<PAGE>
As filed with the Securities and Exchange Commission on April 17, 2000
Securities Act File No. 33-4806
Investment Company Act File No. 811-4636
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 46 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 47 |X|
The Galaxy Fund
(Exact Name of Registrant as Specified in Charter)
4400 Computer Drive
Westborough, Massachusetts 01581-5108
(Address of Principal Executive Offices)
Registrant's Telephone Number:
(877) 289-4252
W. Bruce McConnel, III
DRINKER BIDDLE & REATH LLP
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103
(Name and Address of Agent for Service)
Copy to:
Jylanne Dunne, Vice President
PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581-5108
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[X] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest.
<PAGE>
[Front cover page]
The Galaxy Fund
Prospectus
__________, 2000
Galaxy Pan Asia Fund
Retail A Shares and Retail B Shares
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved any shares of this Fund or determined if this prospectus
is accurate or complete. Anyone who tells you otherwise is committing a crime.
<PAGE>
Contents
<TABLE>
<CAPTION>
<S> <C>
Risk/return summary............................................................................1
Introduction...................................................................................1
Galaxy Pan Asia Fund...........................................................................3
Additional information about risk..............................................................8
Fund management................................................................................9
How to invest in the Fund.....................................................................10
How sales charges work........................................................................10
Buying, selling and exchanging shares.........................................................13
How to buy shares....................................................................14
How to sell shares...................................................................16
How to exchange shares...............................................................18
Other transaction policies...........................................................18
Dividends, distributions and taxes............................................................20
Galaxy investor programs......................................................................22
Retirement plans..............................................................................22
Other programs................................................................................22
How to reach Galaxy...........................................................................24
</TABLE>
<PAGE>
RISK/RETURN SUMMARY
INTRODUCTION
This prospectus describes the Galaxy Pan Asia Fund. The Fund invests primarily
in the common stocks of companies located in or that have their principal
activities in Asia or the Pacific Basin.
On the following pages, you'll find important information about the Fund,
including:
- - the Fund's investment objective (sometimes called the Fund's goal) and the
main investment strategies used by the Fund's investment adviser in trying
to achieve that objective
- - the main risks associated with an investment in the Fund
- - the fees and that you will pay as an investor in the Fund.
IS THE FUND RIGHT FOR YOU?
Not all mutual funds are for everyone. Your investment goals and tolerance for
risk will determine which fund is right for you.
Equity funds are generally best suited to investors seeking growth of their
investment over time and who are prepared to accept the risks associated with
equity securities. Equity funds have the potential for higher returns than other
funds, such as bond funds or money market funds, but also carry more risk.
Different equity funds have different levels of risk. They have varying
objectives and investment styles, and some are considered more aggressive than
others. On a risk spectrum ranking funds from conservative to aggressive, the
Galaxy Pan Asia Fund is considered to have an aggressive level of risk. This
ranking is based on the assessment by the Fund's investment adviser of the
potential risk of the Fund relative to the other equity funds offered by Galaxy,
but this can change over time. It should not be used to compare the Fund with
other mutual funds or other types of investments. Consult your financial
professional to help you decide if the Fund is right for you.
THE FUND'S INVESTMENT ADVISER
Fleet Investment Advisors Inc., which is referred to in this prospectus as the
ADVISER, is the investment adviser for the Fund. The Adviser, an indirect
wholly-owned subsidiary of FleetBoston Financial Corporation, was established in
1984 and has its main office at 75 State
<PAGE>
Street, Boston, Massachusetts 02109. The Adviser also provides investment
management and advisory services to individual and institutional clients and
manages the other Galaxy investment portfolios. As of December 31, 1999, the
Adviser managed over $68 billion in assets.
AN INVESTMENT IN THE FUND ISN'T A FLEET BANK DEPOSIT AND IT ISN'T INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. YOU COULD LOSE MONEY BY INVESTING IN THE FUND.
-2-
<PAGE>
Galaxy Pan Asia Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks capital appreciation.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 65% of its total assets in the common stocks
of companies located in or whose principal activities are in Asia and the
Pacific Basin. These countries may include Hong Kong, India, Indonesia, Japan,
Malaysia, the People's Republic of China, the Philippines, Republic of Korea,
Singapore, Taiwan and Thailand. In determining where a company's principal
activities are located, the Adviser will consider its country of organization,
the principal trading market for its stocks, the source of its revenues and the
location of its assets. The Fund emphasizes investments in the developed
countries of the region (i.e., Hong Kong, Japan, and Singapore), however, it may
also invest in companies located in emerging markets. The Fund will invest
mainly in large and medium-sized companies, although it may invest in companies
of any size.
[Sidenote:]
SUB-ADVISER
The Adviser has appointed UOB Global Capital LLC as Sub-Adviser to assist it in
the day-to-day management of the Fund's investment portfolio.
The Sub-Adviser determines how much to invest in each country by looking at
factors such as prospects for economic growth, expected inflation levels,
government policies and the range of available investment opportunities. The
Sub-Adviser uses a rigorous bottom-up approach, emphasizing intensive research
and stockpicking as the means to identify undervalued stocks in the Asian
markets. The investment process is based on a disciplined and systematic
approach to identifying under-priced securities. Fundamental parameters that are
value and/or growth oriented are used to screen the stock universe to identify
companies that are likely to outperform. Regular company visits are an intrinsic
part of the process. Top-down macro analysis and market valuation are used to
support asset allocation decisions. Quantitative tools are used to help identify
and manage exposure to different risk factors.
The Fund will sell a security if, as a result of changes in the economy of a
particular country or the Asian and Pacific Basin region in general, the
Sub-Adviser believes that holding the security is no longer consistent with the
Fund's investment objective. A security may also be sold as a result of a
deterioration in the performance of the security or in the financial condition
of the company that issued the security.
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<PAGE>
THE MAIN RISKS OF INVESTING IN THE FUND
Changes in the U.S. or foreign economies can cause the value of stocks and other
investments held by the Fund to fall. Stock prices may decline over short or
extended periods. U.S. and foreign stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices.
The value of your investment in the Fund will go up and down with the value of
the investments which the Fund holds. The Fund's investments may not perform as
well as other investments, even in times of rising markets.
In addition, the Fund also carries the following main risks:
- - FOREIGN INVESTMENTS - Foreign investments may be riskier than U.S.
investments because of factors such as foreign government restrictions,
changes in currency exchange rates, incomplete financial information about
the issuers of securities, and political or economic instability. Foreign
stocks may be more volatile and less liquid than U.S. stocks.
- - EMERGING MARKETS - The risks associated with foreign investments are
heightened when investing in emerging markets. The governments and
economies of emerging market countries feature greater instability than
those of more developed countries. Such investments tend to fluctuate in
price more widely and to be less liquid than other foreign investments.
- - REGIONAL RISK - Because the Fund invests primarily in the stocks of
companies located in Asia and the Pacific Basin, the Fund is particularly
susceptible to events in that region. Events in any one country may impact
the other countries or the region as a whole. As a result, events in the
region will generally have a greater effect on the Fund than if the Fund
were more geographically diversified.
- - COUNTRY RISK - The Fund may invest 25% or more of its assets in the
securities of companies located in one country. When the Fund invests a
high percentage of its assets in a particular country, the Fund will be
especially susceptible to factors affecting that country.
- - CURRENCY EXCHANGE - Although the Fund usually makes investments that are
sold in foreign currencies, it values its holdings in U.S. dollars. If the
U.S. dollar rises compared to a foreign currency, the Fund loses on the
currency exchange.
- - SMALL COMPANIES RISK - Small companies tend to have limited resources,
product lines and market share. As a result, their share prices tend to
fluctuate more than those of larger companies. Their shares may also trade
less frequently and in limited volume, making them potentially less liquid.
The price of small company stocks might fall regardless of trends in the
broader market.
- - HEDGING - The Fund may invest in derivatives, such as options, futures and
foreign currencies, to hedge against market risk or the currency risk of
its foreign investments.
-4-
<PAGE>
There's no guarantee hedging will always work. It can also prevent the Fund
from making a gain if markets move in the opposite direction to the hedge.
- - SELECTION OF INVESTMENTS: The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
[Sidenote:]
DERIVATIVES
A derivative is an investment whose value is based on or DERIVED from the
performance of other securities or interest or currency exchange rates or
indices. Derivatives are considered to carry a higher degree of risk than other
types of securities.
HOW THE FUND HAS PERFORMED
The Fund had not commenced operations as of the date of this prospectus and,
accordingly, does not have a long-term performance record.
FEES AND EXPENSES OF THE FUND
The following table shows the fees and expenses you may pay when you buy and
hold shares of the Fund.
<TABLE>
<CAPTION>
Shareholder fees (fees paid directly from your investment)
- ----------------------- ------------------------------ -----------------------------------
<S> <C> <C>
Maximum sales charge Maximum deferred sales
(load) on purchases charge (load) shown as a %
shown as a % of of the the offering price or sale
offering price price, whichever is less
- ----------------------- ------------------------------ -----------------------------------
Retail A Shares 3.75%(1) None(2)
- ----------------------- ------------------------------ -----------------------------------
Retail B Shares None 5.00%(3)
- ----------------------- ------------------------------ -----------------------------------
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Annual Fund operating expenses (expenses deducted from the Fund's assets)
- ----------------------- ----------------- ------------------- ------------- --------------------------
<S> <C> <C> <C> <C>
Distribution
Management and service Other Total Fund operating
fees (12b-1) fees expenses expenses
- ----------------------- ----------------- ------------------- ------------- --------------------------
Retail A Shares 1.00% 0.25% 0.77%(4,5) 2.02%(5)
- ----------------------- ----------------- ------------------- ------------- --------------------------
Retail B Shares 1.00% 1.00% 0.74%(4,5) 2.74%(5)
- ----------------------- ----------------- ------------------- ------------- --------------------------
</TABLE>
(1) Reduced sales charges may be available. See "How to invest in the Fund -
How sales charges work."
(2) Except for investments of $500,000 or more. See "How to invest in the Fund
- How sales charges work."
(3) This amount applies if you sell your shares in the first year after
purchase and gradually declines to 1% in the sixth year after purchase.
After six years, your Retail B Shares will automatically convert to Retail
A Shares. See "How to invest in the Fund - How sales charges work."
(4) Other expenses are based on estimated amounts for the current fiscal year.
(5) The Adviser has agreed to reimburse Other expenses so that Total Fund
operating expenses do not exceed 1.95% and 2.67% for Retail A Shares and
Retail B Shares, respectively. These reimbursements may be revised or
discontinued at any time.
EXAMPLE
This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:
- - you invest $10,000 for the periods shown
- - you reinvest all dividends and distributions in the Fund
- - you sell all your shares at the end of the periods shown
- - your investment has 5% return each year
- - the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:
<TABLE>
<CAPTION>
- ----------------------- --------------------- --------------------
1 year 3 years
- ----------------------- --------------------- --------------------
<S> <C> <C>
Retail A Shares $572 $985
- ----------------------- --------------------- --------------------
Retail B Shares $777 $1150
- ------------------------------------------------------------------
If you hold Retail B Shares, you would pay the
following expenses if you didn't sell your shares:
- ----------------------- --------------------- --------------------
Retail B Shares $277 $850
- ----------------------- --------------------- --------------------
</TABLE>
-6-
<PAGE>
[Sidenote:]
PORTFOLIO MANAGER
The Fund's portfolio manager is Janet Liem, who joined UOB Overseas Bank
Group (UOB) in 1993 and who has been a portfolio manager with the Sub-Adviser
since April 2000. Under the supervision of Daniel Chan, a member of the
Sub-Adviser's Investment Committee, she is primarily responsible for the
day-to-day management of the Fund's investment portfolio.
Ms. Liem , who also serves as Director and Head of Research of UOB Asset
Management Ltd. (UOBAM), has over 15 years of investment experience. Prior to
joining UOB, she held various research positions with global financial
institutions. She holds a BBA from the National University of Singapore and
an MBA from the University of New South Wales.
Mr. Chan has over 20 years investment experience. He currently serves as
Chief Investment Officer and Managing Director of UOBAM. He has been with
UOB since 1982 and the Sub-Adviser since its inception in 1998. He is
responsible for all aspects of the investment process. He is also the current
Chairperson of the Investment Management Association of Singapore. Prior to
joining UOB, he was a Vice President at Sun Hung Kai Securities in Singapore.
He holds a BBA from the National University of Singapore.
-7-
<PAGE>
ADDITIONAL INFORMATION ABOUT RISK
The main risks associated with an investment in the Galaxy Pan Asia Fund have
been described above. The following supplements that discussion.
TEMPORARY DEFENSIVE POSITIONS
The Fund may temporarily hold up to 100% of its total assets in investments that
are not part of its principal investment strategy to try to avoid losses during
unfavorable market conditions. These investments may include cash (which will
not earn any income), U.S. and foreign money market instruments, debt securities
issued or guaranteed by the U.S. Government or its agencies and foreign national
governments or their agencies, securities of foreign issuers located outside the
Asian and Pacific Basin region, and the securities of U.S. issuers. This
strategy could prevent the Fund from achieving its investment objective and
could reduce the Fund's return and affect its performance during a market
upswing.
OTHER TYPES OF INVESTMENTS
This prospectus describes the Fund's main investment strategies and the
particular types of securities in which the Fund mainly invests. The Fund may,
from time to time, pursue other investment strategies and make other types of
investments in support of its overall investment goal. These supplemental
investment strategies, which are not considered to be main investment strategies
of the Fund - and the risks involved - are described in detail in the Statement
of Additional Information (SAI) which is referred to on the back cover of this
prospectus.
YEAR 2000 RISKS
Over the past several years, the Adviser and Galaxy's other major service
providers expended considerable time and money in addressing the computer and
technology problems associated with the transition to the Year 2000. As a result
of those efforts, Galaxy did not experience any material disruptions in its
operations as a result of the transition to the 21st century. The Adviser and
Galaxy's other major service providers are continuing to monitor the Year 2000
or Y2K problems, however, and there can be no assurances that there will be no
adverse impact to Galaxy or the Fund as a result of future computer-related Y2K
difficulties.
-8-
<PAGE>
FUND MANAGEMENT
ADVISER
The Adviser, subject to the general supervision of Galaxy's Board of Trustees,
manages the Fund in accordance with its investment objective and policies, makes
decisions with respect to and places orders for all purchases and sales of its
portfolio securities, and maintains related records. For these services, the
Adviser is entitled to receive management fees from the Fund at the annual rate
of 1.00% of the Fund's average daily net assets.
SUB-ADVISER
The Adviser has delegated some of its advisory responsibilities with respect
to the Pan Asia Fund to UOB Global Capital LLC as Sub-Adviser. The
Sub-Adviser determines which securities will be purchased, retained or sold
for the Fund, places orders for the Fund and provides the Adviser with
information on international investment and economic developments. The
Adviser assists and consults with the Sub-Adviser as to the Fund's investment
program, approves the list of foreign countries recommended by the
Sub-Adviser for investment and manages the Fund's daily cash position. The
Sub-Adviser's fees are paid by the Adviser.
The Sub-Adviser is located at 592 Fifth Avenue, Suite 602, New York, New York
10036. The Sub-Adviser has entered into an arrangement with its affiliate,
UOB Asset Management Ltd (UOBAM), pursuant to which UOBAM has agreed to
provide appropriate resources, including investment, operations and
compliance personnel, to the Sub-Adviser. UOBAM is located at UOB Plaza 2, 80
Raffles Place, #03-00, Singapore 048624. At December 31, 1999, together with
its affiliates, the Sub-Adviser had discretionary management authority over
approximately $2.17 billion in assets.
ALLOCATION OF ORDERS FOR PORTFOLIO SECURITIES
The Adviser and Sub-Adviser may allocate orders for the purchase and sale of
portfolio securities to certain financial institutions, including those that are
affiliated with the Adviser or Sub-Adviser or that have sold shares of the Fund,
to the extent permitted by law or by order of the Securities and Exchange
Commission. The Adviser and Sub-Adviser will allocate orders to such
institutions only if they believe that the quality of the transaction and the
commission are comparable to what they would be with other qualified brokerage
firms.
-9-
<PAGE>
HOW TO INVEST IN THE FUND
HOW SALES CHARGES WORK
You will normally pay a sales charge to invest in the Fund. If you buy Retail A
Shares, you'll usually pay a sales charge (sometimes called a front-end load) at
the time you buy your shares. If you buy Retail B Shares, you may have to pay a
contingent deferred sales charge (sometimes called a back-end load or CDSC) when
you sell your shares. This section explains these two options.
[Sidenote:]
NET ASSET VALUE
The price you pay for your shares is based on the net asset value per share
(NAV). It's the value of the Fund's assets attributable to Retail A Shares or
Retail B Shares, minus the value of the Fund's liabilities attributable to
Retail A Shares or Retail B Shares, divided by the number of Retail A Shares or
Retail B Shares held by investors.
RETAIL A SHARES
The table below shows the sales charge you'll pay if you buy Retail A Shares of
the Fund. The offering price is the NAV of the shares purchased, plus any
applicable sales charge.
<TABLE>
<CAPTION>
- ------------------------------------- ------------------------------ -----------------------------
Total sales charge
- ------------------------------------- ------------------------------ -----------------------------
As a % of the offering As a % of your
Amount of your investment price per share investment
- ------------------------------------- ------------------------------ -----------------------------
<S> <C> <C>
Less than $50,000 3.75% 3.90%
- ------------------------------------- ------------------------------ -----------------------------
$50,000 but less than $100,000 3.50% 3.63%
- ------------------------------------- ------------------------------ -----------------------------
$100,000 but less than $250,000 3.00% 3.09%
- ------------------------------------- ------------------------------ -----------------------------
$250,000 but less than $500,000 2.50% 2.56%
- ------------------------------------- ------------------------------ -----------------------------
$500,000 and over 0.00%(1) 0.00%(1)
- ------------------------------------- ------------------------------ -----------------------------
</TABLE>
(1) There is no front-end sales charge on investments in Retail A Shares of
$500,000 or more. However, if you sell the shares within one year after
buying them, you'll pay a CDSC of 1% of the offering price or 1% of the net
asset value of your shares, whichever is less, unless the shares were sold
because of the death or disability of the shareholder. However, Galaxy will
waive the 1% CDSC the first time you sell shares during this one-year
period. If you reinvest
-10-
<PAGE>
the proceeds of this sale within one year, the waiver of the CDSC won't
apply to any sale of shares purchased with such reinvested proceeds
Galaxy's distributor may, from time to time, implement programs under which a
broker-dealer's sales force may be eligible to win nominal awards for certain
sales efforts. If any such program is made available to any broker-dealer, it
will be made available to all broker-dealers on the same terms. Payments made
under such programs are made by Galaxy's distributor out of its own assets and
not out of the assets of the Fund. These programs will not change the price of
Retail A Shares or the amount that the Fund will receive from such sales.
Certain affiliates of the Adviser may, at their own expense, provide additional
compensation to affiliated broker-dealers whose customers purchase significant
amounts of Retail A Shares of one or more Galaxy Fund and to unaffiliated
broker-dealers whose customers purchase Retail A Shares of one or more of the
Funds. Such compensation will not represent an additional expense to the Funds
or their shareholders, since it will be paid from the assets of the Adviser's
affiliates.
There's no sales charge when you buy Retail A Shares if:
- - You buy shares by reinvesting your dividends and distributions.
- - You buy shares for a 401(k) or SIMPLE IRA retirement account.
- - You buy shares for any retirement account provided that you held Retail A
Shares in a retirement account prior to January 1, 1999.
- - You buy shares for any retirement account and your total cumulative Retail
A Share retirement account balance was $30,000 or more between January 1,
1999 and June 30, 1999.
- - You buy shares with money from another Galaxy Fund on which you've already
paid a sales charge (as long as you buy the new shares within 90 days after
selling your other shares).
- - You're an investment professional who places trades for your clients and
charges them a fee.
- - You buy shares under an all-inclusive fee program (sometimes called a "wrap
fee program") offered by a broker-dealer or other financial institution.
- - You were a Galaxy shareholder before December 1, 1995.
- - You previously paid a sales charge for the shares of another mutual fund
company (as long as you buy the Galaxy shares within 60 days of selling
your other shares).
[Sidenote:]
SALES CHARGE WAIVERS
Ask your investment professional or Galaxy's distributor, or consult the SAI,
for other instances in which the sales load on Retail A Shares is waived. When
you buy your shares, you must tell your investment professional or Galaxy's
distributor that you qualify for a sales load waiver. To contact Galaxy's
distributor, call 1-877-BUY- GALAXY (1-877-289-4252).
-11-
<PAGE>
RETAIL B SHARES
If you buy Retail B Shares of the Fund, you won't pay a CDSC unless you sell
your shares within six years of buying them. The following table shows the
schedule of CDSC charges:
<TABLE>
<CAPTION>
- ------------------------------------------ -------------------------------------------
If you sell your shares You'll pay a CDSC of
- ------------------------------------------ -------------------------------------------
<S> <C>
During the first year 5.00%
- ------------------------------------------ -------------------------------------------
During the second year 4.00%
- ------------------------------------------ -------------------------------------------
During the third year 3.00%
- ------------------------------------------ -------------------------------------------
During the fourth year 3.00%
- ------------------------------------------ -------------------------------------------
During the fifth year 2.00%
- ------------------------------------------ -------------------------------------------
During the sixth year 1.00%
- ------------------------------------------ -------------------------------------------
After the sixth year None
- ------------------------------------------ -------------------------------------------
</TABLE>
For purposes of calculating the CDSC, all purchases made during a calendar month
are considered to be made on the first day of that month. The CDSC is based on
the value of the Retail B Shares on the date that they are sold or the original
cost of the shares, whichever is lower. To keep your CDSC as low as possible
each time you sell shares, Galaxy will first sell any shares in your account
that are not subject to a CDSC. If there are not enough of these, Galaxy will
sell those shares that have the lowest CDSC. There is no CDSC on Retail B Shares
that you acquire by reinvesting your dividends and distributions. In addition,
there's no CDSC when Retail B Shares are sold because of the death or disability
of a shareholder and in certain other circumstances such as exchanges. Ask your
investment professional or Galaxy's distributor, or consult the SAI, for other
instances in which the CDSC is waived. To contact Galaxy's distributor, call
1-877-BUY-GALAXY (1-877-289-4252).
DISTRIBUTION AND SHAREHOLDER SERVICE FEES
Retail A Shares of the Fund can pay distribution (12b-1) fees at an annual rate
of up to 0.30% of the Fund's Retail A Share assets. The Fund does not intend to
pay more than 0.25% in distribution fees with respect to Retail A Shares during
the current fiscal year.
Retail B Shares of the Fund can pay distribution and shareholder service (12b-1)
fees at an annual rate of up to 1.25% of the Fund's Retail B Share assets. The
Fund does not intend to pay more than 1.00% in distribution and shareholder
service (12b-1) fees during the current fiscal year.
Galaxy has adopted separate plans under Rule 12b-1 that allow the Fund to pay
fees from its Retail A Share assets for selling and distributing Retail A Shares
and from its Retail B Share assets for selling and distributing Retail B Shares
and for services provided to shareholders.
-12-
<PAGE>
Because 12b-1 fees are paid on an ongoing basis, over time they increase the
cost of your investment and may cost more than paying other sales charges.
CONVERTING RETAIL B SHARES TO RETAIL A SHARES
Six years after you buy Retail B Shares of the Fund, they will automatically
convert to Retail A Shares of the Fund. This allows you to benefit from the
lower annual expenses of Retail A Shares.
CHOOSING BETWEEN RETAIL A SHARES AND RETAIL B SHARES
Retail B Shares are subject to higher fees than Retail A Shares. For this
reason, Retail A Shares can be expected to pay higher dividends than Retail B
Shares. However, because Retail A Shares are subject to an initial sales charge
which is deducted at the time you purchase Retail A Shares (unless you qualify
for a sales load waiver), you will have less of your purchase price invested in
the Fund if you purchase Retail A Shares than if you purchase Retail B Shares of
the Fund.
In deciding whether to buy Retail A Shares or Retail B Shares, you should
consider how long you plan to hold the shares. Over time, the higher fees on
Retail B Shares may equal or exceed the initial sales charge and fees for Retail
A Shares. Retail A Shares may be a better choice if you qualify to have the
sales charge reduced or eliminated or if you plan to sell your shares within one
or two years. Consult your financial professional for help in choosing the
appropriate share class.
BUYING, SELLING AND EXCHANGING SHARES
You can buy and sell Retail A Shares and Retail B Shares of the Fund on any day
that the Fund is open for business, which is any day that the New York Stock
Exchange is open. The New York Stock Exchange is generally open for trading
every Monday through Friday, except for national holidays.
Retail A Shares and Retail B Shares have different prices. The price at which
you buy shares is the NAV next determined after your order is accepted, plus any
applicable sales charge. The price at which you sell shares is the NAV next
determined, after receipt of your order in proper form as described below, less
any applicable CDSC. NAV is determined on each day the New York Stock Exchange
is open for trading at the close of regular trading that day (usually 4:00 p.m.
Eastern time). If market prices are readily available for securities owned by
the Fund,
-13-
<PAGE>
they're valued at those prices. If market prices are not readily available for
some securities, they are valued at fair value under the supervision of Galaxy's
Board of Trustees.
Sometimes, the price of a security trading on a foreign stock exchange may be
affected by events that happen after that exchange closes. If this happens, the
fair value of the security may be determined using other factors and may not
reflect the security's last quoted price. In addition, foreign securities may
trade on days when shares of the Fund are not priced. As a result, the NAV per
share of the Fund may change on days when you won't be able to buy or sell Fund
shares.
[Sidenote:]
MINIMUM INVESTMENT AMOUNTS
The minimum initial investment to open a Fund account is:
- - $2,500 for regular accounts
- - $500 for retirement plan accounts, such as IRA, SEP and Keogh Plan accounts
- - $100 for college savings accounts, including Education IRA accounts
There is generally no minimum initial investment if you participate in the
Automatic Investment Program or in a salary reduction retirement plan such as a
SIMPLE IRA or 401(k). You generally can make additional investments for as
little as $100. See GALAXY INVESTOR PROGRAMS below for information on other
minimums for initial and additional investments.
Usually, you must keep at least $250 in your account other than retirement plan
accounts. If your account falls below $250 because you sell or exchange shares,
Galaxy may redeem your shares and close your account. Galaxy will give you 60
days' notice in writing before closing your account.
HOW TO BUY SHARES
You can buy shares through your financial institution or directly from Galaxy's
distributor by calling 1-877-BUY-GALAXY (1-877-289-4252). A broker or agent who
places orders on your behalf may charge you a separate fee for their services.
BUYING BY MAIL
Complete an account application and mail it, together with a check payable to
the Fund, to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
-14-
<PAGE>
To make additional investments, send your check to the address above along with
one of the following:
- - The detachable form that's included with your Galaxy statement or your
confirmation of a prior transaction
- - A letter stating the amount of your investment, the name of the Fund, and
your account number.
- - If your check is returned because of insufficient funds, Galaxy will
cancel your order.
BUYING BY WIRE
To make an initial or additional investment by wire, send U.S. funds through the
Federal Reserve System to Fleet National Bank as agent for Galaxy's distributor.
You should wire money and registration instructions to:
Fleet National Bank
75 State Street
Boston, MA 02109
ABA #0110-0013-8
DDA #79673-5702
Ref: The Galaxy Fund
(Account number)
(Account registration)
Before making an initial investment by wire, you must complete an account
application and send it to The Galaxy Fund, P.O. Box 6520, Providence, RI
02940-6520. Your order will not be effected until the completed account
application is received by Galaxy. Call Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) for an account application.
Your financial institution may charge you a fee for sending funds by wire.
CUSTOMERS OF FINANCIAL INSTITUTIONS
If you are a customer of a financial institution such as a bank, savings and
loan association or broker-dealer, including a financial institution affiliated
with the Adviser, you should place your order through your financial
institution. Your financial institution is responsible for sending your order to
Galaxy's distributor and wiring the money to Galaxy's custodian. For details,
please contact your financial institution.
DISCOUNT PLANS
You may have the sales charges on purchases of Retail A Shares reduced or waived
completely through the discount plans described below:
-15-
<PAGE>
- - RIGHTS OF ACCUMULATION - You can add the value of the Retail A Shares that
you already own in any Galaxy Fund that charges a sales load to your next
investment in Retail A Shares for purposes of calculating the sales charge.
- - LETTER OF INTENT - You can purchase Retail A Shares of any Galaxy Fund that
charges a sales load over a 13-month period and receive the same sales
charge as if all of the shares had been purchased at the same time. To
participate, complete the Letter of Intent section on the account
application. Galaxy's administrator will hold in escrow Retail A Shares
equal to 5% of the amount you indicate in the Letter of Intent for payment
of a higher sales charge if you don't purchase the full amount indicated in
the Letter of Intent. See the SAI for more information on this escrow
feature.
- - REINVESTMENT PRIVILEGE - You can reinvest some or all of the money that you
receive when you sell Retail A Shares of the Fund in Retail A Shares of any
Galaxy Fund within 90 days without paying a sales charge.
- - GROUP SALES - If you belong to a qualified group with 50,000 or more
members, you can buy Retail A Shares at a reduced sales charge, based on
the number of qualified group members.
[Sidenote:]
DISCOUNT PLANS
You must tell your investment professional or Galaxy's distributor when you buy
your shares that you want to take advantage of any of these discount plans. See
the SAI for additional requirements that may apply. To contact Galaxy's
distributor, call 1-877-BUY-GALAXY (1-877-289-4252).
HOW TO SELL SHARES
You can sell your shares in several ways: by mail, by telephone, by wire, or
through your financial institution.
SELLING BY MAIL
Send your request in writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
You must include the following:
- - The name of the Fund
- - The number of shares or the dollar amount you want to sell
-16-
<PAGE>
- - Your account number
- - Your Social Security number or tax identification number
- - The signatures of each registered owner of the account (the signatures must
match the names on the account registration).
Additional documents may be required for certain types of shareholders, such as
corporations, partnerships, executors, trustees, administrators or guardians.
[Sidenote:]
SIGNATURE GUARANTEES
When selling your shares by mail or by phone, you must have your signature
guaranteed if:
- - you're selling shares worth more than $50,000,
- - you want Galaxy to send your money to an address other than the address on
your account, unless your assets are transferred to a successor custodian,
- - you want Galaxy to send your money to the address on your account that's
changed within the last 30 days, or
- - you want Galaxy to make the check payable to someone else.
Your signature must be guaranteed by a bank that's a member of the FDIC, a trust
company, a member firm of a national securities exchange or any other eligible
institution. A notarized signature is not sufficient.
SELLING BY PHONE
You can sell shares by calling Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) unless you tell Galaxy on the account application or in writing
that you don't want this privilege. If you have difficulty getting through to
Galaxy because of unusual market conditions, consider selling your shares by
mail or wire.
SELLING BY WIRE
Notify Galaxy's distributor by phone or wire that you wish to sell shares and
have the sale proceeds wired to your account at any financial institution in the
U.S. To be eligible to use this privilege, you must complete the appropriate
section on the account application or notify Galaxy in writing (with a signature
guarantee). Your sale proceeds must be more than $1,000.
The sale proceeds must be paid to the same bank and account you named on your
application or in your written instructions.
-17-
<PAGE>
CUSTOMERS OF FINANCIAL INSTITUTIONS
Please contact your financial institution for information on how to sell your
shares. The financial institution is responsible for sending your order to
Galaxy's distributor and for crediting your account with the proceeds. Galaxy
doesn't charge a fee for wiring sale proceeds to your financial institution, but
your financial institution may charge you a fee.
HOW TO EXCHANGE SHARES
You may exchange Retail A Shares of the Fund having a value of at least $100 for
Retail A Shares of any other Galaxy Fund or for shares of any other Fund that's
managed by the Adviser or any of its affiliates in which you have an existing
account. You won't pay a sales charge for exchanging your Retail A Shares.
You may exchange Retail B Shares of the Fund for Retail B Shares of any other
Galaxy Fund. You won't pay a CDSC when you exchange your Retail B Shares.
However, when you sell the Retail B Shares you acquired in the exchange, you'll
pay a contingent deferred sales charge based on the date you bought the Retail B
Shares which you exchanged.
TO EXCHANGE SHARES:
- - call Galaxy's distributor or use the InvestConnect voice response line at
1-877-BUY-GALAXY (1-877-289-4252)
- - send your request in writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
- - ask your financial institution.
Galaxy doesn't charge any fee for making exchanges but your financial
institution might do so. You are generally limited to three exchanges per year.
Galaxy may change or cancel the exchange privilege with 60 days' advance written
notice to shareholders.
OTHER TRANSACTION POLICIES
If Galaxy doesn't receive full payment for your order to buy shares within three
business days of the order date, Galaxy won't accept your order. Galaxy will
advise you if this happens and return any payment it may eventually receive. You
can only invest in shares of the Fund if it is legally available in your state.
-18-
<PAGE>
Galaxy may refuse any order to buy shares. Galaxy doesn't issue a certificate
when you buy shares, but it does keep a record of shares issued to investors.
Galaxy may refuse your order to sell or exchange shares by wire or telephone if
it believes it is advisable to do so. Galaxy or its distributor may change or
cancel the procedures for selling or exchanging shares by wire or telephone at
any time without notice.
If you sell or exchange shares by telephone, you may be responsible for any
fraudulent telephone orders as long as Galaxy has taken reasonable precautions
to verify your identity, such as requesting information about the way in which
your account is registered or about recent transactions in your account.
Galaxy normally pays you cash when you sell your shares, but it has the right to
deliver securities owned by the Fund instead of cash. When you sell these
securities, you'll pay brokerage charges.
Sales proceeds are normally sent to you within three business days but Galaxy
reserves the right to send sales proceeds within seven days if sending proceeds
earlier could adversely affect the Fund.
If any shares that you're selling are part of an investment you've paid for with
a personal check, Galaxy will delay sending your sales proceeds until the check
clears, which can take up to 15 days from the purchase date.
Galaxy reserves the right to vary or waive any minimum investment requirement.
-19-
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund pays any dividends from net investment income annually. The Fund pays
any net capital gains at least once a year. It is expected that the Fund's
annual distributions will normally -- but not always -- consist primarily of
capital gains rather than ordinary income. Dividends and distributions are paid
in cash unless you indicate in the account application or in a letter to Galaxy
that you want to have dividends and distributions reinvested in additional
shares.
FEDERAL TAXES
The Fund contemplates declaring as dividends each year all or substantially all
of its taxable income, including its net capital gain (the excess of long-term
capital gain over short-term capital loss). Distributions attributable to the
net capital gain of the Fund will be taxable to you as long-term capital gain,
regardless of how long you have held your shares. Other Fund distributions
(including distributions attributable to short-term capital gains of the Fund)
will generally be taxable to you as ordinary income. You will be subject to
federal income tax on these distributions regardless of whether they are paid in
cash or reinvested in additional shares. You will be notified annually of the
tax status of distributions to you.
You should note that if you purchase shares just before a distribution, the
purchase price will reflect the amount of the upcoming distribution, but you
will be taxed on the entire amount of the distribution received, even though, as
an economic matter, the distribution simply constitutes a return of capital.
This is known as "buying into a dividend."
You will recognize taxable gain or loss on a sale, exchange or redemption of
your shares, including an exchange for shares of another Fund, based on the
difference between your tax basis in the shares and the amount you receive for
them. (To aid in computing your tax basis, you generally should retain your
account statements for the periods during which you held shares.) Generally,
this gain or loss will be long-term or short-term depending on whether your
holding period for the shares exceeds 12 months, except that any loss realized
on shares held for six months or less will be treated as a long-term capital
loss to the extent of any capital gain dividends that were received on the
shares.
The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
Dividends paid by the Fund to its corporate shareholders and that are
attributable to qualifying dividends the Fund receives from U.S. corporations
may be eligible, in the hands of the corporate
-20-
<PAGE>
shareholders, for the corporate dividends-received deduction, subject to certain
holding period requirements and debt financing limitations.
It is expected that the Fund will be subject to foreign withholding taxes with
respect to dividends or interest received from sources in foreign countries. The
Fund may make an election to treat a proportionate amount of these taxes as
constituting a distribution to each shareholder, which would allow each
shareholder either (1) to credit this proportionate amount of taxes against U.S.
federal income tax liability or (2) to take this amount as an itemized
deduction.
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions,
redemptions and exchanges. State income taxes may not apply, however, to the
portions of the Fund's distributions, if any, that are attributable to interest
on U.S. Government securities.
MISCELLANEOUS
The foregoing is only a summary of certain tax considerations under current law,
which may be subject to change in the future. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.
-21-
<PAGE>
GALAXY INVESTOR PROGRAMS
RETIREMENT PLANS
Retail A Shares and Retail B Shares of the Fund are available for purchase in
connection with any of the following retirement plans:
- - Individual Retirement Arrangements (IRAs), including Traditional, Roth,
Rollover and Education IRAs.
- - Simplified Employee Pension Plans (SEPs).
- - Keogh money purchase and profit sharing plans.
- - Salary reduction retirement plans set up by employers for their employees,
which are qualified under Section 401(k) and 403(b) of the Internal Revenue
Code.
- - SIMPLE IRA plans which are qualified under Section 408(p) of the Internal
Revenue Code.
For information about eligibility requirements and other matters concerning
these plans and to obtain an application, call Galaxy's distributor at
1-877-BUY-GALAXY (1-877-289-4252).
OTHER PROGRAMS
It's also easy to buy or sell shares of the Fund by using one of the programs
described below. Just tell Galaxy the amount and how frequently you want to buy
or sell shares and Galaxy does the rest. For further information on any of these
programs, call Galaxy's distributor at 1-877-BUY-GALAXY (1-877-289-4252) or your
financial institution.
AUTOMATIC INVESTMENT PROGRAM
You can make automatic investments from your bank account every month or every
quarter. You can choose to make your investment on any day of the month or
quarter. The minimum investment is $50 a month or $150 a quarter except for
Education IRAs, in which case the minimum investment is $40 a month or $125 a
quarter.
PAYROLL DEDUCTION PROGRAM
You can make regular investments from your paycheck. The minimum investment is
$25 per pay period. Send a completed Galaxy Payroll Deduction Application to
your employer's payroll department. They'll arrange to have your investment
deducted from your paycheck.
-22-
<PAGE>
COLLEGE INVESTMENT PROGRAM
The minimum for initial and additional investments through the College
Investment Program is $100 unless you participate in the Automatic Investment
Program, in which case the minimum for initial and additional investments is
$50. You can also save for college by opening an Education IRA account. The
minimum for initial and additional investments in an Education IRA is $100
unless you participate in the Automatic Investment Program, in which case the
minimum for initial and additional investments is $40.
DIRECT DEPOSIT PROGRAM
This program lets you deposit your social security payments in your Fund account
automatically. There's no minimum deposit. You can cancel the program by
notifying the Social Security Administration in writing.
SYSTEMATIC WITHDRAWAL PLAN
You can make regular withdrawals from your Fund account every month, every
quarter, every six months or once a year. You need a minimum account balance of
$10,000 to participate in the plan. No CDSC will be charged on withdrawals of
Retail B Shares made through the plan that don't annually exceed 12% of your
account's value.
You may cancel your participation in any of these programs, other than the
Direct Deposit Program, by writing to Galaxy at:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
Please allow at least five days for the cancellation to be processed.
-23-
<PAGE>
HOW TO REACH GALAXY
THROUGH YOUR FINANCIAL INSTITUTION
Your financial institution can help you buy, sell or exchange shares and can
answer questions about your account.
GALAXY SHAREHOLDER SERVICES
Call Galaxy's distributor at 1-877-BUY-GALAXY (1-877-289-4252), Monday through
Friday, 8 a.m. to 6 p.m. (Eastern time), for help from a Galaxy representative.
INVESTCONNECT
InvestConnect is Galaxy's shareholder voice response system. Call
1-877-BUY-GALAXY (1-877-289-4252) from any touch-tone phone for automated access
to account information and current Fund prices and performance, or to place
orders to sell or exchange shares. It's available 24 hours a day, seven days a
week.
If you live outside the United States, you can contact Galaxy by calling
1-508-871-4121.
THE INTERNET
Please visit Galaxy's Web site at:
www.galaxyfunds.com
[Sidenote:]
HEARING IMPAIRED
Galaxy also offers a TDD service for the hearing impaired. Just call
1-800-696-6515, 24 hours a day, seven days a week.
-24-
<PAGE>
[Back Cover Page]
Where to find more information
You'll find more information about the Fund in the following documents:
ANNUAL AND SEMI-ANNUAL REPORTS
Galaxy's annual and semi-annual reports will contain more information about the
Fund and a discussion about the market conditions and investment strategies that
had a significant effect on the Fund's performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains detailed information about the Fund and its policies. By law,
it is incorporated by reference into (considered to be part of) this prospectus.
You can get a free copy of these documents, request other information about the
Fund and make shareholder inquiries by calling Galaxy at 1-877-BUY-GALAXY
(1-877-289-4252) or by writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
If you buy your shares through a financial institution, you may contact your
institution for more information.
You can write to the Securities and Exchange Commission (SEC) Public Reference
Section and ask them to mail you information about the Fund, including the SAI.
They'll charge you a fee for this service. You can also visit the SEC Public
Reference Room and copy the documents while you're there. For information about
the operation of the Public Reference Room, call the SEC.
Public Reference Section of the SEC
Washington, DC 20549-0102
1-202-942-8090.
Reports and other information about the Fund are also available on the EDGAR
Database on the SEC's Web site at http://www.sec.gov. Copies of this information
may also be obtained, after paying a duplicating fee, by electronic request to
the SEC's e-mail address at [email protected].
Galaxy's Investment Company Act File No. is 811-4636.
[Fleet assigned code]
<PAGE>
[Front cover page]
The Galaxy Fund
Prospectus
__________, 2000
Galaxy Pan Asia Fund
Trust Shares
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved any shares of this Fund or determined if this prospectus
is accurate or complete. Anyone who tells you otherwise is committing a crime.
<PAGE>
Contents
<TABLE>
<S> <C>
Risk/return summary....................................................1
Introduction...........................................................1
Galaxy Pan Asia Fund...................................................3
Additional information about risk......................................7
Fund management........................................................8
How to invest in the Fund.............................................10
Buying and selling shares.............................................10
How to buy shares..................................................11
How to sell shares.................................................11
Other transaction policies.........................................11
Dividends, distributions and taxes....................................13
</TABLE>
<PAGE>
RISK/RETURN SUMMARY
INTRODUCTION
This prospectus describes the Galaxy Pan Asia Fund. The Fund invests primarily
in the common stocks of companies located in or that have their principal
activities in Asia or the Pacific Basin.
On the following pages, you'll find important information about the Fund,
including:
- - the Fund's investment objective (sometimes called the Fund's goal) and the
main investment strategies used by the Fund's investment adviser in trying
to achieve that objective
- - the main risks associated with an investment in the Fund
- - the fees and expenses that you will pay as an investor in the Fund.
IS THE FUND RIGHT FOR YOU?
Not all mutual funds are for everyone. Your investment goals and tolerance for
risk will determine which fund is right for you.
Equity funds are generally best suited to investors seeking growth of their
investment over time and who are prepared to accept the risks associated with
equity securities. Equity funds have the potential for higher returns than other
funds, such as bond funds or money market funds, but also carry more risk.
Different equity funds have different levels of risk. They have varying
objectives and investment styles, and some are considered more aggressive than
others. On a risk spectrum ranking funds from conservative to aggressive, the
Galaxy Pan Asia Fund is considered to have an aggressive level of risk. This
ranking is based on the assessment by the Fund's investment adviser of the
potential risk of the Fund relative to the other equity funds offered by Galaxy,
but this can change over time. It should not be used to compare the Fund with
other mutual funds or other types of investments. Consult your financial
professional to help you decide if the Fund is right for you.
THE FUND'S INVESTMENT ADVISER
Fleet Investment Advisors Inc., which is referred to in this prospectus as the
ADVISER, is the investment adviser for the Fund. The Adviser, an indirect
wholly-owned subsidiary of FleetBoston Financial Corporation, was established in
1984 and has its main office at 75 State
<PAGE>
Street, Boston, Massachusetts 02109. The Adviser also provides investment
management and advisory services to individual and institutional clients and
manages the other Galaxy investment portfolios. As of December 31, 1999, the
Adviser managed over $68 billion in assets.
AN INVESTMENT IN THE FUND ISN'T A FLEET BANK DEPOSIT AND IT ISN'T INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. YOU COULD LOSE MONEY BY INVESTING IN THE FUND.
-2-
<PAGE>
Galaxy Pan Asia Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks capital appreciation.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 65% of its total assets in the common stocks
of companies located in or whose principal activities are in Asia and the
Pacific Basin. These countries may include Hong Kong, India, Indonesia, Japan,
Malaysia, the People's Republic of China, the Philippines, Republic of Korea,
Singapore, Taiwan and Thailand. In determining where a company's principal
activities are located, the Adviser will consider its country of organization,
the principal trading market for its stocks, the source of its revenues and the
location of its assets. The Fund emphasizes investments in the developed
countries of the region (i.e., Hong Kong, Japan, and Singapore), however, it may
also invest in companies located in emerging markets. The Fund will invest
mainly in large and medium-sized companies, although it may invest in companies
of any size.
[Sidenote:]
SUB-ADVISER
The Adviser has appointed UOB Global Capital LLC as Sub-Adviser to assist it in
the day-to-day management of the Fund's investment portfolio.
The Sub-Adviser determines how much to invest in each country by looking at
factors such as prospects for economic growth, expected inflation levels,
government policies and the range of available investment opportunities. The
Sub-Adviser uses a rigorous bottom-up approach, emphasizing intensive research
and stockpicking as the means to identify undervalued stocks in the Asian
markets. The investment process is based on a disciplined and systematic
approach to identifying under-priced securities. Fundamental parameters that are
value and/or growth oriented are used to screen the stock universe to identify
companies that are likely to outperform. Regular company visits are an intrinsic
part of the process. Top-down macro analysis and market valuation are used to
support asset allocation decisions. Quantitative tools are used to help identify
and manage exposure to different risk factors.
The Fund will sell a security if, as a result of changes in the economy of a
particular country or the Asian and Pacific Basin region in general, the
Sub-Adviser believes that holding the security is no longer consistent with the
Fund's investment objective. A security may also be sold as a result of a
deterioration in the performance of the security or in the financial condition
of the company that issued the security.
-3-
<PAGE>
THE MAIN RISKS OF INVESTING IN THE FUND
Changes in the U.S. or foreign economies can cause the value of stocks and other
investments held by the Fund to fall. Stock prices may decline over short or
extended periods. U.S. and foreign stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices.
The value of your investment in the Fund will go up and down with the value of
the investments which the Fund holds. The Fund's investments may not perform as
well as other investments, even in times of rising markets.
In addition, the Fund also carries the following main risks:
- - FOREIGN INVESTMENTS - Foreign investments may be riskier than U.S.
investments because of factors such as foreign government restrictions,
changes in currency exchange rates, incomplete financial information about
the issuers of securities, and political or economic instability. Foreign
stocks may be more volatile and less liquid than U.S. stocks.
- - EMERGING MARKETS - The risks associated with foreign investments are
heightened when investing in emerging markets. The governments and
economies of emerging market countries feature greater instability than
those of more developed countries. Such investments tend to fluctuate in
price more widely and to be less liquid than other foreign investments.
- - REGIONAL RISK - Because the Fund invests primarily in the stocks of
companies located in Asia and the Pacific Basin, the Fund is particularly
susceptible to events in that region. Events in any one country may impact
the other countries or the region as a whole. As a result, events in the
region will generally have a greater effect on the Fund than if the Fund
were more geographically diversified.
- - COUNTRY RISK - The Fund may invest 25% or more of its assets in the
securities of companies located in one country. When the Fund invests a
high percentage of its assets in a particular country, the Fund will be
especially susceptible to factors affecting that country.
- - CURRENCY EXCHANGE - Although the Fund usually makes investments that are
sold in foreign currencies, it values its holdings in U.S. dollars. If the
U.S. dollar rises compared to a foreign currency, the Fund loses on the
currency exchange.
- - SMALL COMPANIES RISK - Small companies tend to have limited resources,
product lines and market share. As a result, their share prices tend to
fluctuate more than those of larger companies. Their shares may also trade
less frequently and in limited volume, making them potentially less liquid.
The price of small company stocks might fall regardless of trends in the
broader market.
- - HEDGING - The Fund may invest in derivatives, such as options, futures and
foreign currencies, to hedge against market risk or the currency risk of
its foreign investments.
-4-
<PAGE>
There's no guarantee hedging will always work. It can also prevent the Fund
from making a gain if markets move in the opposite direction to the hedge.
- - SELECTION OF INVESTMENTS: The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
[Sidenote:]
DERIVATIVES
A derivative is an investment whose value is based on or DERIVED from the
performance of other securities or interest or currency exchange rates or
indices. Derivatives are considered to carry a higher degree of risk than other
types of securities.
HOW THE FUND HAS PERFORMED
The Fund had not commenced operations as of the date of this prospectus and,
accordingly, does not have a long-term performance record.
FEES AND EXPENSES OF THE FUND
The following table shows the fees and expenses you may pay when you buy and
hold shares of the Fund.
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Management fees Distribution Other Total Fund operating
(12b-1) fees expenses expenses
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trust Shares 1.00% None 0.62%(1,2) 1.62%(2)
- ------------------------------------------------------------------------------------------------
</TABLE>
1 Other expenses are based on estimated amounts for the current fiscal year.
2 The Adviser has agreed to reimburse Other expenses so that Total Fund
operating expenses do not exceed 1.55%. These reimbursements may be revised
or discontinued at any time.
EXAMPLE
This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:
- - you invest $10,000 for the periods shown
-5-
<PAGE>
- - you reinvest all dividends and distributions in the Fund
- - you sell all your shares at the end of the periods shown
- - your investment has a 5% return each year
- - the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower depending on the amount you
invest and the Fund's actual rate of return, based on these assumptions your
costs would be:
<TABLE>
<CAPTION>
- -----------------------------------------------------
1 year 3 years
- -----------------------------------------------------
<S> <C> <C>
Trust Shares $165 $511
- -----------------------------------------------------
</TABLE>
[Sidenote:]
PORTFOLIO MANAGER
The Fund's portfolio manager is Janet Liem, who joined UOB Overseas Bank
Group (UOB) in 1993 and who has been a portfolio manager with the Sub-Adviser
since April 2000. Under the supervision of Daniel Chan, a member of the
Sub-Adviser's Investment Committee, she is primarily responsible for the
day-to-day management of the Fund's investment portfolio.
Ms. Liem , who also serves as Director and Head of Research of UOB Asset
Management Ltd. (UOBAM), has over 15 years of investment experience. Prior to
joining UOB, she held various research positions with global
financial institutions. She holds a BBA from the National University of
Singapore and an MBA from the University of New South Wales.
Mr. Chan has over 20 years investment experience. He currently serves as
Chief Investment Officer and Managing Director of UOBAM. He has been with
UOB since 1982 and the Sub-Adviser since its inception in 1998. He is
responsible for all aspects of the investment process. He is also the current
Chairperson of the Investment Management Association of Singapore. Prior to
joining UOB, he was a Vice President at Sun Hung Kai Securities in Singapore.
He holds a BBA from the National University of Singapore.
-6-
<PAGE>
Additional information about risk
The main risks associated with an investment in the Galaxy Pan Asia Fund have
been described above. The following supplements that discussion.
TEMPORARY DEFENSIVE POSITIONS
The Fund may temporarily hold up to 100% of its total assets in investments that
are not part of its principal investment strategy to try to avoid losses during
unfavorable market conditions. These investments may include cash (which will
not earn any income), U.S. and foreign money market instruments, debt securities
issued or guaranteed by the U.S. Government or its agencies and foreign national
governments or their agencies, securities of foreign issuers located outside the
Asian and Pacific Basin region, and the securities of U.S. issuers. This
strategy could prevent the Fund from achieving its investment objective and
could reduce the Fund's return and affect its performance during a market
upswing.
OTHER TYPES OF INVESTMENTS
This prospectus describes the Fund's main investment strategies and the
particular types of securities in which the Fund mainly invests. The Fund may,
from time to time, pursue other investment strategies and make other types of
investments in support of its overall investment goal. These supplemental
investment strategies, which are not considered to be main investment strategies
of the Fund - and the risks involved - are described in detail in the Statement
of Additional Information (SAI) which is referred to on the back cover of this
prospectus.
YEAR 2000 RISKS
Over the past several years, the Adviser and Galaxy's other major service
providers expended considerable time and money in addressing the computer and
technology problems associated with the transition to the Year 2000. As a result
of those efforts, Galaxy did not experience any material disruptions in its
operations as a result of the transition to the 21st century. The Adviser and
Galaxy's other major service providers are continuing to monitor the Year 2000
or Y2K problems, however, and there can be no assurances that there will be no
adverse impact to Galaxy or the Fund as a result of future computer-related Y2K
difficulties.
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<PAGE>
FUND MANAGEMENT
ADVISER
The Adviser, subject to the general supervision of Galaxy's Board of Trustees,
manages the Fund in accordance with its investment objective and policies, makes
decisions with respect to and places orders for all purchases and sales of its
portfolio securities, and maintains related records. For these services, the
Adviser is entitled to receive management fees from the Fund at the annual rate
of 1.00% of the Fund's average daily net assets.
SUB-ADVISER
The Adviser has delegated some of its advisory responsibilities with respect to
the Pan Asia Fund to UOB Global Capital LLC as Sub-Adviser. The Sub-Adviser
determines which securities will be purchased, retained or sold for the Fund,
places orders for the Fund and provides the Adviser with information on
international investment and economic developments. The Adviser assists and
consults with the Sub-Adviser as to the Fund's investment program, approves the
list of foreign countries recommended by the Sub-Adviser for investment and
manages the Fund's daily cash position. The Sub-Adviser's fees are paid by the
Adviser.
The Sub-Adviser is located at 592 Fifth Avenue, Suite 602, New York, New York
10036. The Sub-Adviser has entered into an arrangement with its affiliate,
UOB Asset Management Ltd (UOBAM), pursuant to which UOBAM has agreed to
provide appropriate resources, including investment, operations and
compliance personnel, to the Sub-Adviser. UOBAM is located at UOB Plaza 2, 80
Raffles Place, #03-00, Singapore 048624. At December 31, 1999, together with
its affiliates, the Sub-Adviser had discretionary management authority over
approximately $2.17 billion in assets.
ALLOCATION OF ORDERS FOR PORTFOLIO SECURITIES
The Adviser and Sub-Adviser may allocate orders for the purchase and sale of
portfolio securities to certain financial institutions, including those that are
affiliated with the Adviser or Sub-Adviser or that have sold shares of the Fund,
to the extent permitted by law or by order of the Securities and Exchange
Commission. The Adviser and Sub-Adviser will allocate orders to such
institutions only if they believe that the quality of the transaction and the
commission are comparable to what they would be with other qualified brokerage
firms.
SUB-ACCOUNT SERVICES
Affiliates of the Adviser and certain other parties may receive fees from
Galaxy's transfer agent for providing certain sub-accounting and administrative
services to participant sub-accounts with respect to Trust Shares of the Fund
held by defined contribution plans. The transfer agency fees
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<PAGE>
payable by Trust Shares of the Fund have been increased by an amount equal to
these fees, so that the holders of Trust Shares indirectly bear these fees.
-9-
<PAGE>
HOW TO INVEST IN THE FUND
BUYING AND SELLING SHARES
Trust Shares of the Fund are available for purchase by the following types of
investors:
- - Investors maintaining a qualified account at a bank or trust institution,
including subsidiaries of FleetBoston Financial Corporation
- - Participants in employer-sponsored defined contribution plans.
Qualified accounts include discretionary investment management accounts,
custodial accounts, agency accounts and different types of tax-advantaged
accounts. Your financial institution can provide more information about which
types of accounts are eligible.
You can buy and sell Trust Shares of the Fund on any business day. A business
day is any day that Galaxy's distributor, Galaxy's custodian and your
institution or employer-sponsored plan are open for business.
The price at which you buy shares is the net asset value (NAV) per share next
determined after your order is accepted. The price at which you sell shares is
the NAV per share next determined after receipt of your order. NAV is determined
on each day the New York Stock Exchange is open for trading at the close of
regular trading that day (usually 4:00 p.m. Eastern time). The New York Stock
Exchange is generally open for trading every Monday through Friday, except for
national holidays.
If market prices are readily available for securities owned by the Fund, they're
valued at those prices. If market prices are not readily available for some
securities, they are valued at fair value under the supervision of Galaxy's
Board of Trustees.
Sometimes, the price of a security trading on a foreign stock exchange may be
affected by events that happen after that exchange closes. If this happens, the
fair value of the security may be determined using other factors and may not
reflect the security's last quoted price. In addition, foreign securities may
trade on days when shares of the Fund are not priced. As a result, the net asset
value per share of the Fund may change on days when you won't be able to buy or
sell Fund shares.
-10-
<PAGE>
[Sidenote:]
NET ASSET VALUE
The price you pay for your shares is based on the net asset value per share
(NAV). It's the value of the Fund's assets attributable to Trust Shares, minus
the value of the Fund's liabilities attributable to Trust Shares, divided by the
number of Trust Shares held by investors.
HOW TO BUY SHARES
You can buy Trust Shares by following the procedures established by your
financial institution or your employer-sponsored plan. Your financial
institution or plan administrator is responsible for sending your order to
Galaxy's distributor and wiring payment to Galaxy's custodian. The financial
institution or employer-sponsored plan holds the shares in your name and
receives all confirmations of purchases and sales.
[Sidenote:]
INVESTMENT MINIMUMS
Galaxy does not have any minimum investment requirements for initial or
additional investments in Trust Shares, but financial institutions and
employer-sponsored plans may. They may also require you to maintain a minimum
account balance.
HOW TO SELL SHARES
You can sell Trust Shares by following the procedures established by your
financial institution or your employer-sponsored plan. Your financial
institution or plan administrator is responsible for sending your order to
Galaxy's distributor and for crediting your account with the proceeds. Galaxy
doesn't charge for wiring the proceeds, but your financial institution or
employer-sponsored plan may do so. Contact your financial institution or plan
administrator for more information.
OTHER TRANSACTION POLICIES
If Galaxy doesn't receive full payment for your order to buy shares by 4:00 p.m.
on the next business day, Galaxy won't accept your order. Galaxy will advise
your financial institution or plan administrator if this happens.
Galaxy may refuse any order to buy shares. Galaxy doesn't issue a certificate
when you buy shares, but it does keep a record of shares issued to investors.
-11-
<PAGE>
Sales proceeds are normally wired to your financial institution or plan
administrator on the next business day, but Galaxy reserves the right to send
sales proceeds within seven days if sending proceeds earlier could adversely
affect the Fund.
Galaxy may ask for any information it might reasonably need to make sure that
you've authorized a sale of shares.
Galaxy may close any account after 60 days' written notice if the value of the
account drops below $250 as a result of selling shares.
-12-
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund pays any dividends from net investment income annually. The Fund pays
any net capital gains at least once a year. It is expected that the Fund's
annual distributions will normally -- but not always -- consist primarily of
capital gains rather than ordinary income. Dividends and distributions are paid
in cash unless you tell your financial institution or plan administrator in
writing that you want to have dividends and distributions reinvested in
additional shares.
FEDERAL TAXES
The Fund contemplates declaring as dividends each year all or substantially all
of its taxable income, including its net capital gain (the excess of long-term
capital gain over short-term capital loss). Distributions attributable to the
net capital gain of the Fund will be taxable to you as long-term capital gain,
regardless of how long you have held your shares. Other Fund distributions
(including distributions attributable to short-term capital gains of the Fund)
will generally be taxable to you as ordinary income. You will be subject to
federal income tax on these distributions regardless of whether they are paid in
cash or reinvested in additional shares. You will be notified annually of the
tax status of distributions to you.
You should note that if you purchase shares just before a distribution, the
purchase price will reflect the amount of the upcoming distribution, but you
will be taxed on the entire amount of the distribution received, even though, as
an economic matter, the distribution simply constitutes a return of capital.
This is known as "buying into a dividend."
You will recognize taxable gain or loss on a sale or redemption of your shares,
including an exchange for shares of another Fund, based on the difference
between your tax basis in the shares and the amount you receive for them. (To
aid in computing your tax basis, you generally should retain your account
statements for the periods during which you held shares.) Generally, this gain
or loss will be long-term or short-term depending on whether your holding period
for the shares exceeds 12 months, except that any loss realized on shares held
for six months or less will be treated as a long-term capital loss to the extent
of any capital gain dividends that were received on the shares.
Dividends paid by the Fund to its corporate shareholders and that are
attributable to qualifying dividends the Fund receives from U.S. corporations
may be eligible, in the hands of the corporate shareholders, for the corporate
dividends-received deduction, subject to certain holding period requirements and
debt financing limitations.
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<PAGE>
It is expected that the Fund will be subject to foreign withholding taxes with
respect to dividends or interest received from sources in foreign countries. The
Fund may make an election to treat a proportionate amount of these taxes as
constituting a distribution to each shareholder, which would allow each
shareholder either (1) to credit this proportionate amount of taxes against U.S.
federal income tax liability or (2) to take this amount as an itemized
deduction.
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions,
redemptions and exchanges. State income taxes may not apply, however, to the
portions of the Fund's distributions, if any, that are attributable to interest
on U.S. Government securities.
MISCELLANEOUS
The foregoing is only a summary of certain tax considerations under current law,
which may be subject to change in the future. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.
-14-
<PAGE>
[Back Cover Page]
Where to find more information
You'll find more information about the Fund in the following documents:
ANNUAL AND SEMI-ANNUAL REPORTS
Galaxy's annual and semi-annual reports will contain more information about the
Fund and a discussion about the market conditions and investment strategies that
had a significant effect on the Fund's performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains detailed information about the Fund and its policies. By law,
it is incorporated by reference into (considered to be part of) this prospectus.
You can get a free copy of these documents, request other information about the
Fund and make shareholder inquiries by calling Galaxy at 1-877-BUY-GALAXY
(1-877-289-4252) or by writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
If you buy your shares through a financial institution, you may contact your
institution for more information.
You can write to the Securities and Exchange Commission (SEC) Public Reference
Section and ask them to mail you information about the Fund, including the SAI.
They'll charge you a fee for this service. You can also visit the SEC Public
Reference Room and copy the documents while you're there. For information about
the operation of the Public Reference Room, call the SEC.
Public Reference Section of the SEC
Washington, DC 20549-0102
1-202-942-8090.
Reports and other information about the Fund are also available on the EDGAR
Database on the SEC's Web site at http://www.sec.gov. Copies of this information
may also be obtained, after paying a duplicating fee, by electronic request to
the SEC's e-mail address at [email protected].
Galaxy's Investment Company Act File No. is 811-4636.
[Fleet assigned code]
<PAGE>
THE GALAXY FUND
STATEMENT OF ADDITIONAL INFORMATION
____________, 2000
GALAXY PAN ASIA FUND
RETAIL A SHARES, RETAIL B SHARES AND
TRUST SHARES
This Statement of Additional Information is not a prospectus. It relates to
the prospectuses for the Galaxy Pan Asia Fund (the "Fund") as listed below, as
they may be supplemented or revised from time to time (the "Prospectuses"). The
Prospectuses may be obtained, without charge, by writing:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
or by calling 1-877-BUY-GALAXY (1-877-289-4252)
CURRENT PROSPECTUSES
- - Prospectus for Retail A Shares and Retail B Shares of the Fund dated
___________, 2000
- - Prospectus for Trust Shares of the Fund dated ___________, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION....................................................................1
DESCRIPTION OF GALAXY AND ITS SHARES...................................................1
INVESTMENT STRATEGIES, POLICIES AND RISKS..............................................4
Special Risk Considerations...................................................5
Foreign Securities............................................................5
Other Investment Policies and Risk Considerations.............................6
Ratings.......................................................................6
U.S. Government Obligations and Money Market Instruments......................6
Variable and Floating Rate Obligations........................................8
Repurchase and Reverse Repurchase Agreements..................................8
Securities Lending............................................................9
Investment Company Securities................................................10
Derivative Securities........................................................11
American, European and Global Depository Receipts............................17
Convertible Securities.......................................................17
When-Issued Transactions.....................................................18
Restricted and Illiquid Securities...........................................19
Portfolio Turnover...........................................................19
INVESTMENT LIMITATIONS................................................................20
VALUATION OF PORTFOLIO SECURITIES.....................................................22
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION........................................23
Purchases of Retail A Shares and Retail B Shares.............................23
General......................................................................23
Customers of Institutions....................................................24
Applicable Sales Charge - Retail A Shares....................................24
Computation of Offering Price - Retail A Shares..............................26
Quantity Discounts...........................................................26
Applicable Sales Charge - Retail B Shares....................................28
Characteristics of Retail A Shares and Retail B Shares.......................29
Factors to Consider When Selecting Retail A Shares or Retail B Shares........30
Purchases of Trust Shares....................................................31
Other Purchase Information...................................................32
Redemption of Retail A Shares, Retail B Shares and Trust Shares..............32
INVESTOR PROGRAMS-RETAIL A SHARES AND RETAIL B SHARES.................................32
Exchange Privilege...........................................................32
Retirement Plans.............................................................33
Automatic Investment Program and Systematic Withdrawal Plan..................34
Payroll Deduction Program....................................................35
College Investment Program...................................................35
Direct Deposit Program.......................................................35
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<PAGE>
TAXES.................................................................................35
Taxation of Certain Financial Instruments and Investments....................36
TRUSTEES AND OFFICERS.................................................................36
Shareholder and Trustee Liability............................................40
INVESTMENT ADVISER AND SUB-ADVISER....................................................41
ADMINISTRATOR.........................................................................42
CUSTODIAN AND TRANSFER AGENT..........................................................43
EXPENSES .............................................................................44
PORTFOLIO TRANSACTIONS................................................................45
DISTRIBUTION PLANS....................................................................46
RETAIL A SHARES PLAN..................................................................46
RETAIL B SHARES PLAN..................................................................46
BOTH DISTRIBUTION PLANS...............................................................47
DISTRIBUTOR...........................................................................48
AUDITORS..............................................................................48
COUNSEL...............................................................................48
CODES OF ETHICS.......................................................................48
PERFORMANCE AND YIELD INFORMATION.....................................................49
Performance Reporting........................................................51
MISCELLANEOUS.........................................................................52
APPENDIX A...........................................................................A-1
</TABLE>
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<PAGE>
GENERAL INFORMATION
This Statement of Additional Information should be read in conjunction with
a current Prospectus. This Statement of Additional Information relates to the
Prospectuses for Trust Shares, Retail A Shares and Retail B Shares of the Galaxy
Pan Asia Fund (the "Fund"). This Statement of Additional Information is
incorporated by reference in its entirety into the Prospectuses. No investment
in shares of the Fund should be made without reading a Prospectus.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, FLEETBOSTON FINANCIAL CORPORATION OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., OR ANY FLEET BANK. SHARES OF THE FUND ARE NOT
FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS OR OTHER FACTORS SO THAT SHARES
OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED.
DESCRIPTION OF GALAXY AND ITS SHARES
The Galaxy Fund ("Galaxy") is an open-end management investment company
currently offering shares of beneficial interest in thirty-seven investment
portfolios: Money Market Fund, Government Fund, U.S. Treasury Fund, Tax-Exempt
Fund, Connecticut Municipal Money Market Fund, Massachusetts Municipal Money
Market Fund, Institutional Money Market Fund, Institutional Government Money
Market Fund, Institutional Treasury Money Market Fund, Prime Reserves,
Government Reserves, Tax-Exempt Reserves, Equity Value Fund, Equity Growth Fund,
Growth Fund II, Equity Income Fund, International Equity Fund, Pan Asia Fund,
Small Company Equity Fund, Asset Allocation Fund, Small Cap Value Fund, Growth
and Income Fund, Strategic Equity Fund, Short-Term Bond Fund, Intermediate
Government Income Fund, High Quality Bond Fund, Corporate Bond Fund, Tax-Exempt
Bond Fund, Intermediate Tax-Exempt Bond Fund, New Jersey Municipal Bond Fund,
New York Municipal Bond Fund, Connecticut Municipal Bond Fund, Connecticut
Intermediate Municipal Bond Fund, Massachusetts Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond Fund, Rhode Island Municipal Bond Fund
and Florida Municipal Bond Fund. Galaxy is also authorized to issue shares of
beneficial interest in two additional investment portfolios, the MidCap Equity
Fund and the New York Municipal Money Market Fund. As of the date of this
Statement of Additional Information, however, the MidCap Equity Fund and the New
York Municipal Money Market Fund had not commenced investment operations.
Galaxy was organized as a Massachusetts business trust on March 31,
1986. Galaxy's Declaration of Trust authorizes the Board of Trustees to
classify or reclassify any unissued shares into one or more classes or series
of shares by setting or changing in any one or more respects their
respective preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption. Pursuant to such authority, the Board of Trustees
has authorized the issuance of an unlimited number of shares in each of the
series in the Fund as follows: Class NN - Series 1 shares (Trust Shares),
Class NN - Series 2 shares (Retail A Shares), and Class NN - Series 3 shares
(Retail B Shares), each series representing interests in the Pan Asia Fund.
The Fund is classified as a diversified company under the Investment Company
Act of 1940, as amended (the "1940 Act").
<PAGE>
Each share of Galaxy (irrespective of series designation) has a par value
of $.001 per share, represents an equal proportionate interest in the related
investment portfolio with other shares of the same class (irrespective of series
designation), and is entitled to such dividends and distributions out of the
income earned on the assets belonging to such investment portfolio as are
declared in the discretion of Galaxy's Board of Trustees.
Shares have no preemptive rights and only such conversion or exchange
rights as the Board of Trustees may grant in its discretion. When issued for
payment as described in the Prospectuses, shares will be fully paid and
non-assessable. Each series of shares in the Fund (i.e., Retail A Shares, Retail
B Shares and Trust Shares) bear pro rata the same expenses and are entitled
equally to the Fund's dividends and distributions except as follows. Each series
will bear the expenses of any distribution and/or shareholder servicing plans
applicable to such series. For example, as described below, holders of Retail A
Shares will bear the expenses of the Distribution Plan for Retail A Shares and
holders of Retail B Shares will bear the expenses of the Distribution and
Services Plan for Retail B Shares. In addition, each series may incur differing
transfer agency fees and may have differing sales charges. Standardized yield
and total return quotations are computed separately for each series of shares.
The differences in expenses paid by the respective series will affect their
performance. See "Distribution Plan" and "Distribution and Services Plan" below.
In the event of a liquidation or dissolution of Galaxy or the Fund,
shareholders of the Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based upon
the relative asset values of the Fund and Galaxy's other portfolios, of any
general assets of Galaxy not belonging to any particular portfolio, which are
available for distribution. Shareholders of the Fund are entitled to participate
in the net distributable assets of the Fund based on the number of shares of the
Fund that are held by each shareholder, except that each series of the Fund
would be solely responsible for the Fund's payments under any distribution
and/or shareholder servicing plan applicable to such series.
-2-
<PAGE>
Holders of all outstanding shares of the Fund will vote together in the
aggregate and not by series on all matters, except that only shares of a
particular series of the Fund will be entitled to vote on matters submitted to a
vote of shareholders pertaining to any distribution and/or shareholder servicing
plan for such series (e.g., only Retail A Shares of the Fund will be entitled to
vote on matters submitted to a vote of shareholders pertaining to Galaxy's
Distribution Plan for Retail A Shares and only Retail B Shares of the Fund will
be entitled to vote on matters submitted to a vote of shareholders pertaining to
Galaxy's Distribution and Services Plan for Retail B Shares). Further,
shareholders of the Fund, as well as those of any other investment portfolio now
or hereafter offered by Galaxy, will vote together in the aggregate and not
separately on a portfolio-by-portfolio basis, except as otherwise required by
law or when permitted by the Board of Trustees. Rule 18f-2 under the 1940 Act
provides that any matter required to be submitted to the holders of the
outstanding voting securities of an investment company such as Galaxy shall not
be deemed to have been effectively acted upon unless approved by the holders of
a majority of the outstanding shares of the portfolio affected by the matter.
The Fund is deemed to be affected by a matter unless it is clear that the
interests of each portfolio in the matter are substantially identical or that
the matter does not affect any interest of the Fund. Under the Rule, the
approval of an investment advisory agreement or any change in an investment
objective or a fundamental investment policy would be effectively acted upon
with respect to the Fund only if approved by a majority of the outstanding
shares of the Fund (irrespective of series designation). However, the Rule also
provides that the ratification of the appointment of independent public
accountants, the approval of principal underwriting contracts, and the election
of trustees may be effectively acted upon by shareholders of Galaxy voting
without regard to class or series.
Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and will vote in
the aggregate and not by class or series, except as otherwise expressly required
by law or when the Board of Trustees determines that the matter to be voted on
affects only the interests of shareholders of a particular class or series.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
in the aggregate of Galaxy's outstanding shares may elect all of the trustees,
irrespective of the votes of other shareholders.
Galaxy is not required under Massachusetts law to hold annual shareholder
meetings and intends to do so only if required by the 1940 Act. Shareholders
have the right to remove Trustees. Galaxy's Declaration of Trust provides that a
meeting of shareholders shall be called by the Board of Trustees upon a written
request of shareholders owning at least 10% of the outstanding shares of Galaxy
entitled to vote.
Galaxy's Declaration of Trust authorizes the Board of Trustees, without
shareholder approval (unless otherwise required by applicable law), to (a) sell
and convey the assets of the Fund to another management investment company for
consideration which may include securities issued by the purchaser and, in
connection therewith, to cause all outstanding shares of the Fund to be redeemed
at a price which is equal to their net asset value and which may be paid in cash
or by distribution of the securities or other consideration received from the
sale and conveyance; (b) sell and convert the Fund's assets into money and, in
connection therewith, to
-3-
<PAGE>
cause all outstanding shares of the Fund to be redeemed at their net asset
value; or (c) combine the assets belonging to the Fund with the assets belonging
to another portfolio of Galaxy and, in connection therewith, to cause all
outstanding shares of the Fund to be redeemed at their net asset value or
converted into shares of another class of Galaxy's shares at the net asset
value. In the event that shares are redeemed in cash at their net asset value, a
shareholder may receive in payment for such shares, due to changes in the market
prices of the Fund's portfolio securities, an amount that is more or less than
the original investment. The exercise of such authority by the Board of Trustees
will be subject to the provisions of the 1940 Act, and the Board of Trustees
will not take any action described in this paragraph unless the proposed action
has been disclosed in writing to the Fund's shareholders at least 30 days prior
thereto.
INVESTMENT STRATEGIES, POLICIES AND RISKS
Fleet Investment Advisors Inc. ("Fleet"), the Fund's investment adviser,
and UOB Global Capital LLC ("UOBGC"), the Fund's sub-adviser, will use their
best efforts to achieve the Fund's investment objective, although such
achievement cannot be assured. The investment objective of the Fund as described
in its Prospectuses may not be changed without the approval of the holders of
a majority of its outstanding shares (as defined under "Miscellaneous").
Except as noted below under "Investment Limitations," the Fund's investment
policies may be changed without shareholder approval. An investor should not
consider an investment in the Fund to be a complete investment program. The
following investment strategies, policies and risks supplement those set
forth in the Prospectuses.
The Fund invests in common stock and may invest in other securities with
equity characteristics, consisting of trust or limited partnership interests,
preferred stock, rights and warrants. The Fund may also invest in convertible
securities, consisting of debt securities or preferred stock that may be
converted into common stock or that carry the right to purchase common stock.
See "Other Investment Policies and Risk Considerations -- Convertible
Securities" below. The Fund invests in securities listed on foreign or domestic
securities exchanges and securities traded in foreign or domestic
over-the-counter markets, and may invest in unlisted securities.
Securities issued in certain countries are currently accessible to the Fund
only through investment in other investment companies that are specifically
authorized to invest in such securities. The limitations on the Fund's
investment in other investment companies are described below under "Other
Investment Policies and Risk Considerations -- Investment Company Securities."
Subject to applicable securities regulations, the Fund may, for the
purpose of hedging its portfolio, purchase and write covered call options on
specific portfolio securities and may purchase and write put and call options
on foreign stock indexes listed on foreign and domestic stock exchanges. The
Fund may also enter into foreign currency exchange contracts to hedge against
currency risk. In addition, the Fund may invest up to 100% of its total
assets in securities of foreign issuers in the form of ADRs, EDRs or GDRs as
described under "Other Investment
-4-
<PAGE>
Policies and Risk Considerations -- American, European and Global Depository
Receipts." Furthermore, the Fund may purchase and sell securities on a
when-issued basis.
See "Other Investment Policies and Risk Considerations" below regarding
additional investment policies of the Fund.
SPECIAL RISK CONSIDERATIONS
FOREIGN SECURITIES
Investments in foreign securities may involve higher costs than investments
in U.S. securities, including higher transaction costs, as well as the
imposition of additional taxes by foreign governments. In addition, foreign
investments may include additional risks associated with currency exchange
rates, less complete financial information about the issuers, less market
liquidity, and political instability. Future political and economic
developments, the possible imposition of withholding taxes on interest income,
the possible seizure or nationalization of foreign holdings, the possible
establishment of exchange controls, or the adoption of other governmental
restrictions, might adversely affect the payment of dividends or principal and
interest on foreign obligations.
Although the Fund may invest in securities denominated in foreign
currencies, the Fund values its securities and other assets in U.S. dollars. As
a result, the net asset value of the Fund's shares may fluctuate with U.S.
dollar exchange rates as well as with price changes of the Fund's securities in
the various local markets and currencies. Thus, an increase in the value of the
U.S. dollar compared to the currencies in which the Fund makes its investments
could reduce the effect of increases and magnify the effect of decreases in the
price of the Fund's securities in their local markets. Conversely, a decrease in
the value of the U.S. dollar will have the opposite effect of magnifying the
effect of increases and reducing the effect of decreases in the prices of the
Fund's securities in their local markets. In addition to favorable and
unfavorable currency exchange rate developments, the Fund is subject to the
possible imposition of exchange control regulations or freezes on convertibility
of currency.
Certain of the risks associated with investments in foreign securities are
heightened with respect to investments in countries with emerging economies or
emerging securities markets. The risks of expropriation, nationalization and
social, political and economic instability are greater in those countries than
in more developed capital markets.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Investment methods described in the Prospectuses and this Statement of
Additional Information are among those which the Fund has the power to utilize.
Some may be employed on a regular basis; others may not be used at all.
Accordingly, reference to any particular method or technique carries no
implication that it will be utilized or, if it is, that it will be successful.
RATINGS
The Fund may only purchase debt securities rated "A" or higher by
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings
Group ("S&P") or, if unrated, determined by Fleet or UOBGC to be of
comparable quality. Issuers of commercial paper, bank obligations or
repurchase agreements in which the Fund invests must have, at the time of
investment, outstanding debt rated A or higher by Moody's or S&P, or, if they
are not rated, the instrument purchased must be determined to be of
comparable quality.
Subsequent to its purchase by the Fund, an issue of securities may cease
to be rated or its rating may be reduced below the minimum rating required
for purchase by the Fund. The Board of Trustees or Fleet or UOBGC, as the case
may be, may determine that it is appropriate for the Fund to continue to hold
the obligation if retention is in accordance with the interests of the Fund
and applicable regulations of the Securities and Exchange Commission ("SEC").
However, the Fund will sell promptly any security that is not rated investment
grade by either S&P or Moody's if such securities exceed 5% of the Fund's net
assets.
U.S. GOVERNMENT OBLIGATIONS AND MONEY MARKET INSTRUMENTS
The Fund may, in accordance with its investment policies, invest from time
to time in obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities and in other money market instruments, including but not
limited to bank obligations, commercial paper and corporate bonds with remaining
maturities of 397 days or less.
Examples of the types of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (hereinafter, "U.S. Government
obligations") that may be held by the Fund include, without limitation, direct
obligations of the U.S. Treasury, and securities issued or guaranteed by the
Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land
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Banks, Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration,
Government National Mortgage Association, Federal National Mortgage Association,
General Services Administration, Central Bank for Cooperatives, Federal Home
Loan Mortgage Corporation, Federal Intermediate Credit Banks, Resolution Trust
Corporation and Maritime Administration.
U.S. Treasury securities differ only in their interest rates, maturities
and time of issuance: Treasury Bills have initial maturities of one year or
less; Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of more than ten years. Obligations of
certain agencies and instrumentalities of the U.S. Government, such as those of
the Government National Mortgage Association, are supported by the full faith
and credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, are supported by the right of the issuer to borrow from the Treasury;
others, such as those of the Federal National Mortgage Association, are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations; still others, such as those of the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.
No assurance can be given that the U.S. Government would provide financial
support to U.S. Government-sponsored instrumentalities if it is not obligated to
do so by law. Some of these instruments may be variable or floating rate
instruments.
Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits issued for a definite period of time
and earning a specified return by a U.S. bank which is a member of the Federal
Reserve System or is insured by the Federal Deposit Insurance Corporation
("FDIC"), or by a savings and loan association or savings bank which is insured
by the FDIC. Bank obligations also include U.S. dollar-denominated obligations
of foreign branches of U.S. banks or of U.S. branches of foreign banks, all of
the same type as domestic bank obligations. Investments in bank obligations are
limited to the obligations of financial institutions having more than $1 billion
in total assets at the time of purchase. Time deposits with a maturity longer
than seven days or that do not provide for payment within seven days after
notice will be limited to 10% of the Fund's net assets. Investments by the Fund
in non-negotiable time deposits are limited to no more than 5% of the Fund's
total assets at the time of purchase.
Domestic and foreign banks are subject to extensive but different
government regulation which may limit the amount and types of their loans and
the interest rates that may be charged. In addition, the profitability of the
banking industry is largely dependent upon the availability and cost of funds to
finance lending operations and the quality of underlying bank assets.
Investments in obligations of foreign branches of U.S. banks and U.S.
branches of foreign banks may subject the Fund to additional risks, including
future political and economic developments, the possible imposition of
withholding taxes on interest income, possible seizure or nationalization of
foreign deposits, the possible establishment of exchange controls, or the
adoption of foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. In addition, foreign
branches of U.S. banks and U.S. branches of foreign banks may be subject to less
stringent reserve requirements and to different
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accounting, auditing, reporting and recordkeeping standards than those
applicable to domestic branches of U.S. banks. Such investments may also subject
the Fund to investment risks similar to those accompanying direct investments in
foreign securities. See "Special Risk Considerations -- Foreign Securities." The
Fund will invest in the obligations of U.S. branches of foreign banks or foreign
branches of U.S. banks only when Fleet and/or UOBGC believe that the credit risk
with respect to the instrument is minimal.
Commercial paper may include variable and floating rate instruments which
are unsecured instruments that permit the indebtedness thereunder to vary.
Variable rate instruments provide for periodic adjustments in the interest rate.
Floating rate instruments provide for automatic adjustment of the interest rate
whenever some other specified interest rate changes. Some variable and floating
rate obligations are direct lending arrangements between the purchaser and the
issuer and there may be no active secondary market. However, in the case of
variable and floating rate obligations with a demand feature, the Fund may
demand payment of principal and accrued interest at a time specified in the
instrument or may resell the instrument to a third party. In the event that an
issuer of a variable or floating rate obligation defaulted on its payment
obligation, the Fund might be unable to dispose of the note because of the
absence of a secondary market and could, for this or other reasons, suffer a
loss to the extent of the default. The Fund may also purchase Rule 144A
securities. See "Investment Limitations" below.
VARIABLE AND FLOATING RATE OBLIGATIONS
The Fund may purchase variable and floating rate instruments in accordance
with its investment objectives and policies as described in the Prospectuses and
this Statement of Additional Information. If such an instrument is not rated,
Fleet or UOBGC must determine that such instrument is comparable to rated
instruments eligible for purchase by the Fund and will consider the earning
power, cash flows and other liquidity ratios of the issuers and guarantors of
such instruments and will continuously monitor their financial status in order
to meet payment on demand.
In determining average weighted portfolio maturity, an instrument will
usually be deemed to have a maturity equal to the longer of the period remaining
until the next regularly scheduled interest rate adjustment or the time the Fund
can receive payment of principal as specified in the instrument. Instruments
which are U.S. Government obligations and certain variable rate instruments
having a nominal maturity of 397 days or less when purchased by the Fund,
however, will be deemed to have a maturity equal to the period remaining until
the next interest rate adjustment.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
The Fund may purchase portfolio securities subject to the seller's
agreement to repurchase them at a mutually specified date and price ("repurchase
agreements"). Repurchase agreements will be entered into only with financial
institutions such as banks and broker/dealers which are deemed to be
creditworthy by Fleet and/or UOBGC. The Fund will not enter into repurchase
agreements with Fleet or UOBGC or any of their affiliates. Unless a repurchase
agreement has a
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remaining maturity of seven days or less or may be terminated on demand upon
notice of seven days or less, the repurchase agreement will be considered an
illiquid security and will be subject to the 15% limit described below in
Investment Limitation No. 3 under "Investment Limitations."
The seller under a repurchase agreement will be required to maintain the
value of the securities which are subject to the agreement and held by the Fund
at not less than the agreed upon repurchase price. If the seller defaulted on
its repurchase obligation, the Fund would suffer a loss to the extent that the
proceeds from a sale of the underlying securities (including accrued interest)
were less than the repurchase price (including accrued interest) under the
agreement. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be delayed
pending court action.
The repurchase price under a repurchase agreement generally equals the
price paid by the Fund plus interest negotiated on the basis of current
short-term rates (which may be more or less than the rate on the securities
underlying the repurchase agreement). Securities subject to a repurchase
agreement will be held by the Fund's custodian or sub-custodian in a segregated
account or in the Federal Reserve/Treasury book-entry system. Repurchase
agreements are considered to be loans by the Fund under the 1940 Act.
The Fund may also borrow funds for temporary purposes by selling portfolio
securities to financial institutions such as banks and broker/dealers and
agreeing to repurchase them at a mutually specified date and price ("reverse
repurchase agreements"). Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Fund may decline below the repurchase
price. The Fund would pay interest on amounts obtained pursuant to a reverse
repurchase agreement. Whenever the Fund enters into a reverse repurchase
agreement, it will place in a segregated custodial account liquid assets such as
cash or liquid portfolio securities equal to the repurchase price (including
accrued interest). The Fund will monitor the account to ensure such equivalent
value is maintained. Reverse repurchase agreements are considered to be
borrowings by the Fund under the 1940 Act.
SECURITIES LENDING
The Fund may lend its portfolio securities to financial institutions such
as banks and broker/dealers in accordance with the investment limitations
described below. Such loans would involve risks of delay in receiving additional
collateral or in recovering the securities loaned or even loss of rights in the
collateral, should the borrower of the securities fail financially. Any
portfolio securities purchased with cash collateral would also be subject to
possible depreciation. The Fund would continue to accrue interest on the
securities loaned and would also earn income on the loans. Any cash collateral
received by the Fund would be invested in high quality, short-term "money
market" instruments. Loans will generally be short-term, will be made only to
borrowers deemed by Fleet and/or UOBGC to be of good standing and only when, in
Fleet's and/or UOBGC's judgment, the income to be earned from the loan justifies
the attendant risks. The Fund currently intends to limit the lending of its
portfolio securities so that, at any given time, securities loaned by the Fund
represent not more than one-third of the value of its total assets.
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INVESTMENT COMPANY SECURITIES
The Fund may invest in securities issued by other investment companies
which invest in high quality, short-term debt securities and which determine
their net asset value per share based on the amortized cost or penny-rounding
method. The Fund may also purchase shares of investment companies investing
primarily in foreign securities, including so-called "country funds." Country
funds have portfolios consisting primarily of securities of issuers located in
one foreign country. Investments in other investment companies will cause the
Fund (and, indirectly, the Fund's shareholders) to bear proportionately the
costs incurred in connection with the investment companies' operations.
Securities of other investment companies will be acquired by the Fund within the
limits prescribed by the 1940 Act. The Fund currently intends to limit its
investments so that, as determined immediately after a securities purchase is
made: (a) not more than 5% of the value of its total assets will be invested in
the securities of any one investment company; (b) not more than 10% of the value
of its total assets will be invested in the aggregate in securities of other
investment companies as a group; (c) not more than 3% of the outstanding voting
stock of any one investment company will be owned by the Fund; and (d) not more
than 10% of the outstanding voting stock of any one closed-end investment
company will be owned in the aggregate by the Fund, other investment portfolios
of Galaxy, or any other investment companies advised by Fleet or UOBGC.
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DERIVATIVE SECURITIES
The Fund may from time to time, in accordance with its investment policies,
purchase certain "derivative" securities. Derivative securities are instruments
that derive their value from the performance of underlying assets, interest or
currency exchange rates, or indices, and include, but are not limited to, put
and call options, stock index futures and options, indexed securities and swap
agreements, foreign currency exchange contracts and certain asset-backed and
mortgage-backed securities.
Derivative securities present, to varying degrees, market risk that the
performance of the underlying assets, interest or exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
security will decline more than the assets, rates or indices on which it is
based; liquidity risk that the Fund will be unable to sell a derivative security
when it wants to because of lack of market depth or market disruption; pricing
risk that the value of a derivative security will not correlate exactly to the
value of the underlying assets, rates or indices on which it is based; and
operations risk that loss will occur as a result of inadequate systems and
controls, human error or otherwise. Some derivative securities are more complex
than others, and for those instruments that have been developed recently, data
are lacking regarding their actual performance over complete market cycles.
Fleet and/or UOBGC will evaluate the risks presented by the derivative
securities purchased by the Fund, and will determine, in connection with
their day-to-day management of the Fund, how such securities will be used in
furtherance of the Fund's investment objectives. It is possible, however,
that Fleet's and/or UOBGC's evaluations will prove to be inaccurate or
incomplete and, even when accurate and complete, it is possible that the Fund
will, because of the risks discussed above, incur loss as a result of their
investments in derivative securities.
WRITING COVERED OPTIONS. The Fund may write (sell) covered call and put
options on any securities in which it may invest. A call option written by the
Fund obligates it to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the Fund are covered, which means that the
Fund will own the securities subject to the option as long as the option is
outstanding or the Fund will use the other methods described below. The Fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the Fund may
forego the opportunity to profit from an increase in the market price of the
underlying security.
A put option written by the Fund would obligate the Fund to purchase
specified securities from the option holder at a specified price if the option
is exercised at any time before the expiration date. All put options written by
the Fund would be covered, which means that the Fund will segregate cash or
liquid assets with a value at least equal to the exercise price of the put
option or will use the other methods described below. The purpose of writing
such options is to generate additional income for the Fund. However, in return
for the option premium, the Fund accepts the risk that it may be required to
purchase the underlying securities at a price in excess of the securities'
market value at the time of purchase.
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Call and put options written by the Fund will also be considered to be
covered to the extent that the Fund's liabilities under such options are wholly
or partially offset by its rights under call and put options purchased by the
Fund or by an offsetting forward contract which, by virtue of its exercise price
or otherwise, reduces a Fund's net exposure on its written option position.
The Fund may also write (sell) covered call and put options on any
securities index consisting of securities in which it may invest. Options on
securities indices are similar to options on securities, except that the
exercise of securities index options requires cash payments and does not involve
the actual purchase or sale of securities. In addition, securities index options
are designed to reflect price fluctuations in a group of securities or segment
of the securities market rather than price fluctuations in a single security.
The Fund may cover call options on a securities index by owning securities
whose price changes are expected to be similar to those of the underlying index,
or by having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration which has
been segregated by the Fund) upon conversion or exchange of other securities in
its portfolio. The Fund may cover call and put options on a securities index by
segregating cash or liquid assets with a value equal to the exercise price.
The Fund may terminate its obligations under an exchange traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
PURCHASING OPTIONS. The Fund may purchase put and call options on any
securities in which it may invest or options on any securities index composed of
securities in which it may invest. The Fund would also be able to enter into
closing sale transactions in order to realize gains or minimize losses on
options it had purchased.
The Fund may purchase call options in anticipation of an increase in the
market value of securities of the type in which it may invest. The purchase of a
call option would entitle the Fund, in return for the premium paid, to purchase
specified securities at a specified price during the option period. The Fund
would ordinarily realize a gain if, during the option period, the value of such
securities exceeded the sum of the exercise price, the premium paid and
transaction costs; otherwise the Fund would realize either no gain or a loss on
the purchase of the call option.
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The Fund may purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the Fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the Fund's securities. Put
options may also be purchased by the Fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
Fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the Fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
The Fund would purchase put and call options on securities indices for the
same purposes as it would purchase options on individual securities. For a
description of options on securities indices, see "Writing Covered Options"
above.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS. There is no assurance that a
liquid secondary market on an options exchange will exist for any particular
exchange-traded option or at any particular time. If the Fund is unable to
effect a closing purchase transaction with respect to covered options it has
written, the Fund will not be able to sell the underlying securities or dispose
of segregated assets until the options expire or are exercised. Similarly, if
the Fund is unable to effect a closing sale transaction with respect to options
it has purchased, it will have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange;
(v) the facilities of an exchange or the Options Clearing Corporation may not at
all times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that exchange that had been issued by the Options Clearing
Corporation as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.
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The Fund may purchase and sell both options that are traded on U.S. and
foreign exchanges and options traded over-the-counter with broker-dealers who
make markets in these options. The ability to terminate over-the-counter options
is more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations.
Transactions by the Fund in options on securities and indices will be
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group of investors
acting in concert. Thus, the number of options which the Fund may write or
purchase may be affected by options written or purchased by other investment
advisory clients of Fleet and/or UOBGC. An exchange, board of trade or other
trading facility may order the liquidation of positions found to be in excess of
these limits, and it may impose certain other sanctions.
The writing and purchase of options is a highly specialized activity
which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. The use of
options to seek to increase total return involves the risk of loss if Fleet
and/or UOBGC is incorrect in its expectation of fluctuations in securities
prices or interest rates. The successful use of options for hedging purposes
also depends in part on the ability of Fleet and/or UOBGC to manage future
price fluctuations and the degree of correlation between the options and
securities markets. If Fleet and/or UOBGC is incorrect in its expectation of
changes in securities prices or determination of the correlation between the
securities indices on which options are written and purchased and the
securities in the Fund's investment portfolio, the investment performance of
the Fund will be less favorable than it would have been in the absence of
such options transactions. The writing of options could increase the Fund's
portfolio turnover rate and, therefore, associated brokerage commissions or
spreads.
OPTIONS ON FOREIGN STOCK INDEXES. The Fund may, for the purpose of
hedging its portfolio, subject to applicable securities regulations, purchase
and write put and call options on foreign stock indexes listed on foreign and
domestic stock exchanges. A stock index fluctuates with changes in the market
values of the stocks included in the index. Examples of foreign stock indexes
are SIMEX and Topix.
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Options on stock indexes are generally similar to options on stock except
that the delivery requirements are different. Instead of giving the right to
take or make delivery of stock at a specified price, an option on a stock index
gives the holder the right to receive a cash "exercise settlement amount" equal
to (a) the amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied by (b)
a fixed "index multiplier." Receipt of this cash amount will depend upon the
closing level of the stock index upon which the option is based being greater
than, in the case of a call, or less than, in the case of a put, the exercise
price of the option. The writer of the option is obligated, in return for the
premium received, to make delivery of this amount. The writer may offset its
position in stock index options prior to expiration by entering into a closing
transaction on an exchange or the option may expire unexercised.
The effectiveness of purchasing or writing stock index options as a
hedging technique will depend upon the extent to which price movements in the
portion of the securities portfolio of the Fund correlate with price
movements of the stock index selected. Because the value of an index option
depends upon movements in the level of the index rather than the price of a
particular stock, whether the Fund realizes a gain or loss from the purchase
or writing of options on an index is dependent upon movements in the level of
stock prices in the stock market generally or, in the case of certain
indexes, in an industry or market segment, rather than movements in the price
of a particular stock. Accordingly, successful use by the Fund of options on
stock indexes will be subject to Fleet's and/or UOBGC's ability to predict
correctly movements in the direction of the stock market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks. There can be no
assurance that such judgment will be accurate or that the use of these
portfolio strategies will be successful. The Fund will engage in stock index
options transactions that are determined to be consistent with its efforts to
control risk.
When the Fund writes an option on a stock index, the Fund will establish a
segregated account with its custodian or with a foreign sub-custodian in which
the Fund will deposit cash or other liquid assets in an amount equal to the
market value of the option, and will maintain the account while the option is
open.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the Fund may buy and sell
securities denominated in currencies other than the U.S. dollar, and may receive
interest, dividends and sale proceeds in currencies other than the U.S. dollar,
the Fund from time to time may enter into foreign currency exchange transactions
to convert the U.S. dollar to foreign currencies, to convert foreign currencies
to the U.S. dollar and to convert foreign currencies to other foreign
currencies. The Fund either enters into these transactions on a spot (I.E.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or uses forward contracts to purchase or sell foreign currencies. Forward
foreign currency exchange contracts are agreements to exchange one currency for
another -- for example, to exchange a certain amount of U.S. dollars for a
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certain amount of Japanese yen -- at a future date, which may be any fixed
number of days from the date of the contract, and at a specified price.
Typically, the other party to a currency exchange contract will be a commercial
bank or other financial institution.
Forward foreign currency exchange contracts also allow the Fund to hedge
the currency risk of portfolio securities denominated in a foreign currency.
This technique permits the assessment of the merits of a security to be
considered separately from the currency risk. By separating the asset and the
currency decision, it is possible to focus on the opportunities presented by the
security apart from the currency risk. Although forward foreign currency
exchange contracts are of short duration, generally between one and twelve
months, such contracts are rolled over in a manner consistent with a more
long-term currency decision. Because there is a risk of loss to the Fund if the
other party does not complete the transaction, forward foreign currency exchange
contracts will be entered into only with parties approved by Galaxy's Board of
Trustees.
The Fund may maintain "short" positions in forward foreign currency
exchange transactions, which would involve the Fund's agreeing to exchange
currency that it currently does not own for another currency -- for example, to
exchange an amount of Japanese yen that it does not own for a certain amount of
U.S. dollars -- at a future date and at a specified price in anticipation of a
decline in the value of the currency sold short relative to the currency that
the Fund has contracted to receive in the exchange. In order to ensure that the
short position is not used to achieve leverage with respect to the Fund's
investments, the Fund will establish with its custodian a segregated account
consisting of cash or other liquid assets equal in value to the fluctuating
market value of the currency as to which the short position is being maintained.
The value of the securities in the segregated account will be adjusted at least
daily to reflect changes in the market value of the short position.
Forward foreign currency exchange contracts establish an exchange rate at a
future date. These contracts are transferable in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward foreign currency exchange contract generally has no deposit
requirement and is traded at a net price without commission. Neither spot
transactions nor forward foreign currency exchange contracts eliminate
fluctuations in the prices of the Fund's portfolio securities or in foreign
exchange rates, or prevent loss if the prices of these securities should
decline.
The Fund may enter into foreign currency hedging transactions in an attempt
to protect against changes in foreign currency exchange rates between the trade
and settlement dates of specific securities transactions or changes in foreign
currency exchange rates that would adversely affect a portfolio position or an
anticipated portfolio position. Since consideration of the prospect for currency
parities will be incorporated into the Fund's long-term investment decisions,
the Fund will not routinely enter into foreign currency hedging transactions
with respect to portfolio security transactions; however, it is important to
have the flexibility to enter into foreign currency hedging transactions when it
is determined that the transactions would be in the Fund's best interest.
Although these transactions tend to minimize the risk of loss due to a decline
in the value of the hedged currency, at the same time they tend to limit any
potential gain
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that might be realized should the value of the hedged currency increase. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible because the future value of these
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain.
AMERICAN, EUROPEAN AND GLOBAL DEPOSITORY RECEIPTS
The Fund may invest in ADRs, EDRs and GDRs. ADRs are receipts issued in
registered form by a U.S. bank or trust company evidencing ownership of
underlying securities issued by a foreign issuer. EDRs are receipts issued in
Europe typically by non-U.S. banks or trust companies and foreign branches of
U.S. banks that evidence ownership of foreign or U.S. securities. GDRs are
receipts structured similarly to EDRs and are marketed globally. ADRs may be
listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs are designed for use in European exchange and
over-the-counter markets. GDRs are designed for trading in non-U.S. securities
markets. ADRs, EDRs and GDRs traded in the over-the-counter market which do not
have an active or substantial secondary market will be considered illiquid and
therefore will be subject to the Fund's limitations with respect to such
securities. If the Fund invests in an unsponsored ADR, EDR or GDR, there may be
less information available to the Fund concerning the issuer of the securities
underlying the unsponsored ADR, EDR or GDR than is available for an issuer of
securities underlying a sponsored ADR, EDR or GDR. ADR prices are denominated in
U.S. dollars although the underlying securities are denominated in a foreign
currency. Investments in ADRs, EDRs and GDRs involve risks similar to those
accompanying direct investments in foreign securities. Certain of these risks
are described above under "Special Risk Considerations -- Foreign Securities."
CONVERTIBLE SECURITIES
The Fund may from time to time, in accordance with its investment policies,
invest in convertible securities. Convertible securities are fixed income
securities which may be exchanged or converted into a predetermined number of
shares of the issuer's underlying common stock at the option of the holder
during a specified time period. Convertible securities may take the form of
convertible preferred stock, convertible bonds or debentures, units consisting
of "usable" bonds and warrants or a combination of the features of several of
these securities.
Convertible bonds and convertible preferred stocks generally retain the
investment characteristics of fixed income securities until they have been
converted but also react to movements in the underlying equity securities. The
holder is entitled to receive the fixed income of a bond or the dividend
preference of a preferred stock until the holder elects to exercise the
conversion privilege. Usable bonds are corporate bonds that can be used in whole
or in part, customarily at full face value, in lieu of cash to purchase the
issuer's common stock. When owned as part of a unit along with warrants, which
are options to buy the common stock, they
-17-
<PAGE>
function as convertible bonds, except that the warrants generally will expire
before the bond's maturity. Convertible securities are senior to equity
securities and therefore have a claim to the assets of the issuer prior to
the holders of common stock in the case of liquidation. However, convertible
securities are generally subordinated to similar non-convertible securities
of the same issuer. The interest income and dividends from convertible bonds
and preferred stocks provide a stable stream of income with generally higher
yields than common stocks, but lower than non-convertible securities of similar
quality. The Fund will exchange or convert the convertible securities held in
its portfolio into shares of the underlying common stock in instances in
which, in Fleet's and/or UOBGC's opinion, the investment characteristics of
the underlying common shares will assist the Fund in achieving its investment
objective. Otherwise, the Fund will hold or trade the convertible securities.
In selecting convertible securities for the Fund, Fleet and/or UOBGC evaluates
the investment characteristics of the convertible security as a fixed income
instrument, and the investment potential of the underlying equity security
for capital appreciation. In evaluating these matters with respect to a
particular convertible security, Fleet and/or UOBGC considers numerous factors,
including the economic and political outlook, the value of the security relative
to other investment alternatives, trends in the determinants of the issuer's
profits, and the issuer's management capability
and practices.
WHEN-ISSUED TRANSACTIONS
The Fund may purchase eligible securities on a "when-issued" basis.
When-issued transactions, which involve a commitment by the Fund to purchase or
sell particular securities with payment and delivery taking place at a future
date (perhaps one or two months later), permit the Fund to lock in a price or
yield on a security it owns or intends to purchase, regardless of future changes
in interest rates. When-issued transactions involve the risk, however, that the
yield or price obtained in a transaction may be less favorable than the yield or
price available in the market when the securities delivery takes place.
The Fund may dispose of a commitment prior to settlement if Fleet or UOBGC,
as the case may be, deems it appropriate to do so. In addition, the Fund may
enter into transactions to sell its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits or
losses upon the sale of such commitments.
When the Fund agrees to purchase securities on a when-issued basis, the
Fund's custodian will set aside cash or liquid portfolio securities equal to the
amount of the commitment in a separate account. In the event of a decline in the
value of the securities that the custodian has set aside, the Fund may be
required to place additional assets in the separate account in order to ensure
that the value of the account remains equal to the amount of the Fund's
commitment. The Fund's net assets may fluctuate to a greater degree if it sets
aside portfolio securities to cover such purchase commitments than if it sets
aside cash.
When the Fund engages in when-issued transactions, it relies on the seller
to consummate the trade. Failure of the seller to do so may result in the Fund's
incurring a loss or missing an opportunity to obtain a price considered to be
advantageous for a security. For purposes of
-18-
<PAGE>
determining the average weighted maturity of the Fund's portfolio, the
maturity of when-issued securities is calculated from the date of settlement
of the purchase to the maturity date.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). Section 4(2) commercial paper is restricted as to
disposition under federal securities law and is generally sold to institutional
investors, such as the Fund, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) commercial paper is
normally resold to other institutional investors, like the Fund, through or with
the assistance of the issuer or investment dealers who make a market in Section
4(2) commercial paper, thus providing liquidity. The Fund believes that Section
4(2) commercial paper and possibly certain other restricted securities that meet
the criteria for liquidity established by Galaxy's Board of Trustees are quite
liquid. The Fund intends, therefore, to treat the restricted securities that
meet the criteria for liquidity established by the Board of Trustees, including
Section 4(2) commercial paper (as determined by Fleet), as liquid and not
subject to the investment limitation applicable to illiquid securities. In
addition, because Section 4(2) commercial paper is liquid, the Fund does not
intend to subject such paper to the limitation applicable to restricted
securities.
Rule 144A under the 1933 Act allows for a broader institutional trading
market for securities otherwise subject to restrictions on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. The Fund's investment in Rule 144A securities could
have the effect of increasing the level of illiquidity of the Fund during any
period that qualified institutional buyers were no longer interested in
purchasing these securities. For purposes of the Fund's 15% limitation on
purchases of illiquid instruments described under "Investment Limitations"
below, Rule 144A securities will not be considered to be illiquid if Fleet
and/or UOBGC has determined, in accordance with guidelines established by the
Board of Trustees, that an adequate trading market exists for such securities.
PORTFOLIO TURNOVER
The Fund may sell a portfolio investment soon after its acquisition if
Fleet and/or UOBGC believes that such a disposition is consistent with the
Fund's investment objective. Portfolio investments may be sold for a variety
of reasons, such as a more favorable investment opportunity or other
circumstances bearing on the desirability of continuing to hold such
investments. A portfolio turnover rate of 100% or more is considered high,
although the rate of portfolio turnover will not be a limiting factor in
making portfolio decisions. A high rate of portfolio turnover involves
correspondingly greater brokerage commission expenses and other transaction
costs, which must be ultimately borne by the Fund's shareholders. High
portfolio turnover may result in the realization of substantial net capital
gains.
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<PAGE>
INVESTMENT LIMITATIONS
In addition to the Fund's investment objective as stated in the
Prospectuses, the following investment limitations are matters of fundamental
policy and may not be changed without the affirmative vote of the holders of a
majority of the Fund's outstanding shares (as defined under "Miscellaneous").
The Fund may not:
1. Make loans, except that (i) the Fund may purchase or hold debt
instruments in accordance with its investment objective and
policies, and may enter into repurchase agreements with respect
to portfolio securities, and (ii) the Fund may lend portfolio
securities against collateral consisting of cash or securities
which are consistent with its permitted investments, where the
value of the collateral is equal at all times to at least 100% of
the value of the securities loaned.
2. Borrow money or issue senior securities, except that the Fund may
borrow from domestic banks for temporary purposes and then in
amounts not in excess of 33% of the value of its total assets at
the time of such borrowing (provided that the Fund may borrow
pursuant to reverse repurchase agreements in accordance with its
investment policies and in amounts not in excess of the value of
its total assets at the time of such borrowing); or mortgage,
pledge, or hypothecate any assets except in connection with any
such borrowing and in amounts not in excess of the lesser of the
dollar amounts borrowed or of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase
securities while borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding.
3. Invest more than 15% of the value of its net assets in illiquid
securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities
in excess of seven days, securities which are restricted as to
transfer in their principal market, non-negotiable time deposits
and other securities which are not readily marketable.
4. Purchase securities of any one issuer, other than obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, if immediately after such purchase more than
5% of the value of the Fund's total assets would be invested in
such issuer, except that up to 25% of the value of its total
assets may be invested without regard to this limitation.
5. Purchase securities on margin (except such short-term credits as
may be necessary for the clearance of purchases), make short
sales of securities, or maintain a short position.
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<PAGE>
6. Act as an underwriter within the meaning of the 1933 Act; except
insofar as the Fund might be deemed to be an underwriter upon
disposition of restricted portfolio securities; and except to the
extent that the purchase of securities directly from the issuer
thereof in accordance with the Fund's investment objective,
policies and limitations may be deemed to be underwriting.
7. Purchase or sell real estate; except that the Fund may purchase
securities that are secured by real estate, and the Fund may
purchase securities of issuers which deal in real estate or
interests therein; however, the Fund will not purchase or sell
interests in real estate limited partnerships.
8. Purchase or sell commodities or commodity contracts or invest in
oil, gas, or other mineral exploration or development programs or
mineral leases; provided however, that the Fund may enter into
forward currency contracts and foreign currency futures contracts
and related options to the extent permitted by its investment
objectives and policies.
9. Invest in or sell put options, call options, straddles, spreads,
or any combination thereof; provided, however, that the Fund may
write covered call and put options with respect to its portfolio
securities that are traded on a national securities exchange, and
may enter into closing purchase transactions with respect to such
options if, at the time of the writing of such options, the
aggregate value of the securities subject to the options written
by the Fund does not exceed 25% of the value of its total assets;
and further provided that the Fund may purchase put and call
options to the extent permitted by its investment objectives and
policies.
10. Invest in companies for the purpose of exercising management or
control.
11. Purchase securities of other investment companies except in
connection with a merger, consolidation, reorganization, or
acquisition of assets; provided, however, that the Fund may
acquire such securities in accordance with the 1940 Act.
In addition, the Fund may not purchase any securities which would cause 25%
or more of the value of the Fund's total assets at the time of purchase to be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry; provided, however that (a) there is no
limitation with respect to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, (b) wholly-owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents, and
(c) utilities will be classified according to their services. (For example, gas,
gas transmission, electric and gas, electric and telephone each will be
considered a separate industry.)
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<PAGE>
With respect to Investment Limitation No. 2 above, the Fund intends to
limit any borrowings (including reverse repurchase agreements) to not more than
33% of the value of its total assets at the time of such borrowing.
With respect to Investment Limitation No. 4 above, the Fund does not intend
to acquire more than 10% of the outstanding voting securities of any one issuer.
Except as stated otherwise, if a percentage limitation is satisfied at the
time of investment, a later increase in such percentage resulting from a change
in the value of the Fund's portfolio securities generally will not constitute a
violation of the limitation. If the value of the Fund's holdings of illiquid
securities at any time exceeds the percentage limitation applicable at the time
of acquisition due to subsequent fluctuations in value or other reasons, the
Board of Trustees will consider what actions, if any, are appropriate to
maintain adequate liquidity. With respect to borrowings, if the Fund's asset
coverage at any time falls below that required by the 1940 Act, the Fund will
reduce the amount of its borrowings in the manner required by the 1940 Act to
the extent necessary to satisfy the asset coverage requirement.
VALUATION OF PORTFOLIO SECURITIES
In determining market value, the Fund's portfolio securities which are
primarily traded on foreign securities exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges,
except when an occurrence subsequent to the time a value was so established
is likely to have changed such value, in which case the fair value of those
securities may be determined through consideration of other factors by or
under the direction of Galaxy's Board of Trustees. Portfolio securities which
are primarily traded on a domestic exchange are valued at the last sale price
on that exchange or, if there is no recent sale, at the last current bid
quotation. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market
for such security. Investments in debt securities having a remaining maturity
of 60 days or less are valued based upon the amortized cost method. All other
securities are valued at the last current bid quotation if market quotations
are available, or at fair value as determined in accordance with policies
established in good faith by the Board of Trustees. For valuation purposes,
quotations of foreign securities in foreign currency are converted to U.S.
dollar equivalents at the prevailing market rate on the day of valuation. An
option is generally valued at the last sale price or, in the absence of a
last sale price, the last offer price.
Certain of the securities acquired by the Fund may be traded on foreign
exchanges or over-the-counter markets on days on which the Fund's net asset
value is not calculated. In such cases, the net asset value of the Fund's shares
may be significantly affected on days when investors can neither purchase nor
redeem shares of the Fund.
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<PAGE>
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares in the Fund are sold on a continuous basis by Galaxy's distributor,
Provident Distributors, Inc. ("PDI"). PDI is a registered broker/dealer with its
principal offices at 3200 Horizon Drive, King of Prussia, PA 19406. PDI has
agreed to use appropriate efforts to solicit all purchase orders.
PURCHASES OF RETAIL A SHARES AND RETAIL B SHARES
GENERAL
Investments in Retail A Shares of the Fund are subject to a front-end sales
charge. Investments in Retail B Shares of the Fund are subject to a back-end
sales charge. This back-end sales charge declines over time and is known as a
"contingent deferred sales charge."
Investors should read "Characteristics of Retail A Shares and Retail B
Shares" and "Factors to Consider When Selecting Retail A Shares or Retail B
Shares" below before deciding between the two.
PDI has established several procedures to enable different types of
investors to purchase Retail A Shares and Retail B Shares (collectively, "Retail
Shares") of the Fund. Retail Shares may be purchased by individuals or
corporations who submit a purchase application to Galaxy, purchasing directly
either for their own accounts or for the accounts of others. Retail Shares may
also be purchased by FIS Securities, Inc., Fleet Securities, Inc., Fleet
Enterprises, Inc., FleetBoston Financial Corporation, its affiliates, their
correspondent banks and other qualified banks, savings and loan associations and
broker/dealers on behalf of their customers. Purchases may take place only on
days on which the New York Stock Exchange (the "Exchange") is open for business
("Business Days"). If an institution accepts a purchase order from a customer on
a non-Business Day, the order will not be executed until it is received and
accepted by PDI on a Business Day in accordance with PDI's procedures.
Galaxy has authorized certain brokers to accept purchase, exchange and
redemption orders on behalf of Galaxy with respect to Retail A Shares of the
Fund. Such brokers are authorized to designate other intermediaries to accept
purchase, exchange and redemption orders on behalf of Galaxy. Galaxy will be
deemed to have received a purchase, exchange or redemption order when such an
authorized broker or designated intermediary accepts the order. Orders for the
purchase, exchange or redemption of Retail A Shares of the Fund accepted by any
such authorized broker or designated intermediary will be effected at the Fund's
net asset value per share next determined after acceptance of such order and
will not be subject to the front-end sales charge with respect to Retail A
Shares described in the applicable Prospectus and in this Statement of
Additional Information.
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<PAGE>
CUSTOMERS OF INSTITUTIONS
Retail Shares purchased by institutions on behalf of their customers will
normally be held of record by the institution and beneficial ownership of Retail
Shares will be recorded by the institution and reflected in the account
statements provided to its customers. Galaxy's transfer agent may establish an
account of record for each customer of an institution reflecting beneficial
ownership of Retail Shares. Depending on the terms of the arrangement between a
particular institution and Galaxy's transfer agent, confirmations of Retail
Share purchases and redemptions and pertinent account statements will either be
sent by Galaxy's transfer agent directly to a customer with a copy to the
institution, or will be furnished directly to the customer by the institution.
Other procedures for the purchase of Retail Shares established by institutions
in connection with the requirements of their customer accounts may apply.
Customers wishing to purchase Retail Shares through their institution should
contact such entity directly for appropriate purchase instructions.
APPLICABLE SALES CHARGE - RETAIL A SHARES
The public offering price for Retail A Shares of the Fund is the sum of the
net asset value of the Retail A Shares purchased plus any applicable front-end
sales charge as described in the applicable Prospectus. A deferred sales charge
of up to 1.00% is assessed on certain redemptions of Retail A Shares that are
purchased with no initial sales charge as part of an investment of $500,000 or
more. A portion of the front-end sales charge may be reallowed to broker-dealers
as follows:
<TABLE>
<CAPTION>
REALLOWANCE TO
DEALERS
AS A % OF
OFFERING PRICE
AMOUNT OF TRANSACTION PER SHARE
- --------------------- ---------------
<S> <C>
Less than $50,000 3.25
$50,000 but less than $100,000 3.00
$100,000 but less than $250,000 2.50
$250,000 but less than $500,000 2.00
$500,000 and over 0.00
</TABLE>
The appropriate reallowance to dealers will be paid by PDI to broker-dealer
organizations which have entered into agreements with PDI. The reallowance to
dealers may be changed from time to time.
Certain affiliates of Fleet may, at their own expense, provide additional
compensation to broker-dealer affiliates of Fleet and to unaffiliated
broker-dealers whose customers purchase significant amounts of Retail A Shares
of the Fund. Such compensation will not represent an additional expense to the
Fund or its shareholders, since it will be paid from the assets of Fleet's
affiliates.
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<PAGE>
In certain situations or for certain individuals, the front-end sales
charge for Retail A Shares of the Fund may be waived either because of the
nature of the investor or the reduced sales effort required to attract such
investments. In order to receive the sales charge waiver, an investor must
explain the status of his or her investment at the time of purchase. In addition
to the sales charge waivers described in the applicable Prospectus, no sales
charge is assessed on purchases of Retail A Shares of the Fund by the following
categories of investors or in the following types of transactions:
- purchases by directors, officers and employees of broker-dealers
having agreements with PDI pertaining to the sale of Retail A Shares
to the extent permitted by such organizations;
- purchases by current and retired members of Galaxy's Board of Trustees
and members of their immediate families;
- purchases by officers, directors, employees and retirees of
FleetBoston Financial Corporation and any of its affiliates and
members of their immediate families;
- purchases by officers, directors, employees and retirees of PFPC Inc.
and members of their immediate families;
- purchases by persons who are also plan participants in any employee
benefit plan which is the record or beneficial holder of Trust Shares
of the Fund or any of the other portfolios offered by Galaxy;
- purchases by institutional investors, including but not limited to
bank trust departments and registered investment advisers;
- purchases by clients of investment advisers or financial planners who
place trades for their own accounts if such accounts are linked to the
master accounts of such investment advisers or financial planners on
the books of the broker-dealer through whom Retail A Shares are
purchased;
- purchases by institutional clients of broker-dealers, including
retirement and deferred compensation plans and the trusts used to fund
these plans, which place trades through an omnibus account maintained
with Galaxy by the broker-dealer; and
- purchases prior to July 1, 1999 by former deposit customers of
financial institutions (other than registered broker-dealers) acquired
by FleetBoston Financial Corporation in February 1998.
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<PAGE>
COMPUTATION OF OFFERING PRICE - RETAIL A SHARES
An illustration of the computation of the offering price per share of
Retail A Shares of the Fund, on the date such Shares are first offered to the
public and the maximum front-end sales charge of 3.75%, is as follows:
<TABLE>
<S> <C>
Net Assets........................................... $ 10.00
Outstanding Shares................................... 1
Net Asset Value Per Share............................ $ 10.00
Sales Charge (3.75% of
the offering price).................................. $ .39
Offering Price to Public............................. $ 10.39
</TABLE>
QUANTITY DISCOUNTS
Investors may be entitled to reduced sales charges through Rights of
Accumulation, a Letter of Intent or a combination of investments, as described
below, even if the investor does not wish to make an investment of a size that
would normally qualify for a quantity discount.
In order to obtain quantity discount benefits, an investor must notify PDI
at the time of purchase that he or she would like to take advantage of any of
the discount plans described below. Upon such notification, the investor will
receive the lowest applicable sales charge. Quantity discounts may be modified
or terminated at any time and are subject to confirmation of an investor's
holdings through a check of appropriate records. For more information about
quantity discounts, please contact PDI or your financial institution.
RIGHTS OF ACCUMULATION. A reduced sales charge applies to any purchase of
Retail A Shares of any portfolio of Galaxy that is sold with a sales charge
("Eligible Fund") where an investor's then current aggregate investment in
Retail A Shares is $50,000 or more. "Aggregate investment" means the total of:
(a) the dollar amount of the then current purchase of shares of an Eligible
Fund; and (b) the value (based on current net asset value) of previously
purchased and beneficially owned shares of any Eligible Fund on which a sales
charge has been paid. If, for example, an investor beneficially owns shares of
one or more Eligible Funds with an aggregate current value of $49,000 on which a
sales charge has been paid and subsequently purchases shares of an Eligible Fund
having a current value of $1,000, the sales charge applicable to the subsequent
purchase would be reduced to 3.50% of the offering price. Similarly, with
respect to each subsequent investment, all shares of Eligible Funds that are
beneficially owned by the investor at the time of investment may be combined to
determine the applicable sales charge.
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<PAGE>
LETTER OF INTENT. By completing the Letter of Intent included as part of
the Account Application, an investor becomes eligible for the reduced sales
charge applicable to the total number of Eligible Fund Retail A Shares purchased
in a 13-month period pursuant to the terms and under the conditions set forth
below and in the Letter of Intent. To compute the applicable sales charge, the
offering price of Retail A Shares of an Eligible Fund on which a sales charge
has been paid and that are beneficially owned by an investor on the date of
submission of the Letter of Intent may be used as a credit toward completion of
the Letter of Intent. However, the reduced sales charge will be applied only to
new purchases.
PFPC Inc. ("PFPC"), Galaxy's administrator, will hold in escrow Retail A
Shares equal to 5% of the amount indicated in the Letter of Intent for payment
of a higher sales charge if an investor does not purchase the full amount
indicated in the Letter of Intent. The escrow will be released when the investor
fulfills the terms of the Letter of Intent by purchasing the specified amount.
If purchases qualify for a further sales charge reduction, the sales charge will
be adjusted to reflect the investor's total purchases. If total purchases are
less than the amount specified, the investor will be requested to remit an
amount equal to the difference between the sales charge actually paid and the
sales charge applicable to the total purchases. If such remittance is not
received within 20 days, PFPC, as attorney-in-fact pursuant to the terms of the
Letter of Intent and at PDI's direction, will redeem an appropriate number of
Retail A Shares held in escrow to realize the difference. Signing a Letter of
Intent does not bind an investor to purchase the full amount indicated at the
sales charge in effect at the time of signing, but an investor must complete the
intended purchase in accordance with the terms of the Letter of Intent to obtain
the reduced sales charge. To apply, an investor must indicate his or her
intention to do so under a Letter of Intent at the time of purchase.
QUALIFICATION FOR DISCOUNTS. For purposes of applying the Rights of
Accumulation and Letter of Intent privileges described above, the scale of sales
charges applies to the combined purchases made by any individual and/or spouse
purchasing securities for his, her or their own account or for the account of
any minor children, or the aggregate investments of a trustee or custodian of
any qualified pension or profit-sharing plan established (or the aggregate
investment of a trustee or other fiduciary) for the benefit of the persons
listed above.
REINSTATEMENT PRIVILEGE. Investors may reinvest all or any portion of their
redemption proceeds in Retail A Shares of the Fund or in Retail A Shares of
another portfolio of Galaxy within 90 days of the redemption trade date without
paying a sales load. Retail A Shares so reinvested will be purchased at a price
equal to the net asset value next determined after Galaxy's transfer agent
receives a reinstatement request and payment in proper form.
Investors wishing to exercise this Privilege must submit a written
reinstatement request to PFPC as transfer agent stating that the investor is
eligible to use the Privilege. The reinstatement request and payment must be
received within 90 days of the trade date of the redemption. Currently, there
are no restrictions on the number of times an investor may use this Privilege.
Generally, exercising the Reinstatement Privilege will not affect the
character of any gain or loss realized on redemptions for federal income tax
purposes. However, if a redemption
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<PAGE>
results in a loss, the reinstatement may result in the loss being disallowed
under the Code's "wash sale" rules.
GROUP SALES. Members of qualified groups may purchase Retail A Shares of
the Fund at the following group sales rates:
<TABLE>
<CAPTION>
REALLOWANCE
TOTAL SALES CHARGE TO DEALERS
------------------------------------- ----------
AS A % OF AS A % OF AS A % OF
NUMBER OF QUALIFIED OFFERING PRICE NET ASSET VALUE OFFERING PRICE
GROUP MEMBERS PER SHARE PER SHARE PER SHARE
- --------------------- --------- --------- ---------
<S> <C> <C> <C>
50,000 but less than 250,000.................... 3.00 3.09 3.00
250,000 but less than 500,000................... 2.75 2.83 2.75
500,000 but less than 750,000................... 2.50 2.56 2.50
750,000 and over................................ 2.00 2.04 2.00
</TABLE>
To be eligible for the discount, a group must meet the requirements set
forth below and be approved in advance as a qualified group by PDI. To receive
the group sales charge rate, group members must purchase Retail A Shares
directly from PDI in accordance with any of the procedures described in the
applicable Prospectus. Group members must also ensure that their qualified group
affiliation is identified on the purchase application.
A qualified group is a group that (i) has at least 50,000 members, (ii) was
not formed for the purpose of buying Fund shares at a reduced sales charge,
(iii) within one year of the initial member purchase, has at least 1% of its
members invested in the Fund or any of the other investment portfolios offered
by Galaxy, (iv) agrees to include Galaxy sales material in publications and
mailings to members at a reduced cost or no cost, and (v) meets certain other
uniform criteria. PDI may request periodic certification of group and member
eligibility. PDI reserves the right to determine whether a group qualifies for a
quantity discount and to suspend this offer at any time.
APPLICABLE SALES CHARGE - RETAIL B SHARES
The public offering price for Retail B Shares of the Fund is the net asset
value of the Retail B Shares purchased. Although investors pay no front-end
sales charge on purchases of Retail B Shares, such Shares are subject to a
contingent deferred sales charge at the rates set forth below if they are
redeemed within six years of purchase. Securities dealers, brokers, financial
institutions and other industry professionals will receive commissions from PDI
in connection with sales of Retail B Shares. These commissions may be different
than the reallowances or placement fees paid to dealers in connection with sales
of Retail A Shares. Certain affiliates of Fleet may, at their own expense,
provide additional compensation to broker-dealer affiliates and to unaffiliated
broker-dealers of Fleet whose customers purchase significant amounts of Retail B
Shares of the Fund. See "Applicable Sales Charge -- Retail A Shares." The
contingent deferred sales charge on Retail B Shares is based on the lesser of
the net asset value of the Shares on the
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<PAGE>
redemption date or the original cost of the Shares being redeemed. As a result,
no sales charge is imposed on any increase in the principal value of an
investor's Retail B Shares. In addition, a contingent deferred sales charge will
not be assessed on Retail B Shares purchased through reinvestment of dividends
or capital gains distributions.
The proceeds from the contingent deferred sales charge that an investor may
pay upon redemption go to PDI, which may use such amounts to defray the expenses
associated with the distribution-related services involved in selling Retail B
Shares.
EXEMPTIONS FROM THE CONTINGENT DEFERRED SALES CHARGE. Certain types of
redemptions may also qualify for an exemption from the contingent deferred sales
charge. In addition to the sales charge exemptions described in the applicable
Prospectus, the contingent deferred sales charge with respect to Retail B Shares
is not assessed on: (i) redemptions in connection with required (or, in some
cases, discretionary) distributions to participants or beneficiaries of an
employee pension, profit-sharing or other trust or qualified retirement or Keogh
plan, individual retirement account or custodial account maintained pursuant to
Section 403(b)(7) of the Code; (ii) redemptions in connection with required (or,
in some cases, discretionary) distributions to participants in qualified
retirement or Keogh plans, individual retirement accounts or custodial accounts
maintained pursuant to Section 403(b)(7) of the Code due to death, disability or
the attainment of a specified age; (iii) redemptions effected pursuant to the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of Retail B Shares held in the account is less than the minimum account
size; (iv) redemptions in connection with the combination of the Fund with any
other investment company registered under the 1940 Act by merger, acquisition of
assets, or by any other transaction; (v) redemptions resulting from a tax-free
return of an excess contribution pursuant to Section 408(d)(4) or (5) of the
Code; or (vi) any redemption of Retail B Shares held by an investor, provided
the investor was the beneficial owner of shares of the Fund (or any of the other
portfolios offered by Galaxy or otherwise advised by Fleet or its affiliates)
before December 1, 1995. In addition to the foregoing exemptions, no contingent
deferred sales charge will be imposed on redemptions made pursuant to the
Systematic Withdrawal Plan, subject to the limitations set forth under "Investor
Programs - Retail A Shares and Retail B Shares -- Automatic Investment Program
and Systematic Withdrawal Plan" below.
CHARACTERISTICS OF RETAIL A SHARES AND RETAIL B SHARES
The primary difference between Retail A Shares and Retail B Shares lies in
their sales charge structures and shareholder servicing/distribution expenses.
An investor should understand that the purpose and function of the sales charge
structures and shareholder servicing/distribution arrangements for both Retail A
Shares and Retail B Shares are the same.
Retail A Shares of the Fund are sold at their net asset value plus a
front-end sales charge of up to 3.75%. This front-end sales charge may be
reduced or waived in some cases. See the applicable Prospectus and "Applicable
Sales Charges -- Retail A Shares" and "Quantity Discounts" above. Retail A
Shares of the Fund are currently subject to ongoing distribution fees at an
annual rate of up to .25% of the Fund's average daily net assets attributable to
its Retail A Shares.
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<PAGE>
Retail B Shares of the Fund are sold at net asset value without an initial
sales charge. Normally, however, a deferred sales charge is paid if the Shares
are redeemed within six years of investment. See the applicable Prospectus and
"Applicable Sales Charges - Retail B Shares" above. Retail B Shares of the Fund
are currently subject to ongoing shareholder servicing and distribution fees at
an annual rate of up to 1.00% of the Fund's average daily net assets
attributable to its Retail B Shares. These ongoing fees, which are higher than
those charged on Retail A Shares, will cause Retail B Shares to have a higher
expense ratio and pay lower dividends than Retail A Shares.
Six years after purchase, Retail B Shares of the Fund will convert
automatically to Retail A Shares of the Fund. The purpose of the conversion is
to relieve a holder of Retail B Shares of the higher ongoing expenses charged to
those shares, after enough time has passed to allow PDI to recover approximately
the amount it would have received if a front-end sales charge had been charged.
The conversion from Retail B Shares to Retail A Shares takes place at net asset
value, as a result of which an investor receives dollar-for-dollar the same
value of Retail A Shares as he or she had of Retail B Shares. The conversion
occurs six years after the beginning of the calendar month in which the Shares
are purchased. Upon conversion, the converted shares will be relieved of the
distribution and shareholder servicing fees borne by Retail B Shares, although
they will be subject to the shareholder servicing fees borne by Retail A Shares.
Retail B Shares acquired through a reinvestment of dividends or
distributions (as discussed under "Applicable Sales Charge - Retail B Shares")
are also converted at the earlier of two dates - six years after the beginning
of the calendar month in which the reinvestment occurred or the date of
conversion of the most recently purchased Retail B Shares that were not acquired
through reinvestment of dividends or distributions. For example, if an investor
makes a one-time purchase of Retail B Shares of the Fund, and subsequently
acquires additional Retail B Shares of the Fund only through reinvestment of
dividends and/or distributions, all of such investor's Retail B Shares in the
Fund, including those acquired through reinvestment, will convert to Retail A
Shares of the Fund on the same date.
FACTORS TO CONSIDER WHEN SELECTING RETAIL A SHARES OR RETAIL B SHARES
Before purchasing Retail A Shares or Retail B Shares of the Fund, investors
should consider whether, during the anticipated periods of their investments in
the Fund, the accumulated distribution and shareholder servicing fees and
potential contingent deferred sales charge on Retail B Shares prior to
conversion would be less than the initial sales charge and accumulated
distribution fees on Retail A Shares purchased at the same time, and to what
extent such differential would be offset by the higher yield of Retail A Shares.
In this regard, to the extent that the sales charge for Retail A Shares is
waived or reduced by one of the methods described above, investments in Retail A
Shares become more desirable. An investment of $250,000 or more in Retail B
Shares would not be in most shareholders' best interest. Shareholders should
consult their financial advisers and/or brokers with respect to the advisability
of purchasing Retail B Shares in amounts exceeding $250,000.
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<PAGE>
Although Retail A Shares are subject to a distribution fee, they are not
subject to the higher distribution and shareholder servicing fee applicable to
Retail B Shares. For this reason, Retail A Shares can be expected to pay
correspondingly higher dividends per Share. However, because initial sales
charges are deducted at the time of purchase, purchasers of Retail A Shares
(that do not qualify for exemptions from or reductions in the initial sales
charge) would have less of their purchase price initially invested in the Funds
than purchasers of Retail B Shares in the Fund.
As described above, purchasers of Retail B Shares will have more of their
initial purchase price invested. Any positive investment return on this
additional invested amount would partially or wholly offset the expected higher
annual expenses borne by Retail B Shares. Because the Fund's future returns
cannot be predicted, there can be no assurance that this will be the case.
Holders of Retail B Shares would, however, own shares that are subject to a
contingent deferred sales charge of up to 5.00% upon redemption, depending upon
the year of redemption. Investors expecting to redeem during this six-year
period should compare the cost of the contingent deferred sales charge plus the
aggregate distribution and shareholder servicing fees on Retail B Shares to the
cost of the initial sales charge and distribution fees on the Retail A Shares.
Over time, the expense of the annual distribution and shareholder servicing fees
on the Retail B Shares may equal or exceed the initial sales charge and annual
distribution fees applicable to Retail A Shares. For example, if net asset value
remains constant, the aggregate distribution and shareholder servicing fees with
respect to Retail B Shares of the Fund would equal or exceed the initial sales
charge and aggregate distribution fees of Retail A Shares approximately six
years after the purchase. In order to reduce such fees for investors that hold
Retail B Shares for more than six years, Retail B Shares will be automatically
converted to Retail A Shares as described above at the end of such six-year
period.
PURCHASES OF TRUST SHARES
Trust Shares are sold to investors maintaining qualified accounts at bank
and trust institutions, including subsidiaries of FleetBoston Financial
Corporation, and to participants in employer-sponsored defined contribution
plans (such institutions and plans are referred to herein collectively as
"Institutions"). Trust Shares sold to such investors ("Customers") will be held
of record by Institutions. Purchases of Trust Shares will be effected only on
days on which PDI, Galaxy's custodian and the purchasing Institution are open
for business ("Trust Business Days"). If an Institution accepts a purchase order
from its Customer on a non-Trust Business Day, the order will not be executed
until it is received and accepted by PDI on a Trust Business Day in accordance
with the foregoing procedures.
Trust Shares of the Fund may also be sold to clients, members and employees
of UOBGC.
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<PAGE>
OTHER PURCHASE INFORMATION
On a Business Day or a Trust Business Day when the Exchange closes early
due to a partial holiday or otherwise, Galaxy will advance the time at which
purchase orders must be received in order to be processed on that Business Day
or Trust Business Day.
REDEMPTION OF RETAIL A SHARES, RETAIL B SHARES
AND TRUST SHARES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order by PDI. On a Business Day or Trust
Business Day when the Exchange closes early due to a partial holiday or
otherwise, Galaxy will advance the time at which redemption orders must be
received in order to be processed on that Business Day or Trust Business Day.
Galaxy may require any information reasonably necessary to ensure that a
redemption has been duly authorized. Proceeds from the redemptions of Retail B
Shares of the Fund will be reduced by the amount of any applicable contingent
deferred sales charge. Galaxy reserves the right to transmit redemption proceeds
within seven days after receiving the redemption order if, in its judgment, an
earlier payment could adversely affect the Fund.
Galaxy may suspend the right of redemption or postpone the date of payment
for shares for more than seven days during any period when (a) trading in the
markets the Fund normally utilizes is restricted, or an emergency, as defined by
the rules and regulations of the SEC exists making disposal of the Fund's
investments or determination of its net asset value not reasonably practicable;
(b) the Exchange is closed (other than customary weekend and holiday closings);
or (c) the SEC by order has permitted such suspension.
If the Board of Trustees determines that conditions exist which make
payment of redemption proceeds wholly in cash unwise or undesirable, Galaxy may
make payment wholly or partly in securities or other property. Such redemptions
will only be made in "readily marketable" securities. In such an event, a
shareholder would incur transaction costs in selling the securities or other
property. However, Galaxy has filed an election with the SEC to pay in cash all
redemptions requested by a shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment cannot be revoked without the
prior approval of the SEC.
INVESTOR PROGRAMS-RETAIL A SHARES AND RETAIL B SHARES
The following information supplements the description in the applicable
Prospectus as to the various Investor Programs available to holders of Retail
Shares of the Fund.
EXCHANGE PRIVILEGE
The minimum initial investment to establish an account in another Galaxy
portfolio by exchange, except for the Institutional Government Money Market
Fund, is $2,500, unless (i) the
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Retail Shares being redeemed were purchased through a registered representative
who is a Fleet Bank employee, in which event there is no minimum investment
requirement, or (ii) at the time of the exchange the investor elects, with
respect to the portfolio into which the exchange is being made, to participate
in the Automatic Investment Program described below, in which event there is no
minimum initial investment requirement, or in the College Investment Program
described below, in which event the minimum initial investment is generally
$100. The minimum initial investment to establish an account by exchange in the
Institutional Government Money Market Fund is $2 million.
An exchange involves a redemption of all or a portion of the Retail Shares
of the Fund and the investment of the redemption proceeds in Retail Shares of
another portfolio offered by Galaxy or, with respect to Retail A Shares,
otherwise advised by Fleet or its affiliates. The redemption will be made at the
per share net asset value next determined after the exchange request is
received. The Retail Shares of the portfolio to be acquired will be purchased at
the per share net asset value next determined after acceptance of the exchange
request, plus any applicable sales charge.
Investors may find the exchange privilege useful if their investment
objectives or market outlook should change after they invest in the Fund. For
further information regarding Galaxy's exchange privilege, investors should call
PFPC at 1-877-BUY-GALAXY (1-877-289-4252). Customers of institutions should call
their institution for such information. Investors exercising the exchange
privilege into other portfolios should request and review these portfolios'
prospectuses prior to making an exchange. Telephone 1-877-BUY-GALAXY
(1-877-289-4252) for a prospectus or to make an exchange.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, Galaxy reserves the right to terminate the exchange privilege of
any shareholder who requests more than three exchanges a year. Galaxy will
determine whether to do so based on a consideration of both the number of
exchanges that any particular shareholder or group of shareholders has requested
and the time period over which their exchange requests have been made, together
with the level of expense to Galaxy which will result from effecting additional
exchange requests. The exchange privilege may be modified or terminated at any
time. At least 60 days' notice of any material modification or termination will
be given to shareholders except where notice is not required under the
regulations of the SEC.
For federal income tax purposes, an exchange of shares is a taxable event
and, accordingly, a capital gain or loss may be realized by an investor. Before
making an exchange request, an investor should consult a tax or other financial
adviser to determine the tax consequences.
RETIREMENT PLANS
Retail Shares of the Fund are available for purchase in connection with the
following tax-deferred prototype retirement plans:
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INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS") (including traditional, Roth
and Education IRAs and "roll-overs" from existing retirement plans), a
retirement-savings vehicle for qualifying individuals. The minimum initial
investment for an IRA account is $500 (including a spousal account).
SIMPLIFIED EMPLOYEE PENSION PLANS ("SEPS"), a form of retirement plan for
sole proprietors, partnerships and corporations. The minimum initial investment
for a SEP account is $500.
MULTI-EMPLOYEE RETIREMENT PLANS ("MERPS"), a retirement vehicle established
by employers for their employees which is qualified under Section 401(k) and
403(b) of the Code. The minimum initial investment for a MERP is $500.
KEOGH PLANS, a retirement vehicle for self-employed individuals. The
minimum initial investment for a Keogh Plan is $500.
Detailed information concerning eligibility and other matters related to
these plans and the form of application is available from PFPC (call
1-877-BUY-GALAXY (1-877-289-4252)) with respect to IRAs, SEPs and Keogh Plans
and from Fleet Securities, Inc. (call 1-800-221-8210) with respect to MERPs.
AUTOMATIC INVESTMENT PROGRAM AND SYSTEMATIC WITHDRAWAL PLAN
The Automatic Investment Program permits an investor to purchase Retail
Shares of the Fund each month or each quarter. Provided an investor's financial
institution allows automatic withdrawals, Retail Shares are purchased by
transferring funds from the investor's checking, bank money market, NOW or
savings account designated by the investor. The account designated will be
debited in the specified amount, and Retail Shares will be purchased, on a
monthly or quarterly basis, on any Business Day designated by the investor. If
the designated day falls on a weekend or holiday, the purchase will be made on
the Business Day closest to the designated day. Only an account maintained at a
domestic financial institution which is an Automated Clearing House ("ACH")
member may be so designated.
The Systematic Withdrawal Plan permits an investor to automatically redeem
Retail Shares on a monthly, quarterly, semi-annual, or annual basis on any
Business Day designated by the investor. If the designated day falls on a
weekend or holiday, the redemption will be made on the Business Day closest to
the designated day. Proceeds of the redemption will be sent to the shareholder's
address of record or financial institution within three Business Days of the
redemption. If redemptions exceed purchases and dividends, the number of shares
in the account will be reduced. Investors may terminate the Systematic
Withdrawal Plan at any time upon written notice to PFPC, Galaxy's transfer agent
(but not less than five days before a payment date). There is no charge for this
service. Purchases of additional Retail A Shares concurrently with withdrawals
are ordinarily not advantageous because of the sales charge involved in the
additional purchases. No contingent deferred sales charge will be assessed on
redemptions of Retail B Shares made through the Systematic Withdrawal Plan that
do not exceed 12% of an
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<PAGE>
account's net asset value on an annualized basis. For example, monthly,
quarterly and semi-annual Systematic Withdrawal Plan redemptions of Retail B
Shares will not be subject to the contingent deferred sales charge if they do
not exceed 1%, 3% and 6%, respectively, of an account's net asset value on the
redemption date. Systematic Withdrawal Plan redemptions of Retail B Shares in
excess of this limit are still subject to the applicable contingent deferred
sales charge.
PAYROLL DEDUCTION PROGRAM
To be eligible for the Payroll Deduction Program, the payroll department of
an investor's employer must have the capability to forward transactions directly
through the ACH, or indirectly through a third party payroll processing company
that has access to the ACH. An investor must complete and submit a Galaxy
Payroll Deduction Application to his or her employer's payroll department, which
will arrange for the specified amount to be debited from the investor's paycheck
each pay period. Retail Shares of Galaxy will be purchased within three days
after the debit occurred. If the designated day falls on a weekend or
non-Business Day, the purchase will be made on the Business Day closest to the
designated day. An investor should allow between two to four weeks for the
Payroll Deduction Program to be established after submitting an application to
the employer's payroll department.
COLLEGE INVESTMENT PROGRAM
Galaxy reserves the right to redeem accounts participating in the College
Investment Program involuntarily, upon 60 days' written notice, if the account's
net asset value falls below the applicable minimum initial investment as a
result of redemptions. Investors participating in the College Investment Program
will receive consolidated monthly statements of their accounts. Detailed
information concerning College Investment Program accounts and applications may
be obtained from PFPC (call 1-877-BUY-GALAXY (1-877-289-4252)).
DIRECT DEPOSIT PROGRAM
Death or legal incapacity will terminate an investor's participation in the
Direct Deposit Program. An investor may elect at any time to terminate his or
her participation by notifying in writing the Social Security Administration.
Further, Galaxy may terminate an investor's participation upon 30 days' notice
to the investor.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Code, and to distribute out its income to shareholders each
year, so that the Fund itself generally will be relieved of federal income and
excise taxes. If the Fund were to fail to so qualify: (1) the Fund would be
taxed at regular corporate rates without any deduction for distributions to
shareholders; and (2) shareholders would be taxed as if they received ordinary
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dividends, although corporate shareholders could be eligible for the dividends
received deduction.
A 4% non-deductible excise tax is imposed on regulated investment companies
that fail to currently distribute specified percentages of their ordinary
taxable income and capital gain net income (excess of capital gains over capital
losses). The Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and any capital gain net income
prior to the end of each calendar year to avoid liability for this excise tax.
The Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or gross sale proceeds paid to
any shareholder who (i) has failed to provide a correct tax identification
number, (ii) is subject to backup withholding due to prior failure to properly
include on his or her return payments of taxable interest or dividends, or (iii)
has failed to certify to the Fund that he or she is not subject to back-up
withholding when required to do so or that he or she is an "exempt recipient."
Dividends declared in October, November or December of any year that are
payable to shareholders of record on a specified date in such months will be
deemed to have been received by shareholders and paid by the Fund on December 31
of such year if such dividends are actually paid during January of the following
year.
TAXATION OF CERTAIN FINANCIAL INSTRUMENTS AND INVESTMENTS
The tax principles applicable to transactions in financial instruments and
futures contracts and options that may be engaged in by the Fund, and
investments in passive foreign investment companies ("PFICs"), are complex and,
in some cases, uncertain. Such transactions and investments may cause the Fund
to recognize taxable income prior to the receipt of cash, thereby requiring the
Fund to liquidate other positions, or to borrow money, so as to make sufficient
distributions to shareholders to avoid corporate-level tax. Moreover, some or
all of the taxable income recognized may be ordinary income or short-term
capital gain, so that the distributions may be taxable to shareholders as
ordinary income.
In addition, in the case of any shares of a PFIC in which the Fund
invests, the Fund may be liable for corporate-level tax on any ultimate gain or
distributions on the shares if the Fund fails to make an election to recognize
income annually during the period of its ownership of the shares.
TRUSTEES AND OFFICERS
The business and affairs of the Fund are managed under the direction of
Galaxy's Board of Trustees in accordance with the laws of the Commonwealth of
Massachusetts and the Trust's Declaration of Trust. The trustees and executive
officers of Galaxy, their addresses, principal occupations during the past five
years, and other affiliations are as follows:
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<PAGE>
<TABLE>
<CAPTION>
Positions Principal Occupation
with The During Past 5 Years
Name and Address Galaxy Fund and Other Affiliations
- ---------------- ----------- ----------------------
<S> <C> <C>
Dwight E. Vicks, Jr. Chairman & Trustee President & Director, Vicks Lithograph &
Vicks Lithograph & Printing Corporation (book manufacturing
Printing Corporation and commercial printing); Director, Utica
Commercial Drive First Insurance Company; Trustee, Savings
P.O. Box 270 Bank of Utica; Director, Monitor Life
Yorkville, NY 13495 Insurance Company; Director, Commercial
Age 66 Travelers Mutual Insurance Company;
Trustee, The Galaxy VIP Fund; Trustee,
Galaxy Fund II.
John T. O'Neill(1) President, Treasurer Private Investor; Executive Vice President
28 Narragansett Bay Avenue & Trustee and CFO, Hasbro, Inc. (toy and game
Warwick, RI 02889 manufacturer) until December 1999; Trustee,
Age 55 The Galaxy VIP Fund; Trustee, Galaxy Fund
II.
Louis DeThomasis Trustee President, Saint Mary's College of
Saint Mary's College Minnesota; Director, Bright Day Travel,
of Minnesota Inc.; Trustee, Religious Communities Trust;
Winona, MN 55987 Trustee, The Galaxy VIP Fund; Trustee,
Age 59 Galaxy Fund II.
Donald B. Miller Trustee Chairman, Horizon Media, Inc. (broadcast
10725 Quail Covey Road services); Director/Trustee, Lexington
Boynton Beach, FL 33436 Funds; Chairman, Executive Committee,
Age 74 Compton International, Inc. (advertising
agency); Trustee, Keuka College; Trustee,
The Galaxy VIP Fund; Trustee, Galaxy Fund
II.
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<PAGE>
<CAPTION>
Positions Principal Occupation
with The During Past 5 Years
Name and Address Galaxy Fund and Other Affiliations
- ---------------- ----------- ----------------------
<S> <C> <C>
James M. Seed Trustee Chairman and President, The Astra Projects,
The Astra Ventures, Inc. Incorporated (land development); President,
One Citizens Plaza The Astra Ventures, Incorporated
Providence, RI 02903 (previously, Buffinton Box Company -
Age 58 manufacturer of cardboard boxes);
Commissioner, Rhode Island Investment
Commission; Trustee, The Galaxy VIP
Fund; Trustee, Galaxy Fund II.
Bradford S. Wellman(1) Trustee Private Investor; Vice President and
2468 Ohio Street Director, Acadia Management Company
Bangor, ME 04401 (investment services); Director, Essex
Age 68 County Gas Company, until January 1994;
Director, Maine Mutual Fire Insurance Co.;
Member, Maine Finance Authority; Trustee,
The Galaxy VIP Fund; Trustee, Galaxy Fund
II.
W. Bruce McConnel, III Secretary Partner of the law firm Drinker Biddle &
One Logan Square Reath LLP, Philadelphia, Pennsylvania.
18th and Cherry Streets
Philadelphia, PA 19103
Age 57
Jylanne Dunne Vice President and Vice President, PFPC Inc., 1990 to present.
PFPC Inc. Assistant Treasurer
4400 Computer Drive
Westborough, MA 01581-5108
Age 40
William Greilich Vice President Vice President, PFPC Inc., 1991-96; Vice
PFPC Inc. President and Division Manager, PFPC Inc.,
4400 Computer Drive 1996 to present.
Westborough, MA 01581-5108
Age 46
</TABLE>
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<PAGE>
- -------------------
1. May be deemed to be an "interested person" within the definition set forth
in Section 2(a)(19) of the 1940 Act.
Effective May 28, 1999, each trustee receives an annual aggregate fee of
$45,000 for his services as a trustee of Galaxy, The Galaxy VIP Fund ("Galaxy
VIP") and Galaxy Fund II ("Galaxy II") (collectively, the "Trusts"), plus an
additional $3,500 for each in-person Galaxy Board meeting attended and $1,500
for each in-person Galaxy VIP or Galaxy II Board meeting attended not held
concurrently with an in-person Galaxy meeting, and is reimbursed for expenses
incurred in attending all meetings. Each trustee also receives $750 for each
telephone Board meeting in which the trustee participates, $1,000 for each
in-person Board committee meeting attended and $500 for each telephone Board
committee meeting in which the trustee participates. The Chairman of the Boards
of the Trusts is entitled to an additional annual aggregate fee in the amount of
$4,000, and the President and Treasurer of the Trusts is entitled to an
additional annual aggregate fee of $2,500 for their services in these respective
capacities. The foregoing trustees' and officers' fees are allocated among the
portfolios of the Trusts based on their relative net assets. Prior to May 28,
1999, each Trustee was entitled to receive an annual aggregate fee of $40,000
for his services as a Trustee of the Trusts plus an additional $2,500 for each
in-person Galaxy Board meeting attended, with all other fees being the same as
those currently in effect.
Effective March 1, 1996, each trustee became entitled to participate in The
Galaxy Fund, The Galaxy VIP Fund and Galaxy Fund II Deferred Compensation Plans
(the "Original Plans"). Effective January 1, 1997, the Original Plans were
merged into The Galaxy Fund/The Galaxy VIP Fund/Galaxy Fund II Deferred
Compensation Plan (together with the Original Plans, the "Plan"). Under the
Plan, a trustee may elect to have his deferred fees treated as if they had been
invested by the Trusts in the shares of one or more portfolios in the Trusts, or
other types of investment options, and the amount paid to the trustees under the
Plan will be determined based upon the performance of such investments. Deferral
of trustees' fees will have no effect on a portfolio's assets, liabilities, and
net income per share, and will not obligate the Trusts to retain the services of
any trustee or obligate a portfolio to any level of compensation to the trustee.
The Trusts may invest in underlying securities without shareholder approval.
No employee of PFPC receives any compensation from Galaxy for acting as an
officer. No person who is an officer, director or employee of Fleet or UOBGC, or
any of their affiliates, serves as a trustee, officer or employee of Galaxy. The
trustees and officers of Galaxy own less than 1% of its outstanding shares.
The following chart provides certain information about the fees received by
Galaxy's trustees in the most recently completed fiscal year.
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Pension or
Retirement Total Compensation
Benefits Accrued from Galaxy and Fund
Aggregate Compensation as Part of Fund Complex *Paid to
Name of Person/Position from Galaxy Expenses Trustees
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bradford S. Wellman $39,395 None $55,750
Trustee
- ------------------------------------------------------------------------------------------------------------
Dwight E. Vicks, Jr. $42,875 None $60,500
Chairman and Trustee
- ------------------------------------------------------------------------------------------------------------
Donald B. Miller** $40,042 None $56,500
Trustee
- ------------------------------------------------------------------------------------------------------------
Rev. Louis DeThomasis $37,643 None $53,250
Trustee
- ------------------------------------------------------------------------------------------------------------
John T. O'Neill $41,813 None $59,000
President, Treasurer
and Trustee
- ------------------------------------------------------------------------------------------------------------
James M. Seed** $39,355 None $55,750
Trustee
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
* The "Fund Complex" consists of Galaxy, The Galaxy VIP Fund and Galaxy Fund
II which comprised a total of 43 separate portfolios as of October 31,
1999.
** Deferred compensation (including interest) in the amounts of $43,939 and
$65,944 accrued during Galaxy's fiscal year ended October 31, 1999 for
Messrs. Miller and Seed, respectively.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. However, Galaxy's Declaration of Trust provides that shareholders
shall not be subject to any personal liability for the acts or obligations of
Galaxy, and that every note, bond, contract, order or other undertaking made by
Galaxy shall contain a provision to the effect that the shareholders are not
personally liable thereunder. The Declaration of Trust provides for
indemnification out of the trust property of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder and not
because of his or her acts or omissions outside such capacity or some other
reason. The Declaration of Trust also provides that Galaxy shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of Galaxy, and shall satisfy any judgment thereon. Thus, the risk of
shareholder liability is limited to circumstances in which Galaxy itself would
be unable to meet its obligations.
The Declaration of Trust states further that no trustee, officer or agent
of Galaxy shall be personally liable for or on account of any contract, debt,
claim, damage, judgment or decree arising out of or connected with the
administration or preservation of the trust estate or the
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<PAGE>
conduct of any business of Galaxy; nor shall any trustee be personally liable to
any person for any action or failure to act except by reason of his own bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
as trustee. The Declaration of Trust also provides that all persons having any
claim against the trustees or Galaxy shall look solely to the trust property for
payment.
With the exceptions stated, the Declaration of Trust provides that a
trustee is entitled to be indemnified against all liabilities and expenses
reasonably incurred by him in connection with the defense or disposition of any
proceeding in which he may be involved or with which he may be threatened by
reason of his being or having been a trustee, and that the Board of Trustees
shall indemnify representatives and employees of Galaxy to the same extent to
which they themselves are entitled to indemnification.
INVESTMENT ADVISER AND SUB-ADVISER
Fleet serves as investment adviser to the Fund. In its Advisory Agreement,
Fleet has agreed to provide investment advisory services to the Fund as
described in the Prospectuses. Fleet has also agreed to pay all expenses
incurred by it in connection with its activities under the advisory agreement
other than the cost of securities (including brokerage commissions) purchased
for the Fund. See "Expenses" below.
For the services provided and expenses assumed with respect to the Fund,
Fleet is entitled to receive advisory fees, computed daily and paid monthly, at
the annual rate of 1.00% of the average daily net assets of the Fund.
The Advisory Agreement provides that Fleet shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the performance of its duties under the Advisory Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Fleet in the
performance of its duties or from reckless disregard by it of its duties and
obligations thereunder. Unless sooner terminated, the Advisory Agreement will
continue in effect from year to year as long as such continuance is approved at
least annually (i) by the vote of a majority of trustees who are not parties to
such Advisory Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval; and (ii) by Galaxy's Board of Trustees, or by a vote of a
majority of the outstanding shares of the Fund. The term "majority of the
outstanding shares of the Fund" means, with respect to approval of an Advisory
Agreement, the vote of the lesser of (i) 67% or more of the shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund. The Advisory Agreement may be terminated by
Galaxy or by Fleet on sixty days' written notice, and will terminate immediately
in the event of its assignment.
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<PAGE>
The Advisory Agreement provides that Fleet will provide a continuous
investment program for the Fund, including research and management with
respect to all securities and investments and cash equivalents in the Fund.
In addition, the Advisory Agreement authorizes Fleet to engage a sub-adviser
to assist it in the performance of its services. Pursuant to such
authorization, Fleet has appointed UOBGC, which is an indirect majority-owned
subsidiary of United Overseas Bank Group and which has its principal offices
at 592 Fifth Avenue, New York, New York 10036, as the sub-adviser to the
Fund. As of December 31, 1999, UOBGC, together with its affiliates, had
discretionary management authority over approximately $2.17 billion in assets.
Under its Sub-Advisory Agreement with Fleet, UOBGC determines which
securities and other investments will be purchased, retained or sold for the
Fund; places orders for the Fund; manages the Fund's overall cash position;
and provides Fleet with foreign broker research and a quarterly review of
international economic and investment developments. Fleet, among other
things, assists and consults with UOBGC in connection with the Fund's
continuous investment program; approves lists of foreign countries
recommended by UOBGC for investment; reviews the investment policies and
restrictions of the Fund and recommends appropriate changes to the Board of
Trustees; and provides the Board of Trustees and UOBGC with information
concerning relevant economic and political developments. UOBGC will provide
services under the Sub-Advisory Agreement in accordance with the Fund's
investment objectives, policies and restrictions. Unless sooner terminated by
Fleet or the Board of Trustees upon sixty days' written notice or by UOBGC
upon ninety days' written notice, the Sub-Advisory Agreement will continue in
effect from year to year as long as such continuance is approved at least
annually as described above.
For the services provided and the expenses assumed pursuant to the
Sub-Advisory Agreement, Fleet pays a fee to UOBGC, computed daily and paid
quarterly, at the annual rate of 0.50% of the average daily net assets of the
Fund.
ADMINISTRATOR
PFPC Inc. ("PFPC") (formerly known as First Data Investor Services Group,
Inc.), located at 4400 Computer Drive, Westborough, Massachusetts 01581-5108,
serves as the Fund's administrator. PFPC is an indirect majority-owned
subsidiary of PNC Financial Services Group.
PFPC generally assists the Fund in its administration and operation. PFPC
also serves as administrator to the other portfolios of Galaxy. For the services
provided to the Fund, PFPC is entitled to receive administration fees based on
the combined average daily net assets of the Fund and the other portfolios
offered by Galaxy, computed daily and paid monthly, at the following annual
rates:
<TABLE>
<CAPTION>
COMBINED AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------- -----------
<S> <C>
Up to $2.5 billion.......................... 0.090%
From $2.5 to $5 billion..................... 0.085%
From $5 to $12 billion...................... 0.075%
From $12 to $15 billion..................... 0.065%
-42-
<PAGE>
<CAPTION>
COMBINED AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------- -----------
<S> <C>
From $15 to $18 billion..................... 0.060%
Over $18 billion............................ 0.0575%
</TABLE>
PFPC also receives a separate annual fee from each Galaxy portfolio for certain
fund accounting services.
From time to time, PFPC may waive voluntarily all or a portion of the
administration fees payable to it by the Fund.
Under the Administration Agreement between Galaxy and PFPC (the
"Administration Agreement"), PFPC has agreed to maintain office facilities for
Galaxy, furnish Galaxy with statistical and research data, clerical, accounting,
and bookkeeping services, provide certain other services such as internal
auditing services required by Galaxy, and compute the net asset value and net
income of the Fund. PFPC prepares the Fund's annual and semi-annual reports to
the SEC, federal and state tax returns, and filings with state securities
commissions, arranges for and bears the cost of processing share purchase and
redemption orders, maintains the Fund's financial accounts and records, and
generally assists in all aspects of Galaxy's operations. Unless otherwise
terminated, the Administration Agreement will remain in effect until May 31,
2001 and thereafter will continue from year to year upon annual approval of
Galaxy's Board of Trustees.
CUSTODIAN AND TRANSFER AGENT
The Chase Manhattan Bank ("Chase Manhattan"), located at One Chase
Manhattan Plaza, New York, New York 10081, a wholly-owned subsidiary of The
Chase Manhattan Corporation, serves as the custodian of the Fund's assets
pursuant to a Global Custody Agreement. Chase Manhattan may employ
sub-custodians for the Fund for the purpose of providing custodial services for
the Fund's foreign assets held outside the United States.
Under the Global Custody Agreement, Chase Manhattan has agreed to: (i)
maintain a separate account or accounts in the name of the Fund; (ii) hold and
disburse portfolio securities on account of the Fund; (iii) collect and make
disbursements of money on behalf of the Fund; (iv) collect and receive all
income and other payments and distributions on account of the Fund's portfolio
securities; (v) respond to correspondence from security brokers and others
relating to its duties; and (vi) make periodic reports to the Board of Trustees
concerning the Fund's operations. Chase Manhattan is authorized to select one or
more banks or trust companies to serve as sub-custodian for the Fund, provided
that Chase Manhattan shall remain responsible for the performance of all of its
duties under the custodian agreement and shall be liable to the Fund for any
loss which shall occur as a result of the failure of a sub-custodian to exercise
reasonable care with respect to the safekeeping of the Fund's assets. In
addition, Chase Manhattan also serves as Galaxy's "foreign custody manager" (as
that term is defined in Rule 17f-5 under the 1940 Act) and in such capacity
employs sub-custodians for the Fund for the purpose of providing custodial
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<PAGE>
services for the foreign assets of the Fund held outside the U.S. The assets of
the Fund are held under bank custodianship in compliance with the 1940 Act.
PFPC serves as the Fund's transfer and dividend disbursing agent pursuant
to a Transfer Agency and Services Agreement (the "Transfer Agency Agreement").
Communications to PFPC should be directed to PFPC at P.O. Box 5108, 4400
Computer Drive, Westborough, Massachusetts 01581. Under the Transfer Agency
Agreement, PFPC has agreed to: (i) issue and redeem shares of the Fund; (ii)
transmit all communications by the Fund to its shareholders of record, including
reports to shareholders, dividend and distribution notices and proxy materials
for meetings of shareholders; (iii) respond to correspondence by security
brokers and others relating to its duties; (iv) maintain shareholder accounts;
and (v) make periodic reports to the Board of Trustees concerning Galaxy's
operations.
PFPC may enter into agreements with one or more entities, including
affiliates of Fleet, pursuant to which such entities agree to perform certain
sub-accounting and administrative functions ("Sub-Account Services") on a per
account basis with respect to Trust Shares of the Fund held by defined
contribution plans, including maintaining records reflecting separately with
respect to each plan participant's sub-account all purchases and redemptions of
Trust Shares and the dollar value of Trust Shares in each sub-account; crediting
to each participant's sub-account all dividends and distributions with respect
to that sub-account; and transmitting to each participant a periodic statement
regarding the sub-account as well as any proxy materials, reports and other
material Fund communications. Such entities are compensated by PFPC for the
Sub-Account Services and in connection therewith the transfer agency fees
payable by Trust Shares of the Fund to PFPC have been increased by an amount
equal to these fees. In substance, therefore, the holders of Trust Shares of the
Fund indirectly bear these fees.
Fleet Bank, an affiliate of Fleet, is paid a fee for Sub-Account Services
performed with respect to Trust Shares of the Fund held by defined contribution
plans. Pursuant to an agreement between Fleet Bank and PFPC, Fleet Bank is paid
$21.00 per year for each defined contribution plan participant account. PFPC
bears this expense directly, and shareholders of Trust Shares of the Fund bear
this expense indirectly through fees paid to PFPC for transfer agency services.
EXPENSES
Fleet and PFPC bear all expenses in connection with the performance of
their services for the Fund, except that Galaxy bears the expenses incurred in
the Fund's operations including: taxes; interest; fees (including fees paid to
its trustees and officers who are not affiliated with PFPC); SEC fees; state
securities fees; costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders; advisory,
administration, shareholder servicing, Rule 12b-1 distribution (if applicable),
fund accounting and custody fees; charges of the transfer agent and dividend
disbursing agent; certain insurance premiums; outside auditing and legal
expenses; costs of independent pricing services; costs of shareholder reports
and meetings; and any extraordinary expenses. The Fund also pays for brokerage
fees and commissions in connection with the purchase of portfolio securities.
-44-
<PAGE>
PORTFOLIO TRANSACTIONS
Fleet or UOBGC will select specific portfolio investments and effect
transactions for the Fund. Fleet and UOBGC seek to obtain the best net price
and the most favorable execution of orders. Fleet or UOBGC may, in its
discretion, effect transactions in portfolio securities with dealers who
provide research advice or other services to the Fund, Fleet or UOBGC. Fleet
or UOBGC is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for
the Fund which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Fleet or UOBGC
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or Fleet or
UOBGC's overall responsibilities to the Fund and to Galaxy. Such brokerage
and research services might consist of reports and statistics relating to
specific companies or industries, general summaries of groups of stocks or
bonds and their comparative earnings and yields, or broad overviews of the
stock, bond and government securities markets and the economy. The fees under
the Investment Advisory Agreement between Galaxy and Fleet and the Sub-Advisory
Agreement between Fleet and UOBGC are not reduced by reason of receiving such
brokerage and research services. The Board of Trustees will periodically
review the commissions paid by the Fund to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits inuring to the Fund.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. There is generally no
stated commission in the case of securities traded in U.S. over-the-counter
markets, but the prices of those securities include undisclosed commissions or
mark-ups. The cost of securities purchased from underwriters includes an
underwriting commission or concession, and the prices at which securities are
purchased from and sold to dealers include a dealer's mark-up or mark-down. U.S.
Government securities are generally purchased from underwriters or dealers,
although certain newly issued U.S. Government securities may be purchased
directly from the U.S. Treasury or from the issuing agency or instrumentality.
No brokerage commissions are typically paid on purchases and sales of U.S.
Government securities.
The Fund may engage in short-term trading to achieve their investment
objectives. Portfolio turnover may vary greatly from year to year as well as
within a particular year. Except as permitted by the SEC or applicable law,
the Fund will not acquire portfolio securities from, make savings deposits
in, enter into repurchase or reverse repurchase agreements with, or sell
securities to, Fleet, UOBGC, PFPC, or their affiliates, and will not give
preference to affiliates and correspondent banks of Fleet with respect to
such transactions.
Investment decisions for the Fund are made independently from those for
the other portfolios of Galaxy and for any other investment companies and
accounts advised or managed by Fleet or UOBGC. When a purchase or sale of the
same security is made at substantially the same
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<PAGE>
time on behalf of the Fund, another portfolio of Galaxy, and/or another
investment company or account, the transaction will be averaged as to price, and
available investments allocated as to amount, in a manner which Fleet or UOBGC
believes to be equitable to the Fund and such other portfolio, investment
company or account. In some instances, this investment procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or sold by the Fund. To the extent permitted by law, Fleet or UOBGC may
aggregate the securities to be sold or purchased for the Fund with those to be
sold or purchased for Galaxy's other portfolios, or other investment companies
or accounts in order to obtain best execution.
DISTRIBUTION PLANS
RETAIL A SHARES PLAN
Galaxy has adopted a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act (the "Rule") with respect to Retail A Shares of the Fund (the "Retail A
Shares Plan"). Under the Retail A Shares Plan, Galaxy may pay PDI or another
person for expenses and activities intended to result in the sale of Retail A
Shares, including the payment of commissions to broker-dealers and other
industry professionals who sell Retail A Shares and the direct or indirect cost
of financing such payments.
Under the Retail A Shares Plan, payments by Galaxy for distribution
expenses may not exceed the annualized rate of 0.30% of the average daily net
assets attributable to the Fund's outstanding Retail A Shares. As of the date of
this Statement of Additional Information, Galaxy intends to limit the Fund's
payments for distribution expenses to not more than 0.25% (on an annualized
basis) of the average daily net asset value of the Fund's outstanding Retail A
Shares.
RETAIL B SHARES PLAN
Galaxy has adopted a Distribution and Services Plan pursuant to the Rule
with respect to Retail B Shares of the Fund (the "Retail B Shares Plan"). Under
the Retail B Shares Plan, Galaxy may pay (a) PDI or another person for expenses
and activities intended to result in the sale of Retail B Shares, including the
payment of commissions to broker-dealers and other industry professionals who
sell Retail B Shares and the direct or indirect cost of financing such payments,
(b) institutions for shareholder liaison services, which means personal services
for holders of Retail B Shares and/or the maintenance of shareholder accounts,
such as responding to customer inquiries and providing information on accounts,
and (c) institutions for administrative support services, which include but are
not limited to (i) transfer agent and sub-transfer agent services for beneficial
owners of Retail B Shares; (ii) aggregating and processing purchase and
redemption orders; (iii) providing beneficial owners with statements showing
their positions in Retail B Shares; (iv) processing dividend payments; (v)
providing sub-accounting services for Retail B Shares held beneficially; (vi)
forwarding shareholder communications, such as proxies, shareholder reports,
dividend and tax notices, and updating prospectuses to beneficial owners; and
(vii) receiving, translating and transmitting proxies executed by beneficial
owners.
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<PAGE>
Under the Retail B Shares Plan, payments by Galaxy (i) for distribution
expenses may not exceed the annualized rate of .75% of the average daily net
assets attributable to the Fund's outstanding Retail B Shares, and (ii) to an
institution for shareholder liaison services and/or administrative support
services may not exceed the annual rates of .25% and .25%, respectively, of the
average daily net assets attributable to the Fund's outstanding Retail B Shares
which are owned of record or beneficially by that institution's customers for
whom the institution is the dealer of record or shareholder of record or with
whom it has a servicing relationship. As of the date of this Statement of
Additional Information, Galaxy intends to limit the Fund's payments for
shareholder liaison and administrative support services under the Retail B
Shares Plan to an aggregate fee of not more than .25% (on an annualized basis)
of the average daily net asset value of Retail B Shares owned of record or
beneficially by customers of institutions.
BOTH DISTRIBUTION PLANS
Payments for distribution expenses under the Retail A Shares Plan and
Retail B Shares Plan (the "12b-1 Plans") are subject to the Rule. The Rule
defines distribution expenses to include the cost of "any activity which is
primarily intended to result in the sale of shares issued by" Galaxy. The Rule
provides, among other things, that an investment company may bear such expenses
only pursuant to a plan adopted in accordance with the Rule. In accordance with
the Rule, the 12b-1 Plans provide that a report of the amounts expended under
the 12b-1 Plans, and the purposes for which such expenditures were incurred,
will be made to the Board of Trustees for its review at least quarterly. The
12b-1 Plans provide that they may not be amended to increase materially the
costs which Retail A Shares or Retail B Shares of the Fund may bear for
distribution pursuant to the 12b-1 Plans without shareholder approval, and that
any other type of material amendment must be approved by a majority of the Board
of Trustees, and by a majority of the trustees who are neither "interested
persons" (as defined in the 1940 Act) of Galaxy nor have any direct or indirect
financial interest in the operation of the 12b-1 Plans or in any related
agreements (the "12b-1 Trustees"), by vote cast in person at a meeting called
for the purpose of considering such amendments.
Galaxy's Board of Trustees has concluded that there is a reasonable
likelihood that the 12b-1 Plans will benefit the Fund and holders of Retail A
Shares and Retail B Shares. The 12b-1 Plans are subject to annual reapproval by
a majority of the 12b-1 Trustees and are terminable at any time with respect to
the Fund by a vote of a majority of the 12b-1 Trustees or by vote of the holders
of a majority of the Retail A Shares or Retail B Shares of the Fund, as
applicable. Any agreement entered into pursuant to the 12b-1 Plans with an
institution ("Service Organization") is terminable with respect to the Fund
without penalty, at any time, by vote of a majority of the 12b-1 Trustees, by
vote of the holders of a majority of the Retail A Shares or Retail B Shares of
the Fund, as applicable, by PDI or by the Service Organization. An agreement
will also terminate automatically in the event of its assignment.
As long as the 12b-1 Plans are in effect, the nomination of the trustees
who are not interested persons of Galaxy (as defined in the 1940 Act) must be
committed to the discretion of the 12b-1 Trustees.
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<PAGE>
DISTRIBUTOR
PDI serves as Galaxy's distributor. PDI is a registered broker-dealer with
principal offices located at 3200 Horizon Drive, King of Prussia, Pennsylvania
19406. Jane Haegele is the sole shareholder of PDI.
Unless otherwise terminated, the Distribution Agreement between Galaxy and
PDI remains in effect until November 30, 2000, and thereafter will continue from
year to year upon annual approval by Galaxy's Board of Trustees, or by the vote
of a majority of the outstanding shares of Galaxy and by the vote of a majority
of the Board of Trustees of Galaxy who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. The Agreement will terminate in the event of
its assignment, as defined in the 1940 Act.
PDI is entitled to the payment of a front-end sales charge on the sale of
Retail A Shares of the Fund as described in the applicable Prospectus and this
Statement of Additional Information. PDI is also entitled to the payment of
contingent deferred sales charges upon the redemption of Retail B Shares of the
Fund.
AUDITORS
Ernst & Young LLP, independent auditors, with offices at 200 Clarendon
Street, Boston, Massachusetts 02110, serve as auditors for Galaxy.
COUNSEL
Drinker Biddle & Reath LLP (of which W. Bruce McConnel, III, Secretary of
Galaxy, is a partner), One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103, are counsel to Galaxy and will pass upon certain legal
matters on its behalf.
CODES OF ETHICS
Galaxy, Fleet and UOBGC have adopted codes of ethics pursuant to Rule
17j-1 under the 1940 Act that permit investment personnel subject to their
particular codes of ethics to invest in securities, including securities that
may be purchased or held by the Fund, for their own accounts. The codes of
ethics are on public file with, and available from, the Securities and Exchange
Commission's Public Reference Room in Washington, D.C.
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<PAGE>
PERFORMANCE AND YIELD INFORMATION
Investment returns and principal values will vary with market conditions so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Past performance is no guarantee of future results. Unless
otherwise indicated, total return figures include changes in share price,
deduction of any applicable sales charge, and reinvestment of dividends and
capital gains distributions, if any.
The Fund's 30-day (or one month) standard yields are calculated separately
for each series of shares in the Fund in accordance with the method prescribed
by the SEC for mutual funds:
YIELD = 2[(a-b)/cd +1 )6 - 1]
Where: a = dividends and interest earned by the Fund during the period;
b = expenses accrued for the period (net of reimbursements);
c = average daily number of shares outstanding during the period
entitled to receive dividends; and
d = maximum offering price per share on the last day of the
period.
For the purpose of determining net investment income earned during the period
(variable "a" in the formula), dividend income on equity securities held by the
Fund is recognized by accruing 1/360 of the stated dividend rate of the security
each day that the security is in the Fund. Except as noted below, interest
earned on debt obligations held by the Fund is calculated by computing the yield
to maturity of each obligation based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day of each month, or, with respect to obligations purchased during the
month, the purchase price (plus actual accrued interest) and dividing the result
by 360 and multiplying the quotient by the market value of the obligation
(including actual accrued interest) in order to determine the interest income on
the obligation for each day of the subsequent month that the obligation is held
by the Fund. For purposes of this calculation, it is assumed that each month
contains 30 days. The maturity of an obligation with a call provision is the
next call date on which the obligation reasonably may be expected to be called
or, if none, the maturity date. With respect to debt obligations purchased at a
discount or premium, the formula generally calls for amortization of the
discount or premium. The amortization schedule will be adjusted monthly to
reflect changes in the market value of such debt obligations. Expenses accrued
for the period (variable "b" in the formula) include all recurring fees charged
by the Fund to all shareholder accounts in proportion to the length of the base
period and the Fund's mean (or median) account size. Undeclared earned income
will be subtracted from the offering price per share (variable "d" in the
formula).
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<PAGE>
With respect to mortgage or other receivables-backed obligations that are
expected to be subject to monthly payments of principal and interest
("pay-downs"), (i) gain or loss attributable to actual monthly pay-downs are
accounted for as an increase or decrease to interest income during the period,
and (ii) the Fund may elect either (a) to amortize the discount and premium on
the remaining security, based on the cost of the security, to the weighted
average maturity date, if such information is available, or to the remaining
term of the security, if any, if the weighted average date is not available or
(b) not to amortize discount or premium on the remaining security.
If the Fund advertises its "average annual total return," it computes such
return separately for each series of shares by determining the average annual
compounded rate of return during specified periods that equates the initial
amount invested to the ending redeemable value of such investment according to
the following formula:
T = [(ERV/P) - 1]1/n
Where: T = average annual total return;
ERV= ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the
l, 5 or 10 year (or other) periods at the
end of the applicable period (or a
fractional portion thereof);
P = hypothetical initial payment of $1,000; and
n = period covered by the computation, expressed in years.
The Fund that advertises its "aggregate total return" computes such returns
separately for each series of shares by determining the aggregate compounded
rates of return during specified periods that likewise equate the initial amount
invested to the ending redeemable value of such investment. The formula for
calculating aggregate total return is as follows:
Aggregate Total Return = [(ERV/P) - l]
The calculations are made assuming that (1) all dividends and capital gain
distributions are reinvested on the reinvestment dates at the price per share
existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value (variable "ERV" in the
formula) is determined by assuming complete redemption of the hypothetical
investment after deduction of all nonrecurring charges at the end of the
measuring period. In addition, the Fund's Retail Shares average annual total
return and aggregate total return quotations will reflect the deduction of the
maximum sales load charged in connection with purchases of Retail A Shares or
redemptions of Retail B Shares, as the case may be.
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<PAGE>
PERFORMANCE REPORTING
From time to time, in advertisements or in reports to shareholders, the
performance of the Fund may be quoted and compared to that of other mutual funds
with similar investment objectives and to stock or other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
performance of the Fund may be compared to data prepared by Lipper Analytical
Services, Inc., a widely recognized independent service which monitors the
performance of mutual funds, the S&P 500 Index, an unmanaged index of groups of
common stocks, the Consumer Price Index, or the Dow Jones Industrial Average, a
recognized unmanaged index of common stocks of 30 industrial companies listed on
the New York Stock Exchange. In addition, the performance of the Fund may be
compared to the Morgan Stanley Capital International Index or the FT World
Actuaries Index.
Performance data as reported in national financial publications including,
but not limited to, MONEY MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL
and THE NEW YORK TIMES, or publications of a local or regional nature may also
be used in comparing the performance of the Fund. Performance data will be
calculated separately for Trust Shares, Retail A Shares and Retail B Shares of
the Fund.
The standard yield is computed as described above. The Fund may also
advertise its "effective yield" which is calculated similarly but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested.
The Fund may also advertise its performance using "average annual total
return" figures over various periods of time. Such total return figures reflect
the average percentage change in the value of an investment in the Fund from the
beginning date of the measuring period to the end of the measuring period and
are calculated as described above. Average total return figures will be given
for the most recent one-, five- and ten-year periods (if applicable), and may be
given for other periods as well, such as from the commencement of the Fund's
operations, or on a year-by-year basis. The Fund may also use "aggregate total
return" figures for various periods, representing the cumulative change in the
value of an investment in the Fund for the specified period. Both methods of
calculating total return reflect the maximum front-end sales load for Retail A
Shares of the Fund and the applicable contingent deferred sales charge for
Retail B Shares of the Fund and assume that dividends and capital gain
distributions made by the Fund during the period are reinvested in Fund shares.
The Fund may also advertise total return data without reflecting the sales
charges imposed on the purchase of Retail A Shares or the redemption of Retail B
Shares in accordance with the rules of the SEC. Quotations that do not reflect
the sales charges will be higher than quotations that do reflect the sales
charges.
The performance of the Fund will fluctuate and any quotation of performance
should not be considered as representative of the future performance of the
Fund. Since yields fluctuate, yield data cannot necessarily be used to compare
an investment in the Fund's shares with bank
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<PAGE>
deposits, savings accounts and similar investment alternatives which often
provide an agreed or guaranteed fixed yield for a stated period of time.
Shareholders should remember that performance data are generally functions of
the kind and quality of the instruments held in a portfolio, portfolio maturity,
operating expenses, and market conditions. Any additional fees charged by
institutions with respect to accounts of customers that have invested in shares
of the Fund will not be included in performance calculations.
The portfolio manager of the Fund and other investment professionals may
from time to time discuss in advertising, sales literature or other material,
including periodic publications, various topics of interest to shareholders and
prospective investors. The topics may include but are not limited to the
advantages and disadvantages of investing in tax-deferred and taxable
investments; Fund performance and how such performance may compare to various
market indices; shareholder profiles and hypothetical investor scenarios; the
economy; the financial and capital markets; investment strategies and
techniques; investment products; and tax, retirement and investment planning.
MISCELLANEOUS
As used in this Statement of Additional Information, "assets belonging to"
the Fund or series of the Fund means the consideration received by Galaxy upon
the issuance of shares in the Fund or series of the Fund, together with all
income, earnings, profits, and proceeds derived from the investment thereof,
including any proceeds from the sale of such investments, any funds or payments
derived from any reinvestment of such proceeds and a portion of any general
assets of Galaxy not belonging to a particular series or portfolio. In
determining the net asset value of a particular series of the Fund, assets
belonging to the particular series of the Fund are charged with the direct
liabilities in respect of that series and with a share of the general
liabilities of Galaxy, which are allocated in proportion to the relative asset
values of the respective series and Galaxy portfolios at the time of allocation.
Subject to the provisions of Galaxy's Declaration of Trust, determinations by
the Board of Trustees as to the direct and allocable liabilities, and the
allocable portion of any general assets with respect to a particular series or
portfolio, are conclusive.
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent certified public accountants.
A "vote of the holders of a majority of the outstanding shares" of the Fund
or a particular series of shares in the Fund means, with respect to the approval
of an investment advisory agreement, a distribution plan or a change in an
investment objective or fundamental investment policy, the affirmative vote of
the holders of the lesser of (a) more than 50% of the outstanding shares of the
Fund or such series of shares, or (b) 67% or more of the shares of the Fund or
such series of shares present at a meeting if more than 50% of the outstanding
shares of the Fund or such series of shares are represented at the meeting in
person or by proxy.
-52-
<PAGE>
As of April 11, 2000, the name, address and percentage ownership of the
entities or persons that held of record or beneficially more than 5% of the
outstanding shares of each class of shares of Galaxy's investment portfolios
were as follows:
<TABLE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
MONEY MARKET FUND
TRUST
Fleet New York 99.65%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
RETAIL B
Wei Qiang Chen & 5.59%
Yan Juan Chen JT WROS
45 Oval Rd. Unit 1
Quincy, MA 02170-3819
Steven R. Schwartz 5.46%
2393 Lake Elmo Ave. N
Lake Elmo, MN 55042-8407
TAX-EXEMPT MONEY MARKET
TRUST
Fleet New York 99.22%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
RETAIL A
Brenda May Earl 20.31%
279 Central Park West
PH-19A
New York, NY 10024-3080
Joseph Dimenna 6.15%
1049 Fifth Ave. Apt. P3
New York, NY 10028-0115
GOVERNMENT MONEY MARKET
TRUST
Fleet New York 97.96%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
U.S. TREASURY MONEY MARKET
TRUST
Fleet New York 94.65%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
RETAIL A
US Clearing A Division of 9.64%
Fleet Securities Inc.
26 Broadway
New York, NY 10004-1703
Taqua Systems Inc. 9.28%
75 Attucks Lane
Hyannis, MA 02601-1867
INSTITUTIONAL TREASURY MONEY MARKET
TRUST
Fleet New York 89.73%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
-53-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
Luitpold Pharmaceuticals Inc. 6.36%
Kirk Sobecki, CFO
Attn: Harold Noviello
One Luitpold Dr.
Shirley, NY 11967
MASSACHUSETTS MUNICIPAL MONEY MARKET
RETAIL A
Fleet New York 48.35%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
CONNECTICUT MUNICIPAL MONEY MARKET
RETAIL A
Fleet New York 42.57%
Fleet Investment Services
159 East Main St.
NY/RO/T03C
Rochester, NY 14638-0001
EQUITY VALUE
TRUST
Gales & Co. 76.08%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 14.97%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 7.31%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
EQUITY GROWTH
TRUST
Gales & Co. 68.28%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 16.88%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 14.12%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
PRIME A
US Clearing A Division of
Fleet Securities Inc. 49.88%
FBO# 104-32732-16
Hilda Brandt
Roland Park Place
830 W. 40th Street, Apt. 359
Baltimore, MD 21211-2176
-54-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
US Clearing A Division of 26.03%
Fleet Securities Inc.
FBO# 114-97238-17
Sara Mallow
936 Broadway
New York, NY 10010-6013
US Clearing A Division of 8.66%
Fleet Securities Inc.
FBO# 120-97689-18
Yook Y Doo
46-34 Robinson St.
Flushing, NY 11355-3445
US Clearing A Division of 6.86%
Fleet Securities Inc.
FBO# 021-90471-15
Mabel L Bowman
35634 Meyers Ct.
Fremont, CA 94536-2540
US Clearing A Division of 5.33%
Fleet Securities Inc.
FBO# 143-27206-11
Mary V Mastroianni &
Pasqual Mastroianni JT Ten
1811 Randolph Road
Schenectady, NY 12308-2021
PRIME B
US Clearing A Division of 19.66%
Fleet Securities Inc.
FBO# 111-98315-17
Thomas J Bernfeld
185 West End Avenue, Apt. 21D
New York, NY 10023-5548
US Clearing A Division of 12.70%
Fleet Securities Inc.
FBO# 166-31108-13
Frank Catanho, Trustee of
the Frank Catanho
1996 Trust dated 10/22/96
24297 Mission Blvd.
Hayward, CA 94544-1020
US Clearing A Division of 12.33%
Fleet Securities Inc.
FBO# 024-90318-16
Lynn C. Sherrie
P.O. Box 316
Wilson, NY 14172-0316
US Clearing A Division of 10.64%
Fleet Securities Inc.
FBO# 221-00085-18
Walter M. Swiecicki &
Cathleen Swiecicki JT WROS
119 Old Beekman Road
Monmouth Junction, NJ
08852-3114
US Clearing A Division of 5.84%
Fleet Securities Inc.
FBO# 183-97247-11
W P Fleming
66500 E 253rd
Grove, OK 74344-6163
EQUITY INCOME
TRUST
Gales & Co. 12.54%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
-55-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
Gales & Co. 33.12%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 52.69%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
INTERNATIONAL EQUITY
TRUST
Gales & Co. 42.13%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 37.82%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 13.34%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
RETAIL A
Charles Schwab & Co. Inc. 7.17%
Special Custody Acct. for
Exclusive of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
PRIME A
US Clearing A Division of 80.62%
Fleet Securities Inc.
FBO 125-98055-11
Albert F Twanmo
6508 81st St.
Cabin John, MD 20818-1203
US Clearing A Division of 14.83%
Fleet Securities Inc.
FBO 136-99157-13
Jon-Paul Dadaian
178 Clarken Drive
West Orange, NJ 07052-3441
PRIME B
US Clearing A Division of 80.32%
Fleet Securities Inc.
FBO# 102-59241-17
Church & Friary of St.
Francis of Assisi
c/o Fr. Ronald P Stark OFM
135 West 31st St.
New York, NY 10001-3405
GROWTH & INCOME
TRUST
Gales & Co. 77.18%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
-56-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
Gales & Co. 19.13%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
PRIME A
US Clearing A Division of 35.30%
Fleet Securities Inc.
FBO# 160-27022-17
Linda Shaw, Trustee for the
Linda J Shaw Trust
920 Meadows road
Geneva, IL 60134-3052
US Clearing A Division of 28.56%
Fleet Securities Inc.
FBO# 113-27816-16
Pamela M Fein
68 Oak Ridge Drive
Bethany, CT 06524-3118
US Clearing A Division of 23.86%
Fleet Securities Inc.
FBO# 175-97327-10
Margaret Ann Gillenwater
2525 E Prince Road #23
Tucson, AZ 85716-1146
US Clearing A Division of 6.21%
Fleet Securities Inc.
FBO# 103-80060-19
Saint Clare School
Endowment Fund
Attn: Fr, O'Shea/Andrew J
Houvouras &/or Bruce Blatman
821 Prosperity Farms Road
No. Palm Beach, FL 33408-4299
PRIME B
US Clearing A Division of 29.49%
Fleet Securities Inc.
FBO# 147-97497-13
Martin Allen Sante
15222 Birch Lakeshore Drive
Vandalia, MI 49095-9741
US Clearing A Division of 19.45%
Fleet Securities Inc.
FBO# 103-31744-16
Irwin Luftig & Elaine Luftig
6119 Bear Creek Ct
Lake Worth, FL 33467-6812
US Clearing A Division of 16.54%
Fleet Securities Inc.
FBO# 148-28677-18
Linda M. Berke & Michael E.
Berke JT TEN
30941 Westwood Road
Farmington Hills, MI
48331-1466
US Clearing A Division of 16.14%
Fleet Securities Inc.
FBO# 147-29019-15
Walter W Quan
2617 Skyline Drive
Lorain, OH 44053-2243
US Clearing A Division of 6.18%
Fleet Securities Inc.
FBO# 013-90166-12
Florence G. St. Onge
34 Cedar Lane
Warren, RI 02885-2236
-57-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
US Clearing A Division of 5.94%
Fleet Securities Inc.
FBO# 108-00116-10
Michael Kennedy & Carleen
Kennedy JT WROS
12 Walton Avenue
Locust Valley, NY 11560-1227
ASSET ALLOCATION
TRUST
Gales & Co. 92.95%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 6.15%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
PRIME A
US Clearing A Division of 22.80%
Fleet Securities Inc.
FBO# 114-97238-17
Sara Mallow
936 Broadway
New York, NY 10010-6013
US Clearing A Division of 22.62%
Fleet Securities Inc.
FBO# 147-97697-11
Ray Wayne Prince
11010 Stephens Road
Berlin Heights, OH 44814-9673
US Clearing A Division of 14.56%
Fleet Securities Inc.
FBO# 175-97327-10
Margaret Ann Gillenwater
2525 E Prince Road #23
Tucson, AZ 85716-1146
US Clearing A Division of 13.10%
Fleet Securities Inc.
FBO# 166-98586-13
Pamela Ann Radamaker
1001 Tramway Blvd NE
Albuquerque, NM 87112-6280
US Clearing A Division of 7.44%
Fleet Securities Inc.
FBO 170-29789-15
Nicholas G. Roselli &
Nicholas A. Roselli JT WROS
315 Southampton Road
Westfield, MA 01085-1360
US Clearing A Division of 5.26%
Fleet Securities Inc.
FBO 194-97099-17
James Kenneth Winter
28 South Fork Cove
Senatobia, MS 38668-6329
PRIME B
US Clearing A Division of 10.06%
Fleet Securities Inc.
FBO# 138-97818-14
Carol Y Foster
524 Marie Avenue
Blountstown, FL 32424-1218
-58-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
US Clearing A Division of 9.60%
Fleet Securities Inc.
FBO# 102-92974-11
Ann E Herzog
74 Tacoma Street
Staten Island, NY 10304-4222
US Clearing A Division of 6.40%
Fleet Securities Inc.
FBO# 166-98559-16
Ann P Sargent
422 Los Encinos Avenue
San Jose, CA 95134-1336
US Clearing A Division of 6.21%
Fleet Securities Inc.
FBO# 166-97970-19
Alicia E Schober
10139 Ridgeway Drive
Cupertino, CA 95014-2658
US Clearing A Division of 5.70%
Fleet Securities Inc.
FBO# 194-14889-16
Paul R Thornton & Karin Z
Thornton JT TEN
1207 Oak Glen Lane
Sugar Land, TX 77479-6175
US Clearing A Division of 6.06%
Fleet Securities Inc.
FBO# 147-29049-19
Randall Prince
Rt. 1, Box 865
Turtletown, TN 37391-9700
SMALL COMPANY EQUITY
TRUST
Gales & Co. 60.78%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638
Gales & Co. 27.63%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638
Gales & Co. 7.35%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638
SMALL CAP VALUE
TRUST
Gales & Co. 31.24%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 18.19%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
-59-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
Gales & Co. 48.07%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
PRIME A
US Clearing A Division of 30.36%
Fleet Securities Inc.
FBO# 104-32732-16
Hilda Brandt
3900 North Charles Street
Baltimore, MD 21218-1724
US Clearing A Division of 19.13%
Fleet Securities Inc.
FBO# 150-98301-11
N Clifford Nelson Jr
58 Middlebury Road
Orchard Park, NY 14127-3581
US Clearing A Division of 19.00%
Fleet Securities Inc.
FBO# 102-60254-19
Frederick W Geissinger
601 NW 2nd Street
Evansville, IN 47708-1013
US Clearing A Division of 12.77%
Fleet Securities Inc.
FBO# 103-97564-14
Thomas X McKenna
170 Turtle Creek Drive
Tequesta, FL 33469-1547
US Clearing A Division of 9.35%
Fleet Securities Inc.
FBO# 103-31296-18
Edward U Roddy III
109 Angler Avenue
Palm Beach, FL 33480-3101
PRIME B
US Clearing A Division of 14.31%
Fleet Securities Inc.
FBO# 111-98315-17
Thomas J Bernfeld
185 West End Avenue, Apt. 21D
New York, NY 10023-5548
US Clearing A Division of 9.70%
Fleet Securities Inc.
FBO# 107-30623-15
Andrejs Zvejnieks
2337 Christopher Walk
Atlanta, GA 30327-1110
US Clearing A Division of 7.55%
Fleet Securities Inc.
FBO# 108-98472-11
Rufus O.Eddins, Jr.
360 Dominion Circle
Knoxville, TN 37922-2750
US Clearing A Division of 7.25%
Fleet Securities Inc.
FBO# 221-97250-13
Micheal A Veschi
106 Exmoor Court
Leesburg, VA 20176-2049
-60-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
STRATEGIC EQUITY
TRUST
Gales & Co. 97.41%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
RETAIL B
Violet K. Saidnehr 5.77%
260 Middle Neck Road
Great Neck, NY 11021-1175
INTERMEDIATE GOVERNMENT INCOME
TRUST
Gales & Co. 25.40%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 33.33%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 38.47%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
RETAIL B
Adriana Vita 7.71%
345 Park Ave.
New York, NY 10154
HIGH QUALITY BOND
TRUST
Gales & Co. 58.57%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 26.11%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 13.80%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
PRIME A
US Clearing A Division of 45.79%
Fleet Securities Inc.
FBO# 103-30971-12
Doris G Schack
FBO - Doris G Schack
Living Trust
9161 East Evans
Scottsdale, AZ 85260-7575
US Clearing A Division of 33.69%
Fleet Securities Inc.
FBO# 132-90090-11
Virginia Holmes
303 Bella Vista Drive
Ithaca, NY 14850-5774
US Clearing A Division of 20.18%
Fleet Securities Inc.
FBO# 013-02964-11
Jane L Grayhurst
770 Boylston St., Apt 10G
Boston, MA 02199-7709
-61-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
PRIME B
US Clearing A Division of 30.74%
Fleet Securities Inc.
FBO# 200-70099-19
Neil C Feldman
41 Windham way
Englishtown, NJ 07726-8216
US Clearing A Division of 12.40%
Fleet Securities Inc.
FBO# 119-97697-10
Ira Zornberg
4219 Nautilus Avenue
Brooklyn, NY 11224-1019
US Clearing A Division of 12.22%
Fleet Securities Inc.
FBO# 147-24459-13
Jay Robert Klein
26800 Amhearst Circle #209
Cleveland, OH 44122-7572
US Clearing A Division of 11.67%
Fleet Securities Inc.
FBO# 102-68909-11
Marjorie Dion
301 Raimond Street
Yaphank, NY 11980-9725
US Clearing A Division of 7.91%
Fleet Securities Inc.
FBO# 157-98031-13
Patricia Fusco
112 E. Chapel Avenue
Cherry Hill, NJ 08034-1204
US Clearing A Division of 5.86%
Fleet Securities Inc.
FBO# 238-97175-19
Marie Gottfried
10208 Andover Coach
Circle H-2
Lake Worth, FL 33467-8158
US Clearing A Division of 5.48%
Fleet Securities Inc.
FBO# 013-03576-19
Louise Brown & Sandra
Fontaine JT TEN
172 High Street
Woonsocket, RI 02895-4311
SHORT-TERM BOND
TRUST
Gales & Co. 43.76%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 21.17%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 32.36%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
-62-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
RETAIL B
Chelsea Police Relief Assoc. 17.43%
John R. Phillips Treas. &
Michael McCona Clerk
180 Crescent Avenue
Chelsea, MA 02150-3017
Josue Colon Cust 9.72%
Hazel Colon UGMA CT
400 Lasalle St
New Britan, CT 06051-1316
Elizabeth Mugar 9.22%
10 Chestnut St.
Apt. 1808
Springfield, MA 01103-1709
TAX-EXEMPT BOND
TRUST
Gales & Co. 37.11%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 25.94%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 32.03%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
RETAIL A
US Clearing A Division of 6.17%
Fleet Securities Inc.
FBO 979-09787-13
FHV Realty LLC
81 Sheridan Ave.
Saddle River, NJ 07458-3210
RETAIL B
Sylvia Fendler 10.28%
72 Brinkerhoff Ave.
Stamford, Ct. 06905
Frances E. Stady 6.25%
P.O. BOX 433
3176 Main St.
Yorkshire, NY 14173-0433
US Clearing A Division of 5.29%
Fleet Securities Inc.
FBO 978-02869-11
Carol Guy & Ali E. Guy
14 Thomas St.
Scarsdale, NY 10583-1031
CONNECTICUT MUNICIPAL BOND
TRUST
Gales & Co. 67.06%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638
Gales & Co. 23.52%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638
-63-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
Bob & Co. 9.18%
c/o Bank of Boston
Attn: Mutual Fd Dept 45-02-06
PO Box 1809
Boston, MA 02105-1809
RETAIL A
Maria Luisa Carcangiu & 6.02%
Juan Rosai JT WROS
36 Beach Ave.
Milford, CT 06460
MASSACHUSETTS MUNICIPAL BOND
TRUST
Gales & Co. 41.77%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 46.93%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Bob & Co. 9.51%
c/o Bank of Boston
Attn: Mutual Fd Dept 45-02-06
PO Box 1809
Boston, MA 02105-1809
CORPORATE BOND
TRUST
Gales & Co. 41.48%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 31.86%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 16.87%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
RHODE ISLAND MUNICIPAL BOND
RETAIL A
Gales & Co. 35.18%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Bob & Co. 22.21%
c/o Bank of Boston
Attn: Mutual Fd Dept.
45-02-06
PO Box 1809
Boston, MA 02105-1809
-64-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
James R. McCulloch 7.80%
c/o Microfibre
PO Box 1208
Pawtucket, RI 02862-1208
NEW YORK MUNICIPAL BOND
TRUST
Gales & Co. 65.12%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 7.47%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 12.51%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Bob & Co. 14.84%
c/o Bank of Boston
ATTN: Mutual Fund Dept.
45-02-06
P.O. Box 1809
Boston, MA 02105-1809
RETAIL A
Marilyn J Brantley 12.18%
5954 Van Allen Road
Belfast, NY 14711-8750
NEW JERSEY MUNI BOND
TRUST
Gales & Co. 50.60%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 33.51%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Bob & Co. 15.60%
c/o Bank of Boston
ATTN: Mutual Fund Dept.
45-02-06
P.O. Box 1809
Boston, MA 02105-1809
RETAIL A
John W Maki & Kimberly 82.80%
McGrath Maki JT WROS
1 Connet Lane
Mendham, NJ 07945-2938
William Minnaard 6.23%
50 Rock Road
Unit A6
Hawthorne, NJ 07506-1570
PRIME RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703
-65-
<PAGE>
<CAPTION>
PERCENT
REGISTRATION NAME OWNERSHIP
- --------------------------------------------------------
<S> <C>
GOVERNMENT RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703
TAX-EXEMPT RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703
LARGE COMPANY INDEX
Gales & Co. 37.33%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 6.09%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
US TREASURY INDEX
Gales & Co. 15.76%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
Gales & Co. 8.84%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
MUNICIPAL INDEX
Bob & Co. 26.33%
c/o Bank of Boston
Attn: Mutual Fd Dept.
45-02-06
PO Box 1809
Boston, MA 02105-1809
Gales & Co. 9.41%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001
</TABLE>
-66-
<PAGE>
As of April 11, 2000, the name, address and percentage ownership of the
entities or persons that held beneficially more than 5% of the outstanding Trust
Shares of each of Galaxy's investment portfolios were as follows:
<TABLE>
<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
-------------------- -----------------
<S> <C>
MONEY MARKET
Stable Asset Fund 10.97%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
Lycos Credit Suisse Boston 8.27%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
GOVERNMENT MONEY
Advent Realty Limited Partnership 6.00%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
U.S. TREASURY MONEY
Loring Walcott Client Sweep Acct 22.80%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
EQUITY VALUE
Fleet Savings Plus-Equity Value 26.44%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
EQUITY GROWTH
Fleet Savings Plus-Equity Growth 23.18%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
Nusco Retiree Health VEBA Trust 6.96%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
INTERNATIONAL EQUITY
FFG International Equity Fund 11.42%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
Fleet Savings Plus-Intl Equity 10.21%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
INTERMEDIATE GOVT INC
Nusco Retiree Health VEBA Trust 6.57%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
STRATEGIC EQUITY FUND
FFG Retirement & Pension VDG 93.75%
C/O Fleet Financial Group
159 East Main
Rochester, NY 14638
HIGH QUALITY BOND
Fleet Savings Plus Plan-HQ Bond 17.70%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
SHORT TERM BOND FUND
Willcox & Gibbs Retirement Plan 5.42%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
ASSET ALLOCATION
Fleet Savings Plus-Asset Allocation 27.21%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
-67-
<PAGE>
<CAPTION>
ACCOUNT REGISTRATION % HOLDINGS
-------------------- ----------
<S> <C>
SMALL COMPANY EQUITY
Fleet Savings Plus-Small Company 31.55%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
TAX EXEMPT BOND
Nusco Retiree Health VEBA Trust 36.48%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
CONNECTICUT MUNI BOND
Winnifred M Purdy 5.99%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
CORPORATE BOND
Cole Hersee Pension Plan 7.99%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
GROWTH INCOME
Fleet Savings Plus-Grth Income 44.32%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
Crompton & Knowles IARP 9.71%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
SMALL CAP VALUE
FFG Emp Ret Misc Assets SNC 26.34%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
CVS Inc 401K P/S Pln 3 5.02%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
INSTITUTIONAL GOVT
Duncanson & Holt Inc 5.46%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
NEW JERSEY MUNI BOND
Perillo Tours 21.86%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638
Royal Chambord IMA 10.93%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638
McKee Wendell A. Marital Trust 10.85%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638
Varco Inc IMA 5.47%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
Terry, Julia Lee Inv Adv 5.14%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638
</TABLE>
-68-
<PAGE>
APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current opinion of
credit worthiness of an obligor with respect to financial obligations having an
original maturity of no more than 365 days. The following summarizes the rating
categories used by Standard and Poor's for commercial paper:
"A-1" - Obligations are rated in the highest category indicating that
the obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
"A-2" - Obligations are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.
"A-3" - Obligations exhibit adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
"B" - Obligations are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
"C" - Obligations are currently vulnerable to nonpayment and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
"D" - Obligations are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.
Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the rating categories used by Moody's for commercial paper:
"Prime-1" - Issuers (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be
A-1
<PAGE>
evidenced by many of the following characteristics: leading market positions in
well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and ample
asset protection; broad margins in earnings coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity.
"Prime-2" - Issuers (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
"Prime-3" - Issuers (or supporting institutions) have an acceptable
ability for repayment of senior short-term debt obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
"Not Prime" - Issuers do not fall within any of the Prime rating
categories.
The three rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D-1," "D-2" and "D-3." Duff & Phelps
employs three designations, "D-1+," "D-1" and "D-1-," within the highest rating
category. The following summarizes the rating categories used by Duff & Phelps
for commercial paper:
"D-1+" - Debt possesses the highest certainty of timely payment.
Short-term liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty of timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
"D-3" - Debt possesses satisfactory liquidity and other protection
factors qualify issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is expected.
A-2
<PAGE>
"D-4" - Debt possesses speculative investment characteristics.
Liquidity is not sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high degree of
variation.
"D-5" - Issuer has failed to meet scheduled principal and/or interest
payments.
Fitch IBCA short-term ratings apply to debt obligations that have time
horizons of less than 12 months for most obligations, or up to three years for
U.S. public finance securities. The following summarizes the rating categories
used by Fitch IBCA for short-term obligations:
"F1" - Securities possess the highest credit quality. This designation
indicates the strongest capacity for timely payment of financial commitments and
may have an added "+" to denote any exceptionally strong credit feature.
"F2" - Securities possess good credit quality. This designation
indicates a satisfactory capacity for timely payment of financial commitments,
but the margin of safety is not as great as in the case of the higher ratings.
"F3" - Securities possess fair credit quality. This designation
indicates that the capacity for timely payment of financial commitments is
adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.
"B" - Securities possess speculative credit quality. This designation
indicates minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic conditions.
"C" - Securities possess high default risk. This designation indicates
that default is a real possibility and that the capacity for meeting financial
commitments is solely reliant upon a sustained, favorable business and economic
environment.
"D" - Securities are in actual or imminent payment default.
Thomson BankWatch short-term ratings assess the likelihood of an
untimely payment of principal and interest of debt instruments with original
maturities of one year or less. The following summarizes the ratings used by
Thomson Financial BankWatch:
"TBW-1" - This designation represents Thomson Financial BankWatch's
highest category and indicates a very high likelihood that principal and
interest will be paid on a timely basis.
"TBW-2" - This designation represents Thomson Financial BankWatch's
second-highest category and indicates that while the degree of safety regarding
timely repayment of
A-3
<PAGE>
principal and interest is strong, the relative degree of safety is not as high
as for issues rated "TBW-1."
"TBW-3" - This designation represents Thomson BankWatch's lowest
investment-grade category and indicates that while the obligation is more
susceptible to adverse developments (both internal and external) than those with
higher ratings, the capacity to service principal and interest in a timely
fashion is considered adequate.
"TBW-4" - This designation represents Thomson BankWatch's lowest
rating category and indicates that the obligation is regarded as non-investment
grade and therefore speculative.
CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.
"AA" - An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.
"A" - An obligation rated "A" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's capacity to meet
its financial commitment on the obligation is still strong.
"BBB" - An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
Obligations rated "BB," "B," "CCC," "CC" and "C" are regarded as
having significant speculative characteristics. "BB" indicates the least degree
of speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
"BB" - An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation.
A-4
<PAGE>
"B" - An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
"CCC" - An obligation rated "CCC" is currently vulnerable to
nonpayment, and is dependent upon favorable business, financial and economic
conditions for the obligor to meet its financial commitment on the obligation.
In the event of adverse business, financial, or economic conditions, the obligor
is not likely to have the capacity to meet its financial commitment on the
obligation.
"CC" - An obligation rated "CC" is currently highly vulnerable to
nonpayment.
"C" - The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued.
"D" - An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the taking
of a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
"r" - This symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as
high-grade bonds. They are rated lower
A-5
<PAGE>
than the best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risk
appear somewhat larger than the "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations, (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of characteristics
of desirable investment; "Caa" indicates poor standing; "Ca" represents
obligations which are speculative in a high degree; and "C" represents the
lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Con. (---) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b) earnings
of projects unseasoned in operating experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from "Aa" through "Caa." The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of its generic rating category.
The following summarizes the long-term debt ratings used by Duff &
Phelps for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The
risk factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
"AA" - Debt is considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable in periods of greater economic
stress.
A-6
<PAGE>
"BBB" - Debt possesses below-average protection factors but such
protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these
ratings is considered to be below investment grade. Although below investment
grade, debt rated "BB" is deemed likely to meet obligations when due. Debt rated
"B" possesses the risk that obligations will not be met when due. Debt rated
"CCC" is well below investment grade and has considerable uncertainty as to
timely payment of principal, interest or preferred dividends. Debt rated "DD" is
a defaulted debt obligation, and the rating "DP" represents preferred stock with
dividend arrearages.
To provide more detailed indications of credit quality, the "AA," "A,"
"BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.
The following summarizes the ratings used by Fitch IBCA for corporate
and municipal bonds:
"AAA" - Bonds considered to be investment grade and of the highest
credit quality. These ratings denote the lowest expectation of credit risk and
are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to be adversely affected
by foreseeable events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. These ratings denote a very low expectation of credit risk and indicate
very strong capacity for timely payment of financial commitments. This capacity
is not significantly vulnerable to foreseeable events.
"A" - Bonds considered to be investment grade and of high credit
quality. These ratings denote a low expectation of credit risk and indicate
strong capacity for timely payment of financial commitments. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic
conditions than is the case for higher ratings.
"BBB" - Bonds considered to be investment grade and of good credit
quality. These ratings denote that there is currently a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity.
"BB" - Bonds considered to be speculative. These ratings indicate that
there is a possibility of credit risk developing, particularly as the result of
adverse economic changes over time; however, business or financial alternatives
may be available to allow financial commitments to be met. Securities rated in
this category are not investment grade.
A-7
<PAGE>
"B" - Bonds are considered highly speculative. These ratings indicate
that significant credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however, capacity for continued
payment is contingent upon a sustained, favorable business and economic
environment.
"CCC," "CC", and "C" - Bonds have high default risk. Default is a real
possibility, and capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments. "CC" ratings
indicate that default of some kind appears probable, and "C" ratings signal
imminent default.
"DDD," "DD" and "D" - Bonds are in default. The ratings of obligations
in this category are based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor. While expected
recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines. "DDD" obligations have the
highest potential for recovery, around 90%-100% of outstanding amounts and
accrued interest. "DD" indicates potential recoveries in the range of 50%-90%,
and "D" the lowest recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
To provide more detailed indications of credit quality, the Fitch IBCA
ratings from and including "AA" to "CCC" may be modified by the addition of a
plus (+) or minus (-) sign to show relative standing within these major rating
categories.
Thomson Financial BankWatch assesses the likelihood of an untimely
repayment of principal or interest over the term to maturity of long term debt
and preferred stock which are issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the rating categories used by Thomson BankWatch for long-term debt
ratings:
"AAA" - This designation indicates that the ability to repay principal
and interest on a timely basis is extremely high.
"AA" - This designation indicates a very strong ability to repay
principal and interest on a timely basis, with limited incremental risk compared
to issues rated in the highest category.
"A" - This designation indicates that the ability to repay principal
and interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
A-8
<PAGE>
"BBB" - This designation represents the lowest investment-grade
category and indicates an acceptable capacity to repay principal and interest.
Issues rated "BBB" are more vulnerable to adverse developments (both internal
and external) than obligations with higher ratings.
"BB," "B," "CCC," and "CC" - These designations are assigned by
Thomson Financial BankWatch to non-investment grade long-term debt. Such issues
are regarded as having speculative characteristics regarding the likelihood of
timely repayment of principal and interest. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation.
"D" - This designation indicates that the long-term debt is in
default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may
include a plus or minus sign designation which indicates where within the
respective category the issue is placed.
MUNICIPAL NOTE RATINGS
A Standard and Poor's note rating reflects the liquidity concerns and
market access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's Ratings Group for municipal
notes:
"SP-1" - The issuers of these municipal notes exhibit a strong
capacity to pay principal and interest. Those issues determined to possess a
very strong capacity to pay debt service are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.
"SP-3" - The issuers of these municipal notes exhibit speculative
capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:
A-9
<PAGE>
"MIG-1"/"VMIG-1" - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
"MIG-2"/"VMIG-2" - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
"MIG-3"/"VMIG-3" - This designation denotes favorable quality, with
all security elements accounted for but lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and market
access for refinancing is likely to be less well established.
"MIG-4"/"VMIG-4" - This designation denotes adequate quality.
Protection commonly regarded as required of an investment security is present
and although not distinctly or predominantly speculative, there is specific
risk.
"SG" - This designation denotes speculative quality. Debt instruments
in this category lack of margins of protection.
Fitch IBCA and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.
A-10
<PAGE>
THE GALAXY FUND
FORM N-1A
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) (1) Declaration of Trust dated March 31, 1986.
(4)
(2) Amendment No. 1 to the Declaration of Trust
dated as of April 26, 1988.(4)
(3) Certificate pertaining to Classification of
Shares pertaining to Class A and Class B
shares.(4)
(4) Certificate of Classification of Shares
pertaining to Class C, Class D and Class E
shares.(4)
(5) Certificate of Classification of Shares
pertaining to Class C - Special Series 1 and
Class D - Special Series 1 shares.(4)
(6) Certificate of Classification of Shares
pertaining to Class F shares; Class G -
Series 1 shares; Class G - Series 2 shares;
Class H - Series 1 shares; Class H - Series
2 shares; Class I - Series 1 shares; Class I
- Series 2 shares; Class J - Series 1
shares; and Class J - Series 2 shares.(4)
(7) Certificate of Classification of Shares
pertaining to Class K - Series 1 shares;
Class K - Series 2 shares; Class L - Series
1 shares; Class L - Series 2 shares; Class M
- Series 1 shares; Class M - Series 2
shares; Class N Series 1 shares; Class N -
Series 2 shares; Class O - Series 1 shares;
and Class O - Series 2 shares.(4)
(8) Certificate of Classification of Shares
pertaining to Class P - Series 1 shares;
Class P - Series 2 shares; Class Q - Series
1 shares; Class Q - Series 2 shares; Class R
- Series 1 shares; Class R - Series 2
shares; and Class S shares.(4)
(9) Certificate of Classification of Shares
pertaining to Class T - Series 1 shares and
Class T - Series 2 shares.(4)
(10) Certificate of Classification of Shares
pertaining to Class U - Series 1 shares and
Class U - Series 2 shares; Class V shares;
Class W shares; and Class X - Series 1
shares and Class X - Series 2 shares.(8)
<PAGE>
(11) Certificate of Classification of Shares
pertaining to Class C - Special Series 2
shares; Class H - Series 3 shares; Class J -
Series 3 shares; Class K Series 3 shares;
Class L - Series 3 shares; Class M - Series
3 shares; Class N - Series 3 shares; and
Class U - Series 3 shares.(8)
(l2) Certificate of Classification of Shares
pertaining to Class A - Special Series 2
shares.(8)
(13) Certificate of Classification of Shares
pertaining to Class Y - Series 1 shares and
Class Y - Series 2 shares; Class Z - Series
1 shares, Class Z Series 2 shares and Class
Z - Series 3 shares; and Class AA - Series 1
shares, Class AA - Series 2 shares and Class
AA - Series 3 shares.(8)
(14) Certificate of Classification of Shares
pertaining to Class BB, Class CC and Class
DD shares.(8)
(15) Certificate of Classification of Shares
pertaining to Class D - Special Series 2
shares; Class G - Series 3 shares; Class I
Series 3 shares; and Class X - Series 3
shares.(8)
(16) Certificate of Classification of Shares
pertaining to Class C - Special Series 3
shares; Class C - Special Series 4 shares;
Class D - Special Series 3 shares; Class D -
Special Series 4 shares; Class G - Series 4
shares; Class G Series 5 shares; Class H -
Series 4 shares; Class H - Series 5 shares;
Class I - Series 4 shares; Class I - Series
5 shares; Class J - Series 4 shares; Class J
- Series 5 shares; Class K - Series 4
shares; Class K - Series 5 shares; Class L -
Series 4 shares; Class L - Series 5 shares;
Class M - Series 4 shares; Class M - Series
5 shares; Class N - Series 4 shares; Class N
- Series 5 shares; Class U - Series 4
shares; Class U - Series 5 shares; Class X
Series 4 shares; Class X - Series 5 shares;
Class AA - Series 4 shares; and Class AA -
Series 5 shares.(8)
(17) Certificate of Classification of Shares
pertaining to Class EE - Series shares and
Class EE - Series 2 shares; Class V -
Special Series 1 shares; and Class W -
Special Series 1 shares.(11)
(18) Certificate of Classification of Shares
pertaining to Class A - Special Series 3
shares; Class F - Special Series 2 shares;
Class E - Special Series 2 shares; Class L -
Series 6 shares; Class D - Special Series 5
shares; Class J - Series 6 shares; Class R -
Series 3 shares; Class N - Series 6 shares;
Class U - Series 6 shares; Class H - Series
6 shares; and Class G - Series 6 shares.
(12)
-2-
<PAGE>
(19) Certificate of Classification of Shares
pertaining to Class FF shares; Class GG
shares; Class HH - Series 1 shares and Class
HH - Series 2 shares; Class II shares; Class
JJ - Series 1 shares, Class JJ - Series 2
shares and Class JJ Series 3 shares; Class
KK - Series 1 shares, Class KK - Series 2
shares and Class KK - Series 3 shares; Class
LL - Series 1 shares, Class LL - Series 2
shares and Class LL - Series 3 shares; and
Class MM - Series 1 shares, Class MM -
Series 2 shares and Class MM - Series 3
shares.(14)
(20) Certificate of Classification of Shares
pertaining to Class MM - Series 4
shares.(16)
(21) Certificate of Classification of Shares
pertaining to Class NN-Series 1 shares;
Class NN-Series 2 shares; and Class
NN-Series 3 shares.(16)
(b) Code of Regulations.(4)
(c) Article V, Section 5.1, and Article VIII,
Section 8.1, of Registrant's Declaration of
Trust incorporated herein by reference as
Exhibit (a)(1), and Amendment No. 1 to
Registrant's Declaration of Trust
incorporated herein by reference as Exhibit
(a)(2).
(d) (1) Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with
respect to the Money Market, Government,
U.S. Treasury, Tax-Exempt, Institutional
Government Money Market (formerly
Institutional Treasury Money Market),
Short-Term Bond, Intermediate Government
Income (formerly Intermediate Bond),
Corporate Bond, High Quality Bond,
Tax-Exempt Bond, New York Municipal Bond,
Connecticut Municipal Bond, Massachusetts
Municipal Bond, Rhode Island Municipal Bond,
Equity Value, Equity Growth, Equity Income,
International Equity, Small Company Equity
and Asset Allocation Funds dated as of May
19, 1994.(2)
(2) Addendum No. 1 to Advisory Agreement between
the Registrant and Fleet Investment Advisors
Inc. with respect to the Connecticut
Municipal Money Market, Massachusetts
Municipal Money Market, Growth and Income
and Small Cap Value Funds dated as of
December 1, 1995.(1)
(3) Addendum No. 2 to Advisory Agreement between
the Registrant and Fleet Investment Advisors
Inc. with respect to the New Jersey
Municipal Bond Fund, MidCap Equity Fund and
Strategic Equity Fund dated as of March 3,
1998.(5)
-3-
<PAGE>
(4) Addendum No. 3 to Advisory Agreement dated
September 18, 1998 between the Registrant
and Fleet Investment Advisors Inc. with
respect to the Prime Reserves, Government
Reserves and Tax-Exempt Reserves.(8)
(5) Form of Addendum No. 4 to Advisory Agreement
between the Registrant and Fleet Investment
Advisors Inc. with respect to the New York
Municipal Money Market Fund.(11)
(6) Form of Addendum No. 5 to Advisory Agreement
between the Registrant and Fleet Investment
Advisors Inc. with respect to the
Institutional Money Market Fund,
Institutional Treasury Money Market Fund,
Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond
Fund and Growth Fund II.(14)
(7) Form of Addendum No. 6 to Advisory Agreement
between the Registrant and Fleet Investment
Advisors Inc. with respect to the Pan Asia
Fund.(16)
(8) Sub-Advisory Agreement between Fleet
Investment Advisors Inc. and Oechsle
International Advisors, LLC with respect to
the International Equity Fund dated as of
October 8, 1998.(8)
(9) Form of Sub-Advisory Agreement between Fleet
Investment Advisors Inc. and UOB Global
Capital LLC with respect to the Pan Asia
Fund.(16)
(e) (1) Distribution Agreement between the
Registrant and Provident Distributors, Inc.
dated as of December 1, 1999.(12)
(2) Form of Amendment No. 1 to Distribution
Agreement between the Registrant and
Provident Distributors, Inc. with respect to
the New York Municipal Money Market Fund.
(11)
(3) Form of Amendment No. 2 to Distribution
Agreement between the Registrant and
Provident Distributors, Inc. with respect to
the Institutional Money Market Fund,
Institutional Treasury Money Market Fund,
Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond
Fund and Growth Fund II.(14)
-4-
<PAGE>
(4) Form of Amendment No. 3 to Distribution
Agreement between the Registrant and
Provident Distributors, Inc. with respect to
the Pan Asia Fund.(16)
(f) The Galaxy Fund/The Galaxy VIP Fund/Galaxy
Fund II Deferred Compensation Plan and
Related Agreement effective as of January 1,
1997.(2)
(g) (1) Global Custody Agreement between the
Registrant and The Chase Manhattan Bank
dated as of November 1, 1991.(4)
(2) Amendment dated December 2, 1998 to Global
Custody Agreement between the Registrant and
The Chase Manhattan Bank.(9)
(3) Form of Amendment to Global Custody
Agreement between the Registrant and The
Chase Manhattan Bank with respect to the New
Jersey Municipal Bond, MidCap Equity and
Strategic Equity Funds.(3)
(4) Form of Amendment to Global Custody
Agreement between the Registrant and The
Chase Manhattan Bank with respect to the
Prime Reserves, Government Reserves and
Tax-Exempt Reserves.(5)
(5) Form of Amendment to Global Custody
Agreement between the Registrant and The
Chase Manhattan Bank with respect to the New
York Municipal Money Market Fund.(11)
(6) Form of Amendment to Global Custody
Agreement between the Registrant and The
Chase Manhattan Bank with respect to the
Institutional Money Market Fund,
Institutional Treasury Money Market Fund,
Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond
Fund and Growth Fund II.(14)
(7) Form of Amendment to Global Custody
Agreement between the Registrant and The
Chase Manhattan Bank with respect to the Pan
Asia Fund.(16)
-5-
<PAGE>
(8) Consent to Assignment of Global Custody
Agreement between the Registrant, The Chase
Manhattan Bank, N.A. and 440 Financial Group
of Worcester, Inc. to The Shareholder
Services Group, Inc. d/b/a 440 Financial
dated March 31, 1995.(11)
(h) (1) Administration Agreement between the
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.)
dated as of June 1, 1997.(3)
(2) Amendment No. 1 dated March 3, 1998 to
Administration Agreement between the
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.)
with respect to the New Jersey Municipal
Bond Fund, MidCap Equity Fund and Strategic
Equity Fund.(5)
(3) Amendment No. 2 dated as of March 5, 1998 to
Administration Agreement between the
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.).
(6)
(4) Amendment No. 3 dated as of September 18,
1998 to Administration Agreement between the
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.)
with respect to the Prime Reserves,
Government Reserves and Tax-Exempt Reserves
Fund.(8)
(5) Amendment No. 4 dated as of September 10,
1998 to Administration Agreement between the
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.).
(9)
(6) Amendment No. 5 dated as of December 1, 1999
to Administration Agreement between
Registrant and PFPC Inc. (formerly known as
First Data Investor Services Group, Inc.).
(12)
(7) Form of Amendment No. 6 to Administration
Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.) with respect to the
New York Municipal Money Market Fund.(11)
(8) Form of Amendment No. 7 to Administration
Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.) with respect to the
Institutional Money Market Fund,
Institutional Treasury Money Market Fund,
Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond
Fund and Growth Fund II.(14)
-6-
<PAGE>
(9) Form of Amendment No. 8 to Administration
Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.) with respect to the
Pan Asia Fund.(16)
(10) Transfer Agency and Services Agreement
between the Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.) dated as of June 1,
1997.(3)
(11) Amendment No. 1 dated March 3, 1998 to
Transfer Agency and Services Agreement
between the Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.) with respect to the
New Jersey Municipal Bond Fund, MidCap
Equity Fund and Strategic Equity Fund.(5)
(12) Amendment No. 2 dated as of March 5, 1998 to
Transfer Agency and Services Agreement
between the Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.).(6)
(13) Amendment No. 3 dated as of September 18,
1998 to Transfer Agency and Services
Agreement between the Registrant and PFPC
Inc. (formerly known as First Data Investor
Services Group, Inc.) with respect to the
Prime Reserves, Government Reserves and
Tax-Exempt Reserves Fund.(8)
(14) Amendment No. 4 dated as of September 10,
1998 to Transfer Agency and Services
Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.).(9)
(15) Amendment No. 5 dated as of September 9,
1999 to Transfer Agency and Services
Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor
Services Group, Inc.).(12)
(16) Amendment No. 6 dated as of December 2, 1999
to Transfer Agency and Services Agreement
between Registrant and PFPC Inc. (formerly
known as First Data Investor Services Group,
Inc.).(12)
-7-
<PAGE>
(17) Form of Amendment No. 7 to Transfer Agency
and Services Agreement between Registrant
and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) with respect
to the New York Municipal Money Market
Fund.(11)
(18) Form of Amendment No. 8 to Transfer Agency
and Services Agreement between Registrant
and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc). with respect
to the Institutional Money Market Fund,
Institutional Treasury Money Market Fund,
Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond
Fund and Growth Fund II.(14)
(19) Form of Amendment No. 9 to Transfer Agency
and Services Agreement between Registrant
and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) with respect
to the Pan Asia Fund.(16)
(20) Shareholder Services Plan for Trust Shares
and Retail A Shares and Related Forms of
Servicing Agreements.(14)
(21) Shareholder Services Plan for BKB Shares and
Related Forms of Servicing Agreements.(14)
(22) Credit Agreement dated as of December 29,
1999 among the Registrant, The Galaxy VIP
Fund, Galaxy Fund II, Various Banks,
Deutsche Bank Securities Inc. and Deutsche
Bank AG, New York Branch.(14)
(23) Form of Agreement and Plan of Reorganization
between The Galaxy Fund and Boston 1784
Funds.(13)
(i) (1) Opinion and consent of counsel dated
September 28, 1999.(10)
(2) Opinion and consent of counsel dated
December 3, 1999.(11)
-8-
<PAGE>
(3) Opinion and consent of counsel dated April
17, 2000.(16)
(4) Opinion and consent of counsel dated
February 28, 2000.(14)
(j) (1) Consent of Drinker Biddle & Reath LLP.(16)
(k) None.
(l) (1) Purchase Agreement between the Registrant
and Shearson Lehman Brothers Inc. dated July
24, 1986.(4)
(2) Purchase Agreement between the Registrant
and Shearson Lehman Brothers Inc. dated
October 11, 1990 with respect to the
Treasury, Equity Growth, Equity Income,
International Equity and High Quality Bond
Funds.(4)
(3) Purchase Agreement between the Registrant
and SMA Equities, Inc. dated December 30,
1991 with respect to the Small Company
Equity Fund, Short-Term Bond Fund,
Tax-Exempt Bond Fund, Asset Allocation Fund,
and New York Municipal Bond Fund.(4)
(4) Purchase Agreement between the Registrant
and Allmerica Investments, Inc. dated
February 22, 1993 with respect to the
Connecticut Municipal Bond, Massachusetts
Municipal Bond, Rhode Island Municipal Bond
and Institutional Government Money Market
(formerly Institutional Treasury Money
Market) Funds.(4)
(5) Purchase Agreement between the Registrant
and 440 Financial Distributors, Inc. dated
May 19, 1994 with respect to the Corporate
Bond Fund.(4)
(6) Purchase Agreement between the Registrant
and First Data Distributors, Inc. dated
February 28, 1996 with respect to the
Connecticut Municipal Money Market,
Massachusetts Municipal Money Market Money,
Growth and Income and Small Cap Value
Funds.(4)
(7) Purchase Agreement between the Registrant
and First Data Distributors, Inc. with
respect to the New Jersey Municipal Bond
Fund.(5)
-9-
<PAGE>
(8) Form of Purchase Agreement between the
Registrant and First Data Distributors, Inc.
with respect to the MidCap Equity Fund.(3)
(9) Purchase Agreement between the Registrant
and First Data Distributors, Inc. with
respect to the Strategic Equity Fund.(5)
(10) Purchase Agreement between the Registrant
and First Data Distributors, Inc. dated
September 18, 1998 with respect to the Prime
Reserves, Government Reserves and Tax-Exempt
Reserves.(9)
(11) Form of Purchase Agreement between the
Registrant and Provident Distributors, Inc.
with respect to the New York Municipal Money
Market Fund.(14)
(12) Form of Purchase Agreement between the
Registrant and Provident Distributors, Inc.
with respect to the Institutional Money
Market Fund, Institutional Treasury Money
Market Fund, Florida Municipal Bond Fund,
Intermediate Tax-Exempt Bond Fund,
Connecticut Intermediate Municipal Bond
Fund, Massachusetts Intermediate Municipal
Bond Fund and Growth Fund II.(14)
(13) Form of Purchase Agreement between the
Registrant and Provident Distributors, Inc.
with respect to the Pan Asia Fund.(16)
(m) (1) Distribution and Services Plan for Retail B
Shares and Related Form of Servicing
Agreement.(16)
(2) Distribution and Services Plan and Related
Form of Servicing Agreement with respect to
the Prime Reserves, Government Reserves and
Tax-Exempt Reserves.(5)
(3) Distribution Plan for A Prime Shares.(6)
(4) Distribution and Services Plan for B Prime
Shares and Related Form of Servicing
Agreement.(6)
(5) Distribution and Services Plan and Related
Form of Servicing Agreement with respect to
Prime Shares of the New York Municipal Money
Market Fund, Connecticut Municipal Money
Market Fund and Massachusetts Municipal
Money Market Fund.(11)
(6) Distribution Plan with respect to Retail A
Shares of the Pan Asia Fund.(16)
(n) None.
-10-
<PAGE>
(o) Amended and Restated Plan Pursuant to Rule
18f-3 for Operation of a Multi-Class
System.(16)
(p) (1) Code of Ethics - The Galaxy Fund(16)
(2) Code of Ethics - Fleet Investment Advisors,
Inc.(16)
(3) Code of Ethics - Oechsle International
Advisors, LLC(16)
(4) Code of Ethics - UOB Global Capital LLC(16)
- ----------------------------
(1) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 27 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-4806 and 811-4636) as filed with the Commission
on March 4, 1996.
(2) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 30, 1996.
(3) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 31 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 15, 1997.
(4) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 32 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 27, 1998.
(5) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 33 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on June 30, 1998.
(6) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 34 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on September 11, 1998.
-11-
<PAGE>
(7) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 35 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on October 6, 1998.
(8) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 36 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 30, 1998.
(9) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 37 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 26, 1999.
(10) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 38 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on September 28, 1999.
(11) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 40 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 3, 1999.
(12) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 41 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 29, 1999.
(13) Filed electronically as Appendix II to the Combined Prospectus/Proxy
Statement and incorporated herein by reference to the Registrant's
Registration Statement on Form N-14 as filed with the Commission on
February 7, 2000.
(14) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 43 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 23, 2000.
(15) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No.44 to the Registrant's Registration
Statement on Form N-1A as filed with the Commission on February 28, 2000.
(16) Filed herewith.
Item 24. Persons Controlled By or Under Common Control with
Registrant
Registrant is controlled by its Board of Trustees.
Item 25. Indemnification
Indemnification of the Registrant's principal underwriter, custodian
and transfer agent against certain losses is provided for, respectively, in
Section 1.19 of the Distribution Agreement incorporated herein by reference as
Exhibit (e)(1), in Section 12 of the Global Custody Agreement incorporated
herein by reference as Exhibit (g)(1) and in Article 10 of the Transfer Agency
and Services Agreement incorporated herein by reference as Exhibit (h)(9). The
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<PAGE>
Registrant has obtained from a major insurance carrier a directors' and
officers' liability policy covering certain types of errors and omissions. In
addition, Section 9.3 of the Registrant's Declaration of Trust dated March 31,
1986, incorporated herein by reference as Exhibit (a)(1), provides as follows:
9.3 INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND EMPLOYEES.
The Trust shall indemnify each of its Trustees against all
liabilities and expenses (including amounts paid in
satisfaction of judgments, in compromise, as fines and
penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, in which he
may be involved or with which he may be threatened, while as a
Trustee or thereafter, by reason of his being or having been
such a Trustee EXCEPT with respect to any matter as to which
he shall have been adjudicated to have acted in bad faith,
willful misfeasance, gross negligence or reckless disregard of
his duties, PROVIDED that as to any matter disposed of by a
compromise payment by such person, pursuant to a consent
decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless the
Trust shall have received a written opinion from independent
legal counsel approved by the Trustees to the effect that if
either the matter of willful misfeasance, gross negligence or
reckless disregard of duty, or the matter of bad faith had
been adjudicated, it would in the opinion of such counsel have
been adjudicated in favor of such person. The rights accruing
to any person under these provisions shall not exclude any
other right to which he may be lawfully entitled, PROVIDED
that no person may satisfy any right of indemnity or
reimbursement hereunder except out of the property of the
Trust. The Trustees may make advance payments in connection
with the indemnification under this Section 9.3, PROVIDED that
the indemnified person shall have given a written undertaking
to reimburse the Trust in the event it is subsequently
determined that he is not entitled to such indemnification.
The Trustees shall indemnify representatives and employees of
the Trust to the same extent that Trustees are entitled to
indemnification pursuant to this Section 9.3.
Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended, may be permitted to
trustees, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, 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
trustee, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in
connection with the securities being registered, 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
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<PAGE>
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 26. (a) Business and Other Connections of Investment Adviser
Fleet Investment Advisors Inc. ("Fleet") is an investment
adviser registered under the Investment Advisers Act of 1940
(the "Advisers Act").
The list required by this Item 26 of officers and directors of
Fleet, together with information as to any business
profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the past two
years, is incorporated herein by reference to Schedules A and
D of Form ADV filed by Fleet pursuant to the Advisers Act (SEC
File No. 801-20312).
(b) Business and Other Connections of Sub-Adviser
Oechsle International Advisors, LLC ("Oechsle") is an
investment adviser registered under the Investment Advisers
Act of 1940 (the "Advisers Act").
The list required by this Item 26 of the officers of Oechsle,
together with information as to any business profession,
vocation or employment of a substantial nature engaged in by
such officers during the past two years, is incorporated
herein by reference to Schedules A and D of Form ADV filed by
Oechsle pursuant to the Advisers Act (SEC File No. 801-28111).
(c) Business and Other Connections of Sub-Adviser
UOB Global Capital LLC ("UOB") is an investment adviser
registered under the Advisers Act.
The list required by this Item 26 of the officers of UOB,
together with information as to any business profession,
vocation or employment of a substantial nature engaged in by
such officers during the past two years, is incorporated
herein by reference to Schedules A and D of Form ADV filed by
UOB pursuant to the Advisers Act (SEC File No. 801-56090).
Item 27. Principal Underwriter
(a) In addition to The Galaxy Fund, Provident Distributors, Inc.
(the "Distributor") currently acts as distributor for The
Galaxy VIP Fund, Galaxy Fund II, International Dollar Reserve
Fund I, Ltd., Provident Institutional Funds Trust, Columbia
Common Stock Fund, Inc., Columbia Growth Fund, Inc., Columbia
International Stock Fund, Inc., Columbia Special Fund, Inc.,
Columbia Small Cap Fund, Inc., Columbia Real Estate Equity
Fund, Inc., Columbia Balanced Fund, Inc., Columbia Daily
Income Company, Columbia U.S. Government Securities Fund,
Inc., Columbia Fixed Income Securities Fund, Inc., Columbia
Municipal
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<PAGE>
Bond Fund, Inc., Columbia High Yield Fund, Inc., Columbia
National Municipal Bond Fund, Inc., GAMNA Series Funds, Inc.,
WT Investment Trust, Kalmar Pooled Investment Trust, The RBB
Fund, Inc., Robertson Stephens Investment Trust, HT Insight
Funds, Inc., Harris Insight Funds Trust, Hilliard-Lyons
Government Fund, Inc., Hilliard-Lyons Growth Fund, Inc.,
Hilliard-Lyons Research Trust, Senbanc Fund, Warburg Pincus
Trust, ABN AMRO Funds, Alleghany Funds, BT Insurance Funds
Trust, First Choice Funds Trust, Forward Funds, Inc., IAA
Trust Asset Allocation Fund, Inc., IAA Trust Growth Fund,
Inc., IAA Trust Tax Exempt Bond Fund, Inc., IAA Trust Taxable
Fixed Income Series Fund, Inc., IBJ Funds Trust, Light Index
Funds, Inc., LKCM Funds, Matthews International Funds, McM
Funds, Metropolitan West Funds, New Covenant Funds, Inc.,
Panorama Trust, Smith Breeden Series Funds, Smith Breeden
Trust, Stratton Growth Fund, Inc., Stratton Monthly Dividend
REIT Shares, Inc., The Stratton Funds, Inc., The Govett Funds,
Inc., Trainer, Wortham First Mutual Funds, Undiscovered
Managers Funds, Wilshire Target Funds, Inc., Weiss, Peck &
Greer Funds Trust, Weiss, Peck & Greer International Fund, WPG
Growth and Income Fund, WPG Growth Fund, WPG Tudor Fund,
RWB/WPG U.S. Large Stock Fund, Tomorrow Funds Retirement
Trust, The BlackRock Funds, Inc. (distributed by BlackRock
Distributors, Inc., a wholly-owned subsidiary of Provident
Distributors, Inc.), Northern Funds Trust and Northern
Institutional Funds Trust (distributed by Northern Funds
Distributors, LLC, a wholly-owned subsidiary of Provident
Distributors, Inc.), The Offit Investment Fund, Inc.
(distributed by Offit Funds Distributor, Inc., a wholly-owned
subsidiary of Provident Distributors, Inc.), The Offit
Variable Insurance Fund, Inc. (distributed by Offit Funds
Distributor, Inc., a wholly-owned subsidiary of Provident
Distributors, Inc.).
(b) The information required by this Item 27 (b) with respect to
each director, officer, or partner of the Distributor is
incorporated by reference to Schedule A of Form BD filed by
the Distributor with the Securities and Exchange Commission
pursuant to the Securities Act of 1934, as amended (File No.
8-46564).
(c) The Distributor receives no compensation from the Registrant
for distribution of its shares other than payments for
distribution assistance pursuant to Registrant's Distribution
Plan for Retail A Shares, Distribution and Services Plan for
Retail B Shares, Distribution and Services Plan for the Prime
Reserves, Government Reserves and Tax-Exempt Reserves,
Distribution Plan for Prime A Shares and Distribution and
Services Plan for Prime B Shares.
Item 28. Location of Accounts and Records
(1) Fleet Investment Advisors Inc., 75 State Street,
Boston, Massachusetts 02109 (records relating to its
functions as investment adviser to all of the
Registrant's Funds).
-15-
<PAGE>
(2) Oechsle International Advisors, LLC, One
International Place, Boston, Massachusetts 02210
(records relating to its functions as sub-investment
adviser to the International Equity Fund).
(3) UOB Global Capital LLC, 592 Fifth Avenue, New York,
NY 10036 (records relating to its functions as
sub-investment adviser to the Pan Asia Fund).
(4) Provident Distributors Inc., 3200 Horizon Drive, King
of Prussia, Pennsylvania 19406 (records relating to
its functions as distributor).
(5) PFPC Inc. (formerly known as First Data Investor
Services Group, Inc.), 53 State Street, Mail Stop BOS
425, Boston, MA 02109 (records relating to its
functions as administrator).
(6) PFPC Inc. (formerly known as First Data Investor
Services Group, Inc.), 4400 Computer Drive,
Westborough, MA 01581-5108 (records relating to its
functions as transfer agent).
(7) Drinker Biddle & Reath LLP, One Logan Square, 18th
and Cherry Streets, Philadelphia, Pennsylvania 19103
(Registrant's Declaration of Trust, Code of
Regulations and Minute Books).
(8) The Chase Manhattan Bank, 1211 Avenue of the
Americas, New York, New York 10036 (records relating
to its functions as custodian).
Item 29. Management Services
Inapplicable.
Item 30. Undertakings
None.
-16-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant has duly caused
this Post-Effective Amendment No. 46 to its Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in Bonita Springs,
Florida, on the 17th day of April, 2000.
THE GALAXY FUND
Registrant
/s/ John T. O'Neill
-------------------
President
John T. O'Neill
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 46 to the Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John T. O'Neill
- ------------------------------ Trustee, President April 17, 2000
John T. O'Neill and Treasurer
*/s/ Dwight E. Vicks, Jr. Chairman of the Board April 17, 2000
- ------------------------------ of Trustees
Dwight E. Vicks, Jr.
*/s/ Donald B. Miller Trustee April 17, 2000
- ------------------------------
Donald B. Miller
*/s/ Louis DeThomasis Trustee April 17, 2000
- ------------------------------
Louis DeThomasis
*/s/ Bradford S. Wellman Trustee April 17, 2000
- ------------------------------
Bradford S. Wellman
*/s/ James M. Seed Trustee April 17, 2000
- ------------------------------
James M. Seed
*By: /s/ John T. O'Neill
-------------------------------
John T. O'Neill
Attorney-In-Fact
</TABLE>
<PAGE>
THE GALAXY FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.
Dated: December 4, 1996 /s/ Dwight E. Vicks, Jr.
--------------------------------------
Dwight E. Vicks, Jr.
<PAGE>
THE GALAXY FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.
Dated: December 5, 1996 /s/ Donald B. Miller
--------------------------------------
Donald B. Miller
<PAGE>
THE GALAXY FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.
Dated: December 5, 1996 /s/ Brother Louis DeThomasis
--------------------------------------
Brother Louis DeThomasis
<PAGE>
THE GALAXY FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.
Dated: December 5, 1996 /s/ Bradford S. Wellman
--------------------------------------
Bradford S. Wellman
<PAGE>
THE GALAXY FUND
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.
Dated: December 5, 1996 /s/ James M. Seed
--------------------------------------
James M. Seed
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(a)(20) Certificate of Classification of Shares pertaining to Class MM -
Series 4 shares.
(a)(21) Certificate of Classification of Shares pertaining to Class
NN Series 1 shares; Class NN - Series 2 shares; and Class
NN - Series 3 shares.
(d)(7) Form of Addendum No. 6 to Advisory Agreement between the
Registrant and Fleet Investment Advisors Inc. with respect to the
Pan Asia Fund.
(d)(9) Form of Sub-Advisory Agreement between Fleet Investment Advisors
Inc. and UOB Global Capital LLC with respect to the Pan Asia Fund.
(e)(4) Form of Amendment No. 3 to Distribution Agreement between the
Registrant and Provident Distributors, Inc. with respect to the
Pan Asia Fund.
(g)(7) Form of Amendment to Global Custody Agreement between the
Registrant and The Chase Manhattan Bank with respect to the Pan
Asia Fund.
(h)(9) Form of Amendment No. 8 to Administration Agreement between the
Registrant and PFPC Inc. (formerly known as First Data Investor
Services Group, Inc.) with respect to the Pan Asia Fund.
(h)(19) Form of Amendment No. 9 to Transfer Agency and Services Agreement
between Registrant and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) with respect to the Pan Asia Fund.
(i)(3) Opinion of Consent of Counsel dated April 17, 2000.
(j)(1) Consent of Drinker Biddle & Reath LLP.
(l)(13) Form of Purchase Agreement between the Registrant and Provident
Distributors, Inc. with respect to the Pan Asia Fund.
(m)(1) Distribution and Services Plan for Retail B Shares and Related Form
of Servicing Agreement.
(m)(6) Distribution Plan with respect to Retail A Shares of the Pan Asia
Fund.
(o) Amended and Restated Plan Pursuant to Rule 18f-3 For Operation of a
Multi-Class System.
(p)(1) Code of Ethics - The Galaxy Fund.
<PAGE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(p)(2) Code of Ethics - Fleet Investment Advisors, Inc.
(p)(3) Code of Ethics - Oechsle International Advisors, LLC.
(p)(4) Code of Ethics - UOB Global Capital LLC.
</TABLE>
<PAGE>
Exhibit (a)(20)
THE GALAXY FUND
(A Massachusetts Business Trust)
CERTIFICATE OF CLASSIFICATION OF SHARES
I, W. Bruce McConnel, III, do hereby certify as follows:
(1) That I am the duly elected Secretary of The Galaxy Fund
("Galaxy");
(2) That in such capacity I have examined the records of actions
taken by the Board of Trustees of Galaxy at the regular meeting of the Board
held on March 2, 2000;
(3) That the following resolutions were duly adopted at the meeting
by the Board of Trustees of Galaxy:
CLASSIFICATION OF SHARES
RESOLVED, that pursuant to Section 5.1 of Galaxy's Declaration of
Trust, an unlimited number of authorized, unissued and unclassified shares
of beneficial interest of Galaxy be, and hereby are, classified into an
additional separate series of shares which shall be designated Class
MM-Series 4;
FURTHER RESOLVED, that Class MM - Series 4 shares of beneficial
interest shall represent interests in the Growth Fund II;
FURTHER RESOLVED, that each share of Class MM - Series 4 newly
classified hereby shall have all of the following preferences, conversion
and other rights, voting powers, restrictions, limitations, qualifications
and terms and conditions of redemption:
(1) ASSETS BELONG TO A CLASS. All consideration received by Galaxy for
the issue or sale of shares of Class MM - Series 4 shall be invested and
reinvested with the consideration received by Galaxy for the issue and sale
of all other shares now or hereafter classified as shares of Class MM
(irrespective of whether said shares have been classified as part of a
series of said Class and if so classified as part of a series, irrespective
of the particular series classification), together with all income,
earnings, profits, and proceeds derived from the investment thereof,
including any proceeds derived from the sale, exchange, or liquidation of
such investment, any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, and any general assets of
Galaxy allocated to Class MM (including the Class MM shares formerly
classified, The
<PAGE>
Class MM - Series 4 shares herein classified or such other shares with
respect to such Class MM) by the Board of Trustees in accordance with
Galaxy's Declaration of Trust. All income, earnings, profits, and proceeds,
including any profits derived from the sale, exchange or liquidation of
such shares of Class MM and any assets derived from any reinvestment of
such proceeds in whatever form shall be allocated to the Class MM-Series 4
shares in the proportion that the net asset value of such Series 4 shares
of such Class bears to the total net asset value of all shares of such
Class MM (irrespective of whether said shares have been classified as part
of a series of said Class and, if so classified as part of a series,
irrespective of the particular series classification).
(2) LIABILITIES BELONGING TO A CLASS. All the liabilities (including
expenses) of Galaxy in respect of Class MM shall be allocated to the Class
MM - Series 4 shares hereby classified of such Class MM in the proportion
that the net asset value of such Series 4 shares of such Class bears to the
total net asset value of all shares of such Class MM (irrespective of
whether said shares have been classified as a part of a series of said
Class and, if so classified as a part of a series, irrespective of the
particular series classification), except that to the extent that may be
from time to time determined by the Board of Trustees to allocate the
following expenses to such Class MM - Series 4 shares (or any other series
of shares of such Class):
(a) only the Series 4 shares of Class MM shall bear: (i) the
expenses and liabilities of payments to institutions under any
agreements entered into by or on behalf of Galaxy which provide for
services by the institutions exclusively for their customers who own
of record or beneficially such Series 4 shares; and (ii) such other
expenses and liabilities as the Board of Trustees may from time to
time determine are directly attributable to such shares and which
therefore should be borne solely by the Series 4 shares of Class MM;
and
(b) no Series 4 shares of Class MM shall bear (i) the expenses
and liabilities of payments to institutions under any agreements
entered into by or on behalf of Galaxy which provide for services by
the institutions exclusively for their customers who own of record or
beneficially shares of Class MM other than Series 4 shares of such
Class MM other than Series 4 shares of such Class; and (ii) such other
expenses and liabilities as the Board of Trustees may from time to
time determine are directly attributable to shares of Class MM other
than the Series 4 shares of such Class MM and which therefore should
be borne solely by such other shares of Class MM and not the Series 4
shares of such Class MM.
(3) PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS,
RESTRICTIONS, LIMITATIONS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF
REDEMPTION. Except as provided hereby, each Series 4 share of Class MM
shall have the same
-2-
<PAGE>
preferences, conversion, and other rights, voting powers, restrictions,
limitations, qualifications, and terms and conditions of redemption
applicable to all other shares as set forth in Galaxy's Declaration of
Trust and shall also have the same preferences, conversion, and other
rights, voting powers, restrictions, limitations, qualifications, and terms
and conditions of redemption as each other share formerly, now or hereafter
classified as a share of Class MM (irrespective of whether said share has
been classified as a part of a series of said Class and, if so classified
as a part of a series, irrespective of the particular series
classification) except that:
(a) On any matter that pertains to the agreements or expenses
and liabilities described under Section (2), clause (a) above (or
to any plan or other document adopted by Galaxy relating to said
agreements, expenses, or liabilities) and is submitted to a vote
of shareholders of Galaxy, only the Series 4 shares of Class MM
(excluding the other shares classified as a series of such Class
other than Series 4) shall be entitled to vote, except that:
(i) if said matter affects shares in Galaxy other than the
Series 4 shares of Class MM, such other affected shares in
Galaxy shall also be entitled to vote, and in such case,
such Series 4 shares of such Class MM shall be voted in the
aggregate together with such other affected shares and not
by class or series except where otherwise required by law or
permitted by the Board of Trustees of Galaxy; and
(ii) if said matter does not affect the Series 4 shares of
Class MM, such shares shall not be entitled to vote (except
where required by law or permitted by the Board of Trustees)
even though the matter is submitted to a vote of the holders
of shares in Galaxy other than said Series 4 shares of Class
MM.
(b) With respect to such series of shares, the first sentence of
Section 5.1B(9) of Galaxy's Declaration of Trust shall not apply,
and the following shall apply instead:
To the extent of the assets of the Trust legally available
for such redemptions, a Shareholder of the Trust shall have
the right to require the Trust to redeem his full and
fractional Shares of any class out of assets belonging to
the classes with the same alphabetical designation as such
class at a redemption price equal to the net asset value per
Share for such Shares being redeemed next determined after
receipt of a request to redeem in proper form as determined
by the Trustees, less such deferred sales charge, redemption
fee or other charge, if any, as may be fixed by the
Trustees, subject to the right of the Trustees to suspend
the right of
-3-
<PAGE>
redemption of Shares or postpone the date of payment of such
redemption price in accordance with the provisions of
applicable law.
(c) Class MM - Series 4 shares shall be convertible into Class
MM Series 2 shares on the basis of the relative net asset value
of the shares converted, and otherwise after such time or times,
and upon such conditions and pursuant to such procedures, as
shall be determined by the Trustees from time to time in
connection with the sale and issuance of such shares.
(4) That the foregoing resolutions remain in full force and effect on
the date hereof.
/s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
Dated: April 12, 2000
Subscribed and sworn to before
me this 12th day of April, 2000
/s/ Dorothea A. Natale
- -----------------------
Dorothea A. Natale
Notary Public
-4-
<PAGE>
Exhibit (a)(21)
THE GALAXY FUND
(A Massachusetts Business Trust)
CERTIFICATE OF CLASSIFICATION OF SHARES
I, W. Bruce McConnel, III, do hereby certify as follows:
(1) That I am the duly elected Secretary of The Galaxy Fund
("Galaxy");
(2) That in such capacity I have examined the records of
actions taken by the Board of Trustees of Galaxy at the regular meeting of the
Board held on March 2, 2000;
(3) That the following resolutions were duly adopted at the
meeting by the Board of Trustees of Galaxy:
CLASSIFICATION OF SHARES
RESOLVED, that pursuant to Section 5.1 of Galaxy's Declaration
of Trust, an unlimited number of authorized and unissued shares of
beneficial interest in Galaxy be, and hereby are, classified into a new
class of shares denominated as Class NN shares, consisting of three
separate series of shares of beneficial interest designated as Class
NN-Series 1 shares, Class NN-Series 2 shares and Class NN-Series 3
shares, each series representing interests in the Pan Asia Fund;
FURTHER RESOLVED, that all consideration received by Galaxy
for the issue or sale of Class NN-Series 1 shares shall be invested and
reinvested with the consideration received by Galaxy for the issue and
sale of Class NN-Series 2 shares and Class NN-Series 3 shares and any
other shares of beneficial interest in Galaxy hereafter designated as
Class NN shares (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated,
irrespective of the particular series designation), together with all
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of Galaxy allocated to
Class NN shares (irrespective of series designation) by the Board of
Trustees in accordance with Galaxy's Declaration of Trust, and each
Class NN-Series 1 share, Class NN-Series 2 share and Class NN-Series 3
share shall share in proportion to their respective net asset values
with each such other share in such consideration and other assets,
income, earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or
<PAGE>
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each Class NN-Series 1 share, Class
NN-Series 2 share and Class NN-Series 3 share newly classified hereby
shall have all of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption accorded shares of beneficial
interest in Galaxy now or hereinafter designated as Class NN shares
(irrespective of series designation); and
FURTHER RESOLVED, that each Class NN-Series 1 share, each
Class NN-Series 2 share and each Class NN-Series 3 share shall be
charged in proportion to their respective net asset values with each
other share of beneficial interest in Galaxy now or hereafter
designated as a Class NN share (irrespective of whether said share has
been designated as part of a series of said class and, if so
designated, irrespective of the particular series designation) with the
expenses and liabilities of Galaxy in respect of Class NN shares
(irrespective of series designation) and in respect of any general
expenses and liabilities of Galaxy allocated to Class NN shares by the
Board of Trustees in accordance with Galaxy's Declaration of Trust;
PROVIDED, HOWEVER, that to the extent permitted by rule or order of the
Securities and Exchange Commission and as the Board of Trustees may
from time to time determine:
(a) only Class NN-Series 1 shares shall bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services
exclusively with respect to shares of Class NN-Series 1, as
well as any other expenses and liabilities directly
attributable to Class NN-Series 1 shares which the Board of
Trustees determines should be borne solely by shares of such
Series;
(b) only Class NN-Series 2 shares shall bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services
exclusively with respect to shares of Class NN-Series 2, as
well as any other expenses and liabilities directly
attributable to Class NN-Series 2 shares which the Board of
Trustees determines should be borne solely by shares of such
Series;
(c) only Class NN-Series 3 shares shall bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services
exclusively with respect to shares of Class NN-Series 3, as
well as any other expenses and liabilities directly
attributable to Class NN-Series 3 shares which the Board of
Trustees determines should be borne solely by shares of such
Series;
-2-
<PAGE>
(d) Class NN-Series 1 shares shall not bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services with
respect to Class NN shares other than shares of its Series 1,
as well as any other expenses and liabilities directly
attributable to shares of Class NN other than Class NN-Series
1 shares which the Board of Trustees determines should be
borne exclusively by such other shares;
(e) Class NN-Series 2 shares shall not bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services with
respect to Class NN shares other than shares of its Series 2,
as well as any other expenses and liabilities directly
attributable to shares of Class NN other than Class NN-Series
2 shares which the Board of Trustees determines should be
borne exclusively by such other shares;
(f) Class NN-Series 3 shares shall not bear the expenses and
liabilities relating to any agreements or arrangements entered
into by or on behalf of Galaxy pursuant to which an
organization or other person agrees to provide services with
respect to Class NN shares other than shares of its Series 3,
as well as any other expenses and liabilities directly
attributable to shares of Class NN other than Class NN-Series
3 shares which the Board of Trustees determines should be
borne exclusively by such other shares;
(g) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a)
above (or to any plan or other document adopted by Galaxy
relating to said agreements, arrangements, expenses or
liabilities) and that is submitted to a vote of shareholders
of Galaxy, only Class NN-Series 1 shares shall be entitled to
vote, except that: (i) if said matter affects shares of
beneficial interest in Galaxy other than Class NN-Series 1
shares, such other affected shares in Galaxy shall also be
entitled to vote and, in such case, Class NN-Series 1 shares
shall be voted in the aggregate together with such other
affected shares and not by class or series, except where
otherwise required by law or permitted by the Board of
Trustees of Galaxy; and (ii) if said matter does not affect
Class NN-Series 1 shares, said shares shall not be entitled to
vote (except where otherwise required by law or permitted by
the Board of Trustees) even though the matter is submitted to
a vote of the holders of shares of beneficial interest in
Galaxy other than Class NN-Series 1 shares;
(h) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b)
above (or to any plan or other document adopted by Galaxy
relating to said agreements,
-3-
<PAGE>
arrangements, expenses or liabilities) and that is submitted
to a vote of shareholders of Galaxy, only Class NN-Series 2
shares shall be entitled to vote, except that: (i) if said
matter affects shares of beneficial interest in Galaxy other
than Class NN-Series 2 shares, such other affected shares in
Galaxy shall also be entitled to vote and, in such case, Class
NN-Series 2 shares shall be voted in the aggregate together
with such other affected shares and not by class or series,
except where otherwise required by law or permitted by the
Board of Trustees of Galaxy; and (ii) if said matter does not
affect Class NN-Series 2 shares, said shares shall not be
entitled to vote (except where otherwise required by law or
permitted by the Board of Trustees) even though the matter is
submitted to a vote of the holders of shares of beneficial
interest in Galaxy other than Class NN-Series 2 shares;
(i) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (c)
above (or to any plan or other document adopted by Galaxy
relating to said agreements, arrangements, expenses or
liabilities) and that is submitted to a vote of shareholders
of Galaxy, only Class NN-Series 3 shares shall be entitled to
vote, except that: (i) if said matter affects shares of
beneficial interest in Galaxy other than Class NN-Series 3
shares, such other affected shares in Galaxy shall also be
entitled to vote and, in such case, Class NN-Series 3 shares
shall be voted in the aggregate together with such other
affected shares and not by class or series, except where
otherwise required by law or permitted by the Board of
Trustees of Galaxy; and (ii) if said matter does not affect
Class NN-Series 3 shares, said shares shall not be entitled to
vote (except where otherwise required by law or permitted by
the Board of Trustees) even though the matter is submitted to
a vote of the holders of shares of beneficial interest in
Galaxy other than Class NN-Series 3 shares;
(j) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (b)
or clause (c) above (or to any plan or other document adopted
by Galaxy relating to said agreements, arrangements, expenses
or liabilities) and that is submitted to a vote of
shareholders of Galaxy, Class NN-Series 1 shares shall not be
entitled to vote, except where otherwise required by law or
permitted by the Board of Trustees of Galaxy, and except that
if said matter affects Class NN-Series 1 shares, such shares
shall be entitled to vote, and in such case, Class NN-Series 1
shares shall be voted in the aggregate together with all other
shares of beneficial interest in Galaxy voting on the matter
and not by class or series, except where otherwise required by
law or permitted by the Board of Trustees;
(k) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a)
or clause (c) above (or to any plan or other document adopted
by Galaxy relating to said agreements,
-4-
<PAGE>
arrangements, expenses or liabilities) and that is submitted
to a vote of shareholders of Galaxy, Class NN-Series 2 shares
shall not be entitled to vote, except where otherwise required
by law or permitted by the Board of Trustees of Galaxy, and
except that if said matter affects Class NN-Series 2 shares,
such shares shall be entitled to vote, and in such case, Class
NN-Series 2 shares shall be voted in the aggregate together
with all other shares of beneficial interest in Galaxy voting
on the matter and not by class or series, except where
otherwise required by law or permitted by the Board of
Trustees;
(l) on any matter that pertains to the agreements,
arrangements, expenses or liabilities described in clause (a)
or clause (b) above (or to any plan or other document adopted
by Galaxy relating to said agreements, arrangements, expenses
or liabilities) and that is submitted to a vote of
shareholders of Galaxy, Class NN-Series 3 shares shall not be
entitled to vote, except where otherwise required by law or
permitted by the Board of Trustees of Galaxy, and except that
if said matter affects Class NN-Series 3 shares, such shares
shall be entitled to vote and, in such case, Class NN-Series 3
shares shall be voted in the aggregate together with all other
shares of beneficial interest in Galaxy voting on the matter
and not by class or series, except where otherwise required by
law or permitted by the Board of Trustees; and
(m) With respect to Class NN-Series 3 shares, the first
sentence of Section 5.1B(9) of Galaxy's Declaration of Trust
shall not apply, and the following shall apply instead:
To the extent of the assets of the Trust legally
available for such redemptions, a Shareholder of the
Trust shall have the right to require the Trust to
redeem his full and fractional Shares of any class
out of assets belonging to the classes with the same
alphabetical designation as such class at a
redemption price equal to the net asset value per
Share for such Shares being redeemed next determined
after receipt of a request to redeem in proper form
as determined by the Trustees, less such deferred
sales charge, redemption fee or other charge, if any,
as may be fixed by the Trustees, subject to the right
of the Trustees to suspend the right of redemption of
Shares or postpone the date of payment of such
redemption price in accordance with the provisions of
applicable law.
(n) Class NN-Series 3 shares shall be convertible into Class
NN-Series 2 shares on the basis of the relative net asset
value of the shares converted, and otherwise after such time
or times, and upon such conditions and pursuant to such
procedures, as shall be determined by the Trustees from time
to time in connection with the issuance and sale of such
shares.
-5-
<PAGE>
(o) That the foregoing resolutions remain in full force and
effect on the date hereof.
/s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
Dated: April 12, 2000
Subscribed and sworn to before
me this 12th day of April, 2000
/s/ Dorothea A. Natale
- -----------------------
Dorothea A. Natale
Notary Public
-6-
<PAGE>
Exhibit (d)(7)
ADDENDUM NO. 6 TO ADVISORY AGREEMENT
This Addendum No. 6, dated as of the ____ day of _________,
2000, is entered into between THE GALAXY FUND, a Massachusetts business trust,
located in Westborough, Massachusetts ("Galaxy"), and FLEET INVESTMENT ADVISORS
INC., a New York corporation, located in Boston, Massachusetts (the "Adviser").
WHEREAS, Galaxy and the Adviser have entered into an Advisory
Agreement dated as of May 19, 1994, which was extended to additional investment
portfolios of Galaxy by Addendum No. 1 dated as of December 1, 1995, Addendum
No. 2 dated as of March 3, 1998, Addendum No. 3 dated as of September 18, 1998,
Addendum No. 4 dated as of _________, 2000 and Addendum No. 5 dated as of
_________, 2000 (the "Advisory Agreement"), pursuant to which Galaxy appointed
the Adviser to act as investment adviser to Galaxy for its Money Market Fund,
Government Fund, Tax-Exempt Fund, U.S. Treasury Fund, Institutional Government
Money Market Fund, Short-Term Bond Fund, Intermediate Government Income Fund,
High Quality Bond Fund, Corporate Bond Fund, Tax-Exempt Bond Fund, New York
Municipal Bond Fund, Connecticut Municipal Bond Fund, Massachusetts Municipal
Bond Fund, Rhode Island Municipal Bond Fund, Equity Value Fund, Equity Growth
Fund, Equity Income Fund, International Equity Fund, Small Company Equity Fund,
Asset Allocation Fund, Growth and Income Fund, Connecticut Municipal Money
Market Fund, Massachusetts Municipal Money Market Fund, Small Cap Value Fund,
New Jersey Municipal Bond Fund, MidCap Equity Fund, Strategic Equity Fund, Prime
Reserves, Government Reserves, Tax-Exempt Reserves, New York Municipal Money
Market Fund, Institutional Money Market Fund, Institutional Treasury Money
Market Fund, Florida Municipal Bond Fund, Intermediate Tax-Exempt Bond Fund,
Connecticut Intermediate Municipal Bond Fund, Massachusetts Intermediate
Municipal Bond Fund and Growth Fund II (each a "Fund");
WHEREAS, Galaxy has notified the Adviser that it has
established a new portfolio, the Pan Asia Fund (the "New Fund"), and that it
desires to retain the Adviser to act as the investment adviser therefor, and the
Adviser has notified Galaxy that it is willing to serve as investment adviser
for the New Fund;
NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. APPOINTMENT. Galaxy hereby appoints the Adviser to
act as investment adviser to Galaxy for the New Fund for the period and on the
terms set forth in the Advisory Agreement. The Adviser hereby accepts such
appointment and agrees to render the services set forth in the Advisory
Agreement for the compensation herein provided.
2. COMPENSATION. For the services provided and the
expenses assumed pursuant to the Advisory Agreement with respect to the New
Fund, Galaxy will pay the Adviser, and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at the annual rate
of 1.00% of the net assets of the New Fund.
<PAGE>
3. CAPITALIZED TERMS. From and after the date hereof,
the term "Fund" as used in the Advisory Agreement shall be deemed to include the
New Fund. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Advisory Agreement.
4. MISCELLANEOUS. Except to the extent supplemented
hereby, the Advisory Agreement shall remain unchanged and in full force and
effect and is hereby ratified and confirmed in all respects as supplemented
hereby.
IN WITNESS WHEREOF, the undersigned have executed this
Addendum as of the date and year first above written.
THE GALAXY FUND
By:
-------------------------------
Name: John T. O'Neill
Title: President
FLEET INVESTMENT ADVISORS INC.
By:
-------------------------------
Name: Thomas M. O'Neill
Title: President
-2-
<PAGE>
Exhibit (d)(9)
DRAFT
THE GALAXY FUND
SUB-ADVISORY AGREEMENT
PAN ASIA FUND
AGREEMENT made as of _____________, 2000 between FLEET
INVESTMENT ADVISORS INC., a New York corporation (the "Adviser"), and UOB GLOBAL
CAPITAL LLC, a ________________ limited liability company ("UOB").
WHEREAS, The Galaxy Fund ("Galaxy") is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to
Galaxy's Pan Asia Fund (the "Fund");
WHEREAS, the Adviser desires to retain UOB to assist it in the
provision of a continuous investment program for the Fund, and UOB is willing to
do so;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints UOB to act
as sub-adviser to the Fund as permitted by the Adviser's Advisory Agreement with
Galaxy pertaining to the Fund. Intending to be legally bound, UOB accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. SUB-ADVISORY SERVICES. Subject to the supervision of
Galaxy's Board of Trustees, UOB will assist the Adviser in providing a
continuous investment program for the Fund, including research and management
with respect to all securities and investments and cash equivalents in the Fund.
UOB will provide services under this Agreement in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
prospectuses and statement of additional information and resolutions of Galaxy's
Board of Trustees applicable to the Fund.
Without limiting the generality of the foregoing, UOB further
agrees that it will:
(a) prepare, subject to the Adviser's approval, lists
of foreign countries for investment by the Fund and determine from time
to time what securities and other investments will be purchased,
retained or sold for the Fund, including, with the assistance of the
Adviser, the Fund's investments in futures and forward currency
contracts;
<PAGE>
(b) manage in consultation with the Adviser the
Fund's temporary investments in securities;
(c) place orders for the Fund either directly with
the issuer or with any broker or dealer;
(d) manage the Fund's overall cash position, and
determine from time to time what portion of the Fund's assets will be
held in different currencies;
(e) provide the Adviser with foreign broker research,
a quarterly review of international economic and investment
developments, and occasional reports on international investment
issues;
(f) attend regular business and investment-related
meetings with Galaxy's Board of Trustees and the Adviser if requested
to do so by Galaxy and/or the Adviser; and
(g) maintain books and records with respect to the
securities transactions for the Fund, furnish to the Adviser and
Galaxy's Board of Trustees such periodic and special reports as they
may request with respect to the Fund, and provide in advance to the
Adviser all reports to the Board of Trustees for examination and review
within a reasonable time prior to Galaxy Board meetings.
3. COVENANTS BY SUB-ADVISER. UOB agrees with respect to
the services provided to the Fund that it:
(a) will conform with all Rules and Regulations of
the Securities and Exchange Commission ("SEC") applicable to it;
(b) will use the same skill and care in providing
such services as it uses in providing services to other investment companies;
(c) will telecopy trade information to the Adviser on
the first business day following the day of the trade and cause broker
confirmations to be sent directly to the Adviser. In executing portfolio
transactions and selecting brokers or dealers, UOB will use its best efforts to
seek on behalf of the Fund the best overall terms available. In assessing the
best overall terms available for any transaction, UOB shall consider all factors
it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker or dealer to execute a particular
transaction, UOB may also consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Fund and/or other accounts over which UOB or any affiliate of
UOB exercises investment discretion. UOB is authorized, subject to the prior
approval of Galaxy's Board of Trustees, to pay to a broker or dealer who
provides such brokerage
-2-
<PAGE>
and research services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, UOB
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer--viewed in terms of that particular transaction or in terms of the
overall responsibilities of UOB to the Fund and to Galaxy.
Except to the extent permitted by the SEC or by applicable
law, portfolio securities will not be purchased from or sold to the Adviser,
UOB, the Fund's distributor (the "Distributor"), or any affiliated person of
either Galaxy, the Adviser, UOB, or the Distributor.
(d) will treat confidentially and as proprietary
information of Galaxy all records and other information relative to the Fund and
prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder (except after prior notification to and approval in writing by
Galaxy, which approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where UOB may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by
Galaxy);
(e) will notify Galaxy of any change in its
membership within a reasonable time after
such change.
4. SERVICES NOT EXCLUSIVE. (a) The services furnished by
UOB hereunder are deemed not to be exclusive, and nothing in this Agreement
shall (i) prevent UOB or any affiliated person (as defined in the 1940 Act) of
UOB from acting as investment adviser or manager for any other person or
persons, including other management investment companies with investment
objectives and policies the same as or similar to those of the Fund or (ii)
limit or restrict UOB or any such affiliated person from buying, selling or
trading any securities or other investments (including any securities or other
investments which the Fund is eligible to buy) for its or their own accounts or
for the accounts of others for whom it or they may be acting; PROVIDED, HOWEVER,
that UOB agrees that it will not undertake any activities which, in its
judgment, will adversely affect the performance of its obligations to the Fund
under this Agreement.
(b) Nothing contained herein, however, shall prohibit
UOB from advertising or soliciting the public generally with respect to other
products or services, regardless of whether such advertisement or solicitation
may include prior, present or potential shareholders of Galaxy.
5. PORTFOLIO TRANSACTIONS. Investment decisions for the
Fund shall be made by UOB independently from those for any other investment
companies and accounts advised or managed by UOB. The Fund and such investment
companies and accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially the same time on
behalf of the Fund and/or another investment company or account, the transaction
will be averaged as to price, and available investments allocated as to amount,
in a manner which
-3-
<PAGE>
UOB believes to be equitable to the Fund and such other investment company or
account. In some instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position obtained or sold
by the Fund. To the extent permitted by law, UOB may aggregate the securities to
be sold or purchased for the Fund with those to be sold or purchased for other
investment companies or accounts in order to obtain best execution.
6. BOOKS AND RECORDS. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, UOB hereby agrees that all
records which it maintains for Galaxy are the property of Galaxy and further
agrees to surrender promptly to Galaxy any of such records upon Galaxy's
request. UOB further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. EXPENSES. During the term of this Agreement, UOB will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for the Fund.
8. COMPENSATION. For the services provided and the
expenses assumed with respect to the Fund pursuant to this Agreement, the
Adviser will pay UOB and UOB will accept as full compensation therefor fees,
computed daily and paid quarterly, at the annual rate of 0.50% of the Fund's
average daily net assets.
9. LIMITATION OF LIABILITY OF UOB. UOB shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
Galaxy or the Adviser, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of UOB in
the performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
10. REFERENCE TO UOB. Neither the Adviser nor any
affiliate or agent of it shall make reference to or use the name of UOB or any
of its affiliates, or any of their clients, except references concerning the
identity of and services provided by UOB to the Fund, which references shall not
differ in substance from those included in the current registration statement
pertaining to the Fund, this Agreement and the Advisory Agreement between the
Adviser and Galaxy with respect to the Fund, in any advertising or promotional
materials without the prior approval of UOB, which approval shall not be
unreasonably withheld or delayed. The Adviser hereby agrees to make all
reasonable efforts to cause Galaxy and any affiliate thereof to satisfy the
foregoing obligation.
11. DURATION AND TERMINATION. This Agreement shall become
effective on the date of the commencement of the Fund, provided that the Board
of Trustees of Galaxy has previously approved the Agreement in accordance with
the requirements of the 1940 Act. Unless sooner terminated as provided herein,
this Agreement shall continue in effect until __________, 2002. Thereafter if
not terminated, this Agreement shall continue in effect for successive
twelve-month periods ending on __________, PROVIDED such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of Galaxy's Board of Trustees who
-4-
<PAGE>
are not parties to this Agreement, or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) by Galaxy's Board of Trustees or by the vote of a majority of the
outstanding voting securities of the Fund. Notwithstanding the foregoing, this
Agreement may be terminated at any time, without the payment of any penalty, by
the Adviser or by Galaxy (by Galaxy's Board of Trustees or by vote of a majority
of the outstanding voting securities of the Fund) on 60 days' written notice to
UOB (which notice may be waived by the party entitled to receive the same) and
will automatically terminate upon the termination of the Advisory Agreement
between the Adviser and Galaxy with respect to the Fund. This Agreement may be
terminated by UOB at any time, without payment of any penalty, on 90 days'
written notice to Galaxy and the Adviser (which notice may be waived by the
party entitled to receive the same). This Agreement will automatically terminate
in the event of its assignment. (As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested persons" and "assignment"
shall have the same meanings as such terms in the 1940 Act.)
12. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally. A provision
of this Agreement may only be changed, waived, discharged or terminated by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment of this
Agreement shall be effective with respect to the Fund until approved by the vote
of a majority of the outstanding voting securities of the Fund.
13. NOTICE. Any notice, advice or report to be given
pursuant to this Agreement shall be delivered or mailed:
To UOB at:
592 Fifth Avenue
New York, NY 10036
Attention: _________________
To the Adviser at:
75 State Street
Boston, MA 02109
Attention: Thomas M. O'Neill
To Galaxy at:
4400 Computer Drive
Westborough, MA 01581
Attention: William Greilich
-5-
<PAGE>
With a copy to:
W. Bruce McConnel, III, Esq.
Drinker Biddle & Reath LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
14. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by New York law.
15. NAMES. The names "The Galaxy Fund" and "Trustees of
The Galaxy Fund" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated March 31, 1986 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of "The
Galaxy Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of Galaxy personally, but bind only the property of Galaxy, and
all persons dealing with any class of shares of Galaxy must look solely to the
property of Galaxy belonging to such class for the enforcement of any claims
against Galaxy.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
FLEET INVESTMENT ADVISORS INC.
By:
-----------------------------
Name: Thomas M. O'Neill
Title: President
UOB GLOBAL CAPITAL LLC
By:
-----------------------------
Name:
Title:
-7-
<PAGE>
Exhibit (e)(4)
THE GALAXY FUND
DISTRIBUTION AGREEMENT
Amendment No. 3
____________, 2000
Provident Distributors, Inc.
3200 Horizon Drive
King of Prussia, PA 19406
Dear Sirs:
This letter is to confirm that the undersigned, The Galaxy
Fund (the "Trust"), a Massachusetts business trust, has agreed that the
Distribution Agreement between the Trust and Provident Distributors, Inc.
("PDI") dated as of December 1, 1999 (the "Agreement") is herewith amended to
provide that PDI shall be the distributor for the Trust's Pan Asia Fund on the
terms and conditions contained in the Agreement.
If the foregoing is in accordance with your understanding,
will you so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE GALAXY FUND
By:
-----------------------------
Name: John T. O'Neill
Title: President
Accepted:
PROVIDENT DISTRIBUTORS, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
Exhibit (g)(7)
THE GALAXY FUND
Amendment to
GLOBAL CUSTODY AGREEMENT
____________, 2000
The Chase Manhattan Bank
Chase Metrotech Center
Brooklyn, NY 11245
Attn: Global Custody Division
Dear Sirs:
This letter is to confirm that the undersigned, The Galaxy Fund (the
"Trust"), a Massachusetts business trust, has agreed that the Global Custody
Agreement ("Agreement") between the Trust and The Chase Manhattan Bank (formerly
The Chase Manhattan Bank, N.A.) ("Chase") dated as of November 1, 1991 is
herewith amended to provide that Chase shall be the custodian for the Trust's
Pan Asia Fund on the terms and conditions contained in the Agreement.
If the foregoing is in accordance with your understanding, will you so
indicate by signing and returning to us the enclosed copy thereof.
Very truly yours,
THE GALAXY FUND
By:
-----------------------------
Name: John T. O'Neill
Title: President
Accepted:
THE CHASE MANHATTAN BANK
By:
-----------------------------
Name:
Title:
<PAGE>
Exhibit (h)(9)
THE GALAXY FUND
ADMINISTRATION AGREEMENT
Amendment No. 8
As of ____________, 2000
PFPC, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Dear Sirs:
This letter is to confirm that the undersigned, The Galaxy
Fund (the "Trust"), a Massachusetts business trust, has agreed that the
Administration Agreement between the Trust and PFPC, Inc. ("PFPC") (formerly
known as First Data Investor Services Group, Inc.) dated as of June 1, 1997 (the
"Agreement") is herewith amended to provide that PFPC shall be the administrator
for the Trust's Pan Asia Fund on the terms and conditions contained in the
Agreement.
If the foregoing is in accordance with your understanding,
will you so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE GALAXY FUND
By:
-------------------------
Name: John T. O'Neill
Title: President
Accepted:
PFPC, INC.
By:
-------------------------
Name:
Title:
<PAGE>
Exhibit (h)(19)
THE GALAXY FUND
TRANSFER AGENCY AND SERVICES AGREEMENT
Amendment No. 9
____________, 2000
PFPC, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Dear Sirs:
This letter is to confirm that the undersigned, The Galaxy Fund (the
"Trust"), a Massachusetts business trust, has agreed that the Transfer Agency
and Services Agreement ("Agreement") between the Trust and PFPC, Inc. ("PFPC")
(formerly known as First Data Investor Services Group, Inc.) dated as of June 1,
1997 is herewith amended to provide that PFPC shall be the transfer agent and
dividend disbursing agent for the Trust's Pan Asia Fund on the terms and
conditions contained in the Agreement.
If the foregoing is in accordance with your understanding, will you so
indicate by signing and returning to us the enclosed copy thereof.
Very truly yours,
THE GALAXY FUND
By:
-------------------------
Name: John T. O'Neill
Title: President
Accepted:
PFPC, INC.
By:
-------------------------
Name:
Title:
<PAGE>
Exhibit (i)(3)
DRINKER BIDDLE & REATH LLP
One Logan Square
18th & Cherry Sts.
Philadelphia, PA 19103-6996
(215) 988-2700
April 17, 2000
The Galaxy Fund
4400 Computer Drive
Westboro, MA 01581
RE: The Galaxy Fund - Class NN Shares of Beneficial Interest
--------------------------------------------------------
Gentlemen:
We have acted as counsel to The Galaxy Fund, a Massachusetts
business trust (the "Trust"), in connection with the preparation and filing with
the Securities and Exchange Commission of Post-Effective Amendment No. 46 (the
"Amendment") to the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, registering Class NN shares of beneficial
interest, par value $.001 per share (the "Shares"), representing interests in
the Pan Asia Fund. The Amendment seeks to register an indefinite number of the
Shares.
We have reviewed the Trust's Declaration of Trust, as amended,
its Code of Regulations, resolutions adopted by its Board of Trustees and
shareholders, and such other legal and factual matters as we have considered
necessary.
This opinion is based exclusively on the laws of the
Commonwealth of Massachusetts and the federal laws of the United States of
America. We have relied upon an opinion of Ropes & Gray, special Massachusetts
counsel to the Trust, insofar as our opinion relates to matters arising under
the laws of the Commonwealth of Massachusetts.
We have also assumed the following for this opinion:
1. The Shares will be issued in accordance with the
Trust's Declaration of Trust, as amended, and Code of Regulations and
resolutions of the Trust's Board of Trustees and shareholders relating to the
creation, authorization and issuance of the Shares.
2. The Shares will be issued against consideration
therefor as described in the Trust's prospectuses relating thereto, and that
such consideration will have been at least equal to the applicable net asset
value and the applicable par value.
On the basis of the foregoing, it is our opinion that the
Shares will be validly issued, fully paid, and non-assessable by the Trust.
Under Massachusetts law, shareholders of a Massachusetts
business trust could, under certain circumstances, be held personally liable for
the obligations of the trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each note,
<PAGE>
The Galaxy Fund
April 17, 2000
Page 2
bond, contract, order or other undertaking issued by or on behalf of the Trust
or the Trustees relating to the Trust or any class of shares of beneficial
interest of the Trust. The Declaration of Trust provides for indemnification out
of the assets of the particular class of shares for all loss and expense of any
shareholder of that class held personally liable solely by reason of his being
or having been a shareholder. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which that class of shares itself would be unable to meet its obligations.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Amendment.
Very truly yours,
/s/ Drinker Biddle & Reath LLP
------------------------------
DRINKER BIDDLE & REATH LLP
<PAGE>
Exhibit (j)(1)
CONSENT OF COUNSEL
We hereby consent to (i) the use of our name and the
references to our firm under the caption "Counsel" in the Statement of
Additional Information that is included in Post-Effective Amendment No. 46 to
the Registration Statement on Form N-1A under the Investment Company Act of
1940, as amended, of The Galaxy Fund, (ii) the use and incorporation by
reference in said Post-Effective Amendment No. 46 of our firm's opinion of
counsel filed as Exhibit (i) to Post-Effective Amendment No. 38 to the
Registration Statement on Form N-1A under the Investment Company Act of 1940, as
amended, of The Galaxy Fund, and (iii) the use and incorporation by reference in
said Post-Effective Amendment No. 46 of our firm's opinion of counsel filed as
Exhibit (i)(2) to Post-Effective Amendment No. 40 to the Registration Statement
on Form N-1A under the Investment Company Act of 1940, as amended, of The Galaxy
Fund and (iv) the use and incorporation by reference in said Post-Effective
Amendment No. 46 of our firm's opinion and consent filed as Exhibit (i)(4) to
Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A under
the Investment Company Act of 1940, as amended, of The Galaxy Fund.
/s/ Drinker Biddle & Reath LLP
------------------------------
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
April 17, 2000
<PAGE>
Exhibit (l)(13)
PURCHASE AGREEMENT
The Galaxy Fund, a Massachusetts business trust (the "Trust"), and
Provident Distributors, Inc., a Delaware corporation ("PDI"), hereby agree with
each other as follows:
1. The Trust hereby offers PDI and PDI hereby purchases
one (1) Class NN- Series 1 share, one (1) Class NN- Series 2 share and one (1)
Class NN- Series 3 share, each such share representing an interest in the Pan
Asia Fund, at a purchase price of $10.00 per share, aggregating to three (3)
shares of beneficial interest in the Trust (such shares of beneficial interest
in the Trust being hereinafter collectively known as "Shares"). PDI hereby
acknowledges purchase of the Shares and the Trust hereby acknowledges receipt
from PDI of funds in the amount of $30 in full payment for the Shares.
2. PDI represents and warrants to the Trust that the
Shares are being acquired for investment purposes and not with a view to the
distribution thereof.
3. The names "The Galaxy Fund" and "Trustees of The
Galaxy Fund" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated March 31, 1986 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of "The
Galaxy Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the Trust property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust property belonging to such class for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the ___ day of ___________, 2000.
THE GALAXY FUND
By:
-------------------------
William Greilich
Vice President
PROVIDENT DISTRIBUTORS, INC.
By:
-------------------------
Philip H. Rinnander
President
<PAGE>
EXHIBIT (m)(1)
THE GALAXY FUND
DISTRIBUTION AND SERVICES PLAN
FOR RETAIL B SHARES
------------------------------
This Distribution and Services Plan (the "Plan") has been adopted by the
Board of Trustees of The Galaxy Fund (the "Trust") in connection with the Retail
B series of shares (the "B Shares") in each of the following investment
portfolios of the Trust: Small Company Equity Fund, Small Cap Value Fund, MidCap
Equity Fund, Equity Growth Fund, Growth Fund II, Equity Income Fund,
International Equity Fund, Pan Asia Fund, Asset Allocation Fund, Equity Value
Fund, Growth and Income Fund, Strategic Equity Fund, Short-Term Bond Fund,
Intermediate Government Income Fund, High Quality Bond Fund, Tax-Exempt Bond
Fund and Money Market Fund (collectively, the "Funds"). The Plan has been
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act").
Section 1. EXPENSES. The Trust may incur expenses under the Plan in an
amount not to exceed 1.15% annually of the average daily net assets attributable
to the outstanding B Shares of each of the Funds.
Section 2. DISTRIBUTION PAYMENTS. (a) The Trust may pay the
distributor of the Trust (the "Distributor") (or any other person) a fee (a
"Distribution Fee") of up to 0.65% annually of the average daily net assets
attributable to the outstanding B Shares of each of the Funds. The Distribution
Fee shall be calculated and accrued daily, paid monthly and shall be in
consideration for distribution services and the assumption of related expenses
(including the payment of commissions and transaction fees) in conjunction with
the offering and sale of B Shares of the Funds. In determining the amounts
payable on behalf of a Fund under the Plan, the net asset value of the B Shares
shall be computed in the manner specified in the Trust's then current
Prospectuses and Statements of Additional Information describing such B Shares.
(b) Payments to the Distributor under subsection (a) above shall be
used by the Distributor to cover expenses and activities primarily intended to
result in the sale of B Shares. Such expenses and activities may include but are
not limited to: (i) direct out-of-pocket promotional expenses incurred by the
Distributor in advertising and marketing B Shares; (ii) expenses incurred in
connection with preparing, printing, mailing, and distributing or publishing
advertisements and sales literature; (iii) expenses incurred in connection with
printing and mailing Prospectuses and Statements of Additional Information to
other than current shareholders; (iv) periodic payments or commissions to one or
more securities dealers, brokers, financial institutions or other industry
professionals, such as investment advisors, accountants, and estate planning
firms (each a "Distribution Organization") with respect to a Fund's B Shares
beneficially owned by customers for whom the Distribution Organization is the
Distribution Organization of record or shareholder of record; (v) the direct or
indirect cost of financing the payments or expenses included in (i) and (iv)
above; or (vi) such other services as may be construed by any court or
governmental agency or commission, including the Securities and Exchange
Commission (the "Commission"), to constitute distribution services under the
1940 Act or rules and regulations thereunder.
<PAGE>
Section 3. PAYMENTS FOR SHAREHOLDER LIAISON SERVICES COVERED BY PLAN.
(a) The Trust may also pay securities dealers, brokers, financial institutions
or other industry professionals, such as investment advisors, accountants, and
estate planning firms (each a "Service Organization") for Shareholder Liaison
Services (as hereinafter defined) provided with respect to their customers' B
Shares. Shareholder Liaison Services shall be provided pursuant to an agreement
in substantially the form attached hereto ("Servicing Agreement"). Any
organization providing distribution assistance may also become a Service
Organization and receive fees for Shareholder Liaison Services pursuant to a
Servicing Agreement under this Plan.
(b) Fees paid to a Service Organization under subsection (a) above
may be paid at an annual rate of up to 0.25% of the average daily net assets
attributable to the outstanding B Shares of each of the Funds, which B Shares
are owned of record or beneficially by that Service Organization's customers for
whom such Service Organization is the dealer of record or shareholder of record
or with whom it has a servicing relationship. Such fees shall be calculated and
accrued daily, paid monthly and computed in the manner set forth in the
Servicing Agreement.
(c) "Shareholder Liaison Services" means "personal service and/or the
maintenance of shareholder accounts" within the meaning of the Conduct Rules of
the National Association of Securities Dealers, Inc., such as responding to
customers' inquiries and providing information on their investments.
Section 4. PAYMENTS FOR ADMINISTRATIVE SUPPORT SERVICES COVERED BY
PLAN. (a) The Trust may also pay Service Organizations for Administrative
Support Services (as hereinafter defined) provided with respect to its
Customers' B Shares. Administrative Support Services shall be provided pursuant
to a Servicing Agreement. Any organization that receives fees under Section 2 or
Section 3 of this Plan may also receive fees pursuant to this Section 4.
(b) Fees paid to a Service Organization under subsection (a) above
may be paid at an annual rate of up to 0.25% of the average daily net assets
attributable to the outstanding B Shares of each of the Funds, which B Shares
are owned of record or beneficially by that Service Organization's customers for
whom such Service Organization is the dealer of record or shareholder of record
or with whom it has a servicing relationship. Such fees shall be calculated and
accrued daily, paid monthly and computed in the manner set forth in the
Servicing Agreement.
(c) "Administrative Support Services" include but are not limited to:
(i) transfer agent and subtransfer agent services for beneficial owners of B
Shares; (ii) aggregating and processing purchase and redemption orders; (iii)
providing beneficial owners with statements showing their positions in B Shares;
(iv) processing dividend payments; (v) providing subaccounting services for B
Shares held beneficially; (vi) forwarding shareholder communications, such as
proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (vii) receiving, tabulating, and
transmitting proxies executed by beneficial owners; PROVIDED, however, that such
term does not include Shareholder Liaison Services.
-2-
<PAGE>
Section 5. EXPENSES ALLOCATED; COMPLIANCE. Amounts paid by a Fund
under the Plan must be for services rendered for or on behalf of the holders of
such Fund's B Shares. However, joint distribution financing or other services
rendered with respect to such B Shares (which may involve other investment funds
or companies that are affiliated persons of the Trust or affiliated persons of
the Distributor) is authorized to the extent permitted by law.
Section 6. REPORTS TO TRUST. So long as this Plan is in effect, the
Distributor shall provide the Trust's Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
the Plan and the purposes for which such expenditures were made.
Section 7. APPROVAL OF PLAN. This Plan will become effective with
respect to a particular Fund's B Shares on the date the public offering of B
Shares commences upon the approval by a majority of the Board of Trustees,
including a majority of those trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements entered
into in connection with the Plan (the "Disinterested Trustees"), pursuant to a
vote cast in person at a meeting called for the purpose of voting on the
approval of the Plan.
Section 8. CONTINUANCE OF PLAN. Unless sooner terminated in accordance
with the terms hereof, this Plan shall continue until September 30, 2000, and
thereafter for so long as its continuance is specifically approved at least
annually by the Trust's Board of Trustees in the manner described in Section 7
hereof.
Section 9. AMENDMENTS. This Plan may be amended at any time by the
Board of Trustees provided that (a) any amendment to increase materially the
costs which the B Shares of a Fund may bear for distribution pursuant to the
Plan shall be effective only upon approval by a vote of a majority of the
outstanding B Shares affected by such matter, and (b) any material amendments of
the terms of the Plan shall become effective only upon approval in the manner
described in Section 7 hereof.
Section 10. TERMINATION. This Plan, as to any Fund, is terminable
without penalty at any time by (a) a vote of a majority of the Disinterested
Trustees, or (b) a vote of a majority of the outstanding B Shares of such Fund.
Section 11. SELECTION/NOMINATION OF TRUSTEES. While this Plan is in
effect, the selection and nomination of those Disinterested Trustees shall be
committed to the discretion of such Disinterested Trustees.
-3-
<PAGE>
Section 12. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
Adopted: September 7, 1995
Revised: December 5, 1996, December 4, 1997, May 28, 1998, September 3, 1998,
March 2, 2000, May 25, 2000
Reapproved: September 5, 1996, September 4, 1997, September 10, 1998,
September 9, 1999
-4-
<PAGE>
THE GALAXY FUND
SERVICING AGREEMENT
to
DISTRIBUTION AND SERVICES PLAN
FOR RETAIL B SHARES
Ladies and Gentlemen:
We wish to enter into this Servicing Agreement with you concerning the provision
of shareholder liaison and/or administrative support services to your customers
who may from time to time be the record or beneficial owners of Retail B Shares
(such shares referred to herein as the "B Shares") of one or more of our
investment portfolios (individually, a "Fund" and collectively, the "Funds"),
which are listed on Appendix A.
The terms and conditions of this Servicing Agreement are as follows:
Section 1. You agree to provide Shareholder Liaison Services to your customers
("Clients") who may from time to time own of record or beneficially a Fund's B
Shares. "Shareholder Liaison Services" means "personal service and/or the
maintenance of shareholder accounts" within the meaning of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., such as
responding to customers' inquiries and providing information on their
investments.
Section 2. You agree to provide Administrative Support Services to Clients who
may from time to time own of record or beneficially a Fund's B Shares.
"Administrative Support Services" include but are not limited to: (i) transfer
agent and subtransfer agent services for beneficial owners of B Shares; (ii)
aggregating and processing purchase and redemption orders; (iii) providing
beneficial owners with statements showing their positions in B Shares; (iv)
processing dividend payments; (v) providing subaccounting services for B Shares
held beneficially; (vi) forwarding shareholder communications, such as proxies,
shareholder reports, dividend and tax notices, and updating prospectuses to
beneficial owners; and (vii) receiving, tabulating, and transmitting proxies
executed by beneficial owners; PROVIDED, however, that such term does not
include Shareholder Liaison Services.
Section 3. You will provide such office space and equipment, telephone and
personnel (which may be any part of the space, equipment and facilities
currently used in your business, or any personnel employed by you) as may be
reasonably necessary or beneficial in order to provide the aforementioned
services to Clients.
Section 4. Neither you nor any of your officers, employees or agents is
authorized to make any representations concerning us, a Fund, or its B Shares
except those contained in our then current prospectuses for such B Shares,
copies of which will be supplied by us to you, or in such supplemental
literature or advertising as may be authorized by us in writing.
Section 5. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in any
matter or in any respect. You will not engage in activities pursuant to this
Agreement which constitute acting as a broker or dealer under state law unless
you have obtained the licenses required by law. You and your employees will,
upon request, be available during normal business hours to consult with us or
our designees concerning the performance of your responsibilities under this
Agreement.
Section 6. In consideration of the services and facilities provided by you
pursuant to Section 1 hereof, we will pay to you, and you will accept as full
payment therefor, a fee at the annual rate of (a) .25% of the average daily net
asset value of B Shares of the Small Company Equity Fund, Small Cap Value Fund,
MidCap Equity Fund, Equity Growth Fund, Growth Fund II, Equity Income Fund,
International Equity Fund, Pan Asia Fund, Asset Allocation Fund, Equity Value
Fund, Growth and Income Fund and Strategic Equity Fund (collectively, the
"Equity Funds") owned of record or beneficially by Clients from time to time for
whom you are the dealer of record or holder of record or with whom you have a
servicing relationship, (b) .15% of the average daily net asset value of B
Shares of
<PAGE>
the Short-Term Bond Fund, Intermediate Government Income Fund, High
Quality Bond Fund and Tax-Exempt Bond Fund (collectively, the "Bond Funds")
owned of record or beneficially by Clients from time to time for whom you are
the dealer of record or holder of record or with whom you have a servicing
relationship, and (c) .05% of the average daily net asset value of B Shares of
the Money Market Fund owned of record or beneficially by Clients from time to
time for whom you are the dealer of record or holder of record and with whom you
have a servicing relationship. In consideration of the services provided by you
pursuant to Section 2 hereof, we will pay to you, and you will accept as full
payment therefor, a fee at the annual rate of (a) .25% of the average daily net
asset value of B Shares of the Equity Funds, (b) .15% of the average daily net
asset value of B Shares of the Bond Funds, and (c) .05% of the average daily net
asset value of B Shares of the Money Market Fund. Said fee will be computed
daily and payable monthly. For purposes of determining the fees payable under
this Section 6, the average daily net asset value of Clients' B Shares will be
computed in the manner specified in our then current Registration Statement in
connection with the computation of the net asset value of the particular Fund's
B Shares for purposes of purchases and redemptions. The fee rates stated above
may be prospectively increased or decreased by us, in our sole discretion, at
any time upon notice to you. Further, we may, in our discretion and without
notice, suspend or withdraw the sale of B Shares, including the sale of such
Shares to you for the account of any Clients.
Section 7. You acknowledge that you will provide to our Board of Trustees, at
least quarterly, separate written reports of the amounts expended pursuant to
this Agreement for Shareholder Liaison Services and for Administrative Support
Services, respectively, and the purposes for which such expenditures were made.
In connection with such reports, you will furnish us or our designees with such
information as we or they may reasonably request (including, without limitation,
periodic certifications confirming the provision to Clients of some or all of
the services described herein), and will otherwise cooperate with us and our
designees (including, without limitation, any auditors designated by us), in
connection with the preparation of reports to our Board of Trustees concerning
this Agreement and the monies paid or payable by us pursuant hereto, as well as
any other reports or filings that may be required by law.
Section 8. We may enter into other similar Servicing Agreements with any other
person or persons without your consent.
Section 9. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) in no event will any of the services provided by you
hereunder be primarily intended to result in the sale of B Shares; (ii) the
compensation payable to you hereunder, together with any other compensation you
receive from Clients in connection with the investment of their assets in B
Shares of the Funds, will be disclosed to Clients, will be authorized by Clients
and will not be excessive or unreasonable.
Section 10. This Agreement will become effective on the date a fully executed
copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until September 30, 2000, and
thereafter will continue automatically for successive annual periods provided
such continuance is specifically approved at least annually by us in the manner
described in Section 13 hereof. This Agreement is terminable with respect to any
Fund, without penalty, at any time by us (which termination may be by vote of a
majority of our Disinterested Trustees as defined in Section 13 hereof or by
vote of the holders of a majority of the outstanding B Shares of such Fund) or
by you upon notice to us. This Agreement will terminate in the event of its
assignment, as defined in the Investment Company Act of 1940 (the "Act").
Section 11. All notices and other communications to either you or us will be
duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address shown above.
Section 12. This Agreement will be construed in accordance with the laws of the
Commonwealth of Massachusetts without giving effect to principles of conflict of
laws.
Section 13. This Agreement has been approved by vote of a majority of (i) our
Board of Trustees and (ii) those Trustees who are not "interested persons" (as
defined in the Act) of us and have no direct or indirect financial interest in
the operation of the Distribution and Services Plan adopted by us regarding the
provision of shareholder liaison and/or administrative support services to the
record or beneficial owners of B Shares or in any agreements
-2-
<PAGE>
related thereto ("Disinterested Trustees"), cast in person at a meeting called
for the purpose of voting on such approval.
Section 14. The names "The Galaxy Fund" and "Trustees of The Galaxy Fund" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated March 31, 1986 which is hereby referred to and a copy of which is on
file at the office of the State Secretary of the Commonwealth of Massachusetts
and at the principal office of the Trust. The obligations of "The Galaxy Fund"
entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders, or representatives of
the Trust personally, but bind only the Trust property, and all persons dealing
with any class of shares of the Trust must look solely to the Trust property
belonging to such class for the enforcement of any claims against the Trust.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, c/o PFPC, Inc., 4400 Computer Drive, Westborough, Massachusetts
01581-5108.
Very truly yours,
THE GALAXY FUND
By:
------------------------------------------
Authorized Officer
Accepted and Agreed to:
- ---------------------------------------------
Name of Organization
By:
------------------------------------------
Authorized Officer
Date:
----------------------------------------
- ---------------------------------------------
Taxpayer Identification Number
- ---------------------------------------------
Account Number
- ---------------------------------------------
Dealer Code
-3-
<PAGE>
APPENDIX A
Please check the appropriate boxes to indicate the Funds for which you
wish to act as a Service Organization with respect to B Shares:
SHAREHOLDER LIAISON SERVICES ADMINISTRATIVE SUPPORT SERVICES
/ / Small Company Equity Fund / / Small Company Equity Fund
/ / Small Cap Value Fund / / Small Cap Value Fund
/ / MidCap Equity Fund / / MidCap Equity Fund
/ / Equity Growth Fund / / Equity Growth Fund
/ / Growth Fund II / / Growth Fund II
/ / Equity Income Fund / / Equity Income Fund
/ / International Equity Fund / / International Equity Fund
/ / Pan Asia Fund / / Pan Asia Fund
/ / Asset Allocation Fund / / Asset Allocation Fund
/ / Equity Value Fund / / Equity Value Fund
/ / Growth and Income Fund / / Growth and Income Fund
/ / Strategic Equity Fund / / Strategic Equity Fund
/ / Short-Term Bond Fund / / Short-Term Bond Fund
/ / Intermediate Government Income / / Intermediate Government Income
Fund Fund
/ / High Quality Bond Fund / / High Quality Bond Fund
/ / Tax-Exempt Bond Fund / / Tax-Exempt Bond Fund
/ / Money Market Fund / / Money Market Fund
- --------------------------------------------
(Service Organization Name)
By:
-----------------------------------------
Authorized Officer
Dated:
--------------------------------------
A - 1
<PAGE>
Exhibit (m)(6)
THE GALAXY FUND
DISTRIBUTION PLAN
FOR RETAIL A SHARES
This Distribution Plan (the "Plan") has been adopted by the
Board of Trustees of The Galaxy Fund (the "Trust") in connection with the Retail
A series of shares (the "A Shares") of the Pan Asia Fund (the "Fund") of the
Trust. The Plan has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act").
Section 1. DISTRIBUTION PAYMENTS. (a) The Trust may pay
the distributor of the Trust (the "Distributor") (or any other person) a fee (a
"Distribution Fee") of up to 0.30% annually of the average daily net assets
attributable to the outstanding A Shares of the Fund. The Distribution Fee shall
be calculated and accrued daily, paid monthly and shall be in consideration for
distribution services and the assumption of related expenses (including the
payment of commissions and transaction fees) in conjunction with the offering
and sale of A Shares of the Fund. In determining the amounts payable on behalf
of the Fund under the Plan, the net asset value of the A Shares shall be
computed in the manner specified in the Trust's then current Prospectuses and
Statement of Additional Information describing such A Shares.
(b) Payments to the Distributor under subsection (a)
above shall be used by the Distributor to cover expenses and activities
primarily intended to result in the sale of A Shares of the Fund. Such expenses
and activities may include but are not limited to: (i) direct out-of-pocket
promotional expenses incurred by the Distributor in advertising and marketing A
Shares; (ii) expenses incurred in connection with preparing, printing, mailing,
and distributing or publishing advertisements and sales literature; (iii)
expenses incurred in connection with printing and mailing Prospectuses and
Statements of Additional Information to other than current shareholders; (iv)
periodic payments or commissions to one or more securities dealers, brokers,
financial institutions or other industry professionals, such as investment
advisors, accountants, and estate planning firms (each a "Distribution
Organization") with respect to the Fund's A Shares beneficially owned by
customers for whom the Distribution Organization is the Distribution
Organization of record or shareholder of record; (v) the direct or indirect cost
of financing the payments or expenses included in (i) and (iv) above; or (vi)
such other services as may be construed by any court or governmental agency or
commission, including the Securities and Exchange Commission (the "Commission"),
to constitute distribution services under the 1940 Act or rules and regulations
thereunder.
Section 2. EXPENSES ALLOCATED; COMPLIANCE. Amounts paid
by the Fund under the Plan must be for distribution services rendered for or on
behalf of the holders of the Fund's A Shares. However, joint distribution
financing or other services rendered with respect to such A Shares (which may
involve other investment funds or companies that are affiliated
<PAGE>
persons of the Trust or affiliated persons of the Distributor) is authorized to
the extent permitted by law.
Section 3. REPORTS TO TRUST. So long as this Plan is in
effect, the Distributor shall provide the Trust's Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to the Plan and the purposes for which such expenditures were
made.
Section 4. APPROVAL OF PLAN. This Plan will become
effective with respect to the Fund's A Shares on the date the public offering of
A Shares commences upon the approval by a majority of the Board of Trustees,
including a majority of those trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements entered
into in connection with the Plan (the "Disinterested Trustees"), pursuant to a
vote cast in person at a meeting called for the purpose of voting on the
approval of the Plan.
Section 5. CONTINUANCE OF PLAN. Unless sooner terminated
in accordance with the terms hereof, this Plan shall continue until May 31, 2001
and thereafter for so long as its continuance is specifically approved at least
annually by the Trust's Board of Trustees in the manner described in Section 4
hereof.
Section 6. AMENDMENTS. This Plan may be amended at any
time by the Board of Trustees provided that (a) any amendment to increase
materially the costs which the A Shares of the Fund may bear pursuant to the
Plan shall be effective only upon approval by a vote of a majority of the
outstanding A Shares affected by such matter, and (b) any material amendments of
the terms of the Plan shall become effective only upon approval in the manner
described in Section 4 hereof.
Section 7. TERMINATION. This Plan is terminable without
penalty at any time by (a) a vote of a majority of the Disinterested Trustees,
or (b) a vote of a majority of the outstanding A Shares of the Fund.
Section 8. SELECTION/NOMINATION OF TRUSTEES. While this
Plan is in effect, the selection and nomination of those Disinterested Trustees
shall be committed to the discretion of such Disinterested Trustees.
-2-
<PAGE>
Section 9. MISCELLANEOUS. The captions in this Agreement
are included for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or effect.
Adopted: May 25, 2000
-3-
<PAGE>
Exhibit (o)
THE GALAXY FUND
("GALAXY")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18F-3 FOR OPERATION OF
A MULTI-CLASS SYSTEM
I. INTRODUCTION
On February 23, 1995, the Securities and Exchange Commission
(the "Commission") promulgated Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), which permits the creation and operation of a
multi-class distribution structure without the need to obtain an exemptive order
under Section 18 of the 1940 Act. Rule 18f-3, which became effective on April 3,
1995, requires an investment company to file with the Commission a written plan
specifying all of the differences among the classes, including the various
services offered to shareholders, the different distribution arrangements for
each class, the methods for allocating expenses relating to those differences
and any conversion features or exchange privileges. On May 25, 1995, the Board
of Trustees of Galaxy authorized Galaxy to operate its multi-class distribution
structure in compliance with Rule 18f-3. On October 10, 1995, Galaxy filed a
Plan pursuant to Rule 18f-3 for operation of a multi-class system (the "Prior
Plan"), which had been approved by the Board of Trustees of Galaxy on September
7, 1995, with the Commission. Prior to the filing of the Prior Plan, Galaxy
operated a multi-class distribution structure pursuant to an exemptive order
granted by the Commission on February 19, 1992. The Amended and Restated Plan
pursuant to Rule 18f-3 for operation of a multi-class system presented herewith,
which was approved by the Board of Trustees of Galaxy on May 25, 2000,
supersedes the Prior Plan and any subsequent Plans pursuant to Rule 18f-3
approved by the Board of Trustees of Galaxy prior to May 25, 2000.
II. ATTRIBUTES OF CLASSES
A. GENERALLY
EQUITY FUNDS
Galaxy shall offer (a) six classes of shares -- Retail A
Shares, Retail B Shares, Prime A Shares, Prime B Shares, BKB Shares and Trust
Shares -- in the Asset Allocation Fund, Growth and Income Fund and International
Equity Fund, (b) five classes of shares -- Retail A Shares, Retail B Shares,
Prime A Shares, Prime B Shares and Trust Shares -- in the Equity Value Fund,
Equity Growth Fund, Equity Income Fund, Small Company Equity Fund, Small Cap
Value Fund and Strategic Equity Fund, (c) four classes of shares --
Retail A Shares, Retail B Shares, BKB Shares and Trust Shares -- in the Growth
Fund II, and (d) three classes of shares --
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Retail A Shares, Retail B Shares and Trust Shares -- in the MidCap Equity Fund
and Pan Asia Fund (each a "Fund" and collectively, the "Equity Funds").
BOND FUNDS
Galaxy shall offer (a) six classes of shares -- Retail A
Shares, Retail B Shares, Prime A Shares, Prime B Shares, BKB Shares and Trust
Shares -- in the Short-Term Bond Fund, Intermediate Government Income Fund and
High Quality Bond Fund, (b) five classes of shares -- Retail A Shares, Retail B
Shares, Prime A Shares, Prime B Shares and Trust Shares -- in the Tax-Exempt
Bond Fund, (c) three classes of shares -- Retail A Shares, BKB Shares and Trust
Shares -- in the Intermediate Tax-Exempt Bond Fund, Connecticut Intermediate
Municipal Bond Fund, Massachusetts Intermediate Municipal Bond Fund and Rhode
Island Municipal Bond Fund, and (d) two classes of shares -- Retail A Shares and
Trust Shares -- in the Corporate Bond Fund, New Jersey Municipal Bond Fund, New
York Municipal Bond Fund, Connecticut Municipal Bond Fund and Massachusetts
Municipal Bond Fund (each a "Fund" and collectively, the "Bond Funds").
MONEY MARKET FUNDS
Galaxy shall offer (a) four classes of shares -- Retail A
Shares, Retail B Shares, BKB Shares and Trust Shares -- in the Money Market
Fund, (b) three classes of shares -- Retail A Shares, BKB Shares and Trust
Shares -- in the Tax-Exempt Fund and U.S. Treasury Fund, (c) two classes of
shares -- Retail A Shares and Trust Shares -- in the Government Fund, and (d)
two classes of shares -- Retail A Shares and Prime Shares -- in the Connecticut
Municipal Money Market Fund, Massachusetts Municipal Money Market Fund and New
York Municipal Money Market Fund (each a "Fund" and collectively, the "Money
Market Funds").
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
class), certain related rights and certain shareholder services. More
particularly, the Retail A Shares, the Retail B Shares, the Prime A Shares, the
Prime B Shares, the BKB Shares, the Prime Shares and/or the Trust Shares of each
Fund shall represent interests in the same portfolio of investments of the
particular Fund, and shall be identical in all respects, except for: (a) the
impact of (i) expenses assessed to a class pursuant to the Shareholder Services
Plan, Distribution and Services Plan or Distribution Plan adopted for that
class, (ii) transfer agency expenses, and (iii) any other incremental expenses
identified from time to time that should be properly allocated to one class so
long as any changes in expense allocations are reviewed and approved by a vote
of the Board of Trustees, including a majority of the independent Trustees; (b)
the fact that (i) the Retail A Shares (other than Retail A Shares of the Pan
Asia Fund) shall vote separately on any matter submitted to holders of Retail A
Shares that pertains to the Shareholder Services Plan adopted for that class;
(ii) the Retail A Shares of the Pan Asia Fund shall vote separately on any
matter submitted to holders of Retail A Shares of such Fund that pertains to the
Distribution Plan for that class of that Fund; (iii) the Retail B Shares shall
vote separately on any
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matter submitted to holders of Retail B Shares that pertains to the Distribution
and Services Plan adopted for that class; (iv) the Prime A Shares shall vote
separately on any matter submitted to holders of Prime A Shares that pertains to
the Distribution Plan adopted for that class; (v) the Prime B Shares shall vote
separately on any matter submitted to holders of Prime B Shares that pertains to
the Distribution and Services Plan adopted for that class; (vi) the Prime Shares
shall vote separately on any matter submitted to holders of Prime Shares that
pertains to the Distribution and Services Plan adopted for that class; (vii) the
BKB Shares shall vote separately on any matter submitted to holders of BKB
Shares that pertains to the Shareholder Services Plan adopted for that class;
(viii) the Trust Shares shall vote separately on any matter submitted to holders
of Trust Shares that pertains to the Shareholder Services Plan adopted for that
class; and (ix) each class shall vote separately on any matter submitted to
shareholders that pertains to the class expenses borne by that class; (c) the
exchange privileges of each class of shares; (d) the designation of each class
of shares; and (e) the different shareholder services relating to a class of
shares.
B. DISTRIBUTION ARRANGEMENTS, EXPENSES AND SALES CHARGES
1. EQUITY FUNDS
RETAIL A SHARES
Retail A Shares of the Equity Funds shall be offered
to individuals or corporations who submit a purchase application to Galaxy,
purchasing directly either for their own accounts or for the accounts of others
("Direct Investors") and shall be offered to FIS Securities, Inc., Fleet
Brokerage Securities, Inc., Fleet Securities, Inc., Fleet Enterprises, Inc.,
FleetBoston Financial Corporation, its affiliates, their correspondent banks and
other qualified banks, savings and loan associations and broker-dealers
("Institutions") who purchase the shares on behalf of their customers
("Customers") who are the beneficial owners of the shares.
Retail A Shares of the Equity Funds shall be subject
to a front-end sales charge which shall not initially exceed 3.75% of the
offering price of Retail A Shares of those Funds (subject to the reductions and
exemptions described in the prospectus and Statement of Additional Information
("SAI") for such Shares). When the aggregate offering price of Retail A Shares
of the Equity and Bond Funds purchased by an investor qualifies the investor to
purchase such Retail A Shares without payment of a front-end sales charge, a
contingent deferred sales charge of 1% may be imposed if such Retail A Shares
are redeemed within one year of purchase.
Retail A Shares of the Equity Funds (other than the
Pan Asia Fund) shall further be subject to a fee payable pursuant to the
Shareholder Services Plan adopted for that class of up to .25% (on an annualized
basis) of the average daily net asset value of Retail A Shares beneficially
owned by Customers of Institutions. Services provided by Institutions for such
fee may include: (a) aggregating and processing purchase and redemption requests
and placing net purchase and redemption orders with the distributor; (b)
processing dividend payments from an Equity Fund; (c) providing sub-accounting
with respect to Retail A Shares or the information necessary for sub-accounting;
and (d) providing periodic mailings to Customers.
Retail A Shares of the Equity Funds (other than the
Pan Asia Fund) shall further be subject to a separate fee payable pursuant to
the same Shareholder Services Plan adopted for that class of up to .25% (on an
annualized basis) of the average daily net asset value
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of Retail A Shares beneficially owned by Customers of Institutions. Services
provided by Institutions for such separate fee may include: (a) providing
Customers with information as to their positions in Retail A Shares; (b)
responding to Customer inquiries; and (c) providing a service to invest the
assets of Customers in Retail A Shares.
Galaxy shall initially limit the total fees payable
by Retail A Shares of the Equity Funds (other than the Pan Asia Fund) pursuant
to the Shareholder Services Plan adopted for that class to an amount which shall
not initially exceed .30% (on an annualized basis) of the average daily net
asset value of Retail A Shares beneficially owned by Customers of Institutions.
Retail A Shares of the Pan Asia Fund shall further
be subject to a fee payable pursuant to the Distribution Plan adopted for
that class of that Fund for distribution expenses, which shall not initially
exceed .30% (on an annualized basis) of the average daily net asset value of
such Fund's outstanding Retail A Shares.
RETAIL B SHARES
Retail B Shares of the Equity Funds shall be offered
to Direct Investors and to Institutions who purchase the shares on behalf of
Customers who are the beneficial owners of the shares.
Retail B Shares of the Equity Funds, if redeemed
within six years of purchase, shall be subject to a contingent deferred sales
charge which shall not initially exceed 5.0% of the original purchase price or
redemption proceeds, whichever is lower (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares).
Retail B Shares of the Equity Funds shall be further
subject to a fee payable pursuant to the Distribution and Services Plan adopted
for that class (a) for distribution expenses, which shall not initially exceed
.65% (on an annualized basis) of the average daily net asset value of the Equity
Funds' respective outstanding Retail B Shares, (b) for shareholder liaison
services, which shall not initially exceed .25% (on an annualized basis) of the
average daily net assets attributable to Retail B Shares of the respective
Equity Funds that are owned of record or beneficially by customers of securities
dealers, brokers, financial institutions or other industry professionals
("Service Organizations") that provide shareholder liaison services with respect
to such customers' Retail B Shares, and (c) for administrative support services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Retail B Shares of the respective Equity Funds
that are owned of record or beneficially by customers of Service Organizations
that provide administrative support services with respect to such customers'
Retail B Shares.
Galaxy shall initially limit the total fees payable
by Retail B Shares of the Equity Funds for shareholder liaison services and
administrative support services pursuant to the Distribution and Services Plan
adopted for that class to an amount not to exceed .30% (on an annualized basis)
of the average daily net asset value of Retail B Shares owned of record or
beneficially by customers of Service Organizations.
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Shareholder liaison services provided under the
Distribution and Services Plan means "personal service and/or the maintenance of
shareholder accounts" within the meaning of the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD"), such as responding to customer
inquiries and providing information on their investments.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a) transfer
agent and subtransfer agent services for beneficial owners of Retail B Shares;
(b) aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing sub-accounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME A SHARES
Prime A Shares of the Equity Funds shall be offered
through selected broker-dealers to individual or institutional customers.
Prime A Shares of the Equity Funds shall be subject
to a front-end sales charge which shall not initially exceed 5.50% of the
offering price of Prime A Shares of those Funds (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares). When the
aggregate offering price of Prime A Shares of the Equity and Bond Funds
purchased by an investor qualifies the investor to purchase such Prime A Shares
without payment of a front-end sales charge, a contingent deferred sales charge
of 1% may be imposed if such Prime A Shares are redeemed within one year of
purchase.
Prime A Shares of the Equity Funds shall further be
subject to a fee payable pursuant to the Distribution Plan adopted for that
class for distribution expenses, which shall not initially exceed .30% (on an
annualized basis) of the average daily net asset value of the Equity Funds'
respective outstanding Prime A Shares.
PRIME B SHARES
Prime B Shares of the Equity Funds shall be offered
through selected broker-dealers to individual or institutional customers.
Prime B Shares of the Equity Funds, if redeemed
within six years of purchase, shall be subject to a contingent deferred sales
charge which shall not initially exceed 5.0% of the original purchase price or
redemption proceeds, whichever is lower (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares).
Prime B Shares of the Equity Funds shall be further
subject to a fee payable pursuant to the Distribution and Services Plan adopted
for that class (a) for distribution expenses, which shall not initially exceed
.75% (on an annualized basis) of the average daily net
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<PAGE>
asset value of the Equity Funds' respective outstanding Prime B Shares, (b) for
shareholder liaison services, which shall not initially exceed .25% (on an
annualized basis) of the average daily net assets attributable to Prime B Shares
of the respective Equity Funds that are owned of record or beneficially by
customers of securities dealers, brokers, financial institutions or other
industry professionals ("Service Organizations") that provide shareholder
liaison services with respect to such customers' Prime B Shares, and (c) for
administrative support services, which shall not initially exceed .25% (on an
annualized basis) of the average daily net assets attributable to Prime B Shares
of the respective Equity Funds that are owned of record or beneficially by
customers of Service Organizations that provide administrative support services
with respect to such customers' Prime B Shares.
Galaxy shall initially limit the total fees payable
by Prime B Shares of the Equity Funds for shareholder liaison services and
administrative support services pursuant to the Distribution and Services Plan
adopted for that class to an amount not to exceed .25% (on an annualized basis)
of the average daily net asset value of Prime B Shares owned of record or
beneficially by customers of Service Organizations.
Shareholder liaison services provided under the
Distribution and Services Plan means "personal service and/or the maintenance of
shareholder accounts" within the meaning of the Conduct Rules of the NASD, such
as responding to customer inquiries and providing information on their
investments.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a) transfer
agent and subtransfer agent services for beneficial owners of Prime B Shares;
(b) aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Prime B Shares; (d)
processing dividend payments; (e) providing subaccounting services for Prime B
Shares held beneficially; (f) forwarding shareholder communications, such as
proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
BKB SHARES
BKB Shares of the Equity Funds shall be issued to
retail shareholders of corresponding portfolios of the Boston 1784 Funds (the
"1784 Funds") in connection with the reorganization of the 1784 Funds into
Galaxy (the "Galaxy/1784 Reorganization"). Following the Galaxy/1784
Reorganization, BKB Shares of the Equity Funds shall be available for purchase
only by those shareholders who received BKB Shares in the Galaxy/1784
Reorganization.
BKB Shares of the Equity Funds shall not be subject
to a sales charge.
BKB Shares of the Equity Funds shall be subject to a
fee payable pursuant to the Shareholder Services Plan adopted for that class for
shareholder liaison services, which shall not initially exceed .25% (on an
annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions. Services provided by
Institutions for such fee may include: (a) providing Customers with information
as to their positions in BKB
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<PAGE>
Shares; (b) responding to Customer inquiries; and (c) providing a service to
invest the assets of Customers in BKB Shares.
BKB Shares of the Equity Funds shall be subject to a
separate fee payable pursuant to the same Shareholder Services Plan adopted for
that class for administrative support for services, which shall not initially
exceed .25% (on an annualized basis) of the average daily net asset value of BKB
Shares beneficially owned by Customers of Institutions. Services provided by
Institutions for such separate fee may include: (a) aggregating and processing
purchase and redemption requests and placing net purchase and redemption orders
with the distributor; (b) processing dividend payments from an Equity Fund; (c)
providing sub-accounting with respect to BKB Shares or the information necessary
for sub-accounting; and (d) providing periodic mailings to Customers.
Galaxy shall initially limit the total fees payable
by BKB Shares of the Equity Funds pursuant to the Shareholder Services Plan
adopted for that class to an amount which shall not initially exceed .30% (on an
annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions.
TRUST SHARES
Trust Shares of the Equity Funds shall be offered to
investors maintaining qualified accounts at bank and trust institutions,
including subsidiaries of FleetBoston Financial Corporation and to participants
in employer-sponsored defined contribution plans. Trust Shares of the
International Equity Fund also shall be offered to clients, members and
employees of Oechsle International Advisors, LLC, the sub-adviser to that Fund.
Trust Shares of the Equity Funds shall not be subject
to a sales charge and shall not initially be subject to the shareholder
servicing fee payable pursuant to the Shareholder Services Plan adopted but not
yet implemented with respect to that class.
2. BOND FUNDS
RETAIL A SHARES
Retail A Shares of the Bond Funds shall be offered to
Direct Investors and shall be offered to Institutions who purchase shares on
behalf of Customers. As of the date of filing of this Plan with the Commission,
Retail A Shares of the Corporate Bond Fund shall not initially be offered to
investors.
Retail A Shares of the Bond Funds shall be subject to
a front-end sales charge which shall not initially exceed 3.75% of the offering
price of Retail A Shares of those Funds (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares). When the
aggregate offering price of Retail A Shares of the Equity and Bond Funds
purchased by an investor qualifies the investor to purchase such Retail A Shares
without payment of a front-end sales charge, a contingent deferred sales charge
of 1% may be imposed if such Retail A Shares are redeemed within one year of
purchase.
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<PAGE>
Retail A Shares of the Bond Funds shall further be
subject to a fee payable pursuant to the Shareholder Services Plan adopted for
that class of up to .15% (on an annualized basis) of the average daily net asset
value of Retail A Shares beneficially owned by Customers of Institutions.
Services provided by Institutions for such fee may include: (a) aggregating and
processing purchase and redemption requests and placing net purchase and
redemption orders with the distributor; (b) processing dividend payments from a
Bond Fund; (c) providing sub-accounting with respect to Retail A Shares or the
information necessary for sub-accounting; and (d) providing periodic mailings to
Customers.
Retail A Shares of the Bond Funds shall further be
subject to a separate fee payable pursuant to the same Shareholder Services Plan
adopted for that class of up to .15% (on an annualized basis) of the average
daily net asset value of Retail A Shares beneficially owned by Customers of
Institutions. Services provided by Institutions for such separate fee may
include: (a) providing Customers with information as to their positions in
Retail A Shares; (b) responding to Customer inquiries; and (c) providing a
service to invest the assets of Customers in Retail A Shares.
Galaxy shall initially limit the total fees payable
by Retail A Shares of the Bond Funds pursuant to the Shareholder Services Plan
adopted for that class to an amount which shall not initially exceed .15% (on an
annualized basis) of the average daily net asset value of Retail A Shares
beneficially owned by Customers of Institutions.
RETAIL B SHARES
Retail B Shares of the Bond Funds shall be offered to
Direct Investors and to Institutions who purchase the shares on behalf of
Customers who are the beneficial owners of the shares.
Retail B Shares of the Bond Funds, if redeemed within
six years of purchase, shall be subject to a contingent deferred sales charge
which shall not initially exceed 5.0% of the original purchase price or
redemption proceeds, whichever is lower (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares).
Retail B Shares of the Bond Funds shall be further
subject to a fee payable pursuant to the Distribution and Services Plan adopted
for that class (a) for distribution expenses, which shall not initially exceed
.65% (on an annualized basis) of the average daily net asset value of the Bond
Funds' respective outstanding Retail B Shares, (b) for shareholder liaison
services, which shall not initially exceed .25% (on an annualized basis) of the
average daily net assets attributable to Retail B Shares of the respective Bond
Funds that are owned of record or beneficially by customers of securities
dealers, brokers, financial institutions or other industry professionals
("Service Organizations") that provide shareholder liaison services with respect
to such customers' Retail B Shares, and (c) for administrative support services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Retail B Shares of the respective Bond Funds
that are owned of record or beneficially by
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<PAGE>
customers of Service Organizations that provide administrative support services
with respect to such customers' Retail B Shares.
Galaxy shall initially limit the total fees payable
by Retail B Shares of the Bond Funds for shareholder liaison services and
administrative support services pursuant to the Distribution and Services Plan
adopted for that class to an amount not to exceed .15% (on an annualized basis)
of the average daily net asset value of Retail B Shares owned of record or
beneficially by customers of Service Organizations.
Shareholder liaison services provided under the
Distribution and Services Plan means "personal service and/or the maintenance of
shareholder accounts" within the meaning of the Conduct Rules of the NASD, such
as responding to customer inquiries and providing information on their
investments.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a) transfer
agent and subtransfer agent services for beneficial owners of Retail B Shares;
(b) aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing subaccounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME A SHARES
Prime A Shares of the Bond Funds shall be offered
through selected broker-dealers to individual or institutional customers.
Prime A Shares of the Bond Funds shall be subject to
a front-end sales charge which shall not initially exceed 4.75% of the offering
price of Prime A Shares of those Funds (subject to the reductions and exemptions
described in the prospectus and SAI for such Shares). When the aggregate
offering price of Prime A Shares of the Equity and Bond Funds purchased by an
investor qualifies the investor to purchase such Prime A Shares without payment
of a front-end sales charge, a contingent deferred sales charge of 1% may be
imposed if such Prime A Shares are redeemed within one year of purchase.
Prime A Shares of the Bond Funds shall further be
subject to a fee payable pursuant to the Distribution Plan adopted for that
class for distribution expenses, which shall not initially exceed .30% (on an
annualized basis) of the average daily net asset value of the Bond Funds'
respective outstanding Prime A Shares.
PRIME B SHARES
Prime B Shares of the Bond Funds shall be offered
through selected broker-dealers to individual or institutional customers.
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Prime B Shares of the Bond Funds, if redeemed within
six years of purchase, shall be subject to a contingent deferred sales charge
which shall not initially exceed 5.0% of the original purchase price or
redemption proceeds, whichever is lower (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares).
Prime B Shares of the Bond Funds shall be further
subject to a fee payable pursuant to the Distribution and Services Plan adopted
for that class (a) for distribution expenses, which shall not initially exceed
.75% (on an annualized basis) of the average daily net asset value of the Bond
Funds' respective outstanding Prime B Shares, (b) for shareholder liaison
services, which shall not initially exceed .25% (on an annualized basis) of the
average daily net assets attributable to Prime B Shares of the respective Bond
Funds that are owned of record or beneficially by customers of securities
dealers, brokers, financial institutions or other industry professionals
("Service Organizations") that provide shareholder liaison services with respect
to such customers' Prime B Shares, and (c) for administrative support services,
which shall not initially exceed .25% (on an annualized basis) of the average
daily net assets attributable to Prime B Shares of the respective Bond Funds
that are owned of record or beneficially by customers of Service Organizations
that provide administrative support services with respect to such customers'
Prime B Shares.
Galaxy shall initially limit the total fees payable
by Prime B Shares of the Bond Funds for shareholder liaison services and
administrative support services pursuant to the Distribution and Services Plan
adopted for that class to an amount not to exceed .25% (on an annualized basis)
of the average daily net asset value of Prime B Shares owned of record or
beneficially by customers of Service Organizations.
Shareholder liaison services provided under the
Distribution and Services Plan means "personal service and/or the maintenance of
shareholder accounts" within the meaning of the Conduct Rules of the NASD, such
as responding to customer inquiries and providing information on their
investments.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a) transfer
agent and subtransfer agent services for beneficial owners of Prime B Shares;
(b) aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Prime B Shares; (d)
processing dividend payments; (e) providing subaccounting services for Prime B
Shares held beneficially; (f) forwarding shareholder communications, such as
proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
BKB SHARES
BKB Shares of the Bond Funds shall be issued to
retail shareholders of corresponding portfolios of the 1784 Funds in connection
with the Galaxy/1784 Reorganization. Following the Galaxy/1784 Reorganization,
BKB Shares of the Bond Funds shall be available for purchase only by those
shareholders who received BKB Shares in the Galaxy/1784 Reorganization.
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BKB Shares of the Bond Funds shall not be subject to
a sales charge.
BKB Shares of the Bond Funds shall be subject to a
fee payable pursuant to the Shareholder Services Plan adopted for that class for
shareholder liaison services, which shall not initially exceed .15% (on an
annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions. Services provided by
Institutions for such fee may include: (a) providing Customers with information
as to their positions in BKB Shares; (b) responding to Customer inquiries; and
(c) providing a service to invest the assets of Customers in BKB Shares.
BKB Shares of the Bond Funds shall further be subject
to a separate fee payable pursuant to the same Shareholder Services Plan adopted
for that class for administrative support services, which shall not initially
exceed .15% (on an annualized basis) of the average daily net asset value of BKB
Shares beneficially owned by Customers of Institutions. Services provided by
Institutions for such separate fee may include: (a) aggregating and processing
purchase and redemption requests and placing net purchase and redemption orders
with the distributor; (b) processing dividend payments from a Bond Fund; (c)
providing sub-accounting with respect to BKB Shares or the information necessary
for sub-accounting; and (d) providing periodic mailings to Customers.
Galaxy shall initially limit the total fees payable
by BKB Shares of the Bond Funds pursuant to the Shareholder Services Plan
adopted for that class to an amount which shall not initially exceed .15% (on an
annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions.
TRUST SHARES
Trust Shares of the Bond Funds shall be offered to
investors maintaining qualified accounts at bank and trust institutions,
including subsidiaries of FleetBoston Corporation and, with respect to each Bond
Fund other than the tax-exempt Bond Funds, to participants in employer-sponsored
defined contribution plans. Trust Shares of the Corporate Bond Fund shall also
be offered to Direct Investors and to Institutions who purchase shares on behalf
of Customers. As of the date of filing of this Plan with the Commission, Trust
Shares of the Rhode Island Municipal Bond Fund shall not initially be offered to
investors.
Trust Shares of the Bond Funds shall not be subject
to a sales charge and shall not initially be subject to the shareholder
servicing fee payable pursuant to the Shareholder Services Plan adopted but not
yet implemented with respect to that class.
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3. MONEY MARKET FUNDS
RETAIL A SHARES
Retail A Shares of the Money Market Funds shall be
offered to Direct Investors and shall be offered to Institutions who purchase
shares on behalf of Customers.
Retail A Shares of the Money Market Funds shall not
be subject to a sales charge.
Retail A Shares of the Money Market Funds shall be
subject to a shareholder servicing fee payable pursuant to the Shareholder
Services Plan adopted for that class of up to .25% (on an annualized basis) of
the average daily net asset value of the Retail A Shares beneficially owned by
Customers of Institutions.
Services provided by Institutions for such fee may
include: (a) aggregating and processing purchase and redemption requests and
placing net purchase and redemption orders with Galaxy's distributor; (b)
processing dividend payments from a Money Market Fund; (c) providing Customers
with information as to their position in BKB Shares; (d) providing
sub-accounting with respect to Retail A Shares or the information necessary for
sub-accounting; and (e) providing periodic mailings to Customers.
Galaxy shall initially limit the shareholder
servicing fee payable by Retail A Shares of the Money Market Funds pursuant to
the Shareholder Services Plan adopted for that class to an amount which shall
not initially exceed .10% (on an annualized basis) of the average daily net
asset value of Retail A Shares beneficially owned by Customers of Institutions.
RETAIL B SHARES
Retail B Shares of the Money Market Fund shall be
offered to Direct Investors and to Institutions who purchase the shares on
behalf of Customers who are the beneficial owners of the shares.
Retail B Shares of the Money Market Fund, if redeemed
within six years of purchase, shall be subject to a contingent deferred sales
charge which shall not initially exceed 5.0% of the original purchase price or
redemption proceeds, whichever is lower (subject to the reductions and
exemptions described in the prospectus and SAI for such Shares).
Retail B Shares of the Money Market Fund shall be
further subject to a fee payable pursuant to the Distribution and Services Plan
adopted for that class (a) for distribution expenses, which shall not initially
exceed .65% (on an annualized basis) of the average daily net asset value of the
Money Market Fund's outstanding Retail B Shares, (b) for shareholder liaison
services, which shall not initially exceed .05% (on an annualized basis) of the
average daily net assets attributable to Retail B Shares of the Money Market
Fund that are owned of record or beneficially by customers of securities
dealers, brokers, financial institutions or other industry
-12-
<PAGE>
professionals ("Service Organizations") that provide shareholder liaison
services with respect to such customers' Retail B Shares, and (c) for
administrative support services, which shall not initially exceed .05% (on an
annualized basis) of the average daily net assets attributable to Retail B
Shares of the Money Market Fund that are owned of record or beneficially by
customers of Service Organizations that provide administrative support services
with respect to such customers' Retail B Shares.
Shareholder liaison services provided under the
Distribution and Services Plan means "personal service and/or the maintenance of
shareholder accounts" within the meaning of the Conduct Rules of the NASD, such
as responding to customer inquiries and providing information on their
investments.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a) transfer
agent and subtransfer agent services for beneficial owners of Retail B Shares;
(b) aggregating and processing purchase and redemption orders; (c) providing
beneficial owners with statements showing their positions in Retail B Shares;
(d) processing dividend payments; (e) providing sub-accounting services for
Retail B Shares held beneficially; (f) forwarding shareholder communications,
such as proxies, shareholder reports, dividend and tax notices, and updating
prospectuses to beneficial owners; and (g) reviewing, tabulating and
transmitting proxies executed by beneficial owners.
PRIME SHARES
Prime Shares of the Money Market Funds shall be
offered through selected broker-dealers to individual or institutional
customers.
Prime Shares of the Money Market Funds shall not be
subject to a sales charge.
Prime Shares of the Money Market Funds will be
subject to a fee payable pursuant to the Distribution and Services Plan adopted
for that class (a) for distribution expenses, which shall not initially exceed
.75% (on an annualized basis) of the average daily net asset value of the Money
Market Funds' respective outstanding Prime Shares, and (b) for administrative
support services, which shall not initially exceed .25% (on an annualized basis)
of the average daily net assets attributable to Prime Shares of the respective
Money Market Funds that are owned of record or beneficially by customers of
Service Organizations that provide administrative support services with respect
to such customers' Prime Shares.
Administrative support services provided under the
Distribution and Services Plan may include, but are not limited to, (a)
processing dividend and distribution payments; (b) providing beneficial owners
with statements showing their positions in Prime Shares; (c) arranging for bank
wires; (d) responding to routine inquiries from beneficial owners concerning
their investments in Prime Shares; (e) providing subaccounting services for
Prime Shares; (f) forwarding shareholder communications, such as proxies,
shareholder reports, dividends and tax notices, and updating prospectuses to
beneficial owners; and (g) aggregating
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<PAGE>
and processing purchase and redemption orders and placing net purchase and
redemption orders for beneficial owners.
BKB SHARES
BKB Shares of the Money Market Funds shall be issued
to retail shareholders of corresponding portfolios of the 1784 Funds in
connection with the Galaxy/1784 Reorganization. Following the Galaxy/1784
Reorganization, BKB Shares of the Money Market Funds shall be available for
purchase only by those shareholders who received BKB Shares in the Galaxy/1784
Reorganization.
BKB Shares of the Money Market Funds shall not be
subject to a sales charge.
BKB Shares of the Money Market Funds shall be subject
to a fee payable pursuant to the Shareholder Services Plan adopted for that
class for shareholder liaison and/or administrative support services, which
shall not initially exceed .25% (on an annualized basis) of the average daily
net asset value of BKB Shares beneficially owned by Customers of Institutions.
Services provided by Institutions for such fee may
include: (a) aggregating and processing purchase and redemption requests and
placing net purchase and redemption orders with the distributor; (b) processing
dividend payments from a Money Market Fund; (c) providing Customers with
information as to their position in BKB Shares; (d) providing sub-accounting
with respect to BKB Shares or the information necessary for sub-accounting; and
(e) providing periodic mailings to Customers.
Galaxy shall initially limit the fees payable by BKB
Shares of the Money Market Funds pursuant to the Shareholder Services Plan
adopted for that class to an amount which shall not initially exceed .10% (on an
annualized basis) of the average daily net asset value of BKB Shares
beneficially owned by Customers of Institutions.
TRUST SHARES
Trust Shares of the Money Market Funds shall be
offered to investors maintaining qualified accounts at bank and trust
institutions, including subsidiaries of FleetBoston Corporation, and with
respect to each Money Market Fund other than the Tax-Exempt Fund, to
participants in employer-sponsored defined contribution plans.
Trust Shares of the Money Market Funds shall not be
subject to a sales charge and shall not initially be subject to the shareholder
servicing fee payable pursuant to the Shareholder Services Plan adopted but not
yet implemented with respect to that class.
-14-
<PAGE>
C. EXCHANGE PRIVILEGES
RETAIL A SHARES
Holders of Retail A Shares generally shall be permitted to
exchange their Retail A Shares in a Fund for Retail A Shares of other Funds of
Galaxy or shares of other funds advised by Fleet Investment Advisors Inc. or its
affiliates in which the shareholders maintain an existing account. No additional
sales charge will be incurred when exchanging Retail A Shares of a Fund for
Retail A Shares of another Fund that imposes a sales charge. Galaxy shall not
initially charge any exchange fee.
RETAIL B SHARES
Holders of Retail B Shares generally shall be permitted to
exchange their Retail B Shares in a Fund for Retail B Shares of other Funds of
Galaxy without paying any exchange fee or contingent deferred sales charge at
the time the exchange is made.
PRIME A SHARES
Holders of Prime A Shares generally shall be permitted to
exchange their Prime A Shares in a Fund for Prime A Shares of other Funds of
Galaxy. No additional sales charge will be incurred when exchanging Prime A
Shares of a Fund for Prime A Shares of another Fund. Galaxy shall not initially
charge any exchange fee.
PRIME B SHARES
Holders of Prime B Shares generally shall be permitted to
exchange their Prime B Shares in a Fund for Prime B Shares of other Funds of
Galaxy without paying any exchange fee or contingent deferred sales charge at
the time the exchange is made.
BKB SHARES
Holders of BKB Shares generally shall be permitted to exchange
their BKB Shares in a Fund for BKB Shares of other Funds of Galaxy. Galaxy shall
not initially charge any exchange fee.
PRIME SHARES
Galaxy shall not initially offer an exchange privilege to
holders of Prime Shares.
TRUST SHARES
Galaxy shall not initially offer an exchange privilege to
holders of Trust Shares.
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<PAGE>
D. CONVERSION FEATURES
RETAIL A SHARES
Galaxy shall not initially offer a conversion feature to
holders of Retail A Shares.
RETAIL B SHARES
Retail B Shares acquired by purchase generally shall convert
automatically to Retail A Shares, based on relative net asset value, six years
after the beginning of the calendar month in which the Shares were purchased.
Retail B Shares acquired through a reinvestment of dividends
or distributions generally shall convert automatically to Retail A Shares, based
on relative net asset value, at the earlier of (a) six years after the beginning
of the calendar month in which the reinvestment occurred or (b) the date of the
most recently purchased Retail B Shares that were not acquired through
reinvestment of dividends or distributions.
PRIME A SHARES
Galaxy shall not initially offer a conversion feature to
holders of Prime A Shares.
PRIME B SHARES
Prime B Shares acquired by purchase generally shall convert
automatically to Prime A Shares, based on relative net asset value, eight years
after the beginning of the calendar month in which the Shares were purchased.
Prime B Shares acquired through a reinvestment of dividends or
distributions generally shall convert automatically to Prime A Shares, based on
relative net asset value, at the earlier of (a) eight years after the beginning
of the calendar month in which the reinvestment occurred or (b) the date of the
most recently purchased Prime B Shares that were not acquired through
reinvestment of dividends or distributions.
BKB SHARES
BKB Shares generally shall convert to Retail A Shares, based
on relative net asset value, one year after the date of the Galaxy/1784
Reorganization, provided that Galaxy's Board of Trustees has determined that
such conversion is in the best interest of the holders of BKB Shares.
PRIME SHARES
Galaxy shall not initially offer a conversion feature to
holders of Prime Shares.
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<PAGE>
TRUST SHARES
Galaxy shall not initially offer a conversion feature to
holders of Trust Shares.
E. SHAREHOLDER SERVICES
1. RETIREMENT PLANS
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Galaxy shall initially make Retail A Shares, Retail B
Shares and BKB Shares of the Funds (other than the tax-exempt Funds) available
for purchase in connection with the following tax-deferred prototype retirement
plans: individual retirement accounts, simplified employee pension plans,
multi-employee retirement plans and Keogh plans.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially make Prime A Shares, Prime
B Shares, Prime Shares or Trust Shares of the Funds available for purchase in
connection with any retirement plans.
2. CHECKWRITING PRIVILEGE
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES -
MONEY MARKET FUNDS
Galaxy shall initially offer a checkwriting privilege
to holders of Retail A Shares, Retail B Shares and/or BKB Shares of the Money
Market Funds. A charge for use of the checkwriting privilege may be imposed by
Galaxy.
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES -
EQUITY FUNDS AND BOND FUNDS
Galaxy shall not initially offer a checkwriting
privilege to holders of Retail A Shares, Retail B Shares or BKB Shares of the
Equity or Bond Funds.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer a checkwriting
privilege to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust
Shares.
-17-
<PAGE>
3. AUTOMATIC INVESTMENT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and
Retail B Shares) and all investors (with respect to BKB Shares) shall initially
be offered an automatic investment program whereby a Direct Investor (with
respect to Retail A Shares and Retail B Shares) or an investor (with respect to
BKB Shares) generally may purchase Retail A Shares, Retail B Shares and/or BKB
Shares, as the case may be, of a Fund on a monthly or quarterly basis by having
a specific amount of money debited from his/her account at a financial
institution.
Galaxy shall not initially offer an automatic
investment program to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer an automatic
investment program to holders of Prime A Shares, Prime B Shares, Prime Shares or
Trust Shares.
4. SYSTEMATIC WITHDRAWAL PLAN
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and
Retail B Shares) and all investors (with respect to BKB Shares) shall initially
be offered a systematic withdrawal plan which, in general, shall permit a Direct
Investor (with respect to Retail A Shares and Retail B Shares) or an investor
(with respect to BKB Shares) to automatically redeem Retail A Shares, Retail B
Shares and/or BKB Shares, as the case may be, on a monthly, quarterly,
semi-annual or annual basis.
Galaxy shall not initially offer a systematic
withdrawal plan to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer a systematic
withdrawal plan to holders of Prime A Shares, Prime B Shares, Prime Shares or
Trust Shares.
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<PAGE>
5. COLLEGE INVESTMENT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and
Retail B Shares) and all investors (with respect to BKB Shares) shall initially
be offered a college investment program whereby a Direct Investor (with respect
to Retail A Shares and Retail B Shares) or an investor (with respect to BKB
Shares) may purchase Retail A Shares, Retail B Shares and/or BKB Shares of a
Fund as a means to finance a college savings plan.
Galaxy shall not initially offer a college investment
program to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer a college investment
program to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust
Shares.
6. DIRECT DEPOSIT PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and
Retail B Shares) and all investors (with respect to BKB Shares) receiving social
security benefits shall initially be eligible for a direct deposit program
whereby a Direct Investor (with respect to Retail A Shares and Retail B Shares)
or an investor (with respect to BKB Shares) generally may purchase Retail A
Shares, Retail B Shares and/or BKB Shares of a Fund by having social security
payments automatically deposited into his or her Fund account.
Galaxy shall not initially offer a direct deposit
program to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer a direct deposit
program to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust
Shares.
7. INFORMATION SERVICES
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Holders of Retail A Shares, Retail B Shares and BKB
Shares shall initially be able to obtain Fund performance and investment
information 24 hours a day, 7 days a week by telephoning the Galaxy Information
Center - 24 Hour Information Service.
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<PAGE>
Galaxy shall initially offer Direct Investors (with
respect to Retail A Shares and Retail B Shares) and all investors (with respect
to BKB Shares) a Voice Response System which, in general, will provide a Direct
Investor (with respect to Retail A Shares and Retail B Shares) or an investor
(with respect to BKB Shares) with automated telephone access to Fund and account
information and the ability to make telephone exchanges and redemptions. Galaxy
shall not initially offer Customers of Institutions a voice response system.
Galaxy shall initially offer Direct Investors (with
respect to Retail A Shares and Retail B Shares) and all investors (with respect
to BKB Shares) a Galaxy Shareholder Services telephone number which, in general,
will provide a Direct Investor (with respect to Retail A Shares and Retail B
Shares) or an investor (with respect to BKB Shares) with account information and
recent exchange transaction information. Galaxy shall not initially offer
Customers of Institutions a shareholder services telephone number.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall initially offer holders of Prime A
Shares, Prime B Shares, Prime Shares and Trust Shares a telephone number to call
for applications and information concerning initial purchases and current
performance and a telephone number to call for additional purchases,
redemptions, exchanges and other shareholder services.
Galaxy shall initially offer holders of Trust Shares
in the Corporate Bond Fund the information services described for Retail Shares.
8. PAYROLL DEDUCTION PROGRAM
RETAIL A SHARES, RETAIL B SHARES AND BKB SHARES
Direct Investors (with respect to Retail A Shares and
Retail B Shares) and all investors (with respect to BKB Shares) shall initially
be offered a payroll deduction program whereby a Direct Investor (with respect
to Retail A Shares and Retail B Shares) or an investor (with respect to BKB
Shares) may purchase Retail A Shares, Retail B Shares and/or BKB Shares of a
Fund each pay period by having a specific amount of money debited from his/her
paycheck.
Galaxy shall not initially offer a payroll deduction
program to Customers of Institutions.
PRIME A SHARES, PRIME B SHARES, PRIME SHARES AND
TRUST SHARES
Galaxy shall not initially offer a payroll deduction
program to holders of Prime A Shares, Prime B Shares, Prime Shares or Trust
Shares.
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<PAGE>
F. METHODOLOGY FOR ALLOCATING EXPENSES AMONG CLASSES
Class-specific expenses of a Fund shall be allocated to the
specific class of shares of that Fund. Non-class-specific expenses of a Fund
shall be allocated in accordance with Rule 18f-3(c) under the 1940 Act.
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<PAGE>
EXHIBIT (p)(1)
THE GALAXY FUND
(the "Trust")
CODE OF ETHICS
I. LEGAL REQUIREMENT.
Rule 17j-1(a) under the Investment Company Act of 1940, as amended (the
"1940 Act"), makes it unlawful for any officer or trustee of the Trust in
connection with the purchase or sale by such person of a security "held or to be
acquired" by the Trust:
1. To employ any device, scheme or artifice to defraud the Trust;
2. To make to the Trust any untrue statement of a material fact or
omit to state to the Trust a material fact necessary in order to
make the statements made, in light of the circumstances under
which they are made, not misleading;
3. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust; or
4. To engage in any manipulative practice with respect to the
Trust's investment portfolios.
II. PURPOSE OF THE CODE OF ETHICS.
The Trust expects that its officers and trustees will conduct their
personal investment activities in accordance with (1) the duty at all times to
place the interests of the Trust's shareholders first, (2) the requirement that
all personal securities transactions be conducted consistent with this Code of
Ethics and in such a manner as to avoid any actual or potential conflict of
interest or any abuse of an individual's position of trust and responsibility,
and (3) the fundamental standard that investment company personnel should not
take inappropriate advantage of their positions.
In view of the foregoing, the provisions of Section 17(j) of the 1940 Act,
the "Report of the Advisory Group on Personal Investing" issued by the
Investment Company Institute on May 9, 1994 and the Securities and Exchange
Commission's September 1994 Report on "Personal Investment Activities of
Investment Company
<PAGE>
Personnel," the Trust has determined to adopt this Code of Ethics on behalf of
the Trust to specify a code of conduct for certain types of personal securities
transactions which might involve conflicts of interest or an appearance of
impropriety, and to establish reporting requirements and enforcement procedures.
III. DEFINITIONS.
A. An "Access Person" means: (1) each trustee or officer of the Trust;
(2) each employee (if any) of the Trust (or of any company in a
control relationship to the Trust) who in connection with his or her
regular functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by the Trust
or whose functions relate to the making of any recommendations with
respect to such purchases or sales; and (3) any natural person in a
control relationship to the Trust who obtains information concerning
recommendations made to the Trust with regard to the purchase or sale
of a security.
For purposes of this Code of Ethics, an "Access Person" does not
include any person who is subject to the securities transaction
pre-clearance requirements and securities transaction reporting
requirements of the Code of Ethics adopted by the Trust's investment
adviser, administrator or principal underwriter in compliance with
Rule 17j-1 of the 1940 Act and Rule 204-2(a)(12) of the Investment
Advisers Act of 1940 or Section 15(f) of the Securities Exchange Act
of 1934, as applicable.(1)
B. "Restricted Trustee" or "Restricted Officer" means each trustee or
officer of the Trust who is not also a trustee, officer, partner,
employee or controlling person of the Trust's investment adviser,
administrator, custodian, transfer agent, or distributor.
C. An Access Person's "immediate family" includes a spouse, minor
children and adults living in the same household as the Access Person.
D. A security is "held or to be acquired" if within the most recent 15
days it (1) is or has been held by any
- --------------------------
1. For purposes of this Code of Ethics, Rule 17j-1 of the Investment Company
Act of 1940 shall be deemed to be applicable to the Trust's administrator.
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<PAGE>
of the Trust, or (2) is being or has been considered by the Trust or
its investment adviser for purchase by the Trust.
E. A purchase or sale includes the writing of an option to purchase or
sell.
F. "Exempt Security" means:
1. Securities which the Trust's investment portfolios are not
permitted to purchase under the investment objectives and
policies set forth in the Trust's then current prospectuses under
the Securities Act of 1933 or the Trust's registration statements
on Form N-1A.
2. Securities issued by the Government of the United States (i.e.,
U.S. Treasury securities), short-term debt securities which are
"government securities" within the meaning of section 2(a)(16) of
the 1940 Act (which includes securities of the U.S. Government
and its instrumentalities), bankers' acceptances, bank
certificates of deposit, commercial paper, and shares of
registered open-end investment companies.
3. Securities purchased or sold in any account over which the Access
Person has no direct or indirect influence or control.
4. Securities purchased or sold in a transaction which is
non-volitional on the part of either the Access Person or the
Trust.
5. Securities acquired as a part of an automatic dividend
reinvestment plan.
6. Securities acquired upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
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<PAGE>
IV. POLICIES OF THE TRUST REGARDING PERSONAL SECURITIES TRANSACTIONS.
A. GENERAL POLICY.
No Access Person of the Trust shall engage in any act, practice or
course of business that would violate the provisions of Rule 17j-1(a)
set forth above, or in connection with any personal investment
activity, engage in conduct inconsistent with this Code of Ethics.
B. SPECIFIC POLICIES.
1. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS BY ACCESS
PERSONS OTHER THAN RESTRICTED TRUSTEES AND RESTRICTED OFFICERS.
a. No Access Person who is not a Restricted Trustee or
Restricted Officer may buy or sell securities other than
Exempt Securities for his or her personal portfolio or the
portfolio of a member of his or her immediate family without
obtaining oral authorization from the Compliance Officer of
the Trust's investment adviser PRIOR to effecting such
security transaction.
A written authorization for such security transaction will
be provided by the investment adviser's Compliance Officer
to the person receiving the authorization (if granted) and
to the Trust's administrator to memorialize the oral
authorization that was granted.
NOTE: If an Access Person has questions as to
whether purchasing or selling a security for his
or her personal portfolio or the portfolio of a
member of his or her immediate family requires
prior oral authorization, the Access Person should
consult the administrator's Compliance Officer
PRIOR to effecting any securities transactions.
b. Pre-clearance approval under paragraph (a) will expire at
the close of business on the next trading day after the date
on which oral authorization is received, and the Access
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<PAGE>
Person is required to renew clearance for the transaction if
the trade is not completed before the authority expires.
c. No clearance will be given to an Access Person other than a
Restricted Trustee or Restricted Officer to purchase or sell
any security (1) on a day when any portfolio of the Trust
has a pending "buy" or "sell" order in that same security
until that order is executed or withdrawn or (2) when the
Compliance Officer has been advised by the investment
adviser that the same security is being considered for
purchase or sale for any portfolio of the Trust.
2. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS BY RESTRICTED
TRUSTEES AND RESTRICTED OFFICERS.
The Trust recognizes that Restricted Trustees and Restricted
Officers do not have on-going, day-to-day involvement with
the operations of the Trust. In addition, it has been the
practice of the Trust to provide information about
securities purchased or sold by the Trust or considered for
purchase or sale by the Trust to Restricted Trustees and
Restricted Officers in materials circulated more than 15
days after such securities are purchased or sold by the
Trust or are considered for purchase or sale by the Trust.
Accordingly, the Trust believes that less stringent controls
are appropriate for Restricted Trustees and Restricted
officers, as follows:
a. The securities pre-clearance requirement contained in
paragraph IV.B.1.a. above shall only apply to a
Restricted Trustee or Restricted Officer if he or she
knew or, in the ordinary course of fulfilling his or
her official duties as a trustee or officer, should
have known, that during the fifteen-day period before
the transaction in a security other than an Exempt
Security or at the time of the transaction that the
security purchased or sold by him or her other than an
Exempt Security was also purchased or sold by the Trust
or considered for the purchase or sale by the Trust.
b. If the pre-clearance provisions of the preceding
paragraph apply, no clearance will be given to a
Restricted Trustee or
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<PAGE>
Restricted Officer to purchase or sell any security (1)
on a day when any portfolio of the Trust has a pending
"buy" or "sell" order in that same security until that
order is executed or withdrawn or (2) when the
Compliance Officer has been advised by the investment
adviser that the same security is being considered for
purchase or sale for any portfolio of the Trust.
V. PROCEDURES.
A. In order to provide the Trust with information to enable it to
determine with reasonable assurance whether the provisions of this
Code are being observed by its Access Persons:
1. Each Access Person of the Trust other than a Restricted Trustee
or Restricted Officer shall direct his or her broker to supply
to the Compliance Officer of the Trust's administrator, on a
timely basis, duplicate copies of confirmations of all
securities transactions in which the person has, or by reason
of such transaction acquires any direct or indirect beneficial
ownership(2) and copies of periodic statements for all
securities accounts.
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2. You will be treated as the "beneficial owner" of a security under this
policy only if you have a direct or indirect pecuniary interest in the security.
(a) A direct pecuniary interest is the opportunity, directly or
indirectly, to profit, or to share the profit, from the transaction.
(b) An indirect pecuniary interest is any nondirect financial interest,
but is specifically defined in the rules to include securities held by
members of your immediate family sharing the same household;
securities held by a partnership of which you are a general partner;
securities held by a trust of which you are the settlor if you can
revoke the trust without the consent of another person, or a
beneficiary if you have or share investment control with the trustee;
and equity securities which may be acquired upon exercise of an option
or other right, or through conversion.
For interpretive guidance on this test, you should consult counsel.
-6-
<PAGE>
2. Each Access Person of the Trust, other than a trustee who is not
an "interested person" (as defined in the 1940 Act), shall
submit reports in the form attached hereto as Exhibit A to the
Trust's administrator, showing all transactions in securities
other than Exempt Securities in which the person has, or by
reason of such transaction acquires, any direct or indirect
beneficial ownership.(3) Such reports shall be filed no later
than 10 days after the end of each calendar quarter.
3. Each trustee who is not an "interested person" of the Trust shall
submit the same quarterly report as required under paragraph 2 to
the Trust's administrator, but only for a transaction in a
security other than an Exempt Security where he or she knew at
the time of the transaction or, in the ordinary course of
fulfilling his or her official duties as a trustee or officer,
should have known that during the 15-day period immediately
preceding or after the date of the transaction, such security is
or was purchased or sold, or considered for purchase or sale, by
the Trust.
4. The administrator of the Trust shall notify each Access Person of
the Trust who may be required to make reports pursuant to this
Code that such person is subject to this reporting requirement
and shall deliver a copy of this Code to each such person.
5. The administrator of the Trust shall review the reports received,
and as appropriate compare the reports with the pre-clearance
authorization received, and report to the Trust's Board of
Trustees:
a. with respect to any transaction that appears to evidence a
possible violation of this Code; and
b. apparent violations of the reporting requirements stated
herein.
6. The Board shall consider reports made to it hereunder and shall
determine whether the policies established in Sections IV and V
of this Code of
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3. See footnote 2 above.
-7-
<PAGE>
Ethics have been violated, and what sanctions, if any, should
be imposed on the violator, including but not limited to a letter
of censure, suspension or termination of the employment of the
violator, or the unwinding of the transaction and the
disgorgement of any profits to the Trust. The Board shall review
the operation of this Code of Ethics at least once a year.
7. The Trust's investment adviser, administrator and principal
underwriter shall adopt, maintain and enforce separate codes of
ethics with respect to their personnel in compliance with Rule
17j-1 and Rule 204-2(a)(12) of the Investment Advisers Act of
1940 or Section 15(f) of the Securities Exchange Act of 1934, as
applicable, and shall forward to the administrator and the
Trust's counsel copies of such codes and all future amendments
and modifications thereto.
8. At each quarterly board of trustees' meeting the investment
adviser and principal underwriter of the Trust shall report to
the Trust's Board of Trustees:
a. any reported securities transaction that occurred during the
prior quarter that may have been inconsistent with the
provisions of the codes of ethics adopted by the Trust's
investment adviser, administrator or principal underwriter;
and
b. all disciplinary actions(4) taken in response to such
violations.
9. At least once a year, the Trust's investment adviser,
administrator and principal underwriter shall provide to the
Board a report which contains (a) a summary of existing
procedures concerning personal investing by advisory persons and
any changes in the procedures during the past year and (b) an
evaluation of current compliance procedures and a report on any
recommended changes in existing restrictions or procedures based
upon the Trust's experience under this Code of Ethics, industry
practices, or developments in applicable
- -----------------------
4. Disciplinary action includes but is not limited to any action that has a
material financial effect upon the employee, such as fining, suspending, or
demoting the employee, imposing a substantial fine or requiring the disgorgement
of profits.
-8-
<PAGE>
laws and regulations.
10. This Code, the codes of the investment adviser, administrator and
principal underwriter, a copy of each report by an Access Person,
any written report hereunder by the Trust's administrator,
investment adviser or principal underwriter and lists of all
persons required to make reports shall be preserved with the
Trust's records for the period required by Rule 17j-1.
VI. CERTIFICATION.
Each Access Person will be required to certify annually that he or she has
read and understood this Code of Ethics, and will abide by them. Each Access
Person will further certify that he or she has disclosed or reported all
personal securities transactions required to be disclosed or reported under the
Code of Ethics. A form of such certification is attached hereto as Exhibit B.
The Board of Trustees of The Galaxy Fund
Dated: March 5, 1998
-9-
<PAGE>
Exhibit A
The Galaxy Fund
(the "Trust")
Securities Transaction Report
For the Calendar Quarter Ended _______________________
(month/day/year)
To: First Data Investor Services Group, Inc., as Administrator of the above
listed Trust
During the quarter referred to above, the following transactions were
effected in securities of which I had, or by reason of such transactions
acquired, direct or indirect beneficial ownership, and which are required to be
reported pursuant to the Code of Ethics of the Trust:
<TABLE>
<CAPTION>
Number of Nature of Broker/Dealer
Shares or Dollar Amount Transaction or Bank
Date of Principal of (Purchase, Through Whom
Security Transaction Amount Transaction Sale, Other) Price Effected
- -------- ----------- --------- ------------- ------------ ----- -------------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
THIS REPORT (i) EXCLUDES TRANSACTIONS WITH RESPECT TO WHICH I HAD NO
DIRECT OR INDIRECT INFLUENCE OR CONTROL, (ii) EXCLUDES OTHER TRANSACTIONS NOT
REQUIRED TO BE REPORTED, AND (iii) IS NOT AN ADMISSION THAT I HAVE OR HAD ANY
DIRECT OR INDIRECT BENEFICIAL OWNERSHIP IN THE SECURITIES LISTED ABOVE.
SIGNATURE:_____________
PRINT NAME:______________
A-1
<PAGE>
EXHIBIT B
THE GALAXY FUND
(THE "TRUST")
ANNUAL CERTIFICATE
PURSUANT TO THE REQUIREMENTS OF THE CODE OF ETHICS OF THE GALAXY FUND, THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
1. I HAVE READ THE TRUST'S CODE OF ETHICS.
2. I UNDERSTAND THE CODE OF ETHICS AND ACKNOWLEDGE THAT I AM SUBJECT TO
IT.
3. SINCE THE DATE OF THE LAST ANNUAL CERTIFICATE (IF ANY) GIVEN PURSUANT
TO THE CODE OF ETHICS, I HAVE REPORTED ALL PERSONAL SECURITIES
TRANSACTIONS REQUIRED TO BE REPORTED UNDER THE REQUIREMENTS OF THE
CODE OF ETHICS.
DATE: ______________________
PRINT NAME
________________________
SIGNATURE
B-1
<PAGE>
Exhibit (p)(2)
FLEET INVESTMENT ADVISORS ("FIA")
FLEET INVESTMENT MANAGEMENT ("FIM")
CODE OF ETHICS
Effective Date: April 1, 1996
Revision Date:: July 31, 1998
Affected Areas: Fleet Investment Advisors
Access Persons of Fleet Investment Management
Approved by: Jorge Brathwaite
Thomas O'Neill
David Rozenson
Issued by: Investment Compliance
- ------------------------------------------------------------------------------
I - BASIC PHILOSOPHY
The primary purpose of the FIA Code of Ethics is to protect the interests
of all our clients. Our Code is a critical part of maintaining our high
standards and reputation and guarding against an inadvertent violation of our
fiduciary duties or the requirements of the securities laws which govern the
conduct of our investment business. The following points should be constantly
kept in mind:
1. FIA holds itself out as professional investment counsel which provides
UNBIASED advice -- that is, advice based solely on the merits of the individual
investment and undiluted by any conflicts of interest which could prejudice the
investment decision in any way. Thus, the very nature of our business requires
that the main thrust of our Code be the elimination of any conflicts that could
jeopardize our unbiased investment approach.
2. The relationship with our clients is FIDUCIARY in nature. FIA is
considered to be a fiduciary with respect to all its investment clients,
including both non-Trust and non-ERISA accounts. This fiduciary relationship has
been stressed by the SEC and state and federal courts, including the U.S.
Supreme Court. Fiduciary standards require FIA to act honestly and fairly in all
respects in our dealings with clients and to serve their interests with
UNDIVIDED loyalty.
You are obliged to put the interest of FIA clients before your own personal
interests. This is an obligation we all assume as members of an investment
counsel firm. This principle has particular significance with reference to the
flow of investment information our personnel receive from brokers. Such
brokerage information is the property of FIA and is to be used for the exclusive
benefit of our clients and not to be used for the personal advantage of our
personnel.
We recognize that the actual experience of investing one's own capital,
whether it be small or large, is a valuable means of learning firsthand the
opportunities, risks and characteristics of the
<PAGE>
investment markets. Therefore, WE ENCOURAGE SOUND, PERSONAL INVESTMENT BY
MEMBERS OF FIA. On the other hand, we must make certain that there is no abuse
of our responsibilities to clients or to the reputation and professional
standing of our organization or any of its members. Above all we were guided by
three basic principles:
THE INTERESTS OF THE CLIENTS MUST COME FIRST
FIA PERSONNEL SHOULD AVOID ACTUAL OR POTENTIAL CONFLICTS OF INTEREST,
AND
FIA PERSONNEL SHOULD NOT TAKE INAPPROPRIATE ADVANTAGE OF THEIR
POSITIONS.
<PAGE>
II - LEGAL REQUIREMENTS
Section 206 of the Investment Advisers Act makes it unlawful, inter alia,
for any investment adviser, directly or indirectly, to employ any device, scheme
or artifice to defraud any client or prospective client, or to engage in any
transaction or practice which operates as a fraud or deceit on such persons
Rule 17j-l under the Investment Company Act of 1940 (the "1940 Act") makes
it unlawful for any director, trustee, officer or employee of an investment
adviser of an investment company (as well as other persons), in connection with
the purchase and sale by such person of a security "held or to be acquired" by
the investment company (the "Fund"):
1. To employ any device, scheme or artifice to defraud the Fund;
2. To make to the Fund any untrue statement of a material fact or omit to
state to the Fund a material fact necessary in order to make the statements
made, in light of the circumstances under which they are made, not misleading;
3. To engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon the Fund; or
4. To engage in any manipulative practice with respect to the Fund.
To assure compliance with these restrictions, Rule 17j-1 requires the
Adviser (and others) to adopt and agree to be governed by the provisions
contained in this Code of Ethics.
There are numerous similar provisions in other Federal securities laws and
states laws which govern the conduct of FIA's business, including a prohibition
on trading on the basis of material nonpublic information, as discussed below..
The restrictions and obligations under this Code of Ethics apply to ALL
CLIENT ACCOUNTS under FIA management.
<PAGE>
III- PERSONS COVERED BY THE REQUIREMENTS OF THE CODE OF ETHICS
Unless expressly stated otherwise, the requirements of this Code of Ethics
apply to all FIA employees and certain Access Persons (as defined below ) of
FIM. Many of the specific requirements, however, apply to the following
categories:
ACCESS PERSON: Any employee who, as a part of his or her regular duties, makes,
participates in, or obtains information regarding the purchase or sale of a
security for any client account or whose functions relate to the making of any
recommendations with respect to such purchases or sales.
PORTFOLIO MANAGER: Any employee authorized to make investment decisions on
behalf of a client account.
INVESTMENT PERSONNEL: any Portfolio Manager or other employee, such as a
securities analyst or trader, who advises Portfolio Managers or helps execute
their investment decisions.
Note that this Code of Ethics applies to all transactions in securities in which
the covered person has BENEFICIAL OWNERSHIP (as more fully defined in Section
VI, below), which is presumed to include securities and accounts held in the
name of or for the benefit of a spouse or other household member, and
transactions by entities over which a covered person has ownership, voting or
investment control.
IV - SUBSTANTIVE RESTRICTIONS
A. The price paid or received by a client for any security should not be
affected by buying or selling activity on the part of an Access Person, or
otherwise result in an inappropriate advantage to the Access Person. To that
end:
(a) No Access Person shall buy or sell a security within seven days before
or after any portfolio trades in the security, unless an Approval Officer
determines that it is clear that, in view of the nature of the security and the
market for such security, the order of the Access Person will not affect the
price paid or received by the clients; and
(b) A Portfolio Manager may not buy or sell a security within seven days
before or after the portfolios which he or she manages trade in the security.
B. No Investment Person may acquire any securities issued as part of an
initial public offering of the issuer.
C. Each Investment Person must seek prior approval for investment in private
placement transactions from both (1) the Chief Investment Officer, and (2) the
Director of Corporate Compliance. In the case where the Chief Investment Officer
seeks approval for investing in a private placement transaction, approval must
be obtained from the Vice Chairman responsible for investment management
activities and the Director of Compliance. Such approval shall take into
account, among other factors, whether the investment opportunity should be
reserved for a client and whether the opportunity is being offered to such
person because of his or her position with FIA. Any such Investment Person who
has been authorized to acquire securities in a private placement must disclose
his or her interest if he or she is involved in a consideration of an investment
in such issuer. Any decision to acquire such issuer's securities on behalf of a
client shall be subject to review by Investment Persons with no personal
interest in the issuer.
<PAGE>
D. An Investment Person may not profit from the purchase and sale or sale and
purchase of the same or equivalent securities within sixty calendar days.
Nothing in this restriction shall be deemed to prohibit avoidance of loss
through trading within a period shorter than sixty calendar days.
E. An Investment Person must not accept gifts from any entity doing business
with or on behalf of FIA in excess of limits contained in Rule 3060(a) of the
Conduct Rules of the National Association of Securities Dealers, Inc.
(currently, $100 per year).
F. An Investment Person shall not serve on the boards of directors of publicly
traded companies, or in any similar capacity, absent the prior approval of such
service by a Compliance Officer following the receipt of a written request for
such approval. In the event such a request is approved, procedures shall be
developed to avoid potential conflicts of interest.
G. Any profits derived from securities transactions in violation of paragraphs
A, B, C or D, above, shall be forfeited and paid to the appropriate clients or,
in appropriate circumstances, donated to charity. Gifts accepted in violation of
paragraph E shall be forfeited, if practicable, and/or dealt with in any manner
determined appropriate and in the best interests of any affected Trust and its
shareholders.
H. The restrictions of this Section IV shall not apply to the following
transactions unless an Approval Officer determines that such transactions
violate the General Principles of this Code:
1. participation in an issuer's dividend reinvestment plan;
2. transactions in: securities issued or guaranteed by the U.S.
Government or an agency or instrumentality of the U.S. Government; bankers'
acceptances; U.S. bank certificates of deposit; and commercial paper; and
purchases or redemptions of shares of open-end investment companies registered
under the investment Company Act of 1940;
3. transactions in which direct or indirect beneficial ownership is not
acquired or disposed of (e.g., a stock split or an automatic conversion);
4. transactions in accounts as to which an Access Person has no
investment control, subject, as applicable, to Section IV.H.5;
5. transactions in accounts of an Access Person for which investment
discretion is not maintained by the Access Person but is granted to any of the
following that are unaffiliated with the Adviser: a registered broker-dealer,
registered investment adviser or other investment manager acting in a similar
fiduciary capacity (e.g., blind trusts and certain discretionary accounts)
PROVIDED the following conditions are satisfied:
(a) The terms of the account agreement ("Agreement") must be in
writing and filed pursuant to FIA/FIM Insider Trading Procedures prior to any
transactions and must provide that the Access Person have no access to
information about the specific securities or transactions in the account;
(b) Any amendment to the Agreement must be filed prior to its
effective date;
<PAGE>
(c) The Agreement shall prohibit acquisitions of securities in
initial public offerings; and
(d) The exemption provided by this Section III.H.5 shall not be
available for a transaction or class of transactions which is suggested or
directed by the Access Person;
and
6. transactions in securities in connection with an
employer-sponsored tax-qualified plan, such as a 401(k) plan or an ESOP.
<PAGE>
V - MISUSE OF MATERIAL NONPUBLIC INFORMATION
Generally, it is illegal to trade in securities while you are in possession
of material nonpublic information that might affect the value of those
securities or to transmit that information to others who trade in those
securities. Because the law of insider trading involves a number of complex
legal interpretations, FIA requires every employee to confer with an Approval
Officer, before entering into any securities transaction involving material
nonpublic information, whether for a client account for the employee's account.
The Approval Officer will determine whether proceeding with the proposed
transaction would involve substantial risks that the transactions would violate
the law. Every employee of the Company must follow the procedures described
below or risk serious sanctions, including dismissal, substantial personal
liability and criminal penalties, including jail sentences.
1. Identifying Inside Information
Before trading for yourself or others, including any accounts
managed by FIA, in the securities of a company about which you may
have material nonpublic, or "inside information," ask yourself the
following questions:
i. Is the information material? That is, information that an
investor would consider important in making his or her investment
decision. Is this information that would affect the market price
of the securities if generally disclosed?
ii. Is the information nonpublic? To whom has this
information been provided? Has the information been effectively
communicated to the marketplace by, for example, being published
in REUTERS, THE WALL STREET JOURNAL or other publications of
general circulation? Do not assume that information that has been
provided to you by personnel of the issuer has been publicly
disseminated unless you know otherwise.
If, after consideration of the above, you believe that the information is
material and nonpublic, or if you have any questions as to whether the
information is material and nonpublic, you should take the following steps.
i. Report the matter immediately to an Approval Officer.
ii. Do not purchase or sell the securities on behalf of yourself
or others, including investment companies or private
accounts managed by FIA.
iii. Do not communicate the information inside or outside FIA,
other than to the Approval Officer.
iv. After the Approval Officer has reviewed the issue, you will
be instructed to continue the prohibitions against trading
and communication, or you will be allowed to trade and
communicate the information.
If, after consideration of the items set forth above you have any doubt as
to whether information is material or nonpublic, or if there is any unresolved
question as to the applicability or interpretation of the foregoing procedures,
or as to the propriety of any action, you must discuss it with an Approval
Officer before trading or communicating the information to anyone.
<PAGE>
2. Restricting Access to Material Nonpublic Information
Information in your possession that you identify as potentially
material and nonpublic may not be communicated to anyone, including persons
within the FIA, except as provided in paragraph 1 above. In addition, care
should be taken so that such information is secure. For example, files
containing material nonpublic information should be sealed; access to computer
files containing material nonpublic information should be restricted.
<PAGE>
VI - PROCEDURES
The requirements and restrictions of this Code apply to all transactions in
Reportable Securities in which the subject employee has Beneficial Ownership. As
used in this Code:
"BENEFICIAL OWNERSHIP" generally means having a direct or indirect
pecuniary interest in a security and is legally defined to be beneficial
ownership as used in Rule 16a-1(a)(2) under Section 16 of the Securities
Exchange Act of 1934. Beneficial ownership is presumed regarding securities and
ACCOUNTS HELD IN THE NAME OF OR FOR THE BENEFIT OF A SPOUSE OR OTHER HOUSEHOLD
MEMBER. Beneficial ownership also extends to transactions by entities over which
a person has ownership, voting or investment control, including corporations
(and similar entities), trusts and foundations.
"REPORTABLE SECURITIES" include generally all securities, and financial
instruments related to securities, except the securities referenced in Section
IV.H.2, and securities held in accounts referenced in Section IV.H.5 (unless the
Executive Committee shall determine otherwise).
A. To enable FIA to determine with reasonable assurance whether the provisions
of applicable laws and this Code of Ethics are being observed by its Access
Persons, FIA and FIM have developed INSIDER TRADING PROCEDURES, which must be
followed by all employees who are subject to this Code. Among these Procedures
are the following:
1. Upon commencement of employment or otherwise assuming the status of
"Access Person", and annually thereafter, each Access Person shall disclose in
writing, on a form entitled "Acknowledgment and Certificate of Compliance", all
direct or indirect "Beneficial Ownership" interests of such Access Person in
"Reportable Securities."
2. Each Access Person shall obtain the prior approval of an Approval
Officer of all personal securities transactions (other than those exempted under
Section IV.H) in Reportable Securities by submitting a "Preclearance Request
Form."
3. Each Access Person shall notify the Compliance Officer of all
brokerage accounts in which he or she has any beneficial interest and shall
arrange for the broker to mail directly to Investment Compliance at the same
time they are mailed or furnished to such Access Person (a) duplicate copies of
confirmations covering each transaction in Reportable Securities in such account
and (b) copies of periodic statements with respect to the account.
B. Investment Compliance shall notify each Access Person that he or she is
subject to these reporting requirements, and shall deliver a copy of this Code
and the Insider Trading Procedures to each affected employee. (The Fleet
Financial Group Code of Ethics, to which all Fleet employees are subject, is
distributed to all employees by the Human Resources Department.)
The Executive Committee shall review the Code and its operation at least
once a year.
<PAGE>
VII - PENALTIES FOR NONCOMPLIANCE
SUBJECT EMPLOYEES WHO EITHER WILLFULLY OR NEGLIGENTLY VIOLATE THE
PROVISIONS OF THE CODE MAY BE SUBJECT TO ANY OR ALL OF THE FOLLOWING SANCTIONS:
FORMAL WRITTEN WARNING (WITH COPY TO SUPERVISOR AND PERSONNEL FILE)
BANS ON PERSONAL TRADING
REDUCTIONS IN COMPENSATION
DISGORGEMENT OF TRADING PROFITS
SUSPENSION
TERMINATION
<PAGE>
Exhibit (p)(3)
ATTACHMENT 2
2/23/99
OECHSLE INTERNATIONAL ADVISORS, LLC
CODE OF ETHICS
The reputation of Oechsle International Advisors, LLC ("Oechsle") for integrity
and ethics is one of our most important assets. In order to safeguard this
reputation, we believe that it is essential not only to comply with relevant
federal and state laws and regulations, but also to maintain high standards of
personal and professional conduct. Oechsle's Code of Ethics (the "Code") is
designed to ensure that our conduct is at all times consistent with the highest
of ethical standards, with our fiduciary obligations to our clients, and with
industry and regulatory standards for investment managers.
The Code is based on the principle that the officers, directors, members, and
employees of Oechsle owe a fiduciary duty to our clients to:
- Always place the interests of our clients first.
- Conduct our personal securities transactions in a manner which does
not interfere with client transactions, create an actual or potential
conflict of interest with clients, or otherwise take unfair advantage
of our relationship with our clients.
- Avoid even the appearance of impropriety in our personal actions.
Persons covered by this Code must adhere to this general principle as well as
comply with the Code's specific provisions. It bears emphasis that although the
Code provides guidance with respect to many common situations, it cannot address
every possible circumstance that could give rise to a conflict of interest,
potential conflict, or an appearance of impropriety. Regardless of whether a
specific provision of the Code applies, each of us at Oechsle must conduct his
or her activities in accordance with the general principles embodied in the Code
and in such a way as to avoid any actual or potential conflict of interest or
any abuse of an individual's position of trust and responsibility. Please
remember that even if our clients are not harmed, we cannot take inappropriate
advantage of information we learn through our position as fiduciaries. TECHNICAL
COMPLIANCE WITH THE PROCEDURES INCORPORATED IN THE CODE WILL NOT INSULATE FROM
SCRUTINY TRADES WHICH CONTRAVENE AN INDIVIDUAL'S DUTIES TO OECHSLE AND ITS
CLIENTS. Therefore, to protect yourself and Oechsle, please be alert for any
potential for conflicts of interest, and please consult the General Counsel
whenever questions arise concerning the application of the Code to a particular
situation.
<PAGE>
PERSONS COVERED BY THE CODE
The provisions and requirements of the Code apply to all officers, directors,
members, and employees of Oechsle and its subsidiaries ("Oechsle employees"). IN
ADDITION, THE PROVISIONS AND REQUIREMENTS OF THE CODE, INCLUDING THE RULES
PERTAINING TO PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS, APPLY TO ALL
MEMBERS OF ANY EMPLOYEE'S "IMMEDIATE FAMILY." ANY FAMILY MEMBER WHO IS PRESENTLY
LIVING IN YOUR HOUSEHOLD, OR TO WHOSE FINANCIAL SUPPORT YOU MAKE A SIGNIFICANT
CONTRIBUTION, IS CONSIDERED TO BE A MEMBER OF YOUR IMMEDIATE FAMILY. Please bear
in mind that the Code applies to all securities accounts:
(i) in which any Oechsle employee or his or her immediate family have any
direct or indirect beneficial interest (e.g., family trust); or
(ii) over which any Oechsle employee or his or her immediate family
exercise any investment authority; or
(iii) which receive any investment advice from any Oechsle employee or his
or her immediate family.
Please remember that the term "beneficial interest" includes more than ordinary
ownership. In general, you may be deemed to have beneficial ownership under any
of the following circumstances:
1. You have the power to sell or transfer the security, or you have the
power to direct the sale or transfer; or
2. You have the power to vote the security or the power to direct the
vote; or
3. You have an economic interest in the security; or
4. You have the right to acquire, within 60 days, the power to sell, the
power to vote, or an economic interest in the security.
You should consider yourself as having beneficial ownership of a security in the
following situations (which also apply to your immediate family):
1. The security is held by you, whether in bearer form, registered in
your name, or otherwise;
2. The security is held by others for your benefit, such as a security
held for you by a bank, custodian, broker, relative, executor,
administrator, agent, or any other person;
<PAGE>
3. The security is held by a trust of which you are the trustee, or in
which you have an economic interest, or where you participate in the
investment decisions or otherwise have direct or indirect influence or
control;
4. The security is held by a trust of which you are the settlor if you
have the power to revoke the trust without obtaining the consent of
all the beneficiaries;
5. The security is held by any partnership in which you are a general
partner, or with respect to which you have direct or indirect
influence or control;
6. The security is held in the name of another person if, by reason of
any contract, understanding, relationship, agreement, or other
arrangement, you obtain therefrom benefits substantially equivalent to
those of ownership;
7. The security is held in the name of another person, even though you do
not obtain therefrom benefits substantially equivalent to those of
ownership, if you can vest or revest title in yourself at any time.
Although persons who are not members of your "immediate family" are not required
to comply with the pre-clearance procedures contained in the Code, they also may
not take improper advantage of information that they may receive from you
regarding the activity or holdings of Oechsle clients. In addition, it would be
a violation of the Code, and, specifically of Oechsle's Insider Trading Policy,
for an Oechsle employee to arrange for a friend or relative to trade in a
security in which that Oechsle employee would be precluded from trading for his
or her own account, or for an Oechsle employee to give information about the
activity or holdings of Oechsle clients to any person for the purpose of
facilitating securities trading by that person.
GENERAL TERMS AND PROVISIONS
These provisions apply to all employees of Oechsle and its subsidiaries.
These provisions apply only to transactions in reportable securities.
A. REPORTABLE SECURITIES are ALL securities except:
(a) shares of registered, open-end investment companies (mutual funds) for
which Oechsle is not an advisor or sub-advisor;
(b) direct U.S. government obligations, such as Treasury bonds, notes, and
bills, and U.S. Savings Bonds;
(c) CDs, bankers' acceptances, and other money-market instruments;
(d) transactions in commodities and options and futures on commodities;
(e) investments in or by hedge funds and commingled funds managed by
Oechsle, in which Oechsle employees may have beneficial interests.
You do not need to report transfers of securities, stock splits, or other such
activity.
<PAGE>
Thus, REPORTABLE SECURITIES include, but are not limited to:
(a) any type of equity or debt security (including, without limitation,
common and preferred stock and corporate and municipal bonds and debt
obligations issued by foreign governments);
(b) any rights relating to such a security, such as put and call options,
warrants, and convertible securities;
(c) ADRs;
(d) options and futures on security indexes.
B. COMPLIANCE OFFICER - the Oechsle officer assigned the responsibility of
administering this Code is the Compliance Officer, James Record, or in his
absence the General Counsel, Paula N. Drake.
C. PRE-CLEARANCE - of ALL personal securities transactions IN REPORTABLE
SECURITIES is required for all Oechsle employees.
D. BROKERAGE CONFIRMATIONS - copies of brokerage confirmations for each
pre-cleared transaction are required.
E. BLACKOUT PERIODS - for certain designated periods surrounding client trades
or while a transaction is being actively considered for a client.
F. EXCESSIVE SHORT-TERM TRADING - is discouraged and profits from such trading
may have to be disgorged.
G. QUARTERLY REPORTING - of personal securities transactions.
H. ANNUAL CERTIFICATION - that the employee has read and understood the Code.
PRE-CLEARANCE
1. GENERAL RULE:
Oechsle requires written pre-clearance of personal trades in reportable
securities.
2. PROCEDURES:
The pre-clearance requirement is satisfied by completing the Personal Securities
Transaction Pre-Trading Authorization Form (SEE EXHIBIT A). PRE-CLEARANCE IS
ONLY EFFECTIVE FOR THE SPECIFIC TRADE DATE (or for the next available market
session if same-date is not practicable due to foreign market constraints) AND
FOR A SPECIFIC NUMBER OF SHARES. TRADING INSTRUCTIONS GIVEN TO BROKERS MUST BE
FOR SAME DAY EXECUTION. You may not change the trade date, and you may not
increase the size of your order, without obtaining a new pre-clearance. You may,
however, decrease the
<PAGE>
size of your trade without obtaining a new pre-clearance. Moreover, you need not
place an order for which you have obtained pre-clearance. If you choose not to
place that order, you must obtain a new pre-clearance if you change your mind
and wish to enter the order on a later date. In addition, you must inform the
Compliance Officer in writing if you decide not to execute a pre-cleared trade.
Generally, the date on which you initiate your trade instructions should be the
date on which the trade is actually executed. However, there are some
exceptions. For purposes of this Code, the trade date for a limit order or a
stop-loss order is the date on which you give the order to your broker, not the
date on which the order is finally executed in accordance with your
instructions. Therefore, if your limit or stop-loss order is entered with the
broker in accordance with the pre-clearance requirements and consistent with the
blackout period, the subsequent execution of that trade will satisfy the Code,
even if Oechsle subsequently enters trades for client accounts that are executed
on the same day as your order is executed.
Three signatures are required on the pre-clearance form:
1. The Compliance Officer or the General Counsel in the Boston office (in
the absence of the Compliance Officer), or the Compliance Officer of
the London office, in the case of that office.
2. The Trading Desk.
3. A Managing Principal.
As a general rule, no person may sign a pre-clearance form for himself or
herself. In order to ensure that all personal securities transactions are
conducted in accordance with the Code, the Compliance Officer of the Boston
office will retain copies of all pre-clearance forms in each employee's personal
securities transactions file.
The Compliance Officer and the Trading Desk will monitor trading in pre-cleared
securities among Oechsle clients to ensure that all applicable blackout periods
have been complied with and that there is otherwise no activity in such
securities that would raise questions regarding any conflicts or potential
conflicts.
EXEMPTIONS:
A. THIRD PARTY ACCOUNTS. If an Oechsle employee nominally has beneficial
ownership over a particular account, but does not exercise direct or
indirect influence or control over that account and provides no investment
advice with respect to the investment decisions made for the account, he or
she may apply to the General Counsel for a waiver from the pre-clearance
provisions of the Code. Waivers are not automatic, are made on a
case-by-case basis, and are conditioned, at a minimum, upon the following:
1. The Oechsle employee discloses to the General Counsel the existence of
the Third Party Account and allows the General Counsel to review, in
her discretion, the governing documents of such accounts.
<PAGE>
2. The Oechsle employee establishes to the satisfaction of the General
Counsel that he or she has no direct or indirect influence or control
over the Third Party Account or over investment decisions made for
that account.
3. The Oechsle employee completes the Brokerage Account Certification
(SEE EXHIBIT B) on an annual basis.
4. The Oechsle employee does not disclose to any person with influence or
control over the Third Party Account any action that Oechsle may or
may not take, or has or has not taken, with respect to any security.
B. STOCK INDEX FUTURES AND OPTIONS. The pre-clearance requirements of the Code
do not apply to purchases and sales of stock index options and stock index
futures. However, such transactions must be reported on the employee's quarterly
personal securities transactions report.
PROHIBITED TRANSACTIONS
The following categories of transactions may NOT be engaged in by Oechsle
employees:
1. TRANSACTIONS IN CONJUNCTION WITH OECHSLE CLIENTS:
A. No Oechsle employee shall cause an Oechsle client to either take or not
take any action for such employee's personal benefit (or the personal
benefit of anyone else) rather than for the benefit of the client. For
example, an employee would violate this Code by causing a portfolio to
purchase a security he or she owned for the purpose of supporting or
increasing the price of that security. Causing a portfolio to refrain from
selling a security in an attempt to protect a personal investment, such as
an option on that security, also would violate this Code.
B. No Oechsle Employee shall use knowledge of Oechsle client transactions to
profit by the market effect of those transactions.
C. No Oechsle employee may use futures or options to take positions in
securities which the Code would prohibit if the positions were taken
directly.
D. No Oechsle employee may purchase a security with knowledge that it is being
contemplated for purchase, or will be purchased, for an Oechsle client. No
Oechsle portfolio manager, analyst or trader may buy or sell a security
within seven calendar days on either side of a date on which the security
is bought or sold for the account of any Oechsle client. As an example, if
such an account purchases a particular security on Day 8, all portfolio
managers, analysts and traders would be precluded from purchasing or
selling that security for his or her own account(s) from Day 1 through Day
15.
<PAGE>
For all other Oechsle employees the blackout period is one day before and one
day after any trade by any Oechsle client.
If a previously-entered employee trade falls within the blackout period, the
employee must reverse the trade. Thus, for example, if an employee pre-clears a
trade and purchases the security on Day 1, and an Oechsle client purchases the
security on Day 2, the Oechsle employee must reverse the trade. If the trade can
be reversed prior to settlement, the employee should do so, with the cost of
reversal being borne by the employee. If the trade cannot be reversed prior to
settlement, the employee must engage in an offsetting transaction immediately.
If a loss results, the employee must bear the loss; if a profit results, the
employee must donate the profit to a charity of the employee's choice with
suitable evidence of such donation provided to the General Counsel, or forfeit
the profit to Oechsle.
EXEMPTIONS:
A. LARGE CAPITALIZATION STOCKS.
An Oechsle employee may purchase or sell shares of a security which is being
actively considered for purchase or sale, or which is being purchased or sold,
for Oechsle clients if, given the number of shares the employee is purchasing or
selling and the market capitalization (outstanding shares x current price per
share) of the issuer, the employee's trading could have no material impact on
the price of the security and if Oechsle were to trade in the security, such
trading could have no material impact on the price of the security. This
exemption is subject to prior written approval by the General Counsel, the
Trading Desk, and the Chief Operating Officer. YOU MUST SPECIFICALLY REQUEST
THIS PRIOR APPROVAL.
B OPTION EXERCISE BY OTHERS.
An Oechsle employee who has sold ("written") a put or call option in compliance
with the Code will not violate this or any other provision of the Code if the
put or call is exercised and the Oechsle employee must honor the contractual
commitment to purchase or sell the security, as the case may be.
C. MARGIN CALLS.
An Oechsle employee who maintains securities in a margin account with a
broker-dealer will not violate this provision of the Code if the securities are
sold by the broker-dealer pursuant to a bona fide margin call, provided,
however, that withdrawal of collateral by the employee was not a contributing
factor to the margin call.
D. DIVIDEND REINVESTMENT.
An Oechsle employee will not violate this provision of the Code by participating
in an automatic dividend reinvestment program offered by the issuer of a
publicly traded security.
<PAGE>
E. CLIENT SMALL INVESTMENTS.
An Oechsle employee may engage in a transaction which would otherwise violate
this provision of the Code if (a) the client buying the security, or for whom
the security is being considered, is engaged in an ongoing investment program to
augment AN existing position with relatively small regular increments of cash
flow, (b) the General Counsel, after consultation with investment personnel,
determines that neither the client's nor the employee's purchases will
materially affect the market price of the security, and (c) the General Counsel
gives prior consent to the transaction.
F. GIFTS.
Gifts of securities made to others, such as relatives or charities, are treated
as dispositions of beneficial ownership, and must be pre-cleared prior to
transfer of the securities. However, gifts of securities received, if
non-volitional on the Oechsle employees' part, need not be pre-cleared.
G. ACQUISITION AND EXERCISE OF CERTAIN RIGHTS.
The acquisition and exercise of rights that are offered PRO RATA to all
shareholders is not covered by the Code. Exercise of oversubscription rights,
however, does require pre-clearance.
H. STOCK INDEX FUTURES AND STOCK INDEX OPTIONS.
The purchase and sale of stock index futures and stock index options are not
subject to the blackout periods. However, such purchases and sales must be
reported in quarterly reports.
2. PUBLIC OFFERINGS:
No Oechsle employee may purchase equity and equity-related securities in initial
public offerings, whether or not Oechsle client accounts participate in the
offering, except as described below. Oechsle employees may purchase securities
that were the subject of a recent public offering after the offering is
completed, and then only at the prevailing market prices and subject to the
usual pre-clearance procedures. Oechsle employees may not receive special
allocations of "hot issues" from brokers which receive Oechsle business.
<PAGE>
EXEMPTIONS:
A. Oechsle employees are permitted to purchase equity and equity-related
securities in secondary offerings if Oechsle client accounts do not hold
the security and if no Oechsle portfolio manager wishes to participate in
the offering for client accounts.
B. Oechsle employees are permitted to purchase equity and equity-related
securities in rights offerings if the opportunity to purchase is extended
equally to all holders of the company's common stock and the offer is
extended to the employee as a holder of the company's common stock.
C. Oechsle employees are permitted to purchase equity and equity-related
securities in an offering if they are entitled to such purchase by virtue
of being a citizen or resident of a country who qualifies for privatization
issues made available to the public in general.
Any purchase of any security in a public offering, even if permitted under these
rules, must be pre-cleared in writing by the General Counsel.
3. PRIVATE OFFERINGS:
No Oechsle employee may purchase a security in a private offering without first
obtaining a pre-clearance from the General Counsel. The employee should complete
and submit to the General Counsel a checklist in the form attached as EXHIBIT C
hereto.
Consideration of the prior approval request will take into account, among other
factors, whether the investment opportunity should be reserved for an Oechsle
client(s), and whether the opportunity is being offered to an individual as a
favor designed to influence that employee's judgment in the performance of his
or her job duties at Oechsle or as compensation for services of an investment
advisory nature rendered to the issuer. If approval is granted and the employee
has any material role in subsequent consideration by an Oechsle client of an
investment in the same, or a directly affiliated issuer, the employee must
disclose his or her interest in the private placement to the person making the
investment decision.
4. SHORT-TERM TRADING:
Excessive short-term trading increases the risk of conflict of interest, may
over time adversely affect an Oechsle employee's investment judgment on behalf
of Oechsle clients, and may unduly occupy an Oechsle employee's time and
thoughts during working hours. Oechsle employees are hired and compensated on
the assumption that their personal investing will generally be on a long-term
basis.
Therefore, while this Code does not impose an absolute prohibition on short-term
trading, excessive short-term trading is prohibited. Whether the extent of
short-term trading by an employee is "excessive" will be determined on a
case-by-case basis, taking into account all
<PAGE>
relevant factors, including conditions prevailing in the securities markets and
the types of securities traded. Persons determined to be engaged in excessive
short-term trading will be subject to imposition of any or all of the sanctions
described at the end of this Code, including disgorgement of profits realized
from the short-term trade.
A short-term trade is any purchase and sale, or sale and purchase, of the same
(or equivalent) securities within 60 calendar days.
EXEMPTIONS:
A. OPTION EXERCISE BY OTHERS.
An Oechsle employee who has sold ("written") a put or call option in compliance
with this Code will not have effected a short-term trade if the put or call is
exercised and the Oechsle employee must honor the contractual commitment to
purchase or sell the security, as the case may be, within 90 days of selling the
option.
B. MARGIN CALLS. An Oechsle employee who maintains securities in a margin
account with a broker-dealer will not have effected a short-term trade if the
securities are sold by the broker-dealer pursuant to a bona fide margin call,
provided, however, that withdrawal of collateral by the employee was not a
contributing factor to the margin call.
5. TRANSACTIONS WITH OR INVOLVING OECHSLE CLIENTS:
No Oechsle employee may knowingly initiate a purchase from or sell to an Oechsle
client any securities or other property, nor engage in any transaction to which
an Oechsle client is a party or with which any Oechsle client has a significant
relationship.
6. GENERAL FIDUCIARY OBLIGATION TO CLIENTS; DISCLOSURE OF PERSONAL INTEREST:
As noted above, Oechsle and its employees have a fiduciary responsibility to
Oechsle's clients. Therefore we must avoid any conduct that would be detrimental
to their interests. In order to fulfill our duty, Oechsle employees must offer
all investment opportunities to Oechsle's clients BEFORE taking advantage of
such opportunities. Therefore, before trading in any security that is not
covered by an Oechsle analyst, you should ensure that the appropriate research
analyst or portfolio manager is aware that you have identified a security that
you believe would be a good investment, and explain the basis for your interest
in the security. If, after receiving that information, the analyst or portfolio
manager does not wish to recommend the security for investment by Oechsle
clients, you are free to trade, after securing the necessary pre-approvals. If
the analyst or portfolio manger expresses an interest in that security, however,
you must refrain from trading in that security until a decision has been made as
to whether to purchase that security for Oechsle clients and until any
applicable blackout period has expired.
In addition, if one of your personal securities holdings could create a conflict
of interest, or even a potential conflict of interest, with the interest of an
Oechsle client, you must disclose that
<PAGE>
conflict or potential conflict to the appropriate analysts or portfolio managers
before participating in any decision that could affect the security you hold.
For example, if you are an analyst, and if you are recommending that Oechsle
should purchase for client accounts securities of any company whose securities
you hold personally, you must disclose the fact that you own the securities to
the portfolio manager(s) who will make that purchase decision before making your
recommendation. Similarly, if you are a portfolio manager and you want to
purchase for client accounts securities of any company whose securities you hold
personally, you must disclose the fact that you own the securities to someone
else involved in investment decisions BEFORE initiating the purchase. Please
bear in mind, that although not prohibited, as a general matter, Oechsle does
not expect that portfolio managers will hold the same securities as the Accounts
that they manage.
WAIVERS
A written request for a waiver from the prohibited transaction rules may be
granted by the General Counsel after consultation with the applicable personnel,
upon a determination that the waiver is warranted to avoid undue hardship to the
employee and that none of the abuses or potential abuses that the Code is
designed to prevent would occur. Seeking waivers is not encouraged and waivers
will not be granted routinely.
REPORTING
Each Oechsle employee is responsible for complying with the following
reporting requirements:
1. COPIES OF CONFIRMATIONS:
Each Oechsle employee must instruct each broker-dealer with whom he or she
maintains an account, and with respect to all other accounts as to which the
employee is deemed to have beneficial ownership, to send promptly to the
Compliance Officer a copy of all transaction confirmations generated for the
account. For your convenience, a form letter for requesting such confirmations
to be sent to Oechsle is attached as part of Exhibit A.
Confirmations must include the account description, trade date, security
description, number of shares or principal amount of each security, the nature
of the transaction (e.g., purchase, sale, etc.), the total price, and the name
of the institution (e.g., broker, bank, etc.) effecting the transaction.
Each brokerage confirmation received by Oechsle is cross-checked against
pre-clearance forms and quarterly securities transaction reports submitted by
each employee. Copies of all confirmations and associated pre-clearance forms
are retained by the Compliance Officer in the employee's personal securities
transaction file.
In order to ensure that brokerage confirmations are received for all employee
brokerage accounts, all employees are required to complete a Brokerage Account
Form (SEE EXHIBIT B) and
<PAGE>
to submit an updated form (within 5 business days) whenever an account is added
or deleted. You and members of your immediate family must disclose promptly
every brokerage account that you maintain and every new brokerage account that
you open to the Compliance Officer. In addition, each employee is asked to
certify annually that the list of brokerage accounts that have been reported
previously remains complete and accurate.
2. TRANSACTION REPORTS:
Each Oechsle employee must file a Quarterly Securities Transaction Report (SEE
EXHIBIT D) with the Compliance Officer within 10 days after the end of each
quarter, whether or not the employee entered into any personal securities
transactions during that quarter. Quarterly reports are required by the SEC for
all investment company managers and enable Oechsle to double-check that all
personal securities transactions have been appropriately pre-cleared and
reported to Oechsle.
3. ANNUAL ACKNOWLEDGMENT:
By February 28 of each year, every Oechsle employee must sign an acknowledgment
stating that he or she has reviewed, understood, and complied with the
provisions of this Code (SEE EXHIBIT E).
OTHER CONFLICTS OF INTEREST
1. GIFTS OR OTHER PREFERENTIAL TREATMENT:
No Oechsle employee may seek or accept gifts, favors, preferential treatment, or
any special arrangement of material value from certain persons because of the
employee's association with Oechsle. This prohibition applies to anyone who does
business or is soliciting business with any Oechsle entity or Oechsle client, as
well as to any organization (such as any broker, dealer, or investment adviser)
engaged in the securities business.
This rule is intended to permit only the most proper type of customary business
amenities. Listed below are examples of items which would be permitted under
proper circumstances and which are prohibited under the intent of this rule.
These examples are illustrative and not all-inclusive. Notwithstanding these
examples, an Oechsle employee may not, under any circumstances, accept anything
which could lead to or create the appearance of any kind of conflict of
interest. For example, acceptance of any consideration is prohibited if it would
create the appearance of a "reward" or inducement for business conducted with
the person providing the consideration or his employer.
Among items not considered of "material value" which, under proper
circumstances, would be considered permissible are:
(a) Occasional lunches or dinners conducted for business purposes;
<PAGE>
(b) Occasional cocktail parties or similar social gatherings conducted for
business purposes;
(c) Occasional attendance at theater, sporting or other entertainment
events; and
(d) Small gifts, usually in the nature of reminder advertising, such as
pens, calendars, etc.
Among items of consideration of "material value" which are NOT permitted under
any circumstances are the following:
(a) Any gift over $250 in value, or any accumulation of gifts which in
aggregate exceeds $250 in value from one source in one calendar year;
(b) Entertainment of a recurring nature such as sporting events, theater,
golf games, etc.;
(c) The cost of transportation to a locality outside the Boston
metropolitan area, and lodging or meals while in another locality,
unless such attendance and reimbursement arrangements have been
approved in advance by the General Counsel;
(d) Personal loans to the Oechsle employee on terms more favorable than
those generally available for comparable credit standing and
collateral; and
(e) Preferential brokerage commissions or spreads or allocation of stock
in "hot issue" initial public offerings for the Oechsle employee's
personal trading account.
2. DIRECTORSHIPS AND TRUSTEESHIPS IN OUTSIDE ORGANIZATIONS:
No Oechsle employee may accept a directorship in an unaffiliated company without
the prior notification and written approval of the General Counsel. Persons such
as portfolio managers and analysts whose primary responsibilities include
recommending and selecting securities for the accounts of Oechsle clients will
not be granted approval to accept directorships in companies which might qualify
for investment by any Oechsle clients. Approval will be based upon the
determination that the board service would not be inconsistent with the
interests of Oechsle's clients. If board service is authorized, appropriate
procedures will be implemented to ensure that confidential information is not
obtained or used by either the employee or Oechsle.
No Oechsle employee may accept a position as trustee, executor, custodian, or as
any other fiduciary, or as a private investment adviser or counselor for any
outside account, without the prior notification and written approval of the
General Counsel.
3. PROVIDING INVESTMENT ADVICE TO OTHERS:
No Oechsle employee may provide investment advice to anyone or manage any
person's portfolio on a discretionary basis, other than for Oechsle clients or
members of the employee's immediate family. Thus, employees should not give
advice to anyone, other than immediate family members, concerning the purchase
or sale of any security. In particular, Oechsle employees may not provide
investment advice for compensation to anyone other than an Oechsle client,
unless the arrangement is disclosed and approved by Oechsle.
<PAGE>
4. IMPROPER USE OF FUNDS:
No Oechsle employee may pay, or offer or commit to pay, any amount of
consideration which might be or appear to be a bribe, kickback, or other similar
improper use of funds.
5. GENERAL ANTI-FRAUD PROVISION:
No Oechsle employee may violate the anti-fraud provisions of the federal
securities laws and the rules and regulations promulgated thereunder. This
provision covers a broad range of conduct, including, without limitation, the
following:
A. AFFIRMATIVE DUTY TO DISCLOSE. Oechsle employees who own a security, or who
have decided to effect a personal transaction in a security, have an
affirmative duty to disclose this information in the course of any
communication about that security when the purpose or reasonable
consequence of such communication is to influence an Oechsle client to buy,
hold, or sell that security. The disclosure of ownership should be part of
the initial communication but need not be repeated in the case of
continuing communications directed to a specific person.
B. DISCLOSURE OF OECHSLE INFORMATION. No information regarding any Oechsle
client account or actual or proposed securities trading activities of any
Oechsle client may be disclosed outside the Oechsle organization unless the
information has been publicly announced or reported. Oechsle research
information must not be disclosed unnecessarily and never for personal
gain. Information generally about Oechsle and Oechsle clients is
confidential, and should not be disclosed without a valid business purpose.
C. USE OF INFORMATION. No Oechsle employee may use information from any source
in a manner contrary to the interest of, or in competition with, any
Oechsle client. In particular, an Oechsle employee may not invest in a
company which could reasonably be considered as a potential investment for
Oechsle clients and which has not been considered by Oechsle analysts until
determining with appropriate investment personnel that no portfolio
managers have a current interest in the company on behalf of an Oechsle
client. This rule is not intended to prohibit any Oechsle employees from
uncovering and capitalizing on new "investment ideas," but requires that
Oechsle have the first right to such ideas for its clients.
D. "INSIDE" INFORMATION AND INSIDER TRADING.
Neither Oechsle nor any Oechsle employee may utilize "inside" information
about any issuer of securities for personal benefit or the benefit of
clients. Inside information is material information not generally available
to the public. Information is considered "material" if there is a
substantial likelihood that a reasonable investor would consider it
important in making his or her investment decisions, or if it could
reasonably be expected to affect the price of a company's securities. It
need not be so important that it would have changed the investor's decision
to buy or sell. Information that has been disseminated in a
<PAGE>
way that makes it available to investors generally (e.g., national business
and financial news wire services, such as Dow Jones and Reuters; national
news services, such as New York Times; SEC reports; brokerage firm reports)
is considered to be public information. But, for example, information given
by a company director to an acquaintance of an impending takeover prior to
a public announcement would be "nonpublic."
No Oechsle employee may trade, either personally or on behalf of others, on
material, nonpublic information (insider trading), or communicate such
information to others who trade in violation of the law (tipping). Although the
pre-clearance, reporting, and trade restriction requirements of this Code apply
only to Oechsle employees and their immediate family members, the insider
trading and tipping restrictions reach beyond to prohibit Oechsle employees from
illegally profiting or from funneling illegal profits to any other person. They
also prohibit Oechsle from insider trading or tipping in client accounts.
No Oechsle employee may solicit inside information from any company, whether or
not Oechsle clients own stock of the company or Oechsle analysts follow the
company. In addition, please note that the SEC has adopted a rule specifically
prohibiting trading while in possession of material information about a
prospective tender offer before it is publicly announced or trading during a
tender officer if in possession of information which one has reason to know is
not yet public.
PROCEDURES TO BE FOLLOWED WHEN RECEIVING INSIDE INFORMATION:
Whenever an Oechsle employee receives information that he or she believes to be
material, nonpublic information, he or she should not trade on his or her own
behalf or on behalf of Oechsle clients in the securities to which the
information relates, tip the information to others, or recommend for purchase or
sale such securities, so long as the information remains nonpublic. In addition,
the employee should contact the General Counsel immediately and should refrain
from disclosing the information to anyone else, including persons within the
Oechsle organization, unless specifically advised to do so by the General
Counsel.
SANCTIONS
Failure to comply with this Code may adversely affect an Oechsle employee's
performance evaluation, may require the employee to give up any benefit derived
from the violation, may require the employee to refrain from personal trading
for a period, and may lead to termination of employment in appropriate cases.
Penalties under the federal securities laws are also possible in certain
circumstances.
SANCTIONS may include:
1. CAUTION: Administered by the General Counsel;
2. WARNING: Administered by the General Counsel;
<PAGE>
3. FINE: Assessed by the General Counsel, the Chief Operating Officer,
and the Chief Investment Officer;
4. DISMISSAL: Determined by the Executive Committee;
5. CIVIL REFERRAL TO THE SEC OR OTHER CIVIL REGULATORY AUTHORITIES:
Determined by the Executive Committee;
6. CRIMINAL REFERRAL: Determined by the Executive Committee.
PROCEDURES:
When potential violations of the Code come to the attention of the General
Counsel, she will investigate the matter. This investigation may include a
meeting with the employee. Upon completion of the investigation, if necessary,
the General Counsel may meet with senior management (the Chief Operating Officer
and/or the Chief Investment Officer) or other appropriate parties, and a
determination will be made as to whether any sanction should be imposed. The
employee will be informed of any sanction deemed to be appropriate. If the
employee believes that such sanction is unwarranted, the employee must provide
the General Counsel with a written explanation of such belief within 30 days of
being informed after such determination. The General Counsel will then arrange
for a review by senior management or other appropriate party and will advise the
employee as to whether the sanction will be imposed, modified, or withdrawn. The
employee will be given an opportunity to submit a written statement to senior
management and may be represented by counsel of his or her own choosing, at his
or her own expense, at his or her election.
The General Counsel will maintain a written record of all exceptions granted
from prohibited transactions under this Code.
<PAGE>
EXHIBIT A
PERSONAL SECURITIES TRANSACTION PRE-CLEARANCE FORM
NAME OF EMPLOYEE: ____________________________
ACCOUNT NAME AND NUMBER: ____________________________
DATE OF TRANSACTION: ____________________________
SECURITY NAME: ____________________________
SECURITY ID NUMBER (CUSIP/SEDOL): ____________________________
COUNTRY: _______________ TYPE OF SECURITY: ______________
NUMBER OF SHARES: ___________ PRICE: ___________________
BUY: ____________ SELL: _________________
IS THIS A LIMIT ORDER OR STOP-LOSS ORDER TRADE: YES / NO
NAME/ADDRESS OF BROKER: _______________________________________
_______________________________________
_______________________________________
I hereby certify that I am familiar with Oechsle's Code of Ethics, and that
this transaction complies in all material respects with Oechsle's policies. I am
not aware of any material, non-public information concerning this issuer or the
market for its securities, or any pending plans or consideration to purchase
these securities for Oechsle clients.
SIGNATURE: _________________________________ DATE: _______________
AUTHORIZATION
TRADING DESK: _________________________ DATE: ____________
MANAGING PRINCIPAL ___________________ DATE: ____________
COMPLIANCE OFFICER: __________________ DATE: ____________
*IF THIS PRE-CLEARED TRADE IS NOT EXECUTED, PLEASE WRITE CANCELED ACROSS IT AND
SUBMIT A COPY OF THIS CANCELED FORM TO THE COMPLIANCE OFFICER.
<PAGE>
EXHIBIT A
PERSONAL SECURITIES TRANSACTION PRE-CLEARANCE FORM - (LONDON)
NAME OF EMPLOYEE: ____________________________
ACCOUNT NAME AND NUMBER: ____________________________
DATE OF TRANSACTION: ____________________________
SECURITY NAME: ____________________________
SECURITY ID NUMBER (CUSIP/SEDOL): ____________________________
COUNTRY: _______________ TYPE OF SECURITY: ______________
NUMBER OF SHARES: ___________ PRICE: ___________________
BUY: ____________ SELL: _________________
IS THIS A LIMIT ORDER OR STOP-LOSS ORDER TRADE: YES / NO
NAME/ADDRESS OF BROKER: _______________________________________
_______________________________________
_______________________________________
I hereby certify that I am familiar with Oechsle's Code of Ethics, and
that this transaction complies in all material respects with Oechsle's policies.
I am not aware of any material, non-public information concerning this issuer or
the market for its securities, or any pending plans or consideration to purchase
these securities for Oechsle clients.
SIGNATURE: _________________________________ DATE: _______________
AUTHORIZATION
TRADING DESK: ___________________________ DATE: ____________
MANAGING PRINCIPAL: ____________________ DATE: ____________
COMPLIANCE OFFICER: ____________________ DATE: ____________
*IF THIS PRE-CLEARED TRADE IS NOT EXECUTED, PLEASE WRITE CANCELED ACROSS IT AND
SUBMIT A COPY OF THIS CANCELED FORM TO THE COMPLIANCE OFFICER.
<PAGE>
EXHIBIT A
SAMPLE LETTER TO SEND TO YOUR BROKER
TO REQUEST DUPLICATE ACCOUNT INFORMATION
[Broker-Dealer Name]
[Broker-Dealer Address]
RE: Account Number(s)
Dear [Broker]:
Please send a duplicate copy of all trade confirmations (NOT the monthly
statements) relating to the account(s) listed above to:
James Record
Compliance Officer
Oechsle International Advisors, LLC
One International Place, 23rd Floor
Boston, MA 02110
Very truly yours,
[Employee Name]
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
LIST OF BROKERAGE ACCOUNTS IN WHICH YOU HAVE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP*
ANNUAL CERTIFICATION
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
NAME OF
BROKER NAME BROKER ADDRESS ACCOUNT NUMBER ACCOUNT HOLDER RELATIONSHIP
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
<S> <C> <C> <C> <C>
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
- ------------------------ ------------------------------------- ---------------------- -------------------------- -------------------
</TABLE>
Name of Employee___________________________________________________
(Print)
I certify that I have disclosed to Oechsle all brokerage accounts in which I
have a direct or indirect beneficial interest.
Signature___________________________________________________________
*Beneficial ownership is explained in the Code of Ethics.
<PAGE>
EXHIBIT C
PRIVATE PLACEMENT APPROVAL REQUEST
EMPLOYEE NAME: ___________________________ DATE: ______________
1. COMPANY NAME: ______________________________________
2. Business Operations Summary:
3. Who contacted you regarding this investment? _______________________
4. Which firm/company employs this individual? _______________________
5. Does this individual or firm have a relationship with Oechsle or Oechsle
clients? If so, please explain.
_______________________________________________________________________________
6. What is the individual's role within the company? _________________________
7. What is your relationship to the individual? ______________________________
8. What is the total amount of the private placement? ________________________
9. What is the value of your proposed investment? ____________________________
10. Does this company have publicly traded securities? ________________________
11. Is this investment suitable for Oechsle clients? Yes ______ No ________
If not, please explain.
____________________________________________________________________________
____________________________________________________________________________
________________________________
Employee Signature
Approved _______ Disapproved ______
Managing Principal _______________________ Date: ______________
General Counsel Signature _______________ Date: ______________
<PAGE>
EXHIBIT D
QUARTERLY TRANSACTION REPORT
October 1 - December 31, XXXX
The following is a record of every transaction in which I had, or by reason of
which I acquired, any direct or indirect beneficial ownership in securities from
October 1 - December 31, XXXX excluding transactions which do not have to be
reported under Oechsle's Code of Ethics.
I had no securities transactions for the quarter: |_|
I had the following transactions:
<TABLE>
<CAPTION>
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
Account Name/ Trade Buy/Sell # of Price Name and Description (ID#) Broker/Dealer
(Number) Date shares of Security
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
- ----------------- ----------- ------------ ----------- ----------- -------------------------------- --------------------------
</TABLE>
- ------------------------------ ------------------------------
Signature Date
- ----------------------------
Print Name
<PAGE>
EXHIBIT E
OECHSLE INTERNATIONAL ADVISORS, LLC
CODE OF ETHICS
ANNUAL CERTIFICATION
I have received a copy of Oechsle International Advisors, LLC's Code of Ethics,
dated February 23, 1999, I have read it and understand it.
I understand that, as a condition of my employment, I am required to comply with
the Code of Ethics. I agree to comply with all provisions of the Code of Ethics,
including, but not limited to, those governing personal securities transactions.
I certify that to the best of my knowledge I have complied with the terms of the
Code of Ethics during the most recent calendar year.
I authorize Oechsle to furnish the information contained in any report of
securities transactions filed by me with the General Counsel or the Compliance
Officer to such federal, state, and self-regulatory authorities as may be
required by law or by applicable rules and regulations.
I certify that I have disclosed to Oechsle all brokerage accounts in which I
have a beneficial interest, and that I have authorized each such brokerage firm
to send directly to Oechsle duplicate copies of all transaction confirmations
for such accounts.
- --------------------------------
Date
- ---------------------------------
Name (Print)
- ----------------------------------
Signature of Employee
<PAGE>
Exhibit (p)(4)
UOB GLOBAL CAPITAL LLC
CODE OF ETHICS
This Code of Ethics regarding conflicts of interest applies to all
employees of UOB Global Capital LLC ("UOBGC") and its subsidiaries
("Employees"). It covers the following topics: (1) prohibitions related to
material, nonpublic information; (2) personal securities investing; (3) service
as a director; and (4) UOBGC's gift and entertainment policy. This Code also
imposes on Employees certain reporting obligations which are specified below.
Adherence to this Code is a fundamental and absolute condition of service with
UOBGC.
No Code of Ethics can address every circumstance that may give rise to
a conflict, a potential conflict or an appearance of a conflict of interest.
Therefore, every Employee is expected to be alert to any actual, potential or
appearance of a conflict of interest with UOBGC clients and to conduct himself
or herself with good judgment. Failure to exercise good judgment, as well as
violations of this Code, may result in the imposition of sanctions on the
Employee, including suspension or dismissal.
STATEMENT OF GENERAL PRINCIPLES
As a fiduciary, UOBGC owes an undivided duty of loyalty to its clients.
It is UOBGC's policy that Employees conduct themselves so as to avoid not only
actual conflicts of interest with UOBGC clients, but also that they refrain from
conduct which could give rise to the appearance of a conflict of interest that
may compromise the trust our clients have placed in us.
The Code of Ethics is designed to ensure, among other things, that the
personal securities transactions of all Employees are conducted in accordance
with the following principles:
i. a duty at all times to place the interests of UOBGC clients first and
foremost;
ii. the requirement that all personal securities transactions be conducted
in a manner consistent with this Code of Ethics and in such a manner
as to avoid any actual, potential or appearance of a conflict of
interest or any abuse of an Employee's position of trust and
responsibility; and
iii. the requirement that Employees should not take inappropriate advantage
of their positions.
UOBGC's policy is to avoid conflicts and, where they unavoidably occur,
to resolve them in a manner that clearly places our clients' interests first.
In addition to the specific prohibitions on certain personal securities
transactions as set forth herein, all Employees are prohibited from:
i. employing any device, scheme or artifice to defraud any prospect or
client;
ii. making to any prospect or client any untrue statement of a material
fact or omitting to state to such prospect or client a material fact
necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading;
Rev. 03-08-99
<PAGE>
iii. engaging in any act, practice or course of business which operates or
would operate as a fraud or deceit upon any prospect or client;
iv. engaging in any manipulative practice with respect to any prospect or
client; or
v. revealing to any other person (except in the normal course of his or
her duties on behalf of a client) any information regarding securities
transactions by any client or the consideration of any client or UOBGC
of any securities transactions.
1. MATERIAL, NONPUBLIC INFORMATION
1.1 RESTRICTION ON TRADING OR RECOMMENDING TRADING. Each Employee is reminded
that it constitutes a violation of the federal securities laws for any person to
trade in or recommend trading in the securities of a company while in possession
of material, nonpublic information concerning that company, or to disclose such
information to any person not entitled to receive it if there is reason to
believe that such information will be used in connection with a trade in the
securities of that company. Violations of federal law may give rise to civil as
well as criminal liability, including the imposition of monetary penalties.
Tippees (i.e., persons who receive material, nonpublic information) also may be
held liable if they trade or pass along such information to others.
1.2 WHAT IS MATERIAL, NONPUBLIC INFORMATION? "Material information" is any
information about a company which, if disclosed, is likely to affect the market
price of the company's securities or to be considered important by an average
investor in deciding whether to purchase or sell those securities. Examples of
information which should be presumed to be "material" are matters such as
dividend increases or decreases, earnings estimates by the company, changes in
the company's previously released earnings estimates, significant new products
or discoveries, major litigation by or against the company, liquidity or
solvency problems, extraordinary management developments, significant merger or
acquisition proposals, or similar major events which would be viewed as having
materially altered the "total mix" of information available regarding the
company or the market for any of its securities.
"Nonpublic information", often referred to as "inside information", is
information that has not yet been publicly disclosed. Information about a
company is considered to be nonpublic information if it is received under
circumstances which indicate that it is not yet in general circulation and that
such information may be attributable, directly or indirectly, to the company or
its insiders, or that the recipient knows to have been furnished by someone in
breach of a fiduciary obligation. Courts have held that fiduciary relationships
exist between a company and another party in a broad variety of situations
involving a relationship between a company and its lawyers, investment bankers,
financial printers, employees, technical advisors and others.
Information should not be considered to have been publicly disclosed until a
reasonable time after it has been made public (for example, by a press release).
Someone with access to inside information may not "beat the market" by trading
simultaneously with, or shortly after, the official release of material
information.
1.3 REPORTING REQUIREMENT. Whenever an Employee believes that he or she may
have come into possession of material, nonpublic information about a public
company, he or she personally must immediately notify the Compliance Officer (as
defined below) and should not discuss such information with anyone else. For
Employees other than the Managing Director, the "Compliance Officer" shall be
the individual so designated by the company, and for that individual, the
"Compliance Officer" shall be the Managing Director.
Rev. 03-08-99 2
<PAGE>
1.4 SANCTIONS. Any Employee who knowingly trades or recommends trading while in
possession of material, nonpublic information may be subject to civil and
criminal penalties, as well as to immediate suspension and/or dismissal.
2. PERSONAL SECURITIES INVESTING
2.1 PRE-CLEARANCE REQUIREMENTS
(a) TRANSACTIONS COVERED BY THIS CODE.
(1) All transactions by Employees in investments made for their own
accounts, as well as all transactions in certain other accounts, are subject to
the preclearance procedures, trading restrictions and reporting requirements
described below, unless otherwise indicated. For a listing of the Employee and
other accounts subject to these restrictions and requirements ("Covered
Accounts"), see APPENDIX A attached hereto.
(2) Transactions in the following investments ("Exempt Investments") or
types of transactions ("Exempt Transactions") are not subject to the trading
restrictions or other requirements of this Code and need not be pre-cleared or
reported:
- - REGISTERED OPEN-END INVESTMENT COMPANIES (that is, mutual funds but not
closed-end funds);
- - Securities which are DIRECT OBLIGATIONS OF THE UNITED STATES (i.e.,
treasuries);
- - BANK CERTIFICATES OF DEPOSIT;
- - NON-VOLITIONAL TRADES. Transactions which are non-volitional on the
part of the Employee (such as the receipt of securities pursuant to a stock
dividend or merger);
- - AUTOMATIC TRANSACTIONS. Purchases of the stock of a company pursuant to
an automatic dividend reinvestment plan or an employee stock purchase plan
sponsored by such company; and
- - RIGHTS OFFERINGS. Receipt or exercise of rights issued by a company on a
PRO RATA basis to all holders of a class of security. Employees must,
however, preclear transactions for the acquisition of such rights from a
third party or the disposition of such rights.
(b) PRE--CLEARANCE REQUIREMENT. Employees are prohibited from effecting or
permitting the purchase, sale or transfer by gift, directly or indirectly, of
any public or nonpublic security or other instrument by or for any Covered
Account without obtaining pre-clearance of each such transaction pursuant to the
procedure set forth below, which requires the prior approval of the Compliance
Officer.
The pre-clearance procedure is as follows:
(1) The Employee requests approval by submitting a completed
Pre-Clearance of Personal Trade Request form to the Compliance Officer. The
Compliance Officer will notify the employee if and when a pre-clearance request
has been approved, and no trade may be effected prior to receipt of such notice
from the Compliance Officer.
(2) If an Employee receives permission to trade a security or
instrument, the trade must be executed by the close of business on the fifth
business day following.
Rev. 03-08-99 3
<PAGE>
(c) TRANSACTIONS THAT DO NOT NEED TO BE PRE-CLEARED BUT MUST BE REPORTED.
The pre-clearance requirements (and the trading restrictions on personal
investing described below) do not apply to the following transactions:
- NON-DISCRETIONARY ACCOUNTS. Transactions effected in any Covered
Account over which the Employee has no direct or indirect influence or
control (a "Non-Discretionary Account"). An Employee shall be deemed to
have "no direct or indirect influence or control" over an account only
if the following conditions are met: (i) investment discretion for such
account has been delegated in writing to an independent fiduciary and
such investment discretion is not shared with the Employee, or
decisions for the account are made by a family member and not by the
Employee, (ii) the Employee (and, where applicable, the family member)
certifies in writing that he or she has not and will not discuss any
potential investment decisions with such independent fiduciary or
family member, and (iii) the Compliance Officer has determined that the
account satisfies the foregoing requirements.
- GOVERNMENTAL ISSUES. Investments in the debt obligations of Federal
agencies or of state and municipal governments or agencies.
- TRANSACTIONS OF AN INVESTMENT CLUB, where the spouse of an employee
(but not the employee) is a member, are subject only to the reporting
requirements of this code and not to the other requirements.
2.2 TRADING RESTRICTIONS ON PERSONAL INVESTING
All transactions in Covered Accounts which are Subject to the
pre-clearance requirements specified in this Code are also subject to the
following trading restrictions:
(a) BLACKOUT RESTRICTIONS. Transactions in Covered Accounts generally will
not be precleared for a period before and after a client account trades in the
same security or instrument.
(b) BLACKOUT PERIODS.
(1) An Employee may not buy or sell, or permit any Covered Account to
buy or sell, a security or any instrument within seven calendar
days before or after the day on which any client account trades in
the same security or instrument or in a security convertible into
or exchangeable for such security or instrument (including
options).
(2) In the event there is a trade in a client account in the same
security or instrument within a blackout period, the Employee will
be required to close out the position and to disgorge any profit
to a charitable organization chosen by the Compliance Officer;
provided, however, that if an Employee has obtained preclearance
for a transaction and a subsequent client trade occurs within the
blackout period, the Compliance Officer, upon a demonstration of
hardship or extraordinary circumstances, may determine to review
the application of the disgorgement policy to such transaction and
may impose alternative restrictions on the Employee's position.
(c) SHORT-TERM TRADING. While there is no prohibition in this Code on
short-term trading profits per se, the Compliance officer will monitor reports
and address any abuses of short-term trading profits on a case by case basis. To
avoid doubt, employees are advised to avoid the purchase and sale, or the sale
and purchase, of the same (or equivalent) securities within a 60 calendar day
period. Employees may be required to disgorge any profits on personal trades
executed within the above proscribed periods.
Rev. 03-08-99 4
<PAGE>
(d) PUBLIC OFFERINGS. No Employee may purchase or permit any Covered
Account to purchase a security offered pursuant to a public offering, wherever
such offering is made (i.e., purchases in public offerings made outside the
United States also are prohibited).
(e) PRIVATELY-ISSUED SECURITIES. Securities held for non-investment
purposes: Employees may invest in residential cooperatives, private recreational
clubs (such as sports clubs, country clubs, luncheon clubs and the like) for
their personal use; such investments are not subject to the pre-clearance
procedures, trading restrictions and reporting requirements unless the
Employee's investing is part of a business conducted by the Employee.
A proposed client trade of any class of security of an issuer must be
brought to the attention of the Compliance Officer if an Employee who
participated (or will participate) in a decision to recommend the client trade
previously acquired, through a private placement (and continues to hold), shares
of any class of security of such issuer and such proposed trade must be
independently reviewed by the Compliance Officer or his or her designee and
approved or disapproved by the Compliance Officer or such designee.
(f) EXCEPTIONS. The Compliance Officer may in rare instances grant
exceptions from these trading restrictions upon written request. Employees must
demonstrate hardship or extraordinary circumstances. Any exceptions granted will
be reported to the Board of Directors at least annually.
3. SERVICE AS A DIRECTOR
(a) An Employee, before serving as a director or trustee of any public or
private company, or non-profit or charitable institution, or residential
cooperative, must disclose this in writing to the Compliance Officer or his or
her designee. If, in the course of such service, he or she gives advice with
respect to the management of that entity's own funds or funds advised by the
entity, prior written permission for such service must be received from the
Compliance Officer or his or her designee.
(b) If an Employee serving on the board of directors or advisers of any
entity comes into possession of material, nonpublic information through such
service, he or she must immediately notify the Compliance Officer.
4. GIFTS AND ENTERTAINMENT
In order to MINIMIZE any conflict, potential conflict or appearance of
conflict of interest, Employees are subject to the following restrictions and
guidelines with respect to gifts made to or received from, and entertainment
with, a person that does business with or provides services to UOBGC, that may
do business or is being solicited to do business with UOBGC or that is
associated with an organization that does or seeks to do business with UOBGC (a
"Business Associate"):
(a) Gifts. An Employee may not retain a gift received from or make a gift
to a Business Associate valued at $100 or more without the approval of the
Compliance Officer.
(1) Employees may not give, and must tactfully refuse, any gift of
cash, a gift certificate or a gift that is substantially the same
as cash.
(2) Generally, a gift from UOBGC should bear the UOBGC name so that it
is easily recognizable as advertising, such as commemorative
lucite "tombstones" or desk accessories engraved with the UOBGC
name, unless the gift is of value less than $50. Gifts should not
be given to an employee of any securities firm which is making a
public offering of a fund advised by UOBGC nor given in connection
with the acquisition of a new client by UOBGC.
Rev. 03-08-99 5
<PAGE>
(b) Entertainment. Each Employee is expected to use professional judgment,
subject to review by his or her supervisor, in entertaining and in being
entertained by a Business Associate.
(1) Provided that the Employee and Business Associate both attend, an
Employee may accept from, or provide to, a Business Associate,
within the dollar limits established by the Compliance Officer:
(i) an occasional breakfast, luncheon, dinner or reception, ticket
to a sporting event or the theater, or comparable entertainment,
that is not so frequent, so costly, nor so extensive as to raise
any question of impropriety or (ii) a breakfast, luncheon, dinner,
reception or cocktail party in conjunction with a bona fide
business meeting.
(2) If the Employee and the Business Associate are not both present at
such sporting, theater or other entertainment event, the
entertainment should be deemed a gift, subject to the foregoing
$100 limit.
5. REPORTS
In order to implement the general principles, restrictions and
prohibitions contained in this Code of Ethics, each Employee is required to file
the following periodic reports;
(a) INITIAL CERTIFICATION AND SCHEDULES. Within 10 days of commencing
employment at UOBGC, or by March 31, 1999, whichever is later, each Employee
shall submit to the Compliance Officer:
(1) a signed Initial Certification of Compliance with the UOBGC Code
of Ethics; and
(2) schedules listing (i) all Covered Accounts, (ii) all public and
private securities and instruments directly or indirectly held by
any Covered Account (except for Non-Discretionary Accounts) of
such Employee (other than Exempt Investments), with nonpublic
securities plainly indicated and (iii) directorships (or similar
positions) of for-profit, non profit and other enterprises.
(b) CONFIRMATIONS AND MONTHLY STATEMENTS. Each Employee shall cause to be
provided to the Compliance Officer:
(1) duplicate copies of confirmations of all transactions in each
Covered Account (except for Non-Discretionary Accounts); and
(2) not later than 10 days after the end of each month, monthly
statements (if any are regularly prepared) for each Covered
Account (except for Non-Discretionary Accounts).
(c) Periodic Certification. Each Employee shall provide or cause to be
provided, to the Compliance Officer, not later than 10 days after the end of
each calendar quarter (in the case of Non-Discretionary Accounts, not later than
45 days after the end of each calendar year), a signed Periodic Certification of
Compliance with the UOBGC Code of Ethics containing:
(1) with respect to Personal trades during such quarter, and to the
extent not provided in the foregoing monthly statements, (i) the
date of each transaction, the title and number of securities and
the principal amount of each security involved; (ii) the nature of
the transaction (i.e., purchase, sale or any other type of
acquisition or disposition); (iii) the price at which the
transaction was effected; and (iv) the name of the broker, dealer
or bank with or through which the transaction was effected;
Rev. 03-08-99 6
<PAGE>
(2) to the extent not included in the foregoing monthly statements, a
schedule listing any changes or transactions in (i) all Covered
Accounts and (ii) all public and private securities and
instruments directly or indirectly held by any Covered Account of
such Employee (other than Exempt Investments), with nonpublic
securities plainly indicated;
(3) with respect to Non-Discretionary Accounts, if any, certifications
that such Employee does not discuss any investment decisions with
the person making investment decisions;
(4) a schedule listing any changes in directorships (or similar
positions) of for-profit, non- profit and other enterprises; and
(5) with respect to any nonpublic security owned by such Employee, a
statement indicating whether the issuer has changed its name or
publicly issued securities during such calendar quarter.
(d) ANNUAL CERTIFICATION. Each Employee shall provide to the Compliance
Officer, not later than 10 days after the end of each calendar year, a signed
Annual Certification of Compliance with the UOBGC Code of Ethics.
(e) EXEMPT INVESTMENTS. Confirmations and periodic reports need not be
provided with respect to Exempt Investments.
(f) DISCLAIMER OF BENEFICIAL OWNERSHIP. Any report required under this Code
of Ethics may contain a statement that such report is not to be construed as an
admission by the person making the report that he or she has any direct and
indirect beneficial ownership of the security to which the report relates.
6. MISCELLANEOUS
(a) INTERPRETATION. The provisions of this Code of Ethics will be
interpreted by the Compliance Officer. Questions of interpretation should be
directed to the Compliance Officer or his or her designee.
(b) SANCTIONS. If advised of a violation of this Code of Ethics by an
Employee, the Compliance Officer or, in the case of the Compliance Officer, the
Board of Directors, may impose such sanctions as are deemed appropriate. Any
violations of this Code of Ethics and sanctions therefor will be reported to the
Board of Directors at least annually.
(c) EFFECTIVE DATE. This Code of Ethics shall be effective as of March 31,
1999.
Rev. 03-08-99 7
<PAGE>
APPENDIX A
COVERED ACCOUNTS
The Code of Ethics applies to all transactions in the following
investment accounts ("Covered Accounts"):
(1) accounts held for your benefit by you or other persons (including
nominees, custodians, brokers, pledgees, partnerships, personal holding
companies, trustees or other fiduciaries);
(2) accounts held by (or for the benefit of) your spouse or any
children or relatives who share your home;
(3) accounts (other than UOBGC client accounts) for which you have or
share, directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise:
(i) voting power (which includes power to vote, or to direct the
voting of, a security), or
(ii) investment power (which includes the power to dispose, or to
direct the disposition), of a security; or
(4) accounts held by any other person to whose support you materially
contribute or in which, by reason of any agreement or arrangement, you have or
share benefits substantially equivalent to ownership, including, for example:
(i) arrangements (which may be informal) under which you have agreed
to share the profits from an investment, and
(ii) accounts maintained or administered by you for a relative
(such as children or parents) who do not share your home.
Rev. 03-08-99 8
<PAGE>
APPENDIX A
CODE OF ETHICS
ACKNOWLEDGEMENT FORM
I hereby acknowledge receipt of a copy of UOB Global Capital's Code of Ethics
and agree that as an Employee I am subject to and will abide by its provisions
and all amendments thereto.
- ------------------------------ ----------------
Signature Date
- -------------------------------
Print Name
PLEASE RETURN THIS FORM TO THE COMPLIANCE OFFICER
Rev. 03-08-99
<PAGE>
APPENDIX B
EXISITING ACCOUNT FORM
I, ___________________________, am reporting that I presently (1) DO or (2) DO
NOT (circle one) maintain an investment account registered in my name, the name
of my spouse, minor child (as defined under local law) or any other family
member, or have a beneficial interest, share in the profits, or exercise
discretionary authority for any investment account. If such an account exists, I
list below the following information:
BROKER-DEALER NAME ACCOUNT#
- ------------------ --------
I understand that if I choose to open an investment account in the future in my
name and/or the name of my spouse, minor child, or for which I am an adviser or
trustee, I will give written notice to the Compliance Officer within 10 days
following the opening of such account.
- ------------------------------ ----------------
Signature Date
- -------------------------------
Print Name
PLEASE RETURN THIS FORM TO THE COMPLIANCE OFFICER
Rev. 03-08-99
<PAGE>
APPENDIX C
PRE-CLEARANCE FORM
I ________________________________, am contemplating the following securities
transaction(s) for an account in which I have a beneficial interest and for
which approval to trade is requested. I understand approval, once obtained, is
valid for a period of 5 business days, after this time I am required to seek
re-approval. Confirmation of the trade will be provided to the compliance
officer.
TRADE DATE BUY/SELL AMOUNT SECURITY DESCRIPTION
- ---------- -------- ------ --------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------ ----------------
Signature Date
This form should now be passed to the Compliance Officer for approvals.
APPROVAL:
- ------------------------------- ------------------
Signature Date
Rev. 03-08-99
<PAGE>
APPENDIX D
QUARTERLY SECURITIES TRANSACTION REPORT
FOR THE CALENDAR QUARTER ENDED ____________
Please check one:
_____ No securities transactions which are required to be reported pursuant to
the Investment Adviser's Code of Ethics were effected by me or on my behalf
during the quarter referred to above.
_____ I hereby confirm that the brokerage confirmation attached represent all
transactions that were effected in securities for which I had, or by reason for
such transactions acquired, direct or indirect beneficial ownership, and which
are required to be reported pursuant to the Investment Adviser's Code of Ethics
without exception. This report (i) excludes transactions with respect to which I
had no direct or indirect influence or control, (ii) excludes other transactions
not required to be reported, and (iii) is not an admission that I have or had
any direct or indirect beneficial ownership in the securities listed above.
- ------------------------------ ----------------
Signature Date
- -------------------------------
Print Name
THIS REPORT IS REQUIRED TO BE COMPLETED AND RETURNED TO THE COMPLIANCE OFFICER
WITHIN 10 CALENDAR DAYS OF THE QUARTER-END.
Rev. 03-08-99
