic sectors with
attractive growth prospects. To identify attractive stocks for the
Fund, the manager studies a company's business by analyzing its
financial information, industry, markets and competitors, visiting
their operations and/or interviewing management. Generally, a company
is considered for the Fund if the investment adviser believes the
company's management team has the ability to execute their business
plans and increase their market share within their country or
internationally though innovative products or services, strong balance
sheets and/or the access to money to finance their growth. Stocks may
be sold when conditions have changed and the company's prospects and/or
valuations are no longer attractive.
The Fund considers foreign companies to include those domiciled outside
the United States, deriving at least half of their revenue from sales
or production outside the United States, or with the principal trading
market of their securities outside the United States. The Fund
considers developed countries to include Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore,
Spain, Sweden, Switzerland, and the United Kingdom. Emerging market
countries are considered to be those countries not listed as developed
countries above.
The Fund may enter into foreign currency exchange transactions from
time to time to hedge the risks of fluctuations in foreign currencies.
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WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE INTERNATIONAL EQUITY
FUND?
As with any equity fund, the value of your investment will fluctuate
over short, or even extended periods of time in response to overall movements in
the stock market (market risk). In addition, the Fund is subject to the
additional risk that the particular types of stocks held by the Fund will
underperform other types of stocks and may decline in value (management risk).
Therefore, you could lose money by investing in the Fund.
Westcore International Equity Fund's exposure to foreign markets can
regularly effect the net asset value (NAV) and total return of the Fund due to
fluctuations in currency exchange rates or changing political or economic
conditions in a particular country (foreign risk). Emerging market securities
are particularly subject to foreign risks. Therefore the value of this Fund may
be more volatile than equity funds investing only in domestic companies.
The Fund may use a variety of currency hedging techniques to manage
exchange rate risk. The manager believes the use of these techniques will
benefit the Fund, however the Fund's performance could be worse if the manager's
judgement proves incorrect.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
-4-
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RISK/RETURN SUMMARY
WESTCORE SMALL-CAP GROWTH FUND
The Westcore Small-Cap Growth Fund is designed for investors seeking
long-term growth of capital and who can tolerate the risks associated with
investments in common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE SMALL-CAP GROWTH FUND?
WESTCORE SMALL-CAP GROWTH FUND seeks long-term growth of capital
primarily through investments in small companies with growth potential.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE SMALL-CAP GROWTH FUND?
WESTCORE SMALL-CAP GROWTH FUND invests primarily in the common stock of
small companies which appear to have above average revenue and earnings
growth potential. This includes, but is not limited to Initial Public
Offerings, ("IPO"), a corporation's first offering of stock to the
public. Small companies may benefit from factors such as new products
and services and more entrepreneurial management. Small company stocks
may have higher return/risk potential than larger company stocks.
The portfolio manager of the Westcore Small-Cap Growth Fund performs
intensive research to identify companies in businesses and economic
sectors with attractive growth prospects. To identify attractive stocks
for the Fund, the manager studies a company's business by analyzing its
financial information, industry, markets and competitors, frequently
visiting their operations and/or interviewing management. Generally,
the company is considered for the Fund if the investment adviser
believes the company's management team has the ability to execute their
business plans and increase their market share with innovative products
or services, strong balance sheets and/or the access to money to
finance their growth. Stocks may be sold when conditions have changed
and the company's prospects and/or valuations are no longer attractive.
Under normal market conditions at least 65% of the value of this Fund's
total assets is invested in companies with market capitalizations of
$2.5 billion or less at the time of purchase.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE SMALL-CAP GROWTH FUND?
As with any equity fund, the value of your investment will fluctuate
over short, or even extended periods of time in response to overall movements in
the stock market (market risk). In addition, the Fund is subject to the
additional risk that the particular types of stocks held by the Fund will
underperform other types of stocks and may decline in value (management risk).
Therefore, you could lose money by investing in the Fund.
Westcore Small-Cap Growth Fund is subject to the additional risk that
the stocks of smaller and newer
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issuers can be more volatile due to lack of financial resources, product
diversification and competitive strengths of larger companies. Therefore the
value of this Fund may be more volatile.
IPO shares, in particular, are subject to market risk and liquidity
risk. The price of IPO shares can be highly unstable, due to factors including
the absence of a prior public market, unseasoned trading, the small number of
shares available for trading and limited investor information. The purchase of
IPO shares may involve higher transaction costs.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
-6-
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RISK/RETURN SUMMARY
WESTCORE SELECT FUND
The Westcore Select Fund is designed for investors seeking long-term
growth of capital and who can tolerate the risks associated with investments in
common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE SELECT FUND?
WESTCORE SELECT FUND seeks long-term growth of capital primarily
through investments in companies of any size selected for their growth
potential.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE SELECT FUND?
WESTCORE SELECT FUND invests in the common stock of companies of any
size, with an emphasis on larger companies. The portfolio manager looks
for companies in attractive industries with above average revenue and
earnings growth opportunities. The Fund normally invests in a core
group of 20 to 35 common stocks. If the portfolio manager is unable to
find investments with above average revenue and earnings growth
potential, a significant portion of the Fund's assets may be in cash or
similar investments.
The portfolio manager of the Westcore Select Fund performs intensive
research to identify companies in businesses and economic sectors with
attractive growth prospects. To identify attractive stocks for the
Fund, the manager studies a company's business by analyzing its
financial information, industry, markets and competitors, frequently
visiting their operations and/or interviewing management. Generally, a
company is considered for the Fund if the portfolio manager believes
the company's management team has the ability to execute their business
plans, increase their market share and become market leaders through
innovative products or services, strong balance sheets and/or the
access to money to finance their growth. Stocks are sold when
conditions have changed and the company's prospects and/or valuations
are no longer attractive.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE SELECT FUND?
As with any equity fund, the value of your investment will fluctuate
over short, or even extended periods of time in response to overall movements in
the stock market (market risk). In addition, the Fund is subject to the
additional risk that the particular types of stocks held by the Fund will
underperform other types of stocks and may decline in value (management risk).
Therefore, you could lose money by investing in the Fund.
Westcore Select Fund may from time to time invest in fewer companies
and/or industries than other Westcore portfolios. These companies and or
industries may react similarly to certain negative market or
-7-
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[Mountain Logo] WESTCORE FUNDS
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industry conditions (concentration risk). Also the appreciation or
depreciation of a single stock may have a greater impact on net asset value
than if the Fund held a greater number of issues. Therefore the value of this
Fund may be more volatile than funds which hold a greater number of issuers.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
-8-
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FEES AND EXPENSES OF THE FUNDS
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore
International Equity Small-Cap Select
Fund Growth Fund Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly None None None
from your investment)
- ----------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
................................................................................................................
Management Fees(1) 1.00% 0.65%
................................................................................................................
Distribution Fees None None
................................................................................................................
Other Expenses(1) 3.76% 2.07%
................................................................................................................
Total Annual Fund 4.76% 2.72%
Operating Expenses
................................................................................................................
Fee Waiver and (3.46)% (1.57)%
Expense Reimbursement(1)
................................................................................................................
Net Annual Fund 1.30% 1.15%
Operating Expenses(1)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
-9-
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[Mountain Logo] WESTCORE FUNDS
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(1) The Funds are new and the Adviser and Administrators have contractually
agreed to waive a portion of the investment advisory and/or administration fees
and/or to reimburse other expenses, which are estimated, for the Small-Cap
Growth and Select Funds until at least May 31, 2000, so that Net Annual Fund
Operating Expenses will be no more than 1.30% and 1.15% for each Fund,
respectively, for the current fiscal year. You will be notified if these waivers
and/or reimbursements are discontinued after that date resulting in a material
change in the expense ratio.
- --------------------------------------------------------------------------------
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUNDS
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUNDS FOR THE TIME PERIODS
INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS AND
THAT NET ANNUAL OPERATING EXPENSES FOR ONE YEAR AND GROSS ANNUAL OPERATING
EXPENSES FOR ADDITIONAL YEARS SET FORTH IN THE TABLE ON PAGE 4 ARE INCURRED.
THE EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND
THAT THE FUNDS' OPERATING EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS
MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS YOUR COSTS WOULD BE:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Westcore
Westcore Small-Cap Westcore
International Equity Growth Select
Fund Fund Fund
--------------------------------------------------------------------------------
<S> <C> <C>
One Year $132 $117
................................................................................
Three Years $1,433 $844
--------------------------------------------------------------------------------
</TABLE>
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TYPES OF INVESTMENT RISK
The principal risks of investing in each Fund are described previously
in this prospectus. The following list provides more detail about some of those
risks, along with information on additional types of risks that may apply to the
Funds. Risks associated with particular types of investments each Fund makes are
described in this section and in the Statement of Additional Information
referred to on the back page.
GENERAL RISKS OF INVESTING IN EACH OF THE FUNDS
LIQUIDITY RISK - ALL FUNDS
Certain securities may be difficult or impossible to sell at the time
and price that the Fund would like. A Fund may have to lower the price, sell
other securities instead or forego an investment opportunity, any of which could
have a negative effect on fund management or performance. This risk applies, for
example, to variable and floating rate demand notes; variable amount demand
securities and restricted securities that the Funds may purchase; short-term
funding agreements that each Fund may purchase; and the futures contracts in
which each Fund may engage. Illiquid securities also include repurchase
agreements, securities loans and time deposits with notice/termination dates of
greater than seven days, certain municipal leases and certain securities subject
to trading restrictions because they are not registered under the Securities Act
of 1933. There may be no active secondary market for these securities. Each Fund
may invest up to 15% of its net assets at the time of purchase, in securities
that are illiquid. A domestically traded security that is not registered under
the Securities Act of 1933 will not be considered illiquid if the Adviser
determines an adequate investment trading market exists for that security.
However, there can be no assurance that a liquid market will exist for any
security at a particular time. Because illiquid and restricted securities may be
difficult to sell at an acceptable price, they may be subject to greater
volatility and may result in a loss to a Fund.
MANAGEMENT RISK - ALL FUNDS
A strategy that the Adviser uses may fail to produce the intended
results. The particular securities and types of securities a Fund holds may
underperform other securities and types of securities. There can be no assurance
a Fund will achieve its investment objective. Certain policies of each Fund,
which may not be changed without a shareholder vote, are described in the
Statement of Additional Information.
MARKET RISK - ALL FUNDS
The value of the securities in which a Fund invests may go up or down
in response to the prospects of individual companies and/or general economic
conditions. Price changes may be temporary or last for extended periods.
OTHER TYPES OF INVESTMENTS - ALL FUNDS
This prospectus describes each Fund's principal investment strategies,
and the types of securities in which each Fund principally invests. Each Fund
may, from time to time, make other types of investments and pursue other
investment strategies in support of its overall investment goal. These
supplemental investment
-11-
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strategies - and the risk involved - are described in detail in the Statement
of Additional Information, which is referred to on the back cover of this
prospectus.
PORTFOLIO TURNOVER RISKS - ALL FUNDS
The Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater expenses, which must be
borne by a Fund and its shareholders. It may also result in higher short-term
capital gains taxable to shareholders. These gains are taxable at higher rates
than long-term capital gains. Frequent trading could also mean higher brokerage
commissions and other transaction costs, which could reduce the Fund's return.
See "Financial Highlights" for the Funds' historical portfolio turnover rates.
TEMPORARY DEFENSIVE POSITIONS - ALL FUNDS
Each Fund may, from time to time, take temporary defensive positions
that are inconsistent with its principal investment strategies in attempting to
respond to adverse market, economic, political or other conditions. Such
investments include various short-term instruments. If any Fund takes temporary
position at the wrong time, the position would have an adverse impact on that
Fund's performance. The Fund may not achieve its investment objective. The Funds
reserve the right to invest all of their assets in temporary defensive
positions.
-12-
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ADDITIONAL RISKS THAT APPLY TO INVESTMENTS IN CERTAIN OF THE FUNDS
DERIVATIVE RISK - ALL FUNDS
The term derivative covers a wide number of investments, but in general
it refers to any financial instrument whose value is derived, at least in part,
from the price of another security or a specified index, asset or rate. Some
derivatives may be more sensitive to or otherwise not react in tandem with
interest rate changes or market moves, and some may be susceptible to changes in
yields or values due to their structure or contract terms. Loss may result from
a Fund's investments in options, futures, swaps, structured securities and other
derivative instruments which may be leveraged. A Fund may use derivatives to:
increase yield; hedge against a decline in principal value; invest with greater
efficiency and lower cost than is possible through direct investment; adjust the
Fund's duration; or provide daily liquidity.
Hedging is the use of one investment to offset the effects of another
investment. To the extent that a derivative is used as a hedge against an
opposite position that the Fund also holds, a loss generated by the derivative
should be substantially offset by gains on the hedged investment, and vice
versa. While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. Hedging also involves correlation risk - the risk that changes
in the value of a hedging instrument may not match those of the asset being
hedged.
To the extent that a derivative is not used as a hedge, the Fund is
directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
FOREIGN SECURITIES RISKS - ALL FUNDS
When a Fund invests in foreign securities, it will be subject to
special risks not typically associated with domestic issuers resulting from less
government regulation, less public information and less economic, political and
social stability. Foreign securities, and in particular foreign debt securities,
are sensitive to changes in interest rates. In addition, investment in
securities of foreign governments involves the risk that foreign governments may
default on their obligations or may otherwise not respect the integrity of their
debt. A Fund which invests in foreign securities will also be subject to the
diplomatic risk that an adverse change in the diplomatic relations between the
U.S. and another country might reduce the value or liquidity of investments.
Future political and economic developments, the possible imposition of
withholding taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or freezes on
the convertibility of currency, or the adoption of other governmental
restrictions might adversely affect an investment in foreign securities.
Additionally, foreign banks and foreign branches of domestic banks may be
subject to less stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements.
Foreign risks will normally be greatest when a Fund invests in issuers
located in emerging markets. Securities issued in emerging market countries, in
particular, may be more sensitive to certain economic changes and less liquid.
These countries are located in the Asia/Pacific region, Eastern Europe, Latin
and South America and Africa. In general, the securities markets of these
countries are less liquid, are subject to greater price volatility, have smaller
market capitalizations and have problems with securities registration and
custody. In addition, because the securities settlement procedures are less
developed in these countries, a
-13-
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Fund may be required to deliver securities receiving payment and also be
unable to complete transactions during market disruptions. As a result of
these and other risks, investments in these countries generally present a
greater risk of loss to a Fund.
Investment in foreign securities also involves higher costs than
investment in U.S. securities, including higher transaction and custody costs as
well as the imposition of additional taxes by foreign governments.
Each of the Funds may invest in foreign currency denominated
securities. A Fund which invests in foreign currency denominated securities will
also be subject to the risk of negative foreign currency rate fluctuations. A
change in the exchange rate between U.S. dollars and foreign currency may reduce
the value of an investment made in a security denominated in that foreign
currency. The International Equity Fund may hedge against foreign currency risk,
and the other Funds may do so on unsettled trades, but none of the funds is
required to do so.
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 Small-Cap Growth and Select 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.
Year 2000 risks may be greater for foreign issuers than domestic
issuers.
SMALL-CAP STOCK RISK - SMALL-CAP GROWTH FUND
Smaller capitalization stocks involve greater risks than those
associated with larger, more established companies. Small company stocks may be
subject to more abrupt or erratic price movements, for reasons including that
the stocks are traded in lower volume and that the issuers are more sensitive to
changing conditions and have less certain growth prospects. Also, there are
fewer market makers for these stocks and wider spreads between quoted bid and
asked prices in the over-the-counter market for these stocks. Small-cap stocks
tend to be less liquid, particularly during periods of market disruption. There
normally is less publicly available information concerning these securities.
Small companies in which the Funds may invest may have limited product lines,
markets or financial resources, or may be dependent on a small management group.
In particular, investments in unseasoned companies present risks considerably
greater than investments in more established companies.
YEAR 2000 RISKS - ALL FUNDS
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 handle only 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
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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, none of whom are affiliated with the
Adviser or Administrators. 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. In addition, the issuers of securities the Fund owns could have Year
2000 problems. For instance, the issuers' ability to make timely payments of
dividends or interest and principal or to continue their operations or
services may be impaired by the inadequate preparation of computer systems
for the Year 2000. This may adversely affect the market values of securities
of specific issuers or of securities generally, which, in turn, could impact
the Fund's performance. Also, it is possible that the normal operations of
the Funds will in any event be disrupted significantly by the failure of
communications and public utility companies, governmental entities, financial
processors or others to perform services as a result of the Year 2000 Issue.
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ADDITIONAL RISKS THAT APPLY TO PARTICULAR TYPES OF INVESTMENTS
CONVERTIBLE SECURITIES - ALL FUNDS
These Funds may invest in convertible securities, including bonds and
preferred stocks, which 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 specified price.
CASH POSITION - WESTCORE SELECT FUND ONLY
When the Fund's portfolio manager believes that market conditions are
unfavorable for profitable investing, or when he is otherwise unable to locate
attractive investment opportunities, the Fund's cash or similar investments may
increase. In other words, the Fund does no always stay fully invested in stocks.
Cash or similar investments generally are a residual - they represent the assets
that remain after the portfolio manager has committed available assets to
desirable investment opportunities. However, the portfolio manager may also
temporarily increase the Fund's cash position to protect its assets or maintain
liquidity. When the Fund's investments in cash or similar investments increase,
it may not participate in market advances or declines to the same extent that it
would if the Fund remained more fully invested in stocks.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS - ALL 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 a
forward currency exchange contract, 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.
Forward currency exchange transactions 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. In addition, 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.
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,
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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.
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.
INITIAL PUBLIC OFFERINGS - WESTCORE SMALL-CAP GROWTH FUND AND WESTCORE SELECT
FUND
Each of these Funds may invest a portion of its assets in securities of
companies offering shares in IPOs. Because IPO shares frequently are volatile in
price, the Funds may hold IPO shares for a very short period of time. This may
increase the turnover of the Funds' portfolio and may lead to increased expenses
to the Funds, such as commissions and transaction costs. By selling shares, a
Fund may realize taxable gains it will subsequently distribute to shareholders.
In addition, the market for IPO shares can be speculative and/or inactive for
extended periods of time. There is no assurance that a Fund will be able to
obtain allocations of IPO shares. The limited number of shares available for
trading in some IPOs may make it more difficult for the Fund to buy or sell
significant amounts of shares without an unfavorable impact on prevailing
prices. Investors in IPO shares can be affected by substantial dilution in the
value of their shares, by sales of additional shares and by concentration of
control in existing management and principal shareholders.
The Funds' investments in IPO shares may include the securities of
unseasoned companies (companies with less than three years of continuous
operations), which presents risks considerably greater than common stocks of
more established companies. These companies may have limited operating histories
and their prospects for profitability may be uncertain. These companies may be
involved in new and evolving businesses and may be vulnerable to competition and
changes in technology, markets and economic conditions. They may be more
dependent on key managers and third parties and may have limited product lines.
OTHER INVESTMENT COMPANIES - ALL FUNDS
The Funds may invest their cash balances in other investment companies
that invest in high quality, short-term debt securities. A pro rata portion of
the other investment companies' expenses will be borne by the Fund's
shareholders.
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REITS - ALL FUNDS
The Funds may invest in securities issued by equity and mortgage REITs,
which are real estate investment trusts. 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,
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 these
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 heavily dependent on
cash flow and are subject to the risk that borrowers may default.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS - ALL 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.
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.
U.S. GOVERNMENT OBLIGATIONS - ALL FUNDS
The Funds 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.
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WESTCORE FUNDS SPECTRUM
The spectrum below shows the Adviser's 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> <C>
Westcore International Equity Fund ____________
Westcore Small-Cap Growth Fund ____________
Westcore Select Fund ____________
</TABLE>
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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 Funds. You may obtain an Account Application by calling
1-800-392-CORE (2673).
HOW TO PURCHASE, EXCHANGE AND REDEEM
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, Express, Certified
or Registered Mail:
Westcore Funds
PMB 515
303 16th Street, Suite 016
Denver, CO 80202-5657
By Telephone:
Westcore Investor Service Representative
Weekdays 7 a.m. to 6 p.m. mountain time
1-800-392-CORE (2673)
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 Funds 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. citizens or residents.
IF YOU ARE ADDING TO AN EXISTING ACCOUNT:
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Please send a written request, following
the instructions on pg. 18, along with
the check or money order made out to
Westcore Funds at the address above.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH
TO OPEN A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
Send a written request, following the
instructions on pg. 18 and include a
check or money order made out to
Westcore Funds.
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 a Westcore
Investor Service Representative during
normal business hours.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH
TO OPEN A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
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 a Westcore Investor
Service Representative during normal
business hours.
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 on pg. 13.
To add an Automatic Investment Plan to
your existing account, please call us
for the appropriate form.
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HOW TO PURCHASE, EXCHANGE AND REDEEM (CONTINUED)
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 a Westcore Investor Service
Representative during normal business
hours for wiring instructions.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED IN THIS PROSPECTUS AND YOU WISH
TO OPEN A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
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 a
Westcore Investor Service Representative
during normal business hours.
In Person IF YOU ARE OPENING A NEW ACCOUNT IN A FUND
OFFERED IN THIS PROSPECTUS OR ADDING TO AN
EXISTING ACCOUNT:
A Westcore 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 Funds 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.
If you are purchasing shares in a retirement account (expected to be available
for these Funds on or about November 1, 1999), please indicate whether the
purchase is a rollover or a current or a prior-year contribution.
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EXCHANGING SHARES
You may exchange your Fund shares for shares of the other Funds offered in this
prospectus. Exchanges must meet the "Minimum Investments" described on pg. 18.
Exchanges between accounts will be accepted only if the registrations are
identical. 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. 18.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH
TO EXCHANGE INTO A NEW ACCOUNT WITH
IDENTICAL REGISTRATION AND ACCOUNT OPTIONS
IN ANOTHER FUND OFFERED BY THIS PROSPECTUS:
Please send a written request, following
the instructions on pg. 18.
By Telephone IF YOU ARE EXCHANGING INTO AN EXISTING
ACCOUNT:
Your account will automatically have
telephone privileges, 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 a Westcore Investor
Service Representative during normal
business hours.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH
TO EXCHANGE INTO A NEW ACCOUNT WITH
IDENTICAL REGISTRATION AND ACCOUNT OPTIONS
IN ANOTHER FUND OFFERED BY THIS PROSPECTUS:
Your account will automatically have
telephone privileges, 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 a Westcore Investor
Service Representative during normal
business hours.
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[Mountain Logo] WESTCORE FUNDS How to Invest and Obtain
Information (continued)
Automatically Call 1-800-392-CORE (2673) to receive
instructions for automatically
exchanging shares between Funds on a
monthly, quarterly or annual basis.
In Person IF YOU ARE EXCHANGING INTO A NEW ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS OR AN
EXISTING ACCOUNT:
A Westcore 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.
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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 were purchased by check, telephone or through the
Automatic Investment Plan, Westcore 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. 18.
By Telephone Your account will automatically have
telephone privileges, 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 a
Westcore Investor Service Representative
during normal business hours.
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.
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. All
dividends and distributions credited to your
account must be reinvested.
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[Mountain Logo] WESTCORE FUNDS
By Wire Call 1-800-392-CORE (2673) during normal
business hours or write Westcore Funds, PMB
515, 303 16th Street, Suite 016, Denver, CO
80202. You will need to include proper
written instructions as described on pg. 18.
There is a $1,000 minimum per transaction
made by wire.
In Person A Westcore 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 subject to the Funds' right to limit account activity or redeem
involuntarily as described below, will not materially modify or terminate them
without giving shareholders 60 days' written notice. The Funds reserve the right
to modify the general account policies from time to time or to waive them in
whole or in part for certain types of accounts.
<TABLE>
<CAPTION>
Minimum Investments Amount
<S> <C>
To open a new account $1,000
To open a new retirement or certain other
other accounts (expected to be available for
these Funds on or about November 1, 1999) $250
To open a new account with an
automatic investment plan 0
To add to any type of account 50
</TABLE>
Written Instructions
To process transactions in writing, your request should be sent to Westcore
Funds, PMB 515, 303 16th Street, Suite 016, Denver, Colorado 80202-5657 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 SERVICE
Normal business hours to speak with a Westcore Investor Service Representative
at 1-800-392-CORE (2673) are 7 a.m. - 6 p.m. mountain time, Monday through
Friday.
You must authorize, on your account application or otherwise in writing, the
ability to perform purchases and redemptions by electronic transfer from your
bank account via the telephone service.
You may choose to initiate certain transactions by telephone. Although
Westcore Funds has designed procedures to enhance security, including 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 rather than by mail. Westcore Funds has designed procedures to
confirm that telephone transaction requests are genuine. Westcore Funds and
their agents will not be responsible for any losses resulting from
unauthorized telephone transactions when these procedures are followed, and
Westcore has a reasonable belief that the transaction is genuine. It may be
difficult to reach the Funds by telephone 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 transactions and other shareholder services.
Certain telephone transaction privileges are not available for certain
retirement accounts.
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[Mountain Logo] WESTCORE FUNDS
GENERAL ACCOUNT POLICIES (CONTINUED)
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.
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 $200,000 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 that 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 18,
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 plan
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.
Limit on Account Activity
Because excessive account transactions can disrupt management of the Funds and
increase the Funds' cost for all shareholders, Westcore reserves the right to
refuse a share purchase and/or revoke an investor's exchange privilege at any
time.
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Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to engage
in activities that 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. Certain
registration changes may have tax implications. Please contact your tax adviser.
For more information call 1-800-392-CORE (2673).
Quarterly Shareholder Statements and Reports
Westcore Funds will send you a shareholder statement quarterly and, with the
exception of automatic investment plan transactions and dividend reinvestment
transactions, a confirmation after every transaction that affects your share
balance or your account registration. 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.
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, other
institutions 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 (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, other institutions
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 business 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.
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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.
In the case of participants in certain employee benefit plans investing in
certain Funds and certain other investors, purchase and redemption orders will
be processed at the NAV next determined after the Service Organization (as
defined below) acting on their behalf receives the purchase or redemption order.
Westcore has authorized certain broker-dealers and other institutions to accept
on its behalf purchase and redemption orders made through a "mutual fund
supermarket." Such authorized institutions may designate other intermediaries to
accept purchase and redemption orders on behalf of Westcore.
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 of 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.
DISTRIBUTIONS AND TAXES
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. Income dividends are declared
and paid annually and capital gain dividends are generally declared and paid in
December.
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
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[Mountain Logo] WESTCORE FUNDS
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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 Taxes
Each year, the Funds distribute all or substantially all of its taxable
income, including its net capital gain (the excess of long-term capital gain
over short-term capital loss). Distributions attributable to the net capital
gain of a Fund will be taxable to you as long-term capital gain, regardless of
how long you have held your shares. Other Fund distributions (other than
exempt-interest dividends, discussed below) will generally be taxable as
ordinary income. You will be subject to income tax on Fund distributions
regardless whether they are paid in cash or reinvested in additional shares. You
will be notified annually of the tax status of distributions to you.
You should note that if you purchase shares just before a distribution,
the purchase price will reflect the amount of the upcoming distribution. You
will incur taxes on the entire amount of the distribution received, even though,
as an economic matter, you did not participate in these gains and the
distribution simply constitutes a return of capital. This is known as "buying
into a dividend." It is generally not to your advantage to purchase shares just
before a distribution.
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 on 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.
It is expected that the Westcore International Equity Fund will be
subject to foreign withholding taxes with respect to dividends or interest
received from sources in foreign countries. The Westcore International Equity
Fund may make an election to treat a proportionate amount of such taxes as
constituting a distribution to each shareholder, which would allow each
shareholder either (1) to credit such proportionate amount of taxes against U.S.
federal income tax liability or (2) to take such amount as an itemized
deduction.
The foregoing is only a summary of certain tax considerations under
current law, which may be subject to change in the future. Shareholders who are
nonresident aliens, foreign trusts or estates, or foreign corporations or
partnerships may be subject to different United States federal income tax
treatment. You should consult your tax adviser for further information regarding
federal, state, local and/or foreign tax consequences relevant to your specific
situation.
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[Mountain Logo] WESTCORE FUNDS
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State and Local Taxes
Shareowners may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply, however, to the
portions of each Fund's distributions, if any, that are attributable to interest
on Federal Securities or interest on securities of the particular state or
localities within the state. Shareowners should consult their tax advisers
regarding the tax status of distributions in their state and locality.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Denver Investment Advisors LLC, with principal offices at 1225 17th Street, 26th
Floor, Denver, Colorado 80202, serves as the investment adviser to the Funds.
The Adviser was organized in 1994. It is owned by the principal officers and
employees of its predecessor firm. As of May 31, 1999, it had approximately
$10.5 billion in assets under active management, including $732 million for nine
investment company portfolios.
Denver Investment Advisors provides a continuous investment program for the
Funds, including investment research and management. The Adviser makes
investment decisions for the Funds and places orders for all purchases and sales
of the Funds' portfolio securities.
MANAGEMENT EXPENSES
The management fees are set forth below and are expressed as an annual
percentage of a Fund's average daily net assets.
<TABLE>
<CAPTION>
Contractual Advisory Fees
Fee Schedule
- ----------------------------------------------------------------------------------------
<S> <C>
Westcore International Equity Fund*
- ----------------------------------------------------------------------------------------
Westcore Small-Cap Growth Fund* 1.00 %
- ----------------------------------------------------------------------------------------
Westcore Select Fund* 0.65 %
- ----------------------------------------------------------------------------------------
</TABLE>
* The International, Small-Cap Growth and Select Funds have operated for
less than a full fiscal year. The fees stated represents the maximum
contractual investment advisory fees.
INVESTMENT PERSONNEL
John N. Karns, a vice president of Denver Investment Advisors, has primarily
been responsible for managing the portfolios of small-cap and large-cap
institutional clients as well as managing Denver Investment Advisors' IPO
investments. Prior to joining Denver Investment Advisors in 1998, John worked as
a vice president and co-portfolio manager at Smith Barney for three years and in
institutional research for one year.
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Gerald W. Peterson, CFA, a vice president of Denver Investment Advisors, has
primarily been responsible for analyzing a diverse set of industry sectors for
the MIDCO style of investing. Upon becoming responsible for the day-to-day
management for the Select Fund at its inception (October 1, 1999), he expanded
his focus to include all industry sectors. Prior to joining Denver Investment
Advisors in 1982, Jerry served eight years as assistant vice president and
portfolio manager at National Investment Services of America and six years as an
investment officer at CAN Financial.
CO-ADMINISTRATORS
ALPS Mutual Fund Services, Inc. and Denver Investment Advisors serve as
co-administrators to the Funds and receive fees in such capacity. 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.
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
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
provides the Funds with transfer agency services in return for compensation.
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[BACK COVER]
WHERE TO FIND MORE INFORMATION
More Fund information is available to you upon request and without charge:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI includes additional information about the Funds' investment policies,
organization and management. It is legally part of this prospectus (it is
incorporated by reference).
Investors can get free copies of the Funds' SAI. They may also request other
information about the Funds and make shareholder inquiries.
Write to:
Westcore Funds
PMB 515
303 16th Street
Suite 016
Denver, CO 80202
By phone: 1-800-392-CORE (2673)
E-mail: www.westcore.com
Information about the Funds (including the Funds' SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, DC. Information about the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. Reports and other information
about the Funds are available on the SEC's Internet site at www.sec.gov. Copies
of this information may be obtained, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC, Washington, DC 20549-6009.
The Westcore Funds Investment Company Act File No. is 811-3373
Funds distributed by ALPS Mutual Funds Services, Inc., member NASD.
<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 Opportunity Fund
Westcore Small-Cap Growth Fund
Westcore Select Fund
Westcore International Equity Fund
Westcore Long-Term Bond Fund
Westcore Intermediate-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
October 1, 1999
TABLE OF CONTENTS
PAGE
----
THE TRUST................................................................... 2
INVESTMENT OBJECTIVES AND POLICIES.......................................... 2
NET ASSET VALUE............................................................. 31
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION.............................. 32
DESCRIPTION OF SHARES....................................................... 35
ADDITIONAL INFORMATION CONCERNING TAXES..................................... 36
MANAGEMENT OF THE FUNDS..................................................... 38
CUSTODIAN AND TRANSFER AGENT................................................ 47
EXPENSES.................................................................... 48
AUDITORS AND FINANCIAL STATEMENTS........................................... 48
COUNSEL..................................................................... 48
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS.......................... 48
MISCELLANEOUS............................................................... 55
APPENDIX A..................................................................A-1
APPENDIX B..................................................................B-1
1
<PAGE>
This Statement of Additional Information is meant to be read in
conjunction with the Funds' Prospectuses dated October 1, 1999, as the same is
revised from time to time, and is incorporated by reference in its entirety into
the Prospectus for the particular Fund. Because this Statement of Additional
Information is not itself a prospectus, no investment in shares of the Funds
should be made solely based upon the information contained herein. Copies of the
Funds' Prospectuses dated October 1, 1999, 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. The Financial Statements
and Independent Accountants Report thereon in this SAI are incorporated by
reference from the Funds' Annual Report, which may be obtained by writing the
address above or calling the toll-free number above. No other part of the Annual
Report is incorporated herein by reference. Capitalized terms used but not
defined herein have the same meanings as in the Prospectuses.
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. 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.
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 Opportunity Fund, Westcore Small-Cap Growth Fund, Westcore
Select Fund, Westcore International Equity 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
Opportunity Fund, Westcore Small-Cap Opportunity Fund, Westcore Small-Cap Growth
Fund, Westcore Select Fund and Westcore International Equity 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 Trust is an open-end, management investment company. The Funds
(other than the Westcore Colorado Tax-Exempt Fund, which is non-diversified) are
diversified portfolios of the Trust.
2
<PAGE>
The Prospectuses for the Funds describe the Funds' investment
objectives. The following information supplements and should be read in
conjunction with the description of the investment objective and principal
strategies for each Fund in the Prospectuses.
PORTFOLIO TRANSACTIONS
Denver Investment Advisors LLC ("Denver Investment Advisors" or the
"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 objective.
The significant portfolio turnover variation in the MIDCO Growth Fund
over the last two fiscal years is primarily attributable to the timing of
redemptions and, to a lesser extent, the increased weighting in technology
companies, which experienced greater price volatility resulting in increased
portfolio transactions.
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 28, 1999, May 29, 1998 and May 30, 1997, the Funds paid the following
amounts in brokerage commissions:
BROKERAGE COMMISSIONS PAID
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
MAY 28, 1999 MAY 29, 1998 MAY 30, 1997
------------ ------------ ------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund $944,694 $793,591 $742,296
Westcore Blue Chip Fund 99,420 74,156 71,227
Westcore Growth and Income Fund 24,139 14,776 23,464
Westcore Small-Cap Opportunity Fund 288,092 113,825 83,927
Westcore Mid-Cap Opportunity Fund 6,468 N/A N/A
-------- -------- --------
Aggregate Commissions $1,362,813 $996,348 $920,914
--------- ------- -------
--------- ------- -------
</TABLE>
3
<PAGE>
For the same periods the Westcore Long-Term Bond Fund, Westcore
Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund did not pay
any brokerage commissions. During the fiscal years ended May 28, 1999, May 29,
1998 and May 30, 1997, 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 when the 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 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 Adviser and does not
reduce the advisory fees payable
4
<PAGE>
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 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,
1999, the Westcore Mid-Cap Opportunity Fund and 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 May 31, 1999 the Westcore Mid-Cap
Opportunity Fund's aggregate holdings of securities of Lehman Brothers Holdings
Inc. was $43,700. As of May 31, 1999 the Westcore Intermediate-Term Bond Fund's
aggregate holdings of securities of Merrill Lynch & Co. Inc. was $387,338.
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 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 Adviser or principal
underwriter) to 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 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 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.
5
<PAGE>
MOODY'S INVESTORS SERVICE, INC ("MOODY'S") AND STANDARD & POOR'S RATINGS GROUP
("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.
DEBT SECURITIES
The Westcore Intermediate-Term Bond Fund and Westcore Long-Term Bond
Fund invest at least 65% of their respective total assets in a broad range of
debt securities during normal market conditions.
TAX-EXEMPT OBLIGATIONS (WESTCORE BOND FUNDS)
Tax-Exempt 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
"Tax-Exempt 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.
6
<PAGE>
Certain of the Tax-Exempt 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 Tax-Exempt Obligations,
the Fund may also invest 25% or more of its net assets in industrial development
bonds, 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. To the extent
that the Fund's assets are concentrated in these types of Tax-Exempt 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.
Within the types of Tax-Exempt 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 Tax-Exempt Obligations and are generally valued at par or less
than par in the open market.
There are variations in the quality of Tax-Exempt Obligations both
within a particular classification and between classifications, and the yields
on Tax-Exempt Obligations depend upon a variety of factors, including general
money market conditions, the financial 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 Tax-Exempt 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 Tax-Exempt Obligations.
Certain investments of the Funds are subject to the federal alternative
minimum tax. These securities are not considered to be Tax-Exempt Obligations
for purposes of the Funds policy to invest at least 80% of assets in
Tax-Exempt Obligations.
7
<PAGE>
STAND-BY COMMITMENTS (WESTCORE COLORADO TAX-EXEMPT FUND)
The Fund may acquire stand-by commitments with respect to Tax-Exempt
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 Tax-Exempt
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 Tax-Exempt 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 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 Tax-Exempt
Obligations that are subject to the commitment. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the 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 Tax-Exempt 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.
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.
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ECONOMIC FACTORS. Based on data published by the State of Colorado,
Office of State Planning and Budgeting as presented in the COLORADO ECONOMIC
PERSPECTIVE, STATE REVENUE AND ECONOMIC PROJECTIONS THROUGH FY 2003-04, dated
June 20, 1999 and on similar data from earlier year reports (the "Economic
Report"), nearly 54% of non-agricultural employment in Colorado in 1998 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 15.7% and 10.1%, respectively, of non-agricultural employment in
the State in 1998. The Office of Planning and Budgeting projects similar
concentrations for calendar years 1999 and 2000.
According to the Economic Report, the Colorado unemployment rate rose
slightly from 3.3% in 1997 to 3.8% in 1998. The unemployment rate is expected to
remain at a low 3.3% during 1999. Total retail sales increased by 6.4% during
calendar year 1998. Colorado continued to surpass the non-agricultural
employment growth rate of the U.S., with a 3.6% rate of growth for Colorado in
1998, as compared with 2.5% for the nation as a whole. Employment growth is
expected to remain healthy, although to slow slightly to 3.1% in the year 2000.
Income rose 8.2% in Colorado during 1998, as compared with an increase
of 5.8% for the nation as a whole.
RESTRICTIONS OF APPROPRIATION AND REVENUES. The State Constitution
requires that expenditures for any fiscal year not exceed revenues for such
fiscal year. By statute, the amount of 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 General Fund. For fiscal years 1994 and thereafter, the
Unappropriated Reserve requirement is 4% of total appropriations from the
General Fund. 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 is 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 1998-99 ending
General Fund reserve will be $645.8 million, which is $457.6 million over the
statutory four percent reserve
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requirement. The 1997-1998 fiscal year ending General Fund balance was $901.0
million, or $724.0 million over the statutory four percent reserve
requirement. Based on the Economic Report estimates, the fiscal year 1999-00
ending General Fund reserve is expected to be approximately $454.7 million,
or $255.1 million over the statutory reserve requirement.
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 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 each subsequent fiscal years are 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 taxes, 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 deals 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. Recently, the Colorado
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Supreme Court ruled that Notes to be issued by the state the repayment of which
was subject to legislative appropriation must be approved by the voters under
the Amendment. The Court distinguished these Notes from lease-purchase
agreements. 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
an enterprise. Additional litigation in the "enterprise" arena may be filed in
the future to clarify these issues. The Colorado Supreme Court also has 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 1997, general fund
revenues (adjusted for cash funds that are exempt from the Amendment) were
$5,348.0 million and program revenues (cash funds) were $2,087.2 million, for
revenues totaling $7,435.2 million. During calendar year 1996, population and
inflation grew at rates of 3.5% and 2.0%, respectively, for a combined total
limit of 5.5%. Accordingly, under the Amendment, increases in State expenditures
during the 1997-98 fiscal year could not exceed $6,872.0 million and the actual
1997-98 general fund and program revenues of $7,435.2 million were over the
limit. In November, 1998, the voters defeated a proposition to permit the State
to keep and spend a portion of the surplus, thus the excess of $563.2 million
was refunded to Colorado taxpayers. The estimated limitation for fiscal year
1998-99 is 5.3% over the revenue limit for the 1998-99 fiscal year; accordingly,
1998-99 fiscal year revenues cannot exceed an estimate of $7,236.2 million.
Fiscal year 1998-99 revenues are estimated to be $528.8 million over the
limitation which means that there will likely be another refund.
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.
Because of the significant anticipated surpluses, many permanent tax
reductions were passed by the General Assembly in early 1999 and signed into law
by the Governor. In total, taxes were permanently reduced by $237.8 million in
fiscal year 2000-01, the first full year of the majority of the tax cuts. The
largest tax cut was a reduction in the income tax rate to 4.75%, effective
January 1, 1999 (previously Colorado's income tax rate was 5.0%). Even given
these tax cuts, the Office of State Planning and Budgeting expects Colorado to
exceed its revenue limit by $686.3 million in fiscal year 1998-99 and expects
the surplus to reach $1,035.6 million by fiscal year 2003-04.
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 20 of approximately $320.4 million in fiscal year
1994,
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$408.0 million for fiscal year 1995, $368.5 million for fiscal year 1996 and
$514.1 million for fiscal year 1997, and $645.8 million for fiscal year 1998.
For fiscal year 1997-98, the following tax categories generated the
following percentages of the State's $5,401.2 million total revenues (accrual
basis): individual income taxes represented 56% of gross fiscal year 1997-98
receipts; sales, use, and other excise taxes represented 30.0% of gross fiscal
year 1997-98 receipts; and corporate income taxes represented 4.9% of gross
fiscal year 1997-98 receipts. For fiscal year 1998-99, General Fund revenues of
approximately $5,766.4 million and appropriations of approximately $5,850.3
million are projected. The percentages of General Fund revenue generated by type
of tax for fiscal year 1999-00 are not expected to be significantly different
from fiscal year 1998 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. The State
has submitted to the voters of the State at the November 2, 1999 election a
question of issuing $1,700,000,000 of revenue anticipation notes. The proceeds
of the notes are to be used for highway purposes.
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 the 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
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
Adviser at the time of purchase to be of comparable quality.
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
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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.
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 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 demand instruments,
including variable amount master demand notes, issued by corporations,
industrial development authorities and governmental entities. The 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 Tax-Exempt 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
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."
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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.
A Fund will enter into repurchase agreements only with financial
institutions deemed to be creditworthy by the Adviser. 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.
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.
REVERSE REPURCHASE AGREEMENTS (ALL WESTCORE FUNDS)
Each Fund may borrow 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.
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 of counterparty default
and possible loss of collateral held by the counterparty. In addition, 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.
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LOWER-RATED SECURITIES (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. 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 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 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 Adviser
decides this is appropriate.
SECURITIES LENDING (ALL WESTCORE FUNDS OTHER THAN THE COLORADO TAX-EXEMPT FUND,
WESTCORE SMALL-CAP GROWTH FUND, WESTCORE SELECT FUND, AND WESTCORE INTERNATIONAL
EQUITY 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 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. Cash collateral
also may be invested in privately-placed interests in a trust or other entity,
which may be affiliated, which invests solely in the instruments permitted for
investment of cash collateral. Such investments are further described under the
caption "Securities Issued by
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Other Investment Companies; Other Entities Investing in Money Market
Instruments." 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.
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. 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 limitation unless the
Adviser under the supervision of the Board determines that a liquid trading
market exists. 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.
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 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 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
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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, which are securities
backed by installment sale contracts, credit card receivables or other assets.
Asset-backed securities are 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 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
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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 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
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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 the 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 Fund is actually invested in VRM's, its interest
income will vary with changes in the applicable interest rate on 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 Funds' 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,
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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.
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 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
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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.
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 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 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
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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.
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.
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 (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE
COLORADO TAX-EXEMPT FUND)
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
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index. Each 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, 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 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 Adviser's ability to correctly
predict the direction of securities prices, interest rates and other economic
factors.
For a detailed description of futures contracts and related options,
see Appendix B to this Statement of Additional Information.
FOREIGN SECURITIES (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE COLORADO
TAX-EXEMPT FUND)
Each Fund 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
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securities. Up to 25% of the MIDCO Growth, Growth and Income, Blue Chip Mid-Cap
Opportunity, Small-Cap Growth, Select and International Equity 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.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS (ALL WESTCORE FUNDS, OTHER THAN THE
WESTCORE COLORADO TAX-EXEMPT FUND)
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 a
forward currency exchange contract, 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.
Forward currency exchange TRANSACTIONS 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. In addition, 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.
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.
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
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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 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.
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. 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
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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; OTHER ENTITIES INVESTING IN
MONEY MARKET INSTRUMENTS (ALL WESTCORE FUNDS)
Securities issued by other investment companies may be acquired by the
Funds within the limits prescribed by the 1940 Act. The Funds also may invest in
privately-placed interests in a trust or other entity, which may be affiliated,
which invests solely in high quality, short-term, U.S. dollar denominated money
market instruments of U.S. and foreign issuers. 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.
When a Fund invests in another investment company or in another type of entity
as described above, it pays its 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.
DERIVATIVE INSTRUMENTS (ALL WESTCORE FUNDS)
Each Fund may purchase certain "derivative" instruments. 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 economic and interest rate scenarios.
TEMPORARY DEFENSIVE POSITION
The Westcore Equity and Bond Funds may, from time to time, take
temporary defensive positions that are inconsistent with their principal
investment strategies in attempting to respond to adverse market, economic,
political, or other conditions as follows:
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The Westcore Equity Funds 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 1940 Act) and dollar denominated debt obligations of foreign issuers
including foreign corporations and governments and Tax-Exempt 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 Fund may
hold uninvested cash reserves (which would not earn income) pending investment,
to meet anticipated redemption requests or during temporary defensive periods.
The Westcore Bond Funds 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.
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.
EQUITY AND EQUITY-RELATED SECURITIES IN INTERMEDIATE AND LONG-TERM BOND FUNDS
The Westcore Long-Term Bond and Intermediate Term Bond Funds may invest
in obligations convertible into common stock 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.
REAL ESTATE INVESTMENT TRUSTS (REITS) (ALL WESTCORE FUNDS OTHER THAN WESTCORE
COLORADO TAX-EXEMPT FUND
The Funds other than the Westcore Colorado Tax-Exempt Fund may invest
in REITs, as further described in the Prospectuses.
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).
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.
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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.
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
29
<PAGE>
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 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.
30
<PAGE>
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.
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.
NET ASSET VALUE
The net asset value per share of each Fund is calculated as set forth
in the Prospectuses 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.
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.
31
<PAGE>
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 Fund's Prospectus from time to
time.
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.
32
<PAGE>
RETIREMENT PLANS - WESTCORE MIDCO GROWTH FUND, WESTCORE BLUE CHIP FUND, WESTCORE
GROWTH AND INCOME FUND, WESTCORE SMALL-CAP OPPORTUNITY FUND, WESTCORE MID-CAP
OPPORTUNITY FUND, WESTCORE LONG-TERM BOND FUND, WESTCORE INTERMEDIATE-TERM BOND
FUND AND WESTCORE COLORADO TAX-EXEMPT FUND; EXPECTED TO BE AVAILABLE ON OR ABOUT
NOVEMBER 1, 1999 FOR THE WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP
GROWTH FUND, AND WESTCORE SELECT FUND.
INDIVIDUAL RETIREMENT ACCOUNTS. The Trust has available a plan (the
"Traditional 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
Traditional IRA for his or her nonworking spouse under age 70 1/2. Distribution
of an individual's Traditional 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 Traditional IRA are not subject to
federal income tax until distributed.
The Trust also has available a Roth Individual Retirement Account (the
"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, as long as the account owner
has earned income. 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' Traditional 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' Traditional 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 (including a self-employed individual) established a
SARSEP before January 1, 1997, employees may defer a percentage of their
compensation -- pre-tax -- to Traditional 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 Traditional IRA. For example,
contributions to an
33
<PAGE>
employee's Traditional 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 limited to $500 per
year. 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 Traditional, 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 Traditional 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 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.
34
<PAGE>
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 ten 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 of a
particular Fund, 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 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
35
<PAGE>
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. Furthermore, 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. 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
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
received ordinary dividends, although corporate shareholders could be eligible
for the dividends received deduction.
For the Colorado Tax-Exempt Fund to pay tax-exempt dividends for any
taxable year, at least 50% of the aggregate value of the Fund's assets at the
close of each quarter of the Fund's taxable year must consist of exempt-interest
obligations.
An investment in a Colorado Tax-Exempt Fund is not intended to
constitute a balanced investment program. Shares of the Colorado Tax-Exempt Fund
would not be suitable
36
<PAGE>
for tax-exempt institutions and may not be suitable for retirement plans
qualified under Section 401 of the Code, H.R. 10 plans and individual retirement
accounts because such plans and accounts are generally tax-exempt and,
therefore, not only would the shareholder not gain any benefit from the Fund's
dividends being tax-exempt, but such dividends would be ultimately taxable to
the beneficiaries when distributed. In addition, the Colorado Tax-Exempt 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 use" is defined under U.S. Treasury Regulations to include a
non-exempt person who (i) regularly uses a part of such facilities in his or her
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, (ii) occupies more than 5% of
the usable area of such facilities or (iii) are persons 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.
The tax principles applicable to transactions in financial instruments
and futures contacts and options that may be engaged in by a Fund, and
investments in passive foreign investment companies ("PFICs"), are complex and,
in some cases, uncertain. Such transactions and investments may cause a Fund to
recognize taxable income prior to the receipt of cash, thereby requiring the
Fund to liquidate other positions, or to borrow money, so as to make sufficient
distributions to shareholders to avoid corporate-level tax. Moreover, some or
all of the taxable income recognized may be ordinary income or short-term
capital gain, so that the distributions may be taxable to shareholders as
ordinary income.
In addition, in the case of any shares of a PFIC in which a Fund
invests, the Fund may be liable for corporate-level tax on any ultimate gain or
distributions on the shares if the Fund fails to make an election to recognize
income annually during the period of its ownership of the shares.
37
<PAGE>
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:
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
- --------------------- --------- ------------------
<S> <C> <C>
JACK D. HENDERSON, 72(1) Chairman, Trustee Attorney, Jack D. Henderson,
1600 Broadway Self-Employed Attorney-at-
Suite 1410 Law since 1995; prior
Denver, Colorado 80202 thereto partner of the 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, 66 Trustee Chairman of the Board,
P.O. Box 6154 MacCourt Products (plastics
Littleton, Colorado 80121 manufacturer); Director,
Scientific Software
Corporation through
December 31, 1994.
JAMES B. O'BOYLE, 71 Trustee Business Consultant; Trustee
6115 West Mansfield of Pacific American Fund
Avenue, #239 through September 1994.
Denver, Colorado 80235
ROBERT L. STAMP, 67 Trustee Prior to April 1995, Vice
6855 So. Depew Street President of Finance,
Littleton, Colorado 80123 Treasurer and Assistant
Secretary, The Gates
Corporation (rubber
company); Vice President,
The Gates Rubber Company;
Trustee of Pacific American
Fund through September 1994.
LYMAN E. SEELY, 81 Trustee Director of OECO since May
14795 Northeast 1983; Director of McCall Oil
Lawnview Circle and Chemical Co. since 1983;
Aurora, Oregon 97002 Director of Great Western
Chemical Co. since 1983.
38
<PAGE>
Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
- --------------------- --------- ------------------
KENNETH V. PENLAND, 57 President Chairman and Chief Executive
Denver Investment Officer, Denver Investment
Advisors LLC Advisors LLC (and its
1225 17th Street-26th Fl. predecessor) since March
Denver, Colorado 80202 1983; Chairman, Blue Chip
Value Fund.
JASPER R. FRONTZ, 30 Treasurer Treasurer, Blue Chip Value
Denver Investment Fund, Inc. since November
Advisors LLC 1997; Director of Mutual
1225 17th Street-26th Fl. Fund Administration, Denver
Denver, Colorado 80202 Investment Advisors LLC
since June 1997; Fund
Controller, ALPS Mutual
Funds Services, Inc. from
September 1995 through June
1997; Senior Accountant,
Deloitte & Touche LLP from
September 1991 through
August 1995.
LISA A. BRUCKERT, 26 Assistant Fund Controller, ALPS Mutual
ALPS Mutual Funds Treasurer Fund Services, Inc. since
Services, Inc. December 1998; Secretary,
370 17th Street Stonebridge Funds Trust,
Suite 3100 since February, 1999; Senior
Denver, Colorado 80202 Associate,
PricewaterhouseCoopers LLP
from October 1994 to
November 1998.
W. BRUCE McCONNEL, III, 56 Secretary Partner of the law firm of
Drinker Biddle & Reath LLP Drinker Biddle & Reath LLP,
One Logan Square Philadelphia, Pennsylvania.
18th & Cherry Streets
Philadelphia, Pennsylvania
19103-6996
</TABLE>
- -----------
(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.
39
<PAGE>
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 28, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT AGGREGATE
AGGREGATE BENEFITS COMPENSATION
COMPENSATION ACCRUED AS FROM THE FUND
NAME OF PERSON/ FROM THE PART OF FUND COMPLEX*
POSITION TRUST EXPENSES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
JACK D. HENDERSON, Chairman $18,500 $0 $18,500
- -------------------------------------------------------------------------------------------------
McNEIL S. FISKE, Trustee $14,000** $0 $14,500
- -------------------------------------------------------------------------------------------------
JAMES B. O'BOYLE, Trustee $14,500 $0 $14,500
- -------------------------------------------------------------------------------------------------
ROBERT L. STAMP, Trustee $14,500** $0 $14,500
- -------------------------------------------------------------------------------------------------
LYMAN E. SEELY, Trustee $14,500 $0 $14,500
- -------------------------------------------------------------------------------------------------
</TABLE>
* Fund Complex includes funds with a common investment adviser or an
adviser which is an affiliated person. There are currently eleven
Westcore Funds in the Fund Complex.
** 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 28, 1999 is $32,644 and $17,864.
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 Ms. Bruckert is an
employee, receives compensation as co-administrator , bookkeeping
40
<PAGE>
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 2% of the outstanding shares of the
Westcore MIDCO Growth Fund, 3.56% of the outstanding shares of the Westcore
Growth and Income Fund, 18% of the outstanding shares of the Westcore Mid-Cap
Opportunity Fund, 1% of the outstanding shares of the Westcore Long-Term Bond
Fund and 5% of the outstanding shares of the Westcore Colorado Tax-Exempt Fund
as of September 8, 1999. The trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of the Westcore Blue Chip Fund,
Westcore Small-Cap Opportunity Fund, Westcore International Equity Fund,
Westcore Small-Cap Growth Fund, Westcore Select Fund and Westcore
Intermediate-Term Bond Fund as of September 8, 1999.
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.
41
<PAGE>
INVESTMENT ADVISER
Denver Investment Advisors serves as investment adviser to the Funds
pursuant to an Advisory Agreement. In the Advisory Agreement, the 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 Prospectuses, 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 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:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 28, 1999 May 29, 1998 May 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------
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 $2,591,504 $196,466 $4,107,999 $0 $3,834,365 $0
Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Blue 383,666 63,138 378,391 48,681 375,645 26,418
Chip Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Growth 12,126 74,637 21,739 87,613 62,280 82,796
and Income Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Small- 585,241 269,418 311,243 162,526 197,026 114,504
Cap Opportunity
Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore 0 12,726 N/A N/A N/A N/A
Mid-Cap
Opportunity Fund
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore Long- 44,194 50,699 33,851 45,959 65,709 39,100
Term Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore 140,793 63,751 178,738 60,690 253,825 74,356
Intermediate-Term
Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado 0 194,101 0 129,855 0 89,049
Tax-Exempt Fund
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For the fiscal year ended May 28, 1999, the Investment Adviser
reimbursed additional expenses for the Westcore Mid-Cap Opportunity Fund in the
amount of $51,448.
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 for the Westcore MIDCO Growth Fund,
Westcore Growth and Income Fund, Westcore Blue Chip Fund, Westcore Small-Cap
Opportunity Fund, Westcore Long-Term Bond Fund, Westcore Intermediate-Term Bond
Fund and Westcore Colorado Tax-Exempt Fund became effective on October 1, 1995,
and the current Advisory Agreement for the Westcore Mid-Cap Opportunity Fund
became effective on October 1, 1998. The current Advisory Agreements for the
Small-Cap Growth, Select and International Equity Funds became effective on
October 1, 1999. 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.
43
<PAGE>
The Agreement provides that the 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 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 (the "Distributor"), with principal offices at 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202, acts as the distributor of the
Funds' shares pursuant to a Distribution Agreement with the Trust . 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, 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 28, 1999, May 29,
1998 and May 30, 1997, ALPS received $0, $0, and $0, respectively, in
underwriting commissions with respect to all the investment portfolios offered
by the Trust.
ADMINISTRATORS, BOOKKEEPING AND PRICING AGENT
Pursuant to an Administrative Agreement, ALPS and Denver Investment
Advisors serve as co-administrators to the Funds (the "Administrators"), and
have agreed to pay all expenses they incur in connection with their
administrative activities. 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. Under the Administrative 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 for a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Administrators in the performance of their
duties and obligations under the agreement. 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 with respect to the Westcore MIDCO Growth Fund, Westcore Growth
and Income Fund, Westcore Blue Chip Fund, Westcore Mid-Cap Opportunity Fund,
Westcore Small-Cap Opportunity Fund, Westcore International Equity Fund,
Westcore Small-Cap Growth Fund, Westcore Select Fund, Westcore Long-Term Bond
Fund, Westcore
44
<PAGE>
Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund. The
Administrators have contractually agreed to waive fees as set forth in the
prospectus and may voluntarily waive all or any portion of their administration
fees from time to time. 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.
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.
The following table summarizes the administration fees paid by the
Funds and any administration fee waivers for the last three fiscal years:
45
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 28, 1999 May 29, 1998 May 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Administration Waiver of Administration Waiver of Administration Waiver of
Fund Name Fees Fees Fees Fees Fees Fees
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO $1,271,967 $14,788 $1,896,000 $0 $1,769,707 $0
Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Blue 201,532 4,685 193,253 3,857 183,360 2,179
Chip Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Growth 34,523 5,522 43,501 6,969 60,140 6,818
and Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Small- 242,098 14,300 132,961 9,175 86,687 6,733
Cap Opportunity
Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap 0 5,089 N/A N/A N/A N/A
Opportunity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Long- 58,403 4,859 48,481 4,725 65,958 4,181
Term Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore 130,268 6,095 153,392 6,227 210,838 7,950
Intermediate-Term
Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado 92,805 23,655 33,180 44,733 17,320 36,072
Tax-Exempt Fund
- ------------------------------------------------------------------------------------------------------------------------------------
</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 for the Westcore MIDCO Growth Fund,
Westcore Growth and Income Fund, Westcore Blue Chip Fund, Westcore Mid-Cap
Opportunity Fund, Westcore Small-Cap Opportunity Fund, Westcore Long-Term Bond
Fund, Westcore Intermediate-Term Fund and Westcore Colorado Tax-Exempt Fund, 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. The Trust will pay ALPS a monthly
fee at the annual rate of $15,000 per year during the term of the agreement. In
addition, the Trust will pay ALPS a monthly fee at the annual rate of $2.00 for
each shareholder account
46
<PAGE>
that is open during the immediately preceding month. The Trust will also 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. Finally, the Trust will reimburse ALPS for out of pocket
expenses, including but not limited to postage, forms, telephone, microfilm and
microfiche.
No fees were paid under the Telephone and Service Agreement during the
fiscal year ended May 30, 1997, however, ALPS was paid $15,000 in fees under
that Agreement for the fiscal year ended May 29, 1998 and $82,674 for the fiscal
year ended May 28, 1999.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York (the "Custodian"), with principal offices at One
Wall Street, New York, New York 10286, 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. Prior to December 1, 1997, Wells Fargo Bank, N.A. served as
custodian to the Trust.
State Street Bank and Trust Company ("State Street"), P.O. Box 1713,
Boston, Massachusetts, serves as Transfer Agent for the Westcore MIDCO Growth
Fund, Westcore Blue Chip Fund, Westcore Growth and Income Fund, Westcore
Small-Cap Opportunity Fund, Westcore Mid-Cap Opportunity Fund, Westcore
Long-Term Bond Fund, Westcore Intermediate-Term Bond Fund and Westcore Colorado
Tax-Exempt 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 account statements,
confirmations, and dividend and distribution notices; 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.
ALPS, with principal offices at 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202 serves as Transfer Agent for the Westcore Small-Cap
Growth Fund, Westcore Select Fund and Westcore International Equity Fund. As
Transfer Agent, ALPS 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 account statements, confirmations, and
dividend and distribution notices; and (e) maintain shareholder accounts. Under
the Transfer Agency Agreement, ALPS receives a fee from the Trust and is
reimbursed for out-of-pocket expenses.
47
<PAGE>
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 AND FINANCIAL STATEMENTS
Deloitte & Touche LLP, with principal offices at Suite 3600, 555
Seventeenth Street, Denver, Colorado 80202-3942, serves as independent auditors
for the Funds. The Fund's Annual Report to Shareholders for the fiscal year
ended May 28, 1999 has been filed with the SEC. The financial statements and
notes thereto in such Annual Report (the "Financial Statements") are
incorporated by reference into this Statement of Additional Information. The
Financial Statements and Independent Accountants Report thereon, in such Annual
Reports have been incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
COUNSEL
Drinker Biddle & Reath LLP (of which Mr. McConnel, Secretary of the
Trust, is a partner), One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103-6996, 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 newsletters, advertisements and
other publications which 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. Performance
information is generally available by calling ALPS at 1-800-392-CORE (2673).
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.
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
48
<PAGE>
investment alternatives that often provide an agreed or guaranteed fixed yield
for a stated period of time.
YIELD CALCULATIONS - WESTCORE BOND FUNDS
The funds yield shows the rate of income a Fund earns on its
investments as a percentage of its share price. It 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. 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
Yield = 2 [(----- + 1)6 - 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.
49
<PAGE>
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 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 28, 1999 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 5.29% 5.87%
Fund
Westcore Intermediate-Term 5.62% 5.81%
Bond Fund
Westcore Colorado Tax- 3.21% 3.83%
Exempt Fund
</TABLE>
50
<PAGE>
"TAX-EQUIVALENT" YIELD CALCULATIONS - WESTCORE COLORADO TAX-EXEMPT FUND
The Fund's "tax-equivalent" yield shows the level of the taxable yield
needed to produce an after-tax yield equivalent to the Fund's tax-free yield.
The Fund's tax-equivalent yield will always be higher than its yield. It is
calculated 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.
Based on the foregoing calculations, the yield and tax-equivalent yield
of the Fund for the 30-day period ended May 28, 1999 (after fee waivers) were
3.83% and 5.58%, respectively, and before fee waivers were 3.21% and 4.67%,
respectively.
Tax-Equivalent Yield is based upon the effective combined state and
federal tax rate assumptions of 31.42% (assuming a 28% federal tax rate and
a 4.75% Colorado tax rate) for the Westcore Colorado Tax-Exempt Fund.
TOTAL RETURN CALCULATIONS
The average annual total return represents the average annual
percentage change in the value of an investment in a Fund over a specified
measuring period. 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.
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.
51
<PAGE>
The 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. It is computed 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 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 28, 1999, for the five year period
ended May 28, 1999 and for the periods since commencement of the Funds'
respective operations were as follows:
52
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Fund Year Five Ten Years Since Inception
---- Ended Years Ended Ended to
May 28, May 28, May 28, May 28,
1999 1999 1999 1999
---- ---- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westcore MIDCO Growth 11.87% 15.63% 16.32% 15.25%
Fund(1)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund(2) 7.42% 21.83% 16.02% 15.37%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Growth and Income 6.25% 15.17% 12.39% 12.71%
Fund(2)(6)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Small-Cap (19.72)% 12.59% N/A 11.55%
Opportunity Fund(3)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Mid-Cap N/A N/A N/A 10.50%
Opportunity Fund(5)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond 1.21% 8.83% 9.34% 9.67%
Fund(2)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term 3.54% 6.58% 7.32% 7.43%
Bond Fund(2)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado Tax- 3.80% 5.73% N/A 6.29%
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) Commenced Operations on October 1, 1998.
(6) 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
53
<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 Adviser advises, and describe the
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. From time to time, the materials may include contests or promotions
which may include the award of Fund shares as prizes, and a waiver of certain
minimum amount requirements to open an account.
54
<PAGE>
MISCELLANEOUS
As used in this Statement of Additional Information, 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 September __, 1999, the following shareholders owned more than 5%
or more of the outstanding shares of the Funds. In addition, any shareholder
listed below owning 25% or more of the outstanding shares of a Fund may, for
certain purposes, be deemed to control that Fund and be able to affect the
outcome of certain matters presented for a vote of shareholders:
WESTCORE MIDCO GROWTH FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WENDEL & CO.
c/o THE BANK OF NEW YORK
PO BOX 1066 WALL STREET 5.85% 636,937.011 $13,331,092
STATION
NEW YORK, NY 10268-1066
US BANK NA CUST
ARAPOHOE CNTY - DENVER
INVEST EQUITY 5,47% 594,730.649 $12,447,712
P.O. BOX 64010
ST. PAUL, MN 55164-0010
FROST NATIONAL BANK
TTCC
FBO USAA EBA POST 5.05% 549,021.954 $11,491,029
RETIRED TAXABLE
P.O. Box 2479
SAN ANTONIO, TX 78298-
2479
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 5.00% 544,639.000 $11,399,294
9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
</TABLE>
55
<PAGE>
WESTCORE GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WELLS FARGO BANK TTEE
FBO CHOICEMASTER
PO BOX 9800 MUTUAL 14.41% 139,053.726 $1,765,982
FUNDS
MAC 9139-027
CALABASAS, CA 91372-0800
CHERRY TRUST & CO
3033 E 1ST AVE. 9.36% 90,320.008 $1,147,064
DENVER, CO 80206-5617
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 5.50% 53,047.223 $673,700
9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
WESTCORE BLUE CHIP FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
SEI TRUST CO
c/o COLORADO BUSINESS
BANK 20.02% 769,152.060 $12,983,287
ATTN: MUTUAL FUND
ADMINISTRATOR
ONE FREEDOM VALLEY
OAKS, PA 19456
WENDEL & CO A/C
C/O THE BANK OF NEW
YORK 13.43% 516,226.837 $8,713,910
PO BOX 1066 WALL STREET
STATION
NEW YORK, NY 10268-1066
CITY OF LAKEWOOD POLICE
MPPP & TR
NORWEST BANK MN, N.A. 9.18% 352,669.974 $5,953,069
PO BOX 1533
MINNEAPOLIS, MN 55480-
1533
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 8.04% 308,866.106 $5,213,660
9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
</TABLE>
56
<PAGE>
WESTCORE MID-CAP OPPORTUNITY FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
DENVER INVESTMENT
ADVISORS LLC
C/O LOU KAHANEK 38.83% 91,386.525 $993,371
1225 17TH ST FL 26
DENVER, CO 80202-5534
KENNETH V. PENLAND 16.00% 37,648.874 $409,243
101 S. FRANKLIN ST.
DENVER, CO 80209-2604
LEO L. BESERRA 7.32% 17,230.945 $187,300
6760 E. DORADO PL
ENGLEWOOD, CO 80111-1766
WESTCORE SMALL-CAP OPPORTUNITY FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
CHARLES SCHWAB & CO
INC.
SPECIAL ACCOUNT FOR THE 8.32% 359,129.602 $7,254,418
EXCLUSIV BENEFIT OF
CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
COLORADO STATE BANK &
TRUST 9.77% 421,805.165 $8,520,464
1600 BROADWAY
DENVER, CO 80202-4927
CHRISTIAN LABOR ASSOC
PEN FD
LYLE MASCHOFF TTEE 5.09% 220,000.331 $4,444,007
412 LAKELAND DR NE
P.O. BOX 733
WILLMAR, MN 56201-0738
WESTCORE LONG-TERM BOND FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WENDEL & CO A/C #808820
C/O THE BANK OF NEW
YORK 19.64% 468,299.281 $4,467,575
PO BOX 1066 WALL STREET
STATION
NEW YORK, NY 10268-1066
</TABLE>
57
<PAGE>
<TABLE>
<S> <C> <C> <C>
CHRISTIAN LABOR ASSOC
PEN FD
LYLE MASCHOFF TTEE 7.31% 174,228.780 1,662,143
412 LAKELAND DR NE
PO BOX 738
WILLMAR, MN 56201-0738
SEI TRUST COMPANY
C/O COLORADO BUSINESS
BANK 29.70% 708,261.517 $6,756,815
ATTN: MUTUAL FUND
ADMINISTRATOR
ONE FREEDOM VALLEY
OAKS, PA 19456
</TABLE>
58
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WENDEL & CO A/C #808820
C/O THE BANK OF NEW
YORK 15.77% 600,410.708 $6,076,156
PO BOX 1066 WALL STREET
STATION
NEW YORK, NY 10268-1066
SEI TRUST COMPANY
c/o COLORADO BUSINESS
BANK 23.11% 879,968.776 $8,905,284
ATTN: MUTUAL FUND
ADMINISTRATOR
ONE FREEDOM VALLEY
OAKS, PA 19456
CHRISTIAN LABOR ASSOC
PEN FD
LYLE MASCHOFF TTEE 10.64% 405,035.250 $4,098,957
TR DTD 9/23/67
412 LAKELAND DR NE
PO BOX 738
WILLMAR, MN 56201-0738
VIRG & CO
WELLS FARGO BANK NA 8.33% 317,278.794 $3,210,861
MUTUAL FUNDS DEPT MAC
9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
</TABLE>
59
<PAGE>
WESTCORE COLORADO TAX-EXEMPT FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
JANET E. PENLAND 5.08% 202,877.212 $2,170,786
101 S. FRNKLIN STREET
DENVER, CO 80209-2604
DIM & CO
WELLS FARGO BANK NA 5.04% 201,271.943 $2,153,610
MUTUAL FUNDS DEPT
MAL 9139-027
P.O. BOX 9800
CALABASAS, CA 91372-0800
</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 Mid-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.
60
<PAGE>
APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current opinion of
the creditworthiness of an obligor with respect to financial obligations 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 on the obligation
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 in
higher rating categories. 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 upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the 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 Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating will 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 to 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 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 best 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 the higher ratings.
"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 default is a real possibility and 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 Financial 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 Financial BankWatch:
"TBW-1" - This designation represents Thomson Financial 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 Financial 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 Financial 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 Financial 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.
Obligations rated "BB," "B," "CCC," "CC" and "C" are 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" - An obligation rated "BB" is less vulnerable to nonpayment
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" - An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB", but the obligor currently has the capacity to meet its
financial commitment on the
A-4
<PAGE>
obligation. Adverse business, financial or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.
"CCC" - An obligation rated "CCC" is currently vulnerable to
nonpayment, 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
nonpayment.
"C" - The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued.
"D" - An obligation rated "D" is 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 Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the taking
of a 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 symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
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 fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than the "Aaa"
securities.
A-5
<PAGE>
"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" indicates 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 operating 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: Moody's applies numerical modifiers 1, 2, and 3 in each
generic rating classification from "Aa" through "Caa". The modifier 1 indicates
that the obligation ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking
in the lower end of its generic rating category.
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 to be 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 in periods of greater economic
stress.
"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.
A-6
<PAGE>
"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 credit risk and
are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly 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 credit 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 credit risk and indicate
strong capacity for timely payment of financial commitments. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic
conditions than is the case for 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
credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity.
"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 change 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.
"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.
A-7
<PAGE>
"CCC", "CC", "C" - Bonds have high default risk. Default is a real
possibility, and capacity for meeting financial commitments is solely 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. The ratings of
obligations in this category are based on their prospects for achieving partial
or full recovery in a reorganization or liquidation of the obligor. While
expected recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines. "DDD" obligations have the
highest potential for recovery, around 90%-100% of outstanding amounts and
accrued interest. "DD" indicates potential recoveries in the range of 50%-90%,
and "D" the lowest recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of
their obligations. Entities rated "DDD" have the highest prospect for resumption
of performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
To provide more detailed indications of credit quality, the Fitch
IBCA ratings from and including "AA" to "CCC" may be modified by the addition of
a plus (+) or minus (-) sign to denote relative standing within these major
rating categories.
Thomson Financial 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 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 the lowest investment-grade
category and indicates an acceptable capacity to repay principal and interest.
Issues rated "BBB" are more vulnerable to adverse developments (both internal
and external) than obligations with higher ratings.
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"BB," "B," "CCC," and "CC," - These designations are assigned by
Thomson Financial BankWatch to non-investment grade long-term debt. Such issues
are regarded as having speculative characteristics regarding the likelihood of
timely repayment of principal and interest. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation.
"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 note rating reflects the liquidity factors and
market access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's 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 a
very strong capacity to pay debt service 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. There is
present 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. Margins of
protection are 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.
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Liquidity and cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
"MIG-4"/"VMIG-4" - This designation denotes adequate quality.
Protection commonly regarded as required of an investment security is present
and although not distinctly or predominantly speculative, there is specific
risk.
"SG" - This designation denotes speculative quality. Debt
instruments in this category 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 Prospectuses, 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 gain. If the offsetting
purchase price exceeds the sale price, a Fund pays the difference and
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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 of the securities to be sold as part of
the restructuring of its portfolio will decline prior to the time of sale.
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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 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
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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.
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
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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.
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
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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 23. EXHIBITS
(a) (1) 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.
(2) 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.
(b) Registrant's Amended and Restated Code of Regulations is
incorporated by reference to Exhibit 2(a) to Post-Effective
Amendment No. 45.
(c) (1) Specimen copy of share certificate for Class A
Shares is incorporated by reference herein to
Exhibit 4 of Post Effective Amendment No. 7.
(2) Specimen copy of form of share certificate is
incorporated by reference to Exhibit 4(b) to
Post-Effective Amendment No. 34.
(d) (1) 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.
(2) Addendum No. 1 to Amended and Restated Advisory
Agreement relating to the Mid-Cap Opportunity Fund
is incorporated herein by reference to
Exhibit (d)(2) to Post-Effective Amendment No. 49.
(3) Form of Addendum No. 2 to Amended and Restated
Advisory Agreement relating to the Small Cap Growth
Fund is filed herewith.
(4) Form of Addendum No. 3 to Amended and Restated
Advisory Agreement relating to the Select Fund is
filed herewith.
(5) Form of Addendum No. 4 to Amended and Restated
Advisory Agreement relating to the International
Equity Fund is filed
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herewith.
(e) (1) 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) Amendment No. 1 to Amended and Restated
Distribution Agreement relating to the
Mid-Cap Opportunity Fund is incorporated
herein by reference to Exhibit e(1)(i) to
Post-Effective Amendment No. 49.
(ii) Form of Amendment No. 2 to Amended and
Restated Distribution Agreement relating to
the Small Cap Growth Fund is filed herewith.
(iii) Form of Amendment No. 3 to Amended and
Restated Distribution Agreement relating to
the Select Fund is filed herewith.
(iv) Form of Amendment No. 4 to Amended and
Restated Distribution Agreement relating to
the International Equity Fund is filed
herewith.
(2) Form of Broker/Dealer Selling Agreement is
incorporated herein by reference to Exhibit No. 6(c)
to Post-Effective Amendment No. 14.
(3) Form of Bank Agreement is incorporated herein by
reference to Exhibit No. 6(d) to Post-Effective
Amendment No. 14.
(f) (1) Westcore Trust Deferred Compensation Plan (as
Amended and Restated Effective June 22, 1998) is
incorporated by reference to Exhibit 7(a) to
Post-Effective Amendment No. 47.
(g) (1) 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.
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(2) 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.
(3) Amendment No. 1 to Custody Agreement relating to the
Mid-Cap Opportunity Fund is incorporated by
reference to Exhibit g(2)(i) to Post-Effective
Amendment No. 49.
(4) Form of Custody Agreement between Westcore Trust and
Bank of New York ("BONY") is filed herewith.
(5) Form of Foreign Custody Manager Agreement between
Westcore Trust and BONY is filed herewith.
(h) (1) 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-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) Amendment No. 1 to Administration Agreement
relating to the Mid-Cap Opportunity Fund is
incorporated herein by reference to
Exhibit h(1)(i) to Post-Effective
Amendment No. 49.
(ii) Form of Amendment No. 2 to Administration
Agreement relating to the Small Cap Growth
Fund is filed herewith.
(iii) Form of Amendment No. 3 to Administration
Agreement relating to the Select Fund is
filed herewith.
(iv) Form of Amendment No. 4 to Administration
Agreement relating to the International
Equity Fund is filed herewith.
(2) 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
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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 August 3, 1998 is
incorporated herein by reference
to Exhibit 9(b)(iii) to Post-Effective
Amendment No. 48.
(iv) Amendment No. 3 to Amended and Restated
Transfer Agency Agreement relating to the
Mid-Cap Opportunity Fund is incorporated
herein by reference to Exhibit 2(iv) to
Post-Effective Amendment No. 49.
(v) Form of Transfer Agency and Service Agreement
between Westcore Trust and ALPS Mutual Fund
Services with respect to the Small-Cap Growth
and Select Funds is filed herewith.
(3) 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 incorporated
by reference to Exhibit 9(c) to Post-Effective
Amendment No. 47.
(i) Amendment No. 1 to Amended and Restated
Bookkeeping and Pricing Agreement relating to
the Mid-Cap Opportunity Fund is incorporated
herein by reference to Exhibit 3(i) to
Post-Effective amendment No. 49.
(ii) Form of Amendment No. 2 to Amended and
Restated Bookkeeping and Pricing Agreement
relating to the Small Cap Growth Fund is
filed herewith.
(iii) Form of Amendment No. 3 to Amended and
Restated Bookkeeping and Pricing Agreement
relating to the Select Fund is filed
herewith.
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(iv) Form of Amendment No. 4 to Amended and
Restated Bookkeeping and Pricing Agreement
relating to International Equity fund is
filed herewith.
(4) 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.
(5) (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
incorporated by reference to
Exhibit 9(e)(a) to Post-Effective
Amendment No. 47.
(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
incorporated by reference to
Exhibit 9(e)(b) to Post-Effective
Amendment No. 47.
(c) Amendment to Operating Agreement dated
as of October 1, 1998 between Charles
Schwab & Co. and Westcore Trust,
relating to the Cash Reserve Fund,
Colorado Tax-Exempt Fund, Growth and
Income Fund, Intermediate-Term Bond
Fund, Long-
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Term Bond Fund, MIDCO Growth Fund,
Blue Chip Fund and Small-Cap
Opportunity Fund is incorporated
herein by reference to Exhibit h(5)(c)
to Post-Effective Amendment No. 49.
(d) Side Letter to Amendment to Operating
Agreement among Westcore Trust,
Charles Schwab & Co., and Denver
Investment Advisors ("DIA") dated as
of October 1 1998, 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 incorporated herein by
reference to Exhibit h(5)(i)(d) to
Post-Effective Amendment No. 49.
(e) Amendment to Operating Agreement
effective as of January, 1999,
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
incorporated herein by reference to
Exhibit h(5)(i)(e) to Post-Effective
Amendment No. 49.
(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 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-6
<PAGE>
(a) 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 incorporated by
reference to Exhibit 9(e)(iii)(c) to
Post-Effective Amendment No. 47.
(iv) Side Letter dated as of March 5, 1996 among
ALPS Mutual Funds 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-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-7
<PAGE>
(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.
(viii) Amendment to Services Agreement dated as of
October 1, 1998 among Westcore Trust, Schwab
and Denver Investment Advisors is
incorporated herein by reference to
Exhibit h(5)(viii) to Post-Effective
Amendment No. 49.
(6) (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) Indemnification 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.
(7) (i) 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.
(ii) Addition of Parties dated as of August 2,
1999 to Shareholder Services Agreement among
Wells Fargo Bank, N.A., Westcore Trust, ALPS
Mutual Funds Services, Inc. and Denver
Investment Advisers LLC is filed herewith.
(8) (i) 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.
(9) (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.
(ii) Sideletter to Shareholder Services Agreement
dated as of September 25, 1998 among Westcore
Trust, DIA, and Firstrust is incorporated
herein by reference to Exhibit h(10) to
Post-Effective Amendment No. 49.
C-8
<PAGE>
(10) 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 incorporated by
reference to Exhibit 9(j) to Post-Effective
Amendment No. 47.
(11) 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 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 incorporated by
reference to Exhibit 9(k) to Post-Effective
Amendment No. 47.
(12) (i) 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 incorporated by
reference to Exhibit 9(l) to Post-Effective
Amendment No. 47.
(ii) Amendment to Securities Lending Agency Client
Agreement dated as of March 27, 1998 between
Westcore Trust and PaineWebber Incorporated
is filed herewith.
(13) 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
incorporated by reference to Exhibit 9(m) to
Post-Effective Amendment No. 47.
(14) (i) 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
C-9
<PAGE>
and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(n) to
Post-Effective Amendment No. 47.
(ii) Side Letter to Omnibus Account Services
Agreement dated as of February 26, 1998 among
Westcore Trust, National Investor Services
Corp. and DIA is incorporated herein by
reference to Exhibit h(16) to Post-Effective
Amendment No. 49.
(15) 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 incorporated by reference to
Exhibit 9(o) to Post-Effective Amendment No. 47.
(16) Telephone and Service Agreement dated as of
August 3, 1998 between Westcore Trust and ALPS
Mutual Funds 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 incorporated herein
by reference to Exhibit 9(p) to Post-Effective
Amendment No. 48.
(17) Agency Trading Agreement dated as of August 3, 1998
between Westcore Trust, Denver Investment Advisors
LLC, ALPS Mutual Funds Services, Inc., Boston
Financial Data Services, Inc. and American Century
Retirement Plan 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 incorporated herein by reference
to Exhibit 9(q) to Post-Effective Amendment No. 48.
(18) (i) Agency Trading Agreement dated as of
August 21, 1998 between Westcore Trust,
Janney Montgomery Scott, Inc., ALPS Mutual
Funds Services, Inc. and Boston Financial
Data 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 incorporated
herein by reference to Exhibit 9(r) to
Post-Effective Amendment No. 48.
C-10
<PAGE>
(ii) Side Letter to Agency Trading Agreement dated
August 21, 1998 between Westcore Trust and
Janney Montgomery Scott, Inc. ("JMS") and
dated as of September 25, 1998 among Westcore
Trust, JMS, BFDS and ALPS, is incorporated
herein by reference to Exhibit h(21) to
post-Effective Amendment No. 49.
(19) Agency Trading Agreement dated as of September 1,
1998 among Westcore, DIA, and Fidelity Investment
Institutional Operations Company, Inc. is
incorporated herein by reference to Exhibit h(22) to
Post-Effective Amendment No. 49.
(20) No Transaction Fee Mutual Fund Offering/Retail
Shareholder Services Agreement dated as of October
1, 1998 among Westcore Trust, ALPS and E-Trade is
incorporated herein by reference to Exhibit h(23) to
Post-Effective Amendment No. 49.
(i) Opinion of counsel that shares are validly issued, fully
paid and non-assessable is filed herewith.
(j) (1) Consent of Drinker Biddle & Reath LLP is filed
herewith.
(2) Consent of Deloitte & Touche is filed herewith.
(k) None.
(l) (1) Conversion Agreement between Westcore Trust and
Denver Investment Advisors LLC relating to the
Mid-Cap Opportunity Fund is incorporated herein by
reference to Exhibit 13(a) to Post-Effective
Amendment No. 48.
(m) None.
(n) None.
(o) None.
(p) Powers of Attorney and Certificate of Secretary certifying
resolution authorizing signature by powers of attorney are
filed herewith under Rule 485(b) under the Securities Act
of 1933.
C-11
<PAGE>
Item 24. 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 25. 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 Amended and Restated Distribution
Agreement incorporated herein by reference as Exhibit (e)(1).
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 (h)(7).
C-12
<PAGE>
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 (h)(8).
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 incorporated herein by reference
as Exhibit (h)(10).
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 incorporated herein by reference as Exhibit (h)(11).
Indemnification of Registrant's directors, trustees, officers,
members, shareholders, employees, agents and each person, if any, who controls
them within the meaning of the Securities Act against losses, claims, damages,
liabilities or expenses to which any one of them may become subject insofar as
those losses, claims, damages, liabilities or expenses or actions in respect
thereof, arising out of or are based upon American Century Retirement Plan
Services, Inc.'s ("Services") negligence, bad faith, or willful misconduct in
performing its obligations under its agreement with the Trust, any breach by
Services of any material provision of the Agreement or any breach by Services of
a representation, warranty or covenant made in the Agreement is provided for in
section 12(a) of the Agency Trading Agreement incorporated herein by reference
as Exhibit (h)(17).
Indemnification of Registrant's 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, any
actual negligent act or omission by Janney Montgomery Scott, Inc. ("JMS") under
its agreement with the Trust; a material breach of any of the representations,
warranties and covenants; failure to timely and properly transmit orders and
instructions; cancellation or subsequent correction of any orders and
C-13
<PAGE>
instructions transmitted or discrepancies between Participant and Plan
maintained by JMS and account balances maintained by the Trust due to errors
caused by JMS, is provided for in Section 12 of the Agency Trading Agreement
incorporated herein by reference as Exhibit (h)(18)(i).
Indemnification of Registrant's officers, directors, partners,
trustees, member, employees, agents and affiliates ("Indemnitees") against any
and all claims, demands, liabilities and expenses including, without
limitations, reasonable legal fees arising out of, or relating to, (i) any
untrue statement or omission, or alleged untrue statement or omission, of
material fact that E-Trade or its employees make concerning the Fund that is
inconsistent with the Fund's current prospectus, statement of additional
information, periodic reports to shareholders or any other material the Fund
Parties have provided in writing to E-Trade, (ii) any breach by E-Trade of any
representation, warranty or provision contained herein, or (iii) any willful
misconduct or negligence by E-Trade in the performance of, or failure to
perform, its obligations under this Agreement, except to the extent that such
claims, liabilities or expenses are caused by Fund Parties' breach of this
Agreement or willful misconduct or negligence in the performance, or failure to
perform, their respective obligations under this Agreement, is provided for in
Section 4 of the No Transaction Fee Mutual Fund Offering/Retail Shareholder
Services Agreement, included as Exhibit (h)(20).
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
incorporated by reference in 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 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:
9.3 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
C-14
<PAGE>
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 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 26. 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.
C-15
<PAGE>
DENVER INVESTMENT ADVISORS LLC
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Name Position Other Type of
- ---- With Business Business
Denver Investment Connections --------
Advisors LLC -----------
------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Todger Anderson Executive President of Blue Chip Value Investment
Manager/President Fund, Inc.* Company
- ------------------------------------------------------------------------------------------------------------------
Kenneth V. Penland Executive Chairman of the Board of Blue Investment
Manager/Chairman Chip Value Fund, Inc.* Company
- ------------------------------------------------------------------------------------------------------------------
Varilyn Schock Vice President Vice President of Blue Chip Investment
Value Fund, Inc.* Company
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* The address of the Blue Chip Value Fund, Inc., is 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202.
Item 27. PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as the distributor for the
Registrant and the following investment companies: Financial
Investors Trust, Stonebridge Funds Trust, First Funds Trust,
Midcap SPDR Trust, Select Sector SPDR Trust, Nasdaq-100 Trust,
SPDR Trust, and DIAMONDS Trust.
(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
Russell Burk General Counsel None
Thomas A. Carter Chief Financial Officer None
Edmund Burke Executive Vice President None
Jeremy May Vice-President None
Robert Szydlowski Vice President None
C-16
<PAGE>
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 28. LOCATION OF ACCOUNTS AND RECORDS
(a) 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 Opportunity Fund.
(b) 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).
(c) 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).
(d) Drinker Biddle & Reath LLP, One Logan Square, 18th &
Cherry Streets, Philadelphia, PA 19103-6996 (Registrant's
Declaration of Trust, Code of Regulations and Minute Books).
(e) The Bank of New York, One Wall Street, New York, NY 10286 (records
relating to its functions as custodian for each of the
Registrant's investment portfolios).
Item 29. MANAGEMENT SERVICES
None.
Item 30. UNDERTAKINGS
None.
C-17
<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
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and 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 30th day of September, 1999.
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:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
*/s/ Jack D. Henderson Chairman of the September 30, 1999
- ---------------------- Board of Trustees
Jack D. Henderson
*/s/ McNeil S. Fiske Trustee September 30, 1999
- --------------------
McNeil S. Fiske
*/s/ James B. O'Boyle Trustee September 30, 1999
- ---------------------
James B. O'Boyle
*/s/ Robert L. Stamp Trustee September 30, 1999
- --------------------
Robert L. Stamp
*/s/ Lyman Seely Trustee September 30, 1999
- ----------------
Lyman Seely
/s/ Kenneth V. Penland President (Principal September 30, 1999
- ----------------------- Executive Officer)
Kenneth V. Penland
*/s/ Jasper Frontz Treasurer (Principal September 30, 1999
- ------------------ Financial Officer and
Jasper Frontz Chief Accounting Officer)
</TABLE>
*By: /s/ Kenneth V. Penland
----------------------
Kenneth V. Penland
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(d)(3) Form of Addendum No. 2 to Advisory Agreement with respect to the
Small Cap Growth Fund
(d)(4) Form of Addendum No. 3 to Advisory Agreement with respect to the
Select Fund
(d)(5) Form of Addendum No. 4 to Advisory Agreement with respect to the
International Equity Fund.
(e)(1)(ii) Form of Amendment No. 2 to Distribution Agreement with respect to
the Small Cap Growth Fund
(e)(1)(iii) Form of Amendment No. 3 to Distribution Agreement with respect to
the Select Fund
(e)(1)(iv) Form of Amendment No. 4 to Distribution Agreement with respect to
the International Equity Fund
(g)(4) Form of Custody Agreement between Westcore Trust and The Bank of
New York
(g)(5) Form of Foreign Custody Manager Agreement between Westcore Trust
and The Bank of New York
(h)(1)(ii) Form of Amendment No. 2 to Administration Agreement with respect
to the Small Cap Growth Fund
(h)(1)(iii) Form of Amendment No. 3 to Administration Agreement with respect
to the Select Fund
(h)(1)(iv) Form of Amendment No. 4 to Administration Agreement with respect
to the International Equity Fund
(h)(2)(v) Form of Transfer Agency and Service Agreement between Westcore
Trust and ALPS Mutual Fund Services
(h)(3)(ii) Form of Amendment No. 2 to Bookkeeping and Pricing Agreement with
respect to the Small Cap Growth Fund
(h)(3)(iii) Form of Amendment No. 3 to Bookkeeping and Pricing Agreement with
respect to the Select Fund
<PAGE>
(h)(3)(iv) Form of Amendment No. 4 to Bookkeeping and Pricing Agreement with
respect to the International Equity Fund
(h)(7)(ii) Addition of Parties to Shareholder Service Agreement dated
July 1, 1996 among Wells Fargo Bank, N.A., Westcore Trust, ALPS
Mutual Funds Services, Inc. and Denver Investment Advisors LLC.
(h)(12)(ii) Amendment to Securities Lending Agency Client Agreement dated as
of March 27, 1998 between Westcore Trust and PaineWebber
Incorporated
(i) Opinion of Counsel
(j)(1) Consent of Drinker Biddle & Reath LLP
(j)(2) Consent of Deloitte & Touche
(p) Powers of Attorney and Certificate of Secretary
-2-
<PAGE>
Exhibit (d)(3)
ADDENDUM NO. 2 TO AMENDED AND
RESTATED INVESTMENT ADVISORY AGREEMENT
This Addendum No. 2, dated as of the ____ day of ____________, 1999,
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 a
new portfolio, namely the Small-Cap Growth 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
Small-Cap Growth 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 Small-Cap Growth 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 Small-Cap Growth 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
Small-Cap Growth Fund considered separately on a per-Fund basis, at the annual
rate of 1.00% of the net assets of the Small-Cap Growth 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
Small-Cap Growth Fund. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Advisory Agreement.
-1-
<PAGE>
Exhibit (d)(3)
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:
--------------------------------
DENVER INVESTMENT ADVISORS LLC
By:
--------------------------------
Title:
-2-
<PAGE>
Exhibit (d)(4)
ADDENDUM NO. 3 TO AMENDED AND
RESTATED INVESTMENT ADVISORY AGREEMENT
This Addendum No. 3, dated as of the ____ day of ____________, 1999, 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 a new
portfolio, namely the Select 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 Select 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 Select 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 Select 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 Select Fund considered separately on a per-Fund basis, at the annual rate
of 0.65% of the net assets of the Select 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 Select Fund.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Advisory Agreement.
-1-
<PAGE>
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:
-------------------------
DENVER INVESTMENT ADVISORS LLC
By:
-------------------------
Title:
-2-
<PAGE>
Exhibit (d)(5)
ADDENDUM NO. 4 TO AMENDED AND
RESTATED INVESTMENT ADVISORY AGREEMENT
This Addendum No. 4, dated as of the ____ day of ____________, 1999, 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 a
new portfolio, namely the International Equity 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 International Equity 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 International Equity 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 International Equity
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 International Equity Fund considered separately on a per-Fund
basis, at the annual rate of 1.20% of the net assets of the International
Equity 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 International
Equity Fund. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Advisory Agreement.
-1-
<PAGE>
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:
-------------------------
DENVER INVESTMENT ADVISORS LLC
By:
-------------------------
Title:
-2-
-2-
<PAGE>
Exhibit (e)(1)(ii)
AMENDMENT NO. 2
TO THE DISTRIBUTION AGREEMENT
Amendment dated as of _____________, 1999 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 Small-Cap
Growth 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 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>
Exhibit (e)(1)(iii)
AMENDMENT NO. 3
TO THE DISTRIBUTION AGREEMENT
Amendment dated as of ____________, 1999 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
Select 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>
Exhibit (e)(1)(iii)
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>
Exhibit (e)(1)(iv)
AMENDMENT NO. 4
TO THE DISTRIBUTION AGREEMENT
Amendment dated as of _________________, 1999 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
International Equity 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>
Exhibit (g)(4)
CUSTODY AGREEMENT
Agreement made as of this day of , 1999, between WESTCORE
TRUST, a Massachusetts business trust organized and existing under the laws
of the Commonwealth of Massachusetts, having its principal office and place
of business at 1225 17th Street, 26th Floor, Denver, Colorado 80202
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its principal office
and place of business at One Wall Street, New York, New York 10286
(hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth, the
Fund and the Custodian agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Authorized Persons" shall be deemed to include any person, whether
or not such person is an officer or employee of the Fund, duly authorized by
the Board of Trustees of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix A or such other Certificate as may be
received by the Custodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees.
3. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of
the exercise price, as specified therein, to purchase from the writer thereof
the specified underlying Securities.
4. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given
to the Custodian which is actually received by the Custodian and signed on
behalf of the Fund by any two Authorized Persons, and the term Certificate
shall also include Instructions.
<PAGE>
5. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an investment
company, or any broker-dealer reasonably believed by the Custodian to be such
a clearing member.
6. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any
Put Option guarantee letter or similar document described in paragraph 8 of
Article V herein, or (b) any receipt described in Article V or VIII herein.
7. "Composite Currency Unit" shall mean the European Currency Unit or
any other composite unit consisting of the aggregate of specified amounts of
specified Currencies as such unit may be constituted from time to time.
8. "Covered Call Option" shall mean an exchange traded option
entitling the holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the specified
underlying Securities (excluding Futures Contracts) which are owned by the
writer thereof and subject to appropriate restrictions.
9. "Currency" shall mean money denominated in a lawful currency of any
country or the European Currency Unit.
10. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Fund's Board of Trustees specifically
approving deposits therein by the Custodian.
11. "Financial Futures Contract" shall mean the firm commitment to buy
or sell fixed income securities including, without limitation, U.S. Treasury
Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates
of deposit, and Eurodollar certificates of deposit, during a specified month
at an agreed upon price.
12. "Futures Contract" shall mean a Financial Futures Contract and/or
Stock Index Futures Contracts.
13. "Futures Contract Option" shall mean an option with respect to a
Futures Contract.
14. "FX Transaction" shall mean any transaction for the purchase by one
party of an agreed amount in one Currency against the sale by it to the other
party of an agreed amount in another Currency.
-2-
<PAGE>
15. "Instructions" shall mean instructions communications transmitted
by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission signed by an Authorized Person and tested telex.
16. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money
of the Fund shall be deposited and withdrawn from time to time in connection
with such transactions as the Fund may from time to time determine.
Securities held in the Book-Entry System or the Depository shall be deemed to
have been deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry in its books and records.
17. "Money Market Security" shall be deemed to include, without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United
States or agencies or instrumentalities thereof, any tax, bond or revenue
anticipation note issued by any state or municipal government or public
authority, commercial paper, certificates of deposit and bankers'
acceptances, repurchase agreements with respect to the same and bank time
deposits, where the purchase and sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale.
18. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934,
its successor or successors, and its nominee or nominees.
19. "Option" shall mean a Call Option, Covered Call Option, Stock Index
Option and/or a Put Option.
20. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person
reasonably believed by the Custodian to be an Authorized Person.
21. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
-3-
<PAGE>
22. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
23. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Stock Index Options, Stock
Index Futures Contracts, Stock Index Futures Contract Options, Financial
Futures Contracts, Financial Futures Contract Options, Reverse Repurchase
Agreements, common stocks and other securities having characteristics similar
to common stocks, preferred stocks, debt obligations issued by state or
municipal governments and by public authorities, (including, without
limitation, general obligation bonds, revenue bonds, industrial bonds and
industrial development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the same, or
evidencing or representing any other rights or interest therein, or any
property or assets.
24. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account
in which certain Securities and/or other assets of the Fund specifically
allocated to such Series shall be deposited and withdrawn from time to time
in accordance with Certificates received by the Custodian in connection with
such transactions as the Fund may from time to time determine.
25. "Series" shall mean the various portfolios, if any, of the Fund
listed on Appendix B hereto as amended from time to time.
26. "Shares" shall mean the shares of beneficial interest of the Fund,
each of which is, in the case of a Fund having Series, allocated to a
particular Series.
27. "Stock Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the
value of a particular stock index at the close of the last business day of
the contract and the price at which the futures contract is originally struck.
28. "Stock Index Option" shall mean an exchange traded option entitling
the holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
-4-
<PAGE>
ARTICLE II.
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian
of the Securities and money at any time owned by the Fund during the period
of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III.
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all money owned by it, at any time during the period of
this Agreement, and shall specify with respect to such Securities and money
the Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Custodian will not be responsible for any Securities and money not actually
received by it. The Custodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and money is
not finally collected. The Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit A hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all
Securities eligible for deposit therein, regardless of the Series to which
the same are specifically allocated and to utilize the Book-Entry System to
the extent possible in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities and deliveries and returns of Securities
collateral. Prior to a deposit of Securities specifically allocated to a
Series in the Depository, the Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit B hereto, approving, authorizing and instructing the Custodian on a
continuous and ongoing basis until instructed to the contrary by a
Certificate actually received by the Custodian to deposit in the Depository
all Securities specifically allocated to such Series eligible for deposit
therein, and to utilize the Depository to the extent possible with respect to
such Securities in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of Securities
collateral. Securities and money deposited in either the Book-Entry System or
the Depository will be represented in accounts which include only assets held
by the Custodian for customers, including, but not limited to, accounts in
which the Custodian acts in a fiduciary or
-5-
<PAGE>
representative capacity and will be specifically allocated on the Custodian's
books to the separate account for the applicable Series. Prior to the
Custodian's accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series as
provided in this Agreement, the Custodian shall have received a certified
resolution of the Fund's Board of Trustees, substantially in the form of
Exhibit C hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary by a
Certificate actually received by the Custodian, to accept, utilize and act in
accordance with such confirmations as provided in this Agreement with respect
to such Series.
2. The Custodian shall establish and maintain separate accounts, in
the name of each Series, and shall credit to the separate account for each
Series all money received by it for the account of the Fund with respect to
such Series. Money credited to a separate account for a Series shall be
disbursed by the Custodian only:
(a) as hereinafter provided;
(b) pursuant to Certificates setting forth the name and address
of the person to whom the payment is to be made, the Series account from
which payment is to be made and the purpose for which payment is to be made;
or
(c) in payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the Custodian
shall furnish the Fund with confirmations and a summary, on a per Series
basis, of all transfers to or from the account of the Fund for a Series,
either hereunder or with any co-custodian or sub-custodian appointed in
accordance with this Agreement during said day. Where Securities are
transferred to the account of the Fund for a Series, the Custodian shall also
by book-entry or otherwise identify as belonging to such Series a quantity of
Securities in a fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on the books
of the Book-Entry System or the Depository. At least monthly and from time to
time, the Custodian shall furnish the Fund with a detailed statement, on a
per Series basis, of the Securities and money held by the Custodian for the
Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are
issued or issuable only in bearer form, except such Securities as are held in
the Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the
name of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Fund agrees to furnish to the Custodian appropriate
instruments to enable the
-6-
<PAGE>
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from time to
time be registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held in the
Book-Entry System or in the Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or
through the use of the Book-Entry System or the Depository with respect to
Securities held hereunder and therein deposited, shall with respect to all
Securities held for the Fund hereunder in accordance with preceding paragraph
4:
(a) collect all income, dividends and distributions due or
payable;
(b) give notice to the Fund and present payment and collect the
amount payable upon such Securities which are called, but only if either (i)
the Custodian receives a written notice of such call, or (ii) notice of such
call appears in one or more of the publications listed in Appendix C annexed
hereto, which may be amended at any time by the Custodian without the prior
notification or consent of the Fund;
(c) present for payment and collect the amount payable upon all
Securities which mature;
(d) surrender Securities in temporary form for definitive
Securities;
(e) execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;
(f) hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any
Securities held by the Custodian for such Series hereunder; and
(g) deliver to the Fund all notices, proxies, proxy soliciting
materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities
held pursuant to this Agreement which are actually received by the Custodian,
such proxies and other similar materials to be executed by the registered
owner (if Securities are registered otherwise than in the name of the Fund),
but without indicating the manner in which proxies or consents are to be
voted.
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6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
(a) execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held by the
Custodian hereunder for the Series specified in such Certificate may be
exercised;
(b) deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received
in exchange;
(c) deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale
of assets of any corporation, and receive and hold hereunder specifically
allocated to such Series such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to evidence such
delivery;
(d) make such transfers or exchanges of the assets of the Series
specified in such Certificate, and take such other steps as shall be stated
in such Certificate to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which
may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received
a Certificate from the Fund stating, that any such instruments or
certificates are available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the availability of any
such instrument or certificate. Prior to such availability, the Custodian
shall comply with Section 17(f) of the Investment Company Act of 1940, as
amended, in connection with the purchase, sale, settlement, closing-out or
writing of Futures Contracts, Options, or Futures Contract Options by making
payments or deliveries specified in Certificates received by the Custodian in
connection with any such purchase, sale, writing, settlement or closing-out
upon its receipt from a broker, dealer, or futures commission merchant of a
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statement or confirmation reasonably believed by the Custodian to be in the
form customarily used by brokers, dealers, or futures commission merchants
with respect to such Futures Contracts, Options, or Futures Contract Options,
as the case may be, confirming that such Security is held by such broker,
dealer or futures commission merchant, in book-entry form or otherwise, in
the name of the Custodian (or any nominee of the Custodian) as custodian for
the Fund, provided, however, that notwithstanding the foregoing, payments to
or deliveries from the Margin Account, and payments with respect to
Securities to which a Margin Account relates, shall be made in accordance
with the terms and conditions of the Margin Account Agreement. Whenever any
such instruments or certificates are available, the Custodian shall,
notwithstanding any provision in this Agreement to the contrary, make payment
for any Futures Contract, Option, or Futures Contract Option for which such
instruments or such certificates are available only against the delivery to
the Custodian of such instrument or such certificate, and deliver any Futures
Contract, Option or Futures Contract Option for which such instruments or
such certificates are available only against receipt by the Custodian of
payment therefor. Any such instrument or certificate delivered to the
Custodian shall be held by the Custodian hereunder in accordance with, and
subject to, the provisions of this Agreement.
ARTICLE IV.
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii)
with respect to each purchase of Money Market Securities, a Certificate or
Oral Instructions, specifying with respect to each such purchase: (a) the
Series to which such Securities are to be specifically allocated; (b) the
name of the issuer and the title of the Securities; (c) the number of shares
or the principal amount purchased and accrued interest, if any; (d) the date
of purchase and settlement; (e) the purchase price per unit; (f) the total
amount payable upon such purchase; (g) the name of the person from whom or
the broker through whom the purchase was made, and the name of the clearing
broker, if any; and (h) the name of the broker to whom payment is to be made.
The Custodian shall, upon receipt of Securities purchased by or for the Fund,
pay to the broker specified in the Certificate out of the money held for the
account of such Series the total amount payable upon such purchase, provided
that the same conforms to the total amount payable as set forth in such
Certificate or Oral Instructions.
2. Promptly after each sale of Securities by the Fund, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase
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Agreement, the Fund shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, a Certificate, and
(ii) with respect to each sale of Money Market Securities, a Certificate or Oral
Instructions, specifying with respect to each such sale: (a) the Series to which
such Securities were specifically allocated; (b) the name of the issuer and the
title of the Security; (c) the number of shares or principal amount sold, and
accrued interest, if any; (d) the date of sale; (e) the sale price per unit; (f)
the total amount payable to the Fund upon such sale; (g) the name of the broker
through whom or the person to whom the sale was made, and the name of the
clearing broker, if any; and (h) the name of the broker to whom the Securities
are to be delivered. The Custodian shall deliver the Securities specifically
allocated to such Series to the broker specified in the Certificate against
payment of the total amount payable to the Fund upon such sale, provided that
the same conforms to the total amount payable as set forth in such Certificate
or Oral Instructions.
ARTICLE V.
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Custodian a Certificate specifying with respect to each
Option purchased: (a) the Series to which such Option is specifically
allocated; (b) the type of Option (put or call); (c) the name of the issuer
and the title and number of shares subject to such Option or, in the case of
a Stock Index Option, the stock index to which such Option relates and the
number of Stock Index Options purchased; (d) the expiration date; (e) the
exercise price; (f) the dates of purchase and settlement; (g) the total
amount payable by the Fund in connection with such purchase; (h) the name of
the Clearing Member through whom such Option was purchased; and (i) the name
of the broker to whom payment is to be made. The Custodian shall pay, upon
receipt of a Clearing Member's statement confirming the purchase of such
Option held by such Clearing Member for the account of the Custodian (or any
duly appointed and registered nominee of the Custodian) as custodian for the
Fund, out of money held for the account of the Series to which such Option is
to be specifically allocated, the total amount payable upon such purchase to
the Clearing Member through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund
pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such sale: (a) the Series to
which such Option was specifically allocated; (b) the type of Option (put or
call); (c) the name of the issuer and the title and number of shares subject
to such Option or, in the case of a Stock Index Option, the stock index to
which such Option relates and the number of Stock Index Options sold; (d) the
date of sale; (e) the sale price; (f) the date of settlement; (g) the total
amount payable to the Fund upon such sale; and (h) the name of the Clearing
Member through whom the sale was
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made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph 1 of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the Fund, provided
that the same conforms to the total amount payable as set forth in such
Certificate.
3. Promptly after the exercise by the Fund of any Call Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to such Call Option:
(a) the Series to which such Call Option was specifically allocated; (b) the
name of the issuer and the title and number of shares subject to the Call
Option; (c) the expiration date; (d) the date of exercise and settlement; (e)
the exercise price per share; (f) the total amount to be paid by the Fund
upon such exercise; and (g) the name of the Clearing Member through whom such
Call Option was exercised. The Custodian shall, upon receipt of the
Securities underlying the Call Option which was exercised, pay out of the
money held for the account of the Series to which such Call Option was
specifically allocated the total amount payable to the Clearing Member
through whom the Call Option was exercised, provided that the same conforms
to the total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Put Option: (a) the
Series to which such Put Option was specifically allocated; (b) the name of
the issuer and the title and number of shares subject to the Put Option; (c)
the expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid to the Fund upon
such exercise; and (g) the name of the Clearing Member through whom such Put
Option was exercised. The Custodian shall, upon receipt of the amount payable
upon the exercise of the Put Option, deliver or direct the Depository to
deliver the Securities specifically allocated to such Series, provided the
same conforms to the amount payable to the Fund as set forth in such
Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to such Stock Index
Option: (a) the Series to which such Stock Index Option was specifically
allocated; (b) the type of Stock Index Option (put or call); (c) the number
of Options being exercised; (d) the stock index to which such Option relates;
(e) the expiration date; (f) the exercise price; (g) the total amount to be
received by the Fund in connection with such exercise; and (h) the Clearing
Member from whom such payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
such Covered Call Option: (a) the Series for which such Covered Call Option
was
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written; (b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Custodian shall
deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among
Clearing Members dealing in Covered Call Options and shall impose, or direct the
Depository to impose, upon the underlying Securities specified in the
Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the Custodian and not
deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver,
or to direct the Depository to deliver, the Securities subject to such
Covered Call Option and specifying: (a) the Series for which such Covered
Call Option was written; (b) the name of the issuer and the title and number
of shares subject to the Covered Call Option; (c) the Clearing Member to whom
the underlying Securities are to be delivered; and (d) the total amount
payable to the Fund upon such delivery. Upon the return and/or cancellation
of any receipts delivered pursuant to paragraph 6 of this Article, the
Custodian shall deliver, or direct the Depository to deliver, the underlying
Securities as specified in the Certificate against payment of the amount to
be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series for which such Put Option was written; (b) the name of
the issuer and the title and number of shares for which the Put Option is
written and which underlie the same; (c) the expiration date; (d) the
exercise price; (e) the premium to be received by the Fund; (f) the date such
Put Option is written; (g) the name of the Clearing Member through whom the
premium is to be received and to whom a Put Option guarantee letter is to be
delivered; (h) the amount of cash, and/or the amount and kind of Securities,
if any, specifically allocated to such Series to be deposited in the Senior
Security Account for such Series; and (i) the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited into the Collateral Account for such Series. The Custodian shall,
after making the deposits into the Collateral Account specified in the
Certificate, issue a Put Option guarantee letter substantially in the form
utilized by the Custodian on the date hereof, and deliver the same to the
Clearing Member specified in the Certificate against receipt of the premium
specified in said Certificate. Notwithstanding the foregoing, the Custodian
shall be under no obligation to issue any Put Option guarantee letter or
similar document if it is unable to make any of the representations contained
therein.
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9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put Option
was written; (b) the name of the issuer and title and number of shares
subject to the Put Option; (c) the Clearing Member from whom the underlying
Securities are to be received; (d) the total amount payable by the Fund upon
such delivery; (e) the amount of cash and/or the amount and kind of
Securities specifically allocated to such Series to be withdrawn from the
Collateral Account for such Series and (f) the amount of cash and/or the
amount and kind of Securities, specifically allocated to such Series, if any,
to be withdrawn from the Senior Security Account. Upon the return and/or
cancellation of any Put Option guarantee letter or similar document issued by
the Custodian in connection with such Put Option, the Custodian shall pay out
of the money held for the account of the Series to which such Put Option was
specifically allocated the total amount payable to the Clearing Member
specified in the Certificate as set forth in such Certificate against
delivery of such Securities, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
such Stock Index Option: (a) the Series for which such Stock Index Option was
written; (b) whether such Stock Index Option is a put or a call; (c) the
number of options written; (d) the stock index to which such Option relates;
(e) the expiration date; (f) the exercise price; (g) the Clearing Member
through whom such Option was written; (h) the premium to be received by the
Fund; (i) the amount of cash and/or the amount and kind of Securities, if
any, specifically allocated to such Series to be deposited in the Senior
Security Account for such Series; (j) the amount of cash and/or the amount
and kind of Securities, if any, specifically allocated to such Series to be
deposited in the Collateral Account for such Series; and (k) the amount of
cash and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in a Margin Account, and the name in which
such account is to be or has been established. The Custodian shall, upon
receipt of the premium specified in the Certificate, make the deposits, if
any, into the Senior Security Account specified in the Certificate, and
either (1) deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with the customs
prevailing among Clearing Members in Stock Index Options and make the
deposits into the Collateral Account specified in the Certificate, or (2)
make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written;
(b) such information as may be necessary to identify the Stock Index Option
being exercised; (c) the Clearing Member through whom such Stock Index Option
is being exercised; (d) the total amount payable upon such exercise, and
whether such amount is to be paid by or to the Fund; (e) the amount of cash
and/or amount and kind of Securities, if any, to be withdrawn from the Margin
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Account; and (f) the amount of cash and/or amount and kind of Securities, if
any, to be withdrawn from the Senior Security Account for such Series; and
the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Collateral Account for such Series. Upon the return and/or
cancellation of the receipt, if any, delivered pursuant to the preceding
paragraph of this Article, the Custodian shall pay out of the money held for
the account of the Series to which such Stock Index Option was specifically
allocated to the Clearing Member specified in the Certificate the total
amount payable, if any, as specified therein.
12. Whenever the Fund purchases any Option identical to a previously
written Option described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated as a "Closing Purchase Transaction" in order
to liquidate its position as a writer of an Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase Transaction;
(b) the Series for which the Option was written; (c) the name of the issuer
and the title and number of shares subject to the Option, or, in the case of
a Stock Index Option, the stock index to which such Option relates and the
number of Options held; (d) the exercise price; (e) the premium to be paid by
the Fund; (f) the expiration date; (g) the type of Option (put or call); (h)
the date of such purchase; (i) the name of the Clearing Member to whom the
premium is to be paid; and (j) the amount of cash and/or the amount and kind
of Securities, if any, to be withdrawn from the Collateral Account, a
specified Margin Account, or the Senior Security Account for such Series.
Upon the Custodian's payment of the premium and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8 or 10 of this
Article with respect to the Option being liquidated through the Closing
Purchase Transaction, the Custodian shall remove, or direct the Depository to
remove, the previously imposed restrictions on the Securities underlying the
Call Option.
13. Upon the expiration, exercise or consummation of a Closing
Purchase Transaction with respect to any Option purchased or written by the
Fund and described in this Article, the Custodian shall delete such Option
from the statements delivered to the Fund pursuant to paragraph 3 of Article
III herein, and upon the return and/or cancellation of any receipts issued by
the Custodian, shall make such withdrawals from the Collateral Account, and
the Margin Account and/or the Senior Security Account as may be specified in
a Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI.
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying with respect to such
Futures Contract, (or
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with respect to any number of identical Futures Contract(s)): (a) the Series for
which the Futures Contract is being entered; (b) the category of Futures
Contract (the name of the underlying stock index or financial instrument); (c)
the number of identical Futures Contracts entered into; (d) the delivery or
settlement date of the Futures Contract(s); (e) the date the Futures Contract(s)
was (were) entered into and the maturity date; (f) whether the Fund is buying
(going long) or selling (going short) on such Futures Contract(s); (g) the
amount of cash and/or the amount and kind of Securities, if any, to be deposited
in the Senior Security Account for such Series; (h) the name of the broker,
dealer, or futures commission merchant through whom the Futures Contract was
entered into; and (i) the amount of fee or commission, if any, to be paid and
the name of the broker, dealer, or futures commission merchant to whom such
amount is to be paid. The Custodian shall make the deposits, if any, to the
Margin Account in accordance with the terms and conditions of the Margin Account
Agreement. The Custodian shall make payment out of the money specifically
allocated to such Series of the fee or commission, if any, specified in the
Certificate and deposit in the Senior Security Account for such Series the
amount of cash and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian a Certificate specifying:
(a) the Futures Contract and the Series to which the same relates; (b) with
respect to a Stock Index Futures Contract, the total cash settlement amount
to be paid or received, and with respect to a Financial Futures Contract, the
Securities and/or amount of cash to be delivered or received; (c) the broker,
dealer, or futures commission merchant to or from whom payment or delivery is
to be made or received; and (d) the amount of cash and/or Securities to be
withdrawn from the Senior Security Account for such Series. The Custodian
shall make the payment or delivery specified in the Certificate, and delete
such Futures Contract from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to
the Custodian a Certificate specifying: (a) the items of information required
in a Certificate described in paragraph 1 of this Article, and (b) the
Futures Contract being offset. The Custodian shall make payment out of the
money specifically allocated to such Series of the fee or
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commission, if any, specified in the Certificate and delete the Futures
Contract being offset from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and make such withdrawals from the Senior
Security Account for such Series as may be specified in such Certificate. The
withdrawals, if any, to be made from the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
5. Notwithstanding any other provision in this Agreement to the contrary,
the Custodian shall deliver cash and Securities to a futures commission merchant
upon receipt of a Certificate from the Fund specifying: (a) the name of the
futures commission merchant; (b) the specific cash and Securities to be
delivered; (c) the date of such delivery; and (d) the date of the agreement
between the Fund and such futures commission merchant entered pursuant to Rule
17f-6 under the Investment Company Act 1940, as amended. Each delivery of such a
Certificate by the Fund shall constitute (x) a representation and warranty by
the Fund that the Rule 17f-6 agreement has been duly authorized, executed and
delivered by the Fund and the futures commission merchant and complies with Rule
17f-6, and (y) an agreement by the Fund that the Custodian shall not be liable
for the acts or omissions of any such futures commission merchant.
ARTICLE VII.
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Fund, the Fund shall promptly deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the Series to which such
Option is specifically allocated; (b) the type of Futures Contract Option (put
or call); (c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Contract
Option purchased; (d) the expiration date; (e) the exercise price; (f) the dates
of purchase and settlement; (g) the amount of premium to be paid by the Fund
upon such purchase; (h) the name of the broker or futures commission merchant
through whom such option was purchased; and (i) the name of the broker, or
futures commission merchant, to whom payment is to be made. The Custodian shall
pay out of the money specifically allocated to such Series, the total amount to
be paid upon such purchase to the broker or futures commissions merchant through
whom the purchase was made, provided that the same conforms to the amount set
forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) Series to
which such Futures Contract Option was specifically allocated; (b) the type of
Futures Contract Option (put or call); (c) the type of Futures Contract and such
other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of
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sale; (e) the sale price; (f) the date of settlement; (g) the total amount
payable to the Fund upon such sale; and (h) the name of the broker or futures
commission merchant through whom the sale was made. The Custodian shall consent
to the cancellation of the Futures Contract Option being closed against payment
to the Custodian of the total amount payable to the Fund, provided the same
conforms to the total amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the money and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the money and Securities specifically allocated to such
Series the deposits into the Senior Security Account, if any, as specified in
the Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a call
is exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by
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the Fund upon such exercise; and (g) the amount of cash and/or the amount and
kind of Securities to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon its receipt of the net total amount payable to
the Fund, if any, specified in such Certificate make the payments, if any, and
the deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the money and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to a
previously written Futures Contract Option described in this Article in order to
liquidate its position as a writer of such Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) the Series to which such Option
is specifically allocated; (b) that the transaction is a closing transaction;
(c) the type of Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Option Contract; (d) the
exercise price; (e) the premium to be paid by the Fund; (f) the expiration date;
(g) the name of the broker or futures commission merchant to whom the premium is
to be paid; and (h) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security Account
specified in the Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased by
the Fund and described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein
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and, (b) make such withdrawals from and/or in the case of an exercise such
deposits into the Senior Security Account as may be specified in a Certificate.
The deposits to and/or withdrawals from the Margin Account, if any, shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article VI
hereof.
10. Notwithstanding any other provision in this Agreement to the contrary,
the Custodian shall deliver cash and Securities to a futures commission merchant
upon receipt of a Certificate from the Fund specifying: (a) the name of the
futures commission merchant; (b) the specific cash and Securities to be
delivered; (c) the date of such delivery; and (d) the date of the agreement
between the Fund and such futures commission merchant entered pursuant to Rule
17f-6 under the Investment Company Act 1940, as amended. Each delivery of such a
Certificate by the Fund shall constitute (x) a representation and warranty by
the Fund that the Rule 17f-6 agreement has been duly authorized, executed and
delivered by the Fund and the futures commission merchant and complies with Rule
17f-6, and (y) an agreement by the Fund that the Custodian shall not be liable
for the acts or omissions of any such futures commission merchant.
ARTICLE VIII.
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying: (a) the Series
for which such short sale was made; (b) the name of the issuer and the title of
the Security; (c) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (d) the dates of the sale and settlement; (e) the
sale price per unit; (f) the total amount credited to the Fund upon such sale,
if any, (g) the amount of cash and/or the amount and kind of Securities, if any,
which are to be deposited in a Margin Account and the name in which such Margin
Account has been or is to be established; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a Senior Security
Account, and (i) the name of the broker through whom such short sale was made.
The Custodian shall upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon such sale, if any,
as specified in the Certificate is held by such broker for the account of the
Custodian (or any nominee of the Custodian) as custodian of the Fund, issue a
receipt or make the deposits into the Margin Account and the Senior Security
Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such closing-out: (a) the Series for which such transaction is being made; (b)
the name of the
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issuer and the title of the Security; (c) the number of shares or the principal
amount, and accrued interest or dividends, if any, required to effect such
closing-out to be delivered to the broker; (d) the dates of closing-out and
settlement; (e) the purchase price per unit; (f) the net total amount payable
to the Fund upon such closing-out; (g) the net total amount payable to the
broker upon such closing-out; (h) the amount of cash and the amount and kind of
Securities to be withdrawn, if any, from the Margin Account; (i) the amount of
cash and/or the amount and kind of Securities, if any, to be withdrawn from the
Senior Security Account; and (j) the name of the broker through whom the Fund is
effecting such closing-out. The Custodian shall, upon receipt of the net total
amount payable to the Fund upon such closing-out, and the return and/or
cancellation of the receipts, if any, issued by the Custodian with respect to
the short sale being closed-out, pay out of the money held for the account of
the Fund to the broker the net total amount payable to the broker, and make the
withdrawals from the Margin Account and the Senior Security Account, as the same
are specified in the Certificate.
ARTICLE IX.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate, or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate or Oral Instructions
specifying: (a) the Series for which the Reverse Repurchase Agreement is
entered; (b) the total amount payable to the Fund in connection with such
Reverse Repurchase Agreement and specifically allocated to such Series; (c) the
broker or dealer through or with whom the Reverse Repurchase Agreement is
entered; (d) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (e) the date of such Reverse Repurchase Agreement; and
(f) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in a Senior Security
Account for such Series in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate or Oral Instructions make the delivery to the
broker or dealer, and the deposits, if any, to the Senior Security Account,
specified in such Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate or Oral Instructions to the Custodian specifying: (a)
the Reverse Repurchase Agreement being terminated and the Series for which same
was entered; (b) the total amount payable by the Fund in connection with such
termination; (c) the amount and kind of Securities to be received by the Fund
and specifically allocated to such Series in connection with such termination;
(d) the date of termination; (e) the name of the broker or dealer with or
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through whom the Reverse Repurchase Agreement is to be terminated; and (f) the
amount of cash and/or the amount and kind of Securities to be withdrawn from
the Senior Securities Account for such Series. The Custodian shall, upon receipt
of the amount and kind of Securities to be received by the Fund specified in the
Certificate or Oral Instructions, make the payment to the broker or dealer, and
the withdrawals, if any, from the Senior Security Account, specified in such
Certificate or Oral Instructions.
ARTICLE X.
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall deliver or
cause to be delivered to the Custodian a Certificate specifying with respect to
each such loan: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities, (c) the
number of shares or the principal amount loaned, (d) the date of loan and
delivery, (e) the total amount to be delivered to the Custodian against the loan
of the Securities, including the amount of cash collateral and the premium, if
any, separately identified, and (f) the name of the broker, dealer, or financial
institution to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or
Depository only in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York Clearing House funds
and may deliver Securities in accordance with the customs prevailing among
dealers in securities.
2. Promptly after each termination of the loan of Securities by the Fund,
the Fund shall deliver or cause to be delivered to the Custodian a Certificate
specifying with respect to each such loan termination and return of Securities:
(a) the Series to which the loaned Securities are specifically allocated; (b)
the name of the issuer and the title of the Securities to be returned, (c) the
number of shares or the principal amount to be returned, (d) the date of
termination, (e) the total amount to be delivered by the Custodian (including
the cash collateral for such Securities minus any offsetting credits as
described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the money held for the account of the Fund, the total amount payable
upon such return of Securities as set forth in the Certificate.
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ARTICLE XI.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for which
such deposit or withdrawal is to be made and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be deposited by the Custodian into, or withdrawn
from, a Senior Securities Account, the Custodian shall be under no obligation to
make any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin Account
to the broker, dealer, futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as specified in the
Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in
and to any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may enforce
its lien and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter or similar
document or any receipt issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds which are less than
the Custodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Custodian by
the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
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6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to the Custodian
a Certificate specifying the then market value of the Securities described in
such statement. In the event such then market value is indicated to be less than
the Custodian's obligation with respect to any outstanding Put Option guarantee
letter or similar document, the Fund shall promptly specify in a Certificate the
additional cash and/or Securities to be deposited in such Collateral Account to
eliminate such deficiency.
ARTICLE XII.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Trustees of the Fund, certified by the Secretary or any Assistant
Secretary, either (i) setting forth with respect to the Series specified therein
the date of the declaration of a dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the shareholders of
record as of that date and the total amount payable to the Dividend Agent and
any sub-dividend agent or co-dividend agent of the Fund on the payment date, or
(ii) authorizing with respect to the Series specified therein the declaration of
dividends and distributions on a daily basis and authorizing the Custodian to
rely on Oral Instructions or a Certificate setting forth the date of the
declaration of such dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be determined,
the amount payable per Share of such Series to the shareholders of record as of
that date and the total amount payable to the Dividend Agent on the payment
date.
2. Upon the payment date specified in such resolution, Oral Instructions
or Certificate, as the case may be, the Custodian shall pay out of the money
held for the account of each Series the total amount payable to the Dividend
Agent and any sub-dividend agent or co-dividend agent of the Fund with respect
to such Series.
ARTICLE XIII.
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the
Custodian a Certificate duly specifying:
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(a) the Series, the number of Shares sold, trade date, and price;
and
(b) the amount of money to be received by the Custodian for the sale
of such Shares and specifically allocated to the separate account in the name of
such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held for
the account of such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) the number and Series of Shares redeemed; and
(b) the amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the money held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Custodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the money held in
the separate account of the Series of the Shares being redeemed.
ARTICLE XIV.
OVERDRAFTS OR INDEBTEDNESS
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1. If the Custodian should in its sole discretion advance funds on behalf
of any Series which results in an overdraft because the money held by the
Custodian in the separate account for such Series shall be insufficient to pay
the total amount payable upon a purchase of Securities specifically allocated to
such Series, as set forth in a Certificate or Oral Instructions, or which
results in an overdraft in the separate account of such Series for some other
reason, or if the Fund is for any other reason indebted to the Custodian with
respect to a Series, including any indebtedness to The Bank of New York under
the Fund's Cash Management and Related Services Agreement (except a borrowing
for investment or for temporary or emergency purposes using Securities as
collateral pursuant to a separate agreement and subject to the provisions of
paragraph 2 of this Article), such overdraft or indebtedness shall be deemed to
be a loan made by the Custodian to the Fund for such Series payable on demand
and shall bear interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to 1/2% over
Custodian's prime commercial lending rate in effect from time to time, such rate
to be adjusted on the effective date of any change in such prime commercial
lending rate but in no event to be less than 6% per annum. In addition, the Fund
hereby agrees that the Custodian shall have a continuing lien, security
interest, and security entitlement in and to any property including any
investment property or any financial asset specifically allocated to such Series
at any time held by it for the benefit of such Series or in which the Fund may
have an interest which is then in the Custodian's possession or control or in
possession or control of any third party acting in the Custodian's behalf. The
Fund authorizes the Custodian, in its sole discretion, at any time to charge any
such overdraft or indebtedness together with interest due thereon against any
balance of account standing to such Series' credit on the Custodian's books. In
addition, the Fund hereby covenants that on each Business Day on which either it
intends to enter a Reverse Repurchase Agreement and/or otherwise borrow from a
third party, or which next succeeds a Business Day on which at the close of
business the Fund had outstanding a Reverse Repurchase Agreement or such a
borrowing, it shall prior to 9 a.m., New York City time, advise the Custodian,
in writing, of each such borrowing, shall specify the Series to which the same
relates, and shall not incur any indebtedness not so specified other than from
the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the bank, (c) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund, or other loan
agreement, (d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund
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on the borrowing date, (g) the market value of Securities to be delivered as
collateral for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities, and
(h) a statement specifying whether such loan is for investment purposes or
for temporary or emergency purposes and that such loan is in conformance with
the Investment Company Act of 1940 and the Fund's prospectus. The Custodian
shall deliver on the borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against delivery by the
lending bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights therein given
the lending bank by virtue of any promissory note or loan agreement. The
Custodian shall deliver such Securities as additional collateral as may be
specified in a Certificate to collateralize further any transaction described
in this paragraph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and the Custodian
shall receive from time to time such return of collateral as may be tendered
to it. In the event that the Fund fails to specify in a Certificate the
Series, the name of the issuer, the title and number of shares or the
principal amount of any particular Securities to be delivered as collateral
by the Custodian, the Custodian shall not be under any obligation to deliver
any Securities.
ARTICLE XV.
INSTRUCTIONS
1. With respect to any software provided by the Custodian to a Fund in
order for the Fund to transmit Instructions to the Custodian (the
"Software"), the Custodian grants to such Fund a personal, nontransferable
and nonexclusive license to use the Software solely for the purpose of
transmitting Instructions to, and receiving communications from, the
Custodian in connection with its account(s). The Fund shall use the Software
solely for its own internal and proper business purposes, and not in the
operation of a service bureau, and agrees not to sell, reproduce, lease or
otherwise provide, directly or indirectly, the Software or any portion
thereof to any third party without the prior written consent of the
Custodian. The Fund acknowledges that the Custodian and its suppliers have
title and exclusive proprietary rights to the Software, including any trade
secrets or other ideas, concepts, know how, methodologies, or information
incorporated therein and the exclusive rights to any copyrights, trademarks
and patents (including registrations and applications for registration of
either) or statutory or legal protections available with respect thereof. The
Fund further acknowledges that all or a part of the Software may be
copyrighted or trademarked (or a registration or claim made therefor) by the
Custodian or its suppliers. The Fund shall not take any action with respect
to the Software inconsistent with the foregoing acknowledgments, nor shall
the Fund attempt to decompile, reverse engineer or modify the Software. The
Fund may not copy, sell, lease or provide, directly or indirectly, any of the
Software or any portion
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thereof to any other person or entity without the Custodian's prior written
consent. The Fund may not remove any statutory copyright notice, or other
notice including the software or on any media containing the Software. The
Fund shall reproduce any such notice on any reproduction of the Software and
shall add statutory copyright notice or other notice to the Software or media
upon the Bank's request. Custodian agrees to provide reasonable training,
instruction manuals and access to Custodian's "help desk" in connection with
the Fund's user support necessary to use of the Software. At the Fund's
request, Custodian agrees to permit reasonable testing of the Software by the
Fund.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize the Software and transmit Instructions to the
Custodian. The Custodian shall not be responsible for the reliability,
compatibility with the Software or availability of any such equipment or
services or the performance or nonperformance by any nonparty to this Custody
Agreement.
3. The Fund acknowledges that the Software, all data bases made
available to the Fund by utilizing the Software (other than data bases
relating solely to the assets of the Fund and transactions with respect
thereto), and any proprietary data, processes, information and documentation
(other than which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of the Custodian.
The Fund shall keep the Information confidential by using the same care and
discretion that the Fund uses with respect to its own confidential property
and trade secrets and shall neither make nor permit any disclosure without
the prior written consent of the Custodian. Upon termination of this
Agreement or the Software license granted hereunder for any reason, the Fund
shall return to the Custodian all copies of the Information which are in its
possession or under its control or which the Fund distributed to third
parties. The provisions of this Article shall not affect the copyright status
of any of the Information which may be copyrighted and shall apply to all
Information whether or not copyrighted.
4. The Custodian reserves the right to modify, at its own expense, the
Software from time to time without prior notice and the Fund shall install
new releases of the Software as the Custodian may direct. The Fund agrees not
to modify or attempt to modify the Software without the Custodian's prior
written consent. The Fund acknowledges that any modifications to the
Software, whether by the Fund or the Custodian and whether with or without
the Custodian's consent, shall become the property of the Custodian.
5. THE CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND WITH REGARD TO THE SOFTWARE OR THE
METHOD(S) BY WHICH THE FUND MAY TRANSMIT INSTRUCTIONS TO THE CUSTODIAN,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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6. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND AGREES THAT IT WILL NOT UNDER ANY CIRCUMSTANCES RESELL,
DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY
FORM) IN OR TO ANY OTHER COUNTRY. IF THE CUSTODIAN DELIVERS THE SOFTWARE TO
THE FUND OUTSIDE THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED
STATES IN ACCORDANCE WITH EXPORT ADMINISTRATIVE REGULATIONS. DIVERSION
CONTRARY TO U.S. LAWS PROHIBITED. The Fund hereby authorizes Custodian to
report its name and address to government agencies to which Custodian is
required to provide such information by law.
7. Where the method for transmitting Instructions by the Fund involves
an automatic systems acknowledgment by the Custodian of its receipt of such
Instructions, then in the absence of such acknowledgment the Custodian shall
not be liable for any failure to act pursuant to such Instructions, the Fund
may not claim that such Instructions were received by the Custodian, and the
Fund shall deliver a Certificate by some other means.
8. (a) The Fund agrees that where it delivers to the Custodian
Instructions hereunder, it shall be the Fund's sole responsibility to ensure
that only persons duly authorized by the Fund transmit such Instructions to
the Custodian. The Fund will cause all persons transmitting Instructions to
the Custodian to treat applicable user and authorization codes, passwords and
authentication keys with extreme care, and irrevocably authorizes the
Custodian to act in accordance with and rely upon Instructions received by it
pursuant hereto.
(b) The Fund hereby represents, acknowledges and agrees that it is
fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Custodian and that there may be
more secure methods of transmitting instructions to the Custodian than the
method(s) selected by the Fund. The Fund hereby agrees that the security
procedures (if any) to be followed in connection with the Fund's transmission
of Instructions provide to it a commercially reasonable degree of protection
in light of its particular needs and circumstances.
9. The Fund hereby represents, warrants and covenants to the Custodian
that this Agreement has been duly approved by a resolution of its Board of
Trustees, and that its transmission of Instructions pursuant hereto shall at
all times comply with the Investment Company Act.
10. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, its ability to send
Instructions as promptly as practicable, and in any event within 24 hours
after the earliest of (i) discovery thereof, (ii) the Business Day on which
discovery should have occurred through the exercise of
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reasonable care and (iii) in the case of any error, the date of actual
receipt of the earliest notice which reflects such error, it being agreed
that discovery and receipt of notice may only occur on a business day. The
Custodian shall promptly advise the Fund whenever the Custodian learns of any
errors, omissions or interruption in, or delay or unavailability of, the
Fund's ability to send Instructions.
11. Custodian will indemnify and hold harmless the Fund with respect to
any liability, damages, loss or claim incurred by or brought against Fund by
reason any claim or infringement against any patent, copyright, license or
other property right arising out or by reason of the Fund's use of the
Software in the form provided under this Section. Custodian at its own
expense will defend such action or claim brought against Fund to the extent
that it is based on a claim that the Software in the form provided by
Custodian infringes any patents, copyrights, license or other property right,
provided that Custodian is provided with reasonable written notice of such
claim, provided that the Fund has not settled, compromised or confessed any
such claim without the Custodian's written consent, in which event Custodian
shall have no liability or obligation hereunder, and provided Fund cooperates
with and assists Custodian in the defense of such claim. Custodian shall have
the right to control the defense of all such claims, lawsuits and other
proceedings. If, as a result of any claim of infringement against any patent,
copyright, license or other property right, Custodian is enjoined from using
the Software, or if Custodian believes that the System is likely to become
the subject of a claim of infringement, Custodian at its option may in its
sole discretion either (a) at its expenses procure the right for the Fund to
continue to use the Software, or (b), replace or modify the Software so as to
make it non-infringing, or (c) may discontinue the license granted herein
upon written notice to Fund.
ARTICLE XVI.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as
sub-custodian for each Series' Securities for which the primary market is
outside the United States ("Foreign Securities") and other assets, the
foreign banking institutions and foreign securities depositories and clearing
agencies designated on Schedule I hereto ("Foreign Sub-Custodians"). The Fund
may designate any additional foreign sub-custodian with which the Custodian
has an agreement for such entity to act as the Custodian's agent, as its
sub-custodian and any such additional foreign sub-custodian shall be deemed
added to Schedule I. Upon receipt of a Certificate from the Fund, the
Custodian shall cease the employment of any one or more Foreign
Sub-Custodians for maintaining custody of the Fund's assets and such Foreign
Sub-Custodian shall be deemed deleted from Schedule I.
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2. Each delivery of a Certificate to the Custodian in connection with
a transaction involving the use of a Foreign Sub-Custodian shall constitute a
representation and warranty by the Fund that its Board of Trustees, or its
third party foreign custody manager as defined in Rule 17f-5 under the
Investment Company Act of 1940, as amended, if any, has determined that use
of such Foreign Sub-Custodian satisfies the requirements of such Investment
Company Act of 1940 and such Rule 17f-5 thereunder.
3. The Custodian shall identify on its books as belonging to each
Series of the Fund the Foreign Securities of such Series held by each Foreign
Sub-Custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by the
Fund or any Series against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or incurred by the
Fund or any Series if and to the extent that the Fund or such Series has not
been made whole for any such loss, damage, cost, expense, liability or claim.
4. Upon request of the Fund, the Custodian will, consistent with the
terms of the applicable Foreign Sub-Custodian agreement, use reasonable
efforts to arrange for the independent accountants of the Fund to be afforded
access to the books and records of any Foreign Sub-Custodian insofar as such
books and records relate to the performance of such Foreign Sub-Custodian
under its agreement with the Custodian on behalf of the Fund.
5. The Custodian will supply to the Fund from time to time, as
mutually agreed upon, statements in respect of the securities and other
assets of each Series held by Foreign Sub-Custodians, including but not
limited to an identification of entities having possession of each Series'
Foreign Securities and other assets, and advices or notifications of any
transfers of Foreign Securities to or from each custodial account maintained
by a Foreign Sub-Custodian for the Custodian on behalf of the Series.
6. The Custodian shall transmit promptly to the Fund all notices,
reports or other written information received pertaining to the Fund's
Foreign Securities, including without limitation, notices of corporate
action, proxies and proxy solicitation materials.
7. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any Series
and delivery of securities maintained for the account of such Series may be
effected in accordance with the customary or established securities trading
or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivery of securities to the purchaser thereof or to a dealer therefor (or
an agent for such purchaser or dealer) against a receipt with the expectation
of receiving later payment for such securities from such purchaser or dealer.
8. Notwithstanding any other provision in this Agreement to the
contrary, with respect to any losses or damages arising out of or relating to
any actions or
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omissions of any Foreign Sub-Custodian the sole responsibility and liability
of the Custodian shall be to take appropriate action at the Fund's expense to
recover such loss or damage from the Foreign Sub-Custodian. It is expressly
understood and agreed that the Custodian's sole responsibility and liability
shall be limited to amounts so recovered from the Foreign Sub-Custodian.
ARTICLE XVII.
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the Fund
shall promptly deliver to the Custodian a Certificate or Oral Instructions
specifying with respect to such FX Transaction: (a) the Series to which such
FX Transaction is specifically allocated; (b) the type and amount of Currency
to be purchased by the Fund; (c) the type and amount of Currency to be sold
by the Fund; (d) the date on which the Currency to be purchased is to be
delivered; (e) the date on which the Currency to be sold is to be delivered;
and (f) the name of the person from whom or through whom such currencies are
to be purchased and sold. Unless otherwise instructed by a Certificate or
Oral Instructions, the Custodian shall deliver, or shall instruct a Foreign
Sub-Custodian to deliver, the Currency to be sold on the date on which such
delivery is to be made, as set forth in the Certificate, and shall receive,
or instruct a Foreign Sub-Custodian to receive, the Currency to be purchased
on the date as set forth in the Certificate.
2. Where the Currency to be sold is to be delivered on the same day as
the Currency to be purchased, as specified in the Certificate or Oral
Instructions, the Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt
and delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall
continue until the Currency to be received by the Fund has been received in
full.
3. Any FX Transaction effected by the Custodian in connection with
this Agreement may be entered with the Custodian, any office, branch or
subsidiary of The Bank of New York Company, Inc., or any Foreign
Sub-Custodian acting as principal or otherwise through customary banking
channels. The Fund may issue a standing Certificate with respect to FX
Transaction but the Custodian may establish rules or limitations concerning
any foreign exchange facility made available to the Fund. The Fund shall bear
all risks of investing in Securities or holding Currency. Without limiting
the foregoing, the Fund shall bear the risks that rules or procedures imposed
by a Foreign Sub-Custodian or foreign depositories, exchange controls, asset
freezes or other laws, rules, regulations or orders shall prohibit or impose
burdens or costs on the transfer to, by
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or for the account of the Fund of Securities or any cash held outside the
Fund's jurisdiction or denominated in Currency other than its home
jurisdiction or the conversion of cash from one Currency into another
currency. The Custodian shall not be obligated to substitute another Currency
for a Currency (including a Currency that is a component of a Composite
Currency Unit) whose transferability, convertibility or availability has been
affected by such law, regulation, rule or procedure. Neither the Custodian
nor any Foreign Sub-Custodian shall be liable to the Fund for any loss
resulting from any of the foregoing events.
ARTICLE XVIII.
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in Article XVI,
neither the Custodian nor its nominee shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, either hereunder or under any Margin Account Agreement, except for
any such loss or damage arising out of its own negligence or willful
misconduct. In no event shall the Custodian be liable to the Fund or any
third party for special, indirect or consequential damages or lost profits or
loss of business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action. The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and obtain the
advice and opinion of counsel to the Fund, or of its own counsel, at the
expense of the Fund, and shall be fully protected with respect to anything
done or omitted by it in good faith in conformity with such advice or
opinion. The Custodian shall be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence or willful misconduct on the part of the Custodian
or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) the validity of the issue of any Securities purchased, sold,
or written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(b) the legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(c) the legality of the declaration or payment of any dividend by
the Fund;
(d) the legality of any borrowing by the Fund using Securities as
collateral;
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(e) the legality of any loan of portfolio Securities, nor shall
the Custodian be under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial institution or
held by it at any time as a result of such loan of portfolio Securities of
the Fund is adequate collateral for the Fund against any loss it might
sustain as a result of such loan. The Custodian specifically, but not by way
of limitation, shall not be under any duty or obligation periodically to
check or notify the Fund that the amount of such cash collateral held by it
for the Fund is sufficient collateral for the Fund, but such duty or
obligation shall be the sole responsibility of the Fund. In addition, the
Custodian shall be under no duty or obligation to see that any broker, dealer
or financial institution to which portfolio Securities of the Fund are lent
pursuant to Article X of this Agreement makes payment to it of any dividends
or interest which are payable to or for the account of the Fund during the
period of such loan or at the termination of such loan, provided, however,
that the Custodian shall promptly notify the Fund in the event that such
dividends or interest are not paid and received when due; or
(f) the sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund. In addition, the
Custodian shall be under no duty or obligation to see that any broker,
dealer, futures commission merchant or Clearing Member makes payment to the
Fund of any variation margin payment or similar payment which the Fund may be
entitled to receive from such broker, dealer, futures commission merchant or
Clearing Member, to see that any payment received by the Custodian from any
broker, dealer, futures commission merchant or Clearing Member is the amount
the Fund is entitled to receive, or to notify the Fund of the Custodian's
receipt or non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the
Fund until the Custodian actually receives and collects such money directly
or by the final crediting of the account representing the Fund's interest at
the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable
for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to Securities held
in the Depository, unless the Custodian shall have actually received timely
notice from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to collect, or
for the late collection or late crediting by the Depository of any amount
payable upon Securities deposited in the Depository which may mature or be
redeemed, retired, called or otherwise become payable. However, upon receipt
of a Certificate from the Fund of an overdue amount on Securities held in the
Depository the Custodian shall make a claim against the Depository on behalf
of the Fund, except that the Custodian shall not be under any obligation to
appear in, prosecute or defend any action, suit or proceeding in respect to
any Securities held by the Depository which in its opinion may
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involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand
or presentation, unless and until (i) it shall be directed to take such
action by a Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
7. The Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Article XVI appoint one or more banking
institutions as Depository or Depositories, as Sub-Custodian or
Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not
limited to, banking institutions located in foreign countries, of Securities
and money at any time owned by the Fund, upon such terms and conditions as
may be approved in a Certificate or contained in an agreement executed by the
Custodian, the Fund and the appointed institution.
8. The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to, or held by it or
by any Foreign Sub-Custodian, for the account of the Fund and specifically
allocated to a Series are such as properly may be held by the Fund or such
Series under the provisions of its then current prospectus, or (b) to
ascertain whether any transactions by the Fund, whether or not involving the
Custodian, are such transactions as may properly be engaged in by the Fund.
9. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian all out-of-pocket expenses and such compensation as may
be agreed upon from time to time between the Custodian and the Fund. The
Custodian may charge such compensation and any expenses with respect to a
Series incurred by the Custodian in the performance of its duties pursuant to
such agreement against any money specifically allocated to such Series.
Unless and until the Fund instructs the Custodian by a Certificate to
apportion any loss, damage, liability or expense among the Series in a
specified manner, the Custodian shall also be entitled to charge against any
money held by it for the account of a Series such Series' pro rata share
(based on such Series, net asset value at the time of the charge to the
aggregate net asset value of all Series at that time) of the amount of any
loss, damage, liability or expense, including counsel fees, for which it
shall be entitled to reimbursement under the provisions of this Agreement.
The expenses
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for which the Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of sub-custodians and foreign
branches of the Custodian incurred in settling outside of New York City
transactions involving the purchase and sale of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be a Certificate. The Custodian shall
be entitled to rely upon any Oral Instructions actually received by the
Custodian hereinabove provided for. The Fund agrees to forward to the
Custodian a Certificate or facsimile thereof confirming such Oral
Instructions in such manner so that such Certificate or facsimile thereof is
received by the Custodian, whether by hand delivery, telecopier or other
similar device, or otherwise, by the close of business of the same day that
such Oral Instructions are given to the Custodian. The Fund agrees that the
fact that such confirming instructions are not received, or that contrary
instructions are received, by the Custodian shall in no way affect the
validity of the transactions or enforceability of the transactions hereby
authorized by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions given to the Custodian
hereunder concerning such transactions provided such instructions reasonably
appear to have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by
the Custodian to be given in accordance with the terms and conditions of any
Margin Account Agreement. Without limiting the generality of the foregoing,
the Custodian shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification
of any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of the Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment
Company Act of 1940, as amended, and other applicable securities laws and
rules and regulations. The Fund, or the Fund's authorized representatives,
shall have access to such books and records during the Custodian's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by the Custodian to the Fund or the
Fund's authorized representative, and the Fund shall reimburse the Custodian
its expenses of providing such copies. Upon reasonable request of the Fund,
the Custodian shall provide in hard copy or on micro-film, whichever the
Custodian elects, any records included in any such delivery which are
maintained by the Custodian on a computer disc, or are similarly maintained,
and the Fund shall reimburse the Custodian for its expenses of providing such
hard copy or micro-film.
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13. The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-Entry
System, the Depository or O.C.C., and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
14. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising or incurred because of or in
connection with this Agreement, including the Custodian's payment or
non-payment of checks pursuant to paragraph 6 of Article XIII as part of any
check redemption privilege program of the Fund, except for any such
liability, claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this Agreement, including,
without limitation, those contained in Article XVI and XVII the Custodian may
deliver and receive Securities, and receipts with respect to such Securities,
and arrange for payments to be made and received by the Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers in such Securities. When the Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of
payment therefor may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
the Custodian's delivery of Securities pursuant to instructions of the Fund,
which responsibility and liability shall continue until final payment in full
has been received by the Custodian.
16. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XIX.
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. In the event such notice is given by the Fund, it
shall be accompanied by a copy of a resolution of the Board of Trustees of
the Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or custodians,
each of which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. In the event
such notice is given by the Custodian, the Fund shall, on or before the
termination date, deliver to the Custodian a copy of a resolution of the
Board of Trustees of the Fund, certified by the Secretary or any Assistant
Secretary, designating a successor custodian or custodians. In the absence of
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such designation by the Fund, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. Upon the date
set forth in such notice this Agreement shall terminate, and the Custodian
shall upon receipt of a notice of acceptance by the successor custodian on
that date deliver directly to the successor custodian all Securities and
money then owned by the Fund and held by it as Custodian, after deducting all
fees, expenses and other amounts for the payment or reimbursement of which it
shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in
the Book-Entry System which cannot be delivered to the Fund) and money then
owned by the Fund be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities held in the Book
Entry System which cannot be delivered to the Fund to hold such Securities
hereunder in accordance with this Agreement.
ARTICLE XX.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Authorized Persons of the Fund under its seal, setting forth the
names and the signatures of the present Authorized Persons. The Fund agrees
to furnish to the Custodian a new Certificate in similar form in the event
that any such present Authorized Person ceases to be an Authorized Person or
in the event that other or additional Authorized Persons are elected or
appointed. Until such new Certificate shall be received, the Custodian shall
be fully protected in acting under the provisions of this Agreement upon Oral
Instructions or signatures of the Authorized Persons as set forth in the last
delivered Certificate.
2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently given
if addressed to the Custodian and mailed or delivered to it at its offices at
90 Washington Street, New York, New York 10286, or at such other place as the
Custodian may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund shall be sufficiently given if
addressed to the Fund and mailed or delivered to it at its office at the
address for the Fund first above written, or at such other place as the Fund
may from time to time designate in writing.
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4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as
this Agreement and approved by a resolution of the Board of Trustees of the
Fund.
5. 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
written consent of the Custodian, or by the Custodian without the written
consent of the Fund, authorized or approved by a resolution of the Fund's
Board of Trustees.
6. This Agreement shall be construed in accordance with the laws of
the State of New York without giving effect to conflict of laws principles
thereof. Each party hereby consents to the jurisdiction of a state or federal
court situated in New York City, New York in connection with any dispute
arising hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Board of Trustees of the
Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund;
provided, however, that the Declaration of Trust of the Fund provides that
the assets of a particular Series of the Fund shall under no circumstances be
charged with liabilities attributable to any other Series of the Fund and
that all persons extending credit to, or contracting with or having any claim
against a particular Series of the Fund shall look only to the assets of that
particular Series for payment of such credit, contract or claim.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
WESTCORE TRUST
[SEAL] By:
----------------------------
Attest:
- -------------------------
THE BANK OF NEW YORK
[SEAL] By:
----------------------------
Name:
Title:
Attest:
- -------------------------
<PAGE>
APPENDIX A
I, , President and I, ,
of WESTCORE TRUST, a Massachusetts business trust (the "Fund"), do hereby
certify that:
The following persons have been duly authorized in conformity with the
Fund's Declaration of Trust and By-Laws to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund, and the signatures set forth
opposite their respective names are their true and correct signatures:
Name Position Signature
- -------------------- ---------------------- -----------------------
<PAGE>
APPENDIX B
SERIES
<PAGE>
APPENDIX C
I, Richard A. Yacovone, a Vice President with THE BANK OF NEW YORK do
hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, , hereby certifies that he or she is the
duly elected and acting of WESTCORE TRUST, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
, 1999, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
, 1999, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis to deposit in the Book-Entry
System, as defined in the Custody Agreement, all securities eligible for
deposit therein, regardless of the Series to which the same are
specifically allocated, and to utilize the Book-Entry System to the
extent possible in connection with its performance thereunder, including,
without limitation, in connection with settlements of purchases and sales
of securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of WESTCORE
TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE>
EXHIBIT B
CERTIFICATION
The undersigned, , hereby certifies that he or she is the
duly elected and acting of WESTCORE TRUST, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
, 1999, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
, 1999, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Depository, as defined in the Custody
Agreement, all securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated, and to utilize the
Depository to the extent possible in connection with its performance
thereunder, including, without limitation, in connection with settlements
of purchases and sales of securities, loans of securities, and deliveries
and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of WESTCORE
TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE>
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby certifies that he or she is the
duly elected and acting of WESTCORE TRUST, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
, 1999, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
, 1999, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Participants Trust Company as Depository, as
defined in the Custody Agreement, all securities eligible for deposit
therein, regardless of the Series to which the same are specifically
allocated, and to utilize the Participants Trust Company to the extent
possible in connection with its performance thereunder, including,
without limitation, in connection with settlements of purchases and sales
of securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of WESTCORE
TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies that he or she is the
duly elected and acting of WESTCORE TRUST, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
, 1999, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
, 1999, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary, to accept, utilize and act with respect to Clearing Member
confirmations for Options and transaction in Options, regardless of the
Series to which the same are specifically allocated, as such terms are
defined in the Custody Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of WESTCORE
TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE>
EXHIBIT D
The undersigned, , hereby certifies that he or she is
the duly elected and acting of WESTCORE TRUST, a
Massachusetts business trust (the "Fund"), further certifies that the following
resolutions were adopted by the Board of Trustees of the Fund at a meeting duly
held on , 1999, at which a quorum was at all times present and
that such resolutions have not been modified or rescinded and are in full force
and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to the
Custody Agreement between The Bank of New York and the Fund dated as of
, 1999 (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis to act in accordance with,
and to rely on Instructions (as defined in the Custody Agreement).
RESOLVED, that the Fund shall establish access codes and grant use
of such access codes only to Authorized Persons of the Fund as defined in
the Custody Agreement, shall establish internal safekeeping procedures to
safeguard and protect the confidentiality and availability of user and
access codes, passwords and authentication keys, and shall use
Instructions only in a manner that does not contravene the Investment
Company Act of 1940, as amended, or the rules and regulations thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of WESTCORE
TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE>
EXHIBIT (g)(5)
FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of ____________________, between ________
____________________________________________ (the "Fund") and The Bank
of New York ("BNY").
W I T N E S S E T H:
WHEREAS, the Fund desires to appoint BNY as a Foreign Custody
Manager on the terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and condition contained
herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Fund and BNY hereby agrees as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. Capitalized terms used in this Agreement and not otherwise
defined in this Agreement shall have the meanings given such terms in the
Rule.
2. "BOARD" shall mean the board of directors or board of
trustees, as the case may be, of the Fund.
3. "ELIGIBLE FOREIGN CUSTODIAN" shall have the meaning provided
in the Rule.
4. "MONITORING SYSTEM" shall mean a system established by BNY
to fulfill the Responsibilities specified in clauses (d) and (e) of Article
III of this Agreement.
5. "QUALIFIED FOREIGN BANK" shall have the meaning provided in
the Rule.
6. "RESPONSIBILITIES" shall mean the responsibilities delegated
to BNY as a Foreign Custody Manager with respect to each Specified Country
and each Eligible Foreign Custodian selected by BNY, as such responsibilities
are more fully described in Article III of this Agreement.
7. "RULE" shall mean Rule 17f-5 under the Investment Company
Act of 1940, as amended, as such Rule became effective on June 16, 1997.
<PAGE>
8. "SECURITIES DEPOSITORY" shall mean any securities depository
or clearing agency within the meaning of Section (a)(1)(ii) or (a)(1)(iii) of
the Rule.
9. "SPECIFIED COUNTRY" shall mean each country listed on
Schedule I attached hereto and each country, other than the United States,
constituting the primary market for a security with respect to which the Fund
has given settlement instructions to The Bank of New York as custodian (the
"Custodian") under its Custody Agreement with the Fund.
ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to BNY
with respect to each Specified Country the Responsibilities.
2. BNY accepts the Board's delegation of Responsibilities
with respect to each Specified Country and agrees in performing the
Responsibilities as a Foreign Custody Manager to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of the Fund's assets would exercise.
3. BNY shall provide to the Board at such times as the
Board deems reasonable and appropriate based on the circumstances of the
Fund's foreign custody arrangements written reports notifying the Board of
the placement of assets of the Fund with a particular Eligible Foreign
Custodian within a Specified Country and of any material change in the
arrangements (including, in the case of Qualified Foreign Banks, any material
change in any contract governing such arrangements and in the case of
Securities Depositories, any material change in the established practices or
procedures of such Securities Depositories) with respect to assets of the
Fund with any such Eligible Foreign Custodian.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall
with respect to each Specified Country select an Eligible Foreign Custodian.
In connection therewith, BNY shall: (a) determine that assets of the Fund
held by such Eligible Foreign Custodian will be subject to reasonable care,
based on the standards applicable to custodians in the relevant market in
which such Eligible Foreign Custodian operates, after considering all factors
relevant to the safekeeping of such assets, including, without limitation,
those contained in Section (c)(1) of the Rule; (b) determine that the Fund's
foreign custody arrangements with each Qualified Foreign Bank are governed by
a written contract with the Custodian (or, in the case of a Securities
Depository, by such a contract, by the rules or established practices or
procedures of the Securities Depository, or by any combination of the
foregoing) which will provide reasonable care for the Fund's assets based on
the standards specified in paragraph (c)(1) of the Rule; (c) determine that
each contract with a Qualified Foreign Bank shall include the provisions
specified in paragraph (c)(2)(i)(A) through (F) of the Rule or,
alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F)
provisions, such other provisions as BNY determines will provide, in their
entirety, the same or a greater level of care and protection for the assets
of the Fund as such specified provisions; (d)
-2-
<PAGE>
monitor pursuant to the Monitoring System the appropriateness of maintaining
the assets of the Fund with a particular Eligible Foreign Custodian pursuant
to paragraph (c)(1) of the Rule (and in the case of a Qualified Foreign Bank,
any material change in the contract governing such arrangement and in the
case of a Securities Depository, any material change in the established
practices or procedures of such Securities Depository); and (e) advise the
Fund whenever an arrangement (including, in the case of a Qualified Foreign
Bank, any material change in the contract governing such arrangement and in
the case of a Securities Depository, any material change in the established
practices or procedures of such Securities Depository) described in preceding
clause (d) no longer meet the requirements of the Rule. Anything in this
Agreement to the contrary notwithstanding, BNY shall in no event be deemed to
have selected any Securities Depository the use of which is mandatory by law
or regulation or because securities cannot be withdrawn from such Securities
Depository, or because maintaining securities outside the Securities
Depository is not consistent with prevailing custodial practices in the
relevant market (each, a "Compulsory Depository"); it being understood
however, that for each Compulsory Depository utilized or intended to be
utilized by the Fund, BNY shall provide the Fund from time to time with
information addressing the factors set forth in Section (c)(1) of the Rule
and BNY's opinions with respect thereto so that the Fund may determine the
appropriateness of placing Fund assets therein.
2. (a) For purposes of Clauses (a) and (b) of preceding
Section 1 of this Article, with respect to Securities Depositories, it is
understood that such determination shall be made on the basis of, and limited
by, publicly available information with respect to each such Securities
Depository.
(b) For purposes of clause (d) of preceding Section 1 of
this Article, BNY's determination of appropriateness shall not include, nor
be deemed to include, any evaluation of Country Risks associated with
investment in a particular country. For purposes hereof, "Country Risks"
shall mean systemic risks of holding assets in a particular country
including, but not limited to, (a) the use of Compulsory Depositories, (b)
such country's financial infrastructure, (c) such country's prevailing
custody and settlement practices, (d) nationalization, expropriation or other
governmental actions, (e) regulation of the banking or securities industry,
(f) currency controls, restrictions, devaluations of fluctuations, and (g)
market conditions which affect the orderly execution of securities
transactions or affect the value of securities.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Agreement has
been duly authorized, executed and delivered by the Fund, constitutes a valid
and legally binding obligation of the Fund enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding
on the Fund prohibits the Fund's execution or performance of this Agreement;
(b) this Agreement has been approved and ratified by the Board at a meeting
duly called and at which a quorum was at all times present; and (c) the Board
or its investment advisor has considered the Country Risks associated with
investment in each Specified Country and will have considered such risks
prior to any settlement instructions being given to the Custodian with
respect to any other Specified Country.
-3-
<PAGE>
2. BNY hereby represents that: (a) BNY is duly organized
and existing under the laws of the State of New York, with full power to
carry on its businesses as now conducted, and to enter into this Agreement
and to perform its obligations hereunder; (b) this Agreement has been duly
authorized, executed and delivered by BNY, constitutes a valid and legally
binding obligation of BNY enforceable in accordance with its terms, and no
statute, regulation, rule, order, judgment or contract binding on BNY
prohibits BNY's execution or performance of this Agreement; and (c) BNY has
established the Monitoring System.
ARTICLE V
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses,
damages, liabilities or claims, including attorneys' and accountants' fees,
sustained or incurred by, or asserted against, the Fund except to the extent
the same arises out of the failure of BNY to exercise the care, prudence and
diligence required by Section 2 of Article II hereof. In no event shall BNY
be liable to the Fund, the Board, or any third party for special, indirect or
consequential damages, or for lost profits or loss of business, arising in
connection with this Agreement.
2. The Fund agrees to indemnify BNY and holds it harmless
from and against any and all costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees, sustained or incurred by, or
asserted against, BNY by reason or as a result of any action or inaction, or
arising out of BNY's performance hereunder, provided that the Fund shall not
indemnify BNY to the extent any such costs, expenses, damages, liabilities or
claims arises out of BNY's failure to exercise the reasonable care, prudence
and diligence required by Section 2 of Article II hereof.
3. For its services hereunder, the Fund agrees to pay to
BNY such compensation as shall be mutually agreed.
4. BNY shall have only such duties as are expressly set
forth herein. In no event shall BNY be liable for any Country Risks
associated with investments in a particular country.
ARTICLE VI
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between
the Fund and BNY, and no provision in the Custody Agreement between the Fund
and the Custodian shall affect the duties and obligations of BNY hereunder,
nor shall any provision in this Agreement affect the duties or obligations of
the Custodian under the Custody Agreement.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to BNY, shall be sufficiently given if
received by it at its offices at 90 Washington Street, New York, New York,
10286, or at such other place as BNY may from time to time designate in
writing.
-4-
<PAGE>
3. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Fund shall be sufficiently
given if received by it at its offices at ____________________________________
______________________________________________________________ or at such
other places as the Fund may from time to time designate in writing.
4. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality, and enforceability of the remaining provisions shall not
in any way be affected thereby. This Agreement may not be amended or modified
in any manner except by a written agreement executed by both parties. 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 either party without the written consent
of the other.
5. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of
laws principles thereof. The Fund and BNY hereby consent to the jurisdiction
of a state or federal court situated in New York City, New York in connection
with any dispute arising hereunder. The Fund hereby irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it may
now or hereafter have to the laying of venue of any such proceeding brought
in such a court and any claim that such proceeding brought in such a court
has been brought in an inconvenient forum. The Fund and BNY each hereby
irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
6. The parties hereto agree that in performing hereunder,
BNY is acting solely on behalf of the Fund and no contractual or service
relationship shall be deemed to be established hereby between BNY and any
other person.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. This Agreement shall terminate simultaneously with the
termination of the Custody Agreement between the Fund and the Custodian, and
may otherwise be terminated by either party giving to the other party a
notice in writing specifying the date of such termination, which shall be not
less than thirty (30) days after the date of such notice.
9. In consideration of the services provided by BNY
hereunder, the Fund shall pay to BNY such compensation and out-of-pocket
expenses as may be agreed upon from time to time.
-5-
<PAGE>
IN WITNESS WHEREOF, the Fund and BNY have caused this
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the date first above written.
-------------------------------
By:
----------------------------
Title:
Tax Identification No.:
THE BANK OF NEW YORK
By:
----------------------------
Title:
-6-
<PAGE>
FOREIGN CUSTODY MANAGER AGREEMENT
SCHEDULE I
Argentina Luxembourg
Australia Malaysia
Austria Mauritius
Bangladesh Mexico
Belgium Morocco
Bermuda Namibia
Botswana Netherlands
Brazil New Zealand
Bulgaria Nigeria
Canada Norway
Chile Pakistan
China Peru
Columbia Philippines
Cyprus Poland
Czech Republic Portugal
Denmark Russia
Easdaq Singapore
Ecuador Slovenia
Egypt South Africa
Estonia Spain
Euromarket (Cedel) Sri Lanka
Finland Swaziland
France Sweden
Germany Switzerland
Ghana Taiwan
Greece Thailand
Hong Kong Tunisia
Hungary Turkey
India Ukraine
Indonesia United Kingdom
Ireland United States
Israel Uruguay
Italy Venezuela
Ivory Coast Zambia
Japan Zimbabwe
Jordan
Kenya
Korea
Latvia
Lebanon
Lithuania
<PAGE>
Exhibit (h)(1)(ii)
AMENDMENT NO. 2
TO THE ADMINISTRATION AGREEMENT
Amendment dated as of ____________, 1999 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 Small-Cap Growth 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 FUNDS SERVICES, INC.
By: ------------------------------------
<PAGE>
Exhibit (h)(1)(iii)
AMENDMENT NO. 3
TO THE ADMINISTRATION AGREEMENT
Amendment dated as of ____________, 1999 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 Select 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 FUNDS SERVICES, INC.
By:
-------------------------------
<PAGE>
Exhibit (h)(1)(iv)
AMENDMENT NO. 4
TO THE ADMINISTRATION AGREEMENT
Amendment dated as of ____________, 1999 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 International Equity 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 FUNDS SERVICES, INC.
By:
-------------------------------
<PAGE>
Exhibit (h)(2)(v)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
ALPS MUTUAL FUNDS SERVICES, INC.
and
WESTCORE FUNDS
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
ALPS MUTUAL FUNDS SERVICES, INC.
AND
WESTCORE FUNDS
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Section Page
- ------- ----
1. Terms of Appointment and Duties ...................................__
2. Fees and Expenses .................................................__
3. Representations and Warranties of ALPS ............................__
4. Representations and Warranties of the Fund ........................__
5. Wire Transfer Operating Guidelines ................................__
6. Data Access and Proprietary Information ...........................__
7. Indemnification ...................................................__
8. Confidentiality ...................................................__
9. Covenants of the Fund and ALPS ....................................__
10. Termination of Agreement ..........................................__
11. Assignment and Third Party Beneficiaries ..........................__
12. Subcontractors ....................................................__
13. Miscellaneous .....................................................__
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the __ day of ___________, 1999, by and between Westcore
Funds a Massachusetts Business Trust, having its principal office and place
of business at 370 17th Street, Suite 3100, Denver, CO 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 is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, the Trust offers shares in multiple series, certain of such series
to be named on the attached Schedule A which may be amended by the parties
from time to time (each such series, together with all other series
subsequently established by the Trust and made subject to this Agreement in
accordance with Section 12.1 , being herein referred to as a "Portfolio", and
collectively as the "Portfolios") and the shares of such Portfolios are
offered in one or more classes; and
WHEREAS, the Trust , on behalf of certain Portfolios, desires to appoint ALPS
as its transfer agent, dividend disbursing agent and agent in connection with
certain other activities as set forth herein (collectively "Shareholder and
Record-Keeping Services") and ALPS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES
1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set forth
in this Agreement, the Trust hereby employs and appoints ALPS to act
as, and ALPS agrees to act as, the transfer agent for the Trust's
authorized and issued shares of beneficial interest, and the dividend
disbursing agent. As used herein, the term ("Shares") means the
authorized and issued shares of common stock, or shares of beneficial
interest, as the case may be, for the Trust (including certain series
thereof) enumerated in Schedule 1.1 ALPS agrees that it will perform
the following Shareholder and Record-Keeping services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and ALPS, ALPS shall:
(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
thereof to the Custodian of the Trust authorized by the
Board of Trustees of the Trust (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) In the event any check or other order for the transfer of
money is returned unpaid, ALPS shall take such steps as it
may deem appropriate or ALPS may request written
instructions from the Trust;
<PAGE>
(iv) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation
thereof to the Custodian;
(v) In respect to the transactions in items (i) (ii) and (iv)
above, ALPS shall execute transactions directly with
broker-dealers, investment advisers and other institutions
acting on behalf of investors authorized by the Funds who
shall thereby be deemed to be acting on behalf of the
Trust;
(vi) When it receives monies paid to it by the Custodian with
respect to any redemption, pay or cause to be paid in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(vii) Effect transfers of Shares between portfolios as listed in
Appendix A by the registered owners thereof upon receipt of
appropriate instructions;
(viii) Prepare and transmit payments (or where appropriate credit
a shareholder of the Funds ("Shareholder") account) for
dividends and distributions declared by the Trust;
(ix) Maintain records of account for and advise the Trust and
its Shareholders as to the foregoing; and
(x) Record the issuance of Shares of the Trust and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total
number of Shares of the Trust which are authorized, based
upon data provided to it by the Trust, and issued and
outstanding. ALPS shall also provide the Trust on a regular
basis with the total number of Shares which are authorized
and issued and outstanding and shall have no obligation,
when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Trust.
<PAGE>
1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, ALPS
shall perform the following services:
(a) OTHER CUSTOMARY SERVICES. Perform the customary services of a
transfer agent, dividend disbursing agent, and, as relevant,
agent in connection with accumulation, open-account or similar
plans (including without limitation any periodic investment plan
or periodic withdrawal program), including but not limited to:
maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing Shareholder proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding
taxes on U.S. resident and non-resident alien accounts and
maintaining records with respect to such withholding, preparing
and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all taxable
Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information.
Services to be performed by ALPS include those set forth in
Schedule 1.1 hereto.
(b) CONTROL BOOK. Maintain a daily record of all transactions,
including receipts and disbursements of money and securities,
and make available to the Trust a copy of such report on the
next business day following the request;
(c) "BLUE SKY" REPORTING. The Trust or its agent who provides blue
sky services (which, at the date of the Agreement is ALPS);
shall (i) identify to ALPS in writing those transactions and
assets to be treated as exempt from blue sky reporting for
each State and (ii) verify the establishment of transactions
for each State on the system prior to activation and thereafter
monitor the daily activity for each State. The responsibility
of ALPS for the Trust's blue sky State registration status
under this agreement is solely limited to the initial
establishment of transactions subject to blue sky compliance
by the Trust and providing a system which will enable the Trust
to monitor the total number of Shares sold in each State;
(d) NEW PROCEDURES. New procedures as to who shall provide certain
of these services in SECTION I may be established from time to
time by agreement between the Trust and ALPS. ALPS may at
times perform only a portion of these services and the Trust
or its agent may perform these services on the Trust's behalf.
2. FEES AND EXPENSES
2.1 FEE SCHEDULE. For the performance by ALPS pursuant to this Agreement,
the Trust agrees to pay ALPS fees as set forth in the attached fee
schedule ("Schedule 2.1"). Such fees and out-of-pocket expenses and
advances identified under Section 2.2 below may be changed from time
to time subject to mutual written agreement between the Trust and ALPS.
2.2 OUT-OF-POCKET EXPENSES. In addition to the fee paid under Section 2.1
above, the Trust agrees to reimburse ALPS for out-of-pocket expenses,
including but not limited to, postage, forms, telephone, mailing and
tabulating proxies, records storage, or advances incurred by ALPS for
the items set forth in Schedule 2.1 attached hereto. In addition, any
other expenses incurred by ALPS at the request or with the consent of
the Trust , will be reimbursed by the Trust .
<PAGE>
2.3 POSTAGE. Postage for mailing of dividends, proxies, reports and
other mailings to all shareholder accounts shall be advanced to ALPS
by the Trust at least seven (7) days prior to the mailing date of
such materials.
2.4 INVOICES. The Trust agrees to pay all fees and reimbursable expenses
within thirty days following the receipt of the respective billing
notice.
3. REPRESENTATIONS AND WARRANTIES OF ALPS
ALPS represents and warrants to the Trust that:
3.1 It is a duly registered transfer agent under the Securities Exchange Act
of 1934
3.2 It is duly organized and existing as a corporation and in good standing
under the laws of the State of Colorado.
3.3 It is empowered under applicable laws and by its Charter and By-laws
to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
3.6 It will provide the Fund with all information necessary to complete
its annual filing requirements in a timely fashion.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to ALPS that:
4.1 It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.2 It is empowered under applicable laws and by its Amended and Restated
Declaration of Trust and By-Laws to enter into and perform this
Agreement.
4.3 The Board of Trustees has duly authorized it to enter into and perform
this Agreement.
5 WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE
5.1 ALPS is authorized to promptly debit the appropriate account(s) upon
the receipt of a payment order in compliance with the security
procedures agreed upon by ALPS and the Trust (the "Security Procedures")
chosen for funds transfer and in the amount of money that ALPS has been
instructed to transfer. ALPS shall execute payment orders in
compliance with the Security Procedures and with the Trust's
instructions on the execution date provided that such payment order
is received by the customary deadline for processing such a request,
unless the payment order specifies a later time. All payment orders
and communications received after the customary deadline will be
deemed to have been received the next business day.
<PAGE>
5.2 ALPS shall process all payment orders on the basis of the account
number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number,
the account number shall take precedence and govern.
5.3 ALPS reserves the right to decline to process or delay the processing
of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of ALPS's receipt of such payment
order; or (b) if ALPS, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.
5.4 ALPS shall use reasonable efforts to act on all authorized requests to
cancel or amend payment orders after the customary deadline received in
compliance with the Security Procedures provided that such requests are
received in a timely manner affording ALPS reasonable opportunity to
act. However, ALPS assumes no liability if the request for amendment or
cancellation cannot be satisfied, as long as ALPS has acted reasonably.
5.5 ALPS shall assume no responsibility for failure to detect any erroneous
payment order provided that ALPS complies with the payment order
instructions as received and ALPS complies with the Security
Procedures.
5.6 When the Trust initiates or receives Automated Clearing House credit
and debit entries pursuant to the guidelines and the rules of the
National Automated Clearing House Association and the New England
Clearing House Association, ALPS or its bank will act as an Originating
Depository Financial Institution and/or receiving depository
Financial Institution, as the case may be, with respect to such
entries. Credits given by ALPS with respect to an ACH credit entry are
provisional until ALPS receives final settlement for such entry from
the Federal Reserve Bank. If ALPS does not receive such final
settlement, the Trust agrees that ALPS shall receive a refund of the
amount credited to the Trust in connection with such entry, and the
party making payment to the Trust via such entry shall not be deemed to
have paid the amount of the entry.
5.7 Confirmation of ALPS's execution of payment orders shall ordinarily be
provided within twenty four (24) hours, but no later than forty eight
(48) hours, notice of which may be delivered through ALPS's proprietary
information systems, or by facsimile or call-back. Call-back
confirmations will be followed with a written confirmation. Confirmation
will be delivered to the Shareholders in accordance with applicable
regulations and the prospectus.
6. INDEMNIFICATION
6.1 ALPS shall not be responsible for, and the Trust shall indemnify and
hold ALPS harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions of ALPS or its agent or subcontractors required to
be taken 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 arise out of the breach of any representation
or warranty of the Trust hereunder;
(c) The good faith reliance upon, and any subsequent use of or
action taken or omitted, by ALPS, or its agents or
subcontractors on: (i) any information, records, documents, data,
stock certificates or
<PAGE>
services, which are received by ALPS or its agents or
subcontractors by machine readable input, facsimile, CRT data
entry, electronic instructions or other similar means authorized
by the Trust, and which have been prepared, maintained or
performed by the Trust or any other person or firm on behalf of
the Trust including but not limited to any previous transfer
agent or registrar; (ii) any written instructions or requests of
the Trust or any of its officers; (iii) any written instructions
or opinions of Trust's legal counsel with respect to any matter
arising in connection with the services to be performed by ALPS
under this Agreement which are provided to ALPS after
consultation with such legal counsel; or (iv) any paper or
document reasonably believed to be genuine, authentic, or signed
by the proper person or persons;
(d) The offer or sale of Shares in violation of federal securities
laws or regulations requiring that such Shares be registered or
in violation of any stop order or other determination or ruling
by any federal agency with respect to the offer or sale of such
Shares;
6.2 In order that the indemnification provisions contained in this
Section 6 shall apply, upon the assertion of a claim for which one
party may be required to indemnify the other party, the party seeking
indemnification shall promptly notify the party providing
indemnification of such assertion, and shall keep that party advised
with respect to all developments concerning such claim. The party
providing indemnification shall have the option to participate with the
other party in the defense of such claim with its own counsel or to
defend against said claim in its own name or in the name of party
seeking indemnification at its own expense. Neither party shall
confess any claim or make any compromise in any case in which the other
party may be required to provide indemnification except with the other
party's prior written consent.
7. STANDARD OF CARE
ALPS shall at all times act in good faith and agrees to use its best
efforts to ensure the accuracy of all services performed under this
Agreement. At all times, ALPS shall be held to a reasonableness standard
of actions by other similar transfer agents in the mutual fund industry
and shall be liable for any errors caused by the negligence, willful
misconduct or bad faith of its employees.
8. CONFIDENTIALITY
8.1 ALPS and the Trust agree that they will not, at any time during the
term of this Agreement or after its termination, reveal, divulge, or
make known to any person, firm, corporations or other business
organization, any of each other's confidential customers' lists, trade
secrets, cost figures and projections, profit figures and projections,
or any other secret or confidential information whatsoever, used or
gained by it or the Trust during performance under this Agreement. ALPS
and the Trust further covenant and agree to retain all such knowledge
and information acquired during and after the term of this Agreement
respecting such lists, trade secrets, or any secret or confidential
information whatsoever in trust for the sole benefit of the other party
hereto and their successors and assigns. The above prohibition of
disclosure shall not apply to the extent that ALPS must disclose such
data to a Trust agent for purposes of providing services under this
Agreement. Confidential or secret information of a party does not
include information which is rightfully in the possession of the other
party prior to its receipt from ALPS or the Trust (as the case may be)
without any obligation of confidentially or which, without any fault
of such other party, is or becomes available in the public domain.
8.2 In the event that any requests or demands are made for the inspection
of the Shareholder records of the Trust, other than request for
records of Shareholders pursuant to subpoenas from state or federal
<PAGE>
government authorities, ALPS will notify the Trust and secure
instructions from an authorized officer of the Trust as to such
inspection. ALPS and the Trust expressly reserve the right, however,
to exhibit records as required by law or court order, upon
notification of the other party, provided that the other party has an
opportunity to seek proper action to maintain the records'
confidentiality.
9. COVENANTS OF THE TRUST AND ALPS
9.1 ALPS hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices.
9.2 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 the 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 reasonably 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, rendering their opinion.
9.3 In case of any request or demands for the inspection of the
shareholder records of the Trust, ALPS will endeavor to notify the
Trust and to secure instructions from an authorized officer of the
Trust as to such inspection.
10. TERMINATION OF AGREEMENT
10.1 This Agreement may be terminated by either party upon ninety (90) days
written notice to the other, and may be terminated immediately by the
Trust should ALPS cease to be qualified to act as the Trust's transfer
agent pursuant to applicable law.
10.2 Should the Trust exercise its right to terminate, other than as a
result of a default under this Agreement by ALPS, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Fund. Additionally, ALPS reserves the right to charge for
any other reasonable expenses associated with such termination. Payment
of such expenses or costs shall be in accordance with SECTION 2.4 of
this Agreement.
10.3 Upon termination of this Agreement, each party shall return to the
other party all copies of confidential or proprietary materials or
information received from such other party hereunder, other than
materials or information required to be retained by such party under
applicable laws or regulations.
11. ASSIGNMENT AND THIRD PARTY BENEFICIARIES
11.1 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other
party. Any attempt to assign this Agreement in violation of this
Section shall be void. Unless specifically stated to the contrary in
any written consent to an assignment, no assignment will release or
discharge the assignor from any duty or responsibility under this
Agreement.
<PAGE>
11.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in
this Agreement to anyone other than ALPS and the Trust, and the duties
and responsibilities undertaken pursuant to this Agreement shall be for
the sole and exclusive benefit of ALPS and the Trust. This Agreement
shall inure to the benefit of and be binding upon the parties and their
respective permitted successors and assigns.
11.3 This Agreement does not constitute an agreement for a partnership or
joint venture between ALPS and the Trust. Neither party shall make any
commitments with third parties that are binding on the other party
without the other party's prior written consent.
12. MISCELLANEOUS
12.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties.
12.2 COLORADO LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
the State of Colorado.
12.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond
its control, or other causes reasonably beyond its control, such party
shall not be liable for damages to the other for any damages resulting
from such failure to perform or otherwise from such causes. However,
equipment or transmission problems associated with computer year 2000
problems do not constitute a valid force majeure.
12.4 SURVIVAL. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections
of proprietary rights and trade secrets shall survive the termination
of this Agreement.
12.5 SEVERABILITY. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
12.6 PRIORITIES CLAUSE. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this Agreement
and any Schedules hereto, the terms of the Agreement shall take
precedence. However, any written amendment to the Agreement shall
incorporate the Agreement and shall take precedence over any existing
term in the Agreement, to the extent applicable.
12.7 AUDIT OF RECORDS. ALPS will permit the Trust or its authorized agents
to visit, inspect, duplicate, examine, audit and verify (collectively
"audit") the Records belonging to or in the possession or control of
ALPS. Such audit will be completed at ALPS's office or elsewhere during
regular business hours, and with at least seventy-two (72) hours prior
notice to ALPS. The Records to which the Trust will have access are
those which are required by law to be maintained pursuant to the
provision of the Services which ALPS provides to the shareholders.
The Trust may make copies and make extracts from such records, provided
that such audit shall not unreasonably interfere with ALPS normal course
of business.
12.8 WAIVER. NO waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the other
party shall be construed as a waiver of any succeeding breach of the
same or of any other covenant or condition.
<PAGE>
12.9 MERGER OF AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
12.10 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.
12.11 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process. The parties hereto each agree that any such
reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party
in the regular course of business, and that any enlargement, facsimile
or further reproduction shall likewise be admissible in evidence.
12.12 NOTICES. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage
prepaid, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other.
(a) If to , to:
-----------------------------
----------------------------------
----------------------------------
Attention:
----------------
-----------------------
(b) If to the ALPS, to:
ALPS Mutual Funds Services, Inc.
370 17th Street, Suite 3100
Denver, CO 80202-5631
Attention: General Counsel
13. Limitation of Liability of the Trustees and Shareholders
13.1. 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.
<PAGE>
14. Year 2000
14.1. ALPS is in the process of preparing its electronic data processing
system and programs for the arrival of the year 2000, and will inform
the Trust of the status of such preparations upon reasonable request.
ALPS will make every reasonable effort to ensure such systems and
programs utilized by ALPS to provide services to the Trust under this
Agreement will be able to process date-related data on and after
January 1, 2000 accurately.
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.
ALPS MUTUAL FUNDS SERVICES, INC.
BY:
----------------------------
TITLE:
-------------------------
ATTEST:
------------------------
--------------------------------
WESTCORE TRUST
BY:
----------------------------
TITLE:
--------------------------
ATTEST:
------------------------
<PAGE>
SCHEDULE 1.1
ALPS MUTUAL FUNDS SERVICES, INC.
TRANSFER AGENT SERVICE RESPONSIBILITIES*
<TABLE>
<CAPTION>
SERVICE PERFORMED RESPONSIBILITY
ALPS Fund
<S> <C> <C>
1. Receives orders for the purchase X
of Shares.
2. Issue Shares and hold Shares in X
Shareholders accounts.
3. Receive redemption requests. X
4. Pay monies to redeeming X
Shareholders.
5. Effect transfers of Shares. X
6. Prepare and transmit dividends X
and distributions.
7. Reporting of abandoned property. X
8. Maintain records of account. X
9. Maintain and keep a current and X
accurate control book for each
issue of securities.
10. Mail proxies. X
11. Mail Shareholder reports. X
12. Mail prospectuses to current X
Shareholders.
13. Withhold taxes on U.S. resident X
and non-resident alien accounts.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SERVICE PERFORMED RESPONSIBILITY
ALPS FUND
<S> <C> <C>
14. Prepare and file U.S. Treasury X
Department forms.
15. Prepare and mail account and X
confirmation statements for
Shareholders.
16. Provide Shareholder account X
information.
17. Blue sky reporting. X
</TABLE>
*Such services are more fully described in Section 1.1 and 1.2 of the
Agreement.
ALPS MUTUAL FUNDS SERVICES, INC.
BY:
-----------------------------
ATTEST:
-------------------------
- -------------------------------------
WESTCORE TRUST
BY:
-----------------------------
TITLE:
---------------------------
ATTEST:
-------------------------
<PAGE>
APPENDIX A
WESTCORE SMALL-CAP GROWTH FUND
WESTCORE SELECT FUND.
<PAGE>
SCHEDULE 2.1
ALPS MUTUAL FUNDS SERVICES, INC.
FEE SCHEDULE
<TABLE>
<CAPTION>
Annual Account Service Fees
- ---------------------------
Greater of:
<S> <C>
Annual Base Fee $3,000
Per Account Fee $13.00
</TABLE>
Fees are billable on a monthly basis at the rate of 1/12 of the annual fee.
<TABLE>
<CAPTION>
Processing Fees
- ---------------
<S> <C>
New Account Fee (per account) $6.00
Closed Account Fee (per account) $3.00
Account Maintenance Fee (per request) $2.00
Manual Transaction Processing Fee (per transaction) $5.00
Correspondence (per item sent) $4.00
</TABLE>
<TABLE>
<CAPTION>
Other Fees
- ----------
<S> <C>
IRA Custodial Fees (per account, annually) $15.00
</TABLE>
OUT OF POCKET EXPENSES Billed as incurred
Out-of-Pocket expenses include but are not limited to: confirmation statements,
investor statements, postage, banking services, forms, telephone, records
retention, NSCC interface, customized programming / enhancements, federal wires,
stationary, and expenses incurred at the specific direction of the Fund.
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX B
SECURITY PROCEDURES
FOR FUNDS TRANSFER
TELEPHONE VERIFICATION PROCEDURES:
PIN. A unique Personal Identification Number (PIN) is assigned to each
authorized individual on an account by ALPS Transfer Agency.
Verification of social security number and account registration by the
caller.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Funds Transfer Procedures Phone* Mail
- -------------------------------------------------------------------------------------------------------------
NO SIGNATURE
SIGNATURE GUARANTEE
GUARANTEE REQUIRED
REQUIRED
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Redemptions
- -------------------------------------------------------------------------------------------------------------
Wire to bank instructions on record
- -------------------------------------------------------------------------------------------------------------
Wire to new bank instructions
- -------------------------------------------------------------------------------------------------------------
ACH to bank instructions on record
- -------------------------------------------------------------------------------------------------------------
ACH to new bank instructions
- -------------------------------------------------------------------------------------------------------------
Send by check to address of record
- -------------------------------------------------------------------------------------------------------------
Send by check to different address
- -------------------------------------------------------------------------------------------------------------
Purchases
- -------------------------------------------------------------------------------------------------------------
Purchase by wire
- -------------------------------------------------------------------------------------------------------------
Purchase by check
- -------------------------------------------------------------------------------------------------------------
Purchase by bank initiated ACH
- -------------------------------------------------------------------------------------------------------------
Purchase by Transfer Agency initiated ACH from bank
instructions on record**
- -------------------------------------------------------------------------------------------------------------
</TABLE>
*Phone is available for redemptions only if the telephone redemption privileges
have been established on the account.
**Available after 10 day waiting period for prenotes
I am authorized to sign below on behalf of each of the mutual funds named in
Appendix A attached.
By:
----------------- -------------------- ----------------- --------
Type or Print Name Authorized Signature Title Date
<PAGE>
APPENDIX C
SECURITY PROCEDURES
FOR ACCOUNT MAINTENANCE
TELEPHONE VERIFICATION PROCEDURES:
PIN. A unique Personal Identification Number (PIN) is assigned to each
authorized individual on an account by ALPS Transfer Agency.
Verification of social security number and account registration by the
caller.
FAX VERIFICATION PROCEDURES:
Verification that the fax contains the appropriate signature.
Telephone verification should accompany each fax.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Account Maintenance Function PHONE FAX MAIL
- ----------------------------------------------------------------------------------------------------------------------
NO SIGNATURE SIGNATURE
GUARANTEE GUARANTEE
REQUIRED
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Establish New Account X* X
- ----------------------------------------------------------------------------------------------------------------------
Change to Address of Record X X X X**
- ----------------------------------------------------------------------------------------------------------------------
Changing SS# (Need W-9) X X
- ----------------------------------------------------------------------------------------------------------------------
Name Change (Divorce or Marriage) X
- ----------------------------------------------------------------------------------------------------------------------
Re-Registration of Account X
- ----------------------------------------------------------------------------------------------------------------------
Changing Bank Wiring or ACH information X
- ----------------------------------------------------------------------------------------------------------------------
Establishing Telephone Redemption X X X
- ----------------------------------------------------------------------------------------------------------------------
Starting New ACH X
- ----------------------------------------------------------------------------------------------------------------------
Canceling ACH X X X
- ----------------------------------------------------------------------------------------------------------------------
Decreasing ACH $ Amount X X X
- ----------------------------------------------------------------------------------------------------------------------
Increasing ACH $ Amount X X X
- ----------------------------------------------------------------------------------------------------------------------
Changing Bank Info for ACH X
- ----------------------------------------------------------------------------------------------------------------------
Starting New SWP X X
- ----------------------------------------------------------------------------------------------------------------------
Canceling SWP X X X
- ----------------------------------------------------------------------------------------------------------------------
Decreasing SWP $ Amount X X X
- ----------------------------------------------------------------------------------------------------------------------
Increasing SWP $ Amount X X X
- ----------------------------------------------------------------------------------------------------------------------
Changing Bank Info for SWP X
- ----------------------------------------------------------------------------------------------------------------------
Changing Dividend Options (Cash & Reinvest) X X X
- ----------------------------------------------------------------------------------------------------------------------
Sending Dividends to Secondary Address X
- ----------------------------------------------------------------------------------------------------------------------
Setting Up Systematic Exchange X X
- ----------------------------------------------------------------------------------------------------------------------
Setting Up Systematic Dividend Exchange X X
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Hold on all redemptions until original application is received.
**Signature Guarantee is required for any redemptions within 30 days of address
change.
I am authorized to sign below on behalf of each of the mutual funds named in
Appendix A attached.
By:
----------------- -------------------- ----------------- --------
Type or Print Name Authorized Signature Title Date
<PAGE>
Exhibit (h)(3)(ii)
AMENDMENT NO. 2
TO THE AMENDED AND RESTATED
BOOKKEEPING AND PRICING AGREEMENT
Amendment dates as of ____________, 1999 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 Small-Cap Growth Fund (the "Fund"), on the terms 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.
2. COMPENSATION. In consideration for the services to be performed
by ALPS, ALPS shall be entitled to receive from the Trust such compensation
and reimbursement for all reasonable out-of-pocket expenses as described in
the schedule attached as Exhibit A to the Agreement.
3. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect except as modified hereby.
<PAGE>
Exhibit (h)(3)(ii)
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>
Exhibit (h)(3)(iii)
AMENDMENT NO. 3
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 Select Fund (the "Fund"), on the terms 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.
2. COMPENSATION. In consideration for the services to be performed
by ALPS, ALPS shall be entitled to receive from the Trust such compensation
and reimbursement for all reasonable out-of-pocket expenses as described in
the schedule attached as Exhibit A to the Agreement.
3. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect except as modified hereby.
<PAGE>
Exhibit (h)(3)(iii)
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>
EXHIBIT (H)(3)(IV)
AMENDMENT NO. 4
TO THE AMENDED AND RESTATED
BOOKKEEPING AND PRICING AGREEMENT
Amendment dates as of ____________, 1999 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 International Equity Fund (the "Fund"), on the terms 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.
2. COMPENSATION. In consideration for the services to be performed
by ALPS, ALPS shall be entitled to receive from the Trust such compensation
and reimbursement for all reasonable out-of-pocket expenses as described in
the schedule attached as Exhibit A to the Agreement.
3. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect except 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:
-------------------------------
-2-
<PAGE>
Exhibit (h)(7)(ii)
WELLS FARGO BANK, N.A.
INSTITUTIONAL TRUST GROUP 0101-021
420 MONTGOMERY STREET, 2ND FLOOR
SAN FRANCISCO, CA 94104
August 2, 1999
Mr. Jasper R. Frontz
Treasurer
1225 17th Street, 26th Floor
Denver, Colorado 80202
RE: ADDITION OF PARTIES TO SHAREHOLDER SERVICE AGREEMENT DATED
AS OF JULY 1,1996 AMONG WELLS FARGO BANK, N.A., WESTCORE
TRUST, ALPS MUTUAL FUND SERVICES, INC. AND DENVER INVESTMENT
ADVISORS LLC
------------------------------------------------------------
Dear Sirs:
As you are aware, Wells Fargo & Company and Norwest Corporation
merged. With your consent, in connection with that merger, Wells Fargo Bank,
N.A. is assigning to Wells Fargo Bank, N.A. on behalf of itself and its
affiliated banks, its right and obligations under the Shareholder Service
Agreement dated July 1, 1996 between Wells Fargo Bank, N.A., Westcore Trust,
ALPS Mutual Fund Services, Inc., and Denver Investment Advisors LLC (the
"Agreement"). With your consent, in connection with that merger Wells Fargo
Bank, N.A. on behalf of itself and its affiliated banks, hereby assumes all
of the obligations of the former Wells Fargo Bank, N.A. with respect to the
Agreement.
By signing this letter please signify your consent to the foregoing.
Except as modified hereby, the Agreement remains in full force and effect.
<PAGE>
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 Trustees, shareholders, or representatives of the Trust are
made not individually, but in such capacities and are not binding on 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.
Very truly yours,
WELLS FARGO BANK, N.A.
By: /s/ Ryan Baum
--------------
Name: Ryan Baum
Title: Vice President
CONSENT AND AGREEMENT TO ASSIGNMENT TO
AND ASSUMPTION BY WELLS FARGO BANK, N.A.,
ON BEHALF OF ITSELF AND ITS AFFILIATED BANKS,
OF RIGHTS AND OBLIGATIONS OF WELLS FARGO
BANK, N.A. UNDER THE SHAREHOLDER SERVICE
AGREEMENT
Westcore Trust
By: /s/ Jack D. Henderson
----------------------
Name: Jack D. Henderson
Title: Vice President
ALPS Mutual Fund Services, Inc.
By: /s/ Thomas A. Carter
---------------------
Name: Thomas A. Carter
Title: Chief Financial Officer
Denver Investment Advisors LLC
By: /s/ Kenneth V. Penland
------------------------
Name: Kenneth V. Penland
Title: Chairman
- 2 -
<PAGE>
Exhibit (h)(12)(ii)
April 1, 1999
Mr. Jasper Frontz
Treasurer
Westcore Funds
1225 Seventeenth Street, 26th Floor
Denver, CO 80202
RE: EXHIBIT 5 of SECURITIES LENDING AGENCY CLIENT AGREEMENT
-------------------------------------------------------
Dear Jasper,
Pursuant to Section 7(a) of the Securities Lending Agency Client Agreement
between PaineWebber Incorporated and Westcore Trust dated March 27, 1998 (the
"Agreement"), the purpose of this letter is to obtain the written consent of
Westcore Trust to modify the Collateral Guidelines that are set forth in Exhibit
5 and Attachment E for the Agreement. Following your review and approval, the
enclosed collateral guidelines will supercede any prior agreement between
PaineWebber and Westcore Trust.
Please acknowledge your consent below and also initial and date the enclosed
guidelines. Please return a duplicate of this letter and guidelines to my
attention at the above address.
Sincerely,
/s/ Denise E. Karabots
- -----------------------
Denise E. Karabots
First Vice President
AGREED TO AND ACCEPTED:
By: /s/ Jasper R. Frontz
Name: /s/ Jasper R. Frontz
------------------------
Title: Treasurer
------------------------
Date: 4/1/99
------------------------
<PAGE>
Exhibit (h)(12)(ii)
EXHIBIT 5
(COLLATERAL GUIDELINES)
Cash collateral may be invested in accordance with these guidelines.
"Portfolio", as used in these guidelines means the cash collateral received by
PaineWebber for a particular Fund within Westcore Trust (i.e., the requirements
below apply on a Fund-by-Fund basis).
1. FOR EACH LENDING CLIENT, COLLATERAL SHALL BE HELD (CHECK APPROPRIATE BOX):
/ / by PWI for the account of Lending Client;
/X/ in the Client Account
/X/ Treasury collateral only, to be held in a Client approved
tri-party account in Client name.
2. FOR EACH CLIENT, ELIGIBLE COLLATERAL SHALL INCLUDE:
A. CASH IN THE FOLLOWING CURRENCIES:
Yes No
--- --
(i) U.S. Dollars /X/ / /
(ii) Other: ______________ / / /X/
B. U.S. GOVERNMENT SECURITIES /X/ / /
Securities issued or guaranteed by the United States government or any
agency or instrumentality thereof ("U.S. government securities")
C. LETTERS OF CREDIT /X/ / /
Letters of credit may be issued
by the following banks: BANKS THAT HAVE BEEN APPROVED BY CLIENT
3. FOR EACH CLIENT, CASH COLLATERAL MAY BE INVESTED IN AS FOLLOWS:
<TABLE>
<CAPTION>
PERMISSIBLE INVESTMENTS MAXIMUM % OF
PORTFOLIO
<S> <C>
Commercial Paper 100%
Euro Time Deposits 50%
(Banks that have been approved by Client)
Mitchell Hutchins Private Money Market Fund L.L.C. 100%
</TABLE>
<PAGE>
(LIMITED TO 15% OF EACH CLIENT'S NET ASSET VALUE AND TO 10% OF MH
PRIVATE MONEY MARKET FUND NET ASSET VALUE)
<TABLE>
<CAPTION>
PERMISSIBLE INVESTMENTS MAXIMUM % OF
PORTFOLIO
<S> <C>
Money Market Funds 100%
Repurchase Agreements (Treasury only) with a maximum 100%
maturity of 7 days (101% MINIMUM COLLATERALIZATION)
U.S. Treasuries and Agencies 100%
</TABLE>
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.
The maximum amount that any portfolio can invest or hold in the securities of
any single issuer other than U.S. Treasuries and Agencies and the Mitchell
Hutchins Private Money Market Fund L.L.C., is 1.5% of the value of the total
assets of the related Fund.
Securities with maturities less than one year must have a credit rating of "AI,"
"PI" or its equivalent as rated by any nationally recognized statistical rating
organizations ("NRSRO's") from which it receives a rating. List of eligible
issuers of each type of investment described above must be approved in advance
by Denver Investment Advisors ("DIA").
All securities must be U.S. Dollar denominated. All tri-party custodial accounts
must be approved in writing, in advance by DIA. A daily record of collateral
that is held in each client's tri-party account(s) is to be reported daily. All
securities domestic only, except that Euro Time Deposits 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, the relevant Fund's U.S.
custodian without the use of a foreign sub-custodian or securities depository
must hold all foreign securities in custody.
<PAGE>
Exhibit (i)
DRINKER BIDDLE & REATH LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
(215) 988-2700
September 29, 1999
Westcore Trust
370 Seventeenth Street
Suite 3100
Denver, CO 80202
Re: Westcore Trust - Shares of Beneficial Interest
----------------------------------------------
Gentlemen:
We have acted as counsel for Westcore Trust, a Massachusetts business
trust (the "Trust"), in connection with the registration of its shares of
beneficial interest, without par value, under the Securities Act of 1933, as
amended.
The Trust is authorized to issue an unlimited number of shares of
beneficial interest. The Board of Trustees of the Trust has the power to
classify and reclassify any unissued shares of beneficial interest into one or
more classes of shares and to classify or reclassify any class of shares into
one or more series of shares. Pursuant to such authority, the Board of Trustees
has previously classified an unlimited number of the Trust's shares of
beneficial interest into classes designated as Classes B-1, G-1, H-1, I-1, J-1,
S, X-1, Z, AA, BB, and CC (the "Classes") and may classify each Class into one
or more series of shares (the "Series"). At present, each Class has one
authorized Series. The Classes and Series are referred to herein as the
"Shares", except that with respect to Class Z, "Shares" refers only to Shares of
that Class which have been registered pursuant to the Trust's Registration
Statement and amendments thereto under the Securities Act of 1933. You have
asked for our opinion on certain matters relating to the Shares. The Board of
Trustees has previously authorized the issuance of the Shares to the public.
We have reviewed the Trust's Declaration of Trust, as amended, its
Code of Regulations, resolutions adopted by its Board of Trustees and
shareholders, and such other legal and factual matters as we have considered
necessary.
<PAGE>
This opinion is based exclusively on the laws of the Commonwealth of
Massachusetts and the federal law of the United States of America. We have
relied on an opinion of Ropes & Gray, special Massachusetts counsel to the
Trust, insofar as our opinion below relates to matters arising under the laws of
the Commonwealth of Massachusetts.
We have also assumed the following for this opinion:
1. The Shares have been, and will continue to be, issued in accordance
with the Trust's Restated Declaration of Trust, as amended, and Code of
Regulations and resolutions of the Trust's Board of Trustees and shareholders
relating to the creation, authorization and issuance of the Shares.
2. The Shares have been, or will be, issued against consideration
therefor as described in the Trust's prospectuses relating thereto, and that
such consideration was, or will be, per share in each case at least equal to the
applicable net asset value.
On the basis of the foregoing, it is our opinion that the Shares have
been or will be validly issued, fully paid, and non-assessable by the Trust.
Under Massachusetts law, shareholders of a Massachusetts business
trust could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust, as amended,
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each note, bond, contract,
order or other undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust or any class of shares of beneficial interest of the
Trust. The Restated Declaration of Trust, as amended, provides for
indemnification out of the assets of the particular class of shares for all loss
and expense of any shareholder of that class held personally liable solely by
reason of his being or having been a shareholder. Thus, the risk of a
shareholder's incurring financial loss on account of shareholder liability is
limited to circumstances in which that class of shares itself would be unable to
meet its obligations.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to Post-Effective Amendment No. 50 to the
Trust's Registration Statement on Form N-1A.
Very truly yours,
/s/ Drinker Biddle & Reath LLP
-------------------------------
DRINKER BIDDLE & REATH LLP
<PAGE>
Exhibit (j)(1)
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. 50 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: September 30, 1999
<PAGE>
EXHIBIT (j)(2)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 50 to Registration Statement No. 2-75677 of Westcore Trust on Form N-1A of
our report dated July 2, 1999, appearing in the May 28, 1999 Annual Report of
Westcore Trust, and to the references to us under the headings "Financial
Highlights" in the Prospectus and "Auditors and Financial Statements" in the
Statement of Additional Information, which are part of such Registration
Statement.
DELOITTE & TOUCHE LLP
Denver, Colorado
September 29, 1999
<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: May 20, 1999
<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: June 8, 1999
<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: May 19, 1999
<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: May 17, 1999
<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: May 19, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jasper R. 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 R. Frontz
--------------------
Jasper R. Frontz
Date: May 20, 1999
<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, 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 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: May 20, 1999
<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 12, 1999 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
September 30, 1999 /s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
