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1933 Act Registration No. 33-17759
1940 Act Registration No. 811-05355
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 1, 1998
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
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Post-Effective Amendment No. 25
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AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No.
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(Check appropriate box or boxes)
FORTIS ADVANTAGE PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Address of Principal Executive Offices, Zip Code)
(651) 738-4000
(Registrant's Telephone Number, including Area Code)
Scott R. Plummer, Esq.
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Name and Address of Agent for Service)
COPY TO:
Michael J. Radmer, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
It is proposed that this filing will become effective (check appropriate box):
X immediately upon filing pursuant to paragraph (b) of Rule 485
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on (specify date) pursuant to paragraph (b) of Rule 485
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75 days after filing pursuant to paragraph (a) of Rule 485
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on (specify date) pursuant to paragraph (a) of Rule 485
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60 days after filing pursuant to paragraph (a) of Rule 485
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Incorporation by Reference
and
Explanatory Note
Part A (Prospectus) of this Registration Statement is incorporated by
reference from Post-Effective Amendment No. 45 to the Registration Statement of
Fortis Income Portfolios, Inc. (File Nos. 002-46686 and 811-02341) filed on
December 1, 1998. Such Prospectus combines two Registrants: two series of
Fortis Income Portfolios, Inc. and one series of Fortis Advantage Portfolios,
Inc.
The Part B (Statement of Additional Information) of this Registration
Statement is incorporated by reference from Post-Effective Amendment No. 45 to
the Registration Statement of Fortis Income Portfolios, Inc. (File Nos.
002-46686 and 811-02341) filed on December 1, 1998. Such Part B also combines
the same two Registrants: two series of Fortis Income Portfolios, Inc. and one
series of Fortis Advantage Portfolios, Inc. Post-Effective Amendment No. 45 was
filed pursuant to Rule 485(b) to become effective on the same day as this
Registration Statement.
This Registration Statement contains the cover page, Part C, signature
page and eight exhibits.
<PAGE>
PART C
Fortis High Yield Fund
a series of
Fortis Advantage Portfolios, Inc.
OTHER INFORMATION
ITEM 23. EXHIBITS
THE FUND IS FILING OR INCORPORATING BY REFERENCE THE FOLLOWING EXHIBITS:
(a).1 Articles of Amendment and Amended and Restated Articles of
Incorporation adopted 8/23/94 *
(a).2 Certification of Designation of Classes A, B, C & H dated
10/31/94 *
(a).3 Articles of Amendment dated 2/29/96 to Restated Articles of
Incorporation dated as of 9/9/94 *
(b) Amended and Restated Bylaws dated 1/31/92 *
(c) Instruments Defining Rights of Security Holders - not applicable
(d) Investment Advisory and Management Agreement dated 1/31/92 *
(e).1 Underwriting and Distribution Agreement dated 11/14/94 *
(e).2 Dealer Sales Agreement (3)
(e).3 Mutual Fund Supplement to Dealer Sales Agreement (3)
(f) Bonus or Profit Sharing Contracts -not applicable
(g) Custody Agreement dated 3/21/92 *
(h) Other Material Contracts - not applicable
(i) Legal Opinion - not applicable
(j) Consent of KPMG Peat Marwick LLP *
(k) Omitted Financial Statements - not applicable
(l) Initial Capital Agreements - not applicable
(m) Rule 12b-1 Plan (1)
(n) Financial Data Schedule - not applicable
(o) Rule 18f-3 Plan (2)
- -----------------------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement of Fortis Worldwide Portfolios, Inc. on Form N-1A
filed with the Commission on February 26, 1998.
(2) Incorporated by reference to a Post-Effective Amendment No. 13 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on July 31, 1995.
(3) Incorporated by reference to Post-Effective Amendment No. 45 to the
Registration Statement of Fortis Income Portfolios, Inc. on Form N-1A filed
with the Commission on December 1, 1998.
* Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
THE FOLLOWING IS A LIST OF ALL PERSONS DIRECTLY OR INDIRECTLY CONTROLLED BY
OR UNDER COMMON CONTROL WITH THE FUND:
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No person is directly or indirectly controlled by or under common control
with the Registrant.
ITEM 25. INDEMNIFICATION
STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENTS OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE FUND IS
INSURED OR INDEMNIFIED AGAINST ANY LIABILITY INCURRED IN THEIR OFFICIAL
CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR, OFFICER, AFFILIATED
PERSON, OR UNDERWRITER FOR THEIR OWN PROTECTION.
Paragraph 8(d) of the Registrant's Articles of Incorporation provides that
the Registrant shall indemnify such person for such expenses and liabilities, in
such manner, under such circumstances, and to the full extent permitted by
Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended;
provided, however, that no such indemnification may be made if it would be in
violation of Section 17(h) of the Investment Company Act of 1940, as now enacted
or hereinafter amended, and any rules, regulations, or releases promulgated
thereunder.
The Registrant may indemnify its officers and directors and other "persons"
acting in an "official capacity" (as such terms are defined in Section 302A.521)
pursuant to a determination by the board of directors or shareholders of the
Registrant as set forth in Section 302A.521, by special legal counsel selected
by the board or a committee thereof for the purpose of making such a
determination, or by a Minnesota court upon application of the person seeking
indemnification. If a director is seeking indemnification for conduct in the
capacity of director or officer of the Registrant, then such director generally
may not be counted for the purposes of determining either the presence of a
quorum or such director's eligibility to be indemnified.
In any case, indemnification is proper only if the eligibility determining
body decides that the person seeking indemnification:
(a) has not received indemnification for the same conduct from any other
party or organization;
(b) acted in good faith;
(c) received no improper personal benefit;
(d) in the case of criminal proceedings, has no reasonable cause to
believe the conduct was unlawful;
(e) reasonably believed that the conduct was in the best interest of the
Registrant, or in certain contexts, was not opposed to the best
interest of the Registrant; and
(f) had not otherwise engaged in conduct which precludes indemnification
under either Minnesota or Federal law (including, without limitation,
conduct constituting willful misfeasance, bad faith, gross negligence,
or reckless disregard of duties as set forth in Section 17(h) and (i)
of the Investment Company Act of 1940).
ADVANCES. If a person is made or threatened to be made a party to a
proceeding, the person is entitled, upon written request to the Registrant, to
payment or reimbursement by the Registrant of reasonable expenses, including
attorneys fees and disbursements, incurred by the person in advance of the final
disposition of the proceeding, (a) upon receipt by the Registrant of a written
affirmation by the person of a good faith belief that the criteria for
indemnification set
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forth in Section 302A.521 have been satisfied and a written undertaking by the
person to repay all amounts so paid or reimbursed by the Registrant, if it is
ultimately determined that the criteria for indemnification have been satisfied,
and (b) after a determination that the facts then known to those making the
determination would not preclude indemnification under 302A.521. The written
undertaking required by clause (a) is an unlimited general obligation of the
person making it, but need not be secured and shall be accepted without
reference to financial ability to make the repayment.
UNDERTAKING. The Registrant undertakes that insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provision, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless, in the opinion of its counsel, the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
DESCRIBE ANY OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF A
SUBSTANTIAL NATURE THAT EACH INVESTMENT ADVISER, AND EACH DIRECTOR, OFFICER OR
PARTNER OF THE ADVISER, IS OR HAS BEEN ENGAGED WITHIN THE LAST TWO FISCAL YEARS
FOR HIS OR HER OWN ACCOUNT OR IN THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE,
PARTNER OR TRUSTEE.
Information on the business of the Adviser, its directors and officers is
described in the Statement of Additional Information. The following officers
are not listed in the Statement of Additional Information:
<TABLE>
<CAPTION>
Other Business/Employment
Name Position with Adviser During Past Two Years
- ---- --------------------- ---------------------
<S> <C> <C>
Michael D. O'Connor Qualified Plan Officer Qualified Plan Officer of Fortis
Benefits Insurance Company
David C. Greenzang Money Market Portfolio Debt securities manager with
Officer Fortis, Inc.
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS
(a) STATE THE NAME OF EACH INVESTMENT COMPANY (OTHER THAN THE FUND) FOR WHICH
EACH PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING THE FUND'S SECURITIES ALSO
ACTS AS A PRINCIPAL UNDERWRITER, DEPOSITOR, OR INVESTMENT ADVISER.
Investors also acts as the principal underwriter for: Fortis Equity
Portfolios, Inc., Fortis Income Portfolios, Inc., Fortis Money Portfolios, Inc.,
Fortis Tax Free Portfolios, Inc., Fortis Securities, Inc., Fortis Series Fund,
Inc., Fortis Worldwide Portfolios, Inc., Fortis Growth Fund,
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Inc., Variable Account C of Fortis Benefits Insurance Company and Variable
Account D of Fortis Benefits Insurance Company.
(b) PROVIDE THE INFORMATION REQUIRED BY THE FOLLOWING TABLE FOR EACH DIRECTOR,
OFFICER, OR PARTNER OF EACH PRINCIPAL UNDERWRITER NAMED IN RESPONSE TO ITEM 20.
In addition to those listed in the Statement of Additional Information with
respect to Investors, the following are also officers of Investors. The
principal business address of each individual is 500 Bielenberg Drive, Woodbury,
Minnesota 55125.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------ -------------------------- ---------------------
<S> <C> <C>
Carol M. Houghtby Director, Vice President & None
Treasurer
Roger W. Arnold Senior Vice President None
Peter M. Delehanty Senior Vice President None
John E. Hite Vice President & Secretary None
</TABLE>
(c) PROVIDE THE INFORMATION REQUIRED BY THE FOLLOWING TABLE FOR ALL COMMISSIONS
AND OTHER COMPENSATION RECEIVED, DIRECTLY OR INDIRECTLY, FROM THE FUND DURING
THE LAST FISCAL YEAR BY EACH PRINCIPAL UNDERWRITER WHO IS NOT AN AFFILIATED
PERSON OF THE FUND OR ANY AFFILIATED PERSON OF AN AFFILIATED PERSON.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
STATE THE NAME AND ADDRESS OF EACH PERSON MAINTAINING PHYSICAL POSSESSION
OF EACH ACCOUNT, BOOK, OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION
31(a) AND THE RULES UNDER THAT SECTION.
The physical possession of the accounts, books, and other documents
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and Rules 3la-1 to 3la-3 promulgated thereunder is maintained by the Registrant
at Fortis Advisers, Inc., 500 Bielenberg Drive, Woodbury, MN 55125.
ITEM 29. MANAGEMENT SERVICES
PROVIDE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED
SERVICE CONTRACT NOT DISCUSSED IN PART A OR B, DISCLOSING THE PARTIES TO THE
CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM FOR THE FUND FOR THE LAST THREE
FISCAL YEARS.
All contracts were discussed in Part A or B.
ITEM 30. UNDERTAKINGS
(a) IN INITIAL REGISTRATION STATEMENTS FILED UNDER THE SECURITIES ACT, PROVIDE
AN UNDERTAKING TO FILE AN AMENDMENT TO THE REGISTRATION STATEMENT WITH
CERTIFIED FINANCIAL STATEMENTS
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SHOWING THE INITIAL CAPITAL RECEIVED BEFORE ACCEPTING SUBSCRIPTIONS FROM
MORE THAN 25 PERSONS IF THE FUND INTENDS TO RAISE ITS INITIAL CAPITAL UNDER
SECTION 14(a)(3).
Not applicable.
(b) Each recipient of a prospectus of any series of the Registrant may request
the latest Annual Report of such series, and such Annual Report will be
furnished by the Registrant without charge.
(c) Registrant represents that it is relying on a No-Action Letter (IDS
Financial Services, June 20, 1986) and that it has complied with the
provisions of paragraphs (a) - (d) of such No-Action Letter.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement on Form N-1A
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woodbury and State of Minnesota on the
1st day of December 1998.
FORTIS ADVANTAGE PORTFOLIOS, INC.
(Registrant)
By /s/ Dean C. Kopperud
-----------------------------------
Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Dean C. Kopperud President (principal December 1, 1998
- --------------------------- executive officer)
Dean C. Kopperud
/s/ Tamara L. Fagely Treasurer (principal December 1, 1998
- --------------------------- financial and
Tamara L. Fagely accounting officer)
Richard D. Cutting* Director
Allen R. Freedman* Director
Robert M. Gavin* Director
Benjamin S. Jaffray* Director
Jean L. King* Director
Edward M. Mahoney* Director
Robb L. Prince* Director
Leonard J. Santow* Director
Noel S. Shadko Director
Joseph M. Wikler* Director
*By /s/ Dean C. Kopperud December 1, 1998
--------------------------------
Dean C. Kopperud, Attorney-in-Fact
(Pursuant to a Power of Attorney dated March 21, 1996)
<PAGE>
EXHIBIT (a).1
ARTICLES OF AMENDMENT
AMENDING AND RESTATING
ARTICLES OF INCORPORATION
OF
FORTIS ADVANTAGE PORTFOLIOS, INC.
1. The name of the corporation is Fortis Advantage Portfolios, Inc., a
Minnesota corporation.
2. The document entitled "Amended and Restated Articles of Incorporation of
Fortis Advantage Portfolios, Inc.," marked as Exhibit A attached hereto,
contains the full text of the amendment to the Articles of Incorporation of
the corporation.
3. The date of adoption of the amendment by the shareholders of the
corporation was August 23, 1994.
4. The amendment, among other things, permits Fortis Advantage Portfolios,
Inc. to issue multiple classes of shares and to increase the authorized
capital of the corporation.
5. The amendment amends and restates the Articles of Incorporation of the
corporation in their entirety, and the Amended and Restated Articles of
Incorporation attached hereto as Exhibit A supersede the original Articles
of Incorporation and all amendments to and restatements of them.
6. The amendment has been adopted pursuant to Chapter 302A of the Minnesota
Statutes.
IN WITNESS WHEREOF, the undersigned, Michael J. Radmer, the Secretary of
Fortis Advantage Portfolios, Inc., being duly authorized on behalf of Fortis
Advantage Portfolios, Inc., has executed this document this 8th day of
September, 1994.
/s/ Michael J. Radmer
--------------------------------
Michael J. Radmer
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FORTIS ADVANTAGE PORTFOLIOS, INC.
Pursuant to the provisions of Minnesota Statutes, Chapter 302A, the
following Articles of Incorporation are adopted, as amended and restated:
1. The name of this corporation is Fortis Advantage Portfolios, Inc.
2. This corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, this
corporation shall have specific power:
(a) To conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise acquire, and
to own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, choses in action, evidences of indebtedness, certificates
of indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of
the United States, or any state, commonwealth, territory or possession
thereof, or organized under the laws of any foreign country, or any state,
province, territory or possession thereof, or issued or to be issued by the
United States government or any agency or instrumentality thereof, options
on stock indexes, stock index and interest rate futures contracts and
options thereon, and other futures contracts and options thereon.
(c) In the above provisions of this Article 2, purposes shall also be
construed as powers and powers shall also be construed as purposes, and the
enumeration of
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specific purposes or powers shall not be construed to limit other
statements of purposes or to limit purposes or powers which the corporation
may otherwise have under applicable law, all of the same being separate and
cumulative, and all of the same may be carried on, promoted and pursued,
transacted or exercised in any place whatsoever.
3. This corporation shall have perpetual existence.
4. The location and post office address of the registered office in Minnesota
is 500 Bielenberg Drive, Woodbury, Minnesota 55125.
5. The total authorized number of shares of this corporation is
100,000,000,000, all of which shall be common shares of the par value of $.01
each. The corporation may issue and sell any of its shares in fractional
denominations to the same extent as its whole shares, and shares and fractional
denominations shall have, in proportion to the relative fractions represented
thereby, all the rights of whole shares, including, without limitation, the
right to vote, the right to receive dividends and distributions, and the right
to participate upon liquidation of the corporation.
(a) Of said common shares, 10,000,000,000 shares may be issued in the
series of common shares designated "Series A Common Shares," 10,000,000,000
shares may be issued in the series of common shares designated "Series B
Common Shares," 10,000,000,000 shares may be issued in the series of common
shares designated "Series C Common Shares," and 10,000,000,000 shares may
be issued in the series of common shares designated "Series D Common
Shares." The balance of 60,000,000,000 shares may be issued in such series
with such designations, preferences and relative, participating, optional
or other special rights, or qualifications, limitations or restrictions
thereof, as shall be stated or expressed in a resolution or resolutions
providing for the issue of any series of common shares as may be adopted
from time to time by the Board of Directors of this corporation pursuant to
the authority hereby vested in said Board of Directors. Each series of
common shares which the Board of Directors may establish, as provided
herein, may evidence, if the Board of Directors shall so determine by
resolution, an interest in a separate and distinct portion of the
corporation's assets, which shall take the form of a separate portfolio of
investment securities, cash and other assets. Authority to establish such
separate portfolios is hereby vested in the Board of Directors of this
corporation, and such separate portfolios may be established by the Board
of Directors without the authorization or approval of the holders of any
series of shares of this corporation.
(b) The shares of each series may be classified by the Board of
Directors in one or more classes with such relative rights and preferences
as shall be stated or expressed in a resolution or resolutions providing
for the issue of any such class or classes as may be adopted from time to
time by the Board of Directors of the corporation pursuant to the authority
hereby vested in the Board of Directors and Minnesota Statutes, Section
302A.401, Subd. 3, or any successor provision. The shares of each class
within a
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series may be subject to such charges and expenses (including by way of example,
but not by way of limitation, front-end and deferred sales charges, expenses
under Rule l2b-1 plans, administration plans, service plans, or other plans or
arrangements, however designated) as may be adopted from time to time by the
Board of Directors in accordance, to the extent applicable, with the Investment
Company Act of 1940, as amended (together with the rules and regulations
promulgated thereunder, the "1940 Act"), which charges and expenses may differ
from those applicable to another class within such series, and all of the
charges and expenses to which a class is subject shall be borne by such class
and shall be appropriately reflected (in the manner determined or approved by
the Board of Directors) in determining the net asset value and the amounts
payable with respect to dividends and distributions on, and redemptions or
liquidations of, such class. Subject to compliance with the requirements of the
1940 Act, the Board of Directors shall have the authority to provide that shires
of any class shall be convertible (automatically, optionally or otherwise) into
shares of one or more other classes in accordance with such requirements and
procedures as may be established by the Board of Directors.
6. The shareholders of each series (or class thereof) of common shares of this
corporation:
(a) shall not have the right to cumulate votes for the election of
directors; and
(b) shall have no preemptive right to subscribe to any issue of
shares of any class or series of this corporation now or hereafter created,
designated, or classified.
7. A description of the relative rights and preferences of all series of
shares (and classes thereof) is as follows, unless otherwise set forth in one or
more amendments to these Articles of Incorporation or in the resolutions
providing for the issue of such series (and classes thereof):
(a) On any matter submitted to a vote of shareholders of this
corporation, all common shares of this corporation then issued and
outstanding and entitled to vote, irrespective of series or class, shall be
voted in the aggregate and not by series or class, except: (i) when
otherwise required by Minnesota Statutes, Chapter 302A, in which case
shares will be voted by individual series or class, as applicable; (ii)
when otherwise required by the 1940 Act, as amended, or the rules adopted
thereunder, in which case shares shall be voted by individual series or
class, as applicable; and (iii) when the matter does not affect the
interests of a particular series or class, in which case only shareholders
of the series or class affected shall be entitled to vote thereon and shall
vote by individual series or class, as applicable.
(b) All consideration received by this corporation for the issue or
sale of shares of any series, together with all assets, income, earnings,
profits and proceeds derived therefrom (including all proceeds derived from
the sale, exchange or liquidation thereof and, if applicable, any assets
derived from any reinvestment of such proceeds in whatever form the same
may be) shall become part of the assets of the portfolio to which the
shares of that series relate, for all purposes, subject only to the rights
of creditors, and
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shall be so treated upon the books of account of this corporation. Such
assets, income, earnings, profits and proceeds (including any proceeds
derived from the sale, exchange or liquidation thereof and, if applicable,
any assets derived from any reinvestment of such proceeds in whatever form
the same may be) are herein referred to as "assets belonging to" a series
of the common shares of this corporation.
(c) Assets of this corporation not belonging to any particular series
are referred to herein as "General Assets." General Assets shall be
allocated to each series in proportion to the respective net assets
belonging to such series. The determination of the Board of Directors
shall be conclusive as to the amount of assets, as to the characterization
of assets as those belonging to a series or as General Assets, and as to
the allocation of General Assets.
(d) The assets belonging to a particular series of common shares
shall be charged with the liabilities incurred specifically on behalf of
such series of common shares ("Special Liabilities"). Such assets shall
also be charged with a share of the general liabilities of this corporation
("General Liabilities") in proportion to the respective net assets
belonging to such series of common shares. The determination of the Board
of Directors shall be conclusive as to the amount of liabilities, including
accrued expenses and reserves, as to the characterization of any liability
as a Special Liability or General Liability, and as to the allocation of
General Liabilities among series.
(e) The Board of Directors may, to the extent permitted by Minnesota
Statutes, Chapter 302A or any successor provision thereto, and in the
manner provided herein, declare and pay dividends or distributions in
shares or cash on any or all series (or classes thereof) of common shares,
the amount of such dividends and the payment thereof being wholly in the
discretion of the Board of Directors. Dividends or distributions on shares
of any series of common shares shall be paid only out of the earnings,
surplus, or other lawfully available assets belonging to such series
(including, for this purpose, any General Assets allocated to such series).
(f) In the event of the liquidation or dissolution of this
corporation, holders of the shares of any series shall have priority over
the holders of any other series with respect to, and shall be entitled to
receive, out of the assets of this corporation available for distribution
to holders of shares, the assets belonging to such series of common shares
and the General Assets allocated to such series of common shares, and the
assets so distributable to the holders of the shares of any series shall be
distributed among such holders in proportion to the number of shares of
such series held by each such shareholder and recorded on the books of this
corporation, except that, in the case of a series with more than one class
of shares, such distributions shall be adjusted to reflect appropriately
any charges and expenses borne by each individual class.
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(g) With the approval of a majority of the shareholders of each of
the affected series of common shares present in person or by proxy at a
meeting called for the following purpose (provided that a quorum of the
issued and outstanding shares of the affected series is present at such
meeting in person or by proxy), the Board of Directors may transfer the
assets of any series to any other series. Upon such a transfer, the
corporation shall issue common shares representing interests in the series
to which the assets were transferred in exchange for all common shares
representing interests in the series from which the assets were
transferred. Such shares shall be exchanged at their respective net asset
values.
8. The following additional provisions, when consistent with law, are hereby
established for the management of the business, for the conduct of the affairs
of the corporation, and for the purpose of describing certain specific powers of
the corporation and of its directors and shareholders.
(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(1) to make, adopt, alter, amend and repeal Bylaws of the
corporation unless reserved to the shareholders by the Bylaws or by
the laws of the State of Minnesota, subject to the power of the
shareholders to change or repeal such Bylaws;
(2) to distribute, in its discretion, for any fiscal year (in
the year or in the next fiscal year) as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to
enable each series to qualify under the Internal Revenue Code as a
regulated investment company to avoid any liability for federal income
tax in respect of such year. Any distribution or dividend paid to
shareholders from any capital source shall be accompanied by a written
statement showing the source or sources of such payment;
(3) to authorize, subject to such vote, consent, or approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the execution and performance
by the corporation of any agreement or agreements with any person,
corporation, association, company, trust, partnership (limited or
general) or other organization whereby, subject to the supervision and
control of the Board of Directors, any such other person, corporation,
association, company, trust, partnership (limited or general), or
other organization shall render managerial, investment advisory,
distribution, transfer agent, accounting and/or other services to the
corporation (including, if deemed advisable, the management or
supervision of the investment portfolios of the
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corporation) upon such terms and conditions as may be provided in such
agreement or agreements;
(4) to authorize any agreement of the character described in
subparagraph (3) of this paragraph (a) with any person, corporation,
association, company, trust, partnership (limited or general) or other
organization, although one or more of the members of the Board of
Directors or officers of the corporation may be the other party to any
such agreement or an officer, director, employee, shareholder, or
member of such other party, and no such agreement shall be invalidated
or rendered voidable by reason of the existence of any such
relationship;
(5) to allot and authorize the issuance of the authorized but
unissued shares of any series, or class thereof, of this corporation;
(6) to accept or reject subscriptions for shares of any series,
or class thereof, made after incorporation;
(7) to fix the terms, conditions and provisions of and authorize
the issuance of options to purchase or subscribe for shares of any
series, or class thereof, including the option price or prices at
which shires may be purchased or subscribed for, and
(8) to determine what constitutes net income, total assets and
the net asset value of the shires of each series (or class thereof) of
the corporation. Any such determination made in good faith shall be
final and conclusive and shall be binding upon the corporation and all
holders (past, present, and future) of shares of each series (and
class thereof).
(b) Except as provided in the next sentence of this paragraph (b),
shares of any series, or class thereof, which are redeemed, exchanged, or
otherwise acquired by this corporation shall return to the status of
authorized and unissued shares of such series or class. Upon the
redemption, exchange, or other acquisition by the corporation of all
outstanding shares of any series (or class thereof), such shares shall
return to the status of authorized and unissued shares without designation
as to series (if no shares of the series remain outstanding) or with the
same designation as to series, but no designation as to class within such
series (if shares of such series remain outstanding, but no shares of such
class thereof remain outstanding), and all provisions of these Articles of
Incorporation relating to such series, or class thereof (including, without
limitation, any statement establishing or fixing the rights and preferences
of such series, or class thereof), shall cease to be of further effect and
shall cease to be a part of these Articles. Upon the occurrence of such
events, the Board of Directors of the corporation shall have the power,
pursuant to Minnesota Statutes Section 302A.135, Subdivision 5 or any
successor
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provision and without shareholder action, to cause restated articles of
incorporation of the corporation to be prepared and filed with the
Secretary of State of the State of Minnesota which reflect such removal
from these Articles of all such provisions relating to such series, or
class thereof.
(c) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties, shall be final and
conclusive and shall be binding upon the corporation and every holder of
shares of its capital stock: namely, the amount of the assets, obligations,
liabilities and expenses of each series (or class thereof) of the
corporation; the amount of the net income of each series (or class thereof)
of the corporation from dividends and interest for any period and the
amount of assets at any time legally available for the payment of dividends
in each series (or class thereof); the amount of paid-in surplus, other
surplus, annual or other net profits, or net assets in excess of capital,
undivided profits, or excess of profits over losses on sales of securities
of each series (or class thereof); the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or charges
and the propriety thereof (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been paid
or discharged); the market value, or any sale, bid or asked price to be
applied in determining the market value, of any security owned or held by
or in each series (or class thereof) of the corporation; the fair value of
any other asset owned by or in each series of the corporation; the number
of shares of each series (or class thereof) of the corporation issued or
issuable; any matter relating to the acquisition, holding and disposition
of securities and other assets by each series (or class thereof) of the
corporation; and any question as to whether any transaction constitutes a
purchase of securities on margin, a short sale of securities, or an
underwriting of the sale of, or participation in any underwriting or
selling group in connection, with the public distribution of any
securities.
(d) The Board of Directors or the shareholders of the corporation may
adopt, amend, affirm or reject investment policies and restrictions upon
investment or the use of assets of each series of the corporation and may
designate some such policies as fundamental and not subject to change other
than by a vote of a majority of the outstanding voting securities, as such
phrase is defined in the Investment Company Act of 1940, of the affected
series of the corporation.
(e) The corporation shall indemnify such persons for such expenses
and liabilities, in such manner, under such circumstances, and to the full
extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided, however, that no such
indemnification may be made if it would be in violation of Section 17(h) of
the Investment Company Act of 1940, as now enacted or hereafter amended.
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(f) Any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken without
a meeting if done in writing and signed by a majority of the directors or
committee members.
(g) To the fullest extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereafter be amended (except as
prohibited by the Investment Company Act of 1940, as the same exists or may
hereafter be amended), a director of this corporation shall not be liable
to this corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director.
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EXHIBIT (a).2
CERTIFICATE OF DESIGNATION
OF
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
OF
FORTIS ADVANTAGE PORTFOLIOS, INC.
The undersigned duly elected Secretary of Fortis Advantage Portfolios,
Inc., a Minnesota corporation (the "Fund"), hereby certifies that the following
is a true, complete and correct copy of resolutions duly adopted by a majority
of the directors of the Board of Directors of the Fund on June 28, 1994, and
further certifies that the Amended and Restated Articles referred to in such
resolutions were approved by shareholders of the Fund on August 23, 1994.
APPROVAL OF CREATION AND DESIGNATION OF
CLASS A, CLASS B, CLASS C AND CLASS H SHARES
WHEREAS, shareholders of the Fund are being asked to approve Amended and
Restated Articles of Incorporation (the "Articles") to allow the Fund to issue
Multiple Classes of shares and to increase its authorized capital; and
WHEREAS, following the approval of such amended Articles the total authorized
number of shares of the Fund will be 100,000,000,000 (one hundred billion); and
WHEREAS, as amended the Articles will provide that each of the four currently
outstanding series will have 10,000,000,000 (ten billion) shares of designated
shares; and
WHEREAS, the amended Articles set forth that the authorized shares may be issued
in such Classes and with such relative rights and preferences as shall be stated
or expressed in a resolution or resolutions providing for the issue of any such
Class or Classes of common shares as may be adopted from time to time by the
Board of Directors;
NOW, THEREFORE, BE IT RESOLVED, that of the to be authorized common shares of
the Fund, for each of the four currently outstanding series, 1,000,000,000 (one
billion) are hereby designated as Class A Common Shares, 1,000,000,000 (one
billion) are hereby designated as Class B Common Shares, 1,000,000,000 (one
billion) are hereby designated as Class C Common Shares and 1,000,000,000 (one
billion) are hereby designated as Class H Common Shares; and the shares of the
Fund which are outstanding on November 13, 1994 are hereby redesignated as Class
A Common Shares of the currently outstanding series of the Fund.
FURTHER RESOLVED, that the Class A, Class B, Class C and Class H Common Shares
designated by these resolutions shall have the relative rights and preferences
set forth in the amended Articles of the Fund. As provided in Article 5(b) of
such amended Articles, any Class of Common Shares designated by these
resolutions may be subject to such charges and expenses (including by way of
example, but not by way of limitation, such front-end and deferred sales charges
as may be permitted under the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules of the National Association of Securities Dealers,
Inc., and expenses under Rule 12b-1 plans, administration plans, service plans,
or other plans or arrangements, however designated) as may be adopted from time
to time by the Board of Directors of the Fund in accordance, to the extent
applicable, with the 1940 Act, which charges and expenses may differ from those
applicable to another Class, and all of the charges and expenses to which a
Class is subject shall be borne by such Class and shall be appropriately
reflected in determining the net asset value and the amounts payable with
respect to dividends and distributions on, and redemptions or liquidations of,
such Class.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of Fortis Advantage Portfolios, Inc. this 31st day of
October 1994.
/s/Michael J. Radmer
-------------------------------------
Michael J. Radmer, Secretary
<PAGE>
EXHIBIT (a).3
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FORTIS ADVANTAGE PORTFOLIOS, INC.
The undersigned officer of Fortis Advantage Portfolios, Inc. (the
"Corporation"), a corporation subject to the provisions of Chapter 302A of the
Minnesota Statutes, hereby certifies that the Corporation's Board of Directors
and shareholders, at meetings held December 7, 1995 and February 9, 1996,
respectively, adopted the resolutions hereinafter set forth; and such officer
further certifies that the amendments to the Corporation's Amended and Restated
Articles of Incorporation set forth in such resolutions were adopted pursuant to
said Chapter 302A.
WHEREAS, the Corporation is registered as an open end management investment
company (i.e., a mutual fund) under the Investment Company Act of 1940 and
offers its shares to the public in several series, each of which represents
a separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best interests of the holders of the
Series D shares of the Corporation (also known as the "Government Total
Return Portfolio") that the assets belonging to such series be sold to
Fortis U.S. Government Securities Fund, a series of Fortis Income
Portfolios, Inc., a Minnesota corporation and an open end management
investment company registered under the Investment Company Act of 1940, in
exchange for shares of Fortis U.S. Government Securities Fund; and
WHEREAS, the Corporation wishes to provide for the pro rata distribution of
such shares of Fortis U.S. Government Securities Fund received by it to
holders of shares of the Corporation's Government Total Return Portfolio
and the simultaneous cancellation and retirement of the outstanding shares
of the Corporation's Government Total Return Portfolio; and
WHEREAS, the Corporation and Fortis Income Portfolios, Inc. have entered
into an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in order
to bind all holders of shares of the Corporation's Government Total Return
Portfolio to the foregoing transactions, and in particular to bind such
holders to the cancellation and retirement of the outstanding shares of the
Corporation's Government Total Return Portfolio, it is necessary to adopt
an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
<PAGE>
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and Restated
Articles of Incorporation be, and the same hereby are, amended to add the
following Article 5A immediately following Article 5 thereof:
5A. (a) For purposes of this Article 5A, the following terms shall have
the following meanings:
"CORPORATION" means this corporation.
"FORTIS INCOME" means Fortis Income Portfolios, Inc., a Minnesota
corporation.
"ACQUIRED FUND" means the Corporation's Government Total Return Portfolio,
which is represented by the Corporation's Series D shares.
"CLASS A ACQUIRED FUND SHARES" means the Corporation's Series D, Class A
shares.
"CLASS B ACQUIRED FUND SHARES" means the Corporation's Series D, Class B
shares.
"CLASS C ACQUIRED FUND SHARES" means the Corporation's Series D, Class C
shares.
"CLASS H ACQUIRED FUND SHARES" means the Corporation's Series D, Class H
shares.
"ACQUIRING FUND" means Fortis Income's U.S. Government Securities Fund,
which is represented by Fortis Income's Series A shares.
"CLASS A ACQUIRING FUND SHARES" means Fortis Income's Series A, Class A
shares.
"CLASS B ACQUIRING FUND SHARES" means Fortis Income's Series A, Class B
shares.
"CLASS C ACQUIRING FUND SHARES" means Fortis Income's Series A, Class C
shares.
"CLASS H ACQUIRING FUND SHARES" means Fortis Income's Series A, Class H
shares.
"EFFECTIVE TIME" means 4:00 p.m. Eastern time on the date upon which these
Articles of Amendment are filed with the Minnesota Secretary of State.
(b) At the Effective Time, the assets belonging to the Acquired Fund, the
Special Liabilities associated with such assets, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Class A, Class B, Class C and Class H
Acquiring Fund shares, all pursuant to the Agreement and Plan of Reorganization.
For purposes of the foregoing, the terms "assets belonging to," "Special
Liabilities," "General Assets" and "General Liabilities" have the meanings
assigned to them in Article 7(b), (c) and (d) of the Corporation's Amended and
Restated Articles of Incorporation.
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<PAGE>
(c) The numbers of Class A, Class B, Class C and Class H Acquiring Fund
shares to be received by the Acquired Fund and distributed by it to the
respective Acquired Fund shareholders shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and the
Acquiring Fund's Class A shares, Class B shares, Class C shares and Class H
shares shall be computed as of the Effective Time using the valuation
procedures set forth in their respective articles of incorporation and
bylaws, their respective then-current Prospectuses and Statements of
Additional Information, and as may be required by the Investment Company
Act of 1940, as amended (the "1940 ACT").
(ii) The total number of Class A Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and
liabilities of the Acquired Fund which are allocable to the Acquired Fund's
Class A shares shall be determined as of the Effective Time by multiplying
the number of Class A Acquired Fund shares outstanding immediately prior to
the Effective Time times a fraction, the numerator of which is the net
asset value per share of the Acquired Fund's Class A shares immediately
prior to the Effective Time, and the denominator of which is the net asset
value per share of the Acquiring Fund's Class A shares immediately prior to
the Effective Time, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and
liabilities of the Acquired Fund which are allocable to the Acquired Fund's
Class B shares shall be determined as of the Effective Time by multiplying
the number of Class B Acquired Fund shares outstanding immediately prior to
the Effective Time times a fraction, the numerator of which is the net
asset value per share of the Acquired Fund's Class B shares immediately
prior to the Effective Time, and the denominator of which is the net asset
value per share of the Acquiring Fund's Class B shares immediately prior to
the Effective Time, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and
liabilities of the Acquired Fund which are allocable to the Acquired Fund's
Class C shares shall be determined as of the Effective Time by multiplying
the number of Class C Acquired Fund shares outstanding immediately prior to
the Effective Time times a fraction, the numerator of which is the net
asset value per share of the Acquired Fund's Class C shares immediately
prior to the Effective Time, and the denominator of which is the net asset
value per share of the Acquiring Fund's Class C shares immediately prior to
the Effective Time, each as determined pursuant to (i) above.
(v) The total number of Class H Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and
liabilities of the Acquired Fund
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which are allocable to the Acquired Fund's Class H shares shall be
determined as of the Effective Time by multiplying the number of Class H
Acquired Fund shares outstanding immediately prior to the Effective Time
times a fraction, the numerator of which is the net asset value per share
of the Acquired Fund's Class H shares immediately prior to the Effective
Time, and the denominator of which is the net asset value per share of the
Acquiring Fund's Class H shares immediately prior to the Effective Time,
each as determined pursuant to (i) above.
(vi) Immediately after the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes in
liquidation of the Acquired Fund pro rata within classes (based upon the
ratio that the number of Acquired Fund shares of the respective classes
owned by each Acquired Fund shareholder immediately prior to the Effective
Time bears to the total number of issued and outstanding Acquired Fund
shares of such classes immediately prior to the Effective Time) the full
and fractional Acquiring Fund shares of the respective classes received by
the Acquired Fund pursuant to (ii) through (v) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, immediately after the
Effective Time, Class A Acquiring Fund Shares with an aggregate net asset
value equal to the aggregate net asset value of the Class A Acquired Fund
Shares owned by such Acquired Fund shareholder immediately prior to the
Effective Time; each Class B Acquired Fund shareholder shall receive,
immediately after the Effective Time, Class B Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class B Acquired Fund Shares owned by such Acquired Fund shareholder
immediately prior to the Effective Time; each Class C Acquired Fund
shareholder shall receive, immediately after the Effective Time, Class C
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class C Acquired Fund Shares owned by such
Acquired Fund shareholder immediately prior to the Effective Time, and each
Class H Acquired Fund shareholder shall receive, immediately after the
Effective Time, Class H Acquiring Fund Shares with an aggregate net asset
value equal to the aggregate net asset value of the Class H Acquired Fund
Shares owned by such Acquired Fund shareholder immediately prior to the
Effective Time.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by the
issuance of such Acquiring Fund shares to open accounts on the share records of
the Acquiring Fund in the names of the Acquired Fund shareholders representing
the numbers and classes of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired. From and after the Effective Time, share certificates
formerly representing Acquired Fund shares shall represent the numbers and
classes of Acquiring Fund shares determined in accordance with the foregoing
provisions.
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<PAGE>
(e) From and after the Effective Time, the Acquired Fund shares cancelled
and retired pursuant to paragraph (d) above shall have the status of authorized
and unissued Series D shares of the Corporation, without designation as to
class.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed
these Articles of Amendment behalf of the Corporation on February 29, 1996.
FORTIS ADVANTAGE PORTFOLIOS, INC.
By /s/ SCOTT R. PLUMMER
--------------------------
Its Assistant Secretary
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<PAGE>
EXHIBIT (b)
As amended and restated
effective January 31, 1992
AMENDED AND RESTATED
BYLAWS
OF
FORTIS ADVANTAGE PORTFOLIOS, INC.
(formerly AMEV Advantage Portfolios, Inc.)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is Fortis Advantage
Portfolios, Inc. The Articles of Incorporation of the corporation have
designated the following series of Common Shares: Series A, Series B, Series C
and Series D. The names of the series represented by Series A Common Shares,
Series B Common Shares, Series C Common Shares and Series D Common Shares shall
be "Capital Appreciation Portfolio," "High Yield Portfolio," Asset Allocation
Portfolio," and "Government Total Return Portfolio," respectively.
Section 1.02. REGISTERED OFFICE. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03. OTHER OFFICES. The corporation may have such other
offices and places of business, within or without the State of Minnesota, as the
directors shall, from time to time, determine.
Section 1.04. CORPORATE SEAL. The corporate seal shall be circular
in form and shall have inscribed thereon the name of the corporation and the
word "Minnesota" and the words "Corporate Seal." The form of the seal shall be
subject to alteration by the Board of Directors and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or director of the corporation shall have authority to
affix the corporate seal of the corporation to any document requiring the same.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETINGS. Except as provided
otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may
be held at any place, within or without the State of Minnesota, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota.
<PAGE>
The directors shall designate the time of day for each meeting and, in the
absence of such designation, every meeting of shareholders shall be held at ten
o'clock a.m.
Section 2.02. REGULAR MEETINGS. Annual meetings of shareholders are
not required by these Bylaws. Regular meetings shall be held only with such
frequency and at such times and places as provided in and required by law.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, and two or more directors, or by one or more
shareholders holding ten percent (10%) or more of the shares entitled to vote on
the matters to be presented to the meeting, except that a special meeting for
the purpose of considering any action directly or indirectly to facilitate or
effect a business combination, including any action to change or otherwise
affect the composition of the Board of Directors for that purpose, must be
called by 25% of the voting power of all shares entitled to vote.
Section 2.04. QUORUM; ADJOURNED MEETINGS. The holders of ten percent
(10%) of the shares outstanding and entitled to vote at the meeting shall
constitute a quorum for the transaction of business at any regular or special
shareholders' meeting. In case a quorum shall not be present at a meeting,
those present in person or by proxy shall adjourn to such day as they shall, by
majority vote, agree upon without further notice other than by announcement at
the meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present, the shareholders may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation. Upon the demand of any shareholder,
the vote upon any question before the meeting shall be by written ballot. Except
as otherwise specifically provided by these Bylaws or as required by provisions
of the Investment Company Act of 1940 or other applicable laws, all questions
shall be decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote. If the matter(s) to be
presented at a regular or special meeting relates only to a particular portfolio
or portfolios of the corporation, then only the shareholders of the series of
stock issued by such portfolio or portfolios are entitled to vote on such
matter(s).
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall
exist only if the instrument authorizing such proxy to act shall have been
executed in writing by the shareholder himself or by his attorney thereunto duly
authorized in writing. No proxy shall be voted after three years from its date
unless it provides for a longer period.
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<PAGE>
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a
time, not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the corporation after any record date so
fixed. If the Board of Directors fails to fix a record date for determination
of the shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.
Section 2.08. NOTICE OF MEETINGS. The Secretary or an Assistant
Secretary shall mail to each shareholder, shown by the books of the corporation
to be a holder of record of voting shares, at his address as shown by the books
of the corporation, a notice setting out the time and date and place of each
regular meeting and each special meeting, which notice shall be mailed at least
ten (10) days prior thereto; except that notice of a meeting at which an
agreement of merger or consolidation is to be considered shall be mailed to all
shareholders of record, whether entitled to vote or not, at least two (2) weeks
prior thereto; and except that notice of a meeting at which a proposal to
dispose of all, or substantially all, of the property and assets of the
corporation is to be considered shall be mailed to all shareholders of record,
whether entitled to vote or not, at least ten (10) days prior thereto; and
except that notice of a meeting at which a proposal to dissolve the corporation
or to amend the Articles of Incorporation is to be considered shall be mailed to
all shareholders of record, whether entitled to vote or not, at least ten (10)
days prior thereto. Every notice of any special meeting shall state the purpose
or purposes for which the meeting has been called, pursuant to Section 2.03, and
the business transacted at all special meetings shall be confined to the purpose
stated in the call.
Section 2.09. WAIVER OF NOTICE. Notice of any regular or special
meeting may be waived either before, at or after such meeting in writing signed
by each shareholder or representative thereof entitled to vote the shares so
represented.
ARTICLE III
DIRECTORS
Section 3.01. NUMBER, QUALIFICATIONS AND TERM OF OFFICE. Until the
first meeting of shareholders, or until the directors increase their number by
resolution, the number of directors shall be the number named in the Articles of
Incorporation. Thereafter, the number of directors shall be established by
resolution of the shareholders (subject to the authority of the Board of
Directors to increase the number of directors as permitted by law), but shall
not be less than the lesser of (i) the number of shareholders of record and
beneficially, or (ii) three (3). In the absence of such resolution, the number
of directors shall be the number last fixed by the shareholders or the Board of
Directors, or the Articles of Incorporation. Directors may but need not be
shareholders. Each of the directors shall hold office until the regular meeting
of shareholders next held after his election and until his successor shall have
been elected and shall qualify, or until he shall resign, or shall have been
removed as hereinafter provided.
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<PAGE>
Section 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in
Section 3.11 and 3.12 hereof, the directors shall be elected at all regular
shareholders' meeting. Directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall contain mention of such
purpose. At each shareholders' meeting for the election of directors, the
directors shall be elected by a plurality of the votes validly cast at such
election. The shareholders of each series of stock of the corporation shall be
entitled to vote for directors and shall have equal voting power.
Section 3.03. GENERAL POWERS.
(a) The property, affairs and business of the corporation shall be
managed by the Board of Directors, which may exercise all the powers of the
corporation except those powers vested solely in the shareholders of the
corporation by statute, the Articles of Incorporation, or these Bylaws, as
amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his successor shall not have been duly elected
or appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.
Section 3.04. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
each series of stock of the corporation according to their respective rights and
interests in the investment portfolio of the corporation issuing such series of
stock.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than
(i) each investment portfolio's accumulated and accrued
undistributed net income (determined in accordance with generally
accepted accounting practice and the rules and regulations of the
Securities and Exchange Commission then in effect) and not including
profits or losses realized upon the sale of securities or other
properties; or
(ii) each investment portfolio's net income so determined for the
current or preceding fiscal year.
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<PAGE>
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Commission may
prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of Directors may at any time declare and distribute pro rata among the
shareholders of each series of stock a "stock dividend" out of each portfolio's
authorized but unissued shares of stock, including any shares previously
purchased by a portfolio of the corporation.
Section 3.05. ANNUAL MEETING. The Board of Directors shall meet
annually at the registered office of the corporation, or at such other place
within or without the State of Minnesota as may be designated by the Board of
Directors, for the purpose of electing the officers of the corporation and for
the transaction of such other business as shall come before the meeting.
Section 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Minnesota as may be fixed by resolution adopted by a
majority of the whole Board of Directors.
Section 3.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.
Section 3.08. NOTICE OF MEETINGS. Unless otherwise required by
Statute, no notice need be given of any annual or regular meeting of the Board
of Directors. Notice of each special meeting of the Board of Directors shall be
given by the Secretary who shall give at least twenty-four (24) hours' notice
thereof to each director by mail, telephone, telegram or in person.
Section 3.09. WAIVER OF NOTICE. Notice of any meeting of the Board
of Directors may be waived either before, at, or after such meeting in writing
signed by each director. A director, by his attendance and participation in the
action taken at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting.
Section 3.10. QUORUM. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business except that, when a
vacancy or vacancies exist, a majority of the remaining directors (provided such
majority consists of not less than the lesser of (i) the number of directors
required by Section 3.02, or (ii) two (2) directors) shall constitute a quorum.
Section 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in
the Board of Directors of this corporation occurring by reason of death,
resignation or increase in the number of directors by the shareholders to the
minimum number required by Section 3.01 or by the Board pursuant to Section 301,
shall be filled for the unexpired term by a majority of the
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remaining directors of the Board although less than a quorum; newly created
directorships resulting from an increase in the authorized number of directors
by action of the Board of Directors as permitted by Section 301 may be filled by
a two-thirds (2/3) vote of the directors serving at the time of such increase;
and each person so elected shall be a director until his successor is elected by
the shareholders, who may make such election at their next regular meeting or at
any meeting duly called for that purpose; provided, however, that no vacancy can
be filled as provided above if prohibited by the provisions of the Investment
Company Act of 1940.
Section 3.12. REMOVAL. Removal of directors shall be governed by the
provisions of Section 302A.233 of the Minnesota Statutes or other applicable
provisions of the Minnesota Statutes or successors thereto.
Section 3.13. EXECUTIVE COMMITTEE. The Board of Directors, by
unanimous affirmative action of the entire Board, may establish an Executive
Committee consisting of two (2) or more directors. Such Committee may meet at
stated times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such Committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation and, generally, perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such Committee authority to exercise all the
powers of the Board of Directors, except the power to amend the Bylaws and to
take action on matters reserved to the entire Board by the Investment Company
Act of 1940, while the Board of Directors is not in session. Vacancies in the
membership of the Committee shall be filled by the Board of Directors at a
regular meeting or at a special meeting called for that purpose.
Section 3.14. OTHER COMMITTEES. The Board of Directors may establish
other committees from time to time making such regulations as it deems advisable
with respect to the membership, authority and procedures of such committees.
Section 3.15. WRITTEN ACTION. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by a majority of
the directors or committee members.
Section 3.16. COMPENSATION. Directors who are not salaried officers
of this corporation shall receive such fixed sum per meeting attended or such
fixed annual sum as shall be determined, from time to time, by resolution of the
Board of Directors. All directors may receive their expenses, if any, of
attendance at meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving this corporation in any other capacity and receiving proper compensation
therefor.
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ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist
of a Chairman of the Board (if one is elected by the Board), the President, one
or more Vice Presidents (if desired by the Board), a Secretary and one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, and
such other officers and agents as may, from time to time, be elected by the
Board of Directors.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such other
officers as may be deemed advisable. Such officers shall hold office until the
next annual meeting of the directors or until their successors are elected and
qualified. The President and all other officers who may be directors shall
continue to hold office until the election and qualification of their
successors, notwithstanding an earlier termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his office at any
time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his office by a majority of the whole Board of Directors, with or without cause.
Such removal, however, shall be without prejudice to the contract rights of the
person so removed. If there be a vacancy among the officers of the corporation
by reason of death, resignation or otherwise, such vacancy shall be filled for
the unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one is elected, shall preside at all meetings of the shareholders and directors
and shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he shall preside at all meetings of the shareholders and
directors. He shall be the chief executive officer of the corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. He shall be ex officio a member of all standing committees. He may
execute and deliver, in the name of the corporation, any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
corporation and, in general, shall perform all duties usually incident to the
office of President. He shall have such other duties as may, from time to time,
be prescribed by the Board of Directors.
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Section 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of shareholders and directors. He shall
keep the seal of the corporation and shall affix the same to any instrument
requiring it and may, when necessary, attest the seal by his signature. He
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall keep accurate accounts
of all moneys of the corporation received or disbursed. He shall deposit all
moneys, drafts and checks in the name of, and to the credit of, the corporation
in such banks and depositories as a majority of the whole Board of Directors
shall, from time to time, designate. He shall have power to endorse, for
deposit, all notes, checks and drafts received by the corporation. He shall
disburse the funds of the corporation, as ordered by the Board of Directors,
making proper vouchers therefor. He shall render to the President and the
directors, whenever required, an account of all his transactions as Treasurer
and of the financial condition of the corporation, and shall perform such other
duties as may, from time to time, be prescribed by the Board of Directors or by
the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary shall have
power to perform all the duties of the Secretary and, when so acting, shall have
all the powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.12. COMPENSATION. The officers of this corporation shall
receive such compensation for their services as may be determined, from time to
time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by
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the Investment Company Act of 1940 and the rules and regulations of the
Securities and Exchange Commission) to the corporation in such sum and with such
surety or sureties as the Board of Directors may determine, conditioned upon the
faithful performance of his duties to the corporation, including responsibility
for negligence and for the accounting of any of the corporation's property,
funds or securities that may come into his hands. In any such case, a new bond
of like character shall be given at least every six years, so that the date of
the new bond shall not be more than six years subsequent to the date of the bond
immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) Every owner of shares of the corporation shall be entitled to a
certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the corporation owned by him. The
certificates for such shares shall be numbered in the order in which they shall
be issued and shall be signed, in the name of the corporation, by the President
or a Vice President and by the Treasurer, or by such officers as the Board of
Directors may designate. Such signatures may be facsimile if authorized by the
Board of Directors. Every certificate surrendered to the corporation for
exchange or transfer shall be cancelled, and no new certificate or certificates
shall be issued in exchange for any existing certificate until such existing
certificate shall have been so cancelled, except in cases provided for in
Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued and
delivered by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is
authorized to cause to be issued shares of the corporation up to the full amount
authorized by the Articles of Incorporation in such series and in such amounts
as may be determined by the Board of Directors and as may be permitted by law.
No shares shall be allotted except in consideration of cash or of an amount
transferred from surplus to stated capital upon a share dividend. At the time
of such allotment of shares, the Board of Directors making such allotments shall
state, by resolution, their determination of the fair value to the corporation
in monetary terms of any consideration other than cash for which shares are
allotted. The amount of consideration to be received in cash, or otherwise,
shall not be less than the par value of the shares so allotted. No shares of
stock issued by the corporation shall be issued, sold, or exchanged by or on
behalf of the corporation for any amount less than the net asset value per share
of the shares outstanding as determined pursuant to Article XI hereunder.
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Section 5.03. REDEMPTION OF SHARES. Upon the demand of any
shareholder this corporation shall redeem any share of stock issued by it held
and owned by such shareholder at the net asset value thereof as determined
pursuant to Article XI hereunder. The Board of Directors may suspend the right
of redemption or postpone the date of payment during any period when: (a)
trading on the New York Stock Exchange is restricted or such Exchange is closed
for other than weekends or holidays; (b) the Securities and Exchange Commission
has by order permitted such suspension; or (c) an emergency as defined by rules
of the Securities and Exchange Commission exists, making disposal of portfolio
securities or valuation of net assets of the corporation not reasonably
practicable.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares or a duly executed assignment covering shares held
in unissued form. The corporation may treat, as the absolute owner of shares of
the corporation, the person or persons in whose name shares are registered on
the books of the corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.
Section 5.06. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.07. TRANSFER REGULATIONS. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
the shares of stock of the corporation.
Section 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES.
The holder of any stock of the corporation shall immediately notify the
corporation of any loss, theft, destruction or mutilation of any certificate
therefor, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock upon the surrender of the
mutilated certificate or in case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction, after
the owner of the lost, stolen or destroyed certificate, or his legal
representatives, gives to the corporation and to such registrar or transfer
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agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft, or destruction of any such certificate.
Section 5.09. REDEMPTION OF SMALL SHAREHOLDER ACCOUNTS. If the value
of a shareholder's investments in the corporation becomes less than $250 (or
such other amount as may be determined from time to time by the Board of
Directors) as a result of a redemption or transfer of shares, the corporation's
officers are authorized, in their discretion, on behalf of the corporation, to
redeem such shareholder's entire interest and remit such amount, provided that
such a redemption will only be effected by the corporation following (a) the
mailing by the corporation to such shareholder of a "notice of intention to
redeem," and (b) the passage of such time period as may be determined by the
Board of Directors, during which time the shareholder will have the opportunity
to make an additional investment in the corporation to increase the value of
such shareholder's account to at least such minimum amount.
ARTICLE VI
DIVIDENDS, SURPLUS, ETC.
Section 6.01. The corporation's net investment income will be
determined, and its dividends shall be declared and made payable at such time(s)
as the Board of Directors shall determine; dividends shall be payable to
shareholders of record as of the date of declaration.
It shall be the policy of the corporation to qualify for and elect the
tax treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation will not be subjected to Federal income
tax on such part of its income or capital gains as it distributes to
shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. BOOKS AND RECORDS. The Board of Directors of the
corporation shall cause to be kept:
(1) share register, giving the names and addresses of the
shareholders, the number and classes held by each, and the dates
on which the certificates therefor were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
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Section 7.02. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of
Directors shall cause to be kept at the registered office of the corporation
originals or copies of:
(1) records of all proceedings of shareholders and directors
(2) Bylaws of the corporation and all amendments thereto; and
(3) reports made to any or all of the shareholders within the last
preceding three (3) years.
Section 7.03. AUDIT, ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of
account of the corporation to be audited at least once in each fiscal year and
at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent certified public
accountant or firm of independent certified public accountants as its Accountant
to examine the accounts of the corporation and to sign and certify financial
statements filed by the corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the shareholders.
(c) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
Section 7.04. FISCAL YEAR. The fiscal year of the corporation shall
be determined by the Board of Directors.
ARTICLE VIII
INSPECTION OF BOOKS
Section 8.01. Every shareholder of the corporation and every holder
of a voting trust certificate shall have a right to examine, in person or by
agent or attorney, at any reasonable time or times, for any proper purpose, and
at the place or places where usually kept, the share register, books of account
and records of the proceedings of the shareholders and directors and to make
extracts therefrom.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on
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behalf of the corporation, to cast the votes which the corporation may be
entitled to cast as a stockholder or otherwise in any other corporation or
association, any of whose stock or securities may be held by the corporation, at
meetings of the holders of the stock or other securities of any such other
corporation or association, or to consent in writing to any action by any such
other corporation or association, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and may
execute or cause to be executed on behalf of the corporation and under its
corporate seal, or otherwise, such written proxies, consents, waivers, or other
instruments as it may deem necessary or proper in the circumstances; or any of
such officers may themselves attend any meeting of the holders of stock or other
securities of any such corporation or association and thereat vote or exercise
any or all other powers of the corporation as the holder of such stock or other
securities of such other corporation or association, or consent in writing to
any action by any such other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of each series of stock
issued by the portfolios of the corporation shall be determined in good faith by
or under supervision of the officers of the corporation as authorized by the
Board of Directors as often and on such days and at such time(s) as the Board of
Directors shall determine.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation
shall, as hereinafter provided, be held by or deposited with a bank or trust
company having (according to its last published report) not less than two
million dollars ($2,000,000) aggregate capital, surplus and undivided profits
(the "Custodian").
This corporation shall enter into a written contract with the
Custodian regarding the powers, duties and compensation of the Custodian with
respect to the cash and securities of this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by this
corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the whole Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such
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authority in the Board of Directors is subject to the power of the shareholders
to change or repeal such Bylaws by a majority vote of the shareholders present
or represented at any annual or special meeting of shareholders called for such
purpose. The Board of Directors shall not make or alter any Bylaws fixing their
qualifications, classifications, term of office, or number, except that the
Board of Directors may make or alter any Bylaw to increase their number.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. INTERPRETATION. When the context in which words are
used in these Bylaws indicates that such is the intent, singular words will
include the plural and vice versa, and masculine words will include the feminine
and neuter genders and vice versa.
Section 13.02. ARTICLE AND SECTION TITLES. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not control
or alter the meaning of any of these Bylaws as set forth in the text.
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EXHIBIT (d)
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 31st day of January 1992, by and between
Fortis Advantage Portfolios, Inc.,(formerly AMEV Advantage Portfolios, Inc.), a
Minnesota corporation (the "Fund") and Fortis Advisers, Inc. (Formerly AMEV
Advisers, Inc.), a Minnesota ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES
The Fund hereby engages Advisers, and Advisers hereby agrees to act,
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Fund's Portfolios, which shall consist of
Capital Appreciation Portfolio, High Yield Portfolio, Asset Allocation
Portfolio, and any further Portfolios other than Government Total Return
Portfolio from time to time created by the Board of Directors of the Fund. Each
such Portfolio is herein individually referred to as a "Portfolio," and the
Portfolios are herein collectively referred to as the "Portfolios."
The investment of the assets of the Portfolio shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund and the Portfolios as set forth in the Registration Statement and
Prospectus and Statement of Additional Information as interpreted from time to
time by the Board of Directors of the Fund. Within the framework of the
investment policies of the Portfolios, Advisers shall have the sole and
exclusive responsibility for the management of the Portfolios and the making and
execution of all investment decisions for the Portfolios. Advisers shall report
to the Board of Directors regularly at such times and in such detail as the
Board may from time to time determine to be appropriate, in order to permit the
Board to determine the adherence of Advisers to the investment policies of the
Portfolios.
Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. Advisers shall arrange, if requested by
the Fund, for officers, employees or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.
Advisers hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Advisers should
ever occur, Advisers will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
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2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of Advisers hereunder, the Fund shall pay to Advisers a monthly
fee for each Portfolio, which fee shall be paid to Advisers not later than the
fifth business day of the month following the month in which such services are
rendered. Each such monthly fee shall be at the rate or rates set forth below
and shall be based on the average of the net asset values of all of the issued
and outstanding shares of the respective Portfolio as determined as of the close
of each business day of the month pursuant to the Articles of Incorporation,
Bylaws and currently effective Prospectus and Statement of Additional
Information of the Fund. The following table sets forth the fee on a monthly
and annual basis:
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Fund
Capital 1/12 of 1.0% 1.0% On the first $100,000,000
Appreciation 1/12 of .8% .8% On the next $150,000,000
Portfolio 1/12 of .7% .7% On average net assets over
$250,000,000
High Yield 1/12 of .8% .8% On the first $50,000,000
Portfolio 1/12 of .7% .7% On average net assets over
$50,000,000
Asset 1/12 of 1.0% 1.0% On the first $100,000,000
Allocation 1/12 of .8% .8% On the next $150,000,000
Portfolio 1/12 of .7% .7% On average net assets over
$250,000,000
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall be
determined by the Board of Directors of the Fund upon the creation of any such
Portfolio(s).
3. ALLOCATION OF EXPENSES.
In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers, Fortis Investors, Inc.
("Investors") or any other person. These Fund expenses include, by way of
example, but not by way of limitation, the fees and expenses of directors and
officers of the Fund who are not "affiliated persons" of Advisers, interest
expenses, taxes, brokerage fees and commissions, fees and expenses of
registering and qualifying the Fund and its shares for distribution under
federal and state securities laws, expenses of preparing Prospectuses and of
printing and distributing Prospectuses and Statements of Additional Information
annually to existing shareholders, custodian charges, auditing and legal
expenses, insurance expenses, association membership dues, and the expenses of
reports to shareholders, shareholders' meetings and proxy solicitations.
Advisers shall bear the costs of acting as the Fund's transfer agent, registrar
and dividend disbursing agent.
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Advisers (or Investors) shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
Prospectuses and shareholder reports for new shareholders and the costs of sales
literature.
4. LIMIT ON EXPENSES.
Out of its advisory fee, but not in excess thereof, Advisers shall
reimburse the Fund for each Portfolio's expenses from the date of the initial
public offering until the date the Portfolios' aggregate net assets first reach
$10,000,000, to the extent that the aggregate expenses of the Portfolio
(including the investment advisory and management fees for such Portfolio under
paragraph 2 of this Agreement, but excluding interest, taxes, Rule 12b-1 Plan of
Distribution fees, brokerage fees and commissions) exceed an amount equal, on an
annual basis, to the following applicable percentage of the average daily net
assets of the Portfolio:
Capital Appreciation Portfolio 1.5%
High Yield Portfolio 1.0%
Asset Allocation Portfolio 1.5%
In addition to the expense reimbursement set forth in Section 4(a),
Advisers reserves the right, but shall not be obligated, to institute further
voluntary expense reimbursement programs, which shall be in such amounts and
based upon such terms and conditions as Advisers, in its sole and absolute
discretion, determines. Furthermore, Advisers reserves the absolute right to
discontinue any such reimbursement programs at any tie without notice to the
Fund.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
. The Agreement shall be effective as to each Portfolio on January 31,
1992. Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of a Portfolio or
the Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to a
particular Portfolio by the vote of the holders of a majority of the outstanding
voting securities of such Portfolio, and (b) by a majority of the directors who
are not interested persons of Advisers or of the Fund cast in person at a
meeting called for the purpose of voting on such approval; provided that if a
majority of the outstanding voting securities of any of the Portfolios approves
this Agreement, this Agreement shall continue
-3-
<PAGE>
in effect with respect to such approving Portfolio whether or not the
shareholders of any other Portfolio of the Fund approve this Agreement.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by Advisers
upon sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to a particular Portfolio at any time without the
payment of any penalty by the vote of the holders of a majority of the
outstanding voting securities of such Portfolios, upon sixty (60) days' written
notice to Advisers. Any such termination may be made effective with respect to
both the investment advisory and management services provided for in this
Agreement or with respect to either of such kinds of services. This Agreement
shall automatically terminate in the event of its assignment.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by a vote of the holders of a majority of the outstanding voting
securities of the Portfolios which have approved and are subject to this
Agreement. In addition, if a majority of the outstanding voting securities of
any Portfolio of the Fund votes to amend this Agreement, such amendment shall be
effective with respect to such Portfolio whether or not the shareholders of any
other Portfolio vote to adopt such amendment.
7. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FORTIS ADVANTAGE PORTFOLIOS, INC.
By /s/ Edward M. Mahoney
-----------------------------------------
Its President
FORTIS ADVISERS, INC.
By /s/ Edward M. Mahoney
-----------------------------------------
Its President
-4-
<PAGE>
EXHIBIT (e).1
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 14th day of November 1994, by and between Fortis
Advantage Portfolios, Inc. (formerly AMEV Advantage Portfolios, Inc.), a
Minnesota corporation (the "Fund") for and on behalf of each class of shares
(each such class is referred to hereinafter as a "Class") of each of the Fund's
Portfolios and Fortis Investors, Inc. (formerly AMEV Investors, Inc.), a
Minnesota corporation ("Investors")
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund on behalf of each Class hereby engages Investors, and Investors
hereby agrees to act, as principal underwriter for each Class in connection with
the sale and distribution of the shares of each Class of the Fund's Portfolios
to the public, either through dealers or otherwise. Investors agrees to offer
such shares for sale at all times when such shares are available for sale and
may lawfully be offered for sale and sold.
As used herein, "Portfolios" is defined as Capital Appreciation Portfolio,
High Yield Portfolio, Asset Allocation Portfolio, Government Total Return
Portfolio and any other Portfolios which may hereafter be created by the Board
of Directors of the Fund. In addition, as used herein, "Classes" of the Fund's
Portfolios is defined as Class A, Class B, Class C and Class H shares of each
Portfolio and any other classes which may hereinafter be created by the Fund's
Board of Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed to
have been accepted by the Fund if the Fund shall fail to notify Investors of the
rejection of such offer or sale prior to the computation of the net asset value
of the applicable Class's shares next following receipt by the Fund of notice of
such offer or sale.
(b) No share of a Class shall be sold by Investors (i) for any amount
less than the net asset value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than cash, or, pursuant to any
exchange privilege provided for by such Class's currently effective Prospectus
or Statement of Additional Information, shares of the corresponding Class of
shares of any other investment company for which Investors acts as an
underwriter. In addition, except as provided below or in the Class's currently
effective Prospectus or Statement of Additional Information, all shares of the
Fund's Portfolios sold by Investors shall be sold at the applicable public
offering price, as hereinafter defined, provided that, in the case of sales of
such shares to or through bona fide dealers in securities, Investors
<PAGE>
may allow, or sell at, a discount from said public offering price to such
dealers, which discount shall be no greater than the "sales load" hereinafter
referred to.
(c) The public offering price of the shares of the Fund's Portfolios
shall be the current net asset value thereof (computed as provided in the Bylaws
of the Fund) plus the applicable "sales load" or loading charge, if any, which
shall be such percentage of the public offering price, computed to the nearest
cent, as may be agreed upon by the Fund and Investors and specifically approved
by the Board of Directors of the Fund, provided that no schedule of sales loads
shall be effective until set forth in a prospectus of the Fund meeting the
requirements of the Securities Act of 1933. Said sales loads may be graduated
on a scale based on the dollar amount of shares sold.
(d) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction occurring
within a certain period of time following such a purchase, as described in each
Class's currently effective Prospectus and Statement of Additional Information.
(e) The front-end sales charge, if any, for any Class may, at the
discretion of the Fund and Investors, be increased, reduced or eliminated as
permitted by the Investment Company Act of 1940, and the rules and regulations
thereunder, as they may be amended from time to time, or as set forth elsewhere
in this Agreement, provided that, if necessary, such increase, reduction or
elimination shall be set forth in the Prospectus for such Class, and provided
that the Fund shall in no event receive for any shares sold an amount less than
the net asset value thereof. In addition, any contingent deferred sales charge
for any Class may, at the discretion of the Fund and Investors, be increased,
reduced or eliminated in accordance with the terms of an exemptive order
received from, or any applicable rule or rules promulgated by, the Securities
and Exchange Commission by the Fund, provided such increase, reduction or
elimination shall be set forth in the Prospectus for such Class.
(f) Investors may decline to offer for sale or sell shares of the
Fund in an amount the cumulative public offering price of which is less than
$500.00 or such smaller amount as it may from time to time fix.
3. INVESTMENT OF DIVIDEND AND DISTRIBUTIONS.
The Fund may extend to its shareholders the right to purchase shares issued
by each Class of the Fund at the net asset value thereof with the proceeds of
any dividend or capital gain distribution paid or payable by the Fund (or any
other fund for which Investors serves as underwriter) to its shareholders.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and keep in
effect, at its own expense, the registration or qualification of each Class's
shares for sale in such jurisdictions as the Fund may designate.
-2-
<PAGE>
5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with such information with
respect to the affairs and accounts of the Fund (and each Class and Portfolio
thereof) as Investors may from time to time reasonably require, and further
agrees that Investors, at all reasonable times, shall be permitted to inspect
the books and records of the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be paid
all expenses, costs and fees incurred by the Fund which are not assumed by
Investors or Fortis Advisers, Inc. ("Advisers"). Investors agrees to provide,
and shall pay costs which it incurs in connection with providing personal,
continuing services to shareholders (such costs are referred to as "Shareholder
Servicing Costs"). Shareholder Servicing Costs include all expenses of
Investors incurred in connection with providing administrative or accounting
services to shareholders of each Class, including, but not limited to, an
allocation of Investor's overhead and payments made to persons, including
employees of Investors, who respond to inquiries of shareholders regarding their
ownership of Class shares, or who provide other administrative or accounting
services not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding the foregoing, if the
National Association of Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair Practice
that differs from a definition of Shareholder Servicing Costs in this paragraph,
or if the NASD adopts a related definition intended to define the same concept,
the definition of Shareholder Servicing Costs in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of distributing the shares
of each Class ("Distribution Expenses"). Distribution expenses include, but are
not limited to, initial and ongoing sales compensation (in addition to sales
loads) paid to registered representatives of Investors and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of Investors'
overhead; payments to and expenses of persons who provide support services in
connection with the distribution of Fund shares; and other distribution-related
expenses. Advisers, rather than Investors, may bear the expenses referred to in
this paragraph, but Investors shall be primarily liable for such expenses until
paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive and retain the front-end
sales charge (if any) imposed in connection with sales of each Class, as set
forth in the applicable Class's
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<PAGE>
current Prospectus. Up to the entire amount of the front-end sales charge (if
any) with respect to each applicable Class may be reallowed by Investors to
broker-dealers and participating financial institutions in connection with their
sale of Fund shares. The amount of the front-end sales charge (if any) may be
retained or deducted by Investors from any sums received by it in payment for
shares so sold. If such amount is not deducted by Investors from such payments,
such amount shall be paid to Investors by the Fund not later than five business
days after the close of any month during which any such sales were made by
Investors and payment therefor received by the Fund.
(b) Investors shall be entitled to receive any contingent deferred
sales charge imposed in connection with any redemption of applicable Class
shares, as set forth in each applicable Class's current Prospectus.
(c) Investors shall be entitled to receive the following l2b-1 fees,
payable under the Plan of Distribution adopted by each Class in accordance with
Rule 12b-1 under the Investment Company Act of 1940 (the "Plan"):
(i) CLASS A SHARES: Class A shares of each of the Portfolios
are obligated to pay Investors, the principal underwriter of the Fund's shares,
a total fee in connection with distribution-related services provided with
respect to Class A and in connection with the servicing of shareholder accounts
of said Class A. This fee shall be calculated and payable monthly as follows:
<TABLE>
<CAPTION>
Monthly Fee
(as a percentage of
average daily net assets)
-------------------------
<S> <C>
Capital Appreciation Portfolio 1/12 x.45%
High Yield Portfolio 1/12 x.35%
Asset Allocation Portfolio 1/12 x.45%
Government Total Return Portfolio 1/12 x.35%
</TABLE>
All or a portion of such total fee may be payable as a Distribution Fee, and all
or any portion of such total fee may be payable as a Shareholder Servicing Fee,
as determined from time to time by the Fund's Board of Directors. Until further
action by the Board of Directors, all of such fee shall be designated and
payable as a Distribution Fee.
(ii) CLASS B, CLASS C AND CLASS H SHARES: Class B, Class C and
Class H shares of the Portfolios are each obligated to pay Investors a total fee
in connection with the distribution-related services and servicing of
shareholder accounts provided for their respective Class. The total fee paid by
each Class shall be calculated and payable monthly, at an annual rate of 1.00%
of the value of the respective Class's average daily net assets. All or any
portion of such total fee may be payable as a Distribution Fee, and all or any
portion of such total fee may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's Board of Directors. Until further
action by the Board, 75% of such fee (.75 of 1.00%) shall be designated and
payable as a Distribution Fee and 25% of such fee (.25 of 1.00%) shall be
designated and payable as a Shareholder Servicing Fee.
-4-
<PAGE>
(iii) FUTURE PORTFOLIOS AND/OR CLASSES: The 12b-1 fees for
Class A, Class B, Class C or Class H shares of any future Portfolios shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolios, but in no event shall such fees exceed any then existing limitations
imposed under any applicable rule or rules promulgated by the Securities and
Exchange Commission and/or the National Association of Securities Dealers, Inc.
Upon the creation of any new classes of shares for any or all of the Portfolios,
the respective levels of sales charges and 12b-1 fees shall be determined by the
Board of Directors of the Fund, subject to any necessary shareholder approval
and only in accordance with any applicable rule or rules promulgated by the
Securities and Exchange Commission and/or the National Association of Securities
Dealers, Inc. All or any portion of the l2b-1 fees referred to in this
paragraph may be payable as a Distribution Fee, and all or any portion of such
l2b-1 fees may be payable as a Shareholder Servicing Fee, as determined from
time to time by the Fund's Board of Directors.
(iv) OTHER INFORMATION: Average daily net assets shall be
computed in accordance with the Prospectus of each applicable Class. Amounts
payable to Investors under the Plan may exceed or be less than Investor's actual
distribution expenses and shareholder servicing costs. In the event such
distribution expenses and/or shareholder servicing expenses exceed amounts
payable to Investors under the Plan, Investors shall not be entitled to
reimbursement from the Fund.
(d) In each year during which this contract remains in effect, Investors
will prepare and furnish to the Board of Directors of the Fund, and the Board
will review, on a quarterly basis written reports complying with the
requirements of Rule l2b-1 under the Investment Company Act of 1940 (the " 1940
Act") that set forth the amounts expended under this contract and the Plan and
the purposes for which those expenditures were made.
8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS.
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
Investors.
-5-
<PAGE>
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation and
other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or proceedings
in any way arising out of or in connection with the sale or distribution of the
shares of the Fund by Investors. In the event of the threat or institution of
any such litigation or legal proceedings against the Fund, Investors shall
defend such action on behalf of the Fund at its own expense, and shall pay any
such liability, judgment, cost or penalty resulting therefrom, whether imposed
by legal authority or agreed upon by way of compromise and settlement; provided,
however, Investors shall not be required to pay or reimburse the Fund for any
liability, judgment, cost or penalty incurred as a result of information
supplied by, or as the result of the omission to supply information by, the Fund
to Investors, or to Investors by a director, officer, or employee of the Fund
who is not an interested person of Investors, unless the information so supplied
or omitted was available to Investors or the Fund's investment adviser without
recourse to the Fund or any such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
(a) This Agreement shall be effective as to the Capital Appreciation
Portfolio, High Yield Portfolio, Asset Allocation Portfolio and Government Total
Return Portfolio and each Class thereof on November 14, 1994. Unless sooner
terminated as hereinafter provided, this Agreement shall continue in effect only
so long as such continuance is specifically approved at least annually (a) by
the Board of Directors of the Fund, or with respect to a particular Class by the
vote of the holders of a majority of the outstanding voting securities of such
Class, and (b) by a majority of the directors who are not interested persons of
Investors or of the Fund, cast in person at a meeting called for the purpose of
voting on such approval; provided that, if a majority of the outstanding voting
securities of any of the Classes approves this Agreement, this Agreement shall
continue in effect with respect to such approving Class whether or not the
shareholders of any other Class of the Fund approve this Agreement.
(b) This Agreement may be terminated at any time without the payment
of any penalty by the vote of the Board of Directors of the Fund or by
Investors, upon sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular Class at any time
without the payment of any penalty by the vote of the holders of a majority of
the outstanding voting securities of such Class, upon sixty (60) days' written
notice to Investors.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
-6-
<PAGE>
(d) Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the Board of Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such amendment. Additionally, no amendment
to this Agreement that materially increases the distribution fee and/or
shareholder servicing fee payable by any Class hereunder shall be effective
until any necessary amendment to the applicable Rule 12b-1 Plan has been
approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS ADVANTAGE PORTFOLIOS, INC.
By: /s/ Edward M. Mahoney
----------------------------
Its President
FORTIS INVESTORS, INC.
By: /s/ Dean C. Kopperud
----------------------------
Its President
-7-
<PAGE>
EXHIBIT (g)
CUSTODIAN AGREEMENT
THIS AGREEMENT, made as of the 21st day of March, 1992, by and between
Fortis Advantage Portfolios, Inc., a Minnesota corporation (the "Fund"), for and
on behalf of each series of the Fund that adopts this Agreement (said series
being hereinafter referred to, individually, as a "Series" and, collectively, as
the "Series"), and Norwest Bank Minnesota, N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Custodian"). The name of each Series that adopts this Agreement and the
effective date of this Agreement with respect to each such Series are set forth
in EXHIBIT A hereto.
WITNESSETH:
WHEREAS, the Fund desires to appoint the Custodian as the custodian for the
assets of each Series, and the Custodian desires to accept such appointment,
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of deposit,
bankers' acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, investment contracts, voting trust certificates,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, severed and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
The words "Written Order from the Fund" shall mean a writing signed or
initialed by one or more person or persons designated in the current certified
list referred to in Article 2, provided that if said writing is signed by only
one person, that person shall be an officer of the Fund designated in said
current certified list. "Written Order from the Fund" also may include a
communication effected directly between electro-mechanical or electronic devices
(including, but not limited to, facsimile transceivers) provided that management
of the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the assets of each Series.
<PAGE>
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles and signatures of
officers and other persons who are authorized to give any Written Order from the
Fund on behalf of each Series. The Fund agrees that, whenever any change in
such authorization occurs, it will file with the Custodian a new certified list
of names, titles and signatures which shall be signed by at least one officer
previously certified to the Custodian if any such officer still holds an office
in the fund. The Custodian is authorized to rely and act upon the names, titles
and signatures of the individuals as they appear in the most recent such
certified list which has been delivered to the Custodian as hereinbefore
provided.
ARTICLE 3. SUB-CUSTODIANS AND DEPOSITORIES
Notwithstanding any other provision in this Agreement to the contrary, all
or any of the cash and Securities of each Series may be held in the Custodian's
own custody or in the custody of one or more other banks or trust companies
selected by the Custodian or as directed in one or more Written Orders from the
fund. Any such sub-custodian must have the qualifications required for
custodians under the Investment Company Act of 1940, as amended. The Custodian
or sub-custodian, as the case may be, may participate directly or indirectly in
one or more "securities depositories" (as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended, or in any successor provisions or
rules thereto). Any references in this Agreement to the delivery of Securities
by or to the Custodian shall, with respect to Securities custodied with one of
the aforementioned "securities depositories," be interpreted to mean that the
Custodian shall cause a bookkeeping entry to be made by the applicable
securities depository to indicate the transfer of ownership of the applicable
Security to or from the Fund, all as set forth in one or more Written Orders
from the Fund. Additionally, any references in this Agreement to the receipt of
proceeds or payments with respect to Securities transactions shall, with respect
to Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall have received an
advice from such securities depository that said proceeds or payments have been
received by such depository and deposited in the Custodian's account.
ARTICLE 4. RECEIPT AND DISBURSING OF MONEY
SECTION (1). The Fund shall from time to time cause cash owned by the Fund
to be delivered or paid to the Custodian for the account of any Series, but the
Custodian shall not be under any obligation or duty to determine whether all
cash of the Fund is being so deposited or to take any action or to give any
notice with respect to cash not so deposited. The Custodian agrees to hold such
cash, together with any other sum collected or received by it for or on behalf
of each Series of the Fund, in the account of such Series in conformity with the
terms of this Agreement. The Custodian shall be authorized to disburse cash
from the account of each Series only:
-2-
<PAGE>
(a) upon receipt of and in accordance with Written Orders
from the Fund stating that such cash is being used for one or more
of the following purposes, and specifying such purpose or purposes,
provided, however, that a reference in such Written Order from the
Fund to the pertinent paragraph or paragraphs of this Article shall
be sufficient compliance with this provision:
(i) the payment of interest;
(ii) the payment of dividends;
(iii) the payment of taxes;
(iv) the payment of the fees or charges to any investment adviser
of any Series;
(v) the payment of fees to a Custodian, stock registrar, transfer
agent or dividend disbursing agent for any Series;
(vi) the payment of distribution fees and commissions;
(vii) the payment of any operating expenses, which shall be deemed
to include legal and accounting fees and all other expenses
not specifically referred to in this paragraph (a);
(viii) payments to be made in connection with the conversion,
exchange or surrender of Securities owned by any Series;
(ix) payments on loans that may from time to time be due;
(x) payment to a recognized and reputable broker for Securities
purchased by the fund through said broker (whether or not
including any regular brokerage fees, charges or commissions
on the transaction) upon receipt by the Custodian of such
Securities in proper form for transfer and after the receipt
of a confirmation from the broker or dealer with respect to
the transaction;
(xi) payment to an issuer or its agent on a subscription for
Securities of such issuer upon the exercise of rights so to
subscribe, against a receipt from such issuer or agent for the
cash so paid;
(b) as provided in Article 5 hereof; and
(c) upon the termination of this Agreement.
SECTION (2). The Custodian is hereby appointed the
attorney-in-fact of the Fund to use reasonable efforts to enforce and collect
all checks, drafts or other orders for the payment of money received by the
Custodian for the account of each Series and drawn to or to the order of the
Fund and to deposit them in the account of the applicable Series.
ARTICLE 5. RECEIPT OF SECURITIES
The Fund agrees to place all of the Securities of each Series in its
account with the Custodian, but the Custodian shall not be under any obligation
or duty to determine whether all Securities of any Series are being so
deposited,
-3-
<PAGE>
or to require that such Securities be so deposited, or to take any action or
give any notice with respect to the Securities not so deposited. The Custodian
agrees to hold such Securities in the account of the Series designated by the
Fund, in the name of the Fund or of bearer or of a nominee of the Custodian, and
in conformity with the terms of this Agreement. The Custodian also agrees, upon
Written Order from the Fund, to receive from persons other than the Fund and to
hold in the account of the Series designated by the Fund Securities specified in
said Written Order of the Fund, and, if the same are in proper form, to cause
payment to be made therefor to the persons from whom such Securities were
received, from the funds of the applicable Series held by the Custodian in said
account in the amounts provided and in the manner directed by the Written Order
from the Fund.
The Custodian agrees that all Securities of each Series placed in its
custody shall be kept physically segregated at all times from those of any other
Series, person, firm or corporation, and shall be held by the Custodian with all
reasonable precautions for the safekeeping thereof. Upon delivery of any
Securities of any Series to a subcustodian pursuant to Article 3 of this
Agreement, the Custodian will create and maintain records identifying those
assets which have been delivered to the subcustodian as belonging to the
applicable Series.
ARTICLE 6. DELIVERY OF SECURITIES
The Custodian agrees to transfer, exchange or deliver Securities as
provided in Article 7, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby:
(a) in the case of deliveries of Securities sold by the Fund,
against receipt by the Custodian of the proceeds of sale and after
receipt of a confirmation from a broker or dealer (or, in
accordance with industry practice with respect to "same day
trades," acceptance of delivery of such securities by the broker or
dealer, which acceptance is followed up by confirmation thereof
within the normal settlement period) with respect to the
transaction;
(b) in the case of deliveries of Securities which may mature
or be called, redeemed, retired or otherwise become payable,
against receipt by the Custodian of the sums payable thereon or
against interim receipts or other proper delivery receipts;
(c) in the case of deliveries of Securities which are to be
transferred to and registered in the name of the Fund or of a
nominee of the Custodian and delivered to the Custodian for the
account of the Series, against receipt by the Custodian of interim
receipts or other proper delivery receipts;
(d) in the case of deliveries of Securities to the issuer
thereof, its transfer agent or other proper agent, or to any
committee or other organization for exchange for other Securities
to be delivered to the Custodian in connection with a
reorganization or recapitalization of the issuer or any split-up or
similar transaction involving such
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Securities, against receipt by the Custodian of such other
Securities or against interim receipts or other proper delivery
receipts;
(e) in the case of deliveries of temporary certificates in
exchange for permanent certificates, against receipt by the
Custodian of such permanent certificates or against interim
receipts or other proper delivery receipts;
(f) in the case of deliveries of Securities upon conversion
thereof into other Securities, against receipt by the Custodian of
such other Securities or against interim receipts or other proper
delivery receipts;
(g) in the case of deliveries of Securities in exchange for
other Securities (whether or not such transactions also involve the
receipt or payment of cash), against receipt by the Custodian of
such other Securities or against interim receipts or other proper
delivery receipts;
(h) in the case of warrants, rights or similar Securities,
the surrender thereof in the exercise of such warrants, rights or
similar Securities or the surrender of interim receipts or
temporary Securities for definitive Securities;
(i) for delivery in connection with any loans of securities
made by the Fund for the benefit of any Series, but only against
receipt of adequate collateral as agreed upon from time to time by
the Custodian and the Fund;
(j) for delivery as security in connection with any
borrowings by the Fund for the benefit of any Series requiring a
pledge of assets from the applicable Series, but only against
receipt of amounts borrowed;
(k) for delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a bank, broker-dealer
or futures commission merchant relating to compliance with
applicable rules and regulations regarding account deposits, escrow
or other arrangements in connection with transactions by the Fund
for the benefit of any Series;
(l) in a case not covered by the preceding paragraphs of this
Article, upon receipt of a resolution adopted by the Board of
Directors of the Fund, signed by an officer of the Fund and
certified to by the Secretary, specifying the Securities and assets
to be transferred, exchanged or delivered, the purposes for which
such delivery is being made, declaring such purposes to be proper
corporate purposes, and naming a person or persons (each of whom
shall be a properly bonded officer or employee of the Fund) to whom
such transfer, exchange or delivery is to be made; and
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(m) in the case of deliveries pursuant to paragraphs (a)
through (k) above, the Written Order from the Fund shall direct
that the proceeds of any Securities delivered, or Securities or
other assets exchanged for or in lieu of Securities so delivered,
are to be delivered to the Custodian.
ARTICLE 7. CUSTODIAN'S ACTS WITHOUT WRITTEN ORDERS FROM THE FUND
Unless and until the Custodian receives contrary Written Orders
from the Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and
similar items, and all coupons or other income items (except stock
dividends), held or received for the account of any Series, and
which require presentation in the ordinary course of business, and
credit such items to the account of the applicable Series
conditionally, subject to final payment;
(b) present for payment all Securities which may mature or
be called, redeemed, retired or otherwise become payable and credit
such items to the account of the applicable Series conditionally,
subject to final payment;
(c) hold for and credit to the account of any Series all
shares of stock and other Securities received as stock dividends or
as the result of a stock split or otherwise from or on account of
Securities of the Series, and notify the Fund, in the Custodian's
monthly reports to the Fund, of the receipt of such items;
(d) deposit or invest (as instructed from time to time by the
Fund) any cash received by it from, for or on behalf of any Series
to the credit of the account of the applicable Series;
(e) charge against the account for any Series disbursements
authorized to be made by the Custodian hereunder and actually made
by it, and notify the Fund of such charges at least once a month;
(f) deliver Securities which are to be transferred to and
reissued in the name of any Series, or of a nominee of the
Custodian for the account of any Series, and temporary certificates
which are to be exchanged for permanent certificates, to a proper
transfer agent for such purpose against interim receipts or other
proper delivery receipts; and
(g) hold for disposition in accordance with Written Orders
from the Fund hereunder all options, rights and similar Securities
which may be received by the Custodian and which are issued with
respect to any securities held by it hereunder, and notify the Fund
promptly of the receipt of such items.
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ARTICLE 8. SEGREGATED ACCOUNTS
Upon receipt of a Written Order from the Fund, the Custodian shall
establish and maintain one or more segregated accounts for and on behalf of the
Series specified in said Written Order from the Fund for purposes of segregating
cash and/or Securities (of the type agreed upon from time to time by the
Custodian and the Fund) for the purpose or purposes specified in said Written
Order from the Fund.
ARTICLE 9. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies,
notices and communications with relation to Securities held by it which it
may receive from sources other than the Fund.
ARTICLE 10. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for transfer any
Securities which it may hold for the account of any Series of the Fund. For
the purpose of facilitating the handling of Securities, unless otherwise
directed by Written Order from the Fund, the Custodian is authorized to hold
Securities deposited with it under this Agreement in the name of its
registered nominee or nominees (as defined in the Internal Revenue Code and
any regulations of the United States Treasury Department issued thereunder or
in any provision of any subsequent federal tax law exempting such transaction
from liability for stock transfer taxes) and shall execute and deliver all
such certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. The Custodian shall, if requested
by the Fund, advise the Fund of the certificate number of each certificate so
presented for transfer and that of the certificate received in exchange
therefor, and shall use its best efforts to the end that the specific
Securities held by it hereunder shall be at all times identifiable.
ARTICLE 11. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund, for and on behalf of each Series, shall pay or reimburse the
Custodian for any transfer taxes payable upon transfers of Securities made
hereunder, including transfers incident to the termination of this Agreement,
and for all other necessary and proper disbursements and expenses made or
incurred by the Custodian in the performance or incident to the termination of
this Agreement, and the Custodian shall have a lien upon any cash or Securities
held by it for the account of each applicable Series of the fund for all such
items, enforceable, after thirty days' written notice by registered mail from
the Custodian to the Fund, by the sale of sufficient Securities to satisfy such
lien. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an amount sufficient to pay any transfer taxes payable upon
the transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any
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federal revenue act and any regulations of the Treasury Department issued
thereunder or any state laws, to exempt from taxation any transfers and/or
deliveries of any such Securities as may qualify for such exemption.
ARTICLE 12. CUSTODIAN'S LIABILITY FOR PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the
Custodian is not specified in the Written Order from the Fund directing such
delivery, the Custodian shall make delivery of such Securities against
receipt by it of cash, a postal money order or a check drawn by a bank, trust
company or other banking institution, or by a broker named in such Written
Order from the Fund, for the amount the Custodian is directed to receive.
The Custodian shall be liable for the proceeds of any delivery of Securities
made pursuant to this Article, but provided that it has complied with the
provisions of this Article, but provided that is has complied with the
provisions of this Article, only to the extent that such proceeds are
actually received.
ARTICLE 13. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of business
on the last business day of each month, a statement showing all cash
transactions and entries for the account of each Series of the Fund. The
books and records of the Custodian pertaining to its actions as Custodian
under this Agreement shall be open to inspection and audit, at reasonable
times, by officers of, and auditors employed by, the Fund. The Custodian
shall furnish the Fund with a list of the Securities held by it in custody
for the account of each Series of the fund as of the close of business on the
last business day of each quarter of the Fund's fiscal year.
ARTICLE 14. CUSTODIAN COMPENSATION
The Custodian shall be paid compensation at such rates and at such
times as may from time to time be agreed on in writing by the parties hereto
(as set forth with respect to each Series in EXHIBIT B hereto), and the
Custodian shall have a lien for unpaid compensation, to the date of
termination of this Agreement, upon any cash or Securities held by it for the
Series accounts of the Fund, enforceable in the manner specified in Article
11 hereof.
ARTICLE 15. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect with respect to each Series,
as it may from time to time be amended, until it shall have been terminated
as hereinafter provided, but no such amendment or termination shall affect or
impair any rights or liabilities arising out of any acts or omissions to act
occurring prior to such amendment or termination.
The Custodian may terminate this Agreement by giving the Fund
ninety days' written notice of such termination by registered mail addressed
to the Fund at its principal place of business.
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The Fund may terminate this Agreement by giving ninety days'
written notice thereof delivered by registered mail to the Custodian at its
principal place of business. Additionally, this Agreement may be terminated
with respect to any Series of the Fund pursuant to the same procedures, in
which case this Agreement shall continue in full effect with respect to all
other Series of the Fund.
Upon termination of this Agreement, the assets of the Fund, or Series
thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a Written Order from the
Fund designating the successor custodian; and if no successor custodian is
designated in said Written Order from the Fund, the Custodian shall, upon such
termination, deliver all such assets to the Fund.
This Agreement may be amended or terminated at any time to the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended or terminated with respect to any Series of the Fund at any time by the
mutual agreement of the Fund and the Custodian, in which case such amendment or
termination would apply to such Series amending or terminating this Agreement
but not to the other Series of the Fund.
This Agreement may not be assigned by the Custodian without the
consent of the Fund, authorized or approved by a resolution of its Board of
Directors.
ARTICLE 16. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties and
obligations of the preceding custodian under this Agreement and any
amendments thereof and shall succeed to all the exemptions and privileges of
the preceding custodian under this Agreement and any amendments thereof.
ARTICLE 17. GENERAL
Nothing expressed or mentioned in or to be implied from any
provisions of this Agreement is intended to give or shall be construed to
give any person or corporation other than the parties hereto any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
covenant, condition or provision herein contained, this Agreement and all of
the covenants, conditions and provisions hereof being intended to be, and
being, for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns.
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It is the purpose and intention of the parties hereto that the Fund
shall retain all the power, rights and responsibilities of determining
policy, exercising discretion and making decisions with respect to the
purchase, or other acquisition, and the sale, or other disposition, of all of
its Securities, and that the duties and responsibilities of the Custodian
hereunder shall be limited to receiving and safeguarding the assets and
Securities of each Series of the Fund and to delivering or disposing of them
pursuant to the Written Order from the Fund as aforesaid, and the Custodian
shall have no authority, duty or responsibility for the investment policy of
the Fund or for any acts of the Fund in buying or otherwise acquiring, or in
selling or otherwise disposing of, any Securities, except as hereinbefore
specifically set forth.
The Custodian shall in no case or event permit the withdrawal of
any money or Securities of the Fund upon the mere receipt of any director,
officer, employee or agent of the Fund, but shall hold such money and
Securities for disposition under the procedures herein set forth.
ARTICLE 18. STANDARD OF CARE; INDEMNIFICATION
In connection with the performance of its duties and
responsibilities hereunder, the Custodian (and each officer, employee, agent,
sub-custodian and depository of or engaged by the Custodian) shall at all
times be held to the standard of reasonable care. The Custodian shall be
fully responsible for any action taken or omitted by any officer, employee,
agent, sub-custodian or depository of or engaged by the Custodian to the same
extent as if the Custodian were to take or omit to take such action directly.
The Custodian agrees to indemnify and hold the Fund and each Series of the
Fund harmless from and against any and all loss, liability and expense,
including reasonable legal fees and expenses, arising out of the Custodian's
own negligence, misfeasance, bad faith or willful misconduct or that of any
officer, employee, agent, sub-custodian and depository of or engaged by the
Custodian in the performance of the Custodian's duties and obligations under
this Agreement; PROVIDED, HOWEVER, that, notwithstanding any other provision
in this Agreement, the Custodian shall not be responsible for the following:
(a) any action taken or omitted in accordance with any
Written Order from the Fund reasonably believed by the Custodian to
be genuine and to be signed by the proper party or parties; or
(b) any action taken or omitted in reasonable reliance on the
advice of counsel of or reasonably acceptable to the Fund relating
to any of its duties and responsibilities hereunder.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the performance by the Custodian (and each officer,
employee, agent, sub-custodian and depository of or engaged by the Custodian) of
its duties and responsibilities under this Agreement PROVIDED THAT the Custodian
(or any officer, employee, agent, sub-custodian and depository of or engaged by
the Custodian, as applicable) exercised reasonable care in the performance of
its duties and responsibilities under this Agreement.
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ARTICLE 19. EFFECTIVE DATE
This Agreement shall become effective with respect to each Series that
adopts this Agreement when this Agreement shall have been approved with respect
to such Series by the Board of Directors of the Fund. The effective date with
respect to each Series shall be set forth on EXHIBIT A hereto. The Fund shall
transmit to the Custodian promptly after such approval by said Board of
Directors a copy of its resolution embodying such approval, certified by the
Secretary of the Fund.
ARTICLE 20. GOVERNING LAW
This Agreement is executed and delivered in Minneapolis, Minnesota,
and the laws of the State of Minnesota shall be controlling and shall govern
the construction, validity and effect of this contract.
IN WITNESS WHEREOF, the Fund and the custodian have caused this
Agreement to be executed in duplicate as of the date first above written by
their duly authorized officers.
ATTEST: FORTIS ADVANTAGE PORTFOLIOS, INC.
/s/ MICHAEL J. RADMER By /s/ EDWARD M. MAHONEY
- ----------------------------- --------------------------------
Its PRESIDENT
----------------------------
ATTEST: NORWEST BANK MINNESOTA, N.A.
By /s/ BRENT SIEGEL
- ----------------------------- --------------------------------
Its ASSISTANT VICE PRESIDENT
----------------------------
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Exhibit A
(as amended through March 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS ADVANTAGE PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
NAME OF SERIES EFFECTIVE DATE
-------------- --------------
Capital Appreciation Portfolio March 21, 1992
High Yield Portfolio March 21, 1992
Government Total Return Portfolio March 21, 1992
Asset Allocation Portfolio March 21, 1992
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EXHIBIT B
(as amended through March 21, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS ADVANTAGE PORTFOLIOS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
COMPENSATION SCHEDULE
NORWEST BANK MINNESOTA/CUSTODY FEE SCHEDULE (FORTIS)
SAFEKEEPING CHARGES
Per Issue
Bonds: $20.00 per year
Stocks: $40.00 per year
Asset Value
Bonds: $0.10/$1,000.00 par value of assets per year
Stocks: $0.10/$1,000.00 par value of assets per year
TRANSACTION CHARGES
Buy/Sell/Maturity $12.00 per transaction
Principal Payments $12.00 per transaction
Incoming/Outgoing Movement $10.00 per movement
Asset Movements $12.00 per movement
EXTRAORDINARY SERVICES
For any service other than those covered by the aforementioned, a special charge
may be made according to the service provided, time required and responsibility
involved. Such services include, but are not limited to excessive
administrative time, unusual reports, certifications, audits, etc.
ADDITIONAL CHARGES
Reimbursement may be requested for out-of-pocket expenses such as postage,
insurance, shipping, telephone, supplies, etc.
This fee schedule shall remain effective subject to periodic review by all
concerned parties.
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[LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fortis Income Portfolios, Inc.
Fortis Advantage Portfolios, Inc.:
We consent to the use of our report incorporated by reference herein and the
references to our Firm under the headings "Financial Highlights" in Part A and
"Financial Statements" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 30, 1998
