File No. 2-46686
FISCAL YEAR END - July 31
Registrant proposes that
this amendment will become
effective:
60 days after filing
As of the filing date
As of July 31, 1995 X
Pursuant to Rule 485:
paragraph (a) X
paragraph (b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 X
Post-Effective Amendment Number 37
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
FORTIS INCOME PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
500 Bielenberg Drive, Woodbury, Minnesota 55125
(Address of Principal Executive Offices)
Registrant's Telephone Number: (612) 738-4000
Gregory S. Swenson, Esq., Asst. Secretary
(Same address as above)
(Name and Address of Agent for Service)
Copy to:
Michael J. Radmer, Esq.
Dorsey & Whitney
220 South Sixth Street
Minneapolis, MN 55402
Pursuant to Section 270.24f-2 of the Investment Company
Act of 1940, the Registrant has registered an indefinite
amount of securities under the Securities Act of 1933.
The Rule 24f-2 Notice for the Registrant's most recent
fiscal period was filed on September 30, 1994.
<PAGE>
FORTIS INCOME PORTFOLIOS, INC.
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 481(a) and Instruction F1 of Form N-1A
N-1A
Item No.
PART A (PROSPECTUS) PROSPECTUS
HEADING
1. Cover Page...............................COVER PAGE
(no caption)
2. Synopsis (optional)......................SUMMARY OF
FUND EXPENSES
3. Condensed Financial Information..........FINANCIAL
HIGHLIGHTS
4. General Description of Registrant........ORGANIZATION
AND CLASSIFICATION;
INVESTMENT OBJECTIVES
AND POLICIES
5. Management of the Fund...................MANAGEMENT
6. Capital Stock and Other Securities.......CAPITAL
STOCK; SHAREHOLDER INQUIRIES;
DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS; TAXATION
7. Purchase of Securities Being Offered.....HOW TO BUY
FUND SHARES; VALUATION
OF SECURITIES
8. Redemption or Repurchase.................REDEMPTION
9. Pending Legal Proceedings................None
PART B (STATEMENT OF STATEMENT OF
ADDITIONAL INFORMATION ADDITIONAL INFORMATION
HEADING
10. Cover Page..............................COVER PAGE
(no caption)
11. Table of Contents.......................TABLE OF
CONTENTS
12. General Information and History.........ORGANIZATION
AND CLASSIFICATION
13. Investment Objectives and Policies......INVESTMENT
OBJECTIVES AND POLICIES
14. Management of the Fund..................DIRECTORS
AND EXECUTIVE OFFICERS
15. Control Persons and Principal
Holders of Securities...................CAPITAL
STOCK
16. Investment Advisory and Other Services..INVESTMENT
ADVISORY AND OTHER SERVICES
17. Brokerage Allocation....................PORTFOLIO
TRANSACTIONS AND
ALLOCATION OF BROKERAGE
18. Capital Stock and Other Securities......CAPITAL
STOCK
19. Purchase, Redemption, and Pricing of
Securities Being Offered................COMPUTATION
OF NET ASSET VALUE AND
PRICING; SPECIAL
PURCHASE PLANS; REDEMPTION
20. Tax Status..............................TAXATION
21. Underwriters............................UNDERWRITER
22. Calculations of Performance Data........PERFORMANCE
23. Financial Statements....................FINANCIAL
STATEMENTS
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized,
in the City of Woodbury, State of Minnesota, on July 31,
1995.
Fortis Income Portfolios, Inc.
By: /s/
Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of
1933, this Post-Effective Amendment to Registration
Statement has been signed below by the following persons
in the capacities and on the dates shown.
Signature and Title
/s/ Dated July 31, 1995
Dean C. Kopperud, President
(principal executive officer)
/s/ Dated July 31, 1995
Tamara L. Fagely, Treasurer
(principal financial and accounting officer)
Richard W. Cutting*
Director
Allen R. Freedman*
Director
Robert M. Gavin*
Director
Benjamin S. Jaffray*
Director
Jean L. King*
Director
Edward M. Mahoney*
Director
Thomas R. Pellett*
Director
Robb L. Prince* Dean C. Kopperud, Pro-Se
Director and Attorney-in-Fact
Dated: July 31, 1995
Leonard J. Santow*
Director
Joseph M. Wikler*
Director
*Registrant's directors executing Power of Attorney dated
March 30, 1995 <PAGE>
PART A
PROSPECTUS
Incorporated by reference to Part A of Post-Effective
Amendment Number 36 to Registrant's Registration
Statement, filed with the SEC on November 14, 1994.
PART B
STATEMENT OF ADDITIONAL INFORMATION
Incorporated by reference to Part B of Post-Effective
Amendment Number 36 to Registrant's Registration
Statement, filed with the SEC on November 14, 1994.
PART C
OTHER INFORMATION
Incorporated by reference to Part C of Post-Effective
Amendment Number 36 to Registrant's Registration
Statement, filed with the SEC on November 14, 1994. In
addition, the following Item 24(b)(18) and accompanying
exhibit 24(b)(18) is filed herewith:
Item 24(b)(18) Copies of any plan entered into by
Registration pursuant to Rule 18f-3 under the 1940 Act,
any agreement with any person relating to the
implementation of a plan, any amendment to a plan or
agreement, and a copy of the portion of the minutes of a
meeting of the Registrant's directors describing any
action taken to revoke a plan.
Attached
In addition, a new Underwriting and Distribution
Agreement is substituted under Item 24(b)(6).
Attached
FORTIS ADVISERS, INC.
AND
FORTIS INVESTORS, INC.'S
MULTIPLE CLASS SHARES PLAN FOR :
FORTIS ADVANTAGE PORTFOLIOS, INC.
FORTIS EQUITY PORTFOLIOS, INC.
FORTIS FIDUCIARY PORTFOLIOS, INC.
FORTIS GROWTH FUND, INC.
FORTIS INCOME PORTFOLIOS, INC.
FORTIS MONEY PORTFOLIOS, INC.
FORTIS TAX-FREE PORTFOLIOS, INC.
FORTIS WORLDWIDE PORTFOLIOS, INC
July 28, 1995
<PAGE>
Multiple Class Shares Plan for Fortis Funds
I. Introduction
This Multiple Class Shares Plan (the "Plan") for the
Fortis Funds (the "Funds") has been prepared to provide
the Funds' Boards of Directors with an overview of the
multiple class structure that Fortis Advisers, Inc. and
Fortis Investors, Inc. implemented for the Funds on
November 14, 1994. In addition, this document fulfills
the requirements of SEC Rule 18f-3(d), promulgated under
the Investment Company Act of 1940, that provides for the
creation and maintenance of a multiple class shares
structure without the necessity of an SEC Exemptive
Order.
Pursuant to Rule 18f-3(d), this document sets forth the
separate arrangements, characteristics, and expense
allocations for each class and all related conversion
features and exchange privileges, thus providing the
framework for the Funds' multiple class structure. In
addition, the Boards' responsibilities with respect to
the multiple class shares program are set forth. Any
material amendments to the Plan will be presented to the
Boards for their approval.
II. Background
The Funds' multiple class program became effective on
November 14, 1994 pursuant to: (i) Board approval of the
program received on June 28, 1994; (ii) an SEC Exemptive
Order dated June 21, 1994; and (iii) an IRS Private
Letter Ruling dated May 10, 1994. With the
effectiveness of Rule 18f-3 in early 1995, fund groups
operating with a multiple class share structure pursuant
to an SEC Exemptive Order are given the option to
continue to operate under the Exemptive Order or elect to
comply with the provisions of Rule 18f-3. At the Boards'
June 27, 1995 meeting the Directors approved the Funds'
election to operate under Rule 18f-3 effective on such
date as Fund management selected. Fund management
selected July 31, 1995.
In light of the fact that the Funds' multiple class
program has not been materially modified since its
approval on June 28, 1994 and amendment on December 8,
1994, all that is necessary to effectuate the transition
to Rule 18f-3 is the creation of this Plan and filing it
with the SEC as an exhibit to the Funds' registration
statement. No additional Board approvals are necessary.
III. Multiple Class Shares Structure
The Funds' multiple class shares program allows an
investor to select not only the Fund that has an
investment objective that best suits his or her
investment needs, but also the most appropriate
distribution method. Specifically, the investor is able
to choose a method of purchasing shares that the investor
believes is most beneficial given the amount of the
investment, length of time the investor expects to hold
his or her shares and other relevant circumstances. The
investor's choice of a class also determines how the
investor's sales representative will be compensated on
that sale of shares.
Rule 18f-3 authorizes the Board to create additional
classes of shares that are tailored to particular
customers, distribution channels and shareholder
servicing arrangements. This flexibility will allow the
Funds to quickly adapt to future changes in the
marketplace.
A. Class Specifications
The multiple class shares program consists of five
classes of shares. Generally, the characteristics of
each class are laid out in the following chart:
<TABLE>
<CAPTION>
FORTIS FUNDS
Multiple Class Structure
<S> <C> <C> <C> <C>
CLASS A*/** B/H*** C E**/****
Front End
Sales Charge 4.5%-4.75% None None 4.%%
(None on Money Fund)
Dealer Concession 4.0% 4.0% 1.0% 4.0%
5.25% on H
CDSC None 4%, 4%, 3% 1%/ None
3%, 2%, 1% 1 Year
(6 Years)*****
Conversion to A N/A Year 9 None N/A
Total 12b-1 .20%-.45% 1.0% 1.0% None
Trail Commission .20%-.45% .25% 1.0% None
No Trail Year 2+
On H
</TABLE>
* Includes a class of shares for new purchasers of
USG and/or Tax-Free that has a .25% 12b-1 fee.
** The Million Dollar NAV Program, which predates
the multiple class shares program, remains intact.
However, it only applies to purchases of Class A and
Class E shares.
*** Class B is identical to Class H in all respects
except Class H has a 5.25% dealer concession with no
trail commission compared to a 4% dealer concession and
a .25% trail commission on Class B shares. From time to
time, at Investors' sole discretion, the concession on
Class H may be uniformly increased to 5.50%.
**** Class E is available for USG and Tax-Free only.
This class has no 12b-1 fee and is designed for
additional purchases and reinvestment of
dividends/capital gains by USG and Tax-Free shareholders
of record on November 13, 1994.
***** With respect to Class B and H shares only, the
CDSC does not apply to an amount that represents, on an
annual (non-cumulative) basis, up to 10% of the amount
(at the time of the investment) of a shareholder's
purchases. On all classes the CDSC does not apply to
amounts representing an increase in share value due to
capital appreciation and shares acquired through the
reinvestment of dividends or capital gains distributions.
In addition, the CDSC is waived in the event of a
shareholder's death or disability.
The specifics as to how each Fund has implemented the
multiple class structure and the characteristics of each
Fund's classes are set forth in Exhibit A.
As referenced in the preceding chart and Exhibit A, the
multiple class structure for USG and the Tax-Free
Portfolios is somewhat different than for the other
Funds. The other Funds each have four classes of shares:
Class A, Class B, Class H, and Class C. USG and the Tax-
Free Portfolios have an additional class of shares (Class
E) due to the fact that at the time the multiple class
shares program was implemented they were the only Funds
whose shareholders were not assessed a Rule 12b-1 fee. In
light of this fact, and recognizing that in order to
remain viable and competitive, future sales of these
Funds' shares must provide an ongoing trail commission to
the sales force funded by a Rule 12b-1 fee, it was
determined that in the interest of fairness and as a
reward for their loyalty to these Funds, the USG and
Tax-Free shareholders of record on November 13, 1994
should not be asked to incur a Rule 12b-1 fee. Class E
was developed for these shareholders and it will not be
subject to any Rule 12b-1 fee (unless a Rule 12b-1 plan
is subsequently adopted by the Class E shareholders).
Class E shareholders are allowed to obtain additional
Class E shares of their Funds through reinvestment of
dividends and capital gains and/or additional purchases.
Other individuals seeking to purchase shares of these
Funds with a front end sales charge have to purchase
Class A shares that are subject to a .25% 12b-1 fee that
funds a .25% trail commission.
B. Exchanges
With respect to exchanges of shares, the general rule
under the multiple class shares program is that Fund
shares of one class can only be exchanged for shares of
the same class of another Fund. For example, the holder
of Class A shares of Growth Fund is allowed to exchange
those shares for Class A shares of the Fiduciary Fund or
any other Fund. However, that shareholder is not
allowed to exchange his or her Class A Growth Fund shares
for Class B, Class H, or Class C shares of Fiduciary
Fund, Growth Fund or any other Fund.
There are two exceptions to the general rule concerning
exchanges. First, Class E shareholders may only exchange
their shares for Class A shares of another Fund.
However, they will be allowed to move back into Class E
of their original Fund through an exchange.
The second exception relates to Money Fund. New purchases
of Money Fund are only allowed into Class A. However,
Class A Money Fund shareholders are allowed to exchange
their shares (using the systematic investment/dollar cost
averaging mechanism or otherwise) for Class A shares of
any of the other Funds (in which case a front end sales
charge is imposed) or for shares of the other available
classes (not subject to a front end sales charge, but
subject to a CDSC). Once Class A Money Fund shares have
been exchanged into Class B, Class H or Class C shares of
another fund, they cannot be exchanged back for Class A
Money Fund shares. However, each class of shares has a
corresponding Money Fund class (i.e., Class A, Class B,
Class H and Class C) that allows shareholders of that
class to exchange their shares back and forth into Money
Fund. For example, Class B shareholders of Growth Fund
could exchange their shares for Class B shares of Money
Fund and then exchange back for Class B shares of Growth
Fund or Class B shares of any other Fund.
C. Conversions
As the multiple class shares structure is presently
structured, the only conversion that takes place is the
conversion of Class B and Class H shares (except those
purchased by reinvestment of dividends and other
distributions paid on those shares) to Class A shares on
the ninth anniversary of the purchase of those shares.
Shares of these classes purchased through the
reinvestment of dividends and other distributions paid on
such shares are, for purposes of conversion, considered
to be held in a separate sub-account. Each time any
Class B or Class H shares convert to Class A, a
proportionate number of the shares of the same class in
the sub-account converts to Class A.
D. Compliance Guidelines
Investors has adopted compliance standards for the sale
of Fortis Funds and requires that all persons selling
Fortis Funds agree to abide by these standards.
Generally, these standards are based on the following
principles:
1. If the investor intends his or her investment
to be a long-term investment, he or she should
invest in Class A shares.
2. A long-term investor should not invest in Class
C.
3. Any investor who is eligible for an exemption
from the sales charge (i.e., they may purchase
Fund shares at net asset value) should invest
in Class A shares.
4. While Class A shares have no maximum order,
Class B and H shares have a $500,000 maximum
and Class C shares have a $1,000,000 maximum.
Orders greater than these limits are treated as
orders for Class A shares.
IV. Allocation of Expenses
Under the multiple class shares program, Fund-Level
expenses are allocated to the various classes based upon
the relative net assets held by each class. For Class-
Level expenses, each Class is allocated the amount of
that expense actually incurred by the Class.
Specifically, expenses are allocated as follows:
_______________________________________________________
Type of Expense Allocation
Direct Shareholder Expenses:
InvestmentAdvisory & Management Fees Fund-Level
12b-1 Fees Class-Level
Operating Expenses:
Director Fees & Expenses Fund-Level
Directors' Travel & Expenses Fund-Level
Legal Fees & Expenses Fund-Level
Audit Fees Fund-Level
Custodian Fees Fund-Level
Insurance, Errors & Omissions Fund-Level
Dues Fund-Level
Expense Limitation Fund-Level
Registration & Filing Fees Class-Level
SEC Class-Level
Blue Sky (State) Fund-Level
Mailing& Postage-Reports, Prospectuses Fund-Level
Printing-Reports Fund-Level
Mailing & Postage-Proxy Fund-Level
Printing-Proxy Fund-Level
Money Fund-specific Class-Level
transfer agent expenses
(e.g. check writing and
postage for confirmations)
_______________________________________________________
The foregoing methodology for the allocation of expenses
has been reviewed and approved by the Board of each Fund.
Any subsequent changes to the allocation methodology must
similarly be reviewed and approved by the Board of each
Fund. However, under Rule 18f-3, the Boards' approval of
the Plan constitutes an approval of the included
allocation of expenses.
The Board of each Fund receives and reviews, at least
quarterly, a written report of the Fund's expenses. In
its review of these reports the Directors should continue
to keep in mind that the IRS issued a Private Letter
Ruling relating to the Fund's multiple class structure at
least partially on the basis of a representation by the
Funds that the allocation of class expenses, excluding
12b-1 fees, will not cause a differential of 50 basis
points or more among the per share distribution of a
Fund's classes.
On a related basis, the Boards also receive quarterly and
annual statements concerning, as applicable, distribution
and shareholders' servicing expenditures under the Funds'
Rule 12b-1 plans. These statements, including the
allocations upon which they are based, are presented for
approval by the Directors in the exercise of their
fiduciary duties.
V. Board Responsibilities
The responsibilities of the Board of Directors under the
multiple class shares program and Rule 18f-3 are as
follows:
a. Board approvals:
As discussed earlier, the Board of each Fund must
approve all material amendments to the Plan.
Specifically, this approval requires the vote of a
majority of each Fund's Directors and a majority of
each Fund's non-interested Directors. In order to
approve the amended Plan, the Board of each Fund
must find that the amended Plan, including the
expense allocation, is in the best interest of each
class individually and the Fund as a whole. Before
any vote on the Plan, the Directors are obligated
to request and evaluate, and any agreement relating
to a class arrangement shall require the parties
thereto to furnish, such information as may be
reasonably necessary to evaluate the Plan.
b. Monitoring for Conflicts of Interest:
On an ongoing basis, and pursuant to their
fiduciary responsibility under the 1940 Act, the
Directors monitor the Funds for the existence of
any material conflicts between the interests of the
shareholders of different classes. If such a
conflict arises, the Boards, including a majority
of the independent directors, will take such action
as is reasonably necessary to eliminate the
conflict. Fortis Advisers, Inc. ("Advisers") and
Fortis Investors, Inc. ("Investors") have agreed
that they will be responsible for reporting any
potential or existing conflicts to the directors.
If a conflict among classes arises, Advisers and
Investors will remedy such conflict at their own
expense, up to and including establishing a new
registered management investment company.
c. Approval of Rule 12b-1 Plans:
The implementation of the multiple class shares
program has not altered the requirement under Rule
12b-1 that the Board annually approve each Fund's
12b-1 Plans and their related agreements.
d. Dividend Rate Approval:
The dividend setting committee of the Board of
Directors will be responsible for approving the
daily and other periodic dividend rates.
VI. Conclusion
The foregoing information provides an overview of the
Fortis Funds' multiple class structure. In addition,
this document provides the Directors with an outline of
their duties in monitoring the class shares program.
Therefore, it is suggested that each Director retain this
document for use in connection with their future
responsibilities with regard to the multiple class shares
program.<PAGE>
EXHIBIT A
FUND BY FUND SPECIFICATIONS OF THE
FORTIS MULTIPLE CLASS SHARES STRUCTURE<PAGE>
FORTIS ADVANTAGE PORTFOLIOS, INC.
Asset Allocation Portfolio
Capital Appreciation Portfolio
High Yield Portfolio
Government Total Return Portfolio
Summary: Each Advantage Portfolio will have four
classes of shares: Class A, Class B,
Class H, and Class C.
Specifics: The Multiple Class Shares Structure for
the four portfolios of this Fund is,
except to the extent indicated below,
identical.
CLASS A SHARES
Front End Sales Charge ("FESC"): 4.5% (With breakpoints
on sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on sales of
$1,000,000 or more)
Contingent Deferred Sales Charge: None (Except for sales
of $1,000,000 or more, ("CDSC"):
which are subject to a CDSC, but
not a FESC - the "Million Dollar
NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: Asset Allocation Portfolio .45%
Capital Appreciation Portfolio .45%
High Yield Portfolio .35%
Government Total Return Portfolio .35%
Trail Commission: Asset Allocation Portfolio .25% (.45%*)
Capital Appreciation Portfolio .25% (.45%*)
High Yield Portfolio .25% (.35%*)
Government Total Return Portfolio .25% (.35%*)
* The higher Trail Commission amount is paid when the
aggregate current value of the portfolio accounts for the
Dealer's customers exceeds $1,000,000.
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6 years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail Commission
on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS EQUITY PORTFOLIOS, INC.
Fortis Capital Fund
Summary: Fortis Capital Fund will have four classes of
shares: Class A, Class B, Class H and Class
C.
Specifics:
CLASS A SHARES
FESC: 4.75% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS FIDUCIARY FUND, INC.
Summary: Fortis Fiduciary Fund will have four classes
of shares: Class A, Class B, Class H and
Class C.
Specifics:
CLASS A SHARES
FESC: 4.75% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS GROWTH FUND, INC.
Summary: Fortis Growth Fund will have four classes of
shares: Class A, Class B, Class H, Class C.
Specifics:
CLASS A SHARES
FESC: 4.75% (With breakpoints
on sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS INCOME PORTFOLIOS, INC.
Fortis U.S. Government Securities Fund
Summary: Fortis U.S. Government Securities Fund will
have 5 classes of shares: Class A, Class B,
Class H, Class C and Class E.
Specifics:
CLASS A SHARES
FESC: 4.5% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
CLASS E SHARES
FESC: 4.5% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC,
but not a FESC - the
"Million Dollar NAV
Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: None
Trail Commission: None
FORTIS MONEY PORTFOLIOS, INC.
Fortis Money Fund
Summary: Fortis Money Fund will have four classes of
shares: Class A, Class B, Class H and Class
C.
Specifics:
CLASS A SHARES
FESC: None
Dealer Concession: None
CDSC: None
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .20%
Trail Commission: .20%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS TAX-FREE PORTFOLIOS, INC.
Minnesota Portfolio
National Portfolio
New York Portfolio
Summary: The Fortis Tax-Free Portfolios will have
five classes of shares: Class A, Class
B, Class H, Class C, and Class E.
Specifics:
CLASS A SHARES
FESC: 4.5% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (No Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
CLASS E SHARES
FESC: 4.5% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $100,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC,
but not a FESC - the
"Million Dollar NAV
Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: None
Trail Commission: None
FORTIS WORLDWIDE PORTFOLIOS, INC.
Fortis Global Growth Portfolio
Summary: Fortis Global Growth Portfolio will have
four classes of shares: Class A, Class
B, Class H and Class C.
Specifics:
CLASS A SHARES
FESC: 4.75% (With breakpoints on
sales of $100,000 or more)
Dealer Concession: 4.0% (Which decreases on
sales of $1,000,000 or more)
CDSC: None (Except for sales of
$1,000,000 or more, which
are subject to a CDSC but
not a FESC - the "Million
Dollar NAV Program")
Conversion to Class A: Not Applicable
Total 12b-1 Fees: .25%
Trail Commission: .25%
CLASS B/CLASS H SHARES
Except where indicated below, the characteristics of
Class B shares are identical to the characteristics of
Class H shares.
FESC: None
Dealer Concession: 4.0% (5-1/4% on Class H)
CDSC: 4%, 4%, 3%, 3%, 2%, 1% (6
years)
Conversion to Class A: Year 9
Total 12b-1 Fees: 1.0%
Trail Commission: .25% (no Trail
Commission on Class H shares)
CLASS C SHARES
FESC: None
Dealer Concession: 1.0%
CDSC: 1% for 1 year
Conversion to A: None
Total 12b-1 Fees: 1.0%
Trail Commission: 1.0% (Beginning in
Year 2)
FORTIS INCOME PORTFOLIOS, INC.
POWER OF ATTORNEY TO SIGN AMENDMENTS TO REGISTRATION
STATEMENT
The undersigned, directors of FORTIS INCOME PORTFOLIOS,
INC. (the "Company") hereby appoint Michael J. Radmer,
John W. Norton, and Dean C. Kopperud, or any one of them,
as attorneys-in-fact for the purpose of signing in their
names and on their behalf as directors of this Company
and filing with the Securities and Exchange Commission
any and all post-effective amendments to the Registration
Statement of Company on Form N-1A.
Dated: March 30, 1995
/s/ Richard W. Cutting, Director
/s/ Allen R. Freedman, Director
/s/ Robert M. Gavin, Director
/s/ Benjamin S. Jaffray, Director
/s/ Jean L. King, Director
/s/ Dean C. Kopperud, Director
/s/ Edward M. Mahoney, Director
/s/ Thomas R. Pellett, Director
/s/ Robb L. Prince, Director
/s/ Leonard J. Santow, Director
/s/ Joseph M. Wikler, Director
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 14th day of November 1994,
by and between Fortis Income Portfolios, Inc. (formerly
AMEV U.S. Government Securities 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 U.
S. Government Securities 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, Class E and Class H shares of each Portfolio and
any other classes which may hereinafter be created by the
Fund's Board of Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the
following terms:
(a) All subscriptions, offers or sales shall
be subject to acceptance or rejection by the Fund. Any
offer or sale shall be conclusively presumed to have been
accepted by the Fund if the Fund shall fail to notify
Investors of the rejection of such offer or sale prior to
the computation of the net asset value of the applicable
Class's shares next following receipt by the Fund of
notice of such offer or sale.
(b) No share of a Class shall be sold by
Investors (i) for any amount less than the net asset
value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than
cash, or, pursuant to any exchange privilege provided for
by such Class's currently effective Prospectus or
Statement of Additional Information, shares of the
corresponding Class of shares of any other investment
company for which Investors acts as an underwriter. 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 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 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 or such
other 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.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable
efforts to effect and keep in effect, at its own expense,
the registration or qualification of each Class's shares
for sale in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with
such information with respect to the affairs and accounts
of the Fund (and each Class and Portfolio thereof) as
Investors may from time to time reasonably require, and
further agrees that Investors, at all reasonable times,
shall be permitted to inspect the books and records of
the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall
pay or cause to be paid all expenses, costs and fees
incurred by the Fund which are not assumed by Investors
or Fortis Advisers, Inc. ("Advisers"). Investors agrees
to provide, and shall pay costs which it incurs in
connection with providing personal, continuing services
to shareholders (such costs are referred to as
"Shareholder Servicing Costs"). Shareholder Servicing
Costs include all expenses of Investors incurred in
connection with providing administrative or accounting
services to shareholders of each Class, including, but
not limited to, an allocation of Investor's overhead and
payments made to persons, including employees of
Investors, who respond to inquiries of shareholders
regarding their ownership of Class shares, or who provide
other administrative or accounting services not otherwise
required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding
the foregoing, if the National Association of Securities
Dealers, Inc. ("NASD") adopts a definition of "service
fee" for purposes of Section 26(d) of the NASD Rules of
Fair Practice that differs from a definition of
Shareholder Servicing Costs in this paragraph, or if the
NASD adopts a related definition intended to define the
same concept, the definition of Shareholder Servicing
Costs in this paragraph shall be automatically amended,
without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of
distributing the shares of each Class ("Distribution
Expenses"). Distribution expenses include, but are not
limited to, initial and ongoing sales compensation (in
addition to sales loads) paid to registered
representatives of Investors and to other broker-dealers
and participating financial institutions; expenses
incurred in the printing of prospectuses, statements of
additional information and reports used for sales
purposes; expenses of preparation and distribution of
sales 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 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 (except Class E) 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 monthly
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 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 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 subscribe for the shares of the Fund
only for the purpose of covering purchase orders already
received by it or for the purpose of investment for its
own account. 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
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 indemnity the Fund against any
and all litigation and other legal proceedings of any
kind or nature and against any liability, judgment, cost
or penalty imposed as a result of such litigation or
proceedings in any way arising out of or in connection
with the sale or distribution of the shares of the Fund
by Investors. In the event of the threat or institution
of any such litigation or legal proceedings against the
Fund, Investors shall defend such action on behalf of the
Fund at its own expense, and shall pay any such
liability, judgment, cost or penalty resulting therefrom,
whether imposed by legal authority or agreed upon by way
of compromise and settlement; provided, however,
Investors shall not be required to pay or reimburse the
Fund for any liability, judgment, cost or penalty
incurred as a result of information supplied by, or as
the result of the omission to supply information by, the
Fund to Investors, or to Investors by a director,
officer, or employee of the Fund who is not an interested
person of Investors, unless the information so supplied
or omitted was available to Investors or the Fund's
investment adviser without recourse to the Fund or any
such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services
of a nature either similar to or different from those
rendered under this contract, except such as may impair
its performance of the services and duties to be rendered
by it hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF
AGREEMENT.
(a) This Agreement shall be effective as to
Fortis U.S. Government Securities Fund and each Class
thereof on November 14, 1994. Unless sooner terminated
as hereinafter provided, this Agreement shall continue in
effect only so long as such continuance is specifically
approved at least annually (a) by the Board of Directors
of the Fund, or with respect to a particular Class by the
vote of the holders of a majority of the outstanding
voting securities of such Class, and (b) by a majority of
the directors who are not interested persons of Investors
or of the Fund, cast in person at a meeting called for
the purpose of voting on such approval; provided that, if
a majority of the outstanding voting securities of any of
the Classes approves this Agreement, this Agreement shall
continue in effect with respect to such approving Class
whether or not the shareholders of any other Class of the
Fund approve this Agreement.
(b) This Agreement may be terminated at any
time without the payment of any penalty by the vote of
the Board of Directors of the Fund or by Investors, upon
sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular
Class at any time without the payment of any penalty by
the vote of the holders of a majority of the outstanding
voting securities of such Class, upon sixty (60) days'
written notice to Investors.
(c) This Agreement shall automatically
terminate in the event of its "assignment" (as defined by
the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement,
the vote or approval of the holders of a majority of the
outstanding voting securities of a Class or the Fund
shall mean the vote of 67% or more of such securities if
the holders of more than 50% of such securities are
present in person or by proxy or the vote of more than
50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be
effective until approved by a vote of the Board of
Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and
who have no direct or indirect financial interest in this
Agreement, cast in person at a meeting called for the
purpose of voting on such amendment. Additionally, no
amendment to this Agreement that materially increases the
distribution fee and/or shareholder servicing fee payable
by any Class hereunder shall be effective until any
necessary amendment to the applicable Rule 12b-1 Plan has
been approved by a vote of the holders of a majority of
the outstanding voting securities of the
applicable Class and approved by the Fund's Board of
Directors as required under Rule 12b-1 under the
Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid to the
other party at such address as such other party may
designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have
caused this Agreement to be executed by their duly
authorized officers as of the day and year first above
written.
FORTIS INCOME PORTFOLIOS, INC.
By:______________________________
Edward M. Mahoney
Its President
FORTIS INVESTORS, INC.
By: __________________________________
Dean C. Kopperud
Its President
