AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1997
1933 Act File No. 33-61314
1940 Act File No. 811-7654
- -
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 4 [x]
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 5 [x]
The Wright Managed Blue Chip Series Trust
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(Exact Name of Registrant as Specified in Charter)
24 Federal Street, Boston, Massachusetts 02110
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(Address of Principal Executive Offices)
617-482-8260
---------------------
(Registrant's Telephone Number)
H. Day Brigham, Jr.
24 Federal Street, Boston, Massachusetts 02110
------------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[x] On May 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ]On (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ]On (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 26, 1997 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1996. Registrant continues its election to register an
indefinite number of shares of beneficial interest pursuant to Rule 24f-2.
<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheet required by Rule 481(a) under Securities
Act of 1933.
Part A - The Prospectus of
Wright Managed Money Market Portfolio
Wright Near Term Bond Portfolio
Wright Government Obligations Portfolio
Wright Total Return Bond Portfolio
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
Part B - The Statement of Additional Information of
Wright Managed Money Market Portfolio
Wright Near Term Bond Portfolio
Wright Government Obligations Portfolio
Wright Total Return Bond Portfolio
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
Part C - Other Information
Signatures
Exhibit Index required by Rule 483(a) under the Securities
Act of 1933
Exhibits
<PAGE>
The Wright Managed Blue Chip Series Trust
Cross Reference Sheet Showing Location in Prospectus
and Statement of Additional Information
of Information Required by Items of the Registration Form
<TABLE>
<CAPTION>
<S> <C>
FORM N-1A LOCATION IN PROSPECTUS OR
ITEM NUMBER AND CAPTION STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------------------------------------------------------
1. Cover Page...............................................Prospectus - Cover Page
2. Synopsis.................................................Prospectus - Shareholder and Portfolio Expenses
3. Condensed Financial Information..........................Financial Highlights
4. General Description of Registrant........................Prospectus - Investment Objectgives and Policies; Management of the
Trust; Organization and Capitalization of the Trust
5. Management of the Trust..................................Prospectus - Management of the Trust
5a. Management's Discussion of Fund Performance..............Not Applicable
6. Capital Stock and Other Securties........................Prospectus - Investment Objectives and Policies; Net Asset Value
7. Purchase of Securities Being Offered.....................Prospectus - Net Asset Value; Dividends, Distributions and Taxes;
Purchase and Redemption of Shares
8. Redemption or Repurchase.................................Prospectus - Purchase and Redemption of Shares
9. Pending Legal Proceedings................................Not Applicable
10. Cover Page...............................................Statement of Additional Information - Cover Page
11. Table of Contents........................................Statement of Additional Information - Cover Page
12. General Information and History..........................Statement of Additional Information - Cover Page; General
Information
13. Investment Objectives and Policies.......................Statement of Additional Information - Additional Description of
Investments; Investment Restrictions
14. Management of the Trust..................................Statement of Additional Information - Management of the Trust
15. Control Persons and Principal Holders of Securities......Statement of Additional Information - Management of the Trust
16. Investment Advisory and Other Services...................Statement of Additional Information - Management of the Trust
17. Brokerage Allocation and Other Practices.................Statement of Additional Information - Portfolio Transactions
18. Capital Stock and Other Securities.......................Statement of Additional Information - General Information; Net
Asset Value
19. Purchase Redemption and Pricing of Securities
Being Offered............................................Statement of Additional Information - Net Asset Value
20. Tax Status............................................... Statement of Additional Information - Taxes
21. Underwriters............................................. Not Applicable
22. Calculation of Performance Data.......................... Statement of Additional Information - Performance Information
23. Financial Statements..................................... Financial Statements
</TABLE>
<PAGE>
PART A -- Information Required in a Prospectus
Prospectus
- -------------------------------------------------------------------------------
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
24 Federal Street, Boston, MA 02110
The Wright Managed Blue Chip Series Trust (the "Trust") is a diversified,
open-end management investment company that is designed to be the funding
vehicle for various insurance contracts to be offered by PFL Life Insurance
Company and other participating insurance companies. Shares of the Trust will be
offered exclusively to the separate accounts of such insurance companies. Six
managed investment portfolios of the Trust (the "Portfolios") and their
investment objectives are described below. INVESTMENTS IN THE PORTFOLIOS ARE NOT
GUARANTEED OR INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. SHARES OF
THE PORTFOLIOS ARE NOT OBLIGATIONS OR DEPOSITS OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION. THERE IS NO ASSURANCE THAT
WRIGHT MANAGED MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE PORTFOLIOS INVOLVE INVESTMENT
RISKS, INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME OR ALL OF
THE PRINCIPAL INVESTMENT.
Wright Managed Money Market Portfolio (WMMP)* seeks high current income, to
the extent consistent with the preservation of capital and maintenance of
liquidity, by investing in high-quality money market instruments. The Portfolio
seeks to maintain a stable net asset value of $1.00 per share.
Wright Near Term Bond Portfolio (WNTBP) seeks high total return, to the
extent consistent with reasonable safety, by investing primarily in debt
securities directly issued or guaranteed by the U.S. Government. The Portfolio
expects to maintain an average weighted portfolio maturity of five years or
less.
Wright Government Obligations Portfolio (WGOP)* seeks high total return, to
the extent consistent with reasonable safety, by investing primarily in debt
securities directly issued or guaranteed by the U.S. Government. The Portfolio's
average weighted maturity is expected to range from 10 to 25 years.
Wright Total Return Bond Portfolio (WTRBP) seeks high total return,
consisting of current income and capital appreciation, by investing primarily in
obligations issued or guaranteed by the U.S. Government and its agencies or
instrumentalities and in high-grade corporate debt securities of any maturity.
Wright Selected Blue Chip Portfolio (WSBCP) seeks long-term capital
appreciation and, as a secondary objective, reasonable current income by
investing primarily in equity securities of well-established U.S. companies that
meet the investment adviser's quality standards.
Wright International Blue Chip Portfolio (WIBCP) seeks long-term capital
appreciation by investing primarily in equity securities of well-established,
non-U.S. companies that meet the investment adviser's quality standards.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus sets forth the information about the Trust and the
Portfolios that a prospective investor should know before investing. Please read
the Prospectus and retain it for future reference. Additional information
contained in a Statement of Additional Information dated May 1, 1997 has been
filed with the Securities and Exchange Commission and is available upon request
without charge from Wright Investors' Service Distributors, Inc., 1000 Lafayette
Boulevard, Bridgeport, Connecticut 06604 (Telephone: 800-888-9471). The
Statement of Additional Information is incorporated by reference into this
Prospectus.
The date of this Prospectus is May 1, 1997.
*As of the date of this Prospectus,this Portfolio has not commenced operations.
<PAGE>
The Wright Managed Blue Chip Series Trust
24 Federal Street
Boston, MA 02110
===============================================================================
Investment Adviser
Wright Investors' Service, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
Administrator
Eaton Vance Management
24 Federal Street
Boston, Massachusetts 02110
Custodian and Transfer Agent
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
PAGE
SHAREHOLDER AND PORTFOLIO
EXPENSES............................................... 3
FINANCIAL HIGHLIGHTS.................................... 5
THE TRUST............................................... 9
INVESTMENT OBJECTIVES AND POLICIES...................... 10
Wright Managed Money Market Portfolio (WMMP)........... 10
Wright Near Term Bond Portfolio (WNTBP)................ 10
Wright Government Obligations Portfolio (WGOP.......... 11
Wright Total Return Bond Portfolio (WTRBP)............. 11
Wright Selected Blue Chip Portfolio (WSBCP)............ 11
Wright International Blue Chip Portfolio (WIBCP)....... 12
OTHER INVESTMENT POLICIES............................... 14
MANAGEMENT OF THE TRUST................................. 16
The Investment Adviser................................. 16
The Administrator...................................... 19
NET ASSET VALUE......................................... 20
DIVIDENDS, DISTRIBUTIONS AND TAXES...................... 21
PURCHASE AND REDEMPTION OF SHARES....................... 22
PERFORMANCE INFORMATION................................. 22
ORGANIZATION AND CAPITALIZATION OF THE TRUST............ 23
ADDITIONAL INFORMATION.................................. 24
Custodian and Transfer Agent........................... 24
Independent Auditors....................................24
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY STATE OR JURISDICTION OF THE UNITED STATES OR ANY COUNTRY WHERE
SUCH OFFER WOULD BE UNLAWFUL.
<PAGE>
Shareholder and Portfolio Expenses
The following table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by an investment in each Portfolio of the Trust. The percentages
shown below representing total operating expenses are based on actual expenses
for the fiscal year ended December 31, 1996 for the Wright Selected Blue Chip,
Near Term Bond, Total Return Bond, and International Blue Chip Portfolios. For
Wright Money Market and Wright Government Obligations Portfolios, the
percentages shown below are based on estimated expenses for the fiscal year
ended December 31, 1996 adjusted to reflect voluntary expense limitations of
0.45% and 0.90%, respectively, of average net assets.
<TABLE>
<CAPTION>
Wright Wright Wright Wright Wright Wright
Money Near Term Government Selected Total ReturnInternational
Market Bond Obligations Blue Chip Bond Blue Chip
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
(WMMP) (WNTBP) (WGOP) (WSBCP) (WTRBP) (WIBCP)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses None None None None None None
Annualized Fund Operating Expenses
(as a percentage of average daily net assets)
Investment Adviser Fee
(after fee reduction)(1) 0.35% 0.00% 0.45% 0.00% 0.00% 0.00%
Other Expenses
(after expense reduction, including
administration fee of .05%)(2) 0.10% 1.48% 0.45% 1.27% 1.26% 2.31%
------ ------ ------ ------ ------ ------
Total Operating Expenses
(after reductions)(3) 0.45% 1.48% 0.90% 1.27% 1.26% 2.31%
- --------------------------------------------------------------------------------------------------------------
(1) After reduction by Investment Adviser. If no reductions were made,
investment advisory fees would have been as follows: WNTBP - 0.45%; WSBCP -
0.65%; WTRBP - 0.45%; and WIBCP - 0.80% of each Portfolio's average daily
net assets.
(2) After reduction by Administrator. If no reductions were made, administration
fees would have been 0.05% of each Portfolio's average daily net assets. The
Investment Adviser was allocated a portion of the expenses of each
Portfolio. If such allocations were not made, Other Expenses net of
administration fees would have amounted to the following percentage of
average daily net assets: WNTBP - 8.85%; WSBCP - 1.27%; WTRBP - 4.89%; and
WIBCP - 3.52%.
(3) If no fee reductions or expense allocations were made, the Total Operating
Expenses would have been the following percentage of average daily net
assets: WNTBP - 9.35%; WSBCP - 1.97%; WTRBP - 5.39%; and WIBCP - 4.37%.
These fee reductions will continue in effect to the extent necessary to keep
the total operating expenses (without regard to custodian fee credits) of
WNTB, WSBCP, WTRBP and WIBCP from exceeding 0.90%, 1.15%, 0.90% and 1.85%,
respectively. In addition, during the year ended December 31, 1996,
custodian fees were reduced by credits resulting from cash balances
maintained with Investors Bank & Trust Company. If these credits were
reflected in the above table, the Total Operating Expenses shown above would
have been: WNTBP - 0.89%; WSBCP -1.06%; WTRBP- 0.90%; and WIBCP - 1.85%.
</TABLE>
<PAGE>
Example of Portfolio Expenses
The following is an illustration of the total transaction and operating expenses
that an investor in each Portfolio would bear over different periods of time,
assuming an investment of $1,000, a 5% annual return on the investment and
redemption at the end of each period.
<TABLE>
<CAPTION>
Wright Wright Wright Wright Wright Wright
Money Near Term Government Selected Total Return International
Market Bond Obligations Blue Chip Bond Blue Chip
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year $ 5 $ 15 $ 9 $ 13 $ 13 $ 23
3 Years $14 $ 47 $29 $ 40 $ 40 $ 72
5 Years -- $ 81 -- $ 70 $ 69 $124
10 Years -- $177 -- $153 $152 $265
- ------------------------------------------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary.
<PAGE>
Financial Highlights
The following information should be read in conjunction with the audited
financial statements that appear in the Portfolios' annual report to
shareholders. The Portfolios' financial statements have been audited by Deloitte
& Touche LLP, independent certified public accountants, as experts in accounting
and auditing. The financial statements and the independent auditors' report are
incorporated by reference into the Statement of Additional Information. Further
information regarding the performance of a Portfolio is contained in its annual
report to shareholders which may be obtained without charge by contacting Wright
Investors' Service Distributors, Inc. at (800) 888-9471.
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN Year Ended December 31,
BOND PORTFOLIO -----------------------------------------------
1996 1995 1994 1993(2)(7)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year..... $ 9.830 $ 8.840 $ 9.930 $ 10.000
--------- --------- --------- ---------
Income from Investment Operations:
Net investment income(1) ............ $ 0.447 $ 0.469 $ 0.398 $ 0.019
Net realized and unrealized gain (loss)
on investments..................... (0.360) 0.990 (1.090) (0.070)
--------- --------- --------- ---------
Total income (loss) from investment operations $ 0.087 $ 1.459 $ (0.692) $ (0.051)
--------- --------- --------- ---------
Less Distributions to Shareholders:
From net investment income.......... $ (0.447) $ (0.469) $ (0.398) $ (0.019)
--------- --------- --------- ---------
Net asset value, end of year........... $ 9.470 $ 9.830 $ 8.840 $ 9.930
========= ========= ========= =========
Total Return(3)........................ 1.0% 16.9% (7.1%) (0.5%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 789 $ 538 $ 520 $ 167
Ratio of net expenses to average daily
net assets(1)...................... 1.26%(5) 1.26%(5) 0.90% 0.70%(4)
Ratio of net investment income to average daily
net assets.......................... 4.77% 5.09% 4.49% 2.50%(4)
Portfolio Turnover Rate.............. 51% 186%(6) 23% 0%
(1) During the three years ended December 31, 1996, the Investment Adviser and
the Administrator reduced their fees, and the Investment Adviser was
allocated a portion of the Portfolio's operating expenses. Had such actions
not been undertaken, the net investment income (loss) per share and the
ratios would have been as follows:
Net investment income (loss) per share. $ 0.060 $ (0.187) $ (0.143)
========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses............................. 5.39% 8.38% 7.00%
========= ========= =========
Net investment income (loss)......... 0.64% (2.03%) (1.61%)
========= ========= =========
(2) Calculations based on average shares outstanding methodology.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) Annualized.
(5) During the years ended December 31, 1996 and 1995, custodian fees were
reduced by credits resulting from cash balances the Portfolio maintained
with the custodian. The computation of net expenses to average daily net
assets reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets in each
period would have been reduced to 0.90%.
(6) The Portfolio Turnover Rate increased from the prior year due to the need to
increase portfolio diversification (unaudited).
(7) For the period from December 7, 1993(start of business) to December 31,1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT NEAR TERM Year Ended December 31,
BOND PORTFOLIO -----------------------------------
1996 1995 1994(5)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year..... $ 9.880 $ 9.330 $ 10.000
--------- --------- ---------
Income from Investment Operations:
Net investment income(1)............. $ 0.440 $ 0.448 $ 0.324
Net realized and unrealized gain ( loss)
on investments..................... (0.180) 0.550 (0.670)
--------- --------- ---------
Total income (loss) from investment
operations........................ $ 0.260 $ 0.998 $ (0.346)
--------- --------- ---------
Less Distributions to Shareholders:
From net investment income........... $ (0.440) $ (0.448) $ (0.324)
--------- --------- ---------
Net asset value, end of year........... $ 9.700 $ 9.880 $ 9.330
========= ========= =========
Total Return(3)........................ 2.72% 10.9% (3.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 652 $ 327 $ 451
Ratio of net expenses to average daily net
assets.............................. 1.48%(4) 1.39%(4) 0.90%(2)
Ratio of net investment income to average daily
net assets.......................... 4.49% 4.61% 3.43%(2)
Portfolio Turnover Rate.............. 61% 94% 52%
(1) During each of the periods presented, the Investment Adviser and
Administrator reduced their fees, and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share....... $ (0.331) $ (0.438) $ (0.095)
========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses............................ 9.35% 10.51% 5.34%(2)
========= ========= =========
Net investment loss................. (3.38%) (4.51%) (1.01%)(2)
========= ========= =========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the years ended December 31, 1996 and 1995, custodian fees were
reduced by credits resulting from cash balances the Portfolio maintained
with the custodian. The computation of net expenses to average daily net
assets reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 0.89% and 0.90%, respectively.
(5) For the period from January 6, 1994 (start of business) to December 31,
1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT SELECTED Year Ended December 31,
BLUE CHIP PORTFOLIO ----------------------------------
1996 1995 1994(6)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year..... $ 11.410 $ 9.320 $ 10.000
--------- --------- ---------
Income from Investment Operations:
Net investment income(1)............. $ 0.170 $ 0.100 $ 0.092
Net realized and unrealized gain (loss)
on investments..................... 2.430 2.345 (0.712)
--------- --------- ---------
Total income (loss) from investment
operations........................ $ 2.600 $ 2.445 $ (0.620)
--------- --------- ---------
Less Distributions to Shareholders:
From net investment income........... $ (0.010) $ (0.070) $ (0.060)
From net realized gain on investment
transactions........................ -- (0.285) --
--------- --------- ---------
Total distributions................. $ (0.010) $ (0.355) $ (0.060)
--------- --------- ---------
Net asset value, end of year........... $ 14.000 $ 11.410 $ 9.320
========= ========= =========
Total Return(3)........................ 22.8% 26.3% (6.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 2,668 $ 2,239 $ 1,452
Ratio of net expenses to average daily net
assets(1) .......................... 1.27%(4) 1.60%(4) 1.15%(2)
Ratio of net investment income to average
daily net assets(1) ............... 1.14% 0.96% 1.16%(2)
Portfolio Turnover Rate.............. 68% 64% 74%
Average commission rate paid(5) ..... $ 0.0784 -- --
(1) During each of the periods presented, the Investment Adviser and the
Administrator reduced their fees, and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment income (loss) per share and the ratios would
have been as follows:
Net investment income (loss) per share $ 0.066 $ (0.017) $ (0.078)
========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses............................ 1.97% 2.72% 3.30%(2)
========= ========= =========
Net investment income (loss)....... 0.44% (0.16%) (0.99%)(2)
========= ========= =========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the years ended December 31, 1996 and 1995, custodian fees were
reduced by credits resulting from cash balances the Portfolio maintained
with the custodian. The computation of net expenses to average daily net
assets reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 1.06% and 1.15%, respectively.
(5) Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year on which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
(6) For the period from January 6, 1994 (start of business) to December 31,
1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT INTERNATIONAL Year Ended December 31,
BLUE CHIP PORTFOLIO ----------------------------------
1996 1995 1994(7)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year..... $ 10.060 $ 9.140 $ 10.000
--------- --------- ---------
Income from Investment Operations:
Net investment income (loss)(1)...... $ (0.043) $ 0.003 $ 0.031
Net realized and unrealized gain (loss)
on investments..................... 1.793 0.967 (0.886)
--------- --------- ---------
Total income (loss) from investment operations $ 1.750 $ 0.970 $ (0.855)
--------- --------- ---------
Less Distributions to shareholders:
From net investment income........... -- $ (0.005) $ (0.005)
In excess of net investment income(5) -- (0.013) --
Tax distribution from paid-in capital -- (0.032) --
--------- --------- ---------
Total distributions declared to shareholders $ -- $ (0.050) $ (0.005)
--------- --------- ---------
Net asset value, end of year........... $ 11.810 $ 10.060 $ 9.140
========= ========= =========
Total Return(3)........................ 17.4% 10.6% (8.1%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 1,457 $ 1,365 $ 1,229
Ratio of net expenses to average daily net assets(1) 2.31%(4) 2.28%(4) 1.80%(2)
Ratio of net investment income (loss) to average daily
net assets(1)...................... (0.42%) 0.06% 0.19%(2)
Portfolio Turnover Rate.............. 44% 31% 0%
Average commission rate paid(6) ..... $ 0.0773 -- --
(1) During each of the periods presented, the Investment Adviser and
Administrator reduced their fees, and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share....... $ (0.253) $ (0.920) $ (0.434)
========= ========= =========
Ratios (As a percentage of average daily daily net assets):
Expenses............................ 4.37% 4.18% 4.65%(2)
========= ========= =========
Net investment loss................. (2.47%) (1.85%) (2.66%)(2)
========= ========= =========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the years ended December 31, 1996 and 1995, custodian fees were
reduced by credits resulting from cash balances the Portfolio maintained
with the custodian. The computation of net expenses to average daily net
assets reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 1.85% and 1.96%, respectively.
(5) The Portfolio has followed the Statement of Position (SOP) 93-2:
Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distribution by Investment Companies.
The SOP requires that differences in the recognition or classification of
income between the financial statements and tax earnings and profits that
result in temporary over-distributions for financial statement purposes, are
classified as distributions in excess of net investment income or
accumulated net realized gains.
(6) Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year on which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
(7) For the period from January 6, 1994 (start of business) to December 31,
1994.
</TABLE>
<PAGE>
THE TRUST
The Wright Managed Blue Chip Series Trust (the "Trust") is an open-end
management investment company. The Trust consists of six separate portfolios
(each a "Portfolio"), each of which represents a separate pool of assets and has
different investment objectives and policies. Each Portfolio is a diversified
Portfolio. Additional portfolios may be established in the future.
The Trust is designed to be the funding vehicle for variable insurance
contracts (the "Contracts") to be offered by PFL Life Insurance Company ("PFL")
and other participating insurance companies. Shares of each Portfolio will be
offered exclusively to the separate accounts (the "Accounts") of PFL and other
participating insurance companies. References to PFL also include such other
participating insurance companies. The terms and conditions of the Contracts and
any limitations upon the Portfolios in which the Accounts may invest are set
forth in a separate prospectus. The Trust reserves the right to limit in the
future the types of Accounts that may invest in any Portfolio.
PFL is the record holder and the owner of each share of beneficial interest
in each Portfolio of the Trust. Within the limitations set forth in the
appropriate Contract, Contractholders may direct through PFL the allocation of
amounts available for investment under their Contracts among the Trust's
Portfolios. Instructions for any such allocation, or the purchase or redemption
of the shares of any Portfolio, must be made by PFL as the record holder of the
Trust's shares. The rights of PFL as the record holder and the owner of shares
of a Portfolio are different from the rights of a Contractholder. The term
"shareholder" in this Prospectus refers to PFL and not to the Contractholder.
Wright Investors' Service, Inc. ("Wright") acts as investment adviser to
each Portfolio. Eaton Vance Management ("Eaton Vance") acts as administrator to
the Trust.
None of the Portfolios alone constitutes a complete investment program.
=============================================================
The Prospectuses of the Portfolios are combined in this Prospectus. Each
Portfolio offers only its own shares, yet it is possible that a Portfolio might
become liable for a misstatement in the Prospectus of another Portfolio. The
Trustees have considered this in approving the use of a combined Prospectus.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Portfolio are described
below. Such investment objectives and the policies are not fundamental policies
and may be changed by the Trustees without the approval of shareholders. If any
changes were made, a Portfolio might have investment objectives different from
the objectives which a Contractholder considered appropriate at the time of
selecting the Portfolio as the underlying investment for the Contract. There can
be no assurance that any of the Portfolios will be able to achieve its
investment objectives.
Wright Managed Money Market Portfolio
The investment objective of Wright Managed Money Market Portfolio (the
"Money Market Portfolio") is high current income, to the extent consistent with
the preservation of capital and maintenance of liquidity. The Money Market
Portfolio pursues its objective by investing in a diversified portfolio of
high-quality money market securities, including U.S. Treasury bills, notes and
bonds; obligations of U.S. Government agencies and instrumentalities; bank
obligations, including certificates of deposit, time deposits and bankers'
acceptances; commercial paper; and corporate obligations with remaining
maturities of 13 months or less.
The Money Market Portfolio will seek to maintain a net asset value of $1.00
per share, but there can be no assurance that the Money Market Portfolio will be
able to achieve this goal. The Money Market Portfolio's portfolio securities are
valued using the amortized cost method as permitted by a rule of the Securities
and Exchange Commission. The rule requires, among other things, that all
portfolio securities meet certain quality and diversification criteria and have
a maximum remaining maturity at time of purchase of 13 months or less. The Money
Market Portfolio must also maintain a dollar-weighted average portfolio maturity
of not more than 90 days.
The Money Market Portfolio will purchase only commercial paper rated A-1 by
Standard & Poor's Ratings Group ("S&P"), P-1 by Moody's Investors Service, Inc.
("Moody's"), F-1 by Fitch Investors Service, Inc., or Duff-1 by Duff & Phelps
Credit Rating Company or, if not rated, of comparable quality as determined by
the investment adviser. The Money Market Portfolio's investments must also
satisfy certain investment criteria (the "Wright Quality Rating Standards")
established by the investment adviser. See "Wright Quality Rating Standards" in
the Appendix to the Statement of Additional Information.
For a description of the ratings discussed above, see the Appendix to the
"Statement of Additional Information."
Wright Near Term Bond Portfolio
The investment objective of Wright Near Term Bond Portfolio ("WNTBP") is
high total return, to the extent consistent with reasonable safety. WNTBP seeks
to achieve this objective by investing at least 80% of its net assets, under
normal market conditions, in securities issued by the U.S. Government
<PAGE>
or issued by its agencies and instrumentalities and guaranteed by the U.S.
Government and in repurchase agreements with respect to such securities. It is
expected that WNTBP's portfolio will have an average weighted maturity of five
years or less. WNTBP is designed to appeal to an investor seeking a level of
income that is higher and less variable than that available from short-term U.S.
Government obligations and limited fluctuation of capital compared to
investments in long-term U.S. Government obligations.
Wright Government Obligations Portfolio
The investment objective of Wright Government Obligations Portfolio
("WGOP") is high total return, to the extent consistent with reasonable safety.
WGOP seeks to achieve this objective by investing at least 80% of its net
assets, under normal market conditions, in securities issued or guaranteed by
the U.S. Government or issued by its agencies and instrumentalities and
guaranteed by the U.S. Government and in repurchase agreements with respect to
such securities. It is expected that WGOP's portfolio will have an average
weighted maturity ranging from 10 to 25 years. However, the average weighted
maturity of WGOP's portfolio may be shorter or greater than such range if
determined to be in the best interest of WGOP by the investment adviser. WGOP
does not invest in mortgage-related securities.
Wright Total Return Bond Portfolio
The investment objective of Wright Total Return Bond Portfolio ("WTRBP") is
high total return, consisting of current income and capital appreciation. WTRBP
seeks to achieve this objective by investing at least 80% of its net assets,
under normal market conditions, in obligations issued or guaranteed by the U.S.
Government and its agencies or instrumentalities and in high-grade corporate
debt securities. The average weighted maturity of WTRBP's portfolio may vary
depending upon the investment adviser's judgment as to the then current phase of
the interest rate cycle. WTRBP invests in obligations of the U.S. Government,
its agencies and instrumentalities, certificates of deposit of federally insured
banks and corporate obligations rated, at the time of purchase, "A" or better by
S&P or Moody's or if not rated, determined to be of comparable quality by the
investment adviser. Such investments also meet Wright Quality Rating Standards.
Wright Selected Blue Chip Portfolio
The investment objective of Wright Selected Blue Chip Portfolio ("WSBCP")
is long-term capital appreciation and, as a secondary objective, reasonable
current income. Under normal market conditions, WSBCP invests at least 80% of
its net assets in selected equity securities, including common stocks, preferred
stocks and convertible securities. Securities selected for WSBCP are drawn from
an investment list prepared by the investment adviser and known as The Approved
Wright Investment List (the "AWIL").
Approved Wright Investment List. The investment adviser maintains a
proprietary database on approximately 3,000 U.S. companies. The investment
adviser reviews such companies to identify
<PAGE>
those which, on the basis of at least five years of audited financial
statements, meet the minimum standards of prudence (e.g. the value of each
company's assets and shareholders' equity exceeds certain minimum standards and
the company's operations have been profitable during the last three years) and
thus are suitable for consideration by fiduciary investors. Companies which meet
these requirements may be large or small, have their securities traded on
exchanges or in the over-the-counter market, and include companies not currently
paying dividends on their shares.
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of these standards are eligible for selection by the Wright Investment Committee
for inclusion in the AWIL. See the Appendix to the Statement of Additional
Information for a more detailed description of the investment adviser's
standards for investment quality and the AWIL. All companies on the AWIL are, in
the opinion of the investment adviser, soundly financed "True Blue Chips" with
established records of earnings, profitability and equity growth and active,
liquid markets for their publicly held equity securities. The AWIL normally
includes approximately 350 companies.
The equity securities in which WSBCP invests are limited to those companies
on the AWIL whose current operations reflect characteristics which have been
identified by the investment adviser as being likely to provide comparatively
superior total investment return over the intermediate term. WSBCP purchases
securities which meet WSBCP's investment criteria and increases the amount of
current investments in companies the market values of which are below their
target values. Portfolio securities are generally considered for sale if the
value of such securities exceeds 21/2 times their normal weighting in the
portfolio, or if such securities are no longer included in the AWIL or no longer
meet WSBCP's investment criteria.
Wright International Blue Chip Portfolio
The investment objective of Wright International Blue Chip Portfolio
("WIBCP") is long-term capital appreciation. Under normal market conditions,
WIBCP invests at least 80% of its net assets in equity securities, including
common stocks, preferred stocks and convertible securities. Securities selected
for WIBCP are limited to those included on an investment list prepared by the
investment adviser and known as the International Approved Wright Investment
List (the "International AWIL").
The International Approved Wright Investment List. The investment adviser
maintains a proprietary database on approximately 11,000 non-U.S. companies from
over 46 countries. The investment adviser reviews such companies to identify
those which, on the basis of at least five years of audited financial
statements, meet the minimum standards of prudence (e.g. the value of a
company's assets and shareholders' equity exceeds certain minimum standards and
the company's operations have been profitable during the last three years) and
thus are suitable for consideration by fiduciary investors. Companies which meet
these requirements may be large or small, have their securities traded on
exchanges or in the over-the-counter market, and include companies not currently
paying dividends.
<PAGE>
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of these standards are eligible for selection for inclusion in the International
AWIL. See the Appendix to the Statement of Additional Information for a more
detailed description of the investment adviser's standards for investment
quality and the International AWIL. All companies on the International AWIL are,
in the opinion of the investment adviser, soundly financed "True Blue Chips"
with established records of earnings, profitability and equity growth and
active, liquid markets for their publicly held equity securities.
WIBCP intends to maintain investments in a minimum of three foreign
countries. WIBCP purchases securities which meet WIBCP's investment criteria and
increases the amount of current investments in companies the market values of
which are below their target values. Portfolio securities are generally
considered for sale if they are no longer included in the International AWIL or
no longer meet WIBCP's investment criteria. WIBCP may purchase equity securities
traded on foreign securities exchanges, or it may purchase American Depositary
Receipts (ADRs) traded in the United States. Shares of WIBCP are suitable for
investors wishing to diversify their portfolios by investing in non-U.S.
companies or for investors who simply wish to participate in non-U.S.
investments. Although the net asset value of WIBCP's shares will be stated in
U.S. dollars, fluctuations in foreign currency exchange rates may affect the
value of an investment in WIBCP.
WIBCP is intended to provide investors with the opportunity to invest in a
portfolio of securities of non-U.S. companies located throughout the world. In
making the allocation of assets among the various countries and geographic
regions, the investment adviser ordinarily considers such factors as prospects
for relative economic growth between foreign countries; expected levels of
inflation and interest rates; government policies influencing business
conditions; the range of individual investment opportunities available to
international investors; and other pertinent financial, tax, social, political
and national factors -- all in relation to the prevailing prices of the
securities in each country or region.
Foreign Investment Risk. All or a substantial portion of WIBCP's assets
will be invested in securities of foreign companies. Investing in securities of
foreign companies may involve certain considerations in addition to those
arising when investing in domestic securities. These considerations include the
possibility of currency exchange rate fluctuations and revaluation of
currencies, the existence of less publicly available information about issuers,
different accounting, auditing and financial reporting standards, less stringent
securities regulation, non-negotiable brokerage commissions, different tax
provisions, political or social instability, war or expropriation. Moreover,
foreign stock and bond markets generally are not as developed and efficient as
those in the United States and, therefore, the volume and liquidity in those
markets may be less, and the volatility of prices may be greater, than in U.S.
markets. Settlement of transactions on foreign markets may be delayed beyond
what is customary in U.S. markets.
These considerations generally are of greater concern in developing countries.
Because investment in foreign issuers will usually involve currencies of
foreign countries, and because WIBCP may be exposed to currency fluctuations
independent of its securities exposure, the value of the assets of the WIBCP as
measured in U.S. dollars will be affected by changes in foreign currency
exchange rates.
<PAGE>
OTHER INVESTMENT POLICIES
The Trust has adopted on behalf of each Portfolio certain fundamental
investment restrictions which are enumerated in detail in the Statement of
Additional Information and which may be changed only by the vote of a majority
of the affected Portfolio's outstanding voting securities, as defined in the
Investment Company Act of 1940. Among other restrictions, each Portfolio may not
borrow money in excess of 1/3 of the current market value of such Portfolio's
net assets (excluding the amount borrowed), and only for certain temporary or
emergency purposes, invest more than 5% of such Portfolio's total assets taken
at current market value in the securities of any one issuer, purchase more than
10% of the voting securities of any one issuer or invest 25% or more of the
Portfolio's total assets in the securities of issuers in the same industry.
There is, however, no limitation in respect to investments in obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities. No
Portfolio may invest more than 15% of its net assets in illiquid investments.
Repurchase Agreements. Each Portfolio may enter into repurchase agreements
in order to earn income on temporarily uninvested cash. A repurchase agreement
is an agreement under which the seller of a security agrees to repurchase and
the relevant Portfolio agrees to resell, such security at a specified time and
price. A Portfolio may enter into repurchase agreements only with large,
well-capitalized banks or government securities dealers that meet specified
credit standards. In addition, such repurchase agreements will provide that the
value of the collateral underlying the repurchase agreement will always be at
least equal to the repurchase price, including any accrued interest earned under
the repurchase agreement. In the event of a default or bankruptcy by a seller
under a repurchase agreement, the Portfolio will seek to liquidate such
collateral. However, the exercise of the right to liquidate such collateral
could involve certain costs, delays and restrictions and is not ultimately
assured. To the extent that proceeds from any sale upon a default of the
obligation to repurchase are less than the repurchase price, the Portfolio could
suffer a loss.
Forward Foreign Currency Exchange Contracts. WIBCP may enter into contracts
to purchase foreign currencies to protect against an anticipated rise in the
U.S. dollar price of securities it intends to purchase. WIBCP may enter into
contracts to sell foreign currencies to protect against the decline in value of
portfolio securities denominated or quoted in a foreign currency, or a decline
in the value of anticipated dividends from such securities, due to a decline in
the value of foreign currencies against the U.S. dollar. Contracts to sell
foreign currency could limit any potential gain which might be realized by WIBCP
if the value of the hedged currency increased. Forward contracts are subject to
the risk that the counterparty to such contract will default on its obligations.
Each Portfolio's transactions in foreign currency exchange contracts may be
limited by the requirements of the Internal Revenue Code for qualification as a
regulated investment company.
Lending Portfolio Securities. Each Portfolio may seek to increase its total
return by lending portfolio securities to broker-dealers or other institutional
borrowers. Such loans are continuously secured by collateral in cash or liquid
securities held by the Portfolio's custodian and maintained on a current basis
at an amount at least equal to the market value of the securities loaned, which
will be marked to market daily. During the existence of a loan, the Portfolio
will continue to receive the
<PAGE>
equivalent of the interest or dividends paid by the issuer on the
securities loaned and will also receive a fee, or all or a portion of the
interest on investment of the collateral, if any. However, the Portfolio may at
the same time pay a transaction fee to such borrowers and administrative
expenses, such as finders fees to third parties. As with other extensions of
credit there are risks of delay in recovery or even loss of rights in the
securities loaned if the borrower of the securities fails financially. However,
the loans will be made only to organizations deemed by the investment adviser to
be of good standing and when, in the judgment of the investment adviser, the
consideration which can be earned from securities loans of this type justifies
the attendant risk. If the investment adviser decides to make securities loans
on behalf of a Portfolio, it is intended that the value of the securities loaned
would not exceed 30% of such Portfolio's total assets.
Defensive Investments. During periods of unusual market conditions, when
the investment adviser believes that investing for temporary defensive purposes
is appropriate, all or a portion of the assets of any Portfolio may be held in
cash or invested in short-term obligations, including but not limited to
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collateralized by such securities); commercial paper which at the
date of investment is rated A-1 by S&P or P-1 by Moody's, or, if not rated, is
determined by the investment adviser pursuant to procedures established by the
Trustees to be of comparable quality; short-term corporate obligations and other
debt instruments which at the date of investment are rated AA or better by S&P
or Aa or better by Moody's or, if unrated, are determined by the investment
adviser pursuant to procedures established by the Trustees to be of comparable
quality; and certificates of deposit, bankers' acceptances and time deposits of
domestic and foreign banks the debt obligations of which satisfy the foregoing
rating criteria. Each Portfolio may invest in instruments and obligations of
banks that have other relationships with the Trust, Wright or Eaton Vance. No
preference will be shown towards investing in banks which have such
relationships.
Forward Commitments and When-Issued Securities. Each Portfolio may purchase
when-issued securities and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. A Portfolio
entering into such a transaction is required to maintain in a segregated account
with such Portfolio's custodian until the settlement date cash or liquid
securities in an amount sufficient to meet the purchase price. Alternatively,
the Portfolio may enter into offsetting contracts for the forward sale of other
securities that it owns. Securities purchased or sold on a when-issued or
forward commitment basis involve a risk of loss if the value of the security to
be purchased declines prior to the settlement date or if the value of the
security to be sold increases prior to the settlement date. Although a Portfolio
would generally purchase securities on a when-issued or forward commitment basis
with the intention of acquiring securities for its portfolio, the Portfolio may
dispose of a when-issued security or forward commitment prior to settlement if
the investment adviser deems it appropriate to do so.
Mortgage-Related Securities. WTRBP may invest in mortgage-related
securities, including collateralized mortgage obligations ("CMOs") and other
derivative mortgage-related securities. These securities will either be issued
by the U.S. Government or one of its agencies or instrumentalities or, if
privately issued, supported by mortgage collateral that is insured, guaranteed
or otherwise backed by the U.S. Government or its agencies or instrumentalities.
THE PORTFOLIO DOES NOT
<PAGE>
INVEST IN THE RESIDUAL CLASSES OF CMOS, STRIPPED MORTGAGE-RELATED
SECURITIES, LEVERAGED FLOATING RATE INSTRUMENTS OR INDEXED SECURITIES.
LEVERAGED FLOATING RATE INSTRUMENTS OR INDEXED SECURITIES.
Mortgage-related securities represent participation interests in pools of
adjustable and fixed mortgage loans. Unlike conventional debt obligations,
mortgage-related securities provide monthly payments derived from the monthly
interest and principal payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans. The mortgage loans underlying
mortgage-related securities are generally subject to a greater rate of principal
prepayments in a declining interest rate environment and to a lesser rate of
principal prepayments in an increasing interest rate environment. Under certain
interest and prepayment rate scenarios, the Portfolio may fail to recover the
full amount of its investment in mortgage-related securities purchased at a
premium, notwithstanding any direct or indirect governmental or agency
guarantee. The Portfolio may realize a gain on mortgage-related securities
purchased at a discount. Since faster than expected prepayments must usually be
invested in lower yielding securities, mortgage-related securities are less
effective than conventional bonds in "locking in" a specified interest rate.
Conversely, in a rising interest rate environment, a declining prepayment rate
will extend the average life of many mortgage-related securities. Extending the
average life of a mortgage-related security increases the risk of depreciation
due to future increases in market interest rates.
The Portfolio's investments in mortgage-related securities may include
conventional mortgage passthrough securities and certain classes of multiple
class CMOs. Senior CMO classes will typically have priority over residual CMO
classes as to the receipt of principal and/or interest payments on the
underlying mortgages. The CMO classes in which the Portfolio may invest include
sequential and parallel pay CMOs, including planned amortization class ("PAC")
and target amortization class ("TAC") securities.
Different types of mortgage-related securities are subject to different
combinations of prepayment, extension, interest rate and/or other market risks.
Conventional mortgage passthrough securities and sequential pay CMOs are subject
to all of these risks, but are typically not leveraged. PACs, TACs and other
senior classes of sequential and parallel pay CMOs involve less exposure to
prepayment, extension and interest rate risk than other mortgage-related
securities, provided that prepayment rates remain within expected prepayment
ranges or "collars."
MANAGEMENT OF THE TRUST
The Board of Trustees, in addition to reviewing the actions of the
investment adviser and administrator, decides upon general matters of policy for
each Portfolio. The investment adviser and administrator conduct and supervise
the daily operations of the Portfolios.
The Investment Adviser
The Trust has engaged The Winthrop Corporation ("Winthrop") to act as the
Portfolios' investment adviser pursuant to an Investment Advisory Contract.
Pursuant to a service agreement effective February 1, 1996 between Winthrop and
its wholly-owned subsidiary, Wright Investors' Service, Inc. ("Wright"), Wright,
acting under the general supervision of the Trust's Trustees,
<PAGE>
furnishes each Portfolio with investment advice and management services.
Winthrop supervises Wright's performance of this function and retains its
contractual obligations under its Investment Advisory Contract with each
Portfolio. The address of both Winthrop and Wright is 1000 Lafayette Boulevard,
Bridgeport, Connecticut. The Trustees of the Trust are responsible for the
general oversight of the conduct of the Portfolios' business.
Wright is a leading independent international investment management and
advisory firm, which together with its parent, Winthrop, has more than 30 years'
experience. Its staff of over 150 people includes a highly respected team of 65
economists, investment experts and research analysts. Wright, along with
Disclosure International, Inc., manages assets for bank trust departments,
corporations, unions, municipalities, eleemosynary institutions, professional
associations, institutional investors, fiduciary organizations, family trusts
and individuals. Wright operates one of the world's largest and most complete
databases of financial information on 15,000 domestic and international
corporations. The estate of John Winthrop Wright is the controlling shareholder
of Winthrop. At the end of 1996, Wright managed approximately $4 billion of
assets.
An Investment Committee of senior officers, all of whom are experienced
analysts, exercises disciplined direction and control over all investment
selections, policies and procedures for each Portfolio of the Trust. The
Committee, following highly disciplined buy-and-sell rules, makes all decisions
for the selection, purchase and sale of all securities. The members of the
Committee are as follows:
Peter M. Donovan, CFA, President and Chief Executive Officer of Wright. Mr.
Donovan received a BA Economics, Goddard College and joined Wright from Jones,
Kreeger & Co., Washington, DC in 1966. Mr. Donovan is the president of The
Wright Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed
Blue Chip Series Trust, The Wright EquiFund Equity Trust, Catholic Values
Investment Trust and The Wright Blue Chip Master Portfolio Trust. He is also a
director of Aetna Master Fund. He is a member of the New York Society of
Security Analysts and the Hartford Society of Financial Analysts.
Judith R. Corchard, Chairman of the Investment Committee, Executive Vice
President-Investment Management of Wright. Ms. Corchard attended the University
of Connecticut and joined Wright in 1960. She is a member of the New York
Society of Security Analysts and the Hartford Society of Financial Analysts.
Jatin J. Mehta, CFA, Executive Counselor and Director of Education of
Wright. Mr. Mehta received a BS Civil Engineering, University of Bombay, India
and an MBA from the University of Bridgeport. Before joining Wright in 1969, Mr.
Mehta was an executive of the Industrial Credit Investment Corporation of India,
a World Bank agency in India for financial assistance to private industry. He is
a member of the New York Society of Security Analysts and the Hartford Society
of Financial Analysts.
Harivadan K. Kapadia, CFA, Senior Vice President - Investment Analysis and
Information of Wright. Mr. Kapadia received a BA (hon.) Economics and Statistics
and MA Economics, University of Baroda, India and an MBA from the University of
Bridgeport. Before joining Wright in 1969, Mr. Kapadia was Assistant Lecturer at
the College of Engineering and Technology in Surat,
<PAGE>
India and Lecturer, B.J. at the College of Commerce & Economics, VVNagar,
India. He has published the textbooks: "Elements of Statistics," "Statistics,"
"Descriptive Economics," and "Elements of Economics." He was appointed Adjunct
Professor at the Graduate School of Business, Fairfield University in 1981. He
is a member of the New York Society of Security Analysts and the Hartford
Society of Financial Analysts.
Michael F. Flament, CFA, Senior Vice President - Investment and Economic
Analysis of Wright. Mr. Flament received a BS Mathematics, Fairfield University;
MA Mathematics, University of Massachusetts and an MBA Finance, University of
Bridgeport and joined Wright in 1972. He is a member of the New York Society of
Security Analysts and the Hartford Society of Financial Analysts.
James P. Fields, CFA, Vice President and Investment Officer of Wright. Mr.
Fields received a B.S. Accounting, Fairfield University and an MBA Finance from
Pace University. He joined Wright in 1982 and is also a member of the New York
Society of Security Analysts.
Amit S. Khandwala, Vice President - International Investments of Wright.
Mr. Khandwala received a BS (Economics, Accounting, International Business and
Computers) from University of Bombay, India, and an MBA (Investments, Corporate
Finance, International Finance & International Marketing) from the University of
Hartford. Mr. Khandwala has taught in the Executive MBA Program at the
University of Hartford Business School and his research on ADRs has been
published in The Journal of Portfolio Management. He was involved in
establishing the Stamford Society of Securities Analysts and is a member of
the New York Society of Security Analysts and the Hartford Society of Financial
Analysts. He joined Wright in 1986.
Charles T. Simko, Jr., Vice President - Investment Research of Wright. Mr.
Simko received a BS in Mathematics from Fairfield University. He joined Wright
in 1985.
Under the Portfolio's Investment Advisory Contract, each Portfolio is
required to pay Winthrop a monthly advisory fee calculated at the annual rates
(as a percentage of average daily net assets) set forth in the following table.
Effective February 1, 1996, Winthrop will cause the Portfolios to pay to Wright
the entire amount of the advisory fee payable by each Portfolio under the
Investment Advisory Contract with Winthrop:
<TABLE>
<CAPTION>
ANNUAL % ADVISORY FEE RATES
----------------------------------------------
Under $500 Million Over
PORTFOLIOS $500 Million to $1 Billion $1 Billion
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Managed Money Market Portfolio (WMMP) 0.25% 0.20% 0.20%
Wright Near Term Bond Portfolio (WNTBP) 0.45% 0.40% 0.35%
Wright Government Obligations Portfolio (WGOP) 0.45% 0.40% 0.35%
Wright Total Return Bond Portfolio (WTRBP) 0.45% 0.40% 0.35%
Wright Selected Blue Chip Portfolio (WSBCP) 0.65% 0.60% 0.55%
Wright International Blue Chip Portfolio (WIBCP) 0.80% 0.75% 0.70%
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
The following table sets forth the net assets of each Portfolio and the
advisory fee rate paid for the fiscal year ended December 31, 1996. As at
December 31, 1996, Wright Managed Money Market Portfolio and Wright Government
Obligations Portfolio had not commenced operations.
<TABLE>
<CAPTION>
Net Assets Fee Rate Paid
as of for the Fiscal Year
PORTFOLIOS 12/31/96 Ended 12/31/96
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Wright Near Term Bond Portfolio (WNTBP) $652,453 0.00%(1)
Wright Total Return Bond Portfolio (WTRBP) $789,492 0.00%(2)
Wright Selected Blue Chip Portfolio (WSBCP) $2,668,464 0.00%(3)
Wright International Blue Chip Portfolio (WIBCP) $1,457,072 0.00%(4)
- ---------------------------------------------------------------------------------------------------
(1) To enhance the net income of WNTBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $29,128 of
expenses related to the operation of such Portfolio. Absent a fee reduction,
WNTBP would have paid advisory fees equivalent to 0.45% of average daily net
assets.
(2) To enhance the net income of WTRBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $23,698 of
expenses related to the operation of such Portfolio. Absent a fee reduction,
WTRBP would have paid advisory fees equivalent to 0.45% of average daily net
assets.
(3) To enhance the net income of WSBCP, Wright made a reduction of its advisory
fee in the full amount of such fee. Absent a fee reduction, WSCBP would have
paid advisory fees equivalent to 0.65% of average daily net assets.
(4) To enhance the net income of WIBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $15,486 of
expenses related to the operation of such Portfolio. Absent a fee reduction,
WIBCP wuld have paid advisory fees equivalent to 0.80% of average daily net
assets.
</TABLE>
Pursuant to the Investment Advisory Contract, Wright also furnishes office
space and all necessary office facilities, equipment and personnel for servicing
the investments of each Portfolio. Each Portfolio is responsible for the payment
of all expenses relating to its operations other than those expressly stated to
be payable by Wright under its Investment Advisory Contract.
Wright places the security transactions for each Portfolio, which in some
cases may be effected in block transactions which include other accounts managed
by Wright. Wright provides similar services directly for bank trust departments.
Wright seeks to execute the portfolio security transactions on the most
favorable terms and in the most effective manner possible. Subject to the
foregoing, Wright may consider sales of shares of a Portfolio or of other
investment companies for which it acts as investment adviser as a factor in the
selection of broker-dealer firms to execute such transactions.
Wright is also the investment adviser to certain other funds in The Wright
Managed Equity Trust and The Wright Managed Income Trust, all of the funds in
The Wright EquiFund Equity Trust, Catholic Values Investment Trust and the
portfolios in The Wright Blue Chip Master Portfolio Trust.
The Administrator
The Trust engages Eaton Vance as its administrator under an Administration
Agreement. Under the Administration Agreement, Eaton Vance is responsible for
managing the legal and business affairs of each Portfolio, subject to the
supervision of the Trustees. Eaton Vance's services include
<PAGE>
recordkeeping, preparation and filing of documents required to comply with
federal and state securities laws, supervising the activities of the custodian
and transfer agent, providing assistance in connection with the Trustees' and
shareholders' meetings and other administrative services necessary to conduct
each Portfolio's business. Eaton Vance will not provide any investment
management or advisory services to the Portfolios. For its services under the
Administration Agreement, Eaton Vance receives monthly administration fees from
each Portfolio at the annual rates (as a percentage of average daily net assets
of such Portfolio) as follows:
ANNUAL % -- ADMINISTRATION FEE RATES
Under $100 Million to $250 Million to Over
$100 Million $250 Million $500 Million $500 Million
- ------------------------------------------------------------------------------
0.05% 0.04% 0.03% 0.02%
For the fiscal year ended December 31, 1996, Eaton Vance made a reduction
of its full administration fees for each operating Portfolio.
Eaton Vance, its affiliates and its predecessor companies have been
primarily engaged in managing assets of individuals and institutional clients
since 1924 and managing, administering and marketing mutual funds since 1931.
Total assets under management are over $17 billion. Eaton Vance is a
wholly-owned subsidiary of Eaton Vance Corp. ("EVC"), a publicly-held holding
company.
Other Expenses
The Trust will be responsible for all of its expenses not assumed by Wright
under its Investment Advisory Contract or by Eaton Vance under its
Administration Agreement, including, without limitation, the fees and expenses
of its custodian and transfer agent, including those incurred for determining
each Portfolio's net asset value and keeping each Portfolio's books; the cost of
share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; expenses of
Trustees who are not employees of Wright or Winthrop; and investment advisory
and administration fees. The Trust will also bear expenses incurred in
connection with litigation in which the Trust is a party and the legal
obligation the Trust may have to indemnify its officers and Trustees with
respect thereto.
NET ASSET VALUE
The net asset value per share of each Portfolio is determined at the close
of regular trading on the New York Stock Exchange (the "Exchange") (normally
4:00 P.M., New York time) on each day that the Exchange is open for trading. The
determination of net asset value per share is made by subtracting from the value
of the assets of a Portfolio the amount of its liabilities, and dividing the
<PAGE>
remainder by the number of outstanding shares of a Portfolio. The New York Stock
Exchange is closed on the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
The Money Market Portfolio uses the amortized cost method to determine the
value of portfolio securities. The amortized cost method of valuation involves
valuing a security at its cost at the time of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium. The assets of
other Portfolios are valued on the basis of their market values or, in the
absence of a market value with respect to any portfolio securities, at the value
determined by or under the direction of the Trustees, including the employment
of an independent pricing service.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio is treated as a separate entity for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (the "Code"). Each
Portfolio has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment company" for federal income tax purposes
under the Code and intends to continue to qualify as such. In order to so
qualify, each Portfolio must meet certain requirements with respect to the
sources of its income, the diversification of its assets, and the distribution
of its income to shareholders. By so qualifying, a Portfolio will not be subject
to federal income taxes to the extent that its net investment income and net
realized capital gains are distributed to shareholders in accordance with
applicable timing requirements.
It is the intention of each Portfolio to distribute substantially all its
net investment income. Dividends from investment income of WSBCP and WIBCP are
expected to be declared annually. Dividends from investment income of the Money
Market Portfolio, WNTBP, WGOP, and WTRBP will be declared daily and paid
monthly. However, the Trustees may decide to declare dividends at other
intervals. Dividends will be distributed in the form of additional full and
fractional shares of the Portfolio and not in cash, but shareholders may redeem
such shares for cash, as described below.
All net realized long- or short-term capital gains of each Portfolio after
reduction by capital losses, including any available capital loss carryforwards,
if any, will be declared and distributed at least annually either during or
after the close of the Portfolio's taxable year and will be reinvested in
additional full and fractional shares of the Portfolio. A Portfolio may be
subject to foreign withholding or other foreign taxes, with respect to income
(possibly including, in some cases, capital gains) derived from securities of
foreign issuers. U.S. income tax treaties with certain countries may eliminate
or reduce the rates of these taxes. The Trust intends to provide the
documentation necessary to achieve the lower treaty rate of withholding whenever
applicable or to seek a refund of amounts withheld in excess of the treaty rate.
For a discussion of the tax treatment of Contractholders with respect to
their Contracts, including the tax treatment of investment earnings of and
withdrawals from the segregated accounts underlying such Contracts, reference
should be made to the prospectus for the Contracts accompanying this Prospectus.
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
The shares of each Portfolio are not offered to the public but may be
purchased only by PFL or another participating insurance company for its
Accounts allocable to Contracts. Within the limitations set forth in the
appropriate Contract, Contractholders may direct PFL to purchase or redeem
shares of any Portfolio. Instructions for any such purchase or redemption of the
shares of any Portfolio must be made by PFL and Contractholders should not
direct instructions or inquiries to the Trust. The terms and conditions of the
Contracts and any limitations upon the Portfolios in which the Accounts may
invest are set forth in a separate prospectus.
Subject to the foregoing, each Portfolio sells its shares to PFL or another
participating insurance company without a sales charge at the net asset value
per share of such Portfolio next determined after the purchase order is
received. Each Portfolio reserves the right to reject any order for the purchase
of its shares or to limit or suspend, without notice, the offering of its
shares.
Shares of the Portfolios may be redeemed on any day on which the Trust is
open for business. Each Portfolio redeems its shares at the net asset value per
share of such Portfolio next determined after the redemption request is received
from PFL or another participating insurance company. Proceeds of any redemption
are delivered to PFL or another participating insurance company within seven
days after receipt of the redemption request. The right to redeem shares of a
Portfolio and to receive payment therefor may be suspended at times (a) when the
securities markets are closed, other than customary weekend and holiday
closings, (b) when trading is restricted for any reason, (c) when an emergency
exists as a result of which disposal by such Portfolio of securities owned by it
is not reasonably practicable or it is not reasonably practicable for such
Portfolio fairly to determine the value of its net assets, or (d) when the
Securities and Exchange Commission by order permits a suspension of the right of
redemption or a postponement of the date of payment or redemption.
Although the Portfolios normally intend to redeem shares in cash, each
Portfolio reserves the right to redeem securities in kind if deemed advisable by
the Trustees. The value of any portfolio securities distributed upon redemption
will be determined in the manner as described under "Net Asset Value." However,
a Portfolio will redeem shares in cash to the extent that the amount of a
Portfolio's shares to be redeemed for the benefit of any Contractholder within a
90-day period does not exceed the lesser of $250,000 or 1% of the aggregate net
asset value of the Portfolio at the beginning of such period. If portfolio
securities are distributed in lieu of cash, the shareholder will normally incur
transaction costs upon the disposition of any such securities.
PERFORMANCE INFORMATION
From time to time, the Trust may advertise the yield and/or total return of
the Portfolios and may compare the performance of the Portfolios with that of
other mutual funds with similar investment objectives as listed in rankings
prepared by Lipper Analytical Services, Inc., or similar independent services
monitoring mutual fund performance, and with appropriate securities or other
relevant indices. The yield of each Portfolio (except the Money Market
Portfolio) is computed by dividing its net investment income per share earned
during a recent 30-day period by the maximum
<PAGE>
offering price (i.e. net asset value) per share on the last day of the
period and annualizing the resulting figure. The total return of a Portfolio
refers to the average annual compounded rate of return over the stated period
that would equate an initial investment in that Portfolio at the beginning of
the period to its ending redeemable value, assuming reinvestment of all
dividends and distributions and deduction of all recurring charges. The Money
Market Portfolio's yield refers to the income generated by an investment in the
Portfolio over a seven-day period (which period will be stated in the
advertisement). This income is then annualized. That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
by an investment in the Portfolio is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment. The methods used to calculate total return and
yield are described further in the Statement of Additional Information.
The performance of each Portfolio will vary from time to time in response
to fluctuations in market conditions, interest rates, the composition of the
Portfolio's investments and expenses. Consequently, a Portfolio's performance
figures should not be considered representative of the performance of the
Portfolio for any future period. If the expenses of a Portfolio are reduced by
Wright or Eaton Vance, the Portfolio's performance would be higher.
ORGANIZATION AND CAPITALIZATION OF THE TRUST
The Trust was established in April 1993 as a business trust under
Massachusetts law. The Trust's shares of beneficial interest have no par value.
Shares of the Trust may be issued in series or Portfolios. The Trust currently
has six Portfolios. Each Portfolio's shares may be issued in an unlimited number
by the Trustees. Each share of a Portfolio represents an equal proportionate
beneficial interest in that Portfolio and, when issued and outstanding, the
shares are fully paid and non-assessable by the Trust. Shareholders are entitled
to one vote for each full share held. Fractional shares may be voted in
proportion to the amount of the net asset value of a Portfolio which they
represent. Voting rights are not cumulative, which means that the holders of
more than 50% of the shares voting for the election of Trustees can elect 100%
of the Trustees. Shares have no preemptive or conversion rights and are freely
transferable. Upon liquidation of a Portfolio, shareholders are entitled to
share pro rata in the net assets of such Portfolio.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees holding office have been elected by
shareholders. In such an event, the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's by-laws, the Trustees will continue to hold office and may
appoint successor Trustees.
The Trust's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The by-laws
<PAGE>
further provide that under certain circumstances the shareholders may call
a meeting to remove a Trustee and that the Trust is required to provide
assistance in communicating with shareholders about such a meeting.
The rights, if any, of Contractholders to vote the shares of a Portfolio
are governed by the relevant Contract. For information on such voting rights,
see the prospectus describing the Contracts.
ADDITIONAL INFORMATION
Custodian and Transfer Agent
Investors Bank & Trust Company, located at 89 South Street, Boston,
Massachusetts 02111, acts as the Trust's custodian and transfer agent.
Independent Auditors
Deloitte & Touche LLP, located at 125 Summer Street, Boston, Massachusetts
02110, serves as the Trust's independent auditors.
<PAGE>
PART B
==============================================================================
Information Required in a Statement of Additional Information
Statement of Additional Information
The Wright Managed Blue Chip Series Trust
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus dated May 1, 1997, as supplemented from
time to time, which is incorporated herein by reference, for Wright Managed
Money Market Portfolio*, Wright Near Term Bond Portfolio, Wright Government
Obligations Portfolio*, Wright Total Return Bond Portfolio, Wright Selected Blue
Chip Portfolio, and Wright International Blue Chip Portfolio, each a series of
The Wright Managed Blue Chip Series Trust (the "Trust"). The Prospectus may be
obtained from Wright Investors' Service Distributors, Inc., 1000 Lafayette
Boulevard, Bridgeport, Connecticut 06604 (Telephone: 800-888-9471). Unless
otherwise defined herein, capitalized terms have the meanings given to them in
the Prospectus.
Table of Contents
PAGE
- -------------------------------------------------------------------------------
GENERAL INFORMATION....................... 2
ADDITIONAL DESCRIPTION OF INVESTMENTS..... 2
INVESTMENT RESTRICTIONS................... 7
PERFORMANCE INFORMATION................... 9
Total Return........................... 9
Yield.................................. 10
PORTFOLIO TRANSACTIONS.................... 12
MANAGEMENT OF THE TRUST................... 13
Officers and Trustees.................. 13
The Investment Adviser................. 16
The Administrator...................... 17
Custodian.............................. 18
Independent Certified Public
Accountants........................... 18
Legal Matters.......................... 18
NET ASSET VALUE........................... 19
TAXES..................................... 20
Federal Income Taxes................... 20
FINANCIAL STATEMENTS...................... 22
APPENDIX.................................. 23
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS STATEMENT OF ADDITIONAL INFORMATION OR IN
THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS STATEMENT OF ADDITIONAL
INFORMATION DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY STATE
OR OTHER JURISDICTION OF THE UNITED STATES OR ANY COUNTRY WHERE SUCH OFFER WOULD
BE UNLAWFUL.
The date of this Statement of Additional Information is May 1, 1997.
* As of the date of this Statement of Additional Information, this
Portfolio has not commenced operations.
<PAGE>
GENERAL INFORMATION
The Trust did not have the initial capitalization required by Section 14(a)
of the Investment Company Act of 1940 (the "1940 Act") in reliance upon Rule
14a-2 under the 1940 Act and PFL Life acting as a "promoter" of the Trust.
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if only the interests
of a particular Portfolio are affected, a majority of such Portfolio's
outstanding shares. The Trustees are authorized to make amendments to the
Declaration of Trust that do not have a material adverse effect on the interests
of shareholders. The Trust may be terminated (i) upon the sale of the Trust's
assets to another investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the Trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its Trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Trust's Declaration of Trust further provides that the Trustees will
not be liable for errors of judgment or mistakes of fact or law; however,
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Trust's Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The Trust has been advised by counsel that the risk of any
shareholder incurring any liability for the obligations of a Trust is extremely
remote. The Trust's investment adviser does not consider this risk to be
material.
ADDITIONAL DESCRIPTION OF INVESTMENTS
The investment objectives and policies of each of the Portfolios are
described in the Prospectus. The following is a description of certain of the
Trust's investment policies and the portfolio securities in which certain
Portfolios may invest.
U.S. Government, Agency and Instrumentality Securities -- U.S. Government
securities are issued by the Treasury and include bills, certificates of
indebtedness, notes, and bonds. Agencies and instrumentalities of the U.S.
Government are established under the authority of an act of Congress and
<PAGE>
include, but are not limited to, the Government National Mortgage Association
("GNMA"), the Tennessee Valley Authority, the Bank for Cooperatives, the Farmers
Home Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association. Except for
U.S. Government obligations, the securities issued or guaranteed by U.S.
agencies and instrumentalities may or may not be backed by the full faith and
credit of the United States. If the obligation is not backed by the full faith
and credit of the United States, the Portfolio must look principally to the
agency or instrumentally issuing or guaranteeing the obligation for its
repayment and may not be able to assert a claim against the United States itself
in the event that the agency or instrumentality does not meet its obligations.
The U.S. Government does not guarantee the yield or value of any Portfolio's
investments or shares.
Mortgage-Related Securities -- GNMA Certificates are mortgage-backed
securities representing part ownership of a pool of mortgage loans. These loans
- -- issued by lenders such as mortgage bankers, commercial banks and savings and
loan associations -- are either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A "pool" or group of such mortgages
is assembled and, after being approved by GNMA, is offered to investors through
securities dealers. Once such pool is approved by GNMA, the timely payment of
interest and principal on the Certificates representing interests in such pool
is guaranteed by the full faith and credit of the U.S. Government. As
mortgage-backed securities, GNMA Certificates differ from bonds in that the
principal is paid back by the borrower over the term of the loan rather than
returned in a lump sum at maturity. GNMA Certificates are called "pass-through"
securities because a pro rata share of both regular interest and principal
payments, as well as unscheduled early prepayments, on the underlying mortgage
pool is passed through monthly to the holder of the Certificate. As indicated
below, since the unscheduled prepayment rate of the underlying mortgage pool
covered by a "pass-through" security cannot be predicted with accuracy, the
average life of a particular issue of GNMA Certificates cannot be accurately
predicted.
The Federal Home Loan Mortgage Corporation ("FHLMC"), a corporate
instrumentality of the U.S. Government created by Congress for the purpose of
increasing the availability of mortgage credit for residential housing, issues
participation certificates ("PCs") representing undivided interests in FHLMC's
mortgage portfolio. While FHLMC guarantees the timely payment of interest and
ultimate collection of the principal of its PCs, its PCs are not backed by the
full faith and credit of the U.S. Government. FHLMC PCs differ from GNMA
Certificates in that the mortgages underlying the PCs are mostly "conventional"
mortgages rather than mortgages insured or guaranteed by a federal agency or
instrumentality. However, in several other respects, such as the monthly
pass-through of interest and principal (including unscheduled prepayments) and
the unpredictability of future unscheduled prepayments on the underlying
mortgage pools, FHLMC PCs are similar to GNMA Certificates.
The Federal National Mortgage Association ("FNMA"), a federally chartered
corporation owned entirely by private stockholders, purchases both conventional
and federally insured or guaranteed residential mortgages from various entities,
including savings and loan associations, savings banks, credit unions and
mortgage bankers, and packages pools of such mortgages in the form of
pass-through securities generally called FNMA Mortgage-Backed Certificates,
which are guaranteed as to timely payment of principal and interest by FNMA but
are not backed by the full faith and
<PAGE>
credit of the U.S. Government. Like GNMA Certificates and FHLMC PCs, these
pass-through securities are subject to the unpredictability of unscheduled
prepayments on the underlying mortgage pools.
The mortgage-related securities in which the Portfolios may invest include
GNMA, FHLMC and FNMA securities representing interests in pools of 30 year, 15
year, adjustable rate, variable rate, graduated rate and other types of
mortgages. While it is not possible to accurately predict the life of a
particular issue of a mortgage-backed "pass-through" security held by a
Portfolio, the actual life of any such security is likely to be substantially
less than the original average maturity of the mortgage pool underlying the
security. This is because unscheduled early prepayments of principal on the
security owned by the Portfolio will result from the prepayment, refinancing or
foreclosure of the underlying mortgage loans in the mortgage pool. The
prepayment assumptions for pools of 30 and 15-year mortgages are generally
considered to be 12 years and seven years, respectively, but may be considerably
shorter during periods of declining interest rates. Mortgagors may speed up the
rate at which they prepay their mortgages when interest rates decline
sufficiently to encourage refinancing. A Portfolio, when the monthly payments
(which may include unscheduled prepayments) on such a security are passed
through to it, may be able to reinvest such payments only at a lower rate of
interest. Because of the regular scheduled payments of principal and the early
unscheduled prepayments of principal, the mortgage-backed "pass-through"
security is less effective than other types of obligations as a means of
"locking-in" attractive long-term interest rates. As a result, this type of
security may have less potential for capital appreciation during periods of
declining interest rates than other U.S. Government securities of comparable
maturities, although many issues of mortgage-backed "pass-through" securities
may have a comparable risk of decline in market value during periods of rising
interest rates. If such a security has been purchased by a Portfolio at a
premium above its par value, both a scheduled payment of principal and an
unscheduled prepayment of principal, which would be made at par, will accelerate
the realization of a loss equal to that portion of the premium applicable to the
payment or prepayment and will reduce the Portfolio's total return. If such a
security has been purchased by a Portfolio at a discount from its par value,
both a scheduled payment of principal and an unscheduled prepayment of principal
will increase current and total returns and will accelerate the recognition of
income.
Collateralized Mortgage Obligations ("CMOs") are debt securities issued by
FHLMC and by financial institutions and other mortgage lenders which are
generally fully collateralized by a pool of mortgages held under an indenture.
CMOs are issued with a number of classes or series which have different
maturities and are retired in sequence and are the general obligations of the
issuers thereof. CMOs are designed to be retired as the underlying mortgage
loans in the mortgage pool are repaid. In the event of sufficient early
prepayments on such mortgages, the class or series of CMO first to mature
generally will be retired prior to its maturity. Thus the early retirement of a
particular class or series of a CMO held by a Portfolio would affect the
Portfolio's current and total returns in the manner indicated above. Currently,
the investment adviser will consider privately issued CMOs or other
mortgage-backed securities as possible investments for a Portfolio only when the
mortgage collateral is insured, guaranteed or otherwise backed by the U.S.
Government or one or more of its agencies or instrumentalities (e.g., insured by
the Federal Housing Administration or Farmers Home Administration or guaranteed
by the Administrator of Veterans Affairs or consisting in whole or in part of
U.S.Government securities). WGOP may not invest in mortgage-related securities.
<PAGE>
Corporate Obligations -- As described in the Prospectus, each Portfolio may
invest, subject to certain limitations, in corporate debt obligations. Rated
obligations must be rated in the two highest rating categories by a nationally
recognized statistical rating organization for money market instruments in any
portfolio, "A" by Moody's and S&P, in the case of WTRBP, and "AA" by Moody's or
"Aa" by S&P, in the case of WNTBP, WIBCP and WSBCP. Unrated obligations must be
determined by the investment adviser to be of comparable quality.
Foreign Securities -- WIBCP may invest in foreign securities. Investing in
securities issued by companies whose principal business activities are outside
the United States may involve significant risks not associated with domestic
investments. For example, there is generally less publicly available information
about foreign companies, particularly those not subject to the disclosure and
reporting requirements of the U.S. securities laws. Foreign issuers are
generally not bound by uniform accounting, auditing and financial reporting
requirements comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in exchange
control regulations, expropriation or confiscatory taxation, limitation on
removal of funds or other assets of WIBCP, political or financial instability or
diplomatic and other developments which could affect such investments. Further,
economies of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the U.S.
It is anticipated that in most cases, the best available market for foreign
securities will be on exchanges or in over-the-counter markets located outside
the U.S. Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those in the U.S. Securities of some foreign
issuers (particularly those located in developing countries) may be less liquid
and more volatile than securities of comparable U.S. companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of securities exchanges,
brokers and listed companies than in the U.S.
Foreign Currency Exchange Transactions -- WIBCP may engage in foreign
currency exchange transactions. Investments in securities of foreign companies
whose principal business activities are located outside of the United States
will frequently involve currencies of foreign countries. In addition, assets of
WIBCP may temporarily be held in bank deposits in foreign currencies during the
completion of investment programs. Therefore, the value of WIBCP's assets, as
measured in U.S. dollars, may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations. Although WIBCP
values its assets daily in U.S. dollars, it does not intend to convert its
holdings of foreign currencies into U.S. dollars on a daily basis. WIBCP may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market. WIBCP will
convert currency on a spot basis from time to time and will incur costs in
connection with such currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to WIBCP at one rate, while offering a lesser rate of exchange should WIBCP
desire to resell that currency to the dealer. WIBCP does not intend to speculate
in foreign currency exchange rates.
As an alternative to spot transactions, WIBCP may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") or
purchase currency call or put options. A forward contract involves an obligation
to purchase or sell a specific currency at a future date and price fixed by
agreement between the parties at the time of entering into the contract. These
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. Although a forward
contract generally involves no deposit requirement and no commissions are
charged at any stage for trades, WIBCP will use segregated accounts for forward
purchase transactions. WIBCP intends to enter into such contracts only on net
terms. The purchase of a put or call option is an alternative to the purchase or
sale of forward contracts and will be used if the option premiums are less then
those in the forward contract market.
WIBCP may enter into forward contracts or purchase currency options only
under two circumstances. First, when WIBCP enters into a contract for the
purchase or sale of a security dominated in a foreign currency, it may desire to
"lock in" the U.S. dollar price of the security. This is accomplished by
entering into a forward contract for the purchase or sale, for a fixed amount of
U.S. dollars, of the amount of foreign currency involved in the underlying
security transaction ("transaction hedging"). Such forward contract transactions
will enable WIBCP to protect itself against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date the security is purchased or
sold and the date of payment for the security.
Second, when the investment adviser believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, WIBCP may enter into a forward contract to sell, for a fixed amount of
U.S. dollars, the amount of foreign currency approximating the value of some or
all of the securities denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved will
not generally be possible. The future value of such securities in foreign
currencies will change as a consequence of fluctuations in the market value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of currency exchange rates and the
implementation of a short-term hedging strategy are highly uncertain.
WIBCP's custodian will place cash or liquid securities in a segregated
account. The amount of such segregated assets will be at least equal to the
value of WIBCP's total assets committed to the consummation of forward contracts
involving the purchase of forward currency. If the value of the securities
placed in the segregated account declines, additional cash or securities will be
placed in the account on a daily basis so that the value of the amount will
equal the amount of WIBCP's commitments with respect to such contracts.
At the maturity of a forward contract, WIBCP may elect to sell the
portfolio security and make delivery of the foreign currency. Alternatively,
WIBCP may retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an identical offsetting contract from
the same currency trader.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a forward contract. Accordingly, it may be
necessary for WIBCP to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if WIBCP intends to sell the security
and the market value of the security is less than the amount of foreign currency
<PAGE>
that WIBCP is obligated to deliver. Conversely, it may be necessary to sell on
the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
that WIBCP is obligated to deliver.
If WIBCP retains the portfolio security and engages in an offsetting
transaction, WIBCP will incur a gain or a loss (as described below) to the
extent that there has been a change in forward contract prices. If WIBCP engages
in an offsetting transaction, it may subsequently enter into a new forward
contract to sell the foreign currency. Should forward contract prices decline
during the period between the date WIBCP enters into a forward contract for the
sale of the foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, WIBCP will realize a gain to the
extent that the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward contract prices increase,
WIBCP will suffer a loss to the extent that the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
WIBCP will not speculate in forward contracts and will limit its
transactions in such contracts to those described above. Of course, WIBCP is not
required to enter into such transactions with respect to portfolio securities
quoted or denominated in a foreign currency and will not do so unless deemed
appropriate by its investment adviser. This method of protecting the value of
WIBCP's securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which WIBCP can achieve at some future time.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, they also tend to limit any
potential gain which might be realized if the value of such currency increases.
Lending Portfolio Securities -- A Portfolio would have the right to call a
loan and obtain the securities loaned at any time on up to five business days'
notice. A Portfolio would not have the right to vote any securities having
voting rights during the existence of a loan, but would call the loan in
anticipation of an important vote to be taken among holders of the securities or
the giving or withholding of their consent on a material matter affecting the
investment.
Borrowings -- Each Portfolio may borrow money in an amount equal to 1/3 of
its net assets for temporary or emergency purposes or for the clearance of
transactions. A Portfolio will not purchase additional securities while such
borrowings exceed 5% of such Portfolio's total assets.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust on
behalf of each Portfolio and may be changed only by the vote of a majority of a
Portfolio's outstanding voting securities, as defined in the 1940 Act.
Accordingly, each Portfolio may not:
(1) Borrow money in excess of 1/3 of the current market value of the net
assets of such Portfolio (excluding the amount borrowed) and then only
if such borrowing is incurred as a
<PAGE>
temporary measure for extraordinary or emergency purposes or to
facilitate the orderly sale of portfolio securities to accommodate
redemption requests; or issue any securities other than its shares of
beneficial interest except as appropriate to evidence indebtedness
which such Portfolio is permitted to incur;
(2) Pledge, mortgage or hypothecate its assets, except to secure permitted
borrowings. For purposes of this restriction, collateral arrangements
with respect to options, futures contracts and options on futures
contracts shall not be deemed to be a mortgage, pledge or
hypothecation);
(3) Invest more than 5% of its total assets taken at current market value
in the securities of any one issuer or purchase more than 10% of the
voting securities of any one issuer;
(4) Purchase or retain securities of any issuer if 5% of the issuer's
securities are owned by those officers and Trustees of the Trust or its
investment adviser who own individually more than 1/2 of 1% of the
issuer's securities;
(5) Purchase securities on margin or make short sales, except that such
Portfolio may make short sales against the box;
(6) Buy or sell real estate, commodities, or commodity contracts unless
acquired as a result of ownership of securities; except that the
Portfolio may purchase and sell futures contracts on securities,
indices, currency and other financial instruments and options on
futures contracts;
(7) Purchase any securities which would cause more than 25% of the market
value of such Portfolio's total assets at the time of such purchase to
be invested in the securities of issuers having their principal
business activities in the same industry, provided that there is no
limitation in respect to investments in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(8) Underwrite securities issued by other persons except insofar as the
Trust may technically be deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security;
(9) Make loans, except (i) through the loan of a portfolio security, (ii)
by entering into repurchase agreements and (iii) to the extent that the
purchase of debt instruments for the Portfolio in accordance with the
Portfolio's investment objective and policies may be deemed to be
loans;
(10) Purchase from or sell to any of its Trustees and officers, its
administrator, investment adviser, or principal underwriter, if any, or
the officers and directors of said administrator, investment adviser or
principal underwriter, portfolio securities; or
(11) Issue senior securities, except as permitted under (1).
<PAGE>
In addition to the foregoing fundamental investment restrictions, each
Portfolio has adopted the following nonfundamental policies which reflect the
intentions of the Trustees under current circumstances. Unlike the fundamental
investment restrictions, these policies may be changed at any time by the
Trustees without shareholder approval. Each Portfolio will not: purchase oil,
gas or other mineral leases or purchase partnership interests in oil, gas or
other mineral exploration or development programs; purchase warrants of any
issuer if, as a result, more than 2% of the value of its total assets would be
invested in warrants which are not listed on the New York or American Stock
Exchanges and more than 5% of the value of its total assets would be invested in
warrants, such warrants in each case to be valued at the lesser of cost or
market, but assigning no value to warrants acquired by such Portfolio in units
or attached to securities; or enter into repurchase agreements maturing in more
than seven days or invest in illiquid or restricted securities if, as a result,
more than 15% of the Portfolio's net assets (10% of net assets in the case of
the Money Market Portfolio) would be invested in such repurchase agreements and
securities.
If a percentage restriction contained in the Portfolio's investment
restrictions or policies is adhered to at the time of investment, a later
increase or decrease in the percentage resulting from a change in the value of
portfolio securities or the Portfolio's net assets will not be considered a
violation of such restrictions.
PERFORMANCE INFORMATION
Each Portfolio may from time to time report its yield and total return in
advertisements, reports to shareholders and other sales material. Total return
and yield will be computed as described below.
Total Return
The average annual total return of each Portfolio is determined for a
particular period by calculating the actual dollar amount of investment return
on a $1,000 investment in the Portfolio made at the maximum public offering
price (i.e. net asset value) at the beginning of the period, and then
calculating the annual compounded rate of return which would produce that
amount. Total return for a period of one year is equal to the actual return of
the Portfolio during that period. This calculation assumes that all dividends
and distributions are reinvested at net asset value on the reinvestment dates
during the period. The formula can be expressed as follows:
1
Ending Value -
------------- n
Average Annual Total Return = [ ( Starting Value ) - 1 ] x 100
where Starting Value equals $1,000 and n = number of years.
In addition, each Portfolio may provide total return information for other
designated periods, such as for the most recent six months or most recent 12
months. This total return information is computed as described above except that
no annualization is made.
<PAGE>
The average annual total return of each Portfolio for the one-year period
ended December 31, 1996 and from inception to December 31, 1996 are shown in the
table below:
<TABLE>
<CAPTION>
One Year Inception To Inception
Ended 12/31/96 12/31/96 Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Near Term Bond Portfolio 2.72% 3.22% 1/6/94
Wright Selected Blue Chip Portfolio 22.80% 13.35% 1/6/94
Wright Total Return Portfolio 1.00% 2.87% 12/7/93
Wright International Blue Chip Portfolio 17.40% 5.74% 1/6/94
- --------------------------------------------------------------------------------------------------
1 During the periods ended December 31, 1996, the operating expenses of the
Portfolios were reduced either by a reduction of the investment adviser fee,
the administrator fee, and the allocation of expenses to the investment
adviser, or a combination of these. Had such actions not been undertaken,
the Portfolios would have had lower returns.
2 The total investment return does not reflect expenses that apply to the
separate account or policies. If these charges had been included, the
total return would be reduced.
</TABLE>
Yield
The yield of each Portfolio is computed by dividing its net investment
income per share earned during a recent 30-day period by the maximum offering
price (i.e. net asset value) per share on the last day of the period and
annualizing the resulting figure. Net investment income per share is equal to
the dividends and interest earned on a Portfolio's assets during the period,
with the resulting number being divided by the average daily number of shares
outstanding and entitled to receive dividends during the period.
The formula is as follows:
6
Yield = 2 [ ( a--b + 1) - 1 ]
----
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of accumulation units outstanding during
the period.
d = the maximum offering price per accumulation unit on the last day of
the period.
NOTE: "a" is calculated for stocks by dividing the stated dividend rate for
each security held during the period by 360. "a" is estimated for debt
securities other than mortgage certificates by dividing the year-end market
value times the yield to maturity by 360. "a" for mortgage securities, such as
GNMAs, is the actual income earned. Neither discount nor premium has been
amortized.
<PAGE>
For the 30-day period ended December 31, 1996, the yield of each of the
following Portfolios was:
30-Day Period Ended
December 31, 1996
- ------------------------------------------------------------------------------
Wright Near Term Bond Portfolio 2.96%
Wright Selected Blue Chip Portfolio 1.89%
Wright Total Return Bond Portfolio 4.72%
- ------------------------------------------------------------------------------
The "yield" and "effective yield" of the Money Market Portfolio is
calculated in the following manner:
A. Yield -- the net annualized yield based on a specific 7-calendar
days calculated at simple interest rates. Yield is calculated by
determining the net change, exclusive of capital changes, in the
value of a hypothetical preexisting account having a balance of
one share at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from shareholders'
accounts, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period
return. The yield is annualized by multiplying the base period
return by 365/7.
The yield figure is stated to the nearest hundredth of one
percent.
B. Effective Yield -- the net annualized yield for a specified
7-calendar days assuming a reinvestment of the yield or
compounding. Effective yield is calculated by the same method as
yield except the yield figure is compounded by adding 1, raising
the sum to a power equal to 365 divided by 7, and subtracting one
from the result, according to the following formula: Effective
Yield = [(Base Period Return +1)365/7]-1.
Total return, yield and effective yield are based on historical earnings
and are not intended to indicate future performance. Total return and yield will
vary based on changes in market conditions and the level of expenses.
A Portfolio's yield or total return may be compared to the Consumer Price
Index and various domestic securities indices. A Portfolio's yield or total
return and comparisons with these indices may be used in advertisements and in
information furnished to present or prospective shareholders.
From time to time, evaluations of a Portfolio's performance made by
independent sources may be used in advertisements and in information furnished
to present or prospective shareholders. These include the rankings prepared by
Lipper Analytical Services, Inc., an independent service which monitors the
performance of mutual funds. The Lipper performance analysis includes the
reinvestment of dividends and capital gain distributions, but does not take
sales charges into consideration and is prepared without regard to tax
consequences.
<PAGE>
PORTFOLIO TRANSACTIONS
The investment adviser places the security transactions for each Portfolio,
which in some cases may be effected in block transactions which include other
accounts managed by the investment adviser. The investment adviser provides
similar services directly for bank trust departments and other investment
companies. In some instances, allocation of the securities to be purchased or
sold, and the expenses in connection with such transaction, is made in a manner
the investment adviser considers to be most equitable and consistent with its
fiduciary obligations to the Trust and such other clients. Such allocation may
adversely affect the size of the position obtainable by a Portfolio.
The investment adviser seeks to execute portfolio security transactions on
the most favorable terms and in the most effective manner possible. In seeking
best execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant
factors, including without limitation the size and type of the transaction, the
nature and character of the markets for the security, the confidentiality, speed
and certainty of effective execution required for the transaction, the
reputation, experience and financial condition of the broker-dealer and the
value and quality of service rendered by the broker-dealer in other
transactions, and the reasonableness of the brokerage commission or markup, if
any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the Portfolios may give consideration to those firms
which supply brokerage and research services, quotations and statistical and
other information to the investment adviser for use in servicing their accounts
or firms which purchase its investment services. The term "brokerage and
research services" includes advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to the investment adviser in servicing all or less than all of its
accounts and the services and information furnished by a particular firm may not
necessarily be used in connection with the account which paid brokerage
commissions to such firm. The advisory fee paid by the Portfolios to the
investment adviser is not reduced as a consequence of its receipt of such
services and information. While such services and information are not expected
to reduce the investment adviser's normal research activities and expenses, the
investment adviser would, through use of such services and information, avoid
the additional expenses which would be incurred if it attempted to develop
comparable services and information through its own staff.
Under the Investment Advisory Contract, the investment adviser has the
authority to pay commissions on portfolio transactions for brokerage and
research services exceeding that which other brokers or dealers might charge
provided certain conditions are met. The Investment Advisory Contract expressly
authorizes the selection of a broker or dealer which charges a Portfolio a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
<PAGE>
Subject to the requirement that the investment adviser shall use its best
efforts to seek to execute each Portfolio's security transactions at
advantageous prices and at reasonably competitive commission rates, the
investment adviser, as indicated above, is authorized to consider as a factor in
the selection of any broker-dealer firm with whom a Portfolio's orders may be
placed the fact that such firm has sold or is selling shares of the Portfolio or
of other investment companies sponsored by the investment adviser.
During the fiscal years ended December 31, 1996, 1995 and 1994, the
Portfolios that were offering their shares during such periods paid the
following amounts on brokerage commissions:
1996 1995 1994
- -----------------------------------------------------------------------------
WNTB(1) 0 0 0
WSBCP(1) $6,192 $3,551 $4,952
WTRBP(2) 0 0 0
WIBCP(1) $3,221 $2,768 $2,812
- -----------------------------------------------------------------------------
(1) Start of business, January 6, 1994.
(2) Start of business, December 7, 1993.
MANAGEMENT OF THE TRUST
Officers and Trustees
The officers and Trustees of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those Trustees who are "interested
persons," as defined in the 1940 Act, of the Trust, Wright, The Winthrop
Corporation ("Winthrop"), Eaton Vance, Eaton Vance's wholly-owned subsidiary,
Boston Management and Research ("BMR"), or Eaton Vance's parent company, Eaton
Vance Corp. ("EVC"), or Eaton Vance's Trustee, Eaton Vance, Inc. ("EV"), by
virtue of their affiliation with the Trust, Wright, Winthrop, Eaton Vance, EVC
or EV, are indicated by an asterisk (*).
PETER M. DONOVAN (54), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, JR. (70), Vice President, Secretary and Trustee*
Retired Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, EVC, BMR and EV and Director, EVC and EV; Director of
Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
<PAGE>
WINTHROP S. EMMET (86), Trustee
Retired New York City Attorney at Law; Trust Officer, First National City
Bank, New York, NY (1963-1971).
Address: Box 327, West Center Road, West Stockbridge, MA 01266
A.M. MOODY III (60), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President,Wright Investors' Service
Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (78), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE.
Address: 125 Gull Circle North, Daytona Beach, FL 32119
RICHARD E. TABER (48), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed as a Trustee of the Trust on March 18,
1997.
Address: 117 Prospect Street, Stamford, CT 06901
RAYMOND VAN HOUTTE (72), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca, NY
(since January 1989); President and Chief Executive Officer, The Tompkins County
Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaporated
Metal Products and Tompkins County Area Development, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JUDITH R. CORCHARD (58), Vice President
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director Wright and Winthrop.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
JAMES L. O'CONNOR (52), Treasurer
Vice President of Eaton Vance and EV. Officer of various investment companies
managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (61), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance and EV. Officer of various investment companies
managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
A. JOHN MURPHY (34), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust on
June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
<PAGE>
ERIC G. WOODBURY (39), Assistant Secretary
Vice President of Eaton Vance since February 1993; formerly, associate attorney
at Dechert, Price & Rhoads. Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Woodbury was elected Assistant Secretary of the Trust on
June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
WILLIAM J. AUSTIN, JR. (45), Assistant Treasurer
Assistant Vice President of Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
All of the Trustees and officers hold identical positions with The Wright
Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed Blue
Chip Series Trust (except Mr. Miles), Catholic Values Investment Trust and The
Wright Blue Chip Master Portfolio Trust. The fees and expenses of those Trustees
(Messrs. Emmet, Pierce, Taber and Van Houtte) who are not "interested persons"
of the Trust and of Mr. Brigham are paid by the Portfolios. They also receive
additional payments from other investment companies for which Wright provides
investment advisory services. The Trustees who are employees of Wright receive
no compensation from the Trust. The Trust does not have a retirement plan for
its Trustees. Beginning in 1997, Mr. Brigham will receive compensation of $1,250
from the Trust and $6,000 in total compensation from the complex. Mr. Taber,
appointed a Trustee on March 18, 1997, will receive compensation of $1,250 from
the Trust and $5,000 in total compensation from the complex. For Trustee
compensation from the Trust for the fiscal year ended December 31, 1996 and for
the total compensation paid to the Trustees from the Wright Fund complex for the
fiscal year ended December 31, 1996, see the following table.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Aggregate Compensation Pension Estimated Total
From The Wright Managed Benefits Annual Compensation
Trustees Blue Chip Series Trust Accrued Benefits Paid(1)
<S> <C> <C> <C> <C>
Winthrop S. Emmet $1,250 None None $5,000
Leland Miles $ -- None None $3,750
Lloyd F. Pierce $1,250 None None $5,000
George R. Prefer(2) $ 750 None None $3,000
Raymond Van Houtte $1,250 None None $5,000
(1) Total compensation paid is from the The Wright Managed Blue Chip Series Trust (6 Portfolios) and the other funds in the
Wright Fund complex (29 funds) for a total of 35 funds.
(2) Mr. Prefer resigned as a Trustee on September 18, 1996.
</TABLE>
Messrs. Emmet, Pierce and Van Houtte are members of the Special Nominating
Committee of the Trustees. The Special Nominating Committee's function is
selecting and nominating individuals to fill vacancies, as and when they occur,
in the ranks of those Trustees who are not "interested persons" of the Trust,
Eaton Vance, Wright or Winthrop. The Trust does not have a designated audit
committee since the full board performs the functions of such committee.
<PAGE>
The Investment Adviser
The Trust has engaged The Winthrop Corporation ("Winthrop"), to act as the
Portfolio's investment adviser pursuant to an Investment Advisory Contract.
Pursuant to a service agreement effective February 1, 1996 between Winthrop and
its wholly-owned subsidiary, Wright Investors' Service, Inc. ("Wright"), Wright,
acting under the general supervision of the Trust's Trustees, furnishes each
Portfolio with investment advice and management services. Winthrop supervises
Wright's performance of this function and retains its contractual obligations
under its Investment Advisory Contract with each Portfolio. The estate of John
Winthrop Wright may be considered a controlling person of Winthrop and Wright by
reason of its ownership of 29% of the outstanding shares of Winthrop. The
Trustees of the Trust are responsible for the general oversight of the conduct
of each Portfolio's business. An affiliate of the investment adviser receives an
annual service fee of .50% of the annuity purchase value from PFL for acting as
principal underwriter of the Contracts.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the Portfolios, will furnish
continuously an investment program with respect to the Portfolios, will
determine which securities should be purchased, sold or exchanged, and will
implement such determinations. Wright will furnish to the Portfolios investment
advice and management services, office space, equipment and clerical personnel,
and investment advisory, statistical and research facilities. In addition,
Wright has arranged for certain members of the Eaton Vance and Wright
organizations to serve without salary as officers or Trustees of the Trust. In
return for these services, each Portfolio is obligated to pay a monthly advisory
fee calculated at the rates set forth in the Portfolio's current Prospectus.
The following table sets forth the net assets of each Portfolio that was
offering its shares as at December 31, 1996, and the advisory fee earned during
the fiscal years ended December 31, 1996, 1995 and 1994. As of December 31,
1996, Wright Money Market Portfolio and Wright Government Obligations Portfolio
had not commenced operations.
<TABLE>
<CAPTION>
Aggregate Fee Earned Fee Earned Fee Earned
Net for the Fiscal for the Fiscal for the Fiscal
Assets Year Ended Year Ended Year Ended
PORTFOLIOS 12/31/96 12/31/96 12/31/95 12/31/94
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wright Near Term Bond Portfolio (WNTBP)*(1) $ 652,453 $ 1,772 $ 1,563 $1,921
Wright Total Return Bond Portfolio (WTRBP)(2) $ 789,492 $ 2,936 $ 2,034 $1,861
Wright Selected Blue Chip Portfolio (WSBCP)*(3) $2,668,464 $16,989 $11,367 $5,488
Wright International Blue Chip Portfolio(WIBCP)*(4 )$1,457,072 $10,298 $ 9,690 $5,535
- -----------------------------------------------------------------------------------------------------------------
* Start of business, January 6, 1994.
(1) For the fiscal years ended December 31, 1996, 1995 and 1994, WNTBP made a
reduction of its advisory fee in the full amount of such fee and Wright was
allocated $29,128, $29,915 and $16,824, respectively, of expenses related to
the operation of such Portfolio.
(2) For the fiscal years ended December 31, 1996, 1995 and 1994, WTRBP made a
reduction of its advisory fee in the full amount of such fee and Wright was
allocated $23,698, $29,886 and $23,275, respectively, of expenses related to
the operation of such Portfolio.
(3) For the fiscal years ended December 31, 1996, 1995 and 1994, WSBCP made a
reduction of its advisory fee in the full amount of such fee and Wright was
allocated $0, $7,494 and $12,240, respectively, of expenses related to the
operation of such Portfolio.
(4) For the fiscal years ended December 31, 1996, 1995 and 1994, WIBCP made a
reduction of its advisory fee in the full amount of such fee and Wright was
allocated $15,486, $12,813 and $13,935, respectively, of expenses related to
the operation of such Portfolio.
</TABLE>
<PAGE>
The Administrator
The Trust has engaged Eaton Vance to act as the administrator for each
Portfolio. For its services under the Administration Agreement, Eaton Vance
receives monthly administration fees based on the net assets of each Portfolio
at the annual rates set forth in the Portfolio's current Prospectus. The
following table sets forth the administration fees that would have been earned,
absent a fee reduction, from each Portfolio for the fiscal years ended December
31, 1996, 1995 and 1994. As of December 31, 1996, Wright Managed Money Market
Portfolio and Wright Government Obligations Portfolio had not commenced
operations.
<TABLE>
<CAPTION>
Administration Fees Paid
for the Fiscal Year Ended December 31
PORTFOLIOS 1996(1) 1995(1) 1994(1)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Near Term Bond Portfolio (WNTBP)* $ 197 $174 $214
Wright Total Return Bond Portfolio (WTRBP) $ 326 $226 $207
Wright Selected Blue Chip Portfolio (WSBCP)* $1,307 $874 $422
Wright International Blue Chip Portfolio (WIBCP)* $ 644 $606 $346
- ---------------------------------------------------------------------------------------
* Start of business, January 6, 1994.
(1) Eaton Vance made a reduction of the administration fee in the full amount
for each Portfolio.
</TABLE>
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons and
John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, Mr. Gardner is
vice chairman and Mr. Hawkes is president and chief executive officer of EVC,
Eaton Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance
and EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust which expires on December 31, 1997, the Voting
Trustees of which are Messrs. Clay, Gardner, Hawkes, Rowland and Thomas E.
Faust, Jr. The Voting Trustees have unrestricted voting rights for the election
of Directors of EVC. All of the outstanding voting trust receipts issued under
said Voting Trust are owned by certain of the officers of Eaton Vance and BMR
who are also officers or officers and Directors of EVC and EV. As of March 31,
1997, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting trust
receipts, and Messrs. Rowland and Faust owned 15% and 13%, respectively, of such
voting trust receipts. Messrs. Austin, Murphy, O'Connor and Woodbury and Ms.
Sanders, who are officers of the Trust, are also members of the Eaton Vance, BMR
and EV organizations. Eaton Vance will receive the fees paid under the
Administration Agreement.
EVC owns all of the stock of Energex Energy Corporation which is engaged in
oil and gas exploration and development. In addition, Eaton Vance owns all the
stock of Northeast Properties, Inc., which is engaged in real estate investment.
EVC owns all of the stock of Fulcrum Management, Inc. and MinVen, Inc., which
are engaged in precious metal mining venture investment and management. EVC, EV,
Eaton Vance and BMR may also enter into other businesses.
<PAGE>
The Trust's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 1998. The Trust's Investment Advisory
Contract may be continued with respect to a Portfolio from year to year
thereafter so long as such continuance after February 28, 1998 is approved at
least annually (i) by the vote of a majority of the Trustees who are not
"interested persons" of the Trust, Eaton Vance or Wright cast in person at a
meeting specifically called for the purpose of voting on such approval and (ii)
by the Board of Trustees of the Trust or by vote of a majority of the
outstanding shares of that Portfolio. The Trust's Administration Agreement may
be continued from year to year after February 28, 1998 so long as such
continuance is approved annually by the vote of a majority of the Trustees. Each
agreement may be terminated as to a Portfolio at any time without penalty on
sixty (60) days' written notice by the Board of Trustees or Directors of either
party, or by vote of the majority of the outstanding shares of that Portfolio,
and each agreement will terminate automatically in the event of its assignment.
Each agreement provides that, in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations or duties to the Trust
under such agreement on the part of Eaton Vance or Wright, Eaton Vance or Wright
will not be liable to the Trust for any loss incurred.
Custodian
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston,
Massachusetts, acts as custodian for each of the Portfolios. IBT, directly or
through subcustodians, has the custody of all cash and securities of the
Portfolios, maintains the Portfolios' general ledgers and computes daily the net
asset value per share of each Portfolio. In such capacity it attends to details
in connection with the sale, exchange, substitution, transfer or other dealings
with the Portfolios' investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
Portfolios. A portion of the custody fee for each Portfolio is based upon the
Trust's aggregate assets, the fees so determined being then allocated among the
Portfolios relative to their size. These fees are then reduced by a credit for a
Portfolio's cash balances at IBT equal to 75% of the 91-day, U.S. Treasury Bill
auction rate applied to such Portfolio's average daily collected balances for
the week. In addition, each Portfolio pays a fee based on the number of
portfolio transactions and a fee for bookkeeping and valuation services.
Independent Certified Public Accountants
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts are the
Trust's independent certified public accountants, providing audit services, tax
return preparation, and assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission.
Legal Matters
Certain legal matters are passed on for the Trust by Hale and Dorr LLP, 60
State Street, Boston, Massachusetts 02109.
<PAGE>
NET ASSET VALUE
Portfolio securities for which the primary market is on a domestic or
foreign exchange or which are traded over-the-counter and quoted on the NASDAQ
System will be valued at the last sale price on the day of valuation or, if
there was no sale that day, at the last reported bid price, using prices as of
the close of trading. Portfolio securities not quoted on the NASDAQ System that
are actively traded in the over-the-counter market, including listed securities
for which the primary market is believed to be the over-the-counter market, will
be valued at the most recently quoted bid price provided by the principal market
makers.
With respect to WIBCP, foreign securities traded outside the United States
are generally valued as of the time their trading is completed, which is usually
different from the close of the New York Stock Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the New York Stock Exchange that will not be reflected in the
computation of WIBCP's net asset value. If events materially affecting the value
of such securities occur during such period, these securities will be valued at
their fair value according to procedures decided upon in good faith by the
Trustees. All securities and other assets of WIBCP initially quoted or
denominated in foreign currencies will be converted to U.S. dollar values at the
mean of the bid and offer prices of such currencies against U.S. dollars last
quoted on a valuation date by any recognized dealer.
In the case of any securities which are not actively traded, reliable
market quotations may not be considered to be readily available. These
investments are stated at fair value as determined under the direction of the
Trustees. Such fair value is expected to be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
If any securities held by a Portfolio are restricted as to resale, their
fair value will be determined following procedures approved by the Trustees. The
Trustees periodically review such procedures. The fair value of such securities
is generally determined to be the amount which the Portfolio could reasonably
expect to realize from an orderly disposition of such securities over a
reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Portfolio in connection with such disposition). In addition,
specific factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation), the size of the
holding, the prices of any recent transactions or offers with respect to such
securities and any available analysts' reports regarding the issuer.
Notwithstanding the foregoing, short-term debt securities with maturities
of 60 days or less will be valued at amortized cost.
The Money Market Portfolio uses the amortized cost method to value its
securities, which is intended to permit the Money Market Portfolio generally to
maintain a constant net asset value of $1.00 per share. The Money Market
Portfolio is permitted to use the amortized cost method of valuation
<PAGE>
for its portfolio securities pursuant to regulations of the Securities and
Exchange Commission. This method may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Money Market
Portfolio would receive if it sold the instrument. The net asset value per share
would be subject to fluctuation upon any significant changes in the value of the
Money Market Portfolio's securities. The value of debt securities, such as those
in the Money Market Portfolio, usually reflects yields generally available on
securities of similar yield, quality and duration. When such yields decline, the
value of a portfolio holding such securities can be expected to decline.
Although the Money Market Portfolio seeks to maintain the net asset value per
share of the Money Market Portfolio at $1.00, there can be no assurance that net
asset value will not vary.
The Trustees of the Trust have established procedures reasonably designed,
taking into account current market conditions and the Money Market Portfolio's
investment objective, to stabilize the net asset value per share for purposes of
sales and redemptions at $1.00. These procedures include the determination, at
such intervals as the Trustees deem appropriate, of the extent, if any, to which
the net asset value per share calculated by using available market quotations
deviates from $1.00 per share. In the event such deviation exceeds one half of
one percent, the Trustees are required to promptly consider what action, if any,
should be initiated.
TAXES
Federal Income Taxes
In order to qualify as a regulated investment company as described in the
Prospectus, a Portfolio must, among other things, (1) derive at least 90% of its
gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or foreign currencies, or other income (including but not limited
to gains from options and forward contracts) derived with respect to its
business of investing in such stocks or securities; (2) derive less than 30% of
its gross income in each taxable year from the sale or other disposition of
stocks or securities and certain other investments held less than three months;
and (3) diversify its holdings in compliance with the diversification
requirements of Subchapter M of the Code so that, at the end of each quarter of
the Portfolio's taxable year, (a) at least 50% of the market value of the
Portfolio's total assets is represented by cash, U.S. Government securities and
other securities limited in respect of any one issuer to not more than 5% of the
value of the Portfolio's total (gross) assets and to not more than 10% of the
voting securities of such issuer, and (b) not more than 25% of the value of its
total (gross) assets is invested in securities of any one issuer (other than
U.S. Government securities) or certain other issuers controlled by the
Portfolio.
As a regulated investment company, a Portfolio will not be subject to
federal income tax on net investment income and net capital gains (short- and
long-term), if any, that it distributes to its shareholders if at least 90% of
its investment company taxable income (i.e., all of its net taxable income other
than the excess, if any, of net long-term capital gain over net short-term
capital loss ("net capital gain")), for the taxable year is distributed in
accordance with applicable timing requirements, but will be subject to tax at
regular corporate rates on any investment company taxable income or net capital
gain that is not so distributed. In general, dividends will be treated as paid
<PAGE>
when actually distributed, except that dividends declared in October, November
or December and made payable to shareholders of record in such a month will be
treated as having been received by shareholders on December 31, if the dividend
is paid in the following January. Each Portfolio intends to satisfy the
distribution requirement in each taxable year. A Portfolio's distributions from
investment company taxable income and net capital gain are generally treated as
ordinary income and long-term capital gain, respectively, under the Code.
Insurance companies should consult their own tax advisers regarding the tax
rules governing their treatment upon receipt of these distributions and the
proceeds of share redemptions (including exchanges).
Each Portfolio will not be subject to federal excise tax or the related
distribution requirements for any taxable year in which all of its shares are
held by segregated asset accounts of life insurance companies held in connection
with variable contracts or are attributable to certain "seed money" in
accordance with Section 4982(f) of the Code.
Investment by a Portfolio in the stock of a "passive foreign investment
company" may cause the Portfolio to recognize income prior to the receipt of
distributions from such a company or to become subject to tax upon the receipt
of certain excess distributions from, or upon disposition of its stock of, such
a company, although an election may in some cases be available that would
ameliorate some of these adverse tax consequences.
Each Portfolio intends to comply with the diversification requirements
imposed by Section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on a Portfolio by the 1940 Act and Subchapter M of the Code, place certain
limitations on the assets of each separate account and, because Section 817(h)
and those regulations treat the assets of the Portfolio as assets of the related
separate account, the assets of a Portfolio, that may be represented by any one,
two, three and four investments. Specifically, the regulations provide that,
except as permitted by the "safe harbor" described below, as of the end of each
calendar quarter or within 30 days thereafter no more than 55% of the total
assets of a Portfolio may be represented by any one investment, no more than 70%
by any two investments, no more than 80% by any three investments and no more
than 90% by any four investments. For this purpose, all securities of the same
issuer are considered a single investment, and each U.S. Government agency and
instrumentality is considered a separate issuer. Section 817(h) provides, as a
safe harbor, that a separate account will be treated as being adequately
diversified if the diversification requirements under Subchapter M are satisfied
and no more than 55% of the value of the account's total assets are cash and
cash items (including receivables), U.S. Government securities and securities of
other regulated investment companies. Failure by a Portfolio to both qualify as
a regulated investment company and satisfy the Section 817(h) requirements would
generally result in treatment of the variable contract holders other than as
described in the applicable variable contract prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current and all
prior taxable years. Any such failure may also result in adverse tax
consequences for the insurance company issuing the contracts.
The Trust may therefore find it necessary to take action to seek to ensure
that a Contract continues to qualify as a Contract under federal tax laws,
although the insurance company that maintains each segregated asset account is
responsible for ensuring that the assets held in that account satisfy the
diversification requirements of Section 817(h) of the Code and the applicable
regulations and
<PAGE>
the Trust itself can control only the assets held within the Portfolios.
The Trust, for example, may be required to alter the investment objectives of a
Portfolio or substitute the shares of one Portfolio for those of another. No
such change of investment objectives or substitution of securities will take
place without notice to the shareholders of the affected Portfolio.
The Portfolios are not subject to Massachusetts corporate excise or
franchise tax. Provided that a Portfolio qualifies as a regulated investment
company under the Code, it will also not be required to pay any Massachusetts
income tax.
FINANCIAL STATEMENTS
===============================================================================
Registrant incorporates by reference the audited financial information for
the Trust contained in the Trust's shareholder report for the fiscal year ended
December 31, 1996 as previously filed electronically with the Securities and
Exchange Commission (Accession Number 0000901382-97-000001)
<PAGE>
APPENDIX
===============================================================================
Wright Quality Ratings
Wright Quality Ratings provide a means by which Wright evaluates certain
fundamental criteria for the measurement of the quality of an issuer's
securities.
Each rating is based on 32 individual measures of quality which can be
grouped into four components: (1) Investment Acceptance, (2) Financial Strength,
(3) Profitability and Stability, and (4) Growth. The total rating is three
letters and a numeral. The three letters measure (1) Investment Acceptance, (2)
Financial Strength, and (3) Profitability and Stability. Each letter reflects a
composite measurement of eight individual standards which are summarized as A:
Outstanding, B: Excellent, C: Good, D: Fair, L: Limited, and N: Not Rated. The
numeral rating reflects Growth and is a composite of eight individual standards
ranging from 0 to 20.
Equity Securities
Investment Acceptance reflects the acceptability of a security by and its
marketability among investors, and the liquidity of the market for such
securities.
Financial Strength represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
Profitability and Stability measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
Growth measures the growth per common share of the corporation's equity
capital, earnings, and dividends, rather than the corporation's overall growth
of revenues and income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
<PAGE>
Debt Securities
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are particularly relevant to fixed income and reserve investments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 and P-1 Commercial Paper Ratings
by Standard & Poor's and Moody's
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
<PAGE>
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained from other sources it considers reliable. The
ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information.
Bond Ratings
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and Standard & Poor's. Moody's uses a nine-symbol system with Aaa being
the highest rating and C the lowest. Standard & Poor's uses a 10-symbol system
that ranges from AAA to D. Bonds within the top four categories of Moody's (Aaa,
Aa, A, and Baa) and of Standard & Poor's (AAA, AA, A, and BBB) are considered to
be of investment-grade quality. Only the top three grades are acceptable for the
taxable Income Funds and only the top two grades are acceptable for the tax-free
Income Funds. Note that both Standard & Poor's and Moody's currently give their
highest rating to issuers insured by the American Municipal Bond Assurance
Corporation (AMBAC) or by the Municipal Bond Investors Assurance Corporation
(MBIA).
Bonds rated A by Standard & Poor's have a strong capacity to pay principal
and interest, although they are somewhat more susceptible to the adverse effects
of change in circumstances and economic conditions than debt in higher-rated
categories. The rating of AA is accorded to issues where the capacity to pay
principal and interest is very strong and they differ from AAA issues only in
small degree. The AAA rating indicates an extremely strong capacity to pay
principal and interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
<PAGE>
PART C
-------------------
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
Financial Highlights for Wright Total Return Bond Portfolio for
the three years ended December 31, 1996 and for the period from
the start of business, December 7, 1993 to December 31, 1993.
Financial Highlights for Wright Near Term Bond Portfolio, Wright
Selected Blue Chip Portfolio and Wright International Blue Chip
Portfolio for the two years ended December 31, 1996 and for the
period from the start of business, January 6, 1994 to December 31,
1994.
Included in Part B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORT FOR THE FUNDS DATED
DECEMBER 31,1996, FILED ELECTRONICALLY PURSUANT TO SECTION
30(b)(2) OF THE INVESTMENT COMPANY ACT OF 1940 (Accession No.
0000901382-97-000001).
For Wright International Blue Chip Portfolio, Wright Near Term
Bond Portfolio, Wright Selected Blue Chip Portfolio and Wright
Total Return Bond Portfolio:
Portfolio of Investments as of December 31, 1996 Statement of
Assets and Liabilities as of December 31, 1996 Statement of
Operations for the year ended December 31, 1996
Statement of Changes in Net Assets for each of the two years
ended December 31, 1996 Notes to Financial Statements
Independent Auditors' Report
(b) Exhibits:
(1) (a) Amended and Restated Declaration of Trust dated September 16,
1993 filed as Exhibit (1)(a) herewith. (b) Amended and Restated
Establishment and Designation of Series of Shares dated September
16,1993 filed as Exhibit
(1)(b) herewith.
(2) By-laws filed as Exhibit (2) herewith.
(3) Not Applicable
(4) Not Applicable
(5) (a) Investment Advisory Contract dated August 10, 1993 between
the Registrant and Wright Investors' Service filed as Exhibit
(5)(a) to Post-Effective Amendment No. 4 filed April 29, 1996
and incorporated herein by reference.
(b) Administration Agreement between the Registrant and Eaton
Vance Management dated August 10, 1993 filed as Exhibit (5)(b)
herewith.
(6) Not Applicable
(7) Not Applicable
<PAGE>
(8) (a) Custodian Agreement dated August 10, 1993 with
Investors Bank & Trust Company filed as Exhibit (8)(a) to
Post-Effective Amendment No. 4 filed April 29, 1996 and
incorporated herein by reference.
(b) Amendment dated September 20, 1995 to Master Custodian
Agreement filed as Exhibit (8)(b) to Post-Effective Amendment
No. 4 filed April 29, 1996 and incorporated herein by
reference.
(9) Service Agreement dated February 1, 1996 between Wright Investors'
Service, Inc. and The Winthrop Corporation filed as Exhibit (9)
to Post-Effective Amendment No. 4 filed April 29, 1996 and
incorporated herein by reference.
(10) Opinion of Hale and Dorr dated July 16, 1993 filed as Exhibit
(10) herewith.
(11) Consent of Independent Public Accountants filed as Exhibit (11)
herewith.
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) The Performance Information of the Registrant is Incorporated by
Reference from Part B, the Statement of Additional Information.
(17) Power of Attorney dated March 18, 1997 filed as Exhibit (17)
herewith.
Item 25. Persons Controlled By or Under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
Title of Class Number of Record Holders as of March 31, 1997
- -------------------------------------------------------------------------------
Shares of Beneficial Interest
Wright Managed Money Market Portfolio (WMMP) --
Wright Near Term Bond Portfolio (WNTBP) 1
Wright Government Obligations Portfolio (GOP) --
Wright Total Return Bond Portfolio (WTRBP) 1
Wright Selected Blue Chip Portfolio (WSBCP) 1
Wright International Blue Chip Portfolio (WIBCP) 1
- -------------------------------------------------------------------------------
Item 27. Indemnification
Except for the Amended and Restated Declaration of Trust dated September 16,
1993 establishing the Registrant as a Trust under Massachusetts law, there is no
contract, arrangement or statute under which any director, officer, underwriter
or affiliated person of the Registrant is insured or indemnified. The
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability of which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the caption "Management of
the Trust" in the Statement of Additional Information, which information is
incorporated herein by reference.
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02111,
and its transfer agent, First Data Investor Services Group, 4400 Computer Drive,
Westborough, MA 01581-5120, with the exception of certain corporate documents
and portfolio trading documents which are either in the possession and custody
of the Registrant's administrator, Eaton Vance Management, 24 Federal Street,
Boston, MA 02110 or of the investment adviser, Wright Investors' Service, 1000
Lafayette Boulevard, Bridgeport, CT 06604. Registrant is informed that all
applicable accounts, books and documents required to be maintained by registered
investment advisers are in the custody and possession of Registrant's
administrator, Eaton Vance Management, or of the investment adviser, Wright
Investors' Service, Inc.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) The Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six
months from the commencement of operations of Wright Government
Obligations Portfolio and Wright Money Market Portfolio.
(b) The annual report also contains performance information and is
available to any recipient of the Prospectus upon request and without
charge by writing to the Wight Investors' Service Distributors, Inc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604.
<PAGE>
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 amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth
of Massachusetts on the 25th day of April, 1997.
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: Peter M. Donovan*
-----------------------------
Peter M. Donovan, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities and on the 25th day of April, 1997.
SIGNATURE TITLE
- ------------------------------------------------------------------------------
Peter M. Donovan* President
- ------------------ (Principal Executive Officer & Trustee)
Peter M. Donovan
James L. O'Connor* Treasurer and Principal
- ------------------- Financial and Accounting Officer
James L. O'Conno
/s/ H. Day Brigham, Jr. Trustee
- ------------------------
H. Day Brigham, Jr.
Winthrop S. Emmet* Trustee
- ------------------------
Winthrop S. Emmet
A. M. Moody III* Trustee
- -------------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- ----------------
Lloyd F. Pierce
Richard E.Taber* Trustee
- -----------------
Richard E. Taber
Raymond Van Houtte* Trustee
- --------------------
Raymond Van Houtte
* By: /s/ Alan R. Dynner
- -------------------------
Alan R. Dynner
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to General Instructions E of Form N-1A.
Page in
Sequential
Numbering
Exhibit No. Description System
- -------------------------------------------------------------------------------
(1) (a) Amended and Restated Declaration of Trust dated September 16, 1993.
(1) (b) Amended and Restated Establishment and Designation of Series of
Shares dated September 16, 1993.
(2) By-Laws.
(5) (b) Administration Agreement between the Registrant and Eaton Vance
Management dated August 10, 1993.
(10) Opinion of Hale and Dorr dated July 16, 1993.
(11) Consent of Independent Certified Public Accountants.
(17) Power of Attorney dated March 18, 1997.
- -------------------------------------------------------------------------------
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
DATED: SEPTEMBER 16, 1993
AMENDED AND RESTATED DECLARATION OF TRUST made September 16, 1993 by the
undersigned Trustees, being a majority of the Trustees in office on such date,
Peter M. Donovan, H. Day Brigham, Jr., Winthrop S. Emmet, Jatin J. Mehta, A.M.
Moody, III, Lloyd F. Pierce, George R. Prefer and Raymond Van Houtte
(hereinafter referred to collectively as the "Trustees" and individually as a
"Trustee", which terms shall include any successor Trustees or Trustee and any
present Trustees who are not signatories to this instrument).
WHEREAS, on April 15, 1993, the initial Trustees established a trust under
a Declaration of Trust for the investment and reinvestment of funds contributed
therefor; and
WHEREAS, a majority of the Trustees desire to amend and restate said
Declaration of Trust pursuant to the provisions thereof;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Declaration of Trust as so amended and restated for the benefit of the
holders, from time to time, of the shares of beneficial interest issued
hereunder and subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1. NAME. The name of the trust created hereby is The Wright
Managed Blue Chip Series Trust (the "Trust").
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings.
(a) "ADMINISTRATOR" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b) "BY-LAWS" means the By-Laws referred to in Section 2.5 hereof, as from
time to time amended.
(c) "CLASS" means any division or Class of Shares within a Series or Fund,
which Class is or has been established within such Series or Fund in accordance
with the provisions of Article V.
(d) "COMMISSION" has the meaning given it in the 1940 Act.
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(e) "CUSTODIAN" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "DECLARATION" means this Declaration of Trust as amended from time to
time. Reference in this Declaration of Trust to "Declaration," "hereof," and
"hereunder" shall be deemed to refer to this Declaration rather than exclusively
to the article or section in which such words appear.
(g) "FUND" or "FUNDS," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
belonging and allocated thereto.
(h) "HIS" shall include the feminine and neuter, as well as the masculine,
genders.
(i) The term "INTERESTED PERSON" has the meaning specified in the 1940 Act
subject, however, to such exceptions and exemptions as may be granted by the
Commission in any rule, regulation or order.
(j) "INVESTMENT ADVISER" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k) The "1940 ACT" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.
(l) "PERSON" means and includes individuals, corporations, partnerships,
trusts, associations, firms, joint ventures and other entities, whether or not
legal entities, as well as governments, instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m) "PRINCIPAL UNDERWRITER" means the party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n) "PROSPECTUS" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o) "SERIES" individually or collectively means the separately managed
component(s) or Fund(s) of the Trust (or, if the Trust shall have only one such
component or Fund, then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.5 hereof.
(p) "SHAREHOLDER" means a record owner of Outstanding Shares. A Shareholder
of Shares of a Series shall be deemed to own a proportionate undivided
beneficial interest in such Series equal to the number of Shares of each Series
of which he is the record owner divided by the total number of Outstanding
Shares of such Series. A Shareholder of Shares of a Class within a Series shall
be deemed to own a proportionate undivided beneficial interest in such Class
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equal to the number of Shares of such Class of which he is the record owner
divided by the total number of Outstanding Shares of such Class. As used herein
the term "Shareholder" shall, when applicable to one or more Series or Funds or
to one or more Classes thereof, refer to the record owners of Outstanding Shares
of such Series, Fund or Funds or of such Class or Classes of Shares.
(q) "SHARES" means the equal proportionate units of interest into which the
beneficial interest in the Trust shall be divided from time to time, including
the Shares of any and all Series or of any Class within any Series (as the
context may require) which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares. "OUTSTANDING SHARES" means those
Shares shown from time to time on the books of the Trust or its Transfer Agent
as then issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in the
treasury of the Trust.
(r) "TRANSFER AGENT" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(s) "TRUST" means The Wright Managed Blue Chip Series Trust. As used herein
the term Trust shall, when applicable to one or more Series or Funds, refer to
such Series or Funds.
(t) The "TRUSTEES" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this capacity or their
capacities as Trustees hereunder.
(u) "TRUST PROPERTY" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of the Trust or the
Trustees, including any and all assets of or allocated to any Series or Class,
as the context may require.
(v) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Series or Class of Shares, the term "VOTE" when
used in connection with an action of Shareholders shall include a vote taken at
a meeting of Shareholders or the consent or consents of Shareholders taken
without such a meeting. Except as such term may be otherwise defined by the
Trustees in connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the term
"VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES" as used in Sections
8.2 and 8.4 shall have the same meaning as is assigned to that term in the 1940
Act.
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ARTICLE II
TRUSTEES
SECTION 2.1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by the Trustees and they shall have all powers and authority
necessary, appropriate or desirable to perform that function. The number, term
of office, manner of election, resignation, filling of vacancies and procedures
with respect to meetings and actions of the Trustees shall be as prescribed in
the By-Laws of the Trust.
SECTION 2.2. GENERAL POWERS. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bind the Trust and the applicable Series. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regards to trust investments or to other investments which may be
made by fiduciaries, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, and with such full powers
of delegation as the Trustees may exercise from time to time. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determination as to what is in the best interests of the Trust or of any Series
or Class of Shares made by the Trustees in good faith shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grant of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
SECTION 2.3. INVESTMENTS. The Trustees shall have full power and authority:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but not limited to, stocks, profit-sharing
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interests or participations and all other contracts for or evidences of
equity interests, bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, bills, notes and all other contracts for or
evidences of indebtedness, money market instruments including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality thereof, by the
government of any foreign country, by any State, territory or possession of the
United States, by any political subdivision or agency or instrumentality of any
State or foreign country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to acquire
and dispose of interests in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of the Trust in any bank, trust
company or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, coins and currency of all countries; to engage in "when
issued" and delayed delivery transactions; to enter into repurchase agreements,
reverse repurchase agreements and firm commitment agreements; to employ all
types and kinds of hedging techniques and investment management strategies; and
to change the investments of the Trust and of each Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell or
otherwise dispose of, to lend and to pledge any Trust Property or any of the
foregoing securities, instruments or investments; to purchase and sell (or
write) options on securities, currency, precious metals and other commodities,
indices, futures contracts and other financial instruments and assets, and enter
into closing and other transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into interest rate,
currency and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and other assets included in the Trust Property, including
without limitation the right to vote thereon and otherwise act with respect
thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f) To borrow money and in this connection issue notes, commercial paper or
other evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security all or any part of the Trust Property; to
endorse, guarantee, or undertake the performance of any obligation or engagement
of any other Person; and to send all or any part of the Trust Property to other
Persons.
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(g) To aid, support or assist by further investment or other action any
Person, any obligation of or interest in which is included in the Trust Property
or in the affairs of which the Trust or any Series has any direct or indirect
interest; to do all acts and things designed to protect, preserve, improve or
enhance the value of such obligation or interest; and to guarantee or become
surety on any or all of the contracts, securities and other obligations of any
such Person.
(h) To carry on any other business in connection with or incidental to any
of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Fund), or to dispose of part or all of the Trust Property (or part or all of the
assets of any Fund) and invest the proceeds of such disposition, in securities
issued by one or more other investment companies registered under the 1940 Act.
Any such other investment company may (but need not) be a trust (formed under
the laws of the State of New York or of any other state) which is classified as
a partnership for federal income tax purposes.
SECTION 2.4. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust or a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the termination of the term of office, resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees.
SECTION 2.5. BY-LAWS. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the ByLaws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws may be amended
or repealed by the Trustees without Shareholder authorization or approval.
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SECTION 2.6. DISTRIBUTION AND REPURCHASE OF SHARES. The Trustees shall have
full power and authority to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in
Shares. Shares may be sold for cash or property or other consideration whenever
and in such amounts and manner as the Trustees deem desirable. The Trustees
shall have full power to provide for the distribution of Shares either through
one or more principal underwriters or by the Trust itself, or both. The Trustees
shall have full power and authority to cause the Trust and any Series and Class
of Shares to finance distribution activities in the manner described in Section
3.7, and to authorize the Trust, on behalf of one or more Series or Classes of
Shares, to adopt or enter into one or more plans or arrangements whereby
multiple Series and Classes of Shares may be issued and sold to various types of
investors.
SECTION 2.7. DELEGATION. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust or to other Persons the doing of such things and the
execution of such agreements or other instruments either in the name of the
Trust or any Series of the Trust or the names of the Trustees or otherwise as
the Trustees may deem desirable or expedient.
SECTION 2.8. COLLECTION AND PAYMENT. The Trustees shall have full power and
authority to collect all property due to the Trust; to pay all claims, including
taxes, against the Trust or Trust Property; to prosecute, defend, compromise,
settle or abandon any claims relating to the Trust or Trust Property; to
foreclose any security interest securing any obligations, by virtue of which any
property is owed to the Trust; and to enter into releases, agreements and other
instruments.
SECTION 2.9. EXPENSES. The Trustees shall have full power and authority to
incur on behalf of the Trust or any Series or Class of Shares and pay any costs
or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
SECTION 2.10. MANNER OF ACTING. Except as otherwise provided herein or in
the By-Laws, the Trustees and committees of the Trustees shall have full power
and authority to act in any manner which they deem necessary, appropriate or
desirable to carry out, implement or enhance the business or operations of the
Trust or any Series thereof.
SECTION 2.11. MISCELLANEOUS POWERS. The Trustees shall have full power and
authority to: (a) distribute to Shareholders all or any part of the earnings or
profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
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the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as they consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
SECTION 2.12. LITIGATION. The Trustees shall have full power and authority,
in the name and on behalf of the Trust, to engage in and to prosecute, defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims and demands relating to the Trust, and out
of the assets of the Trust or any Series thereof to pay or to satisfy any
liabilities, losses, debts, claims or expenses (including without limitation
attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any
Series thereof, whether or not the Trust or any Series thereof or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust or any Series thereof.
ARTICLE III
CONTRACTS
SECTION 3.1. PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
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discretion determine; and any such contract may also provide for the repurchase
or sale of Shares by such other party as principal or as agent of the Trust.
SECTION 3.2. INVESTMENT ADVISER. The Trustees may in their discretion from
time to time authorize the Trust to enter into one or more investment advisory
agreements, or, if the Trustees establish multiple Series, separate investment
advisory agreements, with respect to one or more Series whereby the other party
or parties to any such agreements shall undertake to furnish the Trust or such
Series investment advisory and research facilities and services and such other
facilities and services, if any, as the Trustees shall consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration, the Trustees may
authorize the Investment Adviser, in its discretion and without any prior
consultation with the Trust, to buy, sell, lend and otherwise trade and deal in
any and all securities, commodity contracts and other investments and assets of
the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action taken
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more subinvestment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
SECTION 3.3. ADMINISTRATOR. The Trustees may in their discretion from time
to time authorize the Trust to enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
SECTION 3.4. OTHER SERVICE PROVIDERS. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more agreements with
respect to one or more Series or Classes of Shares whereby the other party or
parties to any such agreements will undertake to provide to the Trust or Series
or Class or Shareholders or beneficial owners of Shares such services as the
Trustees consider desirable and all upon such terms and conditions as the
Trustees in their discretion may determine.
SECTION 3.5. TRANSFER AGENTS. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
SECTION 3.6. CUSTODIAN. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as sown in its last
published report) of at least $2,000,000 as the principal custodian of the Trust
(the "Custodian") with authority as its agent to hold cash and securities owned
by the Trust and to release and deliver the same upon such terms and conditions
as may be agreed upon between the Trust and the Custodian.
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SECTION 3.7. PLANS OF DISTRIBUTION. The Trustees may in their discretion
authorize the Trust, on behalf of one or more Series or Classes of Shares, to
adopt or enter into a plan or plans of distribution and any related agreements
whereby the Trust or Series or Class may finance directly or indirectly any
activity which is primarily intended to result in sales of Shares or any
distribution activity within the meaning of Rule 12b-1 (or any successor rule)
under the 1940 Act. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the Trustees may in their
discretion determine, subject to the requirements of the 1940 Act and any other
applicable rules and regulations.
SECTION 3.8. AFFILIATIONS. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in Sections 3.1, 3.2,
3.3, 3.4, 3.5 or 3.6 above has been or will be made or to which payments have
been or will be made pursuant to a plan or related agreement described in
Section 3.7 above, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has an interest in the Trust, or that
(ii) any such Person also has similar contracts, agreements or plans with
other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.3) or organizations, or
has other business activities or interests, shall not affect in any way the
validity of any such contract, agreement or plan or disqualify any Shareholder,
Trustee or officer of the Trust from authorizing, voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS AND
EMPLOYEES. No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Series thereof. All Persons dealing or contracting
with the Trustees as such or with the Trust or any Series thereof shall have
recourse only to the Trust or such Series for the payment of their claims or for
the payment or satisfaction of claims, obligations or liabilities arising out of
such dealings or contracts. No Trustee, officer or employee of the Trust,
whether past, present or future, shall be subject to any personal liability
whatsoever to any such Person, and all such Persons shall look solely to the
Trust Property, or to the assets of one or more specific Series of the Trust if
the claim arises from the act, omission or other conduct of such Trustee,
officer or employee with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust or such
Series. If any Shareholder, Trustee, officer or employee, as such, of the Trust
or any Series thereof, is made a party to any suit or proceeding to enforce any
such liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability.
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SECTION 4.2. TRUSTEE'S GOOD FAITH ACTION; ADVICE OF OTHERS; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, investment adviser or other adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. In discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the records, books and
accounts of the Trust and upon reports made to the Trustees by any officer,
employee, agent, consultant, accountant, attorney, investment adviser or other
adviser, principal underwriter, expert, professional firm or independent
contractor. The Trustees as such shall not be required to give any bond or
surety to any other security for the performance of their duties. No provision
of this Declaration shall protect any Trustee or officer of the Trust against
any liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
SECTION 4.3. INDEMNIFICATION. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, officers and
employees of the Trust and of such other Persons as the Trustees in the exercise
of their discretion may deem appropriate or desirable. Any such indemnification
may be mandatory or permissive, and may be insured against by policies
maintained by the Trust.
SECTION 4.4. NO DUTY OF INVESTIGATION. No purchaser, lender or other Person
dealing with the Trustees or any officer, employee or agent of the Trust or a
Series thereof shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series thereof or undertaking, and every other act or
thing whatsoever executed in connection with the Trust shall be conclusively
presumed to have been executed or done by the executors thereof only in their
capacity as Trustees under this Declaration or in their capacity as officers,
employees or agents of the Trust or a Series thereof. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may deem
appropriate, but the omission of any such recital shall not operate to bind the
Trustees or Shareholders individually.
SECTION 4.5. RELIANCE ON RECORDS AND EXPERTS. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the records,
books and accounts of the Trust or a Series thereof, upon an opinion or other
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advice of legal counsel, or upon reports made or advice given to the Trust
or a Series thereof by any Trustee or any of its officers or employees or by the
Investment Adviser, the Administrator, the Custodian, the Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
SECTION 5.1. BENEFICIAL INTEREST. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited, and the number of Shares of each Series or Class thereof
that may be issued hereunder is unlimited. The Trustees shall have the exclusive
authority without the requirement of Shareholder authorization or approval to
establish and designate one or more Series of Shares and one or more Classes
thereof as the Trustees deem necessary, appropriate or desirable. Each Share of
any Series shall represent a beneficial interest only in the assets of that
Series. Subject to the provisions of Section 5.5 hereof, the Trustees may also
authorize the creation of additional Series of Shares (the proceeds of which may
be invested in separate and independent investment portfolios) and additional
Classes of Shares within any Series. All Shares issued hereunder including,
without limitation, Shares issued in connection with a dividend or distribution
in Shares or a split in Shares, shall be fully paid and nonassessable.
SECTION 5.2. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property of
every description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or of any Fund nor can they be called upon to
share or assume any losses of the Trust or of any Fund or suffer an assessment
of any kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration. The
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may specifically determine
with respect to any Series or Class of Shares.
SECTION 5.3. TRUST ONLY. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
member of a joint stock association.
SECTION 5.4. ISSUANCE OF SHARES. The Trustees in their discretion may, from
time to time and without any authorization or vote of the Shareholders, issue
Shares, in addition to the then issued and outstanding Shares and Shares held in
the treasury, to such party or parties and for such amount and type of
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consideration, including cash or property, at such time or times and on
such terms as the Trustees may deem appropriate or desirable, except that only
Shares previously contracted to be sold may be issued during any period when the
right of redemption is suspended pursuant to Section 6.9 hereof, and may in such
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such Shares be entitled to any dividends or other
distributions declared with respect thereto.
SECTION 5.5. SERIES AND CLASS DESIGNATIONS. Without limiting the exclusive
authority of the Trustees set forth in Section 5.1 to establish and designate
any further Series, it is hereby confirmed that the Trust consists of no
distinct Classes of Shares of any Series. The Shares of any Series and Classes
thereof that may from time to time be established and designated by the Trustees
shall be established and designated, and the variations in the relative rights
and preferences as between the different Series and Classes shall be fixed and
determined, by the Trustees (unless the Trustees otherwise determine with
respect to Series or Classes at the time of establishing and designating the
same); provided, that all Shares shall be identical except that there may be
variations so fixed and determined between different Series or Classes thereof
as to investment objective, policies and restrictions, sales charges, purchase
prices, determination of net asset value, assets, liabilities, expenses, costs,
charges and reserves belonging or allocated thereto, the price, terms and manner
of redemption or repurchase, special and relative rights as to dividends and
distributions and on liquidation, conversion rights, exchange rights, and voting
rights. All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. As to any
division of Shares of the Trust into Series or Classes, the following provisions
shall be applicable:
(i) The number of authorized Shares and the number of Shares of
each Series or Class thereof that may be issued shall be unlimited.
The Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any Series or Class into
one or more other Series or one or more other Classes that may be
established and designated from time to time. The Trustees may hold as
treasury shares (of the same or some other Series or Class), reissue
for such consideration and on such terms as they may determine, or
cancel any Shares of any Series or Class reacquired by the Trust at
their discretion from time to time.
(ii) All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
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whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of creditors
of such Series and except as may otherwise be required by applicable
tax laws, and shall be so recorded on the books of account of the
Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Series, the
Trustees or their delegate shall allocate them among any one or more
of the Series established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. Each such allocation by the Trustees or their
delegate shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have
any claim on or right to any assets allocated or belonging to any
other Series.
(iii) Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the
Trustees or their delegate to and among any one or more of the Series
established and designated from time to time in such manner and on
such basis as the Trustees in their sole discretion deem fair and
equitable. The assets belonging to each particular Series shall be
charged with the liabilities, expenses, costs, charges and reserves of
the Trust so allocated to that Series and all liabilities, expenses,
costs, charges and reserves attributable to that Series which are not
readily identifiable as belonging to any particular Class thereof.
Each allocation of liabilities, expenses, costs, charges and reserves
by the Trustees or their delegate shall be conclusive and binding upon
the Shareholders of all Series and Classes for all purposes. The
Trustees shall have full discretion to determine which items are
capital; and each such determination shall be conclusive and binding
upon the Shareholders. The assets of a particular Series of the Trust
shall, under no circumstances, be charged with liabilities, expenses,
costs, charges and reserves attributable to any other Series or Class
thereof of the Trust. All Persons extending credit to, or contracting
with or having any claim against a particular Series of the Trust
shall look only to the assets of that particular Series for payment of
such credit, contract or claim.
(iv) Dividends and distributions on Shares of a particular Series
or Class may be paid or credited in such manner and with such
frequency as the Trustees may determine, to the holders of Shares of
that Series or Class, from such of the earnings or profits, surplus
(including paid-in surplus), capital (including paid-in capital) or
assets belonging to that Series, as the Trustees may deem appropriate
or desirable, after providing for actual and accrued liabilities,
expenses, costs, charges and reserves belonging and allocated to that
Series or Class. Such dividends and distributions may be paid daily or
otherwise pursuant to the offering prospectus relating to the Shares
or pursuant to a standing vote or votes of the Trustees adopted only
once or from time to time or pursuant to other authorization or
instruction of the Trustees. All dividends and distributions on Shares
of a particular Series or Class shall be distributed pro rata to the
Shareholders of that Series or Class in proportion to the number of
Shares of that Series or Class held by such Shareholders at the time
of record established for the payment or crediting of such dividends
or distributions.
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(v) Each Share of a Series of the Trust shall represent a
beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or Class thereof shall be entitled to receive his
pro rata Share of distributions of income and capital gains made
with respect to such Series or Class net of liabilities, expenses,
costs, charges and reserves belonging and allocated to such Series or
Class. Upon redemption of his Shares or indemnification for
liabilities incurred by reason of his being or having been a
Shareholder of a Series or Class, such Shareholder shall be paid
solely out of the funds and property of such Series of the Trust. Upon
liquidation or termination of a Series or Class thereof of the Trust,
a Shareholder of such Series or Class thereof shall be entitled to
receive a pro rata Share of the net assets of such Series based on the
net asset value of his Shares. A Shareholder of a particular Series of
the Trust shall not be entitled to commence or participate in a
derivative or class action on behalf of any other Series or the
Shareholders of any other Series of the Trust.
(vi) On any matter submitted to a vote of Shareholders, the
Shares entitled to vote thereon and the manner in which such Shares
shall be voted shall be as set forth in the ByLaws or proxy materials
for the meeting or other solicitation materials or as otherwise
determined by the Trustees, subject to any applicable requirements of
the 1940 Act. The Trustees shall have full power and authority to call
meetings of the Shareholders of a particular Class or Classes of
Shares or of one or more particular Series of Shares, or otherwise
call for the action of such Shareholders on any particular matter.
(vii) Except as otherwise provided in this Article V, the
Trustees shall have full power and authority to determine the
designations, preferences, privileges, sales charges, purchase prices,
assets, liabilities, expenses, costs, charges and reserves belonging
or allocated thereto, limitations and rights, including without
limitation voting, dividend, distribution and liquidation rights, of
each Class and Series of Shares. Subject to any applicable
requirements of the 1940 Act, the Trustees shall have the authority to
provide that the Shares of one Class shall be automatically converted
into Shares of another Class of the same Series or that the holders of
Shares of any Series or Class shall have the right to convert or
exchange such Shares into Shares of one or more other Series or
Classes of Shares, all in accordance with such requirements,
conditions and procedures as may be established by the Trustees.
(viii) The establishment and designation of any Series or Class
of Shares shall be effective upon the execution by a majority of the
then Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such Series or
Class, or as otherwise provided in such instrument. The Trustees may
by an instrument subsequently executed by a majority of their number
amend, restate or rescind any prior instrument relating to the
establishment and designation of any such Series or Class. Each
instrument referred to in this paragraph shall have the status of an
amendment to this Declaration in accordance with Section 8.4 hereof,
and a copy of each such instrument shall be filed in accordance with
Section 10.1 hereof.
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SECTION 5.6. ASSENT TO DECLARATION OF TRUST AND BY-LAWS. Every Shareholder,
by virtue of having become a Shareholder, shall be held to have expressly
assented and agreed to all the terms and provision of this Declaration and of
the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
SECTION 6.1. REDEMPTION OF SHARES. (a) Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The Trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased Shares may be resold
by the Trust. The Trust may require any Shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or Class
thereof at the price determined as hereinafter set forth, upon the appropriately
verified written application of the record holder thereof (or upon such other
form of request as the Trust may use for the purpose) deposited at such office
or agency as may be designated from time to time for that purpose by the
Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
SECTION 6.2. PRICE. Shares shall be redeemed at a price based on their net
asset value determined as set forth in Section 7.1 hereof as of such time as the
Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of Shares may be deducted from the proceeds of such
redemption.
SECTION 6.3. PAYMENT. Payment of the redemption price of Shares thereof
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective prospectus relating to such Shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust, or (ii) in
connection with any federal or state tax withholding requirements.
SECTION 6.4. EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET VALUE. If,
pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
have received payment) to have Shares redeemed and paid for by the Trust or a
Series shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice at the office or
agency where his application or request for redemption was made, withdraw his
application or request and withdraw any Share certificates on deposit.
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SECTION 6.5. REPURCHASE BY AGREEMENT. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements,
terms, conditions and procedures relating to such repurchases, and the amount of
any sales charge or repurchase fee payable on any repurchase of Shares may be
deducted from the proceeds of such repurchase.
SECTION 6.6. REDEMPTION OF SHAREHOLDER'S INTEREST. The Trustees, in their
sole discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Classes thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
SECTION 6.7. REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED
INVESTMENT COMPANY; DISCLOSURE OF HOLDING. (a) If the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify the Trust or any Series of the Trust
as a regulated investment company under the Internal Revenue Code in 1986, then
the Trustees shall have the power by lot or other means deemed equitable by them
(i) to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and conformity with the requirements for such
qualification and (ii) to refuse to transfer or issue Shares or other securities
of the Trust or any Series of the Trust to any Person whose acquisition of the
Shares or other securities of the Trust or any Series of the Trust in question
would result in such disqualification. The redemption shall be effected in the
manner provided in Section 6.1 and at the redemption price referred to in
Section 6.2.
(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code of 1986, or to comply with the requirements of any other taxing authority.
SECTION 6.8. REDUCTIONS IN NUMBER OF OUTSTANDING SHARES PURSUANT TO NET
ASSET VALUE FORMULA. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
SECTION 6.9. SUSPENSION OF RIGHT OF REDEMPTION. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust or a Fund fairly to determine the value of its net
assets, or (iv) as the Commission may by order permit for the protection of
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security holders of the Trust. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in (ii) or (iii) shall have expired (as to which in the
absence of an official ruling by the Commission, the determination of the Trust
shall be conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
SECTION 7.1. NET ASSET VALUE. The net asset value of each outstanding Share
of the Trust or of each Series or Class thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine. Any reference
in this Declaration to the time at which a determination of net asset value is
made shall mean the time as of which the determination is made. The power and
duty to determine net asset value may be delegated by the Trustees from time to
time to the Investment Adviser, the Administrator, the Custodian, the Transfer
Agent or such other Person or Persons as the Trustees may determine. The value
of the assets of the Trust or any Series thereof shall be determined in a manner
authorized by the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, amounts determined and declared as a dividend or
distribution and all other items in the nature of liabilities which shall be
deemed appropriate, as incurred by or allocated to the Trust or any Series or
Class thereof. The resulting amount, which shall represent the total net assets
of the Trust or Series or Class thereof, shall be divided by the number of
Shares of the Trust or Series or Class thereof outstanding at the time and the
quotient so obtained shall be deemed to be the net asset value of the Shares of
the Trust or Series or Class thereof. The Trust may declare a suspension of the
determination of net asset value to the extent permitted by the 1940 Act. It
shall not be a violation of any provision of this Declaration if Shares are
sold, redeemed or repurchased by the Trust at a price other than one based on
net asset value if the net asset value is affected by one or more errors
inadvertently made in the pricing of portfolio securities or other investments
or in accruing or allocating income, expenses, reserves or liabilities. No
provision of this Declaration shall be construed to restrict or affect the right
or ability of the Trust to employ or authorize the use of pricing services,
appraisers or any other means, methods, procedures, or techniques in valuing the
assets or calculating the liabilities of the Trust or any Series or Class
thereof.
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SECTION 7.2. DIVIDENDS AND DISTRIBUTIONS. (a) the Trustees may from time to
time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Series held by the Trustees as they may deem appropriate or desirable. Such
distributions may be made in cash, additional Shares or property (including
without limitation any type of obligations of the Trust or Series or Class or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans, cash dividend payout plans or
other distribution plans as the Trustees may deem appropriate or desirable. The
Trustees may in their discretion determine that an account administration fee or
other similar charge may be deducted directly from the income and other
distributions paid on Shares to a Shareholder's account in any Series or Class.
(b) The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account, the
above provisions shall be interpreted to give the Trustees full power and
authority in their absolute discretion to distribute for any fiscal year as
dividends and as capital gains distributions, respectively, additional amounts
sufficient to enable the Trust or a Series thereof to avoid or reduce liability
for taxes.
SECTION 7.3. CONSTANT NET ASSET VALUE; REDUCTION OF OUTSTANDING SHARES. The
Trustees may determine to maintain the net asset value per Share of any Series
or Class at a designated constant amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the continuing declarations of
income attributable to that Series or Class as dividends payable in additional
Shares of that Series or Class or in cash or in any combination thereof and for
the handling of any losses attributable to that Series or Class. Such procedures
may provide that, if, for any reason, the income of any such Series or Class
determined at any time is a negative amount, the Trust may with respect to such
Series or Class (i) offset each Shareholder's pro rata share of such negative
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amount from the accrued dividend account of such Shareholder, or (ii) reduce the
number of Outstanding Shares of such Series or Class by reducing the number of
Shares in the account of such Shareholder by that number of full and fractional
Shares which represents the amount of such excess negative income, or (iii)
cause to be recorded on the books of the Trust an asset account in the amount of
such negative income, which account may be reduced by the amount, provided that
the same shall thereupon become the property of the Trust with respect to such
Series or Class and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of such Series or Class on the day such
negative income is experienced, until such asset account is reduced to zero, or
(iv) combine the methods described in clauses (i), (ii) and (iii) of this
sentence, in order to cause the net asset value per Share of such Series or
Class to remain at a constant amount per Outstanding Share immediately after
such determination and declaration. The Trust may also fail to declare a
dividend out of income for the purpose of causing the net asset value of any
such Share to be increased. The Trustees shall have full discretion to determine
whether any cash or property received shall be treated as income or as principal
and whether any item of expense shall be charged to the income or the principal
account, and their determination made in good faith shall be conclusive
upon all Shareholders. In the case of stock dividends or similar distributions
received, the Trustees shall have full discretion to determine, in the light of
the particular circumstances, how much if any of the value thereof shall be
treated as income, the balance, if any, to be treated as principal.
SECTION 7.4. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any
provisions contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series of Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
SERIES 8.1. DURATION. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
SERIES 8.2. TERMINATION OF THE TRUST OR A SERIES OR A CLASS. (a) The Trust
or any Series or Class thereof may be terminated by: (1) the affirmative vote of
the holders of not less than two-thirds of the Shares outstanding and entitled
to vote at any meeting of Shareholders of the Trust or the appropriate Series or
Class thereof, or by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of the Shares of the Trust or a Series
or Class thereof, provided, however, that, if such termination is recommended by
the Trustees, the vote of a majority of the outstanding voting securities of the
Trust or a Series or Class thereof entitled to vote thereon shall be sufficient
authorization; or (2) by means of an instrument in writing signed by a majority
of the Trustees, to be followed by a written notice to Shareholders stating that
a majority of the Trustees has determined that the continuation of the Trust or
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<PAGE>
a Series or a Class thereof is not in the best interest of the Trust, such
Series or Class or of their respective Shareholders. Such determination may (but
need not) be based on factors or events adversely affecting the ability of the
Trust, such Series or Class to conduct its business and operations in an
economically viable manner. Such factors and events may include (but are not
limited to) the inability of a Series or Class or the Trust to maintain its
assets at an appropriate size, changes in laws or regulations governing the
Series or Class or the Trust or affecting assets of the type in which such
Series or Class or the Trust invests, or political, social, legal or economic
developments or trends having an adverse impact on the business or operations of
such Series or Class or the Trust. Upon the termination of the Trust or the
Series or Class,
(i) The Trust, Series or Class shall carry on no business except
for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust, Series or Class and all of the powers of the Trustees under
this Declaration shall continue until the affairs of the Trust, Series
or Class shall have been wound up, including the power to fulfill
or discharge the contract of the Trust, Series or Class, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose
of all or any part of the remaining Trust Property or assets allocated
or belonging to such Series or Class to one or more persons at public
or private sale for the consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or
pay its liabilities, and do all other acts appropriate to liquidate
its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or in
any combination thereof, among the Shareholders of the Trust or the
Series or Class according to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust and file with the Massachusetts Secretary
of State an instrument in writing setting forth the fact of such termination,
and the Trustees shall thereupon be discharged from all further liabilities and
duties with respect to the Trust or the terminated Series or Class, and the
rights and interests of all Shareholders of the Trust or the terminated Series
or Class shall thereupon cease.
SECTION 8.3. MERGER, CONSOLIDATION OR SALE OF ASSETS OF A SERIES. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the Commonwealth
of Massachusetts. The Trustees may also at any time sell and convert into money
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<PAGE>
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued on
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and they shall thereupon
be discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
SECTION 8.4. AMENDMENTS. The execution of an instrument setting forth the
establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
the vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the
Trustees then in office. No Shareholder not so affected by any such amendment
shall be entitled to vote thereon. The Trustees may (by such an instrument) also
amend or otherwise supplement this Declaration of Trust, without any
authorization, consent or vote of the Shareholders, to change the name of the
Trust or any Fund or to make such other changes as do not have a materially
adverse effect on the financial interests of Shareholders hereunder or if they
deem it necessary or desirable to conform this Declaration to the requirements
of applicable federal or state laws or regulations or the requirements of the
Internal Revenue Code of 1986, but the Trustees shall not be liable for failing
to do so. Any such amendment or supplemental Declaration of Trust shall be
effective as provided in the instrument containing its terms or, if there is no
provision therein with respect to effectiveness, upon the signing of such
instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 10.2 hereof. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
Notwithstanding any other provision hereof, until such time as Shares are
issued and sold, this Declaration may be terminated or amended in any respect by
an instrument signed by a majority of the Trustees then in office.
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<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.1. FILING OF COPIES, REFERENCES, HEADINGS AND COUNTERPARTS. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, or any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration of
trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument shall be executed in any number of counterparts each of which shall
be deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon
execution, be conclusive evidence of all amendments and supplemental
declarations contained therein and may hereafter be referred to in lieu of the
original Declaration and the various amendments and supplements thereto.
SECTION 10.2. APPLICABLE LAW. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
SECTION 10.3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) the
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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<PAGE>
IN WITNESS WHEREOF, the undersigned, being a majority of the current
Trustees of the Trust, have executed this instrument this 16th day of September,
1993.
/s/ Peter M. Donovan /s/ A.M. Moody III
- ----------------------------- ------------------------------
Peter M. Donovan A.M. Moody III
/s/ H. Day Brigham, Jr. /s/ Lloyd F. Pierce
- ----------------------------- ------------------------------
H. Day Brigham, Jr. Lloyd F. Pierce
/s/ Winthrop S. Emmet /s/ George R. Prefer
- ----------------------------- ------------------------------
Winthrop S. Emmet George R. Prefer
/s/ Jatin L. Mehta /s/ Raymond Van Houtte
- ----------------------------- ------------------------------
Jatin L. Mehta Raymond Van Houtte
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<PAGE>
Then personally appeared the above-named Peter M. Donovan, H. Day Brigham,
Jr., Winthrop S. Emmet, Jatin J. Mehta, A.M. Moody III, Lloyd F. Pierce, George
R. Prefer and Raymond Van Houtte, being Trustees then in office of The Wright
Managed Blue Chip Series Trust, who acknowledged the foregoing instrument to be
their free act and deed.
Before me,
/S/ HELEN B. IWASCZYSZYN
-------------------------------
My Commission Expires MARCH 31, 1995
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<PAGE>
ATTACHMENT A
The address of the Trust is 24 Federal Street, Boston, MA 02110.
The names and addresses of the Trustees are as follows:
TRUSTEE ADDRESS
Peter M. Donovan 1000 Lafayette Boulevard
Bridgeport, CT 06604
H. Day Brigham, Jr. 24 Federal Street
Boston, MA 02110
Winthrop S. Emmet Box 327
West Center Road
West Stockbridge, MA 02166
Jatin J. Mehta 71 Merrimac Drive
Trumbull, CT 06611
A.M. Moody III 1000 Lafayette Boulevard
Bridgeport, CT 06604
Lloyd F. Pierce 3 Glen Way
Holly Hill, FL 32117
George R. Prefer 7738 Silver Bell Drive
Sarasota, FL 34241
Raymond Van Houtte One Strawberry Lane
Ithaca, NY 14850
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THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
Amended and Restated
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
The undersigned, being at least a majority of the duly elected and
qualified Trustees presently in office of The Wright Managed Blue Chip Series
Trust, a Massachusetts business trust (the "Trust"), acting pursuant to Section
5.5 (viii) of Article V of the Declaration of Trust dated April 15, 1993, as
amended and restated September 16, 1993, hereby amend and restate the Trust's
Establishment and Designation of Series of Shares of Beneficial Interest,
Without Par Value, dated June 16, 1993 which divided the shares of beneficial
interest of the Trust into six separate series or Portfolios of the Trust. Each
Portfolio created thereby shall have the following special and relative rights:
1. The Portfolios shall be designated as follows:
Wright Managed Money Market Portfolio
Wright Near Term Bond Portfolio
Wright Government Obligations Portfolio
Wright Total Return Bond Portfolio
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
2. Each Portfolio shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of 1933
and the Investment Company Act of 1940. Each share of beneficial interest of
each Portfolio ("share") shall be redeemable, shall be entitled to one vote (or
fraction thereof in respect of a fractional share) on matters on which shares of
that Portfolio shall be entitled to vote and shall represent a pro rata
beneficial interest in the assets allocated to that Portfolio, all as provided
in the Declaration of Trust. The proceeds of sales of shares of a Portfolio,
together with any income and gain thereon, less any diminution or expenses
thereof, shall irrevocably belong to that Portfolio, unless otherwise required
by law. Each share of a Portfolio shall be entitled to receive its pro rata
share of net assets of that Portfolio upon liquidation of that Portfolio.
3. Shareholders of each Portfolio shall vote separately as a class to the
extent provided in Rule 18f-2, as from time to time in effect, under the
Investment Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above referenced Portfolios as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below.
<PAGE>
(a) Costs incurred by the Trust in connection with initial organization and
start-up, including federal and state registration and qualification fees and
expenses of the initial offering of Trust shares, shall be deferred and
amortized over a period not to exceed five years, and such initial costs shall
be borne by the respective Portfolios of the Trust, commencing with the date
they are activated, on a basis that is deemed equitable by the Trustees.
(b) The liabilities, expenses, costs, charges or reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Portfolio shall be allocated among the Portfolios on an equitable
basis as determined by the Trustees.
(c) The Trustees may from time to time in particular cases make specific
allocation of assets or liabilities among the Portfolios.
5. A majority of the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of any Portfolio now or hereafter created, or to
otherwise change the special and relative rights of any such Portfolio, and to
terminate any Portfolio or add additional Portfolios as provided in the
Declaration of Trust.
/s/ Peter M. Donovan /s/ A.M. Moody, III
- -------------------------- --------------------------
Peter M. Donovan A. M. Moody, III
/s/ H. Day Brigham, Jr. /s/ Lloyd F. Pierce
- -------------------------- ---------------------------
H. Day Brigham, Jr. Lloyd F. Pierce
/s/ Winthrop S. Emmet /s/ George R. Prefer
- -------------------------- ---------------------------
Winthrop S. Emmet George R. Prefer
/s/ Jatin J. Mehta /s/ Raymond Van Houtte
- -------------------------- ---------------------------
Jatin J. Mehta Raymond Van Houtte
September 16, 1993
BY-LAWS
OF
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
ARTICLE I
The Trustees
SECTION 1. NUMBER OF TRUSTEES. The number of Trustees shall be fixed by a
majority of the Trustees, provided, however, that the number of Trustees shall
at no time exceed eighteen. No decrease in the number of Trustees shall have the
effect of removing any Trustee from office prior to the expiration of his term,
but the number of Trustees may be decreased in conjunction with the removal of a
Trustee.
SECTION 2. RESIGNATION AND REMOVAL. Any Trustee may resign his trust by
written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein. Any Trustee may be removed at any time by written instrument, signed by
at least two-thirds of the number of Trustees prior to such removal, specifying
the date when such removal shall become effective. Any Trustee who requests in
writing to be retired or who has become incapacitated by illness or injury may
be retired by written instruments signed by a majority of the other Trustees,
specifying the date of his retirement. A Trustee may be removed at any special
meeting of the shareholders of the Trust by a vote of two-thirds of the
outstanding shares of beneficial interest of the Trust (the "shares").
SECTION 3. VACANCIES. In case of the declination, death, resignation,
retirement, removal, or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office whereupon the
appointment shall take effect. Within three months of such appointment the
Trustees shall cause notice of such appointment to be mailed to each shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation of increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder and under the Declaration of Trust. The power of
appointment is subject to the provisions of Section 16(a) of the Investment
Company Act of 1940, as from time to time amended (the "1940 Act").
Whenever a vacancy among the Trustees shall occur, until such vacancy is
filled, or while any Trustee is absent from the Commonwealth of Massachusetts
or, if not a domiciliary of Massachusetts, is absent from his state of domicile,
or is physically or mentally incapacitated by reason of disease or otherwise,
the other Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy, absence or incapacity shall be conclusive,
provided, however, that no vacancy shall remain unfilled for a period longer
than six calendar months.
<PAGE>
SECTION 4. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
SECTION 5. EFFECT OF DEATH, RESIGNATION, REMOVAL, ETC. OF A TRUSTEE. The
death, declination, resignation, retirement, removal, or incapacity of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of the Declaration of Trust or
these By-Laws.
ARTICLE II
Officers and Their Election
SECTION 1. OFFICERS. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers or agents as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. ELECTION OF OFFICERS. The Treasurer and Secretary shall be
chosen annually by the Trustees. The President shall be chosen annually by and
from the Trustees.
Except for the offices of the President and Secretary, two or more offices
may be held by a single person. The officers shall hold office until their
successors are chosen and qualified.
SECTION 3. RESIGNATIONS AND REMOVALS. Any officer of the Trust may resign
by filing a written resignation with the President or with the Trustees or with
the Secretary, which shall take effect on being so filed or at such time as may
otherwise be specified therein. The Trustees may at any meeting remove an
officer.
ARTICLE III
Powers and Duties of Trustees and Officers
SECTION 1. TRUSTEES. The business and affairs of the Trust shall be managed
by the Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility, so far as such powers are not inconsistent with the
laws of the Commonwealth of Massachusetts, the Declaration of Trust, or with
these By-Laws.
SECTION 2. EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from
their own number an executive committee to consist of not less than three nor
more than five members, which shall have the power and duty to conduct the
current and ordinary business of the Trust, including the purchase and sale of
securities, while the Trustees are not in session, and such other powers and
duties as the Trustees may from time to time delegate to such committee. The
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<PAGE>
Trustees may also elect from their own number other committees from time to
time, the number composing such committees and the powers conferred upon the
same to be determined by vote of the Trustees.
SECTION 3. CHAIRMAN OF THE TRUSTEES. The Trustees may, but need not,
appoint from among their number a Chairman. When present he shall preside at the
meetings of the shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of the Trust and shall have, with the President, general
supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 4 of this Article
III.
SECTION 4. PRESIDENT. In the absence of the Chairman of the Trustees, the
President shall preside at all meetings of the shareholders. Subject to the
Trustees and to any committees of the Trustees, within their respective spheres,
as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. He shall also have the power to grant, issue, execute or
sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust. The
President shall have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
SECTION 5. TREASURER. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian in accordance with Article VII of the
Declaration of Trust. He shall make annual reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records, and
he shall furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.
SECTION 6. SECRETARY. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the shareholders at their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall perform such duties additional to the foregoing as the Trustees may from
time to time designate.
SECTION 7. OTHER OFFICERS. Other officers elected by the Trustees shall
perform such duties as the Trustees may from time to time designate.
SECTION 8. COMPENSATION. The Trustees and officers of the Trust may receive
such reasonable compensation from the Trust for the performance of their duties
as the Trustees may from time to time determine.
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<PAGE>
ARTICLE IV
Meetings of Shareholders
SECTION 1. MEETINGS. Meetings of the shareholders may be called at any time
by the President, and shall be called by the President or the Secretary at the
request, in writing or by resolution, of a majority of the Trustees, or at the
written request of the holder or holders of ten percent (10%) or more of the
total number of shares of the then issued and outstanding shares of the Trust
entitled to vote at such meeting. Any such request shall state the purposes of
the proposed meeting.
SECTION 2. PLACE OF MEETINGS. Meetings of the shareholders shall be held at
the principal place of business of the Trust in Boston, Massachusetts, unless a
different place within the United States is designated by the Trustees and
stated as specified in the respective notices or waivers of notice with respect
thereto.
SECTION 3. NOTICE OF MEETINGS. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Secretary to each shareholder entitled to vote thereat,
and to each shareholder who under the By-Laws is entitled to such notice, by
mailing the same postage paid, addressed to him at his address as it appears
upon the books of the Trust, at least twenty (20) days before the time fixed for
the meeting, and the person giving such notice shall make an affidavit with
respect thereto. If any shareholder shall have failed to inform the Trust of his
post office address, no notice need be sent to him. No notice need be given to
any shareholder if a written waiver of notice, executed before or after the
meeting by the shareholder or his attorney thereunto authorized, is filed with
the records of the meeting; provided that if a series or class of shares is
entitled to vote as a separate series or class on any matter, then in the case
of that matter a quorum shall consist of the holders of a majority of the total
number of shares of the then issued and outstanding shares of that series of
class entitled to vote at the meeting. Shares owned directly or indirectly by
the Trust, if any, shall not be deemed outstanding for this purpose.
SECTION 4. QUORUM. Except as otherwise provided by law, to constitute a
quorum for the transaction of any business at any meeting of shareholders, there
must be present, in person or by proxy, holders of a majority of the total
number of shares of the then issued and outstanding shares of the Trust entitled
to vote at such meeting; provided that if a series or class of shares is
entitled to vote as a separate series or class on any matter, then in the case
of that matter a quorum shall consist of the holders of a majority of the total
number of shares of the then issued and outstanding shares of that series or
class entitled to vote at the meeting. Shared owned directly or indirectly by
the Trust, if any, shall not be deemed outstanding for this purpose.
If a quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before any meeting of shareholders at the time and
place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present entitled to vote on such matter may by vote adjourn the meeting from
time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
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<PAGE>
entitled to vote on such matter, shall be present, whereupon any such
matter may be voted upon at the meeting as though held when originally convened.
SECTION 5. VOTING. At each meeting of the shareholders every shareholder of
the Trust shall be entitled to one (1) vote in person or by proxy for each of
the then issued and outstanding shares of the Trust then having voting power in
respect of the matter upon which the vote is to be taken, standing in his name
on the books of the Trust at the time of the closing of the transfer books for
the meeting, or, if the books be not closed for any meeting, on the record date
fixed as provided in Section 4 of Article VI of these By-Laws for determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting. The record holder of a
fraction of a share shall be entitled in like manner to corresponding fraction
of a vote. Notwithstanding the foregoing, the Trustees may, in conjunction with
the establishment of any series of shares, establish conditions under which the
several series shall have separate voting rights or no voting rights.
All elections of Trustees shall be conducted in any manner approved at the
meeting of the shareholders at which said election is held, and shall be by
ballot if so requested by any shareholder entitled to vote thereon. The persons
receiving the greatest number of votes shall be deemed and declared elected.
Except as otherwise required by law or by the Declaration of Trust or by these
ByLaws, all matters shall be decided by a majority of the votes cast, as
hereinabove provided, by persons entitled to vote thereon. With resect to the
submission of a management or investment advisory contract or a change in
investment policy to the shareholders for any shareholder approval required by
the Act, such matter shall be deemed to have been effectively acted upon with
respect to any series of shares if the holders of the lesser of
(i) 67 per centum or more of the shares of that series present or
represented at the meeting if the holders of more than 50 per centum of the
outstanding shares of that series are present or represented by proxy at
the meeting or
(ii) more than 50 per centum of the outstanding shares of that series
vote for the approval of such matter, notwithstanding (a) that such matter has
not been approved by the holders of a majority of the outstanding voting
securities of any other series affected by such matter (as described in Rule
18f-2 under the Act) and (b) that such matter has not been approved by the vote
of a majority of the outstanding voting securities of the Trust (as defined in
the Act).
SECTION 6. PROXIES. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy, but no proxy which is dated
more than six months before the meeting named therein shall be accepted and no
such proxy shall be valid after the final adjournment of such meeting. Every
proxy shall be in writing subscribed by the shareholder or his duly authorized
attorney and shall be dated, but need not be sealed, witnessed or acknowledged.
Proxies shall be delivered to the Secretary or person acting as secretary of the
meeting before being voted. A proxy with respect to shares held in the name of
two or more persons shall be valid if executed by one of them unless at or prior
to exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on behalf
of a shareholder shall be deemed valid unless challenged at or prior to its
exercise.
-5-
<PAGE>
SECTION 7. CONSENTS. Any action which may be taken by shareholders may be
taken without a meeting if a majority of shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by law, the
Declaration or these By-Laws for approval of such matter) consent to the action
in writing and the written consents are filed with the records of the meetings
of shareholders. Such consents shall be treated for all purposes as a vote taken
at a meeting of shareholders.
ARTICLE V
Trustee Meetings
SECTION 1. MEETINGS. The Trustees may in their discretion provide for
regular or stated meetings of the Trustees. Meetings of the Trustees other than
regular or stated meetings shall be held whenever called by the Chairman,
President or by any other Trustee at the time being in office. Any or all of the
Trustees may participate in a meeting by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other at the same time, and participation by such
means shall constitute presence in person at a meeting.
SECTION 2. NOTICES. Notice of regular or stated meetings need not be given.
Notice of the time and place of each meeting other than regular or stated
meetings shall be given by the Secretary or by the Trustee calling the meeting
and shall be mailed to each Trustee at least two (2) days before the meeting, or
shall be telegraphed, cabled, or telefaxed to each Trustee at his business
address or personally delivered to him at least one (1) day before the meeting.
Such notice may, however, be waived by all the Trustees. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any special meeting.
SECTION 3. CONSENTS. Any action required or permitted to be taken at any
meeting of the Trustees may be taken by the Trustees without a meeting if a
written consent thereto is signed by all the Trustees and filed with the records
of the Trustees' meetings. Such consent shall be treated as a vote at a meeting
for all purposes.
SECTION 4. PLACE OF MEETINGS. The Trustees may hold their meetings outside
of the Commonwealth of Massachusetts, and may, to the extent permitted by law,
keep the books and records of the Trust, and provide for the issue, transfer and
registration of its stock, outside of said Commonwealth at such places as may,
from time to time, be designated by the Trustees.
SECTION 5. QUORUM AND MANNER OF ACTING. A majority of the Trustees in
office shall be present in person at any regular stated or special meeting of
the Trustees in order to constitute a quorum for the transaction of business at
such meeting and (except as otherwise required by the Declaration of Trust, by
these By-Laws or by statute) the act of a majority of the Trustees present at
any such meeting, at which a quorum is present, shall be the act of the
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Trustees. In the absence of quorum, a majority of the Trustees present may
adjourn the meeting from time to time until a quorum shall be present. Notice of
any adjourned meeting need not be given.
ARTICLE VI
Shares of Beneficial Interest
SECTION 1. CERTIFICATES OF BENEFICIAL INTEREST. Certificates for shares of
beneficial interest of any series or class of shares of the Trust, if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the President and by the Treasurer and may,
but need not be, sealed with seal of the Trust; provided, however, that where
such certificate is signed by a transfer agent or a transfer clerk acting on
behalf of the Trust or a registrar other than a Trustee, officer or employee of
the Trust, the signature of the President or Treasurer and the seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Trust, such certificate or
certificates may nevertheless be adopted by the Trust and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.
SECTION 2. TRANSFER OF SHARES. Transfers of shares of beneficial interest
of the Trust shall be made only on the books of the Trust by the owner thereof
or by his attorney thereunto authorized by a power of attorney duly executed and
filed with the Secretary or a transfer agent, and only upon the surrender of any
certificate or certificates for such shares. The Trust shall not impose any
restrictions upon the transfer of the shares of the Trust, but this requirement
shall not prevent the charging of customary transfer agent fees.
SECTION 3. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The Trust shall, if
and whenever the Trustees shall so determine, maintain one or more transfer
offices or agencies, each in the charge of a transfer agent designated by the
Trustees, where the shares of beneficial interest of the Trust shall be directly
transferable. The Trust shall, if and whenever the Trustees shall so determine,
maintain one or more registry offices, each in the charge of a registrar
designated by the Trustees, where such shares shall be registered, and no
certificate for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
shall be in the Commonwealth of Massachusetts and shall have charge of the stock
transfer books, lists and records, which shall be kept in Massachusetts in an
office which shall be deemed to be the stock transfer office of the Trust. The
Trustees may also make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the Trust.
SECTION 4. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Trustees
may fix in advance a time which shall be not more than sixty (60) days before
the date of any meeting of shareholders, or the date for the payment of any
dividend or the making or any distribution to shareholders or the last day on
which the consent or dissent of shareholders may be effectively expressed for
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any purpose, as the record date for determining the shareholders having the
right to notice of and to vote at such meeting, and any adjournment thereof, or
the right to receive such dividend or distribution or the right to give such
consent or dissent, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. The Trustees may, without fixing such record
date, close the transfer books for all or any part of such period for any of the
foregoing purposes.
SECTION 5. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any
shares of the Trust shall immediately notify the Trust of any loss, destruction
or mutilation of the certificate therefor, and the Trustees may, in their
discretion, cause a new certificate or certificates to be issued to him, in case
of mutilation of the certificate, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate.
SECTION 6. RECORD OWNER OF SHARES. The Trust shall be entitled to treat the
person in whose name any share of a series or class of the Trust is registered
on the books of the Trust as the owner thereof, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person.
ARTICLE VII
Fiscal Year
The fiscal year of the trust shall be the calendar year, provided, however,
that the Trustees may from time to time change the fiscal year.
ARTICLE VIII
Seal
The Trustees may adopt a seal of the Trust which shall be in such form and
shall have such inscription thereon as the Trustees may from time to time
prescribe.
ARTICLE IX
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the shareholders; and no shareholder shall have any right of inspecting any
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account or book or document of the Trust except as conferred by law or
authorized by the Trustees or by resolution of the shareholders.
ARTICLE X
Custodian
The following provisions shall apply to the employment of a Custodian
pursuant to Article VII of the Declaration of Trust and to any contract entered
into with the Custodian so employed:
(a) The Trustees shall cause to be delivered to the Custodian all
securities owned by the Trust or to which it may become entitled,
and shall order the same to be delivered by the Custodian only in
completion of a sale, exchange, transfer, pledge, loan, or other
disposition thereof, against receipt by the Custodian of the
consideration therefor or a certificate of deposit or a receipt
of an issuer or of its transfer agent, or to a securities
depository as defined in Rule 17f-4 under the Investment Company
Act of 1940, as amended, all as the Trustees may generally or
from time to time require or approve, or to a successor
Custodian; and the Trustees shall cause all funds owned by the
Trust or to which it may become entitled to be paid to the
Custodian, and shall order the same disbursed only for investment
against delivery of the securities acquired, or in payment or
expenses, including management compensation, and liabilities of
the Trust, including distributions to shareholders, or to a
successor Custodian.
(b) In case of the resignation, removal or inability to serve of any
such Custodian, the Trustees shall promptly appoint another bank
or trust company meeting the requirements of said Article VII as
successor Custodian. The agreement with the Custodian shall
provide that the retiring Custodian shall, upon receipt of notice
of such appointment, deliver the funds and property of the Trust
in its possession to and only to such successor, and that pending
the appointment of a successor Custodian, or a vote of the
shareholders to function without a Custodian, the Custodian shall
not deliver funds and property of the Trust to the Trustee, but
may deliver them to a bank or trust company doing business in
Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus and undivided profits, as shown by its last
published report, of not less than $2,000,000, as the property of
the Trust to be held under terms similar to those on which they
were held by the retiring Custodian.
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ARTICLE XI
Limitation of Liability and Indemnification
SECTION 1. LIMITATION OF LIABILITY. Provided they have exercised reasonable
care and have acted under the reasonable belief that their actions are in the
best interest of the Trust, the Trustees shall not be responsible for or liable
in any event for neglect or wrongdoing of them or any officer, agent, employee
or investment adviser of the Trust, but nothing contained herein shall protect
any Trustee against any liability to which he would otherwise be subject by
reason or willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office.
SECTION 2. INDEMNIFICATION OF TRUSTEES AND OFFICERS. The Trust shall
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or has been a Trustee, officer, employee or agent of the Trust, or is or has
been serving at the request of the Trust as a Trustee, director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, provided that:
(a) such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Trust,
(b) with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful,
(c) unless ordered by a court, indemnification shall be made only as
authorized in the specific case upon a determination that
indemnification of the Trustee, officer, employee or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in subparagraphs (a) and (b) above
and (e) below, such determination to be made based upon a review
of readily available facts (as opposed to a full trial-type
inquiry) by (i) vote of a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter) or (ii)
by independent legal counsel in a written opinion.
(d) in the case of an action or suit by or in the right of the Trust
to procure a judgment in its favor, no indemnification shall be
made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Trust unless and
only to the extent that the court in which such action or suit is
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brought, or a court of equity in the county in which the Trust
has its principal office, shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably entitled
to indemnify for such expenses which such court shall deem
proper, and
(e) no indemnification or other protection shall be made or given to
any Trustee or officer of the Trust against any liability to the
Trust or to its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
Expenses (including attorneys' fees) incurred with respect to any claim,
action, suit or proceeding of the character described in the preceding paragraph
shall be paid by the Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such person to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Trust as authorized by this Article, provided that either:
(1) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances;
or
(2) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on
the matter) or an independent legal counsel in a written opinion
shall determine, based upon a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason
to believe that the recipient ultimately will be found entitled
to indemnification.
As used in this Section 2, a "Disinterested Trustee" is one who is not (i)
an "Interested Person," as defined in the 1940 Act, of the Trust (including
anyone who has been exempted from being an "Interested Person" by any rule,
regulation, or order of the Securities and Exchange Commission), or (ii)
involved in the claim, action, suit or proceeding.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, or with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 3. INDEMNIFICATION OF SHAREHOLDERS. In case any shareholder or
former shareholder shall be held to be personally liable solely by reason of his
being or having been a shareholder and not because of his acts or omissions or
for some other reason, the shareholder or former shareholder (or his heirs,
executors, administrators or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and indemnified
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against all loss and expense arising from such liability. The Trust shall,
upon request by the shareholder, assume the defense of any claim made against
any shareholder for any act or obligation of the Trust and satisfy any judgment
thereon.
ARTICLE XII
Underwriting Arrangements
Any contract entered into for sale of shares of the Trust pursuant to
Article VIII, Section 2 of the Declaration of Trust shall require the other
party thereto (hereinafter called the "underwriter") whether acting as principal
or as agent to use all reasonable efforts, consistent with the other business of
the underwriter, to secure purchasers for the shares of the Trust.
The underwriter may be granted the right
(a) To purchase as principal, from the Trust, at not less than net
asset value per share, the shares needed, but no more than the
shares needed (except for clerical errors and errors of
transmission), to fill unconditional orders for shares of the
Trust received by the underwriter.
(b) To purchase as principal, from shareholders of the Trust at not
less than net asset value per share such shares as may be
presented to the Trust, or the transfer agent of the Trust, for
redemption and as may be determined by the underwriter in its
sole discretion.
(c) to resell any such shares purchased at not less than net asset
value per share.
ARTICLE XIII
Report to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XIV
Certain Transactions
SECTION 1. LONG AND SHORT POSITIONS. Except as hereinafter provided, no
officer or Trustee of the Trust and no partner, officer, director or shareholder
of the manager or investment adviser of the Trust or of the underwriter of the
Trust, and no manager or investment adviser or underwriter of the Trust, shall
take long or short positions in the securities issued by the Trust.
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(a) The foregoing provision shall not prevent the underwriter from
purchasing from the Trust shares of the Trust if such purchases
are limited (except for reasonable allowances for clerical
errors, delays and errors of transmission and cancellation of
orders) to purchases for the purpose of filling orders for such
shares received by the underwriter, and provided that orders to
purchase from the Trust are entered with the Trust or the
Custodian promptly upon receipt by the underwriter of purchase
orders for such shares, unless the underwriter is otherwise
instructed by its customer.
(b) The foregoing provision shall not prevent the underwriter from
purchasing shares of the Trust as agent for the account of the
Trust.
(c) The foregoing provision shall not prevent the purchase from the
Trust or from the underwriter of shares issued by the Trust by
any officer or Trustee of the Trust or by any partner, officer,
director or shareholder of the manager or investment adviser of
the Trust at the price available to the public generally at the
moment of such purchase or, to the extent that any such person is
a shareholder, at the price available to shareholders of the
Trust generally at the moment of such purchase, or as described
in the current Prospectus of the Trust.
SECTION 2. LOANS OF TRUST ASSETS. The Trust shall not lend assets of the
Trust to any officer or Trustee of the Trust, or to any partner, officer,
director or shareholder of, or person financially interested in, the manager or
investment adviser of the Trust, or the underwriter of the Trust, or to the
manager or investment adviser of the Trust or to the underwriter of the Trust.
SECTION 3. MISCELLANEOUS. The Trust shall not permit any officer or
Trustee, or any officer or director of the manager or investment adviser or
underwriter of the Trust, to deal for or on behalf of the Trust with himself as
principal or agent, or with any partnership, association or corporation in which
he has a financial interest; provided that the foregoing provisions shall not
prevent (i) officers and Trustees of the Trust from buying, holding or selling
shares in the Trust, or from being partners, officers or directors of or
otherwise financially interested in the manager or investment adviser or
underwriter of the Trust; (ii) purchases or sales of securities or other
property by the Trust from or to an affiliated person or to the manager or
investment adviser or underwriter of the Trust if such transaction is exempt
from the applicable provisions of the 1940 Act; (iii) purchases of investments
from the portfolio of the Trust or sales of investments owned by the Trust
through a security dealer who is, or one or more of whose partners,
shareholders, officers or directors is, an officer or Trustee of the Trust, if
such transactions are handled in the capacity of broker only and commissions
charged do not exceed customary brokerage charges for such services; (iv)
employment of legal counsel, registrar, transfer agent, dividend disbursing
agent or custodian who is, or has a partner, shareholder, officer or director
who is, an officer or Trustee of the Trust if only customary fees are charged
for services to the Trust; (v) sharing statistical, research, legal and
management expenses and office hire and expenses with any other investment
company in which an officer or Trustee of the Trust is an officer, trustee or
director or otherwise financially interested.
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References to the manager or investment adviser of the Trust contained in
this Article XIV shall also be deemed to refer to any sub-adviser appointed in
accordance with Article VIII, Section 1 of the Declaration of Trust.
ARTICLE XV
Amendments
These By-Laws may be amended at any meeting of the Trustees by a vote of a
majority of the Trustees then in office.
***********
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ADMINISTRATION AGREEMENT
AGREEMENT originally made on this 10th day of August, 1993, by and between
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST, a Massachusetts business trust (the
"Trust"), and EATON VANCE MANAGEMENT, a Massachusetts business trust (the
"Administrator").
1. DUTIES OF THE ADMINISTRATOR. The Trust hereby employs the Administrator
to administer the affairs of the Trust, subject to the supervision of the
Trustees of the Trust, for the period and on the terms set forth in this
Agreement. The Administrator shall perform these duties with respect to any and
all series of shares ("Funds") which may be established by the Trustees pursuant
to the Declaration of Trust of the Trust. Funds may be terminated and additional
Funds established from time to time by action of the Trustees of the Trust.
The Administrator hereby accepts such employment, and agrees to administer
the Trust's business affairs and, in connection therewith, to furnish for the
use of the Trust office space and all necessary office facilities, equipment and
personnel for administering the affairs of the Trust and to pay the salaries and
fees of all officers and Trustees of the Trust who are members of the
Administrator's organization and all personnel of the Administrator performing
management and administrative services for the Trust. The Administrator shall
for all purposes herein be deemed to be an independent contractor and shall,
except as otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed an agent of the
Trust.
2. COMPENSATION OF THE ADMINISTRATOR. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Trust, on behalf
of each Fund agrees to pay to the Administrator on the last day of each month a
fee equal (annually) to 0.05% of the average daily net asset value of such Fund
up to $100 million, 0.04% of the average daily net asset value of such Fund in
excess of $100 million and less than $250 million, 0.03% of the average daily
net asset value of such Fund in excess of $250 million and less than $500
million and 0.02% of the average daily net asset value of the Fund in excess of
$500 million. Such fee shall be computed in accordance with the Declaration of
Trust, registration statement under the Securities Act of 1933 and any
applicable votes of the Trustees of the Trust.
In case of initiation or termination of this Agreement during any month
with respect to any Fund, the fee for that month shall be reduced
proportionately on the basis of the number of calendar days during which the
Agreement is in effect and the fee shall be computed upon the average net assets
for the business days it is so in effect for that month.
The Administrator may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Trust shall include,
without implied limitation, (i) expenses of maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the Investment Company Act
of 1940, (iii) commissions, fees and other expenses connected with the purchase
or sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes
and interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase
and redemption of shares, (viii) expenses of registering and qualifying the
Trust and its shares under federal and state securities laws and of preparing
and printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
<PAGE>
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registrations of the Trust and of the Trust's principal underwriter, if
any, as a broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Trust (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, shareholder servicing agents and registrars for all services to the
Trust, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation of and any expenses of Trustees of the Trust, (xviii) the
investment advisory fee payable to the Trust's investment adviser, and (xi) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Trust to indemnify
its Trustees and officers with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the
Administrator as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Administrator are or
may be or become similarly interested in the Trust, and that the Administrator
may be or become interested in the Trust as a shareholder or otherwise. It is
also understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Trust are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Trust or to any shareholder of the Trust for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses which may
be sustained in the purchase, holding or sale of any security or other
instrument, including options and futures contracts.
6. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect as to each Fund to and including
February 28, 1995 and shall continue in full force and effect as to each Fund
indefinitely thereafter, but only so long as such continuance after February 28,
1995 is specifically approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement as to any Fund, without the
payment of any penalty, by action of the Trustees of the Trust or the trustees
of the Administrator, as the case may be, and the Trust may, at any time upon
such written notice to the Administrator, terminate this Agreement as to any
Fund by vote of a majority of the outstanding voting securities of that Fund.
This Agreement shall terminate automatically in the event of its assignment.
<PAGE>
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7. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended as to any
Fund by a writing signed by both parties hereto, provided that no amendment to
this Agreement shall be effective as to that Fund until approved by the vote of
a majority of the Trustees of the Trust.
8. LIMITATION OF LIABILITY. The Administrator expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Trust, and the Administrator hereby agrees that
it shall have recourse to the Trust for payment of claims or obligations as
between the Trust and the Administrator arising out of this Agreement and shall
not seek satisfaction from the shareholders or any shareholder of the Trust. No
Fund shall be liable for the obligations of any other Fund hereunder.
9. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the particular Fund present or
represented by proxy at the meeting of the holders of more than 50 per centum of
the outstanding shares of the particular Fund are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the outstanding shares
of the particular Fund.
WRIGHT MANAGED BLUE CHIP EATON VANCE MANAGEMENT
SERIES TRUST
By: /s/ Peter M. Donovan By: /s/ H. Day Brigham, Jr.
------------------------- -------------------------
Hale and Dorr
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o Fax 617-526-5000
July 16, 1993
The Wright Managed Blue Chip Series Trust
24 Federal Street
Boston, Massachusetts 02199
Gentlemen and Ladies:
This opinion is being rendered in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), and the Investment Company
Act of 1940, as amended (the "Investment Company Act"), of shares of beneficial
interest, no par value (the "Shares"), of The Wright Managed Blue Chip Series
Trust (the "Trust"), a Massachusetts business Trust.
The Trust was created under a written Declaration of Trust dated April 15,
1993 (the "Declaration of Trust"). Article V, Section 5.1 of the Declaration of
Trust provides that the number of Shares authorized to be issued is unlimited.
Pursuant to Article V, Section 5.4 of the Declaration of Trust, the Trustees are
empowered, in their discretion, to issue Shares to such parties and for such
consideration, at such time or times and on such terms as the Trustees deem
appropriate or desirable. By vote adopted on June 16, 1993, the Trustees
authorized officers of the Trust to determine the appropriate number of Shares
to be registered under the Act and to issue and sell Shares to the public.
For purposes of this opinion, we have examined such records of the Trust,
certificates and such other documents as we have considered necessary or
appropriate for purposes of this opinion. In our examination of such documents,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or photostatic copies. We have
relied as to certain factual matters on information obtained from officers of
the Trust and other sources believed by us to be reliable.
Based upon and subject to the foregoing, we are of the opinion that, when
the registration statement relating to the Shares has become effective under the
Act and the Shares have been issued, sold and paid for as contemplated by such
registration statement, such Shares will be duly authorized, validly issued,
fully paid and non-assessable by the Trust, subject to compliance with the Act,
the Investment Company Act and applicable state laws regulating the sale of
securities.
The statements and opinions set forth in the third paragraph of this letter
are qualified in that, because the Trust is a Massachusetts business trust,
shareholders of the Trust, under certain circumstances, may be liable under
applicable law to creditors of the Trust.
<PAGE>
The foregoing opinion is limited to the federal laws of the United States
and the laws of The Commonwealth of Massachusetts and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
We consent to your filing this opinion with the Securities and exchange
Commission as an exhibit to the registration statement. In giving such consent,
we do not admit that we are in the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
/s/ Hale and Dorr
Hale and Dorr
EXHIBIT 11
Independent Auditors' Consent
We consent to the use in this Post-Effective Amendment No. 4 to the
Registration Statement (1933 Act File No. 33-61314) of The Wright Managed Blue
Chip Series Trust of our report dated January 31, 1997 which is incorporated by
reference in the Statement of Additional Information and to the references to us
under the heading "Financial Highlights" appearing in the Prospectus which is
part of such Registration Statement.
We also consent to the reference to our firm under the caption "Financial
Statements" in the Statement of Additional Information of the Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 28, 1997
POWER OF ATTORNEY
We, the undersigned officers and Trustees of The Wright Managed Blue Chip
Series Trust, a Massachusetts business trust, do hereby severally constitute and
appoint H. Day Brigham, Jr., Peter M. Donovan, Alan R. Dynner and A.M. Moody,
III, or any of them, to be true, sufficient and lawful attorneys, or attorney
for each of us, to sign for each of us, in the name of each of us in the
capacities indicated below, and any and all amendments (including post-effective
amendments) to the Registration Statement on Form N-1A filed by The Wright
Managed Blue Chip Series Trust with the Securities and Exchange Commission in
respect of shares of beneficial interest and other documents and papers relating
thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
NAME CAPACITY DATE
President, Principal
/s/ Peter M. Donovan Executive Officer and
- ------------------------- Trustee March 18, 1997
Peter M. Donovan
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting
- ------------------------- Officer March 18, 1997
James L. O'Connor
/s/ H. Day Brigham, Jr.
- ------------------------- Trustee March 18, 1997
H. Day Brigham, Jr.
/s/ Winthrop S. Emmet
- ------------------------- Trustee March 18, 1997
Winthrop S. Emmet
/s/ A.M. Moody, III
- ------------------------- Trustee March 18, 1997
A.M. Moody, III
/s/ Lloyd F. Pierce
- ------------------------- Trustee March 18, 1997
Lloyd F. Pierce
/s/ Richard E. Taber
- ------------------------- Trustee March 18, 1997
Richard E. Taber
/s/ Raymond Van Houtte
- ------------------------- Trustee March 18, 1997
Raymond Van Houtte
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 1
[NAME] WRIGHT TOTAL RETURN BOND PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-END] DEC-31-1996
[INVESTMENTS-AT-COST] 740,896
[INVESTMENTS-AT-VALUE] 749,981
[RECEIVABLES] 16,727
[ASSETS-OTHER] 3,404
[OTHER-ITEMS-ASSETS] 26,054
[TOTAL-ASSETS] 796,166
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 6,674
[TOTAL-LIABILITIES] 6,674
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 795,808
[SHARES-COMMON-STOCK] 83,411
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] (36)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (15,365)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,085
[NET-ASSETS] 789,492
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 37,009
[OTHER-INCOME] 0
[EXPENSES-NET] 5,872
[NET-INVESTMENT-INCOME] 31,137
[REALIZED-GAINS-CURRENT] (831)
[APPREC-INCREASE-CURRENT] (17,000)
[NET-CHANGE-FROM-OPS] 13,306
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 31,173
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 54,345
[NUMBER-OF-SHARES-REDEEMED] 28,919
[SHARES-REINVESTED] 3,309
[NET-CHANGE-IN-ASSETS] 251,810
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 2,936
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 35,207
[AVERAGE-NET-ASSETS] 611,873
[PER-SHARE-NAV-BEGIN] 9.83
[PER-SHARE-NII] 0.447
[PER-SHARE-GAIN-APPREC] (0.360)
[PER-SHARE-DIVIDEND] (0.447)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.47
[EXPENSE-RATIO] 1.0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 2
[NAME] WRIGHT NEAR TERM BOND PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-END] DEC-31-1996
[INVESTMENTS-AT-COST] 612,547
[INVESTMENTS-AT-VALUE] 615,495
[RECEIVABLES] 15,007
[ASSETS-OTHER] 3,529
[OTHER-ITEMS-ASSETS] 25,727
[TOTAL-ASSETS] 659,758
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 7,305
[TOTAL-LIABILITIES] 7,305
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 663,980
[SHARES-COMMON-STOCK] 67,238
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (14,475)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 2,948
[NET-ASSETS] 652,453
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 21,271
[OTHER-INCOME] 0
[EXPENSES-NET] 3,536
[NET-INVESTMENT-INCOME] 17,735
[REALIZED-GAINS-CURRENT] 560
[APPREC-INCREASE-CURRENT] (8,161)
[NET-CHANGE-FROM-OPS] 10,134
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 17,735
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 58,895
[NUMBER-OF-SHARES-REDEEMED] 26,542
[SHARES-REINVESTED] 1,825
[NET-CHANGE-IN-ASSETS] 325,889
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,772
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 36,927
[AVERAGE-NET-ASSETS] 389,988
[PER-SHARE-NAV-BEGIN] 9.88
[PER-SHARE-NII] 0.440
[PER-SHARE-GAIN-APPREC] (0.180)
[PER-SHARE-DIVIDEND] (0.440)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.70
[EXPENSE-RATIO] 2.72
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 3
[NAME] WRIGHT SELECTED BLUE CHIP PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-END] DEC-31-1996
[INVESTMENTS-AT-COST] 2,107,703
[INVESTMENTS-AT-VALUE] 2,474,300
[RECEIVABLES] 4,237
[ASSETS-OTHER] 3,534
[OTHER-ITEMS-ASSETS] 195,086
[TOTAL-ASSETS] 2,677,157
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,693
[TOTAL-LIABILITIES] 8,693
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1,834,508
[SHARES-COMMON-STOCK] 190,586
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 39,484
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 427,875
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 366,597
[NET-ASSETS] 2,668,464
[DIVIDEND-INCOME] 57,614
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 27,753
[NET-INVESTMENT-INCOME] 29,861
[REALIZED-GAINS-CURRENT] 427,875
[APPREC-INCREASE-CURRENT] 92,485
[NET-CHANGE-FROM-OPS] 550,221
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,069
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 62,148
[NUMBER-OF-SHARES-REDEEMED] 68,010
[SHARES-REINVESTED] 172
[NET-CHANGE-IN-ASSETS] 429,634
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 16,989
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 51,614
[AVERAGE-NET-ASSETS] 2,609,846
[PER-SHARE-NAV-BEGIN] 11.41
[PER-SHARE-NII] 0.170
[PER-SHARE-GAIN-APPREC] 2.430
[PER-SHARE-DIVIDEND] (0.010)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 14.00
[EXPENSE-RATIO] 1.27
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 4
[NAME] WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-END] DEC-31-1996
[INVESTMENTS-AT-COST] 1,176,038
[INVESTMENTS-AT-VALUE] 1,360,298
[RECEIVABLES] 3,791
[ASSETS-OTHER] 3,529
[OTHER-ITEMS-ASSETS] 123,873
[TOTAL-ASSETS] 1,491,491
[PAYABLE-FOR-SECURITIES] 25,744
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 8,675
[TOTAL-LIABILITIES] 34,419
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1,190,337
[SHARES-COMMON-STOCK] 123,399
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 2,053
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 80,381
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 184,301
[NET-ASSETS] 1,457,072
[DIVIDEND-INCOME] 20,551
[INTEREST-INCOME] 0
[OTHER-INCOME] (2,117)
[EXPENSES-NET] 23,780
[NET-INVESTMENT-INCOME] (5,346)
[REALIZED-GAINS-CURRENT] 89,355
[APPREC-INCREASE-CURRENT] 126,226
[NET-CHANGE-FROM-OPS] 210,235
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 45,060
[NUMBER-OF-SHARES-REDEEMED] 57,376
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 92,201
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 10,298
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 56,217
[AVERAGE-NET-ASSETS] 1,298,380
[PER-SHARE-NAV-BEGIN] 10.06
[PER-SHARE-NII] (0.043)
[PER-SHARE-GAIN-APPREC] 1.793
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.81
[EXPENSE-RATIO] 2.31
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
