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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, 1999
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. 27
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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. 46 to the Registration Statement of
Fortis Income Portfolios, Inc. (File Nos. 002-46686 and 811-02341) filed on
December 1, 1999. Such Prospectus combines two Registrants: two series of Fortis
Income Portfolios, Inc. and one series of Fortis Advantage Portfolios, Inc.
Part B (Statement of Additional Information) of this Registration
Statement is incorporated by reference from Post-Effective Amendment No. 46 to
the Registration Statement of Fortis Income Portfolios, Inc. (File Nos.
002-46686 and 811-02341) filed on December 1, 1999. 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. 46 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.
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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 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:
No person is directly or indirectly controlled by or under common
control with the Registrant.
<PAGE> 4
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 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
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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 DURING
NAME POSITION WITH ADVISER 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 Officer Debt securities manager with
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, Inc., Variable
Account C of Fortis Benefits Insurance Company and Variable Account D of Fortis
Benefits Insurance Company.
<PAGE> 6
(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>
POSITIONS AND OFFICES WITH THE
NAME AND PRINCIPAL BUSINESS ADDRESS UNDERWRITER POSITIONS AND OFFICES WITH FUND
- ------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
Carol M. Houghtby Director, Vice President & None
500 Bielenberg Drive Treasurer
Woodbury, Minnesota 55125
Roger W. Arnold Senior Vice President None
500 Bielenberg Drive
Woodbury, Minnesota 55125
John E. Hite Vice President & Secretary None
500 Bielenberg Drive
Woodbury, Minnesota 55125
</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
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(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 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 the Registrant without charge
will furnish such Annual Report.
(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 1999.
FORTIS ADVANTAGE PORTFOLIOS, INC.
(Registrant)
By /s/ Dean C. Kopperud
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Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Dean C. Kopperud President (principal executive officer) December 1, 1999
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Dean C. Kopperud
/s/ Tamara L. Fagely Treasurer (principal financial and December 1, 1999
- -------------------- accounting officer)
Tamara L. Fagely
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 Schenker Shadko* Director
Joseph M. Wikler* Director
*By /s/ Dean C. Kopperud December 1, 1999
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Dean C. Kopperud, Attorney-in-Fact
(Pursuant to a Power of Attorney dated March 21, 1996)
<PAGE> 1
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> 2
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 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.
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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 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 shares of any class shall be convertible
(automatically, optionally or otherwise) into shares of one or more
other classes in accordance with such requirements and procedures as
may be established by the Board of Directors.
6. The shareholders of each series (or class thereof) of common shares of this
corporation:
<PAGE> 4
(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):
(i) 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.
(ii) All consideration received by this corporation for the issue or
sale of shares of any series, together with all assets, income,
earnings, profits and proceeds derived therefrom (including all
proceeds derived from the sale, exchange or liquidation thereof and, if
applicable, any assets derived from any reinvestment of such proceeds
in whatever form the same may be) shall become part of the assets of
the portfolio to which the shares of that series relate, for all
purposes, subject only to the rights of creditors, and shall be so
treated upon the books of account of this corporation. Such assets,
income, earnings, profits and proceeds (including any proceeds derived
from the sale, exchange or liquidation thereof and, if applicable, any
assets derived from any reinvestment of such proceeds in whatever form
the same may be) are herein referred to as "assets belonging to" a
series of the common shares of this corporation.
(iii) 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.
(iv) 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.
(v) 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).
<PAGE> 5
(vi) 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.
(vii) 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 corporation) upon such terms and
conditions as may be provided in such agreement or agreements;
<PAGE> 6
(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 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
<PAGE> 7
obligation or liability for which such reserves or charges shall have
been created shall have been paid or discharged); the market value, or
any sale, bid or asked price to be applied in determining the market
value, of any security owned or held by or in each series (or class
thereof) of the corporation; the fair value of any other asset owned
by or in each series of the corporation; the number of shares of each
series (or class thereof) of the corporation issued or issuable; any
matter relating to the acquisition, holding and disposition of
securities and other assets by each series (or class thereof) of the
corporation; and any question as to whether any transaction
constitutes a purchase of securities on margin, a short sale of
securities, or an underwriting of the sale of, or participation in any
underwriting or selling group in connection, with the public
distribution of any securities.
(d) The Board of Directors or the shareholders of the corporation may
adopt, amend, affirm or reject investment policies and restrictions
upon investment or the use of assets of each series of the corporation
and may designate some such policies as fundamental and not subject to
change other than by a vote of a majority of the outstanding voting
securities, as such phrase is defined in the Investment Company Act of
1940, of the affected series of the corporation.
(e) The corporation shall indemnify such persons for such expenses and
liabilities, in such manner, under such circumstances, and to the full
extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided, however, that no such
indemnification may be made if it would be in violation of Section
17(h) of the Investment Company Act of 1940, as now enacted or
hereafter amended.
(f) Any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by a majority of the
directors or committee members.
(g) To the fullest extent permitted by the Minnesota Business Corporation
Act, as the same exists or may hereafter be amended (except as
prohibited by the Investment Company Act of 1940, as the same exists
or may hereafter be amended), a director of this corporation shall not
be liable to this corporation or its shareholders for monetary damages
for breach of fiduciary duty as a director.
<PAGE> 1
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
<PAGE> 2
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> 1
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.
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:
<PAGE> 2
"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.
(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:
<PAGE> 3
(i) The net asset value per share of the Acquired Fund's and the Acquiring
Fund's Class 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 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
<PAGE> 4
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.
(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
-------------------------
Scott R. Plummer
Assistant Secretary
<PAGE> 1
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.
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.
<PAGE> 2
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.
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.
<PAGE> 3
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.
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
<PAGE> 4
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. 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
<PAGE> 5
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 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
<PAGE> 6
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.
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, prescribed by the
Board of Directors.
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.
<PAGE> 7
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, 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 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
<PAGE> 8
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.
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.
<PAGE> 9
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 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
<PAGE> 10
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.
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 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
<PAGE> 11
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 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.
<PAGE> 12
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.
<PAGE> 1
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.
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
<PAGE> 2
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:
<TABLE>
<CAPTION>
MONTHLY EQUIVALENT
RATE RATE AVERAGE ASSET VALUES OF THE FUND
--------------- ------------- -------------------------------------------
<S> <C> <C> <C>
Capital Appreciation Portfolio 1/12 of 1.0% 1.0% On the first $100,000,000
1/12 of .8% .8% On the next $150,000,000
1/12 of .7% .7% On average net assets over $250,000,000
High Yield Portfolio 1/12 of .8% .8% On the first $50,000,000
1/12 of .7% .7% On average net assets over $50,000,000
Asset Allocation Portfolio 1/12 of 1.0% 1.0% On the first $100,000,000
1/12 of .8% .8% On the next $150,000,000
1/12 of .7% .7% On average net assets over $250,000,000
</TABLE>
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall be
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.
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%
<PAGE> 3
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 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.
<PAGE> 4
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
<PAGE> 1
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 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
<PAGE> 2
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.
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,
<PAGE> 3
including employees of Investors, who respond to inquiries of shareholders
regarding their ownership of Class shares, or who provide other administrative
or accounting services not otherwise required to be provided by the applicable
Funds' investment adviser or transfer agent. Notwithstanding the foregoing, if
the National Association of Securities Dealers, Inc. ("NASD") adopts a
definition of "service fee" for purposes of Section 26(d) of the NASD Rules of
Fair Practice that differs from a definition of Shareholder Servicing Costs in
this paragraph, or if the NASD adopts a related definition intended to define
the same concept, the definition of Shareholder Servicing Costs in this
paragraph shall be automatically amended, without further action of the parties,
to conform to such NASD definition. Investors shall also pay all costs of
distributing the shares of each Class ("Distribution Expenses"). Distribution
expenses include, but are not limited to, initial and ongoing sales compensation
(in addition to sales loads) paid to registered representatives of Investors and
to other broker-dealers and participating financial institutions; expenses
incurred in the printing of prospectuses, statements of additional information
and reports used for sales purposes; expenses of preparation and distribution of
sales literature; expenses of advertising of any type; an allocation of
Investors' overhead; payments to and expenses of persons who provide support
services in connection with the distribution of Fund shares; and other
distribution-related expenses. Advisers, rather than Investors, may bear the
expenses referred to in this paragraph, but Investors shall be primarily liable
for such expenses until paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive and retain the front-end
sales charge (if any) imposed in connection with sales of each Class, as set
forth in the applicable Class's current Prospectus. Up to the entire amount of
the front-end sales charge (if any) with respect to each applicable Class may be
reallowed by Investors to broker-dealers and participating financial
institutions in connection with their sale of Fund shares. The amount of the
front-end sales charge (if any) may be retained or deducted by Investors from
any sums received by it in payment for shares so sold. If such amount is not
deducted by Investors from such payments, such amount shall be paid to Investors
by the Fund not later than five business days after the close of any month
during which any such sales were made by Investors and payment therefor received
by the Fund.
(b) Investors shall be entitled to receive any contingent deferred
sales charge imposed in connection with any redemption of applicable Class
shares, as set forth in each applicable Class's current Prospectus.
(c) Investors shall be entitled to receive the following 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:
<PAGE> 4
<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.
(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
<PAGE> 5
Act of 1940 (the " 1940 Act") that set forth the amounts expended under this
contract and the Plan and the purposes for which those expenditures were made.
8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except
as specifically provided or authorized herein, shall have no authority to act
for or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS.
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or (b) the net asset
value of such shares at the time of cancellation by Investors.
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation
and other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or proceedings
in any way arising out of or in connection with the sale or distribution of the
shares of the Fund by Investors. In the event of the threat or institution of
any such litigation or legal proceedings against the Fund, Investors shall
defend such action on 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
<PAGE> 6
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 a any other Class of the Fund approve this
Agreement.
(b) This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by Investors,
upon sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to a particular Class at any time without the payment of
any penalty by the vote of the holders of a majority of the outstanding voting
securities of such Class, upon sixty (60) days' written notice to Investors.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by a vote of the Board of Directors of the Fund, including a majority
of the Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such amendment. Additionally, no
amendment to this Agreement that materially increases the distribution fee
and/or shareholder servicing fee payable by any Class hereunder shall be
effective until any necessary amendment to the applicable Rule 12b-1 Plan has
been approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FORTIS ADVANTAGE PORTFOLIOS, INC.
By: /s/ Edward M. Mahoney
---------------------------
Its President
FORTIS INVESTORS, INC.
By: /s/ Dean C. Kopperud
---------------------------
Its President
<PAGE> 1
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.
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
<PAGE> 2
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:
(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);
<PAGE> 3
(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, 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:
<PAGE> 4
(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 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;
<PAGE> 5
(l) in a case not covered by the preceding paragraphs of this Article,
upon receipt of a resolution adopted by the Board of Directors of the Fund,
signed by an officer of the Fund and certified to by the Secretary, specifying
the Securities and assets to be transferred, exchanged or delivered, the
purposes for which such delivery is being made, declaring such purposes to be
proper corporate purposes, and naming a person or persons (each of whom shall be
a properly bonded officer or employee of the Fund) to whom such transfer,
exchange or delivery is to be made; and
(m) in the case of deliveries pursuant to paragraphs (a) through (k)
above, the Written Order from the Fund shall direct that the proceeds of any
Securities delivered, or Securities or other assets exchanged for or in lieu of
Securities so delivered, are to be delivered to the Custodian.
ARTICLE 7. CUSTODIAN'S ACTS WITHOUT WRITTEN ORDERS FROM THE FUND
Unless and until the Custodian receives contrary Written Orders from
the Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and similar
items, and all coupons or other income items (except stock dividends), held or
received for the account of 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.
ARTICLE 8. SEGREGATED ACCOUNTS
<PAGE> 6
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 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
<PAGE> 7
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.
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.
<PAGE> 8
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.
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,
<PAGE> 9
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.
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
<PAGE> 10
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
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
<PAGE> 11
include, but are not limited to excessive administrative time, unusual reports.
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.
<PAGE> 1
[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 LLP
KPMG LLP
Minneapolis, Minnesota
November 29, 1999
