As filed with the Securities and Exchange Commission
on October 25, 1996
Registration No. 811-7698
Pursuant to Rule 8b-16 promulgated under Section 8(b) of the
Investment Company Act of 1940
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 4 |X|
(Check appropriate box or boxes.)
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IOWA SCHOOLS JOINT INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
2203 Grand Avenue
Des Moines, Iowa 50312-5338
(Address of Principal Executive Offices)(Zip code)
Registrant's Telephone Number, Including Area Code: (515) 244-5426
Edgar H. Bittle, Esq.
Ahlers, Cooney, Dorweiler, Haynie,
Smith & Allbee, P.C.
100 Court Avenue, Des Moines, Iowa 50309
(Name and Address of Agent for Service)
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Copies of all communications to:
JOHN C. MILES, ESQ.
Cline, Williams, Wright,
Johnson & Oldfather
1900 FirsTier Bank Building
Lincoln, Nebraska 68508
EDGAR H. BITTLE, ESQ.
Ahlers, Cooney, Dorweiler, Haynie,
Smith & Allbee, P.C.
100 Court Avenue
Des Moines, Iowa 50309
<PAGE>
IOWA SCHOOLS
JOINT INVESTMENT TRUST
(ISJIT)
A comprehensive cash management service for Iowa School Corporations
INFORMATION STATEMENT
October 25, 1996
This booklet provides detailed information about the
Iowa Schools Joint Investment Trust.
Please read it carefully and retain it for future reference.
Sponsored by the
IOWA ASSOCIATION OF SCHOOL BOARDS
<PAGE>
CONTENTS
Section Page
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The Iowa Schools Joint Investment (ISJIT)...............................3
Cash Management Alternatives
Diversified Portfolio ..............................................3
Direct Government Obligation Portfolio..............................3
Authorized Investments
Maximum Current Income..............................................4
Risk and Management of Risk
Management Policies and Procedures..................................4
Maturity of ISJIT Investments.......................................5
Maintenance of Liquidity............................................5
Investing in ISJIT Portfolios
Portfolio Investments...............................................5
Investments by Bank Funds Transfer..................................5
Income Distributions................................................5
Redeeming ISJIT Portfolio Units
Portfolio Withdrawals...............................................5
Valuing ISJIT Portfolio Trust Units
Portfolio Transactions..............................................6
Calculating Yield...................................................6
Expenses of ISJIT...................................................6
Trustees and Officers...................................................7
The Advisor.............................................................8
The Administrator.......................................................8
The Custodian...........................................................8
Administrative and Distribution Related Services........................8
Taxes...................................................................9
Reports to Participants.................................................9
Declaration of Trust
Description of Trust Units..........................................9
Participant Liability...............................................9
Termination of the Declaration......................................9
Amendment of the Declaration .......................................9
Withdrawal..........................................................9
Definitions.........................................................9
Legal Counsel and Independent Auditors..................................9
Document Copies.........................................................9
INSTRUCTIONS AND APPLICATION FORM......................................10
INSTRUCTIONS FOR MAKING INVESTMENTS ...................................16
INSTRUCTIONS FOR MAKING WITHDRAWALS....................................16
No person or entity has been authorized to give any information or to make any
representations other than those contained in this Information Statement, and,
if given or made, such information or representations must not be relied upon as
having been authorized by ISJIT, its Trustees, the Investment Advisor, the
Administrator, the Custodian, or any agent of ISJIT or the Trustees.
<PAGE>
THE IOWA SCHOOLS JOINT INVESTMENT TRUST (ISJIT)
The Iowa Schools Joint Investment Trust ("ISJIT") is a professionally managed
common law trust organized and operated as a diversified open-end investment
management company and created with the objective of providing Iowa schools (the
"Participants") a convenient method for investing their funds in a manner that
will maximize current income consistent with safety of principal and the
required degree of liquidity.
ISJIT has been established under Iowa law pursuant to Iowa Code chapter 28E and
section 279.29, which authorize Iowa schools to jointly invest moneys pursuant
to a joint investment agreement. ISJIT was established by adoption of a Joint
Powers Agreement and Declaration of Trust establishing the Iowa Schools Joint
Investment Trust as of October l, l986 and amended as of November 1, 1988 and
May 1, 1993 (the "Declaration"). An Iowa school corporation whose board of
directors is a member of the Iowa Association of School Boards can become a
Participant in ISJIT by submitting an application and a certified copy of the
form of authorizing resolution contained therein to Iowa Schools Joint
Investment Trust, c/o Norwest Bank Iowa, N.A., 666 Walnut, P.O. Box 837, Des
Moines, Iowa, 50304-0837. See "Instructions and Application Form".
In the opinion of legal counsel, the interests of beneficial ownership in ISJIT
("Trust Units") are exempt from registration under the Securities Act of l933
and the Iowa Uniform Securities Act. ISJIT, however, is registered as an
investment company under the Investment Company Act of 1940 ("1940 Act")
pursuant to the requirements of Iowa Code ss. 12B.10.
This Information Statement provides detailed information about ISJIT and its
investment and operating policies. Please read it carefully and retain it for
future reference. Additional information, a copy of the Declaration, and further
assistance regarding becoming a Participant in ISJIT may be obtained by calling
the ISJIT toll free number, (800) 872-0l40, or by contacting the Iowa Schools
Joint Investment Trust, Norwest Bank Iowa, N.A., 666 Walnut, P.O. Box 837, Des
Moines, Iowa 50304-0837. This Information Statement is qualified in its entirety
by reference to the text of the Declaration.
CASH MANAGEMENT ALTERNATIVES
ISJIT issues two separate series of Trust Units in which Participants may
invest, referred to as the Diversified Portfolio and the Direct Government
Obligation Portfolio (a "Portfolio" or collectively the "Portfolios").
There are no minimum or maximum investments or limitations on redemptions for
either Portfolio. Participants may invest any funds in their custody in either
Portfolio. The Portfolios are operated according to investment and accounting
standards which are required of bond proceeds subject to arbitrage rebate and
which conform to the requirements of Rule 2a-7 under the 1940 Act for "money
market funds." Only funds of Participants may be invested in ISJIT.
DIVERSIFIED PORTFOLIO - The Diversified Portfolio is a professionally managed
portfolio of U.S. government and Federal Agency securities, collateralized
certificates of deposit of Iowa financial institutions and collateralized
perfected repurchase agreements as more fully described below. All such
securities have final maturities of no greater than 397 days from the date of
purchase and the Portfolio maintains a maximum dollar weighted average maturity
of 90 days or less.
DIRECT GOVERNMENT OBLIGATION PORTFOLIO - The Direct Government Obligation
Portfolio is identical in every respect to the Diversified Portfolio except that
it is exclusively invested in direct U.S. government obligations and
certificates of deposit and repurchase agreements collateralized by direct U.S.
government obligations, as more fully described below. All such securities have
final maturities no greater than 397 days from the date of purchase and the
Portfolio maintains a maximum dollar weighted average maturity of 90 days or
less. Thus, Participants, which may be required by Iowa law or who may wish to
confine their short-term investments to these types of instruments, may do so by
investing in the Direct Government Obligation Portfolio.
AUTHORIZED INVESTMENTS
The objective of ISJIT, in offering the Diversified and Direct Government
Obligation Portfolios, is to provide Participants with daily liquidity and the
highest possible investment yield consistent with safety of principal and the
maintenance of liquidity.
Subject to the specific investment restrictions of the Portfolios described
herein, assets of ISJIT will only be invested in securities specifically
permitted for Participants under Iowa law, as it now or in the future exists,
including the following types of securities and instruments ("Permitted
Investments").
(1) Securities issued or guaranteed as to payment of principal and interest by
the U.S. Government. These include, for example, Treasury bills, bonds, and
notes which are direct obligations of the U.S. Government.
(2) Obligations issued or guaranteed as to payment of principal and interest by
agencies or instrumentalities of the U.S. Government. Such agencies and
instrumentalities include, for example, Federal Intermediate Credit Banks,
Federal Home Loan Banks, the Federal National Mortgage Association and the
Farmers Home Administration. Such securities will include those supported
by the full faith and credit of the United States Treasury or the right of
the agency or instrumentality to borrow from the Treasury, as well as those
supported only by the credit of the issuing agency or instrumentality.
(3) Collateralized perfected repurchase agreements secured by securities in the
immediately foregoing categories. A repurchase agreement involves the sale
of such securities to ISJIT with the concurrent agreement of the seller to
repurchase them at a specified time and price to yield an agreed upon rate
of interest. The securities collateralizing the agreement are held in
custody and are regularly verified by the ISJIT Custodian and are
maintained daily in an amount equal to at least 102 percent of the value of
principal and accrued interest of the repurchase agreement.
(4) Collateralized Certificates of Deposit ("CDs") in Iowa financial
institutions. Each collateralized CD that ISJIT places with an Iowa
institution on behalf of the Participants in ISJIT is insured by the FDIC
for the first $100,000 of value. All amounts in excess of $100,000 in any
Iowa institution are protected and collateralized as required by Iowa law,
including the security provided by the State of Iowa's sinking fund for
public deposits.
Every Permitted Investment shall be purchased on a delivery-versus-payment
("DVP") basis. No other settlement procedure shall be allowed.
MAXIMUM CURRENT INCOME - Because of the participation of many Iowa schools in
ISJIT and the large pool of funds resulting therefrom, ISJIT can purchase
securities in larger denominations, thereby improving yields and reducing
transaction costs. ISJIT's size and experience also permits the selection of
securities maturing at various times which can enhance average portfolio yields.
These strategies, implemented by a full-time professional portfolio manager,
will maximize the current returns earned by ISJIT.
Generally, the yields on direct and guaranteed U.S. government obligations are
less than those on Federal Agency securities and other Permitted Investments.
Thus, the returns earned by Participants that elect to invest in the Direct
Government Obligation Portfolio may also be lower.
RISK AND MANAGEMENT OF RISK
While investments by ISJIT will be confined to the highest quality securities
and instruments with varying short-term maturities, the complete elimination of
risk is not possible. It is possible that large redemptions of Trust Units in
the Portfolios could necessitate the sale of some Portfolio investments prior to
maturity at current market prices. If market values have declined, a reduction
in Unit value could result at the time of redemption.
MANAGEMENT POLICIES AND PROCEDURES
Following are the fundamental management policies and procedures for ISJIT. All
securities are maintained in separate ISJIT Custodial accounts at Norwest Bank
Iowa, N.A., segregated by Portfolio on behalf of ISJIT Participants.
1. ISJIT investment procedures require that each purchase of a security be
handled on a DVP basis. Funds for the purchase of an investment shall not
be released to the seller until the security is delivered to the ISJIT
Custodian. Conversely, a sold security shall not be released to the buyer
until funds for the purchase price of the security have been received by
the ISJIT custodian.
2. ISJIT investment procedures prohibit "free delivery" transactions. The
Custodian shall never release assets from the ISJIT custodial accounts
until the funds for the investment are delivered. Prohibiting "free
delivery" settlements precludes movement of ISJIT program investments or
funds to a third party anywhere.
3. Any material deviation (greater than .5 percent) from the amortized cost of
investments shall be promptly reported by the Advisor to the Board of
Trustees. If such deviation exceeds .5 percent, the Advisor will consider
what action, if any, should be initiated to reasonably eliminate or reduce
material dilution or other unfair results to Participants. Such action may
include redemption of Trust Units in kind, selling portfolio securities
prior to maturity, withholding distributions or utilizing a net asset value
per Trust Unit based upon available market quotations.
4. The frequent trading of securities, including day trading for the purpose
of realizing short-term gains, the purchase and sale of futures and options
to buy or sell authorized investments, reverse repurchase agreements, and
other similar speculative or derivative transactions are expressly
prohibited.
5. ISJIT may not make any investment other than Permitted Investments
authorized by the provisions of the law applicable to the investment of
funds by the Participants, as such laws may be amended from time to time.
6. ISJIT may not purchase any Permitted Investment for the Diversified or
Direct Government Obligation Portfolios which has a maturity date more than
397 days from the date of purchase unless subject to a perfected repurchase
agreement, which such maturity shall be determined as set forth in Rule
2a-7 under the 1940 Act it presently exists or as it may be amended in the
future.
7. ISJIT may not purchase any Permitted Investment if the effect of such
purchase by ISJIT would be to make the average dollar weighted maturity of
either the Diversified or Direct Government Obligation Portfolios greater
than ninety (90) days; provided, however, that in making such
determination, the maturity of any Permitted Investment shall be determined
as set forth under 6 above.
8. ISJIT may not borrow money or incur indebtedness whether or not the
proceeds thereof are intended to be used to purchase Permitted Investments;
9. ISJIT may not make loans, provided that ISJIT may make Permitted
Investments;
10. ISJIT may not purchase securities or shares of investment companies or any
entities similar to ISJIT.
The restrictions set forth above are fundamental to the operation and activities
of ISJIT and may not be changed without the affirmative approval in writing of a
majority of the Participants entitled to vote, except that such restrictions may
be changed by the Trustees so as to make them more restrictive when necessary to
conform the investment program and activities of ISJIT to the laws of the State
of Iowa and the United States of America as they may from time to time be
amended.
In addition to the fundamental restrictions and procedures set forth above, as a
condition of providing services to ISJIT, ISJIT presently requires that the
ISJIT Custodian and Investment Advisor maintain fidelity and errors and
omissions insurance coverage for ISJIT's benefit for all services provided to
ISJIT.
MATURITY OF ISJIT INVESTMENTS
Each of the Portfolios strictly adheres to Iowa law and Rule 2a-7 under the 1940
Act for money market mutual funds, developed to minimize risk that the value of
investments in a portfolio might vary. ISJIT investment policy as set forth
above presently limits portfolio investments to the following:
1. The remaining maturity of any individual investment may not exceed more
than 397 days from the date of purchase, which such maturity shall be
determined as set forth in Rule 2a-7 under the 1940 Act as it presently
exists or as it may be amended in the future.
2. The maximum dollar weighted average maturity of all ISJIT investments may
not exceed 90 days.
3. Investments are monitored daily by its Iowa based Investment Advisor and
Administrator to assure that the value of each ISJIT investment does not
materially deviate in value from its amortized cost.
MAINTENANCE OF LIQUIDITY - ISJIT investments in the Diversified and Direct
Government Obligation Portfolios will generally be confined to securities
maturing at various times within 397 days from the date of purchase as
previously described. Because of their relatively short maturities, high
quality, and minimal price fluctuations, ready markets will exist for
liquidating all securities in which ISJIT will invest.
As a general policy, the Portfolios will hold investments until they mature.
However, in an effort to increase yields, ISJIT may sell securities and realize
capital gains when there are perceived disparities between maturities for
various categories of investments. Summaries of all securities trades are
regularly provided to the Board of Trustees by the Advisor.
INVESTING IN ISJIT PORTFOLIOS
PORTFOLIO INVESTMENTS - To become a Participant in ISJIT, the school corporation
must adopt the Form A Resolution included in the Instructions and Application
Form attached hereto, or otherwise provided by ISJIT. The Resolution authorizes
the school corporation to become a Participant, adopts the Declaration, and
designates officials of the school corporation authorized to execute
transactions with ISJIT. Following adoption of the Resolution, the school
corporation must complete and forward to the ISJIT Administrator, Norwest Bank
Iowa, N.A., the Investment Trust Application Form B along with the Form A and
Form A Certificate. See "Instructions and Application Form".
Investments may be made in the Diversified or Direct Government Obligation
Portfolio at the net asset value per Unit determined after an investment order
has been accepted. The net asset value of Portfolio Units is determined once
daily at the close of the New York Stock Exchange (currently 3:00 p.m., Des
Moines time).
INVESTMENTS BY BANK FUNDS TRANSFER - A Participant may authorize Norwest Bank
Iowa, N.A., as ISJIT Administrator, to cause moneys to be transferred, by means
of the Iowa Automated Clearinghouse System ("ACH"), from the Participant's local
bank to ISJIT. The Participant may also have its local bank wire federal funds
directly to Norwest Bank Iowa, N.A., all as indicated herein.
Funds transferred will be invested at the net asset value of a Trust Unit for
the respective Portfolio computed as of 3:00 p.m. on the day the transfer is
authorized and will commence earning interest the following day.
A Participant has the ability to invest in a Portfolio by the following methods:
(1) An authorized official may telephone ISJIT at (800) 872-0140 and furnish
the school's name, name of person calling, the ISJIT account number, the
amount being invested, and the account number from which the funds are to
be transferred. A request for the ISJIT investment to be transferred by ACH
must be made by 2:00 p.m.
(2) To make an investment by wire transfer, an authorized official must notify
an ISJIT representative by 10:00 a.m., furnishing the information described
above. The Participant must also instruct its local financial institution
to wire funds to the ISJIT Custodian with the following instructions:
Norwest Bank Iowa, N.A., Des Moines
ABA #073000228
Credit #405200
Iowa Schools Joint Investment Trust
(Further credit to Participant Name and ISJIT
account number)
(3) A Participant may invest in ISJIT Portfolio Units by mailing a check or
other bank draft to the ISJIT Administrator, Norwest Bank Iowa, N.A., Iowa
Schools Joint Investment Trust, 666 Walnut, P.O. Box 837, Des Moines, Iowa
50304-0837. Until the check has been converted into federal funds, the
investment order will not be accepted, and no income will be earned on the
investment until that time.
INCOME DISTRIBUTIONS - Net income, for each Portfolio of ISJIT, is declared each
business day for Participants of record immediately before 3:00 p.m. Des Moines
time. Income distributions are accrued to Participants' accounts daily and
reinvested in additional Trust Units monthly for compounded interest. Total
distributions for the previous month are credited to Participants' Diversified
Portfolio accounts by the first business day of each month and Participants' DGO
Portfolio accounts by the second business day of each month. Distributions are
automatically reinvested in ISJIT Portfolio Trust Units unless cash payment has
been requested. Cash payments, if requested, will be made monthly. If a
Participant redeems the entire amount in its account during the month, income
distributions accrued to the account from the beginning of the month through the
date of redemption are paid into the account the first business day of the
following month.
REDEEMING ISJIT PORTFOLIO TRUST UNITS
PORTFOLIO WITHDRAWALS - ISJIT Portfolio Trust Units may be redeemed on any day
on which the New York Stock Exchange is open for trading, on which the
Administrator computes the net asset value of the ISJIT Portfolios and which is
not a federal holiday or a holiday officially observed by commercial banks in
Iowa. ISJIT Portfolio Trust Units will be redeemed at their net asset value
after a withdrawal request in good order is received by the Administrator at
offices in Des Moines.
Proceeds from the redemption of ISJIT Portfolio Trust Units will be transmitted
to the Participant's local financial institution by means of the ACH System or
by the federal reserve wire system. No charge will be made for the ACH transfer
of Participant's funds; however, local financial institutions may reserve the
right to charge for an incoming wire transfer. Proceeds can also be paid by
check to the registered Participant and mailed to the Participant's address of
record.
Proceeds from the redemption of ISJIT Portfolio Trust Units which have been paid
for by check may not be transmitted to the Participant's financial institution
by wire for up to a maximum of 7 days after the ISJIT Administrator has been
informed that the Participant's check has cleared, but in no event for more than
15 days after the Units have been issued and outstanding.
A Participant has the ability to redeem ISJIT Portfolio Trust Units by the
following methods:
(1) An authorized official may redeem ISJIT Portfolio Trust Units by
telephoning (800) 872-0140 and furnishing the school district's name, name
of person calling, the ISJIT account number, the amount to be withdrawn,
and the account number to which the funds are to be transferred. A request
for the ISJIT withdrawal to be transferred by the Automated Clearing House
System (ACH), which will be transferred the next business day, must be made
by 2:00 p.m.
(2) To redeem ISJIT Portfolio Trust Units by wire transfer to be effective the
same day, an ISJIT representative must be notified by 10:00 a.m. by a
Participant's Authorized Official. The Participant must instruct the ISJIT
representative to wire funds to its local financial institution. The
Participant must provide the wiring instructions, including the local
financial institution name, location, account number, and name and
telephone number of a contact person at that financial institution.
(3) A Participant may redeem all or a portion of its ISJIT Portfolio Trust
Units by instructing the Administrator by letter mailed to the following
address: Iowa Schools Joint Investment Trust, c/o Norwest Bank Iowa, N.A.,
666 Walnut, P.O. Box 837, Des Moines, Iowa, 50304-0837. This redemption
request must be in good order indicating the dollar amount or number of
ISJIT Portfolio Trust Units to be redeemed, the method of redemption (i.e.,
ACH, check) and signed by an authorized official of the school.
VALUING ISJIT PORTFOLIO TRUST UNITS
The net asset value of ISJIT Portfolio Trust Units is determined once each day,
as of the close of the New York Stock Exchange (currently 3:00 p.m. Des Moines
time). Except for federal holidays, such other holidays that are officially
observed by commercial banks in Iowa, and days on which no investments in or
redemption of ISJIT Trust Units occur, the Administrator will compute the ISJIT
Portfolio's net asset value on each day the New York Stock Exchange is open for
trading or when there is a sufficient volume of trading which might materially
affect the net asset value of the securities held by the Portfolios. The net
asset value of each Portfolio Trust Unit is computed by adding the value of all
securities and other assets (including income receivable), subtracting
liabilities (including accrued expenses) attributable to each Portfolio and
dividing by the number of Trust Units of each Portfolio outstanding.
The ISJIT Administrator will compute the net asset value of Portfolio Trust
Units by using the amortized cost method for valuing securities. Under the
amortized cost method a security is initially valued at cost on the date of
purchase and, thereafter, any discount or premium is amortized on a straight
line basis to maturity, regardless of fluctuating interest rates or the market
value of the security. However, the Advisor will establish procedures to
stabilize the net asset value of Trust Units at $l.00 per Trust Unit. These
procedures include a review by the Advisor as to the extent of the deviation of
net asset value based upon available market quotations from the Portfolio's
$l.00 amortized cost per value unit. If such deviation exceeds .5 percent, the
Advisor will consider what action, if any, should be initiated to reasonably
eliminate or reduce material dilution or other unfair results to Participants.
Such action may include redemption of Portfolio Trust Units in kind, selling
portfolio securities prior to maturity, withholding distributions or utilizing a
net asset value per Portfolio Trust Unit based upon available market quotations.
If, and only if, the Trustees, with the advice of the Advisor, shall determine
that the amortized cost method of determining the net asset value of Portfolio
Trust Units no longer represents a fair method of valuation, the Trustees may
either permit such net asset value to fluctuate or may reflect the fair value
thereof in the number of Trust Units allocated to each Participant.
PORTFOLIO TRANSACTIONS - Subject to policies set by the Trustees, the Advisor is
authorized to determine, consistent with the ISJIT investment objectives and
policies, which securities will be purchased, sold and held by ISJIT. Most of
the securities will be purchased on a principal basis directly from the issuer,
from banks, underwriters or market makers and, thus, will not involve payment of
a brokerage commission. Such purchases may include a discount, concession or
mark-up retained by an underwriter or dealer. The Advisor is authorized to
select the brokers or dealers that will execute the purchases and sales of
securities and is directed to use its best efforts to obtain the best available
price and most favorable execution on brokerage transactions. Some of the
transactions may be directed to brokers or dealers who furnish special research
and statistical information or services rendered in the execution of orders.
CALCULATING YIELD - The yield on Trust Units (a 7-calendar-day historical yield)
is calculated by first dividing the average daily net income per Portfolio Trust
Unit for that 7-day period by the average daily net asset value per Trust Unit
for the same period. This return is then annualized by multiplying the result
times 365. The yield for the 7-day period ended June 30, 1996, for ISJIT and
ISJIT DSO was 4.82% and 4.44%, respectively.
EXPENSES OF ISJIT - Under separate agreements with ISJIT, the Advisor, the
Administrator and the Custodian each is paid an annual fee for its services.
Fees are paid from each portfolio according to the schedule illustrated on the
following page:
DIVERSIFIED PORTFOLIO
AVERAGE DAILY CUSTODIAN ADMINISTRATOR ADVISOR
NET ASSET AMOUNT FEE FEE FEE
Less than $150 million .050% .175% .250%
For additional amounts
up to $200 million .045% .165% .225%
For amounts greater than
$200 million .040% .150% .225%
DGO PORTFOLIO
AVERAGE DAILY CUSTODIAN ADMINISTRATOR ADVISOR
NET ASSET AMOUNT FEE FEE FEE
Less than $150 million .050% .275% .150%
For additional amounts
up to $200 million .045% .265% .125%
For amounts greater than
$200 million .040% .250% .125%
These fees are based upon the average daily net assets of the respective
Portfolios and are accrued daily and paid monthly.
ISJIT also pays the operating expenses incurred directly by ISJIT and its
Trustees in connection with the discharge of their duties. These expenses
include initial and on-going legal fees, auditing fees, out-of-pocket expenses
of Trustees, and the cost of printing, mailing and other services performed
independently by ISJIT. Payment of all operating expenses are accrued daily and
are estimated at the annual rate of 0.03 percent of average daily net assets.
Pursuant to the Trust's Rule 12b-1 Plan, a Participant service fee computed at
the annual rate of 0.10 percent of the average daily net assets of the
Portfolios is payable to the Iowa Association of School Boards ("IASB"). The fee
is paid for administrative services provided by IASB to ISJIT, including
clerical and administrative services in connection with meetings of the Board of
Trustees, evaluation of performance of service providers, review of compliance
with investment policies, providing the Board of Trustees various reports
thereon, maintaining Trust records and providing marketing services.
Expenses directly attributable to a Portfolio are accrued against the respective
Portfolio. Expenses not attributable to a particular Portfolio ("general
expenses") are allocated to the Portfolios pro rata based upon the relative net
asset value of the Portfolios.
For the fiscal year ending June 30, 1996, total expenses of the Portfolios
amounted to 0.60 percent and 0.60 percent, respectively, of the Diversified and
Direct Government Obligation Portfolios' average daily net assets.
These fees and operating expenses are subject to adjustment and renegotiation as
determined by the Board of Trustees and the terms of the contracts with the
service providers.
TRUSTEES AND OFFICERS
The Board of Trustees has full and complete control over the business and assets
of ISJIT, subject to the rights of ISJIT Participants as provided in the
Declaration.
There are six voting members of the Board of Trustees. Ronald M. Rice, the
Executive Director of the Iowa Association of School Boards, Inc. serves as an
ex officio nonvoting member of the Board of Trustees and, pursuant to the
By-laws, is Secretary for the Board. The Assistant Secretary is Robert M.
Huckleberry, Director of Finance of the Iowa Association of School Boards, Inc.
The names, affiliations and positions of the Board members are set forth below:
NAME AFFILIATION POSITION
Carolyn Jons Ames Chairperson
Don Williams Villisca Vice Chairperson
Gary D. Bengtson Carroll Treasurer
Dean Borg Mount Vernon Member
Gerald L. Cowell Creston Member
Richard Vande Kieft Cedar Falls Member
Of the six voting Trustees, four Trustees must be persons who are school board
members and members of the board of directors of the Iowa Association of School
Boards; one must be a school superintendent; and one must be a school business
official. The Chairman, Vice Chairman, and Secretary serve on an Executive
Committee. The Executive Committee may exercise all of the authority of the
Board of Trustees except that the Executive Committee cannot create a new
portfolio or series of units or change investment policies. Ex Officio Trustees
have no voting power in connection with any actions that the Trustees may take
on behalf of ISJIT. The Trustees have legal title to the assets of ISJIT for the
benefit of the Participants. In their capacity, the Trustees function on behalf
of the Participants, as the agents and fiduciaries of the Participants, to
implement and administer the Declaration, as an agreement among the
Participants.
Trustees are elected to terms with staggered, annual expiration dates over three
years. In each year, the Trustees will elect two Trustees to serve for a term of
three years. The Declaration provides that two-thirds of the Trustees may, at
any time, remove a Trustee from office for cause.
If at any time a Trustee is associated as a school board member, a school
superintendent or a school business official, with a school which ceases to be a
Participant, such Trustee must resign.
No Trustee (whether voting or non-voting) of ISJIT will receive any compensation
from ISJIT, the Advisor, Administrator or Custodian for his or her services.
ISJIT will reimburse the Trustees for their reasonable expenses incurred on
behalf of ISJIT.
ISJIT refers to the Trustees in their capacity collectively as Trustees and not
individually or personally. All persons dealing with ISJIT must look solely to
the ISJIT assets for the enforcement of claims against ISJIT. The Trustees,
officers and Participants do not assume any liability for obligations entered
into on behalf of ISJIT. The Declaration shall not create any right, title,
privilege or entitlement in any person, corporation or other legal entity except
a Participant and a Person that has a direct and written contract with ISJIT.
The terms and conditions of the Declaration are not intended to and shall not be
construed to create any cause of action, legal or equitable, in any Person
against the Participants, Trustees, officers, employees or agents of ISJIT,
except as is provided by specific language in the Declaration or by specific
language in written agreements or contracts entered into by the Trustees in
implementing ISJIT. It is not intended and the terms of the Declaration shall
not be construed so that any breach thereof by Participants, Trustees, officers,
employees or agents of ISJIT creates an action at common law, tort, contract or
otherwise.
A Trustee is not personally liable for a claim based upon an act or omission of
the Trustee performed in the discharge of the Trustee's duties, except for acts
or omissions which involve intentional misconduct or knowing violation of the
law or for a transaction from which the Trustee derives an improper personal
benefit.
The Trustees are responsible for the management of ISJIT, the conduct of its
affairs, and the management and distribution of ISJIT assets. However, the
Trustees are not required personally to conduct all of the affairs of ISJIT.
Consistent with their responsibility, the Trustees have appointed an Advisor, an
Administrator, and Custodian and have assigned to them such duties as the
Trustees have deemed appropriate with regard to the investment, administration,
record keeping, and custody of moneys and investments of ISJIT.
THE ADVISOR
Investors Management Group ("IMG"), 2203 Grand Avenue, Des Moines, Iowa
50312-5338, an investment advisor, registered under the Investment Company Act
of 1940, serves as the ISJIT's Advisor, pursuant to an Advisor Agreement. Since
IMG was founded in 1982, its principal business has been providing continuous
investment management to pension and profit-sharing plans, insurance companies,
public agencies, banks, endowments and charitable institutions, mutual funds,
individuals and others. As of June 30, 1996, IMG had approximately $1.4 billion
in equity, fixed income and money market assets under management. David W.
Miles, Mark A. McClurg, and James W. Paulsen are principal shareholders of IMG.
The Trust is managed by Kathryn D. Beyer, CFA, Managing Director. Ms. Beyer is a
fixed income strategist and is a member of IMG's Investment Policy Committee.
Her experience includes serving as a securities analyst and director of
mortgage-backed securities for Central Life Assurance Company. She received her
Master of Business Administration from Drake University and her Bachelor of
Science degree in agricultural engineering from Iowa State University. The
Advisor furnishes ISJIT with advice with respect to ISJIT operations and the
investment of its assets, subject to and in conformity with the Declaration and
the policies adopted by the Board of Trustees. The ISJIT agreement with the
Advisor is approved annually by the Trustees, not assignable, and is cancelable
on 60 days notice by either party without penalty. It will remain in effect
until September 30, 1999, and thereafter as approved by the Trustees. For the
fiscal year ended June 30, 1996, fees paid by ISJIT and ISJIT DGO to IMG for
investment advisory services amounted to $221,698 and $49,831 respectively, or
approximately 0.15 percent of each Fund's average net assets.
THE ADMINISTRATOR
Pursuant to an Administrator Agreement, Norwest Bank Iowa, N.A., 666 Walnut
Street, P. O. Box 837, Des Moines, Iowa 50304-0837, has been retained as
Administrator of ISJIT. The Administrator provides daily account services to
Participants; determines and allocates income of ISJIT; administers all
Portfolio Unit transactions and purchases and sales associated with the Fixed
Term Program; provides administrative personnel, equipment and office space to
ISJIT; determines the net asset value of ISJIT on a daily basis; and performs
all related administrative services for ISJIT. The ISJIT agreement with the
Administrator is approved annually by the Trustees, not assignable, and is
cancelable on 60 days notice by either party without penalty. It will remain in
effect until September 30, 1999, and thereafter as approved by the Trustees.
THE CUSTODIAN
Norwest Bank Iowa, N.A., 666 Walnut, P.O. Box 837, Des Moines, Iowa 50304-0837,
acts as Custodian for ISJIT pursuant to a Custodian Agreement. The Custodian
will hold in a separate account all investment instruments and moneys, including
cash received for each Portfolio. Subject to the terms and conditions of the
Custodian Agreement, the Custodian may register or transfer assets of ISJIT into
the Custodian's name or the name of a nominee or nominees provided that the
books and records of the Custodian at all times show that such accounts are a
part of ISJIT. All ISJIT security transactions are handled on the basis of
delivery versus payment of the Custodian or its nominee or nominees. The ISJIT
agreement with the Custodian is approved annually by the Trustees, not
assignable, and is cancelable on 60 days notice by either party without penalty.
It will remain in effect until September 30, 1999, and thereafter as approved by
the Trustees.
ADMINISTRATIVE AND DISTRIBUTION RELATED SERVICES
The Trust has adopted a Rule 12b-1 Plan ("Plan") which permits the Trust to pay
for certain distribution related expenses. Under the Plan, the Trust pays the
Iowa Association of School Boards, ("IASB"), a fee at the annual rate of 0.10
percent of average net assets for providing to the Trust various administrative
services, including clerical and administrative services in connection with
meetings of the Board of Trustees, evaluation of performance of service
providers, review of compliance with investment policies, providing marketing
assistance, providing the Board of Trustees various reports thereon, and
maintaining Trust records. IASB was instrumental in facilitating the
establishment of the Trust which was and is intended to assist Iowa schools in
cash management, thereby lessening the burdens of government. The Executive
Director of IASB serves as Secretary of ISJIT. The Plan is approved annually by
the Trustees only after careful consideration of whether there is a reasonable
likelihood that the Plan will benefit the Trust and the Participants.
TAXES
Counsel for ISJIT is of the opinion that ISJIT is not subject to Federal or Iowa
income tax and that distributions received by Participants are not taxable to
them.
REPORTS TO PARTICIPANTS
Participants receive an "advice of activity" confirming all transactions
processed. Participants will receive a monthly statement summarizing all
activity on each account opened with ISJIT. This statement will include a list
of all investments currently held by ISJIT for the Participant. In addition,
Participants will be provided monthly performance information illustrating
historical investment performance and yield. ISJIT will issue unaudited
semi-annual reports which will include a list of securities owned by ISJIT and
complete financial statements. It will also issue an annual report containing a
financial report audited by the ISJIT independent auditors, KPMG Peat Marwick
LLP.
DECLARATION OF TRUST
ISJIT was established as of October 1, 1986, as a common law trust under the
laws of the State of Iowa by the adoption and execution of a Joint Powers
Agreement and Declaration by the Iowa Association of School Boards, the
Southeast Polk Community School District and the Pella Community School
District, which served as the initial Participants. Additional Iowa schools
(including 28E organizations) whose boards of directors are members in good
standing of the Iowa Association of School Boards, Inc., may become Participants
in the manner described in this Information Statement. The Declaration was
amended November 1, 1988 and May 1, 1993, and restated as of May 1, 1993.
Each potential Participant is given a copy of the Declaration before it becomes
a Participant. The summary of the Declaration given herein is qualified in its
entirety by reference to the full text of the Declaration.
DESCRIPTION OF TRUST UNITS. The Declaration authorizes an unlimited number of
full and fractional Trust Units which may be issued in series. All Trust Units
of each series participate equally in the allocation of distributions and have
equal liquidation and other rights pertaining to that series. The Trust Units
have no conversion, exchange or preemptive rights.
For all matters requiring a vote of Participants, each Participant is entitled
to one vote with respect to each matter. It is not necessary for a Participant
to hold any minimum number of Trust Units to be entitled to vote. Participants
are not entitled to cumulative voting.
No Trust Units may be transferred to any transferee other than ISJIT itself at
the time of redemption.
PARTICIPANT LIABILITY - The Declaration provides that Participants will not be
subject to any liability whatsoever in tort, contract or otherwise to any other
person or persons in connection with ISJIT property or the affairs of ISJIT. Any
Participant made a party to any suit or proceedings to assert or enforce any
such liability shall not on account thereof be held to any personal liability.
TERMINATION OF THE DECLARATION - ISJIT may be terminated by the affirmative vote
of a majority of Participants entitled to vote at any meeting of Participants or
by an instrument in writing, without a meeting, signed by a majority of the
Trustees and consented to by not less than a majority of the Participants
entitled to vote.
AMENDMENT OF THE DECLARATION - The Declaration may be amended at any meeting of
Participants or by an instrument or instruments in writing, by the affirmative
vote or signed approval of a majority of the Participants. The Trustees, from
time to time, by a two-thirds vote of the Trustees and after fifteen days prior
written notice to the Participants, may amend the Declaration without the vote
or consent of the Participants, to the extent they deem necessary to conform the
Declaration to the requirements of applicable laws or regulations, or any
interpretation thereof by a court or other governmental agency; but the Trustees
shall not be liable for failing to do so.
WITHDRAWAL - A Participant may withdraw from ISJIT at any time by notifying the
Trustees as specified in the Declaration.
DEFINITIONS - Unless otherwise expressly defined herein, words that are
capitalized in this Information Statement have the meaning defined in the Joint
Powers Agreement and Declaration.
LEGAL COUNSEL AND INDEPENDENT AUDITORS
Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, P.C., 100 Court Avenue, Des
Moines, Iowa 50309, serves as general counsel to ISJIT.
KPMG Peat Marwick LLP, 2500 Ruan Center, Des Moines, Iowa 50309, serves as the
ISJIT independent auditors.
DOCUMENT COPIES
Copies of the Joint Powers Agreement and Declaration, the Advisor Agreement, the
Administrator Agreement and the Custodian Agreement can be obtained from the
ISJIT Administrator, Norwest Bank Iowa, N.A., 666 Walnut, P.O. Box 837, Des
Moines, Iowa 50304-0837.
<PAGE>
INSTRUCTIONS AND APPLICATION FORM
HOW TO OPEN ACCOUNTS WITH THE IOWA SCHOOLS JOINT INVESTMENT TRUST (ISJIT)
Any Iowa School Corporation (or 28E organizations whose members are Iowa School
Corporations) whose board of directors are members in good standing with the
Iowa Association of School Boards, Inc., may join ISJIT as a "Participant" and
take full advantage of its investment programs.
A SCHOOL CORPORATION (OR 28E ORGANIZATION) THAT WISHES TO OPEN AN ACCOUNT WITH
ISJIT AND BECOME A PARTICIPANT SHOULD COMPLETE FORMS A AND B.
FORM A (Model Resolution)
The board of directors of the School Corporation or 28E organization must adopt
a resolution in the form as provided by the model resolution. The adopted
resolution must be certified using the certificate provided. The resolution
authorizes the School Corporation to become a Participant of ISJIT and adopts
the Joint Powers Agreement and Declaration. It also designates the officials of
the School Corporation authorized to effect transactions with ISJIT. Form A must
be completed with the School Corporation name, the names, titles and signatures
of authorizing officials, the signatures of the board president and secretary
and a certification signed and notarized by the board secretary. Form A and the
certificate are to be sent with Form B to the Administrator, Norwest Bank Iowa,
N.A. at the address given herein. The school must include a copy of the
resolution along with a copy of the Joint Powers Agreement and Declaration in
the minutes of the meeting at which the resolution is approved.
FORM B (Application Form)
This form must be completed and signed by a school official authorized by board
resolution to transact business with ISJIT. Form B provides all applicable
information about the School Corporation and the local depository bank. After an
application is received by the ISJIT Administrator, it will take approximately
two days to open an account and assign an account number. Once the account is
open, the Participant may make its initial investment according to the
"Instructions for Investment and Withdrawals" given at the back of this
publication. Supplemental Form B should be used for opening additional accounts.
For more information regarding the opening of an account or the use of automated
clearinghouse transfer, please call the ISJIT Administrator toll-free
(800)872-0140.
NOTE: All completed forms should be mailed to the ISJIT Admini- strator at the
following address:
Iowa Schools Joint Investment Trust
c/o Norwest Bank Iowa, N.A.
666 Walnut, P.O. Box 837
Des Moines, Iowa 50304-0837
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST (ISJIT)
RESOLUTION
FORM A Date ____________________
The Board of Directors (the "Board") of the _______________________ (the "School
Corporation"), met in __________________________ (regular or special) session,
at the _______________________________________ , ______________________________,
Iowa at __________ o'clock, on the above date. There were present, President
_________________________ , in the chair, and the following named Board Members:
______________________ _______________________ _______________________
______________________ _______________________ _______________________
______________________ _______________________ _______________________
Absent: _________________________ _________________________
Director _________________________ introduced the following resolution
entitled "Resolution Authorizing the Adoption of a Joint Powers Agreement and
Declaration for the IOWA SCHOOLS JOINT INVESTMENT TRUST ("ISJIT") and
Authorizing Participation Therein," and moved its adoption. Director
_____________________________ seconded the motion to adopt. The roll was called
and the vote was:
Ayes: _________________________ Nays: _________________________
RESOLUTION AUTHORIZING THE APPROVAL OF A
JOINT POWERS AGREEMENT AND DECLARATION OF TRUST
FOR THE IOWA SCHOOLS JOINT INVESTMENT TRUST
AND AUTHORIZING PARTICIPATION THEREIN
WHEREAS, the Iowa Association of School Boards, Inc., is a nonprofit
corporation organized and existing under the laws of the State of Iowa; the
Pella Community School District and the Southeast Polk Community School District
in the State of Iowa are municipal corporations and political subdivisions
organized under and by virtue of the laws and Constitution of the State of Iowa;
and
WHEREAS, the Iowa Association of School Boards, Inc., the Pella Community
School District and the Southeast Polk Community School District have approved
the Joint Powers Agreement and Declaration and have established the Iowa Schools
Joint Investment Trust as of October 1, 1986; and
WHEREAS, Iowa Code section 28E.1 permits political subdivisions to make
efficient use of their powers enabling them to provide joint services with other
agencies and to cooperate in other ways of mutual advantage, and to exercise and
enjoy jointly any powers, privileges or authority exercised or capable of being
exercised by the School Corporation with any other school corporation or public
agency of this state or private agencies for joint or cooperative action; and
WHEREAS, Iowa Code section 279.29 empowers school corporations to invest
their moneys pursuant to a joint investment agreement; and
WHEREAS, this Board desires to adopt and enter into the Joint Powers
Agreement and Declaration as amended, and it is in the best interest of this
School Corporation to participate in the Iowa Schools Joint Investment Trust for
the purpose of the joint investment of this School Corporation's moneys with
other school corporations so as to enhance investment earnings accruing to each;
and
WHEREAS, this Board deems it to be advisable for this School Corporation
to make use of the Fixed Term Automated Investment Program available to
Participants of ISJIT;
NOW, THEREFORE, BE IT RESOLVED:
Section 1. The Joint Powers Agreement and Declaration is approved and
adopted. This School Corporation joins with the other school corporations in
accordance with the Joint Powers Agreement and Declaration as amended, which is
incorporated herein by reference with the same effect as if it had been set out
verbatim in this Resolution. A copy of the Joint Powers Agreement and
Declaration as amended is filed in the minutes of this meeting. The President
and Secretary of this Board are authorized and directed to take actions and
execute documents necessary to effect the entry of this School Corporation into
the Declaration to carry out the intent and purposes of this Resolution.
Section 2. This School Corporation is hereby authorized to invest its
available moneys from time to time and to withdraw such moneys from time to time
in accordance with the provisions of the Joint Powers Agreement and Declaration
and the Fixed Term Automated Investment Program of ISJIT.
Section 3. The following officers and officials of this School
Corporation and their respective successors in office, are designated as
"Authorized Officials", with full power and authority to invest and withdraw
moneys of this School Corporation in accordance with the Joint Powers Agreement
and Declaration and pursuant to the Fixed Term Automated Investment Program of
ISJIT. The Board Secretary must notify ISJIT of any changes in Authorized
Officials in accordance with procedures established by ISJIT.
________________________ ________________________ _______________________
Printed Name Signature Title
________________________ ________________________ _______________________
Printed Name Signature Title
________________________ ________________________ _______________________
Printed Name Signature Title
Section 4. Payment for Fixed Term Automated Investments is authorized to
be made from the School Corporation's designated ISJIT Account. Interest and
principal payments of investments shall be credited to the School Corporation's
designated ISJIT account. Fixed Term Automated Investments shall be held by the
Custodian in the name of ISJIT for the account of the School Corporation.
Section 5. The Trustees of ISJIT are designated as having official
custody of this School Corporation's moneys, which are invested in accordance
with the Joint Powers Agreement and Declaration and any moneys invested in
accordance with ISJIT's Fixed Term Automated Investment Program.
Section 6. ISJIT is authorized to designate and name depositories and to
file Form CPE-31019, to execute documents, and to take necessary actions to
purchase and make payment, sell, secure, or take payment of principal and
interest. Certificates of Deposit must be purchased only from financial
institutions designated by ISJIT, which are approved depositories as prescribed
in Iowa Code chapter 573.
Section 7. Authorization is given for members of this Board and officials
of this School Corporation to serve as Trustees of ISJIT from time to time, if
selected, pursuant to the provisions of the Joint Powers Agreement and
Declaration.
Section 8. Unless otherwise expressly defined herein, words that are
capitalized in this Resolution have the meanings defined in the Joint Powers
Agreement and Declaration.
Passed and approved this _________ day of ___________________________ , 19____.
________________________________
President
ATTEST: ____________________________________
Secretary
Mail one original copy of this form and the secretary's certification along with
FORM B to ISJIT Administrator:
Iowa Schools Joint Investment Trust, Norwest Bank Iowa, N.A.
666 Walnut, P.O. Box 837, Des Moines, Iowa 50304-0837
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
FORM A CERTIFICATE
STATE OF IOWA )
) SS:
COUNTY OF )
I, the undersigned Secretary of _______________________________________,
State of Iowa, certify that attached is a complete copy of the records of this
School Corporation, and the same is a complete copy of the action taken by the
Board of Directors with respect to this matter at the meeting held on this date;
these proceedings remain in full force and effect and have not been amended or
rescinded in any way; that the meeting and all action was publicly held in
accordance with a Notice of Public Meetings and tentative agenda, a copy of
which was timely served on each member of the Board and posted on a bulletin
board or other prominent place easily accessible to the public and clearly
designated for that purpose, at the principal office of the School Corporation
and in accordance with the provisions of Iowa Code chapter 21, with at least 24
hours advance notice to the public and media as required by law and with members
of the public present in attendance.
I further certify that the individuals named were on this date lawfully
possessed of their respective offices as indicated, that no vacancy existed
except as may be stated in these proceedings, and that no controversy or
litigation is pending, prayed or threatened involving the incorporation,
organization, existence or boundaries of the School Corporation or the right of
the individuals named as officers to their respective positions.
WITNESS MY HAND HERETO AFFIXED THIS ________ DAY OF _______________, 19____.
BY _________________________________
SECRETARY
SUBSCRIBED AND SWORN TO BEFORE ME ON THE ______ DAY OF ____________, 19____.
_________________________________
NOTARY PUBLIC
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
APPLICATION FORM
I. BASIC INFORMATION
Name of School Corporation ____________________________________________
Mailing Address _______________________________________________________
Contact Person and Title ______________________________________________
Telephone Number ( ) _____________________________________________
II. ISJIT ACCOUNT INFORMATION
Authority is given to Norwest Bank Iowa, N.A., as ISJIT Administrator, to
open the following Account(s).
_______________________________________________________________________
Name to appear on this Account (e.g. General Fund,
Schoolhouse Fund, etc.)
Name of local depository for funds transfer ___________________________
City __________________________________________________________________
Telephone Number ( ) ______________________________________________
Depository Account Number to be accessed
Checking |_| Savings |_|
(FOR YOUR PROTECTION, EACH ISJIT ACCOUNT MAY ACCESS ONLY ONE DEPOSITORY
ACCOUNT.)
Local depository ABA Routing Number: _________________________________________
(THIS CAN BE OBTAINED FROM THE BOTTOM OF A BLANK CHECK OR BY CALLING YOUR
DEPOSITORY.)
**TO OPEN ADDITIONAL ISJIT ACCOUNTS USE SUPPLEMENTAL FORM B**
III. DEPOSIT/WITHDRAWAL INFORMATION AND AUTHORIZATION
Authorization is given to Norwest Bank Iowa, N.A., as ISJIT
Administrator, to honor any request believed to be authentic for
investment to or withdrawal from the ISJIT Accounts. Moneys will be
transferred only upon telephone, written or personal notice from an
authorized official of the School Corporation. Upon notification, Norwest
Bank Iowa, N.A., will initiate debit and credit entries to the local
depository account(s) indicated and the local depository(ies) are
authorized to further debit and credit the same to the accounts(s).
Transfer must be made by Automated Clearinghouse Transfer (ACH), if
available, unless otherwise directed by the School Corporation. There is
no direct charge for ACH transfers.
IV. INFORMATION STATEMENT AND DECLARATION
It is certified that the School Corporation has received a copy of the
Information Statement of ISJIT and a copy of the Joint Powers Agreement
and Declaration and agrees to be bound by the terms of such documents.
V. EFFECTIVENESS OF APPLICATION FORM
The information, certifications and authorizations set forth on this
application form remain in full force and effect until the ISJIT
Administrator receives written notification of a change.
VI. APPLICATION SIGNATURE
Application is made and executed this _____ day of ___________ , 19____.
Name: _____________________________ Title: ___________________________
Signature ________________________________________________
THIS APPLICATION FORM MUST BE SIGNED BY A SCHOOL OFFICIAL AUTHORIZED BY BOARD
RESOLUTION TO TRANSACT BUSINESS WITH ISJIT. (SEE RESOLUTION FORM A FOR
AUTHORIZED OFFICIALS). MAIL THIS FORM ALONG WITH FORM A TO THE ISJIT
ADMINISTRATOR.
<PAGE>
SUPPLEMENTAL FORM B
TO BE USED FOR OPENING ADDITIONAL ACCOUNTS
IOWA SCHOOLS JOINT INVESTMENT TRUST
School Corporation _________________________________________________
ISJIT ACCOUNT INFORMATION
Authority is given to Norwest Bank Iowa, as ISJIT Administrator, to open the
following Account(s).
Name to appear on this Account (e.g. General Fund, Schoolhouse Fund, etc.)
______________________________________________________________________________
Name of local depository for funds transfer __________________________________
City _____________________________________________
Telephone Number ( ) ______________________
Depository Account Number to be accessed _____________________________________
Checking |_| Savings |_|
(For your protection, each ISJIT Account may access only one depository
account.)
Local depository ABA Routing Number: _________________________________________
(This can be obtained from the bottom of a blank check or by calling your
depository.)
Name to appear on this Account (e.g. General Fund, Schoolhouse Fund, etc.)
______________________________________________________________________________
Name of local depository for funds transfer __________________________________
City _____________________________________________
Telephone Number ( ) ______________________
Depository Account Number to be accessed _____________________________________
Checking |_| Savings |_|
(For your protection, each ISJIT Account may access only one depository
account.)
Local depository ABA Routing Number: _________________________________________
(This can be obtained from the bottom of a blank check or by calling your
depository.)
________________________________
Signature of Authorized Official
This form may be photocopied
<PAGE>
INSTRUCTIONS FOR
MAKING INVESTMENTS
TO MAKE AN INVESTMENT BY AUTOMATED CLEARINGHOUSE (ACH) DEBIT:
(Interest always begins the following business day)
1. Call (800) 872-0140 prior to 2:00 p.m. and an ISJIT representative will
answer - "Iowa Schools Cash Management."
2. Say: "This is (Your Name) with ___________ School Corporation, ISJIT
account number ___________, with an ACH Investment, in the amount of
$___________. My local checking/savings account number is ___________."
3. The ISJIT representative will repeat the information given and acknowledge
that the Investment is accepted.
NOTE: NOTICE MUST BE RECEIVED PRIOR TO 2:00 P.M. TO BEGIN EARNING INTEREST THE
NEXT BUSINESS DAY.
TO MAKE AN INVESTMENT BY WIRING MONEYS:
(Interest begins same day)
1. Call (800) 872-0140 prior to 10:00 a.m. and an ISJIT representative will
answer - "Iowa Schools Cash Management."
2. Say: "This is (Your Name) with ___________ School Corporation, ISJIT
account number ____________ with a wire investment in the amount of
$___________. This will be coming from (Financial Institution Name and
Location)."
3. The ISJIT representative will repeat the information given and acknowledge
the investment.
4. Instruct your local Financial Institution to wire moneys to Norwest Bank
Iowa, N.A., Des Moines, ABA #073000228, credit #405200, Iowa Schools Joint
Investment Trust, further credit to (School Corporation and ISJIT account
number).
NOTE: TO BE CREDITED THE SAME DAY, THE PARTICIPANT MUST CALL BEFORE 10:00 A.M.
AND THE LOCAL FINANCIAL INSTITUTION MUST DEPOSIT MONEY WITH THE FEDERAL RESERVE
WIRE SYSTEM NO LATER THAN 11:00 A.M.
TO MAKE AN INVESTMENT BY CHECK OR BANK DRAFT:
(Interest begins usually one business day following receipt)
1. Mail or deliver checks endorsed for deposit or made payable to Norwest
Bank Iowa N.A., along with investment instructions, giving the School
Corporation name, ISJIT account number, and investment amount. Mail or
deliver to:
Iowa Schools Joint Investment Trust
c/o Norwest Bank Iowa N.A.
666 Walnut, P.O. Box 837
Des Moines, IA 50304-0837
INSTRUCTIONS FOR
MAKING WITHDRAWALS
TO MAKE A WITHDRAWAL BY AUTOMATED CLEARINGHOUSE (ACH) CREDIT:
(Moneys transferred next business day after request)
1. Call (800) 872-0140 prior to 2:00 p.m. and an ISJIT representative will
answer - "Iowa Schools Cash Management."
2. Say: "This is (Your Name) with ___________ School Corporation, ISJIT
account number __________ with an ACH withdrawal request, in the amount of
$___________. My local checking/savings account number is ___________."
3. The ISJIT representative will repeat the information given and acknowledge
the withdrawal.
NOTE: NOTICE MUST BE RECEIVED PRIOR TO 2:00 P.M. FOR MONEYS TO BE ON DEPOSIT IN
YOUR LOCAL BANK THE NEXT BUSINESS DAY.
TO MAKE A WITHDRAWAL BY WIRING MONEYS:
(Moneys transferred same day)
1. Call (800) 872-0140 prior to 10:00 a.m. and an ISJIT representative will
answer: - "Iowa Schools Cash Management."
2. Say: "This is (Your Name) with ___________ School Corporation, ISJIT
account number ___________, with a wire withdrawal request, in the
amount of $___________."
3. Provide instructions for wiring, including local financial institution,
location, account number, and name and telephone number of a contact
person at that financial institution.
4. The ISJIT representative will repeat the information given and acknowledge
the withdrawal.
NOTE: NOTICE MUST BE RECEIVED PRIOR TO 10:00 A.M. FOR TRANSFERS TO BE MADE THE
SAME DAY.
TO RECEIVE A CHECK BY MAIL:
(This option is available but not recommended since the ISJIT account is
debited same day check is written)
Call (800)872-0140 and an ISJIT representative will assist you.
<PAGE>
IOWA SCHOOLS JOINT INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
October 25, 1996
Table of Contents
Page
Investment Objectives, Policies and Restrictions......................... 2
Trustees and Executive Officers.......................................... 5
Compensation Table....................................................... 6
Investment Advisory and Other Services................................... 6
Distribution Plan........................................................ 8
Portfolio Transactions and Brokerage Allocations......................... 9
Trust Units and Control.................................................. 10
Net Asset Value and Public Offering Price................................ 11
Purchase and Redemption.................................................. 11
Financial Statements..................................................... 12
Independent Auditors..................................................... 12
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Information Statement dated
October 25, 1996, and should be read in conjunction therewith. A copy of the
Information Statement may be obtained from the Iowa Schools Joint Investment
Trust, Norwest Bank Iowa, N.A., 666 Walnut, P.O. Box 837, Des Moines, Iowa
50304-0837.
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The units of beneficial interest ("Trust Units") in the Iowa Schools Joint
Investment Trust ("ISJIT" or the "Trust") are offered in series. This Statement
of Additional Information only relates to the two series designated Diversified
Portfolio and Direct Government Obligations Portfolio (sometimes referred to
herein as a "Portfolio" or, collectively, as the "Portfolios"). The investment
objectives and policies of the Portfolios are set forth in the Information
Statement. Certain additional investment information is set forth below.
INVESTMENT RESTRICTIONS.
The Trust Portfolios are available for investment only by Iowa school
corporations pursuant to Iowa Code chapter 28E and section 12B.10 and 279.29
thereof. As a result, the Trust is only permitted to invest in securities which
such school corporations are permitted to invest in under Iowa law as it
presently exists or as it may be amended in the future.
In addition to the investment objectives and policies set forth in the
Information Statement, each of the Portfolios is subject to certain investment
restrictions, as set forth below, which may not be changed without the vote of a
majority of the Participants in a Portfolio. "Majority," as used in the
Information Statement and in this Statement of Additional Information, means the
lesser of (a) 67 percent of the Trust's or a Portfolio's outstanding Trust Units
voting at a meeting of Participants at which more than 50 percent of the
outstanding Trust Units are represented in person or by proxy or (b) a majority
of the Trust's or a Portfolio's outstanding Trust Units.
Unless otherwise specified below, none of the Portfolios will:
1. Invest more than 5 percent of the value of their total assets in the
securities of any one federally insured Iowa depository institution
(other than securities of the U.S. government or its agencies or
instrumentalities).
2. Invest 25 percent or more of the value of their total assets in the
securities of issuers conducting their principal business activities in
any one industry, including financial institutions. This restriction
does not apply to securities of the U.S. government or its agencies and
instrumentalities and repurchase agreements relating thereto.
3. Issue any senior securities (as defined in the Investment Company Act
of 1940, as amended).
4. Mortgage, pledge or hypothecate their assets.
5. Make short sales of securities or maintain a short position.
6. Purchase any securities on margin.
7. Write, purchase or sell puts, calls or combinations thereof.
8. Purchase or sell real estate or real estate mortgage loans.
9. Purchase or sell commodity contracts, including futures contracts.
10. Borrow or make loans, provided that ISJIT may make Permitted
Investments.
11. Invest in restricted securities or invest more than 10 percent of the
Portfolio's net assets in repurchase agreements with a maturity of more
than seven days, and other liquid assets, such as securities with no
readily available market quotation.
12. Underwrite the securities of other issues.
13. Invest in any securities in contravention of the provisions of Rule
2a-7 of the Investment Company Act of 1940 as it presently exists or as
it may hereafter be amended.
The Trust may invest Portfolio assets pursuant to the maximum extent possible by
Iowa law governing investments by public agencies and Rule 2a-7 and any change
in the restrictions of Iowa law governing investments by public agencies and
Rule 2a-7 shall be deemed to be adopted by the Trust, and such change shall not
require the approval of Participants.
Any investment restriction or limitation referred to above or in the Information
Statement, which involves a maximum percentage of securities or assets shall not
be considered to be violated unless an excess over the percentage occurs
immediately after an acquisition of securities or utilization of assets and
results therefrom.
OTHER POLICIES--NONFUNDAMENTAL
In addition to the above investment restrictions and those fundamental policies
set forth in the Information Statement, the Board of Trustees has adopted other
policies as set forth below which are nonfundamental and which can be changed
without Participant approval. These investment policies are intended to comply
with Iowa Code chapter 12B.
The Investment Policy of the Trust applies to all funds invested on behalf of
Participants accounted for in the Trust's financial statements. Each investment
made pursuant to this Investment Policy must be authorized by applicable law and
this written Investment Policy.
Upon passage and upon future amendment, if any, copies of this Investment Policy
shall be delivered to all of the following:
1. The ISJIT Board of Trustees.
2. All ISJIT depository institutions or fiduciaries.
3. The auditor engaged to audit any fund of ISJIT.
DELEGATION OF AUTHORITY
The responsibility for conducting ISJIT investment transactions resides with the
ISJIT Board of Trustees. Certain responsibilities have been delegated to the
Executive Committee, the Investment Advisor, the Custodian and the Administrator
(the "Service Providers") pursuant to the Advisor Agreement, the Custodian
Agreement and the Administrator Agreement with amendments as may be adopted from
time to time and the current Information Statement (the "Documents").
Each Service Provider shall individually notify the ISJIT Board of Trustees in
writing within thirty days of receipt of all communication from the auditor of
any Service Provider or any regulatory authority of the existence of a material
weakness in internal control structure of the Service Provider or regulatory
orders or sanctions regarding the type of services being provided to ISJIT by
the Service Provider.
The records of investment transactions made by or on behalf of ISJIT are public
records and are the property of ISJIT whether in the custody of ISJIT or in the
custody of a fiduciary or other third party.
OBJECTIVES OF INVESTMENT POLICY
The primary objectives, in order of priority, of all investment activities
involving the financial assets of ISJIT shall be the following:
1. Safety: Safety and preservation of principal in the overall portfolio
is the foremost investment objective.
2. Liquidity: Maintaining the necessary liquidity to match expected
liabilities is the second investment objective.
3. Return: Obtaining a reasonable return is the third investment
objective.
PRUDENCE
The Board of Trustees, when providing for the investment or deposit of public
funds in the ISJIT program, shall exercise the care, skill, prudence and
diligence under the circumstances then prevailing that a person acting in a like
capacity and familiar with such matters would use to attain the investment
objectives.
OTHER PROHIBITED INVESTMENT PRACTICES
At no time will ISJIT invest pursuant to a contract providing for the
compensation of an agent or fiduciary based upon the performance of the invested
assets. Furthermore, if a fiduciary or other third party with custody of public
investment transaction records of ISJIT fails to produce records when requested
by ISJIT or its agent within a reasonable time, ISJIT shall make no new
investment with or through the fiduciary or third party and shall not renew
maturing investments with or through the fiduciary or third party.
SAFEKEEPING AND CUSTODY
All invested assets of Participants in the Portfolios, or in the Fixed Term
Program, shall be held in accordance with the Custodian Agreement.
All invested assets eligible for physical delivery shall be secured by having
them held at a third party custodian. All purchased investments shall be held
pursuant to a written third party custodial agreement requiring delivery versus
payment. No assets may be delivered out of the ISJIT account without full
payment (no "free deliveries" shall be permitted).
REPORTING
The Service Providers shall submit all reports required in the Documents.
TRUSTEES AND EXECUTIVE OFFICERS
The operations of the Trust are governed by a Board of Trustees ("Board of
Trustees") and by various officers elected from time to time. The names,
addresses and principal occupations during the past five years of the trustees
and executive officers of the Trust are:
<TABLE>
<CAPTION>
Principal Occupation
Name and Address Age Position with Trust (last five years)
---------------- --- ------------------- -----------------
<S> <C> <C> <C>
Carolyn Jons 54 Chairperson and Vice President, Iowa Association of
2916 Forest Hills Drive Trustee School Boards, Member
Ames, Iowa 50010 Board of Education, Ames, Iowa,
Volunteer
Don Williams 57 Vice Chairperson President-Elect, Iowa Association of
R.R. 1, Box 98A and Trustee School Boards, Villisca Community
Villisca, Iowa 50864-9801 Schools Board of Directors
Gary D. Bengtson 40 Treasurer and Trustee Business Manager
Carroll Community School District Carroll Community School District
2809 No. Grant Road
Carroll, Iowa 51401
Dean Borg 58 Trustee Admin. Staff,
722 College Boulevard Univ. of Iowa Hospital & Clinic
Mount Vernon, Iowa 52314 Iowa City, Iowa, Mt. Vernon
School Board of Directors
Richard L. Vande Kieft 56 Trustee Processing Engineer,
3100 Shady Lane John Deere
Cedar Falls, Iowa 50613 Waterloo, Iowa, Cedar Falls
School Board of Directors
Gerald L. Cowell 53 Trustee Superintendent of Schools
Creston Community School District Creston Community School District
619 North Maple Street
Creston, Iowa 50801
Ronald M. Rice 54 Ex-Officio Trustee Executive Director
Iowa Association of School Boards and Secretary Iowa Association of School Boards
700 Second Avenue, Suite 100 Superintendent of Schoold, Ames
Des Moines, Iowa 50309-1731 Community School District
Robert M. Huckleberry 49 Ex-Officio Trustee Director of Finance, Iowa Association of
Iowa Association of School Boards and Assistant Secretary School Boards since March 1995; Vice
700 Second Avenue, Suite 100 President of Finance Administration, Iowa
Des Moines, Iowa 50309-1731 Beverage Association; Office Adminis-
trator, Smith Law Firm.
</TABLE>
The Board of Trustees does note include any percon who is deemed to be an
"interested person" as determined in Section 2(a)(19) of the Investment Company
Act of 1940 ("1940 Act"). Ex-Officia Trustees have no voting power in connection
with any actions that the Trustees may take on behalf of ISJIT.
<TABLE>
COMPENSATION TABLE
<CAPTION>
(1) (2) (3) (4) (5)
Aggregate Pension or Retirement Estimated Annual Total Compensation From
Name of Compensation Benefits Accrue As Benefits Upon Registrant and Fund
Person, Position From Registrant Part of Fund Expenses Retirement Complex Paid to Director
<S> <C> <C> <C> <C>
Carolyn Jons $ 0 $ 0 $ 0 $ 0
Chairperson &
Trustee
Don Williams 0 0 0 0
Vice Chairperson
& Trustee
Gary D. Bergsten 0 0 0 0
Treasurer &
Trustee
Dean Borg 0 0 0 0
Trustee
Gerald L. Cowell 0 0 0 0
Trustee
Robert L. Vande Kieft 0 0 0 0
Trustee
Ronald M. Rice 0 0 0 0
Ex-Officio
Trustee &
Secretary
Robert M. Huckleberry 0 0 0 0
Ex-Officio
Trustee & Assistant
Secretary
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
GENERAL
The investment advisor for the Portfolios is Investors Management Group (the
"Advisor" or "IMG").
David W. Miles, Mark A. McClurg, and James W. Paulsen each beneficially own more
than 20 percent of the outstanding common stock of the Advisor and are deemed to
be control persons of the Advisor. Senior Managing Directors of IMG are Mark A.
McClurg, David W. Miles, and James W. Paulsen. They intend to devote
substantially all of their time to the operation of the Advisor. The Advisor is
an Iowa corporation established in 1982 which provides investment advisory
services to mutual funds, banks, insurance companies, public agencies and
private individuals and as of June 30, 1996, had approximately $1.4 billion in
equity, fixed income and money market assets under management.
THE ADVISOR
IMG acts as the investment advisor to the Trust under an Advisor Agreement
("Advisor Agreement"). The Advisor Agreement has been approved by the Board of
Trustees. The Advisor Agreement was first approved by the Board of Trustees on
October 22, 1987, and was last approved as amended on August 29, 1996 for a 3
year term ending September 30, 1999, subject to annual approval.
The Advisor Agreement terminates automatically in the event of its assignment.
In addition, the Advisor Agreement is terminable at any time, without penalty,
by the Trustees of the Trust or by vote of a majority of the Trust's outstanding
voting securities or by the Advisor on not more than 60 days written notice to
the Advisor. Unless sooner terminated, the Advisor Agreement shall continue in
effect only so long as such continuance is specifically approved at least
annually by the Board of Trustees. All investment decisions are subject to
review by the Trustees.
The Trust is managed by Kathryn D. Beyer, CFA, Managing Director. Ms. Beyer is a
fixed income strategist and is a member of IMG's Investment Policy Committee.
Her experience includes serving as a securities analyst and director of
mortgage-backed securities for Central Life Assurance Company. She received her
Master of Business Administration from Drake University and her Bachelor of
Science degree in Agricultural engineering from Iowa State University.
THE CUSTODIAN AND ADMINISTRATOR
Norwest Bank, Iowa, N.A., 666 Walnut, P.O. Box 837, Des Moines, Iowa 50304-0837,
acts as the Trust's custodian pursuant to a Custodian Agreement, as amended and
approved August 29, 1996. Pursuant to an Administrator Agreement as amended and
approved August 29, 1996, Norwest Bank Iowa, has also been retained as
Administrator of ISJIT. The Administrator provides daily account services to
Participants; determines and allocates income of ISJIT; administers all
Portfolio Unit transactions and purchases and sales associated with the Fixed
Term Program; provides administrative personnel, equipment and office space to
ISJIT; determines the net asset value of ISJIT on a daily basis; and performs
all related administrative services for ISJIT. The ISJIT agreement with the
Administrator is not assignable, is reviewed and approved annually and is
cancelable on 60 days notice by either party without penalty. It will remain in
effect until September 30, 1999.
Under the Advisor Agreement, Custodian Agreement and Administrator Agreement,
the Trust pays the following fees, accrued daily and paid monthly on the average
annual net assets of the Portfolios as indicated.
DIVERSIFIED PORTFOLIO
Average Daily Custodian Administrator Advisor
Net Asset Amount Fee Fee Fee
---------------- --- --- ---
Less than $150 million .050% .175% .250%
For additional amounts
up to $200 million .045% .165% .225%
For amounts greater than
$200 million .040% .150% .225%
DGO PORTFOLIO
Average Daily Custodian Administrator Advisor
Net Asset Amount Fee Fee Fee
---------------- --- --- ---
Less than $150 million .050% .275% .150%
For additional amounts
up to $200 million .045% .265% .125%
For amounts greater than
$200 million .040% .250% .125%
For the last three fiscal years ending June 30, 1996, the Trust paid the Advisor
advisory fees, allocated between the Portfolios as indicated.
1996 1995 1994
---- ---- ----
Diversified Portfolio $ 221,698 $ 196,268 $ 206,078
DGO Portfolio $ 49,831 $ 45,298 $ 45,397
The laws of certain states require that if a mutual fund's expenses (including
advisory fees but excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceed certain percentages of average net assets, the
fund must be reimbursed for such excess expenses. There are no such expense
limitations applicable.
DISTRIBUTION PLAN
Rule 12b-1(b) under the Investment Company Act of 1940 provides that any
payments made by the Trust in connection with financing the distribution of
Units may only be made pursuant to a written plan describing all aspects of the
proposed financing of distribution, and also requires that all Agreements with
any person relating to the implementation of the plan must be in writing.
Because some of the payments described below to be made by the Trust are
distribution expenses within the meaning of Rule 12b-1, the Trust adopted a
Distribution Plan in accordance with such Rule.
Rule 12b-1(b)(1) requires that such plan be approved by a majority of a
Portfolio's outstanding securities, and Rule 12b-1(b)(2) requires that such
plan, together with any related agreements, be approved by a vote of the
Trustees who are not interested persons of the Trust and who have no direct or
indirect interest in the operation of the plan, cast in person at a meeting for
the purpose of voting on such plan or agreement. Rule 12(b)-1(b)(3) requires
that the plan or agreement provide, in substance:
(a) that it shall continue in effect for a period of more than one year
from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually in the manner
described in paragraph (b)(2) of Rule 12b-1;
(b) that any person authorized to direct the disposition of moneys paid or
payable by the Trust pursuant to the plan or any related agreement
shall provide to the Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made; and
(c) in the case of a plan, that it may be terminated at any time by a vote
of a majority of the Trustees who are not interested persons of the
Trust and who have no direct or indirect financial interest in the
operation of the plan or in any agreements related to the plan or by a
vote of a majority of the outstanding voting securities of a Portfolio.
Rule 12b-1(b)(4) requires that such a plan may not be amended to increase
materially the amount to be spent for distribution without Participant approval
and that all material amendments to the plan must be approved in the manner
described in paragraph (b)(2) of Rule 12b-1.
Rule 12b-1(c) provides that the Trust may rely upon Rule 12b-1(b) only if the
selection and nomination of the Trust's disinterested Trustees are committed to
the discretion of such disinterested directors. Rule 12b-1(e) provides that the
Trust may implement or continue a plan pursuant to Rule 12b-1(b) only if the
directors who vote to approve such implementation or continuation conclude, in
the exercise of reasonable business judgement and in light of their fiduciary
duties under state law, and under Sections 36(a) and (b) of the Investment
Company Act of 1940, that there is a reasonable likelihood that the plan will
benefit the Trust and the Participants. The Trustees have concluded that there
is a reasonable likelihood that the Distribution Plan will benefit the Trust and
the Participants.
Pursuant to the provisions of the Distribution Plan (and pursuant to a
"Administrative and Distribution Services Agreement"), each of the Trust's
Portfolios pays a fee to the Iowa Association of School Boards ("IASB") computed
and paid monthly at an annual rate of up to 0.10 percent of such Portfolios'
average daily net assets attributable to Participants who are members of IASB
including clerical and administrative services in connection with meetings of
the Board of Trustees, evaluation of performance of service providers, review of
compliance with investment policies, providing the Board of Trustees various
reports thereon, providing various marketing services to the Trust and
maintaining Trust records. For the year ended June 30, 1996, the Trust paid
$150,368 and $33,407 in distribution fees to IASB for the Diversified Portfolio
and Direct Government Portfolio respectively.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS
The Advisor is responsible for decisions to buy and sell securities for the
Portfolios, the selection of broker-dealers to effect the transactions and the
negotiation of brokerage commissions, if any. Usually, securities will be
purchased on a principal basis directly from the issuer or from the underwriter
at the initial offering and the brokerage commission will be paid, although
certain portions may receive discounts or concessions out of offering proceeds.
In placing orders for securities transactions, the primary criterion for the
selection of a broker-dealer is the ability of the broker-dealer, in the opinion
of the Advisor, to secure prompt execution of the transactions on favorable
terms, including the reasonableness of the commission (if any) and considering
the state of the market at the time.
When consistent with these objectives, orders may be placed with broker-dealers
who furnish investment research and/or services to the Advisor. Such research or
services include advice, both verbally and in writing, 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; as
well as analyses and reports concerning issues, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts. This
allows the Advisor to supplement its own investment research activities and
enables the Advisor to obtain the views and information of individuals and
research staffs of many different securities firms prior to making investment
decisions for the Portfolios. To the extent portfolio transactions are effected
with broker-dealers who furnish research services to the Advisor, the Advisor
receives a benefit, not capable of evaluation in dollar amounts, without
providing any direct monetary benefit to the Trust from these transactions. The
Advisor believes that most research services obtained by it generally benefit
several or all of the accounts which it manages, as opposed to solely benefiting
one specific managed fund or account. Normally, research services obtained
through managed funds or accounts investing in fixed-income securities would be
of greater benefit to the managed funds or accounts which invest in debt
securities.
The Advisor has not entered into any formal or informal Agreements with any
broker-dealers, nor does it maintain any "formula" which must be followed in
connection with the placement of any Portfolio's transactions in exchange for
research services. However, from time to time, the Advisor may elect to use
certain brokers to execute transactions in order to encourage them to provide it
with research services which it anticipates will be useful to it. The Advisor
will authorize the Trust to pay an amount of commission for effecting a
securities transaction in excess of the amount of commission another
broker-dealer would have charged only if the Advisor determines in good faith
that such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, viewed in terms
of either that particular transaction or the Advisor's overall responsibilities
with respect to the accounts as to which it exercises investment discretion.
In certain instances, there may be securities which are suitable for the Trust's
Portfolios as well as for that of one or more of the advisory clients of the
Advisor. Investment decisions for the Trust's Portfolios and for such advisory
clients are made by the Advisor with a view to achieving their respective
investment objectives. It may develop that a particular security is bought or
sold for only one client of the Advisor even though it might be held by, or
bought or sold for, other clients. Likewise, a particular security may be bought
for one or more clients of the Advisor when one or more other clients are
selling that same security. Some simultaneous transactions are inevitable when
several clients receive investment advice from the same investment advisor,
particularly when the same security is suitable for the investment objectives of
more than one client. When two or more clients of the Advisor are simultaneously
engaged in the purchase or sale of the same security, the securities are
allocated among clients in a manner believed by the Advisor to be equitable to
each (and may result, in the case of purchases, in allocation of that security
only to some of those clients and the purchase of another security for other
clients regarded by the Advisor as a satisfactory substitute). It is recognized
that in some cases this system could have a detrimental effect on the price or
volume of the security as far as the Portfolio involved is concerned. At the
same time, however, it is believed that the ability of the Portfolio to
participate in volume transactions will sometimes produce better execution
prices. The Trust does not purchase any securities on an agency basis and,
therefore, does not incur brokerage commissions. The Trust purchases government
securities in principal transactions with unaffiliated broker-dealers. Such
principal transactions include nonnegotiated markups by the broker-dealer.
TRUST UNITS AND CONTROL
A complete description of the rights and characteristics of the Trust's Units is
included in the Information Statement.
As of September 30, 1996, the following Participants owned 5 percent or more of
the value of Trust Units in the Portfolios indicated. There were no "control"
persons of the Trust or the Portfolios.
DIVERSIFIED PORTFOLIO
Name Amount % Ownership
---- ------ -----------
Indian Hills Community College; Ottumwa, Iowa $8,417,640 8.84%
Kirkwood Community College; Cedar Rapids, Iowa $5,821,462 6.11%
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
Name Amount % Ownership
---- ------ -----------
Kirkwood Community College; Cedar Rapids, Iowa $11,968,099 58.63%
Des Moines Area Community College; Ankeny, Iowa $4,860,764 23.81%
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The Securities and Exchange Commission adopted Rule 2a-7 under the Investment
Company Act of 1940 which permits the Trust to compute the Portfolios' net asset
value per Trust Unit using the amortized cost method of valuing portfolio
securities. As a condition for using the amortized cost method of valuation, the
Board of Trustees must establish procedures to stabilize the Trust's net asset
value at $1.00 per Trust Unit. These procedures include a review by the Trustees
as to the extent of any deviation of net asset value based on available market
quotations from the $1.00 amortized cost value per Trust Unit. If such deviation
exceeds $.005, the Trustee will consider what action, if any, should be
initiated to reasonably eliminate or reduce material dilution or other unfair
results to shareholders. Such action may include redemption of shares in kind,
selling portfolio securities prior to maturity, withholding dividends or
utilizing a net asset value per share as determined by using available market
quotations. In addition, each Portfolio must maintain a dollar-weighted average
portfolio maturity appropriate to its investment objective, but in any event,
not longer than 90 days, must limit portfolio investments to those instruments
which the Trustees determine present minimum credit risks, and must observe
certain other reporting and recordkeeping procedures.
Under the amortized cost method of valuation, a security is initially valued at
cost on the date of purchase and, thereafter, any discount or premium is
amortized on a straight-line basis to maturity, regardless of the effect of
fluctuating interest rates on the market value of the security. Accordingly,
U.S. government obligations held by the Trust will be valued at their amortized
cost, which normally will be their face amount. Other assets and securities are
valued at a fair value determined, in good faith, by the Trustees.
The amortized cost method of valuation may result in some dilution of a
shareholder's interest in the Portfolio insofar as general market increases and
decreases of interest rates usually have an inverse effect on the value of debt
instruments. However, the significance of the effect of such general market
increases and decreases in interest rates directly corresponds to the maturity
of the debt instruments; that is, the change in the market value of the
underlying debt instruments and the corresponding change in the premium or
discount of such instruments is greater when maturities are larger and less when
maturities are shorter.
The net asset value of each Portfolio's Units is determined on each day on which
the New York Stock Exchange is open, provided that the net asset value need not
be determined on days when no Portfolio shares are tendered for redemption and
no order for Portfolio shares is received. The New York Stock Exchange is not
open for business on the following holidays (or on the nearest Monday or Friday
if the holiday falls on a weekend): New Year's Day, Presidents' Day, Martin
Luther King Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving
and Christmas.
PURCHASE AND REDEMPTION
Participation in the Trust is only available to Iowa schools pursuant to the
provisions of Iowa Code Chapter 28E and Section 12B.10 and 279.29 and to those
schools whose boards of directors are members of the Iowa Association of School
Boards., Inc. The description of how to become a Participant, including
application forms and model resolutions, is included in the Information
Statement.
Redemption of Trust Units, or payment, may be suspended at times (a) when the
New York Stock Exchange is closed for other than customary weekend or holiday
closings, (b) when trading on the exchange is restricted, (c) when an emergency
exists, as a result of which disposal by the Portfolios of securities owned by
them is not reasonably practicable, or it is not reasonably practicable for the
Portfolios fairly to determine the value of their net assets, or (d) during any
other period when the Securities and Exchange Commission, by order, so permits,
provided that applicable rules and regulations of the Securities and Exchange
Commission shall govern as to whether the conditions prescribed in (b) or (c)
exist.
FINANCIAL STATEMENTS
The Trust hereby incorporates by reference the information under the caption
"Independent Auditors' Report," "Statements of Net Assets, June 30, 1996,"
"Statements of Operations, June 30, 1996," "Statements of Changes in Net Assets
for the Years ended June 30, 1996 and 1995" and the Financial Highlights for the
periods ended June 30, 1996, which are attached hereto and incorporated by
reference herein.
INDEPENDENT AUDITORS
On August 29, 1996, the Board of Trustees unanimously approved the appointment
of KPMG Peat Marwick LLP, 2500 Ruan Center, Des Moines, Iowa 50309 as the
Trust's independent auditors.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized pursuant to a resolution
unanimously adopted by the Board of Trustees on August 29, 1996, in the city of
Des Moines, state of Iowa on the 25th day of October, 1996.
IOWA SCHOOLS JOINT INVESTMENT TRUST
By: /s/ Carolyn Jons
Carolyn Jons, Chairperson
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
(1) Included in Part A:
Not Applicable
(2) Included in Part B:
Annual Financial Report for the Year Ended
June 30, 1996
(3) Included in Part C:
Consent of KPMG Peat Marwick LLP
(B) EXHIBITS
Exhibit Number Description
-------------- -----------
*1. Amended Joint Powers Agreement and Declaration of
Trust; incorporated by reference to the Trust's
Registration Statement, filed May 6, 1993
*2. Bylaws, incorporated by reference to the Trust's
Registration Statement, filed May 6, 1993
*5. Advisor Agreement, incorporated by reference to the
Trust's Registration Statement, filed May 6, 1993
*8. Custodian Agreement, incorporated by reference
to the Trust's Registration Statement, filed
May 6, 1993
*9.(a) Administrative and Distribution Agreement,
incorporated by reference to the Trust's
Registration Statement, filed May 6, 1993
*9.(b) Administrator Agreement, incorporated by reference
to the Trust's Registration Statement, filed
May 6, 1993
*15. Rule 12b-1 Plan, incorporated by reference to the
Trust's Registration Statement, filed May 6, 1993
16. Computation of Yield Quotation
17. Financial Data Schedule
*All previously filed as indicated.
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
-------------- ------------------------
Diversified Portfolio Units 299 as of September 30, 1996
Diversified Government Obligation Units 12 as of September 30, 1996
Item 27. INDEMNIFICATION
Pursuant to Section 2.19 of the amended Joint Powers Agreement
and Declaration of Trust ("Declaration") attached hereto as Exhibit 1, the
trustees are empowered to indemnify or enter into agreements with respect to
indemnification with respect to any person with whom the Trust has dealings, to
the extent permitted by applicable law or the Investment Company Act of 1940
("1940 Act"). Section 17(h) of the 1940 Act prohibits indemnification of any
person, unless the loss results from willful misfeasance, bad faith, gross
negligence or from reckless disregard of duties. Furthermore, pursuant to
Article V of the Declaration and Article VII of the Bylaws (included herewith as
Exhibit 2), the Trust is empowered to indemnify persons in certain circumstances
where they are not involved in intentional misconduct, knowing violation of law
or where they have not derived improper personal benefit or with respect to
criminal actions had no reasonable cause to believe that their actions are
unlawful. For a complete description of such indemnifications and limitations of
liability, see the appropriate provisions of the Declaration and the Bylaws.
Pursuant to the general authority of Section 2.19 of the
Declaration, the Trust has entered into agreements with the Advisor and
Custodian which specifically reference Section 5 of the Declaration and
furthermore, with respect to the Custodian, limit the liability of the Custodian
to the extent that the Custodian acts in good faith in the exercise of
reasonable care. See Article IV of the Administrator-Advisor Agreement included
herewith as Exhibit 5; Article VIII of the Custodian Agreement included herewith
as Exhibit 8; and Article IV of the Bank Trust Services Agreement included
herewith as Exhibit 9(a).
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification by the Registrant is against public policy as
expressed in the Act and, therefore, may be unenforceable. In the event that a
claim for such indemnification (except insofar as it provides for the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted against the Registrant by such director, officer or controlling
person and the Securities and Exchange Commission is still of the same opinion,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether or not such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR
Not Applicable
Item 29. PRINCIPAL UNDERWRITERS
(A) Not Applicable
(B) Not Applicable
(C) Not Applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All required accounts, books and records are maintained by
Investors Management Group, 2203 Grand Avenue, Des Moines, Iowa 50312-5338
Item 31. MANAGEMENT SERVICES
Not Applicable
Item 32. UNDERTAKINGS
Not Applicable
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
To the Unitholders and Board of Trustees
Iowa Schools Joint Investment Trust:
We consent to the use of our report included herein by reference and to the
reference to our Firm under the headings "REPORTS TO PARTICIPANTS" and "LEGAL
COUNSEL AND INDEPENDENT AUDITORS" in the Information Statement and "INDEPENDENT
AUDITORS" in the Statement of Additional Information.
KPMG Peat Marwick LLP
Des Moines, Iowa
October 23, 1996
EXHIBIT 16
SCHEDULE OF CALCULATIONS OF YIELD QUOTATIONS
<PAGE>
COMPUTATION OF YIELD
IOWA SCHOOLS JOINT INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
EARNINGS
SHARES PER
EARNINGS OUTSTANDING SHARE
23-Jun-96 $26,905.95 204,879,362.06
24-Jun-96 $25,599.61 194,183,596.57 0.0001318320
25-Jun-96 $24,979.46 189,964,270.02 0.0001314956
26-Jun-96 $24,820.33 188,402,009.92 0.0001317413
27-Jun-96 $24,107.75 182,509,914.88 0.0001320901
28-Jun-96 $22,685.90 171,554,263.78 0.0001322375
29-Jun-96 $22,685.90 171,554,263.78 0.0001322375
30-Jun-96 $22,685.90 171,554,263.78 0.0001322375
INCOME FOR ONE SHARE FOR THE SEVEN DAYS ENDED JUNE 30 0.0009238713
BASE PERIOD RETURN = 0.000923871
(CHANGE/BEGINNING ACCOUNT VALUE)
CURRENT YIELD = 4.82%
BASE PERIOD RETURN * (365/7) 0.048173292
- --------------------------------------------------------------------------------
COMPUTATION OF YIELD
IOWA SCHOOLS JOINT INVESTMENT TRUST
DGO PORTFOLIO
EARNINGS
SHARES PER
EARNINGS OUTSTANDING SHARE
23-Jun-96
24-Jun-96 $3,174.24 $24,926,981.40 0.0001273415
25-Jun-96 $3,106.28 24,926,981.40 0.0001246152
26-Jun-96 $3,151.22 24,926,981.40 0.0001264180
27-Jun-96 $3,148.57 25,030,883.40 0.0001257874
28-Jun-96 $2,897.77 24,974,968.40 0.0001160270
29-Jun-96 $2,897.77 24,974,968.40 0.0001160270
30-Jun-96 $2,884.45 24,974,968.40 0.0001154936
INCOME FOR ONE SHARE FOR THE SEVEN DAYS ENDED JUNE 30 0.0008517097
BASE PERIOD RETURN = 0.000851710
(CHANGE/BEGINNING ACCOUNT VALUE)
CURRENT YIELD = 4.44%
BASE PERIOD RETURN * (365/7) 0.044410579
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S ANNUAL REPORT FOR THE PERIOD JULY 1, 1995 TO JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT PREVIOUSLY FILED WITH THE
COMMISSION ON OR ABOUT AUGUST 26, 1996 PURSUANT TO RULE 30b2-1.
</LEGEND>
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 192,438,535
<INVESTMENTS-AT-VALUE> 192,438,535
<RECEIVABLES> 2,809,857
<ASSETS-OTHER> 23,048
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195,271,440
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 995,369
<TOTAL-LIABILITIES> 995,369
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 194,276,071
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10,354,034
<OTHER-INCOME> 0
<EXPENSES-NET> 1,095,829
<NET-INVESTMENT-INCOME> 9,258,205
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 9,258,205
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 966,518,582
<NUMBER-OF-SHARES-REDEEMED> 976,101,919
<SHARES-REINVESTED> 9,258,205
<NET-CHANGE-IN-ASSETS> (325,132)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 422,508
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 184,562,835
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.051
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.051
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.006
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
