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Registration No. 2-11387
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 14, 1998
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 / /
Post-Effective Amendment No. / /
(Check appropriate box or boxes)
Exact name of Registrant as Specified in Charter:
FORTIS EQUITY PORTFOLIOS, INC.
Area Code and Telephone Number:
(612) 738-4000
Address of Principal Executive Offices:
500 Bielenberg Drive
Woodbury, Minnesota 55125
Name and Address of Agent for Service:
Scott R. Plummer, Esq., Assistant Secretary
Fortis Equity Portfolios, Inc.
500 Bielenberg Drive
Woodbury, Minnesota 55125
COPY TO:
Kathleen L. Prudhomme, Esq.
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402
Approximate Date of Proposed Public Offering:
As soon as possible following the effective date of this Registration Statement.
Title of Securities Being Registered:
Common Stock
(No filing fee is required because of reliance by the
Registrant on Section 24(f)of the Investment Company Act of 1940.)
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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INCORPORATION BY REFERENCE
Part A and Part B of this Registration Statement are incorporated
by reference from the Registration Statement on Form N-14 of Fortis Equity
Portfolios, Inc. filed August 14, 1998 (SEC File No. 2-11387).
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PART C
OTHER INFORMATION
Fortis Equity Portfolios, Inc.
ITEM 15. INDEMNIFICATION
STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENT OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE REGISTRANT
IS INSURED OR INDEMNIFIED IN ANY MANNER AGAINST ANY LIABILITY WHICH MAY BE
INCURRED IN SUCH CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR,
OFFICER, AFFILIATED PERSON OR UNDERWRITER FOR THEIR OWN PROTECTION.
INDEMNIFICATION. Paragraph 8(d) of the Registrant's Articles of Incorporation
provides that the Registrant shall indemnify such person for such expenses and
liabilities, in such manner, under such circumstances, and to the full extent
permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or
hereafter amended; provided, however, that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act of
1940, as now enacted or hereinafter amended, and any rules, regulations, or
releases promulgated thereunder.
The Registrant may indemnify its officers and directors and other "persons"
acting in an "official capacity" (as such terms are defined in Section 302A.521)
pursuant to a determination by the board of directors or shareholders of the
Registrant as set forth in Section 302A.521, by special legal counsel selected
by the board or a committee thereof for the purpose of making such a
determination, or by a Minnesota court upon application of the person seeking
indemnification. If a director is seeking indemnification for conduct in the
capacity of director or officer of the Registrant, then such director generally
may not be counted for the purposes of determining either the presence of a
quorum or such director's eligibility to be indemnified.
In any case, indemnification is proper only if the eligibility determining body
decides that the person seeking indemnification:
(a) has not received indemnification for the same conduct from any
other party or organization;
(b) acted in good faith;
(c) received no improper personal benefit;
(d) in the case of criminal proceedings, has no reasonable cause to
believe the conduct was unlawful;
(e) reasonably believed that the conduct was in the best interest of
the Registrant, or in certain contexts, was not opposed to the best interest of
the Registrant; and
(f) had not otherwise engaged in conduct which precludes
indemnification under either Minnesota or Federal law (including, without
limitation, conduct constituting willful misfeasance, bad faith, gross
negligence, or reckless disregard of duties as set forth in Section 17(h) and
(i) of the Investment Company Act of 1940).
ADVANCES. If a person is made or threatened to be made a party to a proceeding,
the person is entitled, upon written request to the Registrant, to payment or
reimbursement by the Registrant of reasonable expenses, including attorneys fees
and disbursements, incurred by the person in advance of the final disposition of
the proceeding, (a) upon receipt by the Registrant of a written affirmation by
the person of a good faith belief that the criteria for indemnification set
forth in Section 302A.521 have been satisfied and a written undertaking by the
person to repay all amounts so paid or reimbursed by the Registrant, if it is
ultimately determined that the criteria for indemnification have been satisfied,
and (b) after a determination that the facts then known to those making the
determination would not preclude indemnification under 302A.521. The written
undertaking required by clause (a) is an unlimited general obligation of the
person making it, but need not be secured and shall be accepted without
reference to financial ability to make the repayment.
UNDERTAKING. The Registrant undertakes that insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provision, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless, in the opinion of its counsel, the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 16. EXHIBITS
1. Articles of Incorporation * and (1)
2. Bylaws (2)
3. Not applicable
4. Agreement and Plan of Reorganization, attached as Exhibit A to the
Prospectus/Proxy Statement included in Part A of this Registration
Statement on Form N-14.
5. Not applicable
6. Investment Advisory and Management Agreement * and (1)
7. Underwriting Agreement * and (1)
8. Not applicable
9. Custody Agreement *
10. Not applicable
** 11. Opinion and consent of Dorsey & Whitney LLP with respect to the
legality of the securities being registered
*** 12. Opinion and consent of Dorsey & Whitney LLP with respect to tax
matters
13. Not applicable
** 14. Consent of KPMG Peat Marwick LLP
** 16. Powers of Attorney of Directors signing the Registration Statement
** 17. Form of proxy card
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(1) Incorporated by reference to Post-Effective Amendment No. 76 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in October 1995.
(2) Incorporated by reference to Post-Effective Amendment No. 77 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in December 1995.
(*) Filed herewith.
(**) Previously filed
(***)To be filed by amendment
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter
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within the meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective.
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file, by post-effective
amendment, an opinion of counsel or a copy of a ruling of the Internal Revenue
Service supporting the tax consequences of the proposed reorganization within a
reasonable time after receipt of such opinion or ruling.
2
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Woodbury and State of Minnesota on the 11th day of
September 1998.
FORTIS EQUITY PORTFOLIOS, INC.
(Registrant)
By /s/ Dean C. Kopperud
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Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Dean C. Kopperud President (principal September 11, 1998
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Dean C. Kopperud
/s/ Tamara L. Fagely Treasurer (principal September 11, 1998
- -------------------------------- financial and
Tamara L. Fagely accounting officer)
Richard D. Cutting* Director
Allen R. Freedman* Director
Robert M. Gavin* Director
Benjamin S. Jaffray* Director
Jean L. King* Director
Edward M. Mahoney* Director
Robb L. Prince* Director
Leonard J. Santow* Director
Noel S. Shadko Director
Joseph M. Wikler* Director
*By /s/ Dean C. Kopperud September 11, 1998
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Dean C. Kopperud, Attorney-in-Fact
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ARTICLES OF AMENDMENT
AMENDING AND RESTATING
ARTICLES OF INCORPORATION
OF
FORTIS EQUITY PORTFOLIOS, INC.
1. The name of the corporation is Fortis Equity Portfolios, Inc., a Minnesota
corporation.
2. The document entitled "Amended and Restated Articles of Incorporation of
Fortis Equity Portfolios, Inc.," marked as Exhibit A attached hereto,
contains the full text of the amendment to the Articles of Incorporation of
the corporation.
3. The date of adoption of the amendment by the shareholders of the
corporation was August 23, 1994.
4. The amendment, among other things, permits Fortis Equity Portfolios, Inc.
to issue multiple classes of shares and to increase the authorized capital
of the corporation.
5. The amendment amends and restates the Articles of Incorporation of the
corporation in their entirety, and the Amended and Restated Articles of
Incorporation attached hereto as Exhibit A supersede the original Articles
of Incorporation and all amendments to and restatements of them.
6. The amendment has been adopted pursuant to Chapter 302A of the Minnesota
Statutes.
IN WITNESS WHEREOF, the undersigned, Michael J. Radmer, the Secretary of
Fortis Equity Portfolios, Inc., being duly authorized on behalf of Fortis Equity
Portfolios, Inc., has executed this document this 8th day of September, 1994.
/s/ Michael J. Radmer
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Michael J. Radmer
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EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FORTIS EQUITY PORTFOLIOS, INC.
Pursuant to the provisions of Minnesota Statutes, Chapter 302A, the
following Articles of Incorporation are adopted, as amended and restated:
1. The name of this corporation is Fortis Equity Portfolios, Inc.
2. This corporation shall have general business purposes and shall
have unlimited power to engage in and do any lawful act concerning any and all
lawful businesses for which corporations may be organized under the Minnesota
Statutes, Chapter 302A. Without limiting the generality of the foregoing, this
corporation shall have specific power:
(a) To conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise acquire,
and to own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, choses in action, evidences of indebtedness, certificates
of indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of
the United States, or any state, commonwealth, territory or possession
thereof, or organized under the laws of any foreign country, or any state,
province, territory or possession thereof, or issued or to be issued by
the United States government or any agency or instrumentality thereof,
options on stock indexes, stock index and interest rate futures contracts
and options thereon, and other futures contracts and options thereon.
(c) In the above provisions of this Article 2, purposes shall
also be construed as powers and powers shall also be construed as purposes,
and the enumeration of specific purposes or powers shall not be construed
to limit other statements of purposes or to limit purposes or powers which
the corporation may otherwise have under applicable law, all of the same
being separate and cumulative, and all of the same may be carried on,
promoted and pursued, transacted or exercised in any place whatsoever.
3. This corporation shall have perpetual existence.
4. The location and post office address of the registered office in
Minnesota is 500 Bielenberg Drive, Woodbury, Minnesota 55125.
5. The total authorized number of shares of this corporation is
100,000,000,000, all of which shall be common shares of the par value of $.01
each. The corporation may issue and sell any of its shares in fractional
denominations to the same extent as its whole shares, and shares and fractional
denominations shall have, in proportion to the relative fractions represented
thereby, all the rights of whole shares, including, without limitation, the
right to
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vote, the right to receive dividends and distributions, and the right to
participate upon liquidation of the corporation.
(a) Of said common shares, 10,000,000,000 shares may be issued
in the series of common shares designated "Series A Common Shares." The
balance of 90,000,000,000 shares may be issued in such series with such
designations, preferences and relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof,
as shall be stated or expressed in a resolution or resolutions providing
for the issue of any series of common shares as may be adopted from time
to time by the Board of Directors of this corporation pursuant to the
authority hereby vested in said Board of Directors. Each series of
common shares which the Board of Directors may establish, as provided
herein, may evidence, if the Board of Directors shall so determine by
resolution, an interest in a separate and distinct portion of the
corporation's assets, which shall take the form of a separate portfolio of
investment securities, cash and other assets. Authority to establish such
separate portfolios is hereby vested in the Board of Directors of this
corporation, and such separate portfolios may be established by the Board
of Directors without the authorization or approval of the holders of any
series of shares of this corporation.
(b) The shares of each series may be classified by the Board of
Directors in one or more classes with such relative rights and preferences
as shall be stated or expressed in a resolution or resolutions providing
for the issue of any such class or classes as may be adopted from time to
time by the Board of Directors of the corporation pursuant to the
authority hereby vested in the Board of Directors and Minnesota Statutes,
Section 302A.401, Subd. 3, or any successor provision. The shares of
each class within a series may be subject to such charges and expenses
(including by way of example, but not by way of limitation, front-end
and deferred sales charges, expenses under Rule 12b-1 plans, administration
plans, service plans, or other plans or arrangements, however designated)
as may be adopted from time to time by the Board of Directors in
accordance, to the extent applicable, with the Investment Company Act of
1940, as amended (together with the rules and regulations promulgated
thereunder, the "1940 Act"), which charges and expenses may differ from
those applicable to another class within such series, and all of the
charges and expenses to which a class is subject shall be borne by such
class and shall be appropriately reflected (in the manner determined or
approved by the Board of Directors) in determining the net asset value
and the amounts payable with respect to dividends and distributions on
and redemptions or liquidations of, such class. Subject to compliance
with the requirements of the 1940 Act, the Board of Directors shall have
the authority to provide that shares of any class shall be convertible
(automatically, optionally or otherwise) into shares of one or more
other classes in accordance with such requirements and procedures as may
be established by the Board of Directors.
6. The shareholders of each series (or class thereof) of common
shares of this corporation:
(a) shall not have the right to cumulate votes for the election
of directors; and
(b) shall have no preemptive right to subscribe to any issue of
shares of any class or series of this corporation now or hereafter created,
designated, or classified.
7. A description of the relative rights and preferences of all
series of shares (and classes thereof) is a follows, unless otherwise set forth
in one or more amendments to these Articles of Incorporation or in the
resolutions providing for the issue of such series (and classes thereof):
(a) On any matter submitted to a vote of shareholders of this
corporation, all common shares of this corporation then issued and
outstanding and entitled to vote, irrespective of series or class, shall
be voted in the aggregate and not by series or class, except: (i) when
otherwise required by Minnesota Statutes, Chapter 302A, in which case
shares will be voted by individual series or class, as applicable; (ii)
when otherwise required by the 1940 Act, as amended, or the rules adopted
thereunder, in which case shares shall be voted by individual series or
class, as applicable; and (iii) when the matter does not affect the
interests of a particular series or class, in which case only
shareholders of the series or class affected shall be entitled to vote
thereon and shall vote by individual series or class, as applicable.
<PAGE>
(b) All consideration received by this corporation for the issue
or sale of shares of any series, together with all assets, income,
earnings, profits and proceeds derived therefrom (including all proceeds
derived from the sale, exchange or liquidation thereof and, if applicable,
any assets derived from any reinvestment of such proceeds in whatever
form the same may be) shall become part of the assets of the portfolio
to which the shares of that series relate, for all purposes, subject only
to the rights of creditors, and shall be so treated upon the books of
account of this corporation. Such assets, income, earnings, profits and
proceeds (including any proceeds derived from the sale, exchange or
liquidation thereof and, if applicable, any assets derived from any
reinvestment of such proceeds in whatever form the same may be) are herein
referred to as "assets belonging to" a series of the common shares of this
corporation.
(c) Assets of this corporation not belonging to any particular
series are referred to herein as "General Assets." General Assets shall be
allocated to each series in proportion to the respective net assets
belonging to such series. The determination of the Board of Directors
shall be conclusive as to the amount of assets, as to the characterization
of assets as those belonging to a series or as General Assets, and as to
the allocation of General Assets.
(d) The assets belonging to a particular series of common shares
shall be charged with the liabilities incurred specifically on behalf of
such series of common shares ("Special Liabilities"). Such assets shall
also be charged with a share of the general liabilities of this
corporation ("General Liabilities") in proportion to the respective net
assets belonging to such series of common shares. The determination of
the Board of Directors shall be conclusive as to the amount of liabilities,
including accrued expenses and reserves, as to the characterization of any
liability as a Special Liability or General Liability, and as to the
allocation of General Liabilities among series.
(e) The Board of Directors may, to the extent permitted by
Minnesota Statutes, Chapter 302A or any successor provision thereto, and
in the manner provided herein, declare and pay dividends or distributions
in shares or cash on any or all series (or classes thereof) of common
shares, the amount of such dividends and the payment thereof being wholly
in the discretion of the Board of Directors. Dividends or distributions
on shares of any series of common shares shall be paid only out of the
earnings, surplus, or other lawfully available assets belonging to such
series (including, for this purpose, any General Assets allocated to
such series).
(f) In the event of the liquidation or dissolution of this
corporation, holders of the shares of any series shall have priority over
the holders of any other series with respect to, and shall be entitled
to receive, out of the assets of this corporation available for
distribution to holders of shares, the assets belonging to such series
of common shares and the General Assets allocated to such series of
common shares, and the assets so distributable to the holders of the
shares of any series shall be distributed among such holders in proportion
to the number of shares of such series held by each such shareholder
and recorded on the books of this corporation, except that, in the case
of a series with more than one class of shares, such distributions shall
be adjusted to reflect appropriately any charges and expenses borne by
each individual class.
(g) With the approval of a majority of the shareholders of each
of the affected series of common shares present in person or by proxy at a
meeting called for the following purpose (provided that a quorum of the
issued and outstanding shares of the affected series is present at such
meeting in person or by proxy), the Board of Directors may transfer the
assets of any series to any other series. Upon such a transfer, the
corporation shall issue common shares representing interests in the series
to which the assets were transferred in exchange for all common shares
representing interests in the series from which the assets were
transferred. Such shares shall be exchanged at their respective net
asset values.
8. The following additional provisions, when consistent with law,
are hereby established for the management of the business, for the conduct of
the affairs of the corporation, and for the purpose of describing
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certain specific powers of the corporation and of its directors and
shareholders.
(a) In furtherance and not in limitation of the powers conferred
by statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(1) to make, adopt, alter, amend and repeal Bylaws of
the corporation unless reserved to the shareholders by the Bylaws or
by the laws of the State of Minnesota, subject to the power of the
shareholders to change or repeal such Bylaws;
(2) to distribute, in its discretion, for any fiscal year
(in the year or in the next fiscal year) as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to
enable each series to qualify under the Internal Revenue Code as a
regulated investment company to avoid any liability for federal
income tax in respect of such year. Any distribution or dividend
paid to shareholders from any capital source shall be accompanied by a
written statement showing the source or sources of such payment;
(3) to authorize, subject to such vote, consent, or
approval of shareholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation, the execution
and performance by the corporation of any agreement or agreements
with any person, corporation, association, company, trust, partnership
(limited or general) or other organization whereby, subject to the
supervision and control of the Board of Directors, any such other
person, corporation, association, company, trust, partnership
(limited or general), or other organization shall render managerial,
investment advisory, distribution, transfer agent, accounting and/or
other services to the corporation (including, if deemed advisable,
the management or supervision of the investment portfolios of the
corporation) upon such terms and conditions as may be provided in such
agreement or agreements;
(4) to authorize any agreement of the character described
in subparagraph 3 of this paragraph (a) with any person, corporation,
association, company, trust, partnership (limited or general) or
other organization, although one or more of the members of the Board
of Directors or officers of the corporation may be the other party
to any such agreement or an officer, director, employee, shareholder,
or member of such other party, and no such agreement shall be
invalidated or rendered voidable by reason of the existence of any
such relationship;
(5) to allot and authorize the issuance of the authorized
but unissued shares of any series, or class thereof, of this
corporation;
(6) to accept or reject subscriptions for shares of any
series, or class thereof, made after incorporation;
(7) to fix the terms, conditions and provisions of and
authorize the issuance of options to purchase or subscribe for shares
of any series, or class thereof, including the option price or prices
at which shares may be purchased or subscribed for; and
(8) to determine what constitutes net income, total assets
and the net asset value of the shares of each series (or class
thereof) of the corporation. Any such determination made in good
faith shall be final and conclusive, and shall be binding upon the
corporation, and all holders (past, present, and future) of shares of
each series (and class thereof).
(b) Except as provided in the next sentence of this paragraph
(b), shares of any series, or class thereof, hereafter issued which are
redeemed, exchanged, or otherwise acquired by this corporation shall
return to the status of authorized and unissued shares of such series or
class. Upon the redemption,
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exchange, or other acquisition by the corporation of all outstanding
shares of any series (or class thereof), hereafter issued, such shares
shall return to the status of authorized and unissued shares without
designation as to series (if no shares of the series remain outstanding)
or with the same designation as to series, but no designation as to class
within such series (if shares of such series remain outstanding, but no
shares of such class thereof remain outstanding), and all provisions of
these Articles of Incorporation relating to such series, or class thereof
(including, without limitation, any statement establishing or fixing the
rights and preferences of such series, or class thereof), shall cease to
be of further effect and shall cease to be a part of these Articles.
Upon the occurrence of such events, the Board of Directors of the
corporation shall have the power, pursuant to Minnesota Statutes Section
302A.135, Subdivision 5 or any successor provision and without shareholder
action, to cause restated articles of incorporation of the corporation to
be prepared and filed with the Secretary of State of the State of Minnesota
which reflect such removal from these Articles of all such provisions
relating to such series, or class thereof.
(c) The determination as to any of the following matters made by
or pursuant to the direction of the Board of Directors consistent with
these Articles of Incorporation and in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of duties, shall be
final and conclusive and shall be binding upon the corporation and every
holder of shares of its capital stock: namely, the amount of the assets,
obligations, liabilities and expenses of each series (or class thereof)
of the corporation; the amount of the net income of each series (or class
thereof) of the corporation from dividends and interest for any period and
the amount of assets at any time legally available for the payment of
dividends in each series (or class thereof); the amount of paid-in surplus,
other surplus, annual or other net profits, or net assets in excess of
capital, undivided profits, or excess of profits over losses on sales of
securities of each series (or class thereof); the amount, purpose, time
of creation, increase or decrease, alteration or cancellation of any
reserves or charges and the propriety thereof (whether or not any
obligation or liability for which such reserves or charges shall have been
created shall have been paid or discharged); the market value, or any sale,
bid or asked price to be applied in determining the market value, of any
security owned or held by or in each series (or class thereof) of the
corporation; the fair value of any other asset owned by or in each series
of the corporation; the number of shares of each series (or class thereof)
of the corporation issued or issuable; any matter relating to the
acquisition, holding and disposition of securities and other assets
by each series (or class thereof) of the corporation; and any question as
to whether any transaction constitutes a purchase of securities on margin,
a short sale of securities, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with
the public distribution of any securities.
(d) The Board of Directors or the shareholders of the
corporation may adopt, amend, affirm or reject investment policies and
restrictions upon investment or the use of assets of each series of the
corporation and may designate some such policies as fundamental and not
subject to change other than by a vote of a majority of the outstanding
voting securities, as such phrase is defined in the Investment Company Act
of 1940, of the affected series of the corporation.
(e) The corporation shall indemnify such persons for such
expenses and liabilities, in such manner, under such circumstances, and
to the full extent permitted by Section 302A.521 of the Minnesota Statutes,
as now enacted or hereafter amended, provided, however, that no such
indemnification may be made if it would be in violation of Section 17(h)
of the Investment Company Act of 1940, as now enacted or hereafter amended.
(f) Any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken without
a meeting if done in writing and signed by a majority of the directors or
committee members.
(g) To the fullest extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereafter be amended (except as
prohibited by the Investment Company Act of 1940, as the same exists or may
hereafter be amended), a director of this corporation shall not be liable
to this corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director.
<PAGE>
CERTIFICATE OF DESIGNATION
of
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
of
FORTIS EQUITY PORTFOLIOS, INC.
The undersigned duly elected Secretary of Fortis Equity Portfolios, Inc., a
Minnesota corporation (the "Fund"), hereby certifies that the following is a
true, complete and correct copy of resolutions duly adopted by a majority of the
directors of the Board of Directors of the Fund on June 28, 1994, and further
certifies that the Amended and Restated Articles referred to in such resolutions
were approved by the shareholders of the Fund on August 23, 1994.
APPROVAL OF CREATION AND DESIGNATION OF
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
WHEREAS, shareholders of the Fund are being asked to approve Amended and
Restated Articles of Incorporation (the "Articles") to allow the Fund to issue
Multiple Classes of shares and to increase its authorized capital; and
WHEREAS, following the approval of such amended Articles the total authorized
number of shares of the Fund will be 100,000,000,000 (one hundred billion); and
WHEREAS, as amended the Articles will provide that the sole currently
outstanding series will have 10,000,000,000 (ten billion) shares of designated
shares; and
WHEREAS, the amended Articles set forth that the authorized shares may be issued
in such Classes and with such relative rights and preferences as shall be stated
or expressed in a resolution or resolutions providing for the issue of any such
Class or Classes of common shares as may be adopted from time to time by the
Board of Directors;
NOW, THEREFORE, BE IT RESOLVED, that of the to be authorized common shares of
the Fund, for the sole currently outstanding series, 1,000,000,000 (one billion)
are hereby designated as Class A Common Shares, 1,000,000,000 (one billion) are
hereby designated as Class B Common Shares, 1,000,000,000 (one billion) are
hereby designated as Class C Common Shares and 1,000,000,000 (one billion) are
hereby designated as Class H Common Shares; and the shares of the Fund which are
outstanding on November 13, 1994 are hereby redesignated as Class A Common
Shares of the currently outstanding series of the Fund.
FURTHER RESOLVED, that the Class A, Class B, Class C, and Class H Common Shares
designated by these resolutions shall have the relative rights and preferences
set forth in the amended Articles of the Fund. As provided in Article 5(b) of
such amended Articles, any Class of Common Shares designated by these
resolutions may be subject to such charges and expenses (including by way of
example, but not by way of limitation, such front-end and deferred sales charges
as may be permitted under the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules of the National Association of Securities Dealers,
Inc., and expenses under Rule 12b-1 plans, administration plans, service plans,
or other plans or arrangements, however designated) as may be adopted from time
to time by the Board of Directors of the Fund in accordance, to the extent
applicable, with the 1940 Act, which charges and expenses may differ from those
applicable to another Class, and all of the charges and expenses to which a
Class is subject shall be borne by such Class and shall be appropriately
reflected in determining the net asset value and the amounts payable with
respect to dividends and distributions on, and redemptions or liquidations of,
such Class.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of Fortis Equity Portfolios, Inc. this 31st day of
October, 1994.
/s/ Michael J. Radmer
--------------------------------
Michael J. Radmer, Secretary
<PAGE>
CERTIFICATE OF DESIGNATION
OF
SERIES B COMMON SHARES
AND
SERIES C COMMON SHARES
OF
FORTIS EQUITY PORTFOLIOS, INC.
The undersigned duly elected Assistant Secretary of Fortis Equity
Portfolios, Inc., a Minnesota corporation (the "Corporation"), hereby certifies
that the following is a true, complete and correct copy of resolutions duly
adopted by a majority of the directors of the Board of Directors of the
Corporation on December 7, 1995.
DESIGNATION OF SERIES B COMMON SHARES
AND SERIES C COMMON SHARES
WHEREAS, the total authorized number of shares of the Corporation is
100,000,000,000, all of which shares are common shares, $.01 par value per
share, as set forth in the Corporation's Articles of Incorporation (the
"Articles"); and
WHEREAS, of said total authorized shares, 10,000,000,000 have been
designated Series A Common Shares, with 1,000,000,000 of such shares
designated as Class A Commons Shares; 1,000,000,000 designated as Class B
Common Shares; 1,000,000,000 designated as Class C Common Shares; and
1,000,000,000 designated as Class H Common Shares; and
WHEREAS, said Articles set forth that the balance of 90,000,000,000
authorized but unissued common shares may be issued in such series, and in
such classes of such series, with such relative rights and preferences as
shall be stated or expressed in a resolution or resolutions providing for the
issue of any such series of common shares, or any such class of such series,
as may be adopted form time to time by the Board of Directors of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED, that of the 90,000,000,000 authorized
but unissued common shares, 10,000,000,000 of such shares are hereby
designated as Series B Common Shares and 10,000,000,000 of such shares are
hereby designated as Series C Common Shares as provided in Article 5(a) of
the Articles and each of said Series B Common Shares and Series C Common
Shares shall represent interests in a separate and distinct portion of the
Corporation's assets and liabilities which shall take the form of a separate
portfolio of investment securities, cash other assets and liabilities.
BE IT FURTHER RESOLVED, of the 10,000,000,000 shares designated herein
as Series B Common Shares, 1,000,000,000 are hereby designated as Class A
Common Shares, 1,000,000,000 are hereby designated as Class B Common Shares,
1,000,000,000 are hereby designated as Class C Common Shares and
1,000,000,000 are hereby designated as Class H Common Shares, as provided
1
<PAGE>
in Article 5(b) of the Articles.
BE IF FURTHER RESOLVED, of the 10,000,000,000 shares designated herein as
Series C Common Shares, 1,000,000,000 are hereby designated as Class A Common
Shares, 1,000,000,000 are hereby designated as Class B Common Shares,
1,000,000,000 are hereby designated as Class C Common Shares and 1,000,000,000
are hereby designated as Class H Common Shares, as provided in Article 5(b) of
the Articles.
BE IT FURTHER RESOLVED, that Articles 5, 6, and 7 of the Articles of the
Corporation setting forth the relative rights and preferences of each series and
class thereof be, and they hereby are, adopted as the rights and preferences of
the series and classes designated in these resolutions. As provided in Article
5(b) of the Articles, any Class of Common Shares designated by these resolutions
may be subject to such charges and expenses (including by way of example, but
not of limitation, such front-end and deferred sales charges as may be permitted
under the Investment Company Act of 1940, as amended (the "1940 Act") and the
rules of the National Association of Securities Dealers, Inc., and expenses
under Rule 12b-1 plans, administration plans, service plans, or other plans or
arrangements, however designated) as may be adopted from time to time by the
Board of Directors of the Corporation in accordance, to the extent applicable,
with the 1940 Act, which charges and expenses may differ from those applicable
to another Class, and all of the charges and expenses to which a Class is
subject shall be borne by such Class and shall be appropriately reflected in
determining the net asset value and the amounts payable with respect to
dividends and distributions on, and redemptions or liquidations of, such Class.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of Fortis Equity Portfolios, Inc. this 19th day of
December, 1995.
/s/ Scott R. Plummer
-------------------------------------
Scott R. Plummer, Assistant Secretary
2
<PAGE>
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 31st day of January 1992, by and between
Fortis Equity Portfolios, Inc. (formerly AMEV Capital Fund, Inc.), a Minnesota
corporation (the "Fund") and Fortis Advisers, Inc. (formerly AMEV Advisers,
Inc.), a Minnesota corporation ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Advisers, and Advisers hereby agrees to act,
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Fund's Portfolios, which shall consist of Fortis
Capital Fund and any further Portfolios from time to time created by the Board
of Directors of the Fund. Each such Portfolio is herein individually referred
to as a "Portfolio," and the Portfolios are herein collectively referred to as
the "Portfolios."
The investment of the assets of the Portfolios shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund and the Portfolios as set forth in the Registration Statement and
Prospectus and Statement of Additional Information and as interpreted from time
to time by the Board of Directors of the Fund. Within the framework of the
investment policies of the Portfolios, Advisers shall have the sole and
exclusive responsibility for the management of the Portfolios and the making and
execution of all investment decisions for the Portfolios. Advisers shall report
to the Board of Directors regularly
<PAGE>
at such times and in such detail as the Board may from time to time determine to
be appropriate, in order to permit the Board to determine the adherence of
Advisers to the investment policies of the Portfolios.
Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. Advisers shall arrange, if requested by
the Fund, for officers, employees, or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.
Advisers hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to its shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Advisers should
ever occur, Advisers will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of Advisers hereunder, the Fund shall pay to Advisers a monthly
fee for each Portfolio, which fee shall be paid to Advisers not later than the
fifth business day of the month following the month in which such services are
rendered. Each such monthly fee shall be at the rate or rates set forth below
and shall be based on the average of the net asset values of all of the issued
and outstanding shares of the
-2-
<PAGE>
respective Portfolio as determined as of the close of each business day of the
month pursuant to the Articles of Incorporation, Bylaws and currently effective
Prospectus and Statement of Additional Information of the Fund. The following
table sets forth the fees on a monthly and annual basis:
<TABLE>
<CAPTION>
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Portfolio
------- ------------- -----------------------
<S> <C> <C> <C>
Fortis 1/12 of 1.0% 1.0% On the first $100,000,000
Capital 1/12 of .8% .8% On the next $150,000,000
Fund 1/12 of .7% .7% On average assets over
$250,000,000
</TABLE>
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolio(s).
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by Advisers and/or Fortis
Investors, Inc. ("Investors"). These Fund expenses include, by way of example,
but not by way of limitation, the fees and expenses of directors and officers of
the Fund who are not "affiliated persons" of Advisers, interest expenses, taxes,
brokerage fees and commissions, fees and expenses of registering and qualifying
the Fund and its shares for distribution under federal and state securities
laws, expenses of preparing
-3-
<PAGE>
prospectuses and of printing and distributing prospectuses annually to existing
shareholders, custodian charges, auditing and legal expenses, insurance
expenses, association membership dues, and the expense of reports to
shareholders, shareholders' meetings, and proxy solicitations. Advisers shall
bear the costs of acting as the Fund's transfer agent, registrar, and dividend
disbursing agent.
(b) Advisers or Investors shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses and shareholder reports for new shareholders, and the costs of
sales literature.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement as to Fortis Capital Fund shall
be January 31, 1992. Wherever referred to in this Agreement, the vote or
approval of the holders of a majority of the outstanding voting securities of a
Portfolio or the Fund shall mean the vote of 67% or more of such securities if
the holders of more than 50% of such securities are present in person or by
proxy or the vote of more than 50% of such securities, whichever is less.
-4-
<PAGE>
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to a
particular Portfolio by the vote of the holders of a majority of the outstanding
voting securities of such Portfolio, and (b) by a majority of the directors who
are not interested persons of Advisers or of the Fund cast in person at a
meeting called for the purpose of voting on such approval; provided that if a
majority of the outstanding voting securities of any of the Portfolios approves
this Agreement, this Agreement shall continue in effect with respect to such
approving Portfolio whether or not the shareholders of any other Portfolio of
the Fund approve this Agreement.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by Advisers
upon sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to a particular Portfolio at any time without the
payment of any penalty by the vote of the holders of a majority of the
outstanding voting securities of such Portfolios, upon sixty (60) days' written
notice to Advisers. Any such termination may be made effective with respect to
both the investment advisory and management services provided for in this
Agreement or with respect to either of such kinds of services. This Agreement
shall automatically terminate in the event of its assignment.
-5-
<PAGE>
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolios which have approved and are subject to this
Agreement. In addition, if a majority of the outstanding voting securities of
any Portfolio of the Fund votes to amend this Agreement, such amendment shall be
effective with respect to such Portfolio whether or not the shareholders of any
other Portfolio vote to adopt such amendment.
7. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
-6-
<PAGE>
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FORTIS EQUITY PORTFOLIOS, INC.
By /s/ Edward M. Mahoney
-------------------------------
Edward M. Mahoney
Its President
FORTIS ADVISERS, INC.
By /s/ Edward M. Mahoney
-------------------------------
Edward M. Mahoney
Its President
-7-
<PAGE>
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 14th day of November 1994, by and between Fortis
Equity Portfolios, Inc. (formerly AMEV Capital Fund, Inc.), a Minnesota
corporation (the "Fund") for and on behalf of each class of shares (each such
class is referred to hereinafter as a "Class") of each of the Fund's Portfolios
and Fortis Investors, Inc. (formerly AMEV Investors, Inc.), a Minnesota
corporation ("Investors"),
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund on behalf of each Class hereby engages Investors, and Investors
hereby agrees to act, as principal underwriter for each Class in connection with
the sale and distribution of the shares of each Class of the Fund's Portfolios
to the public, either through dealers or otherwise. Investors agrees to offer
such shares for sale at all times when such shares are available for sale and
may lawfully be offered for sale and sold.
As used herein, "Portfolios" is defined as Fortis Capital Fund and any
other Portfolios which may hereafter be created by the Board of Directors of the
Fund. In addition, as used herein, "Classes" of the Fund's Portfolios is
defined as Class A, Class B, Class C and Class H shares of each Portfolio and
any other classes which may hereinafter be created by the Fund's Board of
Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed to
have been accepted by the
1
<PAGE>
Fund if the Fund shall fail to notify Investors of the rejection of such offer
or sale prior to the computation of the net asset value of the applicable
Class's shares next following receipt by the Fund of notice of such offer or
sale.
(b) No share of a Class shall be sold by Investors (i) for any amount
less than the net asset value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than cash, or, pursuant to any
exchange privilege provided for by such Class's currently effective Prospectus
or Statement of Additional Information, shares of the corresponding Class of
shares of any other investment company for which Investors acts as an
underwriter. In addition, except as provided below or in the Class's currently
effective Prospectus or Statement of Additional Information, all shares of the
Fund's Portfolios sold by Investors shall be sold at the applicable public
offering price, as hereinafter defined, provided that, in the case of sales of
such shares to or through bona fide dealers in securities, Investors may allow,
or sell at, a discount from said public offering price to such dealers, which
discount shall be no greater than the "sales load" hereinafter referred to.
(c) The public offering price of the shares of the Fund's Portfolios
shall be the current net asset value thereof (computed as provided in the Bylaws
of the Fund) plus the applicable "sales load" or loading charge, if any, which
shall be such percentage of the public offering price, computed to the nearest
cent, as may be agreed upon by the Fund and Investors and specifically approved
by the Board of Directors of the Fund, provided that no schedule of sales loads
shall be effective until set forth in a prospectus of the Fund meeting the
requirements of the Securities Act of 1933. Said sales loads may be graduated
on a scale based on the dollar amount of shares sold.
(d) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction occurring
within a certain period
2
<PAGE>
of time following such a purchase, as described in each Class's currently
effective Prospectus and Statement of Additional Information.
(e) The front-end sales charge, if any, for any Class may, at the
discretion of the Fund and Investors, be increased, reduced or eliminated as
permitted by the Investment Company Act of 1940, and the rules and regulations
thereunder, as they may be amended from time to time, or as set forth elsewhere
in this Agreement, provided that, if necessary, such increase, reduction or
elimination shall be set forth in the Prospectus for such Class, and provided
that the Fund shall in no event receive for any shares sold an amount less than
the net asset value thereof. In addition, any contingent deferred sales charge
for any Class may, at the discretion of the Fund and Investors, be increased,
reduced or eliminated in accordance with the terms of an exemptive order
received from, or any applicable rule or rules promulgated by, the Securities
and Exchange Commission by the Fund, provided such increase, reduction or
elimination shall be set forth in the Prospectus for such Class.
(f) Investors may decline to offer for sale or sell shares of the
Fund in an amount the cumulative public offering price of which is less than
$500.00 or such smaller amount as it may from time to time fix.
3. INVESTMENT OF DIVIDEND AND DISTRIBUTIONS.
The Fund may extend to its shareholders the right to purchase shares issued
by each Class of the Fund at the net asset value thereof with the proceeds of
any dividend or capital gain distribution paid or payable by the Fund (or any
other fund for which Investors serves as underwriter) to its shareholders.
3
<PAGE>
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and keep in
effect, at its own expense, the registration or qualification of each Class's
shares for sale in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with such information with
respect to the affairs and accounts of the Fund (and each Class and Portfolio
thereof) as Investors may from time to time reasonably require, and further
agrees that Investors, at all reasonable times, shall be permitted to inspect
the books and records of the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be paid
all expenses, costs and fees incurred by the Fund which are not assumed by
Investors or Fortis Advisers, Inc. ("Advisers"). Investors agrees to provide,
and shall pay costs which it incurs in connection with providing personal,
continuing services to shareholders (such costs are referred to as "Shareholder
Servicing Costs"). Shareholder Servicing Costs include all expenses of
Investors incurred in connection with providing administrative or accounting
services to shareholders of each Class, including, but not limited to, an
allocation of Investor's overhead and payments made to persons, including
employees of Investors, who respond to inquiries of shareholders regarding their
ownership of Class shares, or who provide other administrative or accounting
services not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding the foregoing, if the
National Association of Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair Practice
that differs from a definition of Shareholder Servicing Costs in this paragraph,
or if the NASD adopts a related definition intended to define the same concept,
the
4
<PAGE>
definition of Shareholder Servicing Costs in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of distributing the shares
of each Class ("Distribution Expenses"). Distribution expenses include, but are
not limited to, initial and ongoing sales compensation (in addition to sales
loads) paid to registered representatives of Investors and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of Investors'
overhead; payments to and expenses of persons who provide support services in
connection with the distribution of Fund shares; and other distribution-related
expenses. Advisers, rather than Investors, may bear the expenses referred to in
this paragraph, but Investors shall be primarily liable for such expenses until
paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive and retain the front-end
sales charge (if any) imposed in connection with sales of each Class, as set
forth in the applicable Class's current Prospectus. Up to the entire amount of
the front-end sales charge (if any) with respect to each applicable Class may be
reallowed by Investors to broker-dealers and participating financial
institutions in connection with their sale of Fund shares. The amount of the
front-end sales charge (if any) may be retained or deducted by Investors from
any sums received by it in payment for shares so sold. If such amount is not
deducted by Investors from such payments, such amount shall be paid to Investors
by the Fund not later than five business days after the
5
<PAGE>
close of any month during which any such sales were made by Investors and
payment therefor received by the Fund.
(b) Investors shall be entitled to receive any contingent deferred
sales charge imposed in connection with any redemption of applicable Class
shares, as set forth in each applicable Class's current Prospectus.
(c) Investors shall be entitled to receive the following 12b-1 fees,
payable under the Plan of Distribution adopted by each Class in accordance with
Rule 12b-1 under the Investment Company Act of 1940 (the "Plan"):
(i) CLASS A SHARES: Class A shares of each of the Portfolios
are obligated to pay Investors, the principal underwriter of the Fund's shares,
a total fee in connection with distribution-related services provided with
respect to Class A and in connection with the servicing of shareholder accounts
of said Class A. This fee shall be calculated and payable monthly at an annual
rate of .25% of the value of the Class's average daily net assets. All or a
portion of such total fee may be payable as a Distribution Fee, and all or any
portion of such total fee may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's Board of Directors. Until further
action by the Board of Directors, all of such fee shall be designated and
payable as a Distribution Fee.
(ii) CLASS B, CLASS C AND CLASS H SHARES: Class B, Class C and
Class H shares of the Portfolios are each obligated to pay Investors a total fee
in connection with the distribution-related services and servicing of
shareholder accounts provided for their respective Class. The total fee paid by
each Class shall be calculated and payable monthly, at an annual rate of 1.00%
of the value of the respective Class's average daily net assets. All or any
portion of such total fee may be payable as a Distribution Fee, and all or any
portion of such total fee may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's
6
<PAGE>
Board of Directors. Until further action by the Board, 75% of such fee (.75 of
1.00%) shall be designated and payable as a Distribution Fee and 25% of such fee
(.25 of 1.00%) shall be designated and payable as a Shareholder Servicing Fee.
(iii) FUTURE PORTFOLIOS AND/OR CLASSES: The 12b-1 fees for Class
A, Class B, Class C or Class H shares of any future Portfolios shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolios, but in no event shall such fees exceed any then existing limitations
imposed under any applicable rule or rules promulgated by the Securities and
Exchange Commission and/or the National Association of Securities Dealers, Inc.
Upon the creation of any new classes of shares for any or all of the Portfolios,
the respective levels of sales charges and 12b-1 fees shall be determined by the
Board of Directors of the Fund, subject to any necessary shareholder approval
and only in accordance with any applicable rule or rules promulgated by the
Securities and Exchange Commission and/or the National Association of Securities
Dealers, Inc. All or any portion of the 12b-1 fees referred to in this
paragraph may be payable as a Distribution Fee, and all or any portion of such
12b-1 fees may be payable as a Shareholder Servicing Fee, as determined from
time to time by the Fund's Board of Directors.
(iv) OTHER INFORMATION Average daily net assets shall be computed
in accordance with the Prospectus of each applicable Class. Amounts payable to
Investors under the Plan may exceed or be less than Investor's actual
distribution expenses and shareholder servicing costs. In the event such
distribution expenses and/or shareholder servicing expenses exceed amounts
payable to Investors under the Plan, Investors shall not be entitled to
reimbursement from the Fund.
(d) In each year during which this contract remains in effect,
Investors will prepare and furnish to the Board of Directors of the Fund, and
the Board will review, on a
7
<PAGE>
quarterly basis written reports complying with the requirements of Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") that set forth the
amounts expended under this contract and the Plan and the purposes for which
those expenditures were made.
8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES-REFUND FOR CANCELED ORDERS
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
Investors.
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation and
other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or proceedings
in any way arising out of or in connection with the sale or distribution of the
shares of the Fund by Investors. In the event of the threat or institution of
any such litigation or legal proceedings against the Fund, Investors shall
defend such action on
8
<PAGE>
behalf of the Fund at its own expense, and shall pay any such liability,
judgment, cost or penalty resulting therefrom, whether imposed by legal
authority or agreed upon by way of compromise and settlement; provided, however,
Investors shall not be required to pay or reimburse the Fund for any liability,
judgment, cost or penalty incurred as a result of information supplied by, or as
the result of the omission to supply information by, the Fund to Investors, or
to Investors by a director, officer, or employee of the Fund who is not an
interested person of Investors, unless the information so supplied or omitted
was available to Investors or the Fund's investment adviser without recourse to
the Fund or any such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF
AGREEMENT
(a) This Agreement shall be effective as to Fortis Capital Fund and
each Class thereof, on November 14, 1994. Unless sooner terminated as
hereinafter provided, this Agreement shall continue in effect only so long as
such continuance is specifically approved at least annually (a) by the Board of
Directors of the Fund, or with respect to a particular Class by the vote of the
holders of a majority of the outstanding voting securities of such Class, and
(b) by a majority of the directors who are not interested persons of Investors
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval; provided that, if a majority of the outstanding voting securities
of any of the Classes approves this Agreement, this Agreement shall continue in
effect with respect to such approving Class whether or not the shareholders of
any other Class of the Fund approve this Agreement.
9
<PAGE>
(b) This Agreement may be terminated at any time without the payment
of any penalty by the vote of the Board of Directors of the Fund or by
Investors, upon sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular Class at any time
without the payment of any penalty by the vote of the holders of a majority of
the outstanding voting securities of such Class, upon sixty (60) days' written
notice to Investors.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the Board of Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such amendment. Additionally, no amendment
to this Agreement that materially increases the distribution fee and/or
shareholder servicing fee payable by any Class hereunder shall be effective
until any necessary amendment to the applicable Rule 12b-1 Plan has been
approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
10
<PAGE>
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS EQUITY PORTFOLIOS, INC
By: /s/ Edward M. Mahoney
------------------------------
Edward M. Mahoney
Its President
FORTIS INVESTORS, INC.
By:/s/ Dean C. Kopperud
------------------------------
Dean C. Kopperud
Its President
11
<PAGE>
CUSTODIAN AGREEMENT
THIS AGREEMENT, made as of the 21st day of March, 1992, by and between
Fortis Equity Portfolios, Inc., a Minnesota corporation (the "Fund"), for and
on behalf of each Series of the Fund that adopts this Agreement (said series
being hereinafter referred to individually, as a "Series" and collectively,
as the "Series"), and Norwest Bank Minnesota, N.A., national banking
association organized and existing under the laws of the United States of
America (the "Custodian"). The name of each Series that adopts this
Agreement and the effective date of this Agreement with respect to each such
Series are set forth in EXHIBIT A hereto.
WITNESSETH:
WHEREAS, the Fund desires to appoint the Custodian as the custodian for
the assets of each Series, and the Custodian desires to accept such
appointment, pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of deposit,
bankers' acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, investment contracts, voting trust certificates,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
The words "Written Order from the Fund" shall mean a writing signed or
initialed by one or more person or persons designated in the current certified
list referred to in Article 2, provided that if said writing is signed by only
one person, that person shall be an officer of the Fund designated in said
current certified list. "Written Order from the Fund" also may include a
communication effected directly between electro-mechanical or electronic devices
(including, but not limited to, facsimile transceivers) provided that management
of the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the assets of each Series.
<PAGE>
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles and signatures
of officers and other persons who are authorized to give any Written Order
from the Fund on behalf of each Series. The Fund agrees that, whenever any
change in such authorization occurs, it will file with the Custodian a new
certified list of names, titles and signatures which shall be signed by at
least one officer previously certified to the Custodian if any such officer
still holds an office in the Fund. The Custodian is authorized to rely and
act upon the names, titles and signatures of the individuals as they appear
in the most recent such certified list which has been delivered to the
Custodian as hereinbefore provided.
ARTICLE 3. SUB-CUSTODIANS AND DEPOSITORIES
Notwithstanding any other provision in this Agreement to the contrary,
all or any of the cash and Securities of each Series may be held in the
Custodian's own custody or in the custody of one or more other banks or trust
companies selected by the Custodian or as directed in one or more Written
Orders from the Fund. Any such sub-custodian must have the qualifications
required for custodians under the Investment Company Act of 1940, as amended.
The Custodian or sub-custodian, as the case may be, may participate directly
or indirectly in one or more "securities depositories" (as defined in Rule
17f-4 under the Investment Company Act of 1940, as amended, or in any
successor provisions or rules thereto). Any references in this Agreement to
the delivery of Securities by or to the Custodian shall, with respect to
Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall cause a
bookkeeping entry to be made by the applicable securities depository to
indicate the transfer of ownership of the applicable Security to or from the
Fund, all as set forth in one or more Written Orders from the Fund.
Additionally, any references in this Agreement to the receipt of proceeds or
payments with respect to Securities transactions shall, with respect to
Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall have received
an advice from such securities depository that said proceeds or payments have
been received by such depository and deposited in the Custodian's account.
ARTICLE 4. RECEIPT AND DISBURSING OF MONEY
SECTION (1). The Fund shall from time to time cause cash owned by the
Fund to be delivered or paid to the Custodian for the account of any Series,
but the Custodian shall not be under any obligation or duty to determine
whether all cash of the Fund is being so deposited or to take any action or
to give any notice with respect to cash not so deposited. The Custodian
agrees to hold such cash, together with any other sum collected or received
by it for or on behalf of each Series, in the account of such Series in
conformity with the terms of this Agreement. The Custodian shall be
authorized to disburse cash from the account of each Series only:
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<PAGE>
(a) upon receipt of and in accordance with Written Orders from the Fund
stating that such cash is being used for one or more of the following purposes,
and specifying such purpose or purposes, provided, however, that a reference in
such Written Order from the Fund to the pertinent paragraph or paragraphs of
this Article shall be sufficient compliance with this provision:
(i) the payment of interest;
(ii) the payment of dividends;
(iii) the payment of taxes;
(iv) the payment of the fees or charges to any investment
adviser of any Series;
(v) the payment of fees to a Custodian, stock registrar,
transfer agent or dividend disbursing agent of any
Series;
(vi) the payment of distribution fees and commissions;
(vii) the payment of any operating expenses, which shall be
deemed to include legal and accounting fees and all other
expenses not specifically referred to in this paragraph
(a);
(viii) payments to be made in connection with the conversion,
exchange or surrender of Securities owned by any Series;
(ix) payments on loans that may from time to time be due;
(x) payment to a recognized and reputable broker for
Securities purchased by the Fund through said broker
(whether or not including any regular brokerage fees,
charges or commissions on the transaction) upon receipt by
the Custodian of such Securities in proper form for
transfer and after the receipt of a confirmation from the
broker or dealer with respect to the transaction;
(xi) payment to an issuer or its agent on a subscription for
Securities of such issuer upon the exercise of rights so
to subscribe, against a receipt from such issuer or agent
for the cash so paid;
(b) as provided in Article 5 hereof; and
(c) upon the termination of this Agreement.
-3-
<PAGE>
SECTION (2). The Custodian is hereby appointed the attorney-in-fact of
the Fund to use reasonable efforts to enforce and collect all checks, drafts
or other orders for the payment of money received by the Custodian for the
account of the Fund and drawn to or to the order of the Fund and to deposit
them in the account of the applicable Series.
ARTICLE 5. RECEIPT OF SECURITIES
The Fund agrees to place all of the Securities of each Series in its
account with the Custodian, but the Custodian shall not be under any
obligation or duty to determine whether all Securities of any Series are
being so deposited, or to require that such Securities be so deposited, or to
take any action or give any notice with respect to the Securities not so
deposited. The Custodian agrees to hold such Securities in the account of the
Series designated by the Fund, in the Fund's name of the Fund or of bearer
or of a nominee of the Custodian, and in conformity with the terms of this
Agreement. The Custodian also agrees, upon Written Order from the Fund, to
receive from persons other than the Fund and to hold in the account of the
Series designated by the Fund Securities specified in said Written Order of
the Fund, and, if the same are in proper form, to cause payment to be made
therefor to the persons from whom such Securities were received, from the
funds of the applicable Series held by the Custodian in the Fund's account in
the amounts provided and in the manner directed by the Written Order from the
Fund.
The Custodian agrees that all Securities of each Series placed in the
Custodian's custody shall be kept physically segregated at all times from
those of any other Series, person, firm or corporation, and shall be held by
the Custodian with all reasonable precautions for the safekeeping thereof.
Upon delivery of any Securities of any Series to a subcustodian pursuant to
Article 3 of this Agreement, the Custodian will create and maintain records
identifying those assets which have been delivered to the subcustodian as
belonging to the applicable Series.
ARTICLE 6. DELIVERY OF SECURITIES
The Custodian agrees to transfer, exchange or deliver Securities as
provided in Article 7, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby:
(a) in the case of deliveries of Securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of a
confirmation from a broker or dealer (or, in accordance with industry practice
with respect to "same day trades," acceptance of delivery of such securities by
the broker or dealer, which acceptance is followed up by confirmation thereof
within the normal settlement period) with respect to the transaction;
-4-
<PAGE>
(b) in the case of deliveries of Securities which may mature or be called,
redeemed, retired or otherwise become payable, against receipt by the Custodian
of the sums payable thereon or against interim receipts or other proper delivery
receipts;
(c) in the case of deliveries of Securities which are to be transferred to
and registered in the name of the Fund or of a nominee of the Custodian and
delivered to the Custodian for the account of the Series, against receipt by the
Custodian of interim receipts or other proper delivery receipts;
(d) in the case of deliveries of Securities to the issuer thereof, its
transfer agent or other proper agent, or to any committee or other organization
for exchange for other Securities to be delivered to the Custodian in connection
with a reorganization or recapitalization of the issuer or any split-up or
similar transaction involving such Securities, against receipt by the Custodian
of such other Securities or against interim receipts or other proper delivery
receipts;
(e) in the case of deliveries of temporary certificates in exchange for
permanent certificates, against receipt by the Custodian of such permanent
certificates or against interim receipts or other proper delivery receipts;
(f) in the case of deliveries of Securities upon conversion thereof into
other Securities, against receipt by the Custodian of such other Securities or
against interim receipts or other proper delivery receipts;
(g) in the case of deliveries of Securities in exchange for other
Securities (whether or not such transactions also involve the receipt or payment
of cash), against receipt by the Custodian of such other Securities or against
interim receipts or other proper delivery receipts;
(h) in the case of warrants, rights or similar Securities, the surrender
thereof in the exercise of such warrants, rights or similar Securities or the
surrender of interim receipts or temporary Securities for definitive Securities;
(i) for delivery in connection with any loans of securities made by the
Fund for the benefit of any Series, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the Fund;
(j) for delivery as security in connection with any borrowings by the
Fund for the benefit of any Series requiring a pledge of assets from the
Fund, but only against receipt of amounts borrowed;
(k) for delivery in accordance with the provisions of any agreement among
the Fund, the Custodian and a bank, broker-dealer or futures commission merchant
relating to compliance with applicable rules and
-5-
<PAGE>
regulations regarding account deposits, escrow or other arrangements in
connection with transactions by the Fund for the benefit of any Series;
(l) in a case not covered by the preceding paragraphs of this Article,
upon receipt of a resolution adopted by the Board of Directors of the Fund,
signed by an officer of the Fund and certified to by the Secretary, specifying
the Securities and assets to be transferred, exchanged or delivered, the
purposes for which such delivery is being made, declaring such purposes to be
proper corporate purposes, and naming a person or persons (each of whom shall be
a properly bonded officer or employee of the Fund) to whom such transfer,
exchange or delivery is to be made; and
(m) in the case of deliveries pursuant to paragraphs (a) through (k)
above, the Written Order from the Fund shall direct that the proceeds of any
Securities delivered, or Securities or other assets exchanged for or in lieu of
Securities so delivered, are to be delivered to the Custodian.
ARTICLE 7. CUSTODIAN'S ACTS WITHOUT WRITTEN ORDERS FROM THE FUND
Unless and until the Custodian receives contrary Written Orders from the
Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and similar
items, and all coupons or other income items (except stock dividends), held
or received for the account of the Fund, and which require presentation in
the ordinary course of business, and credit such items to the account of the
applicable Series conditionally, subject to final payment;
(b) present for payment all Securities which may mature or be called,
redeemed, retired or otherwise become payable and credit such items to the
account of the Fund conditionally, subject to final payment;
(c) hold for and credit to the account of any Series all shares of
stock and other Securities received as stock dividends or as the result of a
stock split or otherwise from or on account of Securities of the Series, and
notify the Fund, in the Custodian's monthly reports to the Fund, of the
receipt of such items;
(d) deposit or invest (as instructed from time to time by the Fund) any
cash received by it from, for or on behalf of any Series to the credit of the
applicable Series;
(e) charge against the account of any Series disbursements authorized to
be made by the Custodian hereunder and actually made by it, and notify the Fund
of such charges at least once a month;
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<PAGE>
(f) deliver Securities which are to be transferred to and reissued in the
name of the Fund, or of a nominee of the Custodian for the account of the Fund,
and temporary certificates which are to be exchanged for permanent certificates,
to a proper transfer agent for such purpose against interim receipts or other
proper delivery receipts; and
(g) hold for disposition in accordance with Written Orders from the Fund
hereunder all options, rights and similar Securities which may be received by
the Custodian and which are issued with respect to any securities held by it
hereunder, and notify the Fund promptly of the receipt of such items.
ARTICLE 8. SEGREGATED ACCOUNTS
Upon receipt of a Written Order from the Fund, the Custodian shall
establish and maintain one or more segregated accounts for and on behalf of the
Series specified in said Written Order from the Fund for purposes of segregating
cash and/or Securities (of the type agreed upon from time to time by the
Custodian and the Fund) for the purpose or purposes specified in said Written
Order from the Fund.
ARTICLE 9. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies, notices and
communications with relation to Securities held by it which it may receive from
sources other than the Fund.
ARTICLE 10. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for transfer any
Securities which it may hold for the account of any Series of the Fund. For
the purpose of facilitating the handling of Securities, unless otherwise
directed by Written Order from the Fund, the Custodian is authorized to hold
Securities deposited with it under this Agreement in the name of its
registered nominee or nominees (as defined in the Internal Revenue Code and
any regulations of the United States Treasury Department issued thereunder or
in any provision of any subsequent federal tax law exempting such transaction
from liability for stock transfer taxes) and shall execute and deliver all
such certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. The Custodian shall, if
requested by the Fund, advise the Fund of the certificate number of each
certificate so presented for transfer and that of the certificate received in
exchange therefor, and shall use its best efforts to the end that the
specific Securities held by it hereunder shall be at all times identifiable.
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<PAGE>
ARTICLE 11. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund, for and on behalf of each Series, shall pay or reimburse the
Custodian for any transfer taxes payable upon transfers of Securities made
hereunder, including transfers incident to the termination of this Agreement,
and for all other necessary and proper disbursements and expenses made or
incurred by the Custodian in the performance or incident to the termination
of this Agreement, and the Custodian shall have a lien upon any cash or
Securities held by it for the Fund's account for all such items, enforceable,
after thirty days' written notice by registered mail from the Custodian to
the Fund, by the sale of sufficient Securities to satisfy such lien. The
Custodian may reimburse itself by deducting from the proceeds of any sale of
Securities an amount sufficient to pay any transfer taxes payable upon the
transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any federal revenue act and any regulations
of the Treasury Department issued thereunder or any state laws, to exempt
from taxation any transfers and/or deliveries of any such Securities as may
qualify for such exemption.
ARTICLE 12. CUSTODIAN'S LIABILITY FOR
PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the Custodian is
not specified in the Written Order from the Fund directing such delivery, the
Custodian shall make delivery of such Securities against receipt by it of cash,
a postal money order or a check drawn by a bank, trust company or other banking
institution, or by a broker named in such Written Order from the Fund, for the
amount the Custodian is directed to receive. The Custodian shall be liable for
the proceeds of any delivery of Securities made pursuant to this Article, but
provided that it has complied with the provisions of this Article, only to the
extent that such proceeds are actually received.
ARTICLE 13. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of business on the
last business day of each month, a statement showing all cash transactions
and entries for the account of each Series of the Fund. The books and
records of the Custodian pertaining to its actions as Custodian under this
Agreement shall be open to inspection and audit, at reasonable times, by
officers of, and auditors employed by, the Fund. The Custodian shall furnish
the Fund with a list of the Securities held by it in custody for the account
of each Series of the Fund as of the close of business on the last business
day of each quarter of the Fund's fiscal year.
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<PAGE>
ARTICLE 14. CUSTODIAN'S COMPENSATION
The Custodian shall be paid compensation at such rates and at such times as
may from time to time be agreed on in writing by the parties hereto (as set
forth with respect to each Series in EXHIBIT A hereto), and the Custodian shall
have a lien for unpaid compensation, to the date of termination of this
Agreement, upon any cash or Securities held by it for the account of the Fund,
enforceable in the manner specified in Article 11 hereof.
ARTICLE 15. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect with respect to each Series, as it
may from time to time be amended, until it shall have been terminated as
hereinafter provided, but no such amendment or termination shall affect or
impair any rights or liabilities arising out of any acts or omissions to act
occurring prior to such amendment or termination.
The Custodian may terminate this Agreement by giving the Fund ninety days'
written notice of such termination by registered mail addressed to the Fund at
its principal place of business.
The Fund may terminate this Agreement by giving ninety days' written notice
thereof delivered by registered mail to the Custodian at its principal place of
business. Additionally, this Agreement may be terminated with respect to any
Series of the Fund pursuant to the same procedures, in which case this Agreement
shall continue in full effect with respect to all other Series of the Fund.
Upon termination of this Agreement, the assets of the Fund, or Series
thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a Written Order from the
Fund designating the successor custodian; and if no successor custodian is
designated in said Written Order from the Fund, the Custodian shall, upon
such termination, deliver all such assets to the Fund.
This Agreement may be amended or terminated at any time by the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended or terminated with respect to any Series of the Fund at any time by
the mutual agreement of the Fund and the Custodian, in which case such
amendment or termination would apply to such Series amending or terminating
this Agreement but not to the other Series of the Fund.
This Agreement may not be assigned by the Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Directors.
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ARTICLE 16. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties and obligations of
the preceding custodian under this Agreement and any amendments thereof and
shall succeed to all the exemptions and privileges of the preceding custodian
under this Agreement and any amendments thereof.
ARTICLE 17. GENERAL
Nothing expressed or mentioned in or to be implied from any provisions of
this Agreement is intended to give or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund shall
retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisition, and the sale, or other disposition, of all of its Securities,
and that the duties and responsibilities of the Custodian hereunder shall be
limited to receiving and safeguarding the assets and Securities of the Fund and
to delivering or disposing of them pursuant to the Written Order from the Fund
as aforesaid, and the Custodian shall have no authority, duty or responsibility
for the investment policy of the Fund or for any acts of the Fund in buying or
otherwise acquiring, or in selling or otherwise disposing of, any Securities,
except as hereinbefore specifically set forth.
The Custodian shall in no case or event permit the withdrawal of any money
or Securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and Securities for
disposition under the procedures herein set forth.
ARTICLE 18. STANDARD OF CARE; INDEMNIFICATION
In connection with the performance of its duties and responsibilities
hereunder, the Custodian (and each officer, employee, agent, sub-custodian and
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depository of or engaged by the Custodian) shall at all times be held to the
standard of reasonable care. The Custodian shall be fully responsible for any
action taken or omitted by any officer, employee, agent, sub-custodian or
depository of or engaged by the Custodian to the same extent as if the Custodian
were to take or omit to take such action directly. The Custodian agrees to
indemnify and hold the Fund harmless from and against any and all loss,
liability and expense, including reasonable legal fees and expenses, arising out
of the Custodian's own negligence, misfeasance, bad faith or willful misconduct
or that of any officer, employee, agent, sub-custodian and depository of or
engaged by the Custodian in the performance of the Custodian's duties and
obligations under this Agreement; PROVIDED, HOWEVER, that, notwithstanding any
other provision in this Agreement, the Custodian shall not be responsible for
the following:
(a) any action taken or omitted in accordance with any Written Order from
the Fund reasonably believed by the Custodian to be genuine and to be signed by
the proper party or parties; or
(b) any action taken or omitted in reasonable reliance on the advice of
counsel of or reasonably acceptable to the Fund relating to any of its duties
and responsibilities hereunder.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the performance by the Custodian (and each officer,
employee, agent, sub-custodian and depository of or engaged by the Custodian) of
its duties and responsibilities under this Agreement PROVIDED THAT the Custodian
(or any officer, employee, agent, sub-custodian or depository of or engaged by
the Custodian, as applicable) exercised reasonable care in the performance of
its duties and responsibilities under this Agreement.
ARTICLE 19. EFFECTIVE DATE
This Agreement shall become effective with respect to each Series that
adopts this Agreement when this Agreement shall have been approved with
respect to such Series by the Board of Directors of the Fund. The effective
date with respect to each Series shall be set forth on EXHIBIT A hereto. The
Fund shall transmit to the Custodian promptly after such approval by said
Board of Directors a copy of its resolution embodying such approval,
certified by the Secretary of the Fund.
ARTICLE 20. GOVERNING LAW
This Agreement is executed and delivered in Minneapolis, Minnesota, and the
laws of the State of Minnesota shall be controlling and shall govern the
construction, validity and effect of this contract.
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IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement
to be executed in duplicate as of the date first above written by their duly
authorized officers.
ATTEST: FORTIS , INC.
/s/ Michael J. Radmer
Secretary By /s/ Edward Mahoney
----------------------------
Its President
----------------------------
ATTEST: NORWEST BANK MINNESOTA, N.A
Trust Officer By /s/ Brent Siegel
----------------------------
Its Assistant Vice President
----------------------------
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EXHIBIT A
(AS AMENDED THROUGH MARCH 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS EQUITY PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
NAME OF SERIES EFFECTIVE DATE
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Fortis Capital Fund March 21, 1992
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EXHIBIT B
(AS AMENDED THROUGH MARCH 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS EQUITY PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
COMPENSATION SCHEDULE
B-1
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NORWEST BANK MINNESOTA
CUSTODY FEE SCHEDULE
FORTIS
SAFEKEEPING CHARGES
PER ISSUE
Bonds: $20.00 per year
Stocks: $40.00 per year
ASSET VALUE
Bonds: $0.10/$1,000.00 par value of assets per year
Stocks: $0.10/$1,000.00 par value of assets per year
TRANSACTION CHARGES
Buy/Sell/Maturity $ 12.00 per transaction
Principal Payments $ 12.00 per transaction
Incoming/Outgoing Movement $ 10.00 per movement
Asset Movements $ 12.00 per movement
EXTRAORDINARY SERVICES
For any service other than those covered by the aforementioned, a special charge
may be made according to the service provided, time required and responsibility
involved. Such services include, but are not limited to excessive
administrative time, unusual reports, certifications, audits, etc.
ADDITIONAL CHARGES
Reimbursement may be requested for out-of-pocket expenses such as postage,
insurance, shipping, telephone, supplies, etc.
This fee schedule shall remain effective subject to periodic review by all
concerned parties.
