As filed with the Securities and Exchange Commission
on February 25, 1998
Securities Act File No. 33-68124
Investment Company Act File No. 811-7986
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 9 [x]
(Check appropriate box or boxes)
THE ALGER RETIREMENT FUND
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
75 Maiden Lane
New York, New York 10038
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 212-806-8800
MR. GREGORY S. DUCH
FRED ALGER MANAGEMENT, INC.
75 MAIDEN LANE
NEW YORK, NY 10038
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Page 1 of ___ Pages
Exhibit Index at Page ____
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It is proposed that this filing will become effective (check appropriate box):
[X] immediately upon filing pursuant to paragraph (b), or
[ ] on [date] pursuant to paragraph (b), or
[ ] 60 days after filing pursuant to paragraph (a), or
[ ] on [date] pursuant to paragraph (a) of Rule 485
----------
DECLARATION PURSUANT TO RULE 24f-2
Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933, as amended, pursuant to Rule 24f-2(a)(1) under
the Investment Company Act of 1940, as amended. The Rule 24f-2 Notice for
Registrant's fiscal year ended October 31, 1997 was filed on December 19, 1997.
<PAGE>
- ----------
THE ALGER
RETIREMENT
FUND
75 Maiden Lane
New York, New York 10038
(800) 992-3362
================================================================================
The Alger Retirement Fund (the "Fund"), formerly known as The Alger Defined
Contribution Trust, is a registered investment company--a mutual fund--that
presently offers interests in four portfolios. Each Portfolio has distinct
investment objectives and policies and a shareholder's interest is limited to
the Portfolio in which he or she owns shares. The investment objectives of each
Portfolio are highlighted beginning on page 1. The four Portfolios are:
o Alger Small Cap Retirement Portfolio
o Alger MidCap Growth Retirement Portfolio
o Alger Growth Retirement Portfolio
o Alger Capital Appreciation Retirement Portfolio
Shares of the Portfolios are available for investment without a sales
charge to defined contribution retirement plans (the "Plans") which elect to
make the Fund an investment option for participants in such Plans.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
This Prospectus, which should be retained for future reference, is designed
to provide you with certain essential information that you should know before
investing. A "Statement of Additional Information" dated February 25, 1998
containing further information about the Fund has been filed with the Securities
and Exchange Commission and is incorporated by reference into this Prospectus. A
copy of the Statement of Additional Information may be obtained, without charge,
by contacting the Fund at the address or phone number above.
FRED ALGER
MANAGEMENT, INVESTMENT MANAGER
INC.
FRED ALGER
& COMPANY, DISTRIBUTOR
INCORPORATED
================================================================================
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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FEBRUARY 25, 1998
<PAGE>
================================================================================
CONTENTS
PAGE
The Portfolios' Expenses .................................................. iii
Financial Highlights ...................................................... iv
The Alger Retirement Fund ................................................. 1
Fred Alger Management, Inc. ............................................... 1
Investment Objectives and Policies ........................................ 1
All Portfolios ........................................................... 2
Alger Small Cap Retirement Portfolio ..................................... 3
Alger MidCap Growth Retirement Portfolio ................................. 3
Alger Growth Retirement Portfolio ........................................ 3
Alger Capital Appreciation Retirement Portfolio .......................... 4
Selecting Among the Portfolios ............................................ 4
Certain Securities and Investment Techniques .............................. 5
Management ................................................................ 8
Net Asset Value ........................................................... 10
Purchases and Redemptions ................................................. 10
Dividends and Distributions ............................................... 11
Taxes ..................................................................... 11
Organization .............................................................. 12
Performance ............................................................... 12
Investor and Shareholder Information ...................................... 13
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ii
<PAGE>
================================================================================
THE PORTFOLIOS' EXPENSES
The Table below is designed to assist an investor in the Portfolios in
understanding the various costs and expenses that he or she will bear directly
or indirectly. The Table does not reflect any charges or deductions which are,
or may be, imposed by the Plans.
The Example below assumes that all dividends and distributions are
reinvested and that the annual percentage amounts listed under Annual Fund
Operating Expenses remain the same in each of the periods shown. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES; ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
<TABLE>
<CAPTION>
ALGER ALGER ALGER
SMALL MIDCAP ALGER CAPITAL
CAP GROWTH GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases .............................. None None None None
Maximum Sales Load Imposed on Reinvested Dividends ................... None None None None
Deferred Sales Load .................................................. None None None None
Redemption Fees ...................................................... None None None None
Exchange Fees ........................................................ None None None None
ANNUAL FUND
OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees ...................................................... .85% .80% .75% .85%
Other Expenses ....................................................... .21% .51% .38% .77%*
---- ---- ---- ----
Total Fund Operating Expenses ........................................ 1.06% 1.31% 1.13% 1.62%
==== ==== ==== ====
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
One Year ............................................................. $ 11 $ 13 $ 12 $ 16
Three Years .......................................................... 34 42 36 51
Five Years ........................................................... 58 72 62 88
Ten Years ............................................................ 129 158 137 192
* Included in Other Expenses of the Capital Appreciation Retirement Portfolio
is 0.15% of interest expense.
</TABLE>
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iii
<PAGE>
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FINANCIAL HIGHLIGHTS
The Financial Highlights have been audited by Arthur Andersen LLP, the Fund's
independent public accountants, as indicated in their report dated December 12,
1997 on the Fund's financial statements as of October 31, 1997. These financial
statements are incorporated by reference into the Statement of Additional
Information. An Annual Report of the Fund is available by contacting the Fund at
(800) 992-3362. In addition to financial statements, the Annual Report contains
further information about performance of the Fund.
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1997
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 17.87 $ 14.48 $ 9.32 $ 9.88
------- ------- ------- --------
Net investment loss ..................... (0.10) (0.15) (0.02)(i) (0.10)(i)
Net realized and unrealized gain on investments .. 3.13 3.46 2.65 2.51
------- ------- ------- --------
Total from investment operations ............... 3.03 3.31 2.63 2.41
Distributions from net realized gains ............ (2.90) (6.43) (1.17) (2.59)
------- ------- ------- --------
Net asset value, end of year ..................... $ 18.00 $ 11.36 $ 10.78 $ 9.70
======= ======= ======= ========
Total Return ..................................... 19.0% 28.6% 28.8% 26.1%
======= ======= ======= ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) ......... $31,499 $ 6,435 $22,922 $ 4,520
======= ======= ======= ========
Ratio of expenses excluding interest
to average net assets .......................... 1.06% 1.31% 1.13% 1.47%
======= ======= ======= ========
Ratio of expenses including interest
to average net assets .......................... 1.06% 1.31% 1.13% 1.62%
======= ======= ======= ========
Ratio of net investment loss
to average net assets .......................... (.62%) (.79%) (.22%) (1.02%)
======= ======= ======= ========
Portfolio Turnover Rate .......................... 134.25% 183.31% 159.38% 159.56%
======= ======= ======= ========
Average Commission Rate Paid ..................... $ .0701 $ .0699 $ .0718 $ .0711
======= ======= ======= ========
Amount of debt outstanding at end of year ........................................................... $127,000
========
Average amount of debt outstanding during the year .................................................. $127,915
========
Average daily number of shares outstanding during the year .......................................... 511,947
========
Average amount of debt per share during the year .................................................... $ .25
========
- ----------
(i) Amount was computed based on average shares outstanding during the year.
</TABLE>
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iv
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1996
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year .............. $ 17.92 $ 16.34 $ 11.65 $ 12.72
------- ------- ------- --------
Net investment loss ............................. (0.05) (0.07) (0.01) (0.07)
Net realized and unrealized gain on
investments .................................... 1.72 1.09 0.91 0.83
------- ------- ------- --------
Total from investment operations .............. 1.67 1.02 0.90 0.76
Distributions from net realized gains ........... (1.72) (2.88) (3.23) (3.60)
------- ------- ------- --------
Net asset value, end of year .................... $ 17.87 $ 14.48 $ 9.32 $ 9.88
======= ======= ======= ========
Total Return .................................... 9.2% 6.2% 8.2% 6.1%
======= ======= ======= ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) ........ $30,043 $ 9,726 $11,325 $ 6,703
======= ======= ======= ========
Ratio of expenses excluding interest
to average net assets ......................... 1.05% 1.16% 1.07% 1.37%
======= ======= ======= ========
Ratio of expenses including interest
to average net assets ......................... 1.05% 1.16% 1.07% 1.44%
======= ======= ======= ========
Ratio of net investment loss
to average net assets ......................... (.54%) (.45%) (.09%) (.94%)
======= ======= ======= ========
Portfolio Turnover Rate ......................... 182.49% 170.21% 142.83% 203.46%
======= ======= ======= ========
Average Commission Rate Paid .................... $ .0629 $ .0682 $ .0716 $ .0668
======= ======= ======= ========
Amount of debt outstanding at end of year ............................................................ $ --
========
Average amount of debt outstanding during the year ................................................... $ 62,130
========
Average daily number of shares outstanding during the year ........................................... 595,051
========
Average amount of debt per share during the year ..................................................... $ .10
========
- ----------
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
</TABLE>
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v
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1995
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year .............. $ 10.83 $ 11.66 $ 10.38 $ 10.08
------- ------- ------- --------
Net investment loss ............................. (0.07) (0.07) (0.01) (0.19)
Net realized and unrealized gain on
investments .................................... 7.23 6.07 3.59 5.30
------- ------- ------- --------
Total from investment operations .............. 7.16 6.00 3.58 5.11
Distributions from net realized gains ........... (0.07) (1.32) (2.31) (2.47)
------- ------- ------- --------
Net asset value, end of year .................... $ 17.92 $ 16.34 $ 11.65 $ 12.72
======= ======= ======= ========
Total Return .................................... 66.2% 54.1% 37.1% 54.4%
======= ======= ======= ========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) ........ $23,002 $10,914 $13,042 $ 8,116
======= ======= ======= ========
Ratio of expenses excluding interest
to average net assets ......................... 1.13% 1.23% 1.11% 1.43%
======= ======= ======= ========
Ratio of expenses including interest
to average net assets ......................... 1.13% 1.23% 1.11% 2.70%
======= ======= ======= ========
Ratio of net investment loss
to average net assets ......................... (.73%) (.69%) (.18%) (2.32%)
======= ======= ======= ========
Portfolio Turnover Rate ......................... 104.84% 132.74% 133.42% 188.53%
======= ======= ======= ========
Amount of debt outstanding at end of year .......................................................... $302,600
========
Average amount of debt outstanding during the year ................................................. $939,600
========
Average daily number of shares outstanding during the year ......................................... 565,805
========
Average amount of debt per share during the year ................................................... $ 1.66
========
- ----------
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
</TABLE>
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vi
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period from
November 8, 1993 (commencement of operations) through October 31, 1994*
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- ------- ------- --------
Net investment loss .............................. (0.07) (0.09) (0.03) (0.23)
Net realized and unrealized gain on investments .. 0.90 1.75 0.41 0.31
------- ------- ------- --------
Total from investment operations ............... 0.83 1.66 0.38 0.08
------- ------- ------- --------
Net asset value, end of period ................... $ 10.83 $ 11.66 $ 10.38 $ 10.08
======= ======= ======= ========
Total Return ..................................... 8.3% 16.6% 3.8% 0.8%
======= ======= ======= ========
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ....... $ 9,513 $ 6,774 $ 9,365 $ 5,251
======= ======= ======= ========
Ratio of expenses excluding interest
to average net assets .......................... 1.47% 1.53% 1.26% 1.78%
======= ======= ======= ========
Ratio of expenses including interest
to average net assets .......................... 1.47% 1.53% 1.26% 2.87%
======= ======= ======= ========
Ratio of net investment loss
to average net assets .......................... (0.80)% (0.89)% (0.29)% (2.53)%
======= ======= ======= ========
Portfolio Turnover Rate .......................... 186.76% 134.06% 103.79% 229.11%
======= ======= ======= ========
Amount of debt outstanding at end of period ........................................................ $955,600
========
Average amount of debt outstanding during the period ............................................... $826,076
========
Average daily number of shares outstanding during the period ....................................... 515,270
========
Average amount of debt per share during the period ................................................. $ 1.60
========
- ----------
* Ratios have been annualized; total return has not been annualized.
** Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
</TABLE>
================================================================================
vii
<PAGE>
THE ALGER RETIREMENT FUND
The Fund is a diversified, open-end management investment company that
offers a selection of four portfolios, each with the investment objective of
long-term capital appreciation. The offering price of the shares of each
portfolio is net asset value per share. Shares of the portfolios are only
available for investment through defined contribution retirement plans (the
"Plans") which elect to make the Fund an investment option for participants in
such Plans. Individuals, including participants in such Plans, cannot directly
invest in the Fund but may do so only through a participating Plan. The Fund
reserves the right to make shares of the portfolios available to other
investors, as may be approved by the Trustees from time to time. The Fund's
Board of Trustees may establish additional Portfolios at any time.
Only the Plans may be record holders of the shares of the portfolios.
Within the limitations applicable to a Plan, a participant in such Plan (a
"Participant") may direct the Plan to purchase or redeem shares of the Fund.
Participants in a Plan cannot contact the Fund directly to request the purchase
or redemption of the portfolios' shares. Instead, Participants must contact
their Plan Sponsor or its agent designated for the purpose of processing
purchase and redemption requests. References in this Prospectus to shareholders
are to Plan Sponsors as the record holders of the Fund's shares. The assets of
the Fund are not plan assets of any of the Plans.
FRED ALGER MANAGEMENT, INC.
Subject to the supervision and direction of the Fund's Board of Trustees,
Fred Alger Management, Inc. ("Alger Management") is responsible for the overall
administration of the Fund, manages the portfolios in accordance with the
portfolios' investment objectives and stated investment policies, makes
investment decisions for the portfolios, places orders to purchase and sell
securities on behalf of the portfolios and employs professional securities
analysts who provide research services exclusively to the portfolios and other
accounts for which Alger Management or its affiliates serve as investment
adviser. Alger Management is generally engaged in the business of rendering
investment advisory services to mutual funds, institutions and, to a lesser
extent, individuals. Alger Management has been engaged in the business of
rendering investment advisory services since 1964 and as of January 31, 1998,
had approximately $7.8 billion under management--$4.5 billion in mutual fund
accounts and $3.3 billion in other advisory accounts.
INVESTMENT OBJECTIVES
AND POLICIES
The following is a brief description of the investment objectives and
policies of each Portfolio. No assurance can be given that any Portfolio's
objective(s) will be achieved. Certain instruments and techniques discussed in
this summary are described in greater detail in this Prospectus under the
caption "Certain Securities and Investment Techniques" and in the Statement of
Additional Information.
The Statement of Additional Information contains specific investment
restrictions that govern the Portfolios' investments. These restrictions and the
Portfolios' investment objectives are "fundamental" policies, which means that
they may not be changed without a majority vote of shareholders of the affected
Portfolio. Except for the investment objectives and the investment restrictions
specifically identified as fundamental, all investment policies and practices
described in this Prospectus and in the Statement of Additional Information are
not fundamental, so the Fund's Board of Trustees may change them without
shareholder approval. The fundamental restrictions applicable to the Portfolios
include, among others, (i) a prohibition on any Portfolio's purchasing a
1
<PAGE>
security, other than obligations issued or guaranteed by the U. S. Government,
its agencies or instrumentalities ("U. S. Government securities"), if as a
result more than five percent of the assets of the Portfolio would be invested
in the securities of the issuer or the Portfolio would own more than 10 percent
of the outstanding voting securities of the issuer, except that 25 percent of a
Portfolio's total assets may be invested without regard to the five percent
limitation; (ii) a prohibition on any Portfolio's investing more than 25 percent
of its total assets in the securities of issuers in a particular industry with
exceptions for U.S. Government securities; and (iii) a prohibition on any
Portfolio's borrowing money or pledging its assets, except for temporary or
emergency purposes in an amount not exceeding 10 percent of the Portfolio's
total assets, except that the Alger Capital Appreciation Retirement Portfolio
may borrow for investment purposes (see "Certain Securities and Investment
Techniques--Leverage Through Borrowing").
Each Portfolio may invest a portion of its assets in money market
instruments, including, but not limited to, certificates of deposit, time
deposits and bankers' acceptances issued by domestic bank and thrift
institutions, U.S. Government securities, commercial paper and repurchase
agreements.
No Portfolio will invest more than 15 percent of its net assets in
"illiquid" securities, which include restricted securities, securities for which
there is no readily available market and repurchase agreements with maturities
of greater than seven days; however, restricted securities that are determined
by the Board of Trustees to be liquid are not subject to this limitation (see
"Certain Securities and Investment Techniques--Restricted Securities"). In
addition, each Portfolio will limit its investments in warrants and rights to
not more than five percent of its net assets, of which not more than two percent
of its net assets may be invested in warrants not listed on a recognized
domestic stock exchange. Warrants or rights acquired as part of a unit attached
to securities at the time of acquisition are not subject to these limitations,
which may be changed without shareholder approval. Each Portfolio may lend its
securities and enter into "short sales against the box." See "Certain Securities
and Investment Techniques." The Portfolios will only invest in convertible debt
securities rated in one of the three highest rating categories by any nationally
recognized statistical rating organization ("NRSRO"). See the Statement of
Additional Information for a description of these ratings.
ALL PORTFOLIOS
The investment objective of each Portfolio is long-term capital
appreciation. Income is a consideration in the selection of investments but is
not an investment objective of a Portfolio. Each Portfolio seeks to achieve its
objective by investing in equity securities, such as common or preferred stocks
or securities convertible into or exchangeable for equity securities, including
warrants and rights. The capitalization criteria outlined below for each
Portfolio are not mutually exclusive and a given security may be owned by more
than one or all of the Portfolios.
It is anticipated that each Portfolio will invest primarily in companies
whose securities are traded on domestic stock exchanges or in the
over-the-counter market. These companies may still be in the developmental
stage, may be older companies that appear to be entering a new stage of growth
progress owing to factors such as management changes or development of new
technology, products or markets or may be companies providing products or
services with a high unit volume growth rate. The risks involved in investing in
smaller companies are discussed below under "Alger Small Cap Retirement
Portfolio." In order to afford a Portfolio the flexibility to take advantage of
new opportunities for investments in accordance with its
2
<PAGE>
investment objective or to meet redemptions, each Portfolio may hold up to 15
percent of its net assets in money market instruments and repurchase agreements
and in excess of this amount (up to 100% of its assets) during temporary
defensive periods. This amount may be higher than that maintained by other funds
with similar investment objectives. See "Certain Securities and Investment
Techniques."
ALGER SMALL CAP RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger Small Cap Retirement
Portfolio, formerly known as Alger Defined Contribution Small Cap Portfolio,
invests at least 65% of its total assets in equity securities of companies that,
at the time of purchase of the securities, have "total market
capitalization"--present market value per share multiplied by the total number
of shares outstanding--within the range of companies included in the Russell
2000 Growth Index ("Russell Index") or the S&P SmallCap 600 Index ("S&P Index"),
updated quarterly. Both indexes are broad indexes of small capitalization
stocks. As of December 31, 1997, the range of market capitalization of the
companies in the Russell Index was $20 million to $2.97 billion; the range of
market capitalization of the companies in the S&P Index at that date was $21
million to $2.934 billion. The combined range as of that date was $20 million to
$2.97 billion. The Portfolio may invest up to 35% of its total assets in equity
securities of companies that, at the time of purchase, have total market
capitalization outside this combined range and in excess of that amount (up to
100% of its assets) during temporary defensive periods.
Investing in smaller, newer issuers generally involves greater risk than
investing in larger, more established issuers. Companies in which the Portfolio
is likely to invest may have limited product lines, markets or financial
resources and may lack management depth. The securities issued by such companies
may have limited marketability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the
market averages in general. Accordingly, an investment in the Portfolio may not
be appropriate for all investors.
ALGER MIDCAP GROWTH
RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger MidCap Growth
Retirement Portfolio, formerly known as Alger Defined Contribution MidCap Growth
Portfolio, invests at least 65% of its total assets in equity securities of
companies that, at the time of purchase of the securities, have total market
capitalization within the range of companies included in the S&P MidCap 400
Index, updated quarterly. The S&P MidCap 400 Index is designed to track the
performance of medium capitalization companies. As of December 31, 1997, the
range of market capitalization of these companies was $213 million to $13.737
billion. The Portfolio may invest up to 35% of its total assets in equity
securities of companies that, at the time of purchase, have total market
capitalization outside the range of companies included in the S&P MidCap 400
Index and in excess of that amount (up to 100% of its assets) during temporary
defensive periods.
ALGER GROWTH RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger Growth Retirement
Portfolio, formerly known as Alger Defined Contribution Growth Portfolio,
invests at least 65 percent of its total assets in equity securities of
companies that, at the time of purchase of the securities, have total market
capitalization of $1 billion or greater.
The Portfolio may invest up to 35 percent of its total assets in equity
securities of companies
3
<PAGE>
that, at the time of purchase, have total market capitalization of less than $1
billion.
ALGER CAPITAL APPRECIATION
RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger Capital Appreciation
Retirement Portfolio, formerly known as Alger Defined Contribution Leveraged
AllCap Portfolio, invests at least 85 percent of its net assets in equity
securities of companies of any size. The Portfolio may purchase put and call
options and sell (write) covered call and put options on securities and
securities indexes to increase gain and to hedge against the risk of unfavorable
price movements, and may enter into futures contracts on securities indexes and
purchase and sell call and put options on these futures contracts. The Portfolio
may also borrow money for the purchase of additional securities. The Portfolio
may borrow only from banks and may not borrow in excess of one-third of the
market value of its assets, less liabilities other than such borrowing. See
"Certain Securities and Investment Techniques."
SELECTING AMONG THE PORTFOLIOS
Set forth below is information that may be of assistance in selecting a
Portfolio suitable for a particular investor's needs. Further assistance in the
investment process is available by calling (800) 992-3362. Available at this
number will be licensed, registered representatives who are knowledgeable about
the Fund and each of the Portfolios. There is no charge for making this call.
Each of the Portfolios, like all other investments, can provide two types
of return: income return and capital return. Income return is the income
received from an investment, such as interest on bonds and money market
instruments and dividends from common and preferred stocks. Capital return is
the change in the market value of an investment, such as an increase in the
price of a common stock or of shares of a Portfolio. Total return is the sum of
income return and capital return. Thus, if a Portfolio over a year produces four
percent in income return and its shares increase in value by three percent, its
total return is seven percent. In general, the more that capital return is
emphasized over income return in an investment program, the more risk is
associated with the program.
Growth funds such as the Portfolios seek primarily capital return. They
invest primarily in common stocks and offer the opportunity of the greatest
return over the long term but can be risky since their prices fluctuate with
changes in stock market prices, as described in the preceding paragraph.
Further, growth funds that invest in smaller companies, such as the Alger Small
Cap Retirement Portfolio, offer potential for significant price gains if the
companies are successful, but there is also the risk that the companies will not
succeed and the price of the companies' shares will drop in value. Growth funds
that invest in larger, more established companies, such as the Alger Growth
Retirement Portfolio and the Alger MidCap Growth Retirement Portfolio, generally
offer relatively less opportunity for capital return but a greater degree of
safety. In addition, funds that leverage through borrowing, such as the Alger
Capital Appreciation Retirement Portfolio, offer an opportunity for greater
capital appreciation, but at the same time increase exposure to capital risk.
Investors considering equity investing through the Portfolios should
carefully consider the inherent risks. Expectations of future inflation rates
should be considered in making investment decisions and even though over the
long term stocks may present attractive oppor-
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tunities, the results of an equity investment managed by a particular management
firm may not match those of the market as a whole.
CERTAIN SECURITIES AND
INVESTMENT TECHNIQUES
REPURCHASE AGREEMENTS
Under the terms of a repurchase agreement, a Portfolio would acquire a high
quality money market instrument for a relatively short period (usually not more
than one week) subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the instrument at an agreed price (including accrued
interest) and time, thereby determining the yield during the Portfolio's holding
period.
SHORT SALES
Each Portfolio may sell securities "short against the box." While a short
sale is the sale of a security the Portfolio does not own, it is "against the
box" if at all times when the short position is open the Portfolio owns an equal
amount of the securities or securities convertible into, or exchangeable without
further consideration for, securities of the same issue as the securities sold
short.
RESTRICTED SECURITIES
Each Portfolio may invest in restricted securities, which are securities
subject to legal or contractual restrictions on their resale. These restrictions
might prevent the sale of the securities at a time when a sale would otherwise
be desirable. In order to sell securities that are not registered under the
federal securities laws it may be necessary for the Portfolio to bear the
expense of registration. No restricted securities will be acquired if the
acquisition would cause the aggregate value of all illiquid securities to exceed
15 percent of the Portfolio's net assets.
The Portfolios may invest in restricted securities governed by Rule 144A
under the Securities Act of 1933. In adopting Rule 144A, the Securities and
Exchange Commission specifically stated that restricted securities traded under
Rule 144A may be treated as liquid for purposes of investment limitations if the
board of trustees (or the fund's adviser acting subject to the board's
supervision) determines that the securities are in fact liquid. The Fund's Board
of Trustees has delegated its responsibility to Alger Management to determine
the liquidity of each restricted security purchased by a Portfolio pursuant to
the Rule, subject to the Board's oversight and review. Examples of factors that
will be taken into account in evaluating the liquidity of a Rule 144A security,
both with respect to the initial purchase and on an ongoing basis, will include,
among others: (1) the frequency of trades and quotes for the security; (2) the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the
security; and (4) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Because institutional trading
in restricted securities is relatively new, it is not possible to predict how
institutional markets will develop. If institutional trading in restricted
securities were to decline to limited levels, the liquidity of the Fund's
Portfolios could be adversely affected.
LENDING OF PORTFOLIO SECURITIES
In order to generate income and to offset expenses, each Portfolio may lend
portfolio securities to brokers, dealers and other financial organizations.
Loans of securities by a Portfolio, if and when made, may not exceed 331/3
percent of the Portfolio's total assets including all collateral on such loans,
less liabilities exclusive of the obligation to return such collateral, and will
be
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collateralized by cash, letters of credit or U. S. Government securities that
are maintained at all times in an amount equal to at least 100 percent of the
current market value of the loaned securities.
OPTIONS TRANSACTIONS
The Alger Capital Appreciation Retirement Portfolio may purchase or sell
(that is, write) listed options on securities as a means of achieving additional
return or of hedging the value of its portfolio. The Portfolio may write covered
call options on common stocks that it owns or has an immediate right to acquire
through conversion or exchange of other securities in an amount not to exceed
25% of total assets. The Portfolio may only buy or sell options that are listed
on a national securities exchange.
A call option on a security is a contract that gives the holder of the
option the right, in return for a premium paid, to buy from the writer (seller)
of the call option the security underlying the option at a specified exercise
price at any time during the term of the option. The writer of the call option
has the obligation upon exercise of the option to deliver the underlying
security upon payment of the exercise price during the option period.
A put option on a security is a contract that, in return for the premium,
gives the holder of the option the right to sell to the writer (seller) the
underlying security at a specified price during the term of the option. The
writer of the put, who receives the premium, has the obligation to buy the
underlying security upon exercise, at the exercise price during the option
period.
If the Portfolio has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing an
option of the same series as the option previously written. There can be no
assurance that a closing purchase transaction can be effected when the Portfolio
so desires.
An option may be closed out only on an exchange that provides a secondary
market for an option of the same series. Although the Portfolio will generally
purchase or write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option. The Portfolio will not purchase
options if, as a result, the aggregate cost of all outstanding options exceeds
10% of the Portfolio's total assets, although no more than 5% will be committed
to transactions entered into for non-hedging purposes.
The Portfolio may write put and call options on stock indexes for the
purpose of increasing its gross income and to protect its portfolio against
declines in the value of the securities it owns or increases in the value of
securities to be acquired. In addition, the Portfolio may purchase put and call
options on stock indexes in order to hedge its investments against a decline in
value or to attempt to reduce the risk of missing a market or industry segment
advance. Options on stock indexes are similar to options on specific securities.
However, because options on stock indexes do not involve the delivery of an
underlying security, the option represents the holder's right to obtain, from
the writer, cash in an amount equal to a fixed multiple of the amount by which
the exercise price exceeds (in the case of a put) or is less than (in the case
of a call) the closing value of the underlying stock index on the exercise date.
Therefore, while one purpose of writing such options is to generate additional
income for the Portfolio, the Portfolio recognizes that it may be required to
deliver an amount of cash in excess of the market value of a stock index at such
time as an option written by the Portfolio is exercised by the holder. The
writing and purchase of options is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. The successful use of protective
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puts for hedging purposes depends in part on Alger Management's ability to
predict future price fluctuations and the degree of correlation between the
options and securities markets.
STOCK INDEX FUTURES AND OPTIONS ON
STOCK INDEX FUTURES
The Alger Capital Appreciation Retirement Portfolio may purchase and sell
stock index futures contracts and options on stock index futures contracts.
These investments may be made solely for hedging or other permissible risk
management purposes, such as protecting the price of a security the Portfolio
intends to buy, but not for purposes of speculation. Aggregate initial margins
and premiums on such investments may not constitute more than 5% of the
Portfolio's assets. Hedging and other risk management transactions are
undertaken to reduce or eliminate any of several kinds of price fluctuation
risk. For example, put options on futures might be purchased to protect against
declines in the market values of securities occasioned by a decline in stock
prices and securities index futures might be sold to protect against a general
decline in the value of securities of the type that comprise the index.
A stock index future obligates the seller to deliver (and the purchaser to
take) an amount of cash equal to a specific dollar amount times the difference
between the value of a specific stock index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying stocks in the index is made. With respect to stock
indexes that are permitted investments, the Portfolio intends to purchase and
sell futures contracts on the stock index for which it can obtain the best price
with considerations also given to liquidity. While incidental to its securities
activities, the Portfolio may use index futures as a substitute for a comparable
market position in the underlying securities.
There can be no assurance of the Portfolio's successful use of stock index
futures as a hedging device. Due to the risk of an imperfect correlation between
securities in the Portfolio that are the subject of a hedging transaction and
the futures contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the portfolio
securities may be in excess of gains on the futures contract or losses on the
futures contract may be in excess of gains on the portfolio securities that were
the subject of the hedge. The risk of imperfect correlation increases as the
composition of the Portfolio varies from the composition of the stock index. In
an effort to compensate for the imperfect correlation of movements in the price
of the securities being hedged and movements in the price of the stock index
futures, the Portfolio may buy or sell stock index futures contracts in a
greater or lesser dollar amount than the dollar amount of the securities being
hedged if the historical volatility of the stock index futures has been less or
greater than that of the securities. Such "over hedging" or "under hedging" may
adversely affect the Portfolio's net investment results if market movements are
not as anticipated when the hedge is established.
An option on a stock index futures contract, as contrasted with the direct
investment in such a contract, gives the purchaser the right, in return for the
premium paid, to assume a position in a stock index futures contract at a
specified exercise price at any time prior to the expiration date of the option.
The Portfolio will sell options on stock index futures contracts only as part of
closing purchase transactions to terminate its options positions. No assurance
can be given that such closing transactions can be effected or that there will
be a correlation between price movements in the options on stock index futures
and price movements in the Portfolio's securities which are the subject of the
hedge. In addition, the Portfolio's purchase of such options
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will be based upon predictions as to anticipated market trends, which could
prove to be inaccurate.
LEVERAGE THROUGH BORROWING
The Alger Capital Appreciation Retirement Portfolio may borrow from banks
for investment purposes. This borrowing is known as leveraging. The Portfolio
may use up to 331/3 percent of its assets for leveraging. The Investment Company
Act of 1940, as amended, requires the Portfolio to maintain continuous asset
coverage (that is, total assets including borrowings less liabilities exclusive
of borrowings) of 300% of the amount borrowed. If such asset coverage should
decline below 300% as a result of market fluctuations or other reasons, the
Portfolio may be required to sell some of its portfolio holdings within three
days to reduce the debt and restore the 300% asset coverage, even though it may
be disadvantageous from an investment standpoint to sell securities at that
time. Leveraging may exaggerate the effect on net asset value of any increase or
decrease in the market value of the Portfolio's securities. Money borrowed for
leveraging will be subject to interest costs which may or may not be recovered
by appreciation of the securities purchased; in certain cases, interest costs
may exceed the return received on the securities purchased. The Portfolio also
may be required to maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fee to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate.
PORTFOLIO TURNOVER
A Portfolio's turnover rate is calculated by dividing the lesser of
purchases or sales of securities for the fiscal year by the monthly average of
the value of the Portfolio's securities, with obligations with less than one
year to maturity excluded. A 100 percent turnover rate would occur, for example,
if all included securities were replaced once during the year.
The Portfolios will not normally engage in the trading of securities for
the purpose of realizing short-term profits, but will adjust their holdings as
considered advisable in view of prevailing or anticipated market conditions, and
turnover will not be a limiting factor should Alger Management deem it advisable
to purchase or sell securities.
In Alger Management's view, companies are organic entities that
continuously undergo changes in response to, among other things, economic,
market, environmental, technological, political and managerial factors.
Generally, securities will be purchased for capital appreciation and not for
short-term trading profits. However, the Portfolios may dispose of securities
without regard to the time they have been held when such action, for defensive
or other purposes, appears advisable. Moreover, it is Alger Management's
philosophy to pursue the Portfolios' investment objective of capital
appreciation by managing these Portfolios actively, which may result in high
portfolio turnover. Increased portfolio turnover will have the effect of
increasing a Portfolio's brokerage and custodial expenses.
MANAGEMENT
BOARD OF TRUSTEES
The affairs of the Fund are managed under the supervision of its Board of
Trustees. The Statement of Additional Information contains general background
information about each Trustee and executive officer of the Fund. By virtue of
the responsibilities assumed by Alger Management, the Fund requires no employees
other than its executive officers. None of the Fund's executive officers devotes
full time to the affairs of the Fund.
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INVESTMENT MANAGER
Alger Management serves as the Fund's investment manager. In that capacity,
Alger Management, among other things, analyzes the Portfolios' assets, arranges
for the purchase and sale of the Portfolios' securities and selects
broker-dealers that, in its judgment, provide prompt and reliable execution at
favorable prices and reasonable commission rates. It is anticipated that the
Fund's distributor, Fred Alger & Company, Incorporated ("Alger Inc."), an
affiliate of Alger Management, will serve as the Fund's broker in effecting
substantially all of the Portfolios' transactions on securities exchanges and
will retain commissions in accordance with certain regulations of the Securities
and Exchange Commission. In addition, Alger Management may select broker-dealers
that provide it with brokerage and research services and may cause a Portfolio
to pay these broker-dealers commissions that exceed those other broker-dealers
may have charged, if it views the commissions as reasonable in relation to the
value of the brokerage and research services received. The Fund will consider
sales of its shares as a factor in the selection of broker-dealers to execute
over-the-counter portfolio transactions, subject to the requirements of best
price and execution.
Alger Management is a wholly owned subsidiary of Alger Inc. which in turn
is a wholly owned subsidiary of Alger Associates, Inc., a financial services
holding company.
Fred M. Alger III and his brother, David D. Alger, are the majority
shareholders of Alger Associates, Inc. and may be deemed to control that company
and its subsidiaries.
As compensation for the investment management services rendered, each
Portfolio pays Alger Management a separate fee computed daily and paid monthly
at annual rates based on a percentage of the value of the relevant Portfolio's
average daily net assets, as follows: Alger Small Cap Retirement Portfolio and
Alger Capital Appreciation Retirement Portfolio--.85 percent; Alger MidCap
Growth Retirement Portfolio--.80 percent; Alger Growth Retirement Portfolio--.75
percent.
David D. Alger, Seilai Khoo and Ronald Tartaro are primarily responsible
for the day-to-day management of the Portfolios of the Fund. Mr. Alger has been
employed by Alger Management since 1971, as Executive Vice President and
Director of Research until 1995 and as President since 1995. Ms. Khoo has been
employed by Alger Management since 1989 as a senior research analyst until 1995
and as a Senior Vice President since 1995. Mr. Tartaro has been employed by
Alger Management since 1990 as a senior research analyst until 1995 and as a
Senior Vice President since 1995. Mr. Alger, Ms. Khoo and Mr. Tartaro also serve
as portfolio managers for other mutual funds and investment accounts managed by
Alger Management.
Alger Management personnel ("Access Persons") are permitted to engage in
personal securities transactions subject to the restrictions and procedures of
the Fund's Code of Ethics. Pursuant to the Code of Ethics, Access Persons
generally must preclear all personal securities transactions prior to trading
and are subject to certain prohibitions on personal trading. You can get a copy
of the Fund's Code of Ethics by calling the Fund toll-free at (800) 992-3362.
Alger Shareholder Services, Inc., an affiliate of Alger Management, serves
as transfer agent for the Fund. Certain record-keeping services that would
otherwise be performed by Alger Shareholder Services, Inc. may be performed by
other entities providing similar services to their customers who invest in the
Portfolios. The Fund, Alger Shareholder Services, Inc., Alger Inc. or any of its
affiliates may elect to enter into a contract to pay them for such services.
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EXPENSES OF THE FUND
Each Portfolio will bear its own expenses. Operating expenses for each
Portfolio generally consist of all costs not specifically borne by Alger
Management, including investment management fees, fees for necessary
professional and brokerage services, costs of regulatory compliance and costs
associated with maintaining legal existence and shareholder relations. From time
to time, Alger Management in its sole discretion and as it deems appropriate,
may assume certain expenses of one or more of the Portfolios while retaining the
ability to be reimbursed by the applicable Portfolio for such amounts prior to
the end of the fiscal year. This will have the effect of lowering the applicable
Portfolio's overall expense ratio and of increasing yield to investors, or the
converse, at the time such amounts are assumed or reimbursed, as the case may
be.
Each Portfolio of the Fund may compensate certain entities other than Alger
Inc. and its affiliates for providing record-keeping and/or administrative
services to participating retirement plans. This compensation may be paid at an
annual rate of up to .25% of the net asset value of shares of the Portfolio held
by those plans.
NET ASSET VALUE
The net asset value per share of each Portfolio is calculated on each day
on which the New York Stock Exchange, Inc. (the "NYSE") is open as of the close
of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The NYSE is
currently open on each Monday through Friday, except (i) January 1st, Dr. Martin
Luther King, Jr. Day, Presidents' Day (the third Monday in February), Good
Friday, Memorial Day (the last Monday in May), July 4th, Labor Day (the first
Monday in September), Thanksgiving Day (the fourth Thursday in November) and
December 25th or (ii) the preceding Friday when any one of those holidays falls
on a Saturday, or the subsequent Monday when any one of those holidays falls on
a Sunday. Net asset value per share of a Portfolio is computed by dividing the
value of the Portfolio's net assets by the total number of its shares
outstanding.
The assets of the Portfolios that are traded on a securities exchange or
other recognized market are valued on the basis of market quotations. Assets of
those Portfolios for which quotations are not readily available are valued at
fair value as determined in good faith under procedures approved by the Board of
Trustees. Instruments with remaining maturities of 60 days or less are valued on
the basis of amortized cost, as described in the Statement of Additional
Information.
PURCHASES AND REDEMPTIONS
All direct purchasers of shares of the Portfolios will be Plan Sponsors
which establish or maintain Plans. Participants may invest in shares of the
Portfolios only through their respective Plan Sponsor. Participants cannot
contact the Fund directly to purchase or redeem shares of the Portfolios.
Instead, Participants must contact their Plan Sponsor or its agent for the
purpose of processing purchase requests. There is no minimum amount for initial
or subsequent investments for any Plan Sponsor. Participants should contact
their Plan Sponsor for information concerning the appropriate procedure for
investing in the Fund.
Orders received by the Fund or the Fund's transfer agent are effected on
days on which the NYSE is open for trading. For orders received before the close
of regular trading on the NYSE, purchases and redemptions of the shares of each
Portfolio are effected at the respective net asset values per share determined
as of the close of regular trading on the NYSE on that same day. Orders received
after the close of regular trading on the NYSE are effected at the next
calculated net asset value. See "Net Asset
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Value." All orders for the purchase of shares are subject to acceptance or
rejection by the Fund. Payment for redemptions will be made by the Fund's
transfer agent on behalf of the Fund and the relevant Portfolios within seven
days after the request is received. The Fund does not assess any fees, either
when it sells or when it redeems its shares.
Investors may exchange stock of companies acceptable to Alger Management
for shares of the Portfolios of the Fund with a minimum of 100 shares of each
company generally being required. The Fund believes such exchange provides a
means by which holders of certain securities may invest in the Portfolios of the
Fund without the expense of selling the securities in the public market. The
investor should furnish either in writing or by telephone to Alger Management a
list with a full and exact description of all securities proposed for exchange.
Alger Management will then notify the investor as to whether the securities are
acceptable and, if so, will send a Letter of Transmittal to be completed and
signed by the investor. Alger Management has the right to reject all or any part
of the securities offered for exchange. The securities must then be sent in
proper form for transfer with the Letter of Transmittal to the Custodian of the
Fund's assets. The investor must certify that there are no legal or contractual
restrictions on the free transfer and sale of the securities. Upon receipt by
the Custodian, the securities will be valued as of the close of business on the
day of receipt in the same manner as the Portfolio's securities are valued each
day. Shares of the Portfolio having an equal net asset value as of the close of
the same day will be registered in the investor's name. There is no sales charge
on the issuance of shares of the Portfolio, no charge for making the exchange
and no brokerage commission on the securities accepted, although applicable
stock transfer taxes, if any, may be deducted. The exchange of securities by the
investor pursuant to this offer may constitute a taxable transaction and may
result in a gain or loss for federal income tax purposes. The tax treatment
experienced by investors may vary depending upon individual circumstances. Each
investor should consult a tax adviser to determine federal, state and local tax
consequences.
Under unusual circumstances, shares of a Portfolio may be redeemed "in
kind," which means that the redemption proceeds will be paid with securities
which are held by the Portfolio. Please refer to the Statement of Additional
Information for more details.
DIVIDENDS AND DISTRIBUTIONS
Each Portfolio will be treated separately in determining the amounts of
dividends of net investment income and distributions of capital gains payable to
holders of its shares. Dividends and distributions will be automatically
reinvested on the payment date for each shareholder's account in additional
shares of the Portfolio that paid the dividend or distribution at net asset
value. Dividends will be declared and paid annually. Distributions of any net
realized capital gains earned by a Portfolio usually will be made annually after
the close of the fiscal year in which the gains are earned.
TAXES
Each Portfolio will be treated as a separate taxpayer with the result that,
for federal income tax purposes, the amounts of net investment income and
capital gains earned will be determined on a Portfolio-by-Portfolio (rather than
on a Fund-wide) basis.
The Fund intends that each Portfolio will qualify separately as a
"regulated investment company" within the meaning of the Internal Revenue Code
of 1986, as amended (the "Code") for each taxable year of each Portfolio. If so
qualified, and providing certain distribution requirements are met, a Portfolio
will not be subject to federal income tax on its net investment income and net
capital gains that it distributes to its shareholders.
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With respect to participants in the Plans, dividends from net investment
income and net realized capital gains ordinarily will not be subject to taxation
until such dividends are distributed to such participants from their Plan
accounts. Generally, distributions from a Plan will be taxable as ordinary
income at the rate applicable to the participant at the time of distribution. In
certain cases, distributions made to a participant from a Plan prior to the date
on which the participant reaches age 591/2 are subject to a penalty tax
equivalent to 10% of the amount so distributed, in addition to the ordinary
income tax payable on such amount for the year in which it is distributed.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
the Treasury regulations promulgated thereunder. Participants should consult
their Plan Sponsors or tax advisers regarding the tax consequences of
participation in the Plan or of any Plan contributions or withdrawals.
ORGANIZATION
The Fund was organized on July 14, 1993 under the laws of the Commonwealth
of Massachusetts and is a business entity commonly known as a "Massachusetts
business trust." The Fund offers shares of beneficial interest of separate
series, par value $.001 per share. An unlimited number of shares of four series,
representing the shares of the Portfolios, have been authorized. No series of
shares has any preference over any other series.
When matters are submitted for shareholder vote, shareholders of each
Portfolio will have one vote for each full share held and proportionate,
fractional votes for fractional shares held. A separate vote of a Portfolio is
required on any matter affecting the Portfolio on which shareholders are
entitled to vote, such as approval of a Portfolio's agreement with Alger
Management. Shareholders of one Portfolio are not entitled to vote on a matter
that does not affect that Portfolio but that does require a separate vote of the
other Portfolios. There normally will be no annual meetings of shareholders for
the purpose of electing Trustees unless and until such time as less than a
majority of Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Any Trustee may be removed from office on the vote of
shareholders holding at least two-thirds of the Fund's outstanding shares at a
meeting called for that purpose. The Trustees are required to call such a
meeting on the written request of shareholders holding at least 10 percent of
the Fund's outstanding shares.
CONTROL SHAREHOLDERS
At February 2, 1998, Wells Fargo Bank, Trustee for Mentor Graphics, owned
beneficially or of record 57.38% of the Alger Small Cap Retirement Portfolio.
Northern Trust Company, Trustee for IHC 401K, owned beneficially or of record
53.61% of the Alger Growth Retirement Portfolio. The Fred Alger & Company,
Incorporated et al Pension Plan and the Fred Alger & Company, Incorporated et al
Profit Sharing Plan owned beneficially or of record 35.00% and 41.64%,
respectively, of the Alger MidCap Growth Retirement Portfolio; and 38.27% and
38.75%, respectively, of the Alger Capital Appreciation Retirement Portfolio at
February 2, 1998. These shareholders may be deemed to control the specified
portfolios.
PERFORMANCE
Each Portfolio may include quotations of "total return" and/or "yield" in
advertisements or reports to shareholders or prospective investors. BOTH "TOTAL
RETURN" AND/OR "YIELD" FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
IN-
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TENDED TO INDICATE FUTURE PERFORMANCE. Total return figures show the aggregate
or average percentage change in value of an investment in a Portfolio from the
beginning date of the measuring period to the end of the measuring period. These
figures reflect changes in the price of the Portfolio's shares and assume that
any income dividends and/or capital gains distributions made by the Portfolio
during the period were reinvested in shares of the Portfolio. Figures will be
given for recent 1, 5 and 10 year periods, and may be given for other periods as
well (such as from commencement of the Portfolio's operations, or on a
year-by-year basis). When considering "average" total return figures for periods
longer than one year, it is important to note that the Portfolio's annual total
return for any one year in the period might have been greater or less than the
average for the entire period. The Portfolio may also use "aggregate" total
return figures for various periods, representing the cumulative change in value
of an investment in the Portfolio for the specific period (again reflecting
changes in Portfolio share prices and assuming reinvestment of dividends and
distributions) as well as "actual annual" and "annualized" total return figures.
Total returns may be shown by means of schedules, charts or graphs, and may
indicate subtotals of the various components of total return (i. e., change in
value of initial investment, income dividends and capital gains distributions).
The "yield" of the Portfolio refers to "net investment income" generated by the
Portfolio over a specified thirty-day period. This income is then "annualized."
That is, the amount of "net investment income" generated by the Portfolio during
that thirty-day period is assumed to be generated over a 12-month period and is
shown as a percentage of the investment. "Total return" and "yield" for a
Portfolio will vary based on changes in market conditions. In addition, since
the deduction of a Portfolio's expenses is reflected in the total return and
yield figures, "total return" and "yield" will also vary based on the level of
the Portfolio's expenses.
From time to time, advertisements or reports to shareholders may compare
the yield or performance of a Portfolio to that of other mutual funds with a
similar investment objective. The performance of a Portfolio might be compared
with rankings prepared by Lipper Analytical Services, Inc., which is a widely
recognized, independent service that monitors the performance of mutual funds,
as well as to various unmanaged indices, such as the S&P 500. In addition,
evaluations of the Portfolios published by nationally recognized ranking
services and by financial publications that are nationally recognized, such as
BARRON'S, BUSINESS WEEK, FORBES, INSTITUTIONAL INVESTOR, INVESTOR'S BUSINESS
DAILY, KIPLINGER'S PERSONAL FINANCE, MONEY, MORNINGSTAR, THE NEW YORK TIMES, USA
TODAY AND THE WALL STREET JOURNAL may be included in advertisements or
communications to shareholders. Any given performance comparison should not be
considered as representative of such Portfolio's performance for any future
period.
INVESTOR AND SHAREHOLDER INFORMATION
Investors and shareholders may contact the Fund toll-free at (800) 992-3362
for further information regarding the Fund and the Portfolios, as well as for
assistance in selecting a Portfolio and obtaining a Statement of Additional
Information. The Fund's Annual Report contains additional performance
information and is available on request and without charge by contacting the
Fund at the toll-free number listed above.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE STATEMENT
OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING OF THE FUND'S SHARES,
AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED ON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
- --------------------------------------------------------------------------------
INVESTMENT MANAGER:
Fred Alger Management, Inc.
75 Maiden Lane
New York, New York 10038
DISTRIBUTOR:
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
TRANSFER AGENT:
Alger Shareholder Services, Inc.
30 Montgomery Street
Box 2001
Jersey City, New Jersey 07302
INDEPENDENT PUBLIC ACCOUNTANTS:
Arthur Andersen LLP
1345 Avenue of the Americas
New York, New York 10105
COUNSEL:
Hollyer Brady Smith Troxell Barrett Rockett
Hines & Mone LLP
551 Fifth Avenue
New York, NY 10176
================================================================================
THE ALGER
RETIREMENT MEETING THE CHALLENGE
FUND OF INVESTING
ALGER SMALL CAP
RETIREMENT PORTFOLIO
ALGER MIDCAP GROWTH
RETIREMENT PORTFOLIO
ALGER GROWTH
RETIREMENT PORTFOLIO
ALGER CAPITAL APPRECIATION
RETIREMENT PORTFOLIO
PROSPECTUS
FEBRUARY 25, 1998
<PAGE>
PROSPECTUS
THE ALGER|75 Maiden Lane
RETIREMENT|New York, New York 10038
FUND|(800) 992-3362
================================================================================
The Alger Retirement Fund (the "Fund"), formerly known as The Alger Defined
Contribution Trust, is a registered investment company--a mutual fund--that
presently offers interests in four portfolios. This Prospectus sets forth
information about three of these portfolios (the "Portfolios"). Each Portfolio
has distinct investment objectives and policies and a shareholder's interest is
limited to the Portfolio in which he or she owns shares. The investment
objectives of each Portfolio are highlighted beginning on page 1. The three
Portfolios discussed in this Prospectus are:
o Alger Small Cap Retirement Portfolio
o Alger MidCap Growth Retirement Portfolio
o Alger Capital Appreciation Retirement Portfolio
Shares of the Portfolios are available for investment without a sales
charge to defined contribution retirement plans (the "Plans") which elect to
make the Fund an investment option for participants in such Plans.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
This Prospectus, which should be retained for future reference, is designed
to provide you with certain essential information that you should know before
investing. A "Statement of Additional Information" dated February 25, 1998
containing further information about the Fund has been filed with the Securities
and Exchange Commission and is incorporated by reference into this Prospectus. A
copy of the Statement of Additional Information may be obtained, without charge,
by contacting the Fund at the address or phone number above.
INVESTMENT MANAGER
DISTRIBUTOR
================================================================================
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================
FEBRUARY 25, 1998
<PAGE>
================================================================================
CONTENTS
PAGE
----
The Portfolios' Expenses ................................................ iii
Financial
Highlights .............................................................. iv
The Alger Retirement Fund ............................................... 1
Fred Alger Management, Inc. ............................................. 1
Investment Objectives and Policies ...................................... 1
All Portfolios ...................................................... 2
Alger Small Cap Retirement Portfolio ................................ 3
Alger MidCap Growth
Retirement Portfolio .............................................. 3
Alger Capital Appreciation
Retirement Portfolio .............................................. 3
Selecting Among the Portfolios .......................................... 4
Certain Securities and Investment
Techniques .............................................................. 4
Management .............................................................. 8
Net Asset Value ......................................................... 10
Purchases and Redemptions ............................................... 10
Dividends and Distributions ............................................. 11
Taxes ................................................................... 11
Organization ............................................................ 12
Performance ............................................................. 12
Investor and Shareholder Information .................................... 13
================================================================================
ii
<PAGE>
================================================================================
THE PORTFOLIOS' EXPENSES
The Table below is designed to assist an investor in the Portfolios in
understanding the various costs and expenses that he or she will bear directly
or indirectly. The Table does not reflect any charges or deductions which are,
or may be, imposed by the Plans.
The Example below assumes that all dividends and distributions are
reinvested and that the annual percentage amounts listed under Annual Fund
Operating Expenses remain the same in each of the periods shown. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES; ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
<TABLE>
<CAPTION>
ALGER ALGER ALGER
SMALL MIDCAP CAPITAL
CAP GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases None None None
Maximum Sales Load Imposed on Reinvested Dividends None None None
Deferred Sales Load None None None
Redemption Fees None None None
Exchange Fees None None None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees .85% .80% .85%
Other Expenses .21% .51% .77%*
---- ---- ----
Total Fund Operating Expenses 1.06% 1.31% 1.62%
==== ==== ====
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period:
One Year $ 11 $ 13 $ 16
Three Years 34 42 51
Five Years 58 72 88
Ten Years 129 158 192
</TABLE>
* Included in Other Expenses of the Capital Appreciation Retirement Portfolio
is 0.15% of interest expense.
================================================================================
iii
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Financial Highlights have been audited by Arthur Andersen LLP, the Fund's
independent public accountants, as indicated in their report dated December 12,
1997 on the Fund's financial statements as of October 31, 1997. These financial
statements are incorporated by reference into the Statement of Additional
Information. An Annual Report of the Fund is available by contacting the Fund at
(800) 992-3362. In addition to financial statements, the Annual Report contains
further information about performance of the Fund.
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1997
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- -----------
<S> <C> <C> <C>
Net asset value, beginning of year ....................... $ 17.87 $ 14.48 $ 9.88
----------- ----------- -----------
Net investment loss ...................................... (0.10) (0.15) (0.10)(i)
Net realized and unrealized gain on
investments ............................................. 3.13 3.46 2.51
----------- ----------- -----------
Total from investment operations ....................... 3.03 3.31 2.41
Distributions from net realized gains .................... (2.90) (6.43) (2.59)
----------- ----------- -----------
Net asset value, end of year ............................. $ 18.00 $ 11.36 $ 9.70
=========== =========== ===========
Total Return ............................................. 19.0% 28.6% 26.1%
=========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) ................ $ 31,499 $ 6,435 $ 4,520
=========== =========== ===========
Ratio of expenses excluding interest
to average net assets .................................. 1.06% 1.31% 1.47%
=========== =========== ===========
Ratio of expenses including interest
to average net assets .................................. 1.06% 1.31% 1.62%
=========== =========== ===========
Ratio of net investment loss
to average net assets .................................. (.62%) (.79%) (1.02%)
=========== =========== ===========
Portfolio Turnover Rate .................................. 134.25% 183.31% 159.56%
=========== =========== ===========
Average Commission Rate Paid ............................. $ .0701 $ .0699 $ .0711
=========== =========== ===========
Amount of debt outstanding at end of year ...................................................... $ 127,000
===========
Average amount of debt outstanding during the year ............................................. $ 127,915
===========
Average daily number of shares outstanding during the year ..................................... 511,947
===========
Average amount of debt per share during the year ............................................... $ .25
===========
</TABLE>
- ------------
(i) Amount was computed based on average shares outstanding during the year.
================================================================================
iv
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1996
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO*
---------- ---------- -----------
<S> <C> <C> <C>
Net asset value, beginning of year ........................ $ 17.92 $ 16.34 $ 12.72
----------- ----------- -----------
Net investment (loss) ..................................... (0.05) (0.07) (0.07)
Net realized and unrealized gain on
investments .............................................. 1.72 1.09 0.83
----------- ----------- -----------
Total from investment operations ........................ 1.67 1.02 0.76
Distributions from net realized gains ..................... (1.72) (2.88) (3.60)
----------- ----------- -----------
Net asset value, end of year .............................. $ 17.87 $ 14.48 $ 9.88
=========== =========== ===========
Total Return .............................................. 9.2% 6.2% 6.1%
=========== =========== ===========
Ratios and Supplememtal Data:
Net assets, end of year (ooo's omitted)................... $ 30,043 $ 9,726 $ 6,703
=========== =========== ===========
Ratio of expenses excluding interest
to average net assets .................................... 1.05% 1.16% 1.37%
=========== =========== ===========
Ratio of expenses including interest
to average net assets .................................... 1.05% 1.16% 1.44%
=========== =========== ===========
Ratio of net investment loss
to average net assets ................................... (.54%) (.45%) (.94%)
=========== =========== ===========
Portfolio Turnover Rate ................................... 182.49% 170.21% 203.46%
=========== =========== ===========
Average Commission Rate Paid .............................. $ .0629 $ .0682 $ .0668
=========== =========== ===========
Amount of debt outstanding at end of year ..................................................... $ --
===========
Average amount of debt outstanding during the year ............................................ $ 62,130
===========
Average daily number of shares outstanding during the year .................................... 595,051
===========
Average amount of debt per share during the year .............................................. $ .10
===========
</TABLE>
- ------------
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
================================================================================
v
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended October 31, 1995
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO*
---------- ---------- -----------
<S> <C> <C> <C>
Net asset value, beginning of year ........................ $ 10.83 $ 11.66 $ 10.08
----------- ----------- -----------
Net investment loss ....................................... (0.07) (0.07) (0.19)
Net realized and unrealized gain on
investments .............................................. 7.23 6.07 5.30
----------- ----------- -----------
Total from investment operations ........................ 7.16 6.00 5.11
Distributions from net realized gains ..................... (0.07) (1.32) (2.47)
----------- ----------- -----------
Net asset value, end of year .............................. $ 17.92 $ 16.34 $ 12.72
=========== =========== ===========
Total Return 66.2% 54.1% 54.4%
=========== =========== ===========
Ratios and Supplemental Data:
Net assets, end of year (000's omitted) .................. $ 23,002 $ 10,914 $ 8,116
=========== =========== ===========
Ratio of expenses excluding interest
to average net assets .................................... 1.13% 1.23% 1.43%
=========== =========== ===========
Ratio of expenses including interest
to average net assets .................................... 1.13% 1.23% 2.70%
=========== =========== ===========
Ratio of net investment loss
to average net assets .................................... (.73%) (.69%) (2.32%)
=========== =========== ===========
Portfolio Turnover Rate ................................... 104.84% 132.74% 188.53%
=========== =========== ===========
Amount of debt outstanding at end of year ..................................................... $ 302,600
===========
Average amount of debt outstanding during the year ............................................ $ 939,600
===========
Average daily number of shares outstanding during the year .................................... 565,805
===========
Average amount of debt per share during the year .............................................. $ 1.66
===========
</TABLE>
- ------------
* Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
================================================================================
vi
<PAGE>
================================================================================
THE ALGER RETIREMENT FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period from
November 8, 1993 (commencement of operations) through October 31, 1994*
<TABLE>
<CAPTION>
MIDCAP CAPITAL
SMALL CAP GROWTH APPRECIATION
RETIREMENT RETIREMENT RETIREMENT
PORTFOLIO PORTFOLIO PORTFOLIO*
---------- ---------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ...................... $ 10.00 $ 10.00 $ 10.00
-------- -------- -----------
Net investment loss ....................................... (0.07) (0.09) (0.23)
Net realized and unrealized gain on investments ........... 0.90 1.75 0.31
-------- -------- -----------
Total from investment operations ........................ 0.83 1.66 0.08
-------- -------- -----------
Net asset value, end of period ............................ $ 10.83 $ 11.66 $ 10.08
======== ======== ===========
Total Return .............................................. 8.3% 16.6% 0.8%
======== ======== ===========
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) ................ $ 9,513 $ 6,774 $ 5,251
======== ======== ===========
Ratio of expenses excluding interest
to average net assets ................................... 1.47% 1.53% 1.78%
======== ======== ===========
Ratio of expenses including interest
to average net assets ................................... 1.47% 1.53% 2.87%
======== ======== ===========
Ratio of net investment loss
to average net assets ................................... (0.80)% (0.89)% (2.53)%
======== ======== ===========
Portfolio Turnover Rate ................................... 186.76% 134.06% 229.11%
======== ======== ===========
Amount of debt outstanding at end of period .................................................... $ 955,600
==========
Average amount of debt outstanding during the period ........................................... $ 826,076
==========
Average daily number of shares outstanding during the period ................................... 515,270
==========
Average amount of debt per share during the period ............................................. $ 1.60
==========
* Ratios have been annualized; total return has not been annualized.
** Prior to April 12, 1996, the Alger Capital Appreciation Retirement Portfolio
was the Alger Defined Contribution Leveraged AllCap Portfolio.
</TABLE>
================================================================================
vii
<PAGE>
THE ALGER RETIREMENT FUND
The Fund is a diversified, open-end management investment company that
offers a selection of four portfolios, each with the investment objective of
long-term capital appreciation. The offering price of the shares of each
portfolio is net asset value per share. Shares of the portfolios are only
available for investment through defined contribution retirement plans (the
"Plans") which elect to make the Fund an investment option for participants in
such Plans. Individuals, including participants in such Plans, cannot directly
invest in the Fund but may do so only through a participating Plan. The Fund
reserves the right to make shares of the portfolios available to other
investors, as may be approved by the Trustees from time to time. The Fund's
Board of Trustees may establish additional Portfolios at any time.
Only the Plans may be record holders of the shares of the portfolios.
Within the limitations applicable to a Plan, a participant in such Plan (a
"Participant") may direct the Plan to purchase or redeem shares of the Fund.
Participants in a Plan cannot contact the Fund directly to request the purchase
or redemption of the portfolios' shares. Instead, Participants must contact
their Plan Sponsor or its agent designated for the purpose of processing
purchase and redemption requests. References in this Prospectus to shareholders
are to Plan Sponsors as the record holders of the Fund's shares. The assets of
the Fund are not plan assets of any of the Plans.
FRED ALGER MANAGEMENT, INC.
Subject to the supervision and direction of the Fund's Board of Trustees,
Fred Alger Management, Inc. ("Alger Management") is responsible for the overall
administration of the Fund, manages the portfolios in accordance with the
portfolios' investment objectives and stated investment policies, makes
investment decisions for the Portfolios, places orders to purchase and sell
securities on behalf of the portfolios and employs professional securities
analysts who provide research services exclusively to the Portfolios and other
accounts for which Alger Management or its affiliates serve as investment
adviser. Alger Management is generally engaged in the business of rendering
investment advisory services to mutual funds, institutions and, to a lesser
extent, individuals. Alger Management has been engaged in the business of
rendering investment advisory services since 1964 and as of January 31, 1998,
had approximately $7.8 billion under management--$4.5 billion in mutual fund
accounts and $3.3 billion in other advisory accounts.
INVESTMENT OBJECTIVES
AND POLICIES
The following is a brief description of the investment objectives and
policies of each Portfolio. No assurance can be given that any Portfolio's
objective(s) will be achieved. Certain instruments and techniques discussed in
this summary are described in greater detail in this Prospectus under the
caption "Certain Securities and Investment Techniques" and in the Statement of
Additional Information.
The Statement of Additional Information contains specific investment
restrictions that govern the Portfolios' investments. These restrictions and the
Portfolios' investment objectives are "fundamental" policies, which means that
they may not be changed without a majority vote of shareholders of the affected
Portfolio. Except for the investment objectives and the investment restrictions
specifically identified as fundamental, all investment policies and practices
described in this Prospectus and in the Statement of Additional Information are
not fundamental, so the Fund's Board of Trustees may change them without
shareholder approval. The fundamental restrictions applicable to the Portfolios
include, among others, (i) a prohibition on any Portfolio's purchasing a
1
<PAGE>
security, other than obligations issued or guaranteed by the U. S. Government,
its agencies or instrumentalities ("U. S. Government securities"), if as a
result more than five percent of the assets of the Portfolio would be invested
in the securities of the issuer or the Portfolio would own more than 10 percent
of the outstanding voting securities of the issuer, except that 25 percent of a
Portfolio's total assets may be invested without regard to the five percent
limitation; (ii) a prohibition on any Portfolio's investing more than 25 percent
of its total assets in the securities of issuers in a particular industry with
exceptions for U.S. Government securities; and (iii) a prohibition on any
Portfolio's borrowing money or pledging its assets, except for temporary or
emergency purposes in an amount not exceeding 10 percent of the Portfolio's
total assets, except that the Alger Capital Appreciation Retirement Portfolio
may borrow for investment purposes (see "Certain Securities and Investment
Techniques--Leverage Through Borrowing").
Each Portfolio may invest a portion of its assets in money market
instruments, including, but not limited to, certificates of deposit, time
deposits and bankers' acceptances issued by domestic bank and thrift
institutions, U.S. Government securities, commercial paper and repurchase
agreements.
No Portfolio will invest more than 15 percent of its net assets in
"illiquid" securities, which include restricted securities, securities for which
there is no readily available market and repurchase agreements with maturities
of greater than seven days; however, restricted securities that are determined
by the Board of Trustees to be liquid are not subject to this limitation (see
"Certain Securities and Investment Techniques--Restricted Securities"). In
addition, each Portfolio will limit its investments in warrants and rights to
not more than five percent of its net assets, of which not more than two percent
of its net assets may be invested in warrants not listed on a recognized
domestic stock exchange. Warrants or rights acquired as part of a unit attached
to securities at the time of acquisition are not subject to these limitations,
which may be changed without shareholder approval. Each Portfolio may lend its
securities and enter into "short sales against the box." See "Certain Securities
and Investment Techniques." The Portfolios will only invest in convertible debt
securities rated in one of the three highest rating categories by any nationally
recognized statistical rating organization ("NRSRO"). See the Statement of
Additional Information for a description of these ratings.
ALL PORTFOLIOS
The investment objective of each Portfolio is long-term capital
appreciation. Income is a consideration in the selection of investments but is
not an investment objective of a Portfolio. Each Portfolio seeks to achieve its
objective by investing in equity securities, such as common or preferred stocks
or securities convertible into or exchangeable for equity securities, including
warrants and rights. The capitalization criteria outlined below for each
Portfolio are not mutually exclusive and a given security may be owned by more
than one or all of the Portfolios.
It is anticipated that each Portfolio will invest primarily in companies
whose securities are traded on domestic stock exchanges or in the
over-the-counter market. These companies may still be in the developmental
stage, may be older companies that appear to be entering a new stage of growth
progress owing to factors such as management changes or development of new
technology, products or markets or may be companies providing products or
services with a high unit volume growth rate. The risks involved in investing in
smaller companies are discussed below under "Alger Small Cap Retirement
Portfolio." In order to afford a Portfolio the flexibility to take advantage of
new opportunities for investments in accordance with its
2
<PAGE>
investment objective or to meet redemptions, each Portfolio may hold up to 15
percent of its net assets in money market instruments and repurchase agreements
and in excess of this amount (up to 100% of its assets) during temporary
defensive periods. This amount may be higher than that maintained by other funds
with similar investment objectives. See "Certain Securities and Investment
Techniques."
ALGER SMALL CAP RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger Small Cap Retirement
Portfolio, formerly known as Alger Defined Contribution Small Cap Portfolio,
invests at least 65% of its total assets in equity securities of companies that,
at the time of purchase of the securities, have "total market
capitalization"--present market value per share multiplied by the total number
of shares outstanding--within the range of companies included in the Russell
2000 Growth Index ("Russell Index") or the S&P SmallCap 600 Index ("S&P Index"),
updated quarterly. Both indexes are broad indexes of small capitalization
stocks. As of December 31, 1997, the range of market capitalization of the
companies in the Russell Index was $20 million to $2.97 billion; the range of
market capitalization of the companies in the S&P Index at that date was $21
million to $2.934 billion. The combined range as of that date was $20 million to
$2.97 billion. The Portfolio may invest up to 35% of its total assets in equity
securities of companies that, at the time of purchase, have total market
capitalization outside this combined range and in excess of that amount (up to
100% of its assets) during temporary defensive periods.
Investing in smaller, newer issuers generally involves greater risk than
investing in larger, more established issuers. Companies in which the Portfolio
is likely to invest may have limited product lines, markets or financial
resources and may lack management depth. The securities issued by such companies
may have limited marketability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the
market averages in general. Accordingly, an investment in the Portfolio may not
be appropriate for all investors.
ALGER MIDCAP GROWTH
RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger MidCap Growth
Retirement Portfolio, formerly known as Alger Defined Contribution MidCap Growth
Portfolio, invests at least 65% of its total assets in equity securities of
companies that, at the time of purchase of the securities, have total market
capitalization within the range of companies included in the S&P MidCap 400
Index, updated quarterly. The S&P MidCap 400 Index is designed to track the
performance of medium capitalization companies. As of December 31, 1997, the
range of market capitalization of these companies was $213 million to $13.737
billion. The Portfolio may invest up to 35% of its total assets in equity
securities of companies that, at the time of purchase, have total market
capitalization outside the range of companies included in the S&P MidCap 400
Index and in excess of that amount (up to 100% of its assets) during temporary
defensive periods.
ALGER CAPITAL APPRECIATION
RETIREMENT PORTFOLIO
Except during temporary defensive periods, the Alger Capital Appreciation
Retirement Portfolio, formerly known as Alger Defined Contribution Leveraged
AllCap Portfolio, invests at least 85 percent of its net assets in equity
securities of companies of any size. The Portfolio may purchase put and call
options and sell (write) covered call and put options on securities and
securities indexes to in-
3
<PAGE>
crease gain and to hedge against the risk of unfavorable price movements, and
may enter into futures contracts on securities indexes and purchase and sell
call and put options on these futures contracts. The Portfolio may also borrow
money for the purchase of additional securities. The Portfolio may borrow only
from banks and may not borrow in excess of one-third of the market value of its
assets, less liabilities other than such borrowing. See "Certain Securities and
Investment Techniques."
SELECTING AMONG THE PORTFOLIOS
Set forth below is information that may be of assistance in selecting a
Portfolio suitable for a particular investor's needs. Further assistance in the
investment process is available by calling (800) 992-3362. Available at this
number will be licensed, registered representatives who are knowledgeable about
the Fund and each of the Portfolios. There is no charge for making this call.
Each of the Portfolios, like all other investments, can provide two types
of return: income return and capital return. Income return is the income
received from an investment, such as interest on bonds and money market
instruments and dividends from common and preferred stocks. Capital return is
the change in the market value of an investment, such as an increase in the
price of a common stock or of shares of a Portfolio. Total return is the sum of
income return and capital return. Thus, if a Portfolio over a year produces four
percent in income return and its shares increase in value by three percent, its
total return is seven percent. In general, the more that capital return is
emphasized over income return in an investment program, the more risk is
associated with the program.
Growth funds such as the Portfolios seek primarily capital return. They
invest primarily in common stocks and offer the opportunity of the greatest
return over the long term but can be risky since their prices fluctuate with
changes in stock market prices, as described in the preceding paragraph.
Further, growth funds that invest in smaller companies, such as the Alger Small
Cap Retirement Portfolio, offer potential for significant price gains if the
companies are successful, but there is also the risk that the companies will not
succeed and the price of the companies' shares will drop in value. Growth funds
that invest in larger, more established companies, such as the Alger MidCap
Growth Retirement Portfolio, generally offer relatively less opportunity for
capital return but a greater degree of safety. In addition, funds that leverage
through borrowing, such as the Alger Capital Appreciation Retirement Portfolio,
offer an opportunity for greater capital appreciation, but at the same time
increase exposure to capital risk.
Investors considering equity investing through the Portfolios should
carefully consider the inherent risks. Expectations of future inflation rates
should be considered in making investment decisions and even though over the
long term stocks may present attractive opportunities, the results of an equity
investment managed by a particular management firm may not match those of the
market as a whole.
CERTAIN SECURITIES AND
INVESTMENT TECHNIQUES
REPURCHASE AGREEMENTS
Under the terms of a repurchase agreement, a Portfolio would acquire a high
quality money market instrument for a relatively short period (usually not more
than one week) subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the instrument at an agreed price (including accrued
interest) and time, thereby determining the yield during the Portfolio's holding
period.
4
<PAGE>
SHORT SALES
Each Portfolio may sell securities "short against the box." While a short
sale is the sale of a security the Portfolio does not own, it is "against the
box" if at all times when the short position is open the Portfolio owns an equal
amount of the securities or securities convertible into, or exchangeable without
further consideration for, securities of the same issue as the securities sold
short.
RESTRICTED SECURITIES
Each Portfolio may invest in restricted securities, which are securities
subject to legal or contractual restrictions on their resale. These restrictions
might prevent the sale of the securities at a time when a sale would otherwise
be desirable. In order to sell securities that are not registered under the
federal securities laws it may be necessary for the Portfolio to bear the
expense of registration. No restricted securities will be acquired if the
acquisition would cause the aggregate value of all illiquid securities to exceed
15 percent of the Portfolio's net assets.
The Portfolios may invest in restricted securities governed by Rule 144A
under the Securities Act of 1933. In adopting Rule 144A, the Securities and
Exchange Commission specifically stated that restricted securities traded under
Rule 144A may be treated as liquid for purposes of investment limitations if the
board of trustees (or the fund's adviser acting subject to the board's
supervision) determines that the securities are in fact liquid. The Fund's Board
of Trustees has delegated its responsibility to Alger Management to determine
the liquidity of each restricted security purchased by a Portfolio pursuant to
the Rule, subject to the Board's oversight and review. Examples of factors that
will be taken into account in evaluating the liquidity of a Rule 144A security,
both with respect to the initial purchase and on an ongoing basis, will include,
among others: (1) the frequency of trades and quotes for the security; (2) the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the
security; and (4) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Because institutional trading
in restricted securities is relatively new, it is not possible to predict how
institutional markets will develop. If institutional trading in restricted
securities were to decline to limited levels, the liquidity of the Fund's
Portfolios could be adversely affected.
LENDING OF PORTFOLIO SECURITIES
In order to generate income and to offset expenses, each Portfolio may lend
portfolio securities to brokers, dealers and other financial organizations.
Loans of securities by a Portfolio, if and when made, may not exceed 331/3
percent of the Portfolio's total assets, including all collateral on such loans
less liabilities exclusive of the obligation to return such collateral, and will
be collateralized by cash, letters of credit or U. S. Government securities that
are maintained at all times in an amount equal to at least 100 percent of the
current market value of the loaned securities.
OPTIONS TRANSACTIONS
The Alger Capital Appreciation Retirement Portfolio may purchase or sell
(that is, write) listed options on securities as a means of achieving additional
return or of hedging the value of its portfolio. The Portfolio may write covered
call options on common stocks that it owns or has an immediate right to acquire
through conversion or exchange of other securities in an amount not to exceed
25% of total assets. The Portfolio may only buy or sell options that are listed
on a national securities exchange.
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A call option on a security is a contract that gives the holder of the
option the right, in return for a premium paid, to buy from the writer (seller)
of the call option the security underlying the option at a specified exercise
price at any time during the term of the option. The writer of the call option
has the obligation upon exercise of the option to deliver the underlying
security upon payment of the exercise price during the option period.
A put option on a security is a contract that, in return for the premium,
gives the holder of the option the right to sell to the writer (seller) the
underlying security at a specified price during the term of the option. The
writer of the put, who receives the premium, has the obligation to buy the
underlying security upon exercise, at the exercise price during the option
period.
If the Portfolio has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing an
option of the same series as the option previously written. There can be no
assurance that a closing purchase transaction can be effected when the Portfolio
so desires.
An option may be closed out only on an exchange that provides a secondary
market for an option of the same series. Although the Portfolio will generally
purchase or write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option. The Portfolio will not purchase
options if, as a result, the aggregate cost of all outstanding options exceeds
10% of the Portfolio's total assets, although no more than 5% will be committed
to transactions entered into for non-hedging purposes.
The Portfolio may write put and call options on stock indexes for the
purpose of increasing its gross income and to protect its portfolio against
declines in the value of the securities it owns or increases in the value of
securities to be acquired. In addition, the Portfolio may purchase put and call
options on stock indexes in order to hedge its investments against a decline in
value or to attempt to reduce the risk of missing a market or industry segment
advance. Options on stock indexes are similar to options on specific securities.
However, because options on stock indexes do not involve the delivery of an
underlying security, the option represents the holder's right to obtain, from
the writer, cash in an amount equal to a fixed multiple of the amount by which
the exercise price exceeds (in the case of a put) or is less than (in the case
of a call) the closing value of the underlying stock index on the exercise date.
Therefore, while one purpose of writing such options is to generate additional
income for the Portfolio, the Portfolio recognizes that it may be required to
deliver an amount of cash in excess of the market value of a stock index at such
time as an option written by the Portfolio is exercised by the holder. The
writing and purchase of options is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. The successful use of protective puts for
hedging purposes depends in part on Alger Management's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
STOCK INDEX FUTURES AND OPTIONS ON
STOCK INDEX FUTURES
The Alger Capital Appreciation Retirement Portfolio may purchase and sell
stock index futures contracts and options on stock index futures contracts.
These investments may be made solely for hedging or other permissible risk
management purposes, such as protecting the price of a security the Portfolio
intends to buy, but not for purposes of speculation. Aggregate initial margins
and premiums on such investments may not constitute more than 5% of the
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Portfolio's assets. Hedging and other risk management transactions are
undertaken to reduce or eliminate any of several kinds of price fluctuation
risk. For example, put options on futures might be purchased to protect against
declines in the market values of securities occasioned by a decline in stock
prices and securities index futures might be sold to protect against a general
decline in the value of securities of the type that comprise the index.
A stock index future obligates the seller to deliver (and the purchaser to
take) an amount of cash equal to a specific dollar amount times the difference
between the value of a specific stock index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying stocks in the index is made. With respect to stock
indexes that are permitted investments, the Portfolio intends to purchase and
sell futures contracts on the stock index for which it can obtain the best price
with considerations also given to liquidity. While incidental to its securities
activities, the Portfolio may use index futures as a substitute for a comparable
market position in the underlying securities.
There can be no assurance of the Portfolio's successful use of stock index
futures as a hedging device. Due to the risk of an imperfect correlation between
securities in the Portfolio that are the subject of a hedging transaction and
the futures contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the portfolio
securities may be in excess of gains on the futures contract or losses on the
futures contract may be in excess of gains on the portfolio securities that were
the subject of the hedge. The risk of imperfect correlation increases as the
composition of the Portfolio varies from the composition of the stock index. In
an effort to compensate for the imperfect correlation of movements in the price
of the securities being hedged and movements in the price of the stock index
futures, the Portfolio may buy or sell stock index futures contracts in a
greater or lesser dollar amount than the dollar amount of the securities being
hedged if the historical volatility of the stock index futures has been less or
greater than that of the securities. Such "over hedging" or "under hedging" may
adversely affect the Portfolio's net investment results if market movements are
not as anticipated when the hedge is established.
An option on a stock index futures contract, as contrasted with the direct
investment in such a contract, gives the purchaser the right, in return for the
premium paid, to assume a position in a stock index futures contract at a
specified exercise price at any time prior to the expiration date of the option.
The Portfolio will sell options on stock index futures contracts only as part of
closing purchase transactions to terminate its options positions. No assurance
can be given that such closing transactions can be effected or that there will
be a correlation between price movements in the options on stock index futures
and price movements in the Portfolio's securities which are the subject of the
hedge. In addition, the Portfolio's purchase of such options will be based upon
predictions as to anticipated market trends, which could prove to be inaccurate.
LEVERAGE THROUGH BORROWING
The Alger Capital Appreciation Retirement Portfolio may borrow from banks
for investment purposes. This borrowing is known as leveraging. The Portfolio
may use up to 331/3 percent of its assets for leveraging. The Investment Company
Act of 1940, as amended, requires the Portfolio to maintain continuous asset
coverage (that is, total assets including borrowings less liabilities exclusive
of borrowings) of 300% of the amount borrowed. If such asset coverage should
decline below 300% as a result of market fluctuations or other reasons, the
Portfolio may be required to sell some of its portfolio holdings
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within three days to reduce the debt and restore the 300% asset coverage, even
though it may be disadvantageous from an investment standpoint to sell
securities at that time. Leveraging may exaggerate the effect on net asset value
of any increase or decrease in the market value of the Portfolio's securities.
Money borrowed for leveraging will be subject to interest costs which may or may
not be recovered by appreciation of the securities purchased; in certain cases,
interest costs may exceed the return received on the securities purchased. The
Portfolio also may be required to maintain minimum average balances in
connection with such borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate.
PORTFOLIO TURNOVER
A Portfolio's turnover rate is calculated by dividing the lesser of
purchases or sales of securities for the fiscal year by the monthly average of
the value of the Portfolio's securities, with obligations with less than one
year to maturity excluded. A 100 percent turnover rate would occur, for example,
if all included securities were replaced once during the year.
The Portfolios will not normally engage in the trading of securities for
the purpose of realizing short-term profits, but will adjust their holdings as
considered advisable in view of prevailing or anticipated market conditions, and
turnover will not be a limiting factor should Alger Management deem it advisable
to purchase or sell securities.
In Alger Management's view, companies are organic entities that
continuously undergo changes in response to, among other things, economic,
market, environmental, technological, political and managerial factors.
Generally, securities will be purchased for capital appreciation and not for
short-term trading profits. However, the Portfolios may dispose of securities
without regard to the time they have been held when such action, for defensive
or other purposes, appears advisable. Moreover, it is Alger Management's
philosophy to pursue the Portfolios' investment objective of capital
appreciation by managing these Portfolios actively, which may result in high
portfolio turnover. Increased portfolio turnover will have the effect of
increasing a Portfolio's brokerage and custodial expenses.
MANAGEMENT
BOARD OF TRUSTEES
The affairs of the Fund are managed under the supervision of its Board of
Trustees. The Statement of Additional Information contains general background
information about each Trustee and executive officer of the Fund. By virtue of
the responsibilities assumed by Alger Management, the Fund requires no employees
other than its executive officers. None of the Fund's executive officers devotes
full time to the affairs of the Fund.
INVESTMENT MANAGER
Alger Management serves as the Fund's investment manager. In that capacity,
Alger Management, among other things, analyzes the Portfolios' assets, arranges
for the purchase and sale of the Portfolios' securities and selects
broker-dealers that, in its judgment, provide prompt and reliable execution at
favorable prices and reasonable commission rates. It is anticipated that the
Fund's distributor, Fred Alger & Company, Incorporated ("Alger Inc."), an
affiliate of Alger Management, will serve as the Fund's broker in effecting
substantially all of the Portfolios' transactions on securities
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exchanges and will retain commissions in accordance with certain regulations of
the Securities and Exchange Commission. In addition, Alger Management may select
broker-dealers that provide it with brokerage and research services and may
cause a Portfolio to pay these broker-dealers commissions that exceed those
other broker-dealers may have charged, if it views the commissions as reasonable
in relation to the value of the brokerage and research services received. The
Fund will consider sales of its shares as a factor in the selection of
broker-dealers to execute over-the-counter portfolio transactions, subject to
the requirements of best price and execution.
Alger Management is a wholly owned subsidiary of Alger Inc. which in turn
is a wholly owned subsidiary of Alger Associates, Inc., a financial services
holding company.
Fred M. Alger III and his brother, David D. Alger, are the majority
shareholders of Alger Associates, Inc. and may be deemed to control that company
and its subsidiaries.
As compensation for the investment management services rendered, each
Portfolio pays Alger Management a separate fee computed daily and paid monthly
at annual rates based on a percentage of the value of the relevant Portfolio's
average daily net assets, as follows: Alger Small Cap Retirement Portfolio and
Alger Capital Appreciation Retirement Portfolio--.85 percent; Alger MidCap
Growth Retirement Portfolio--.80 percent.
David D. Alger, Seilai Khoo and Ronald Tartaro are primarily responsible
for the day-to-day management of the Portfolios of the Fund. Mr. Alger has been
employed by Alger Management since 1971, as Executive Vice President and
Director of Research until 1995 and as President since 1995. Ms. Khoo has been
employed by Alger Management since 1989 as a senior research analyst until 1995
and as a Senior Vice President since 1995. Mr. Tartaro has been employed by
Alger Management since 1990 as a senior research analyst until 1995 and as a
Senior Vice President since 1995. Mr. Alger, Ms. Khoo and Mr. Tartaro also serve
as portfolio managers for other mutual funds and investment accounts managed by
Alger Management.
Alger Management personnel ("Access Persons") are permitted to engage in
personal securities transactions subject to the restrictions and procedures of
the Fund's Code of Ethics. Pursuant to the Code of Ethics, Access Persons
generally must preclear all personal securities transactions prior to trading
and are subject to certain prohibitions on personal trading. You can get a copy
of the Fund's Code of Ethics by calling the Fund toll-free at (800) 992-3362.
Alger Shareholder Services, Inc., an affiliate of Alger Management, serves
as transfer agent for the Fund. Certain record-keeping services that would
otherwise be performed by Alger Shareholder Services, Inc. may be performed by
other entities providing similar services to their customers who invest in the
Portfolios. The Fund, Alger Shareholder Services, Inc., Alger Inc. or any of its
affiliates may elect to enter into a contract to pay them for such services.
EXPENSES OF THE FUND
Each Portfolio will bear its own expenses. Operating expenses for each
Portfolio generally consist of all costs not specifically borne by Alger
Management, including investment management fees, fees for necessary
professional and brokerage services, costs of regulatory compliance and costs
associated with maintaining legal existence and shareholder relations. From time
to time, Alger Management in its sole discretion and as it deems appropriate,
may assume certain expenses of one or more of the Portfolios while retaining the
ability to be reimbursed by
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the applicable Portfolio for such amounts prior to the end of the fiscal year.
This will have the effect of lowering the applicable Portfolio's overall expense
ratio and of increasing yield to investors, or the converse, at the time such
amounts are assumed or reimbursed, as the case may be.
Each Portfolio of the Fund may compensate certain entities other than Alger
Inc. and its affiliates for providing record-keeping and/or administrative
services to participating retirement plans. This compensation may be paid at an
annual rate of up to .25% of the net asset value of shares of the Portfolio held
by those plans.
NET ASSET VALUE
The net asset value per share of each Portfolio is calculated on each day
on which the New York Stock Exchange, Inc. (the "NYSE") is open as of the close
of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The NYSE is
currently open on each Monday through Friday, except (i) January 1st, Dr. Martin
Luther King, Jr. Day, Presidents' Day (the third Monday in February), Good
Friday, Memorial Day (the last Monday in May), July 4th, Labor Day (the first
Monday in September), Thanksgiving Day (the fourth Thursday in November) and
December 25th or (ii) the preceding Friday when any one of those holidays falls
on a Saturday, or the subsequent Monday when any one of those holidays falls on
a Sunday. Net asset value per share of a Portfolio is computed by dividing the
value of the Portfolio's net assets by the total number of its shares
outstanding.
The assets of the Portfolios that are traded on a securities exchange or
other recognized market are valued on the basis of market quotations. Assets of
those Portfolios for which quotations are not readily available are valued at
fair value as determined in good faith under procedures approved by the Board of
Trustees. Instruments with remaining maturities of 60 days or less are valued on
the basis of amortized cost, as described in the Statement of Additional
Information.
PURCHASES AND REDEMPTIONS
All direct purchasers of shares of the Portfolios will be Plan Sponsors
which establish or maintain Plans. Participants may invest in shares of the
Portfolios only through their respective Plan Sponsor. Participants cannot
contact the Fund directly to purchase or redeem shares of the Portfolios.
Instead, Participants must contact their Plan Sponsor or its agent for the
purpose of processing purchase requests. There is no minimum amount for initial
or subsequent investments for any Plan Sponsor. Participants should contact
their Plan Sponsor for information concerning the appropriate procedure for
investing in the Fund.
Orders received by the Fund or the Fund's transfer agent are effected on
days on which the NYSE is open for trading. For orders received before the close
of regular trading on the NYSE, purchases and redemptions of the shares of each
Portfolio are effected at the respective net asset values per share determined
as of the close of regular trading on the NYSE on that same day. Orders received
after the close of regular trading on the NYSE are effected at the next
calculated net asset value. See "Net Asset Value." All orders for the purchase
of shares are subject to acceptance or rejection by the Fund. Payment for
redemptions will be made by the Fund's transfer agent on behalf of the Fund and
the relevant Portfolios within seven days after the request is received. The
Fund does not assess any fees, either when it sells or when it redeems its
shares.
Investors may exchange stock of companies acceptable to Alger Management
for shares of the Portfolios of the Fund with a minimum of 100 shares of each
company generally being required. The Fund believes such exchange provides a
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means by which holders of certain securities may invest in the Portfolios of the
Fund without the expense of selling the securities in the public market. The
investor should furnish either in writing or by telephone to Alger Management a
list with a full and exact description of all securities proposed for exchange.
Alger Management will then notify the investor as to whether the securities are
acceptable and, if so, will send a Letter of Transmittal to be completed and
signed by the investor. Alger Management has the right to reject all or any part
of the securities offered for exchange. The securities must then be sent in
proper form for transfer with the Letter of Transmittal to the Custodian of the
Fund's assets. The investor must certify that there are no legal or contractual
restrictions on the free transfer and sale of the securities. Upon receipt by
the Custodian, the securities will be valued as of the close of business on the
day of receipt in the same manner as the Portfolio's securities are valued each
day. Shares of the Portfolio having an equal net asset value as of the close of
the same day will be registered in the investor's name. There is no sales charge
on the issuance of shares of the Portfolio, no charge for making the exchange
and no brokerage commission on the securities accepted, although applicable
stock transfer taxes, if any, may be deducted. The exchange of securities by the
investor pursuant to this offer may constitute a taxable transaction and may
result in a gain or loss for federal income tax purposes. The tax treatment
experienced by investors may vary depending upon individual circumstances. Each
investor should consult a tax adviser to determine Federal, state and local tax
consequences.
Under unusual circumstances, shares of a Portfolio may be redeemed "in
kind," which means that the redemption proceeds will be paid with securities
which are held by the Portfolio. Please refer to the Statement of Additional
Information for more details.
DIVIDENDS AND DISTRIBUTIONS
Each Portfolio will be treated separately in determining the amounts of
dividends of net investment income and distributions of capital gains payable to
holders of its shares. Dividends and distributions will be automatically
reinvested on the payment date for each shareholder's account in additional
shares of the Portfolio that paid the dividend or distribution at net asset
value. Dividends will be declared and paid annually. Distributions of any net
realized capital gains earned by a Portfolio usually will be made annually after
the close of the fiscal year in which the gains are earned.
TAXES
Each Portfolio will be treated as a separate taxpayer with the result that,
for federal income tax purposes, the amounts of net investment income and
capital gains earned will be determined on a Portfolio-by-Portfolio (rather than
on a Fund-wide) basis.
The Fund intends that each Portfolio will qualify separately as a
"regulated investment company" within the meaning of the Internal Revenue Code
of 1986, as amended (the "Code") for each taxable year of each Portfolio. If so
qualified, and providing certain distribution requirements are met, a Portfolio
will not be subject to federal income tax on its net investment income and net
capital gains that it distributes to its shareholders.
With respect to participants in the Plans, dividends from net investment
income and net realized capital gains ordinarily will not be subject to taxation
until such dividends are distributed to such participants from their Plan
accounts. Generally, distributions from a Plan will be taxable as ordinary
income at the rate applicable to the participant at the time of distribution. In
certain cases, distributions made to a participant from a Plan prior to the date
on which the participant reaches age 591/2 are subject to a penalty tax
equivalent to 10% of
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the amount so distributed, in addition to the ordinary income tax payable on
such amount for the year in which it is distributed.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
the Treasury regulations promulgated thereunder. Participants should consult
their Plan Sponsors or tax advisers regarding the tax consequences of
participation in the Plan or of any Plan contributions or withdrawals.
ORGANIZATION
The Fund was organized on July 14, 1993 under the laws of the Commonwealth
of Massachusetts and is a business entity commonly known as a "Massachusetts
business trust." The Fund offers shares of beneficial interest of separate
series, par value $.001 per share. An unlimited number of shares of four series,
representing the shares of the Fund's portfolios, have been authorized. No
series of shares has any preference over any other series.
When matters are submitted for shareholder vote, shareholders of each
Portfolio will have one vote for each full share held and proportionate,
fractional votes for fractional shares held. A separate vote of a Portfolio is
required on any matter affecting the Portfolio on which shareholders are
entitled to vote, such as approval of a Portfolio's agreement with Alger
Management. Shareholders of one Portfolio are not entitled to vote on a matter
that does not affect that Portfolio but that does require a separate vote of the
other Portfolios. There normally will be no annual meetings of shareholders for
the purpose of electing Trustees unless and until such time as less than a
majority of Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Any Trustee may be removed from office on the vote of
shareholders holding at least two-thirds of the Fund's outstanding shares at a
meeting called for that purpose. The Trustees are required to call such a
meeting on the written request of shareholders holding at least 10 percent of
the Fund's outstanding shares.
CONTROL SHAREHOLDERS
At February 2, 1998, Wells Fargo Bank, Trustee for Mentor Graphics, owned
beneficially or of record 57.38% of the Alger Small Cap Retirement Portfolio.
The Fred Alger & Company, Incorporated et al Pension Plan and the Fred Alger
Company, Incorporated et al Profit Sharing Plan (the "Plans") owned beneficially
or of record 35.00% and 41.64%, respectively, of the Alger MidCap Growth
Retirement Portfolio; and 38.27% and 38.75%, respectively, of the Alger Capital
Appreciation Retirement Portfolio at February 2, 1998. These shareholders may be
deemed to control the specified portfolios.
PERFORMANCE
Each Portfolio may include quotations of "total return" and/or "yield" in
advertisements or reports to shareholders or prospective investors. BOTH "TOTAL
RETURN" AND/OR "YIELD" FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. Total return figures show the aggregate
or average percentage change in value of an investment in a Portfolio from the
beginning date of the measuring period to the end of the measuring period. These
figures reflect changes in the price of the Portfolio's shares and assume that
any income dividends and/or capital gains distributions made by the Portfolio
during the period were reinvested in shares of the Portfolio. Figures will be
given for recent 1, 5 and 10 year periods, and may be given for other periods as
well (such as from commencement of the Portfolio's operations, or on a
year-by-year basis). When considering "average" total return figures for periods
longer than one year, it is important to note that the Portfolio's annual total
return for
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any one year in the period might have been greater or less than the average for
the entire period. The Portfolio may also use "aggregate" total return figures
for various periods, representing the cumulative change in value of an
investment in the Portfolio for the specific period (again reflecting changes in
Portfolio share prices and assuming reinvestment of dividends and distributions)
as well as "actual annual" and "annualized" total return figures. Total returns
may be shown by means of schedules, charts or graphs, and may indicate subtotals
of the various components of total return (i. e., change in value of initial
investment, income dividends and capital gains distributions). The "yield" of
the Portfolio refers to "net investment income" generated by the Portfolio over
a specified thirty-day period. This income is then "annualized." That is, the
amount of "net investment income" generated by the Portfolio during that
thirty-day period is assumed to be generated over a 12-month period and is shown
as a percentage of the investment. "Total return" and "yield" for a Portfolio
will vary based on changes in market conditions. In addition, since the
deduction of a Portfolio's expenses is reflected in the total return and yield
figures, "total return" and "yield" will also vary based on the level of the
Portfolio's expenses.
From time to time, advertisements or reports to shareholders may compare
the yield or performance of a Portfolio to that of other mutual funds with a
similar investment objective. The performance of a Portfolio might be compared
with rankings prepared by Lipper Analytical Services, Inc., which is a widely
recognized, independent service that monitors the performance of mutual funds,
as well as to various unmanaged indices, such as the S&P 500. In addition,
evaluations of the Portfolios published by nationally recognized ranking
services and by financial publications that are nationally recognized, such as
BARRON'S, BUSINESS WEEK, FORBES, INSTITUTIONAL INVESTOR, INVESTOR'S BUSINESS
DAILY, KIPLINGER'S PERSONAL FINANCE, MONEY, MORNINGSTAR, THE NEW YORK TIMES, USA
TODAY AND THE WALL STREET JOURNAL may be included in advertisements or
communications to shareholders. Any given performance comparison should not be
considered as representative of such Portfolio's performance for any future
period.
INVESTOR AND SHAREHOLDER INFORMATION
Investors and shareholders may contact the Fund toll-free at (800) 992-3362
for further information regarding the Fund and the Portfolios, as well as for
assistance in selecting a Portfolio and obtaining a Statement of Additional
Information. The Fund's Annual Report contains additional performance
information and is available on request and without charge by contacting the
Fund at the toll-free number listed above.
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================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE STATEMENT
OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING OF THE FUND'S SHARES,
AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED ON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
INVESTMENT MANAGER:
Fred Alger Management, Inc.
75 Maiden Lane
New York, New York 10038
DISTRIBUTOR:
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
TRANSFER AGENT:
Alger Shareholder Services, Inc.
30 Montgomery Street
Box 2001
Jersey City, New Jersey 07302
INDEPENDENT PUBLIC ACCOUNTANTS:
Arthur Andersen LLP
1345 Avenue of the Americas
New York, New York 10105
COUNSEL:
Hollyer Brady Smith Troxell Barrett Rockett
Hines & Mone LLP
551 Fifth Avenue
New York, NY 10176
ALGER SMALL CAP
RETIREMENT PORTFOLIO
ALGER MIDCAP GROWTH
RETIREMENT PORTFOLIO
ALGER CAPITAL APPRECIATION
RETIREMENT PORTFOLIO
PROSPECTUS
FEBRUARY 25, 1998
================================================================================
<PAGE>
PROSPECTUS
- ----------
THE ALGER|75 Maiden Lane
RETIREMENT|New York, New York 10038
FUND|(800) 992-3362
ALGER GROWTH RETIREMENT PORTFOLIO
================================================================================
The Alger Retirement Fund (the "Fund"), formerly known as The Alger Defined
Contribution Trust, is a registered investment company--a mutual fund--that
presently offers interests in four portfolios. This Prospectus sets forth
information about the Alger Growth Retirement Portfolio (the "Portfolio"). The
Portfolio seeks long-term capital appreciation by investing in a diversified,
actively managed portfolio of equity securities, primarily of companies with
total market capitalization of $1 billion or greater.
Shares of the Portfolio are available for investment without a sales charge
to defined contribution retirement plans (the "Plans") which elect to make the
Fund an investment option for participants in such Plans.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
This Prospectus, which should be retained for future reference, is designed
to provide you with certain essential information that you should know before
investing. A "Statement of Additional Information" dated February 25, 1998
containing further information about all portfolios of the Fund, including the
Portfolio, has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus. A copy of the Statement of
Additional Information may be obtained, without charge, by contacting the Fund
at the address or phone number above.
FRED ALGER| FRED ALGER|
MANAGEMENT,|INVESTMENT MANAGER & COMPANY,|DISTRIBUTOR
INC.| INCORPORATED|
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
February 25, 1998
<PAGE>
- --------------------------------------------------------------------------------
CONTENTS
Page
----
The Portfolio's Expenses......................... iii
Financial Highlights ............................ iv
Alger Growth Retirement Portfolio ............... 1
Fred Alger Management, Inc. ..................... 1
Investment Objective and Policies ............... 1
Certain Securities and Investment
Techniques .................................. 3
Management ...................................... 5
Net Asset Value ................................. 7
Purchases and Redemptions ....................... 7
Dividends and Distributions ..................... 8
Taxes ........................................... 8
Organization .................................... 9
Performance ..................................... 9
Investor and Shareholder Information ............ 10
- --------------------------------------------------------------------------------
ii
<PAGE>
- --------------------------------------------------------------------------------
THE PORTFOLIO'S EXPENSES
The Table below is designed to assist you in understanding the various costs
and expenses that you will bear as a shareholder. The Table does not reflect any
charges or deductions which are, or may be, imposed by the Plans.
The Example below asssumes that all dividends and distributions are
reinvested and that the annual percentage amounts listed under Annual Portfolio
Operating Expenses remain the same in each of the periods shown. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES; ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases ........................... None
Maximum Sales Load Imposed on Reinvested Dividends ................ None
Deferred Sales Load ............................................... None
Redemption Fees ................................................... None
Exchange Fees ..................................................... None
ANNUAL PORTFOLIO OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)*
Management Fees ................................................... .75%
Other Expenses .................................................... .38
Total Portfolio Expenses .......................................... 1.13%
====
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
One Year .......................................................... $ 12
Three Years ....................................................... 36
Five Years ........................................................ 62
Ten Years ......................................................... 137
* Based on expenses incurred during the Portfolio's last fiscal year,
restated to reflect the estimated future effect of compensating providers
of record-keeping and/or administrative services to participating
retirement plans. See "Management--Expenses."
- --------------------------------------------------------------------------------
iii
<PAGE>
FINANCIAL HIGHLIGHTS
The Financial Highlights have been audited by Arthur Andersen LLP, the
Fund's independent public accountants, as indicated in their report dated
December 12, 1997 on the Fund's financial statements as of October 31, 1997,
which are included in the Fund's Statement of Additional Information. The
Financial Highlights should be read in conjunction with the Fund's financial
statements and related notes. The Statement of Additional Information may be
obtained from the Fund without charge.
<TABLE>
<CAPTION>
THE ALGER RETIREMENT FUND
GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- -----------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994(i)
---- ---- ---- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 9.32 $ 11.65 $ 10.38 $ 10.00
--------- --------- ---------- ---------
Net investment loss .................................. (0.02)(ii) (0.01) (0.01) (0.03)
Net realized and unrealized gain on investments ...... 2.65 0.91 3.59 0.41
--------- --------- ---------- ---------
Total from investment operations ................... 2.63 0.90 3.58 0.38
Distributions from net realized gains ................ (1.17) (3.23) (2.31) --
--------- --------- ---------- ---------
Net asset value, end of period ....................... $ 10.78 $ 9.32 $ 11.65 $ 10.38
========= ========= ========== =========
Total Return ........................................ 28.8% 8.2% 37.1% 3.8%
Ratios and Supplemental Data:
Net assets, end of period (000's omitted) .......... $ 22,922 $ 11,325 $ 13,042 $ 9,365
--------- --------- ---------- ---------
Ratio of expenses to average net assets ............ 1.13% 1.07% 1.11% 1.26%
========= ========= ========== =========
Ratio of net investment loss
to average net assets ........................... (0.22%) (0.09%) (0.18%) (0.29%)
========= ========= ========== =========
Portfolio Turnover Rate ............................. 159.38% 142.83% 133.42% 103.79%
========= ========= ========== =========
Average Commission Rate Paid ........................ $ .0718 $ .0716
========= =========
(i) For the period November 8, 1993 (commencement of operations) through October
31, 1994. Ratios have been annualized; total return has not been annualized.
(ii) Amount was computed based on average shares outstanding during the year.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
iv
<PAGE>
ALGER GROWTH
RETIREMENT PORTFOLIO
The Fund is a diversified, open-end management investment company that
offers a selection of four portfolios, each with the investment objective of
long-term capital appreciation. The offering price of the shares of the
Portfolio is net asset value per share. Shares of the Portfolio are only
available for investment through defined contribution retirement plans (the
"Plans") which elect to make the Portfolio an investment option for participants
in such Plans. Individuals, including participants in such Plans, cannot
directly invest in the Portfolio but may do so only through a participating
Plan. The Fund reserves the right to make shares of the Portfolio available to
other investors, as may be approved by the Trustees from time to time. The
Fund's Board of Trustees may establish additional portfolios at any time.
Only the Plans may be record holders of the shares of the Portfolio. Within
the limitations applicable to a Plan, a participant in such Plan (a
"Participant") may direct the Plan to purchase or redeem shares of the
Portfolio. Participants in a Plan cannot contact the Fund directly to request
the purchase or redemption of the Portfolio's shares. Instead, Participants must
contact their Plan Sponsor or its agent designated for the purpose of processing
purchase and redemption requests. References in this Prospectus to shareholders
are to Plan Sponsors as the record holders of the Portfolio's shares. The assets
of the Portfolio are not plan assets of any of the Plans.
FRED ALGER MANAGEMENT, INC.
Subject to the supervision and direction of the Fund's Board of Trustees,
Fred Alger Management, Inc. ("Alger Management") is responsible for the overall
administration of the Fund, manages the Portfolio in accordance with the
Portfolio's investment objectives and stated investment policies, makes
investment decisions for the Portfolio, places orders to purchase and sell
securities on behalf of the Portfolio and employs professional securities
analysts who provide research services exclusively to the Portfolio and other
accounts for which Alger Management or its affiliates serve as investment
adviser. Alger Management is generally engaged in the business of rendering
investment advisory services to mutual funds, institutions and to a lesser
extent, individuals. Alger Management has been engaged in the business of
rendering investment advisory services since 1964 and as of January 31, 1998,
had approximately $7.8 billion under management--$4.5 billion in mutual fund
accounts and $3.3 billion in other advisory accounts.
INVESTMENT OBJECTIVE
AND POLICIES
The following is a brief description of the investment objective and
policies of the Portfolio. No assurance can be given that the Portfolio's
objective will be achieved. Certain instruments and techniques discussed in this
summary are described in greater detail in this Prospectus under the caption
"Certain Securities and Investment Techniques" and in the Statement of
Additional Information.
The Statement of Additional Information contains specific investment
restrictions that govern the Portfolio's investments. These restrictions and the
Portfolio's investment objective are "fundamental" policies, which means that
they may not be changed without a majority vote of shareholders of the
Portfolio. Except for the investment objective
1
<PAGE>
and the investment restrictions specifically identified as fundamental, all
investment policies and practices described in this Prospectus and in the
Statement of Additional Information are not fundamental, so the Fund's Board of
Trustees may change them without shareholder approval. The fundamental
restrictions applicable to the Portfolio include, among others, (i) a
prohibition on the Portfolio's purchasing a security, other than obligations
issued or guaranteed by the U. S. Government, its agencies or instrumentalities
("U. S. Government securities"), if as a result more than five percent of the
assets of the Portfolio would be invested in the securities of the issuer or the
Portfolio would own more than 10 percent of the outstanding voting securities of
the issuer, except that 25 percent of the Portfolio's total assets may be
invested without regard to the five percent limitation; (ii) a prohibition on
the Portfolio's investing more than 25 percent of its total assets in the
securities of issuers in a particular industry with exceptions for U.S.
Government securities; and (iii) a prohibition on the Portfolio's borrowing
money or pledging its assets, except for temporary or emergency purposes in an
amount not exceeding 10 percent of the Portfolio's total assets.
Except during temporary defensive periods, the Portfolio, formerly known as
Alger Defined Contribution Growth Portfolio, invests at least 65 percent of its
total assets in equity securities of companies that, at the time of purchase of
the securities, have total market capitalization of $1 billion or greater.
The Portfolio may invest up to 35 percent of its total assets in equity
securities of companies that, at the time of purchase, have total market
capitalization of less than $1 billion.
The Portfolio will not invest more than 15 percent of its net assets in
"illiquid" securities, which include restricted securities, securities for which
there is no readily available market and repurchase agreements with maturities
of greater than seven days; however, restricted securities that are determined
by the Board of Trustees to be liquid are not subject to this limitation (see
"Certain Securities and Investment Techniques--Restricted Securities"). In
addition, the Portfolio will limit its investments in warrants and rights to not
more than five percent of its net assets, of which not more than two percent of
its net assets may be invested in warrants not listed on a recognized domestic
stock exchange. Warrants or rights acquired as part of a unit attached to
securities at the time of acquisition are not subject to these limitations,
which may be changed without shareholder approval. The Portfolio may lend its
securities and enter into "short sales against the box." See "Certain Securities
and Investment Techniques." The Portfolio will only invest in convertible debt
securities rated in one of the three highest rating categories by any nationally
recognized statistical rating organization ("NRSRO"). See the Statement of
Additional Information for a description of these ratings.
The investment objective of the Portfolio is long-term capital
appreciation. Income is a consideration in the selection of investments but is
not an investment objective of the Portfolio. The Portfolio seeks to achieve its
objective by investing in equity securities, such as common or preferred stocks
or securities convertible into or exchangeable for equity securities, including
warrants and rights.
It is anticipated that the Portfolio will invest primarily in companies
whose securities are traded on domestic stock exchanges or in the
over-the-counter market.
2
<PAGE>
These companies may still be in the developmental stage, may be older companies
that appear to be entering a new stage of growth progress owing to factors such
as management changes or development of new technology, products or markets or
may be companies providing products or services with a high unit volume growth
rate. In order to afford the Portfolio the flexibility to take advantage of new
opportunities for investments in accordance with its investment objective, the
Portfolio may hold up to 15 percent of its net assets in money market
instruments and repurchase agreements and in excess of that amount (up to 100%
of its assets) during temporary defensive periods. This amount may be higher
than that maintained by other funds with similar investment objectives. See
"Certain Securities and Investment Techniques."
Investors considering equity investing through the Portfolio should
carefully consider the inherent risks. Expectations of future inflation rates
should be considered in making investment decisions and even though over the
long term stocks may present attractive opportunities, the results of an equity
investment managed by a particular management firm may not match the market as a
whole.
CERTAIN SECURITIES AND
INVESTMENT TECHNIQUES
The Portfolio may use the investment strategies and invest in the types of
securities described below, which may involve certain risks. The Statement of
Additional Information contains more detailed information about these practices
and information about other investment practices of the Portfolio.
REPURCHASE AGREEMENTS
Under the terms of a repurchase agreement, the Portfolio would acquire a
high quality money market instrument for a relatively short period (usually not
more than one week) subject to an obligation of the seller to repurchase, and
the Portfolio to resell, the instrument at an agreed price (including accrued
interest) and time, thereby determining the yield during the Portfolio's holding
period.
SHORT SALES
The Portfolio may sell securities "short against the box." While a short
sale is the sale of a security the Portfolio does not own, it is "against the
box" if at all times when the short position is open the Portfolio owns an equal
amount of the securities or securities convertible into, or exchangeable without
further consideration for, securities of the same issue as the securities sold
short.
RESTRICTED SECURITIES
The Portfolio may invest in restricted securities, which are securities
subject to legal or contractual restrictions on their resale. These restrictions
might prevent the sale of the securities at a time when a sale would otherwise
be desirable. In order to sell securities that are not registered under the
federal securities laws it may be necessary for the Portfolio to bear the
expense of registration. No restricted securities will be acquired if the
acquisition would cause the aggregate value of all illiquid securities to exceed
15 percent of the Portfolio's net assets.
The Portfolio may invest in restricted securities issued under Rule 144A of
the Securities Act of
3
<PAGE>
1933. In adopting Rule 144A, the Securities and Exchange Commission specifically
stated that restricted securities traded under Rule 144A may be treated as
liquid for purposes of investment limitations if the board of trustees (or the
fund's adviser acting subject to the board's supervision) determines that the
securities are in fact liquid. Examples of factors that the Fund's Board of
Trustees will take into account in evaluating the liquidity of a Rule 144A
security, both with respect to the initial purchase and on an ongoing basis,
will include, among others: (1) the frequency of trades and quotes for the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential purchasers; (3) dealer undertakings to make a
market in the security; and (4) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer). In accordance with Rule
144A, the Board has delegated its responsibility to Alger Management to
determine the liquidity of each restricted security purchased by the Portfolio
pursuant to the Rule, subject to the Board's oversight and review. Because
institutional trading in restricted securities is relatively new, it is not
possible to predict how institutional markets will develop. If institutional
trading in restricted securities were to decline to limited levels, the
liquidity of the Portfolio could be adversely affected.
LENDING OF PORTFOLIO SECURITIES
In order to generate income and to offset expenses, the Portfolio may lend
portfolio securities to brokers, dealers and other financial organizations.
Loans of securities by the Portfolio, if and when made, may not exceed 331/3
percent of the Portfolio's total assets, including all collateral on such loans
less liabilities exclusive of the obligation to return such collateral, and will
be collateralized by cash, letters of credit or U. S. Government securities that
are maintained at all times in an amount equal to at least 100 percent of the
current market value of the loaned securities.
OTHER INVESTMENTS
The Portfolio may invest a portion of its assets in money market
instruments, including, but not limited to, certificates of deposit, time
deposits and bankers' acceptances issued by domestic bank and thrift
institutions, U.S. Government securities, commercial paper and repurchase
agreements.
PORTFOLIO TURNOVER
A Portfolio's turnover rate is calculated by dividing the lesser of
purchases or sales of securities for the fiscal year by the monthly average of
the value of the Portfolio's securities, with obligations with less than one
year to maturity excluded. A 100 percent turnover rate would occur, for example,
if all included securities were replaced once during the year.
The Portfolio will not normally engage in the trading of securities for the
purpose of realizing short-term profits, but will adjust their holdings as
considered advisable in view of prevailing or anticipated market conditions, and
turnover will not be a limiting factor should Alger Management deem it advisable
to purchase or sell securities.
In Alger Management's view, companies are organic entities that
continuously undergo changes in response to, among other things, economic,
market, environmental, technological, political and managerial factors.
Generally, securities will be purchased for capital appreciation and not for
short-term trading profits. However, the Portfolio may
4
<PAGE>
dispose of securities without regard to the time they have been held when such
action, for defensive or other purposes, appears advisable. Moreover, it is
Alger Management's philosophy to pursue the Portfolio's investment objective of
capital appreciation by managing this Portfolio actively, which may result in
high portfolio turnover. Increased portfolio turnover will have the effect of
increasing the Portfolio's brokerage and custodial expenses.
MANAGEMENT
BOARD OF TRUSTEES
The affairs of the Fund are managed under the supervision of its Board of
Trustees. The Statement of Additional Information contains general background
information about each Trustee and executive officer of the Fund. By virtue of
the responsibilities assumed by Alger Management, the Fund requires no employees
other than its executive officers. None of the Fund's executive officers devotes
full time to the affairs of the Fund.
INVESTMENT MANAGER
Alger Management serves as the Fund's investment manager. In that capacity,
Alger Management, among other things, analyzes the Portfolio's assets, arranges
for the purchase and sale of the Portfolio's securities and selects
broker-dealers that, in its judgment, provide prompt and reliable execution at
favorable prices and reasonable commission rates. It is anticipated that the
Fund's distributor, Fred Alger & Company, Incorporated ("Alger Inc."), an
affiliate of Alger Management, will serve as the Fund's broker in effecting
substantially all of the Portfolio's transactions on securities exchanges and
will retain commissions in accordance with certain regulations of the Securities
and Exchange Commission. In addition, Alger Management may select broker-dealers
that provide it with brokerage and research services and may cause the Portfolio
to pay these broker-dealers commissions that exceed those other broker-dealers
may have charged, if it views the commissions as reasonable in relation to the
value of the brokerage and research services received. The Fund will consider
sales of its shares as a factor in the selection of broker-dealers to execute
over-the-counter portfolio transactions, subject to the requirements of best
price and execution.
Alger Management is a wholly owned subsidiary of Alger Inc. which in turn
is a wholly owned subsidiary of Alger Associates, Inc., a financial services
holding company.
Fred M. Alger III and his brother, David D. Alger are the majority
shareholders of Alger Associates, Inc. and may be deemed to control that company
and its subsidiaries.
Alger Management has been engaged in the business of rendering investment
advisory services since 1964 and as of January 31, 1998, had approximately $7.8
billion under management--$4.5 billion in mutual fund accounts and $3.3 billion
in other advisory accounts.
PORTFOLIO MANAGERS
David D. Alger, Seilai Khoo and Ronald Tartaro are primarily responsible
for the day-to-day management of the portfolios of the Fund. Mr. Alger has been
employed by Alger Management since 1971, as Executive Vice President and
Director of Research until 1995 and as President since 1995. Ms. Khoo has been
employed by Alger Management since 1989, as a senior research analyst until 1995
and as a Senior Vice President since 1995. Mr. Tartaro
5
<PAGE>
has been employed by Alger Management since 1990, as a senior research analyst
until 1995 and as a Senior Vice President since 1995. Mr. Alger, Ms. Khoo and
Mr. Tartaro also serve as portfolio managers for other mutual funds and
investment accounts managed by Alger Management.
Alger Management personnel ("Access Persons") are permitted to engage in
personal securities transactions subject to the restrictions and procedures of
the Fund's Code of Ethics. Pursuant to the Code of Ethics, Access Persons
generally must preclear all personal securities transactions prior to trading
and are subject to certain prohibitions on personal trading. You can get a copy
of the Fund's Code of Ethics by calling the Fund toll-free at (800) 992-3362.
FEES
The Portfolio pays Alger Management a management fee computed daily and
paid monthly at an annual rate of 0.75% of the Portfolio's average daily net
assets.
EXPENSES
Operating expenses for the Portfolio generally consist of all costs not
specifically borne by Alger Management, including investment management fees,
fees for necessary professional and brokerage services, costs of regulatory
compliance and costs associated with maintaining legal existence and shareholder
relations. From time to time, Alger Management in its sole
discretion and as it deems appropriate, may assume certain expenses of the
Portfolio while retaining the ability to be reimbursed by the Portfolio for such
amounts prior to the end of the fiscal year. This will have the effect of
lowering the Portfolio's overall expense ratio and of increasing yield to
investors, or the converse, at the time such amounts are assumed or reimbursed,
as the case may be.
The Portfolio may compensate certain entities other than Alger Inc. and its
affiliates for providing record-keeping and/or administrative services to
participating retirement plans. This compensation may be paid at an annual rate
of up to .25% of the net asset value of shares of the Portfolio held by those
plans.
DISTRIBUTOR
Alger Inc. serves as the Fund's distributor and also distributes the shares
of other mutual funds managed by Alger Management.
TRANSFER AGENT
Alger Shareholder Services, Inc., an affiliate of Alger Management, serves
as transfer agent for the Fund. Certain record-keeping services that would
otherwise be performed by Alger Shareholder Services, Inc. may be performed by
other entities providing similar services to their customers who invest in the
Portfolio. The Fund, Alger Shareholder Services, Inc., Alger Inc. or any of its
affiliates may elect to enter into a contract to pay them for such services.
6
<PAGE>
NET ASSET VALUE
The net asset value per share of the Portfolio is calculated on each day on
which the New York Stock Exchange, Inc. (the "NYSE") is open as of the close of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). The NYSE is
currently open on each Monday through Friday, except (i) January 1st, Dr. Martin
Luther King, Jr. Day, Washington's Birthday (the third Monday in February), Good
Friday, Memorial Day (the last Monday in May), July 4th, Labor Day (the first
Monday in September), Thanksgiving Day (the fourth Thursday in November) and
December 25th or (ii) the preceding Friday when any one of those holidays falls
on a Saturday, or the subsequent Monday when any one of those holidays falls on
a Sunday. Net asset value per share of the Portfolio is computed by dividing the
value of the Portfolio's net assets by the total number of its shares
outstanding.
The assets of the Portfolio that are traded on a securities exchange or
other recognized market are valued on the basis of market quotations. Those
assets for which quotations are not readily available are valued at fair value
as determined in good faith under procedures approved by the Board of Trustees.
Instruments with remaining maturities of 60 days or less are valued on the basis
of amortized cost, as described in the Statement of Additional Information.
PURCHASES AND REDEMPTIONS
All direct purchasers of shares of the Portfolio will be Plan Sponsors
which establish or maintain Plans. Participants may invest in shares of the
Portfolio only through their respective Plan Sponsor. Participants cannot
contact the Fund directly to purchase shares of the Portfolio. Instead,
Participants must contact their Plan Sponsor or its agent for the purpose of
processing purchase requests. There is no minimum amount for initial or
subsequent investments for any Plan Sponsor. Participants should contact their
Plan Sponsor for information concerning the appropriate procedure for investing
in the Portfolio.
Orders for shares of the Portfolio received by the Fund or the Fund's
transfer agent are effected on days on which the NYSE is open for trading. For
orders received before the close of regular trading on the NYSE, purchases and
redemptions of the shares of the Portfolio are effected at the net asset value
per share determined as of the close of regular trading on the NYSE on that same
day. Orders received after the close of regular trading on the NYSE are effected
at the next calculated net asset value. See "Net Asset Value." All orders for
the purchase of shares are subject to acceptance or rejection by the Fund.
Payment for redemptions will be made by the Fund's transfer agent on behalf of
the Fund and the Portfolio within seven days after the request is received.
Neither the Fund nor the Portfolio assesses any fees, either when it sells or
when it redeems its shares.
Investors may exchange stock of companies acceptable to Alger Management
for shares of the Portfolio with a minimum of 100 shares of each company
generally being required. The Fund believes such exchange provides a means by
which holders of certain securities may invest in the Portfolio without the
expense of selling the securities in the public market. The investor should
furnish either in writing or by telephone to Alger Management a list with a full
and exact description of all securities proposed for exchange. Alger Management
will then notify the investor as to whether the securities are acceptable and,
if so, will send a Let-
7
<PAGE>
ter of Transmittal to be completed and signed by the investor. Alger Management
has the right to reject all or any part of the securities offered for exchange.
The securities must then be sent in proper form for transfer with the Letter of
Transmittal to the Custodian of the Portfolio's assets. The investor must
certify that there are no legal or contractual restrictions on the free transfer
and sale of the securities. Upon receipt by the Custodian, the securities will
be valued as of the close of business on the day of receipt in the same manner
as the Portfolio's securities are valued each day. Shares of the Portfolio
having an equal net asset value as of the close of the same day will be
registered in the investor's name. There is no sales charge on the issuance of
shares of the Portfolio, no charge for making the exchange and no brokerage
commission on the securities accepted, although applicable stock transfer taxes,
if any, may be deducted. The exchange of securities by the investor pursuant to
this offer may constitute a taxable transaction and may result in a gain or loss
for federal income tax purposes. The tax treatment experienced by investors may
vary depending upon individual circumstances. Each investor should consult a tax
adviser to determine federal, state and local tax consequences.
Under unusual circumstances, shares of a Portfolio may be redeemed "in
kind," which means that the redemption proceeds will be paid with securities
which are held by the Portfolio. Please refer to the Statement of Additional
Information for more details.
DIVIDENDS AND DISTRIBUTIONS
Each Portfolio of the Fund will be treated separately in determining the
amounts of dividends of investment income and distributions of capital gains
payable to holders of its shares. Dividends and distributions will be
automatically reinvested on the payment date for each shareholder's account in
additional shares of the Portfolio at net asset value. Dividends will be
declared and paid annually. Distributions of any net realized capital gains
earned by the Portfolio usually will be made annually after the close of the
fiscal year in which the gains are earned.
TAXES
The Fund intends that the Portfolio will qualify separately as a "regulated
investment company" within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code") for each taxable year of each Portfolio. If so qualified,
and providing certain distribution requirements are met, the Portfolio will not
be subject to federal income tax on its net investment income and net capital
gains that it distributes to its shareholders.
With respect to participants in the Plans, dividends from net investment
income and net realized capital gains ordinarily will not be subject to taxation
until such dividends are distributed to such participants from their Plan
accounts. Generally, distributions from a Plan will be taxable as ordinary
income at the rate applicable to the participant at the time of distribution. In
certain cases, distributions made to a participant from a Plan prior to the date
on which the participant reaches age 591/2 are subject to a penalty tax
equivalent to 10% of the amount so distributed, in addition to the ordinary
income tax payable on such amount for the year in which it is distributed.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to
8
<PAGE>
the pertinent Code sections and the Treasury regulations promulgated thereunder.
Participants should consult their Plan Sponsors or tax advisers regarding the
tax consequences of participation in the Plan or of any Plan contributions or
withdrawals.
ORGANIZATION
The Fund was organized on July 14, 1993 under the laws of the Commonwealth
of Massachusetts and is a business entity commonly known as a "Massachusetts
business trust." The Fund offers shares of beneficial interest of separate
series, par value $.001 per share. An unlimited number of shares of four series,
representing the shares of the Fund's portfolios, have been authorized. No
series of shares has any preference over any other series.
When matters are submitted for shareholder vote, shareholders of the
Portfolio will have one vote for each full share held and proportionate,
fractional votes for fractional shares held. A separate vote of a portfolio is
required on any matter affecting the portfolio on which shareholders are
entitled to vote, such as approval of a portfolio's agreement with Alger
Management. Shareholders of one portfolio are not entitled to vote on a matter
that does not affect that portfolio but that does require a separate vote of the
other portfolios. There normally will be no annual meetings of shareholders for
the purpose of electing Trustees unless and until such time as less than a
majority of Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Any Trustee may be removed from office on the vote of
shareholders holding at least two-thirds of the Fund's outstanding shares at a
meeting called for that purpose. The Trustees are required to call such a
meeting on the written request of shareholders holding at least 10 percent of
the Fund's outstanding shares.
CONTROL SHAREHOLDERS
At February 2, 1998, Northern Trust Company, Trustee for IHC 401k, owned
beneficially or of record 53.61% of the Alger Growth Retirement Portfolio and
may therefore be deemed to control the Portfolio.
PERFORMANCE
The Portfolio may include quotations of "total return" and/or "yield" in
advertisements or reports to shareholders or prospective investors. BOTH "TOTAL
RETURN" AND/OR "YIELD" FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. Total return figures show the aggregate
or average percentage change in value of an investment in the Portfolio from the
beginning date of the measuring period to the end of the measuring period. These
figures reflect changes in the price of the Portfolio's shares and assume that
any income dividends and/or capital gains distributions made by the Portfolio
during the period were reinvested in shares of the Portfolio. Figures will be
given for recent 1, 5 and 10 year periods, and may be given for other periods as
well (such as from commencement of the Portfolio's operations, or on a
year-by-year basis). When considering "average" total return figures for periods
longer than one year, it is important to note that the Portfolio's annual total
return for any one year in the period might have been greater or less than the
average for the entire period. The Portfolio may also use "aggregate" total
return figures for various periods, representing the cumulative
9
<PAGE>
change in value of an investment in the Portfolio for the specific period (again
reflecting changes in Portfolio share prices and assuming reinvestment of
dividends and distributions) as well as "actual annual" and "annualized" total
return figures. Total returns may be shown by means of schedules, charts or
graphs, and may indicate subtotals of the various components of total return (i.
e., change in value of initial investment, income dividends and capital gains
distributions). The "yield" of the Portfolio refers to "net investment income"
generated by the Portfolio over a specified thirty-day period. This income is
then "annualized." That is, the amount of "net investment income" generated by
the Portfolio during that thirty-day period is assumed to be generated over a
12-month period and is shown as a percentage of the investment. "Total return"
and "yield" for the Portfolio will vary based on changes in market conditions.
In addition, since the deduction of the Portfolio's expenses is reflected in the
total return and yield figures, "total return" and "yield" will also vary based
on the level of the Portfolio's expenses.
From time to time, advertisements or reports to shareholders may compare
the yield or performance of the Portfolio to that of other mutual funds with a
similar investment objective. The performance of the Portfolio might be compared
to rankings prepared by Lipper Analytical Services, Inc., which is a widely
recognized, independent service that monitors the performance of mutual funds,
as well as to various unmanaged indices, such as the S&P 500. In addition,
evaluations of the Portfolio published by nationally recognized ranking services
and by financial publications that are nationally recognized, such as BARRON'S,
BUSINESS WEEK, FORBES, INSTITUTIONAL INVESTOR, INVESTOR'S BUSINESS DAILY,
KIPLINGER'S PERSONAL FINANCE, MONEY, MORNINGSTAR, THE NEW YORK TIMES, USA TODAY
AND THE WALL STREET JOURNAL may be included in advertisements or communications
to shareholders. Any given performance comparison should not be considered as
representative of the Portfolio's performance for any future period.
INVESTOR AND SHAREHOLDER
INFORMATION
Investors and shareholders may contact the Fund toll-free at (800) 992-3362
for further information regarding the Fund and the Portfolio, including current
performance quotations, as well as for assistance in obtaining a Statement of
Additional Information. The Fund's Annual Report contains additional performance
information and is available on request and without charge by contacting the
Fund at the toll-free number listed above.
10
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE STATEMENT
OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING OF THE PORTFOLIO'S
SHARES, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.
-----
INVESTMENT MANAGER:
Fred Alger Management, Inc.
75 Maiden Lane
New York, New York 10038
DISTRIBUTOR:
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
TRANSFER AGENT:
Alger Shareholder Services, Inc.
30 Montgomery Street
Box 2001
Jersey City, New Jersey 07302
INDEPENDENT PUBLIC ACCOUNTANTS:
Arthur Andersen LLP
1345 Avenue of the Americas
New York, New York 10105
COUNSEL:
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
THE ALGER|MEETING THE CHALLENGE
RETIREMENT|OF INVESTING
FUND|
ALGER GROWTH
RETIREMENT PORTFOLIO
PROSPECTUS|February 25, 1998
================================================================================
<PAGE>
THE ALGER|75 MAIDEN LANE
RETIREMENT|NEW YORK, NEW YORK 10038
FUND|(800) 992-3362
================================================================================
The Alger Retirement Fund (the "Fund"), formerly known as The Alger
Defined Contribution Trust, is a registered investment company--a mutual fund--
that presently offers interests in the following four portfolios (the
"Portfolios"):
* Alger Small Cap Retirement Portfolio
* Alger MidCap Growth Retirement Portfolio
* Alger Growth Retirement Portfolio
* Alger Capital Appreciation Retirement Portfolio
Shares of the Fund are available for investment without a sales charge through
defined contribution retirement plans (the "Plans") which elect to make the Fund
an investment option for participants in such Plans. Individuals, including
participants in such Plans, cannot directly invest in the Fund but may do so
only through a participating Plan.
A Prospectus for the Fund dated February 25, 1998, which provides the
basic information investors should know before investing, may be obtained
without charge by contacting the Fund at the address or phone number above. This
Statement of Additional Information, which is not a prospectus, is intended to
provide additional information regarding the activities and operations of the
Fund, and should be read in conjunction with the Prospectus. Unless otherwise
noted, terms used in this Statement of Additional Information have the same
meaning as assigned to them in the Prospectus.
CONTENTS
Investment Objectives and Policies .................. 2
Net Asset Value ..................................... 7
Purchases and Redemptions ........................... 7
Management .......................................... 8
Taxes ............................................... 10
Custodian ........................................... 11
Transfer Agent ...................................... 11
Certain Shareholders ................................ 11
Organization ........................................ 12
Determination of Performance ........................ 13
Financial Statements ................................ 14
Appendix ............................................ A-l
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
The Prospectus discusses the investment objectives of each Portfolio and the
policies to be employed to achieve those objectives. This section contains
supplemental information concerning the types of securities and other
instruments in which the Portfolios may invest, the investment policies and
portfolio strategies that the Portfolios may utilize and certain risks attendant
to those investments, policies and strategies.
USE OF RATINGS AS INVESTMENT CRITERIA
The ratings of the nationally recognized statistical rating organizations, which
are described in the Appendix to this Statement of Additional Information,
represent their opinions as to the quality of corporate obligations. It should
be emphasized that ratings are general and not absolute standards of quality,
and obligations with the same maturity, interest rate and rating may have
different yields while obligations of the same maturity and interest rate with
different ratings may have the same yield. After being purchased by a Portfolio,
an obligation may cease to be rated or its rating may be reduced below the
minimum required for purchase by a Portfolio. In such case, although neither
event will require the sale of the obligation by a Portfolio, Fred Alger
Management, Inc. ("Alger Management") will consider the event in determining
whether a Portfolio should continue to hold the obligation.
U.S. GOVERNMENT SECURITIES
Examples of the types of U.S. Government securities that the Portfolios may hold
include, in addition to those described in the Prospectus and direct obligations
of the U.S. Treasury, the obligations of the Federal Housing Administration,
Farmers Home Administration, Small Business Administration, General Services
Administration, Central Bank for Cooperatives, Federal Farm Credit Banks,
Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks
and Maritime Administration.
LENDING OF PORTFOLIO SECURITIES
The Portfolios have the authority to lend securities to brokers, dealers and
other financial organizations. The Portfolios will not lend securities to Alger
Management or its affiliates. By lending its securities, a Portfolio can
increase its income by continuing to receive interest or dividends on the loaned
securities as well as either investing the cash collateral in short-term
securities or by earning income in the form of interest paid by the borrower
when U.S. Government securities are used as collateral. Each Portfolio will
adhere to the following conditions whenever its securities are loaned: (a) the
Portfolio must receive at least 100 percent cash collateral or equivalent
securities from the borrower; (b) the borrower must increase this collateral
whenever the market value of the securities including accrued interest exceeds
the value of the collateral; (c) the Portfolio must be able to terminate the
loan at any time; (d) the Portfolio must receive reasonable interest on the
loan, as well as any dividends, interest or other distributions on the loaned
securities and any increase in market value; (e) the Portfolio may pay only
reasonable custodian fees in connection with the loan; and (f) voting rights on
the loaned securities may pass to the borrower; provided, however, that if a
material event adversely affecting the investment occurs, the Fund's Board of
Trustees must terminate the loan and regain the right to vote the securities.
REPURCHASE AGREEMENTS
Each Portfolio may engage in repurchase agreement transactions with banks,
registered broker-dealers and government securities dealers approved by the
Fund's Board of Trustees. Under the terms of a repurchase agreement, a Portfolio
would acquire a high quality money market instrument for a relatively short
period (usually not more than one week) subject to an obligation of the seller
to repurchase, and the Portfolio to resell, the instrument at an agreed price
(including accrued interest) and time, thereby determining the yield during the
Portfolio's holding period. Thus, repurchase agreements may be seen to be loans
by the Portfolio collateralized by the underlying instrument. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Portfolio's holding period and not necessarily related to the rate of
return on the underlying instrument. The value of the underlying securities,
including accrued interest, will be at least equal at all times to the total
amount of the repurchase obligation including interest. A Portfolio bears a risk
of loss in the event that the other party to a repurchase agreement defaults on
its obligations and the Portfolio is delayed in or prevented from exercising its
rights to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period in which the
Portfolio seeks to assert these rights, the risk of incurring expenses
associated with asserting these rights and the risk of losing all or a part of
the income from the agreement. Alger Management, acting under the supervision of
the Fund's Board of Trustees, reviews the creditworthiness of those banks and
dealers with
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which the Portfolios enter into repurchase agreements to evaluate these risks
and monitors on an ongoing basis the value of the securities subject to
repurchase agreements to ensure that the value is maintained at the required
level.
RULE 144A SECURITIES
Rule 144A under the Securities Act of 1933 is designed to facilitate efficient
trading of unregistered securities among institutional investors. The Rule
permits the resale to qualified institutions of restricted securities that, when
issued, were not of the same class as securities listed on a U.S. securities
exchange or quoted on NASDAQ.
OPTIONS (ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO ONLY)
A call option written by the Portfolio is "covered" if the Portfolio owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also covered if the Portfolio holds a call on the same security as the
call written where the exercise price of the call held is (1) equal to or less
than the exercise price of the call written or (2) greater than the exercise
price of the call written if the difference is maintained by the Portfolio in
cash, U.S. Government securities or other high grade short-term obligations in a
segregated account held with its custodian. A put option is "covered" if the
Portfolio maintains cash or other high grade short-term obligations with a value
equal to the exercise price in a segregated account held with its custodian, or
else holds a put on the same security as the put written where the exercise
price of the put held is equal to or greater than the exercise price of the put
written.
If the Portfolio has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing an
option of the same series as the option previously written. However, once the
Portfolio has been assigned an exercise notice, the Portfolio will be unable to
effect a closing purchase transaction. Similarly, if the Portfolio is the holder
of an option it may liquidate its position by effecting a closing sale
transaction. This is accomplished by selling an option of the same series as the
option previously purchased. There can be no assurance that either a closing
purchase or sale transaction can be effected when the Portfolio so desires.
The Portfolio will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Portfolio will realize a
loss from a closing transaction if the price of the transaction is less than the
premium paid to purchase the option. Since call option prices generally reflect
increases in the price of the underlying security, any loss resulting from the
repurchase of a call option may also be wholly or partially offset by unrealized
appreciation of the underlying security. Other principal factors affecting the
market value of a put or a call option include supply and demand, interest
rates, the current market price and price volatility of the underlying security
and the time remaining until the expiration date.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Portfolio will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option. In such event it might not be
possible to effect closing transactions in particular options, so that the
Portfolio would have to exercise its option in order to realize any profit and
would incur brokerage commissions upon the exercise of the options. If the
Portfolio, as a covered call option writer, is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or otherwise covers the position.
In addition to options on securities, the Portfolio may also purchase and sell
call and put options on securities indexes. A stock index reflects in a single
number the market value of many different stocks. Relative values are assigned
to the stocks included in an index and the index fluctuates with changes in the
market values of the stocks. The options give the holder the right to receive a
cash settlement during the term of the option based on the difference between
the exercise price and the value of the index. By writing a put or call option
on a securities index, the Portfolio is obligated, in return for the premium
received, to make delivery of this amount. The Portfolio may offset its position
in stock index options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire unexercised.
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<PAGE>
Use of options on securities indexes entails the risk that trading in the
options may be interrupted if trading in certain securities included in the
index is interrupted. The Portfolio will not purchase these options unless Alger
Management is satisfied with the development, depth and liquidity of the market
and Alger Management believes the options can be closed out.
Price movements in the Portfolio's securities may not correlate precisely with
movements in the level of an index and, therefore, the use of options on indexes
cannot serve as a complete hedge and will depend, in part, on the ability of
Alger Management to predict correctly movements in the direction of the stock
market generally or of a particular industry. Because options on securities
indexes require settlement in cash, Alger Management may be forced to liquidate
portfolio securities to meet settlement obligations.
Although Alger Management will attempt to take appropriate measures to minimize
the risks relating to the Portfolio's writing of put and call options, there can
be no assurance that the Portfolio will succeed in any option-writing program it
undertakes.
STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES (ALGER CAPITAL
APPRECIATION RETIREMENT PORTFOLIO ONLY)
The Portfolio may enter into stock index futures contracts or purchase or sell
put and call options on such futures as a hedge against anticipated market
changes and for risk management purposes. Futures are generally bought and sold
on the commodities exchanges where they are listed with payment of initial and
variation margin as described below. The sale of a futures contract creates a
firm obligation by the Portfolio, as seller, to deliver to the buyer the net
cash amount called for in the contract at a specific future time. Options on
futures contracts are similar to options on securities except that an option on
a futures contract gives the Purchaser the right in return for the premium paid
to assume a position in a futures contract and obligates the seller to deliver
such position.
The Portfolio's use of stock index futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the Commodity Futures Trading Commission and will be
entered into only for bona fide hedging, risk management or other portfolio
management purposes. Typically, maintaining a futures contract or selling an
option thereon requires the Portfolio to deposit with a financial intermediary
as security for its obligations an amount of cash or other specified assets
(initial margin) which initially is typically 1% to 10% of the face amount of
the contract (but may be higher in some circumstances). Additional cash or
assets (variation margin) may be required to be deposited thereafter on a daily
basis as the mark to market value of the contract fluctuates. In addition to the
initial deposit and variation margin, the Portfolio will maintain in a
segregated account with its custodian liquid securities in an amount equal to
the difference between (i) the sum of the total deposit and variation margin
payments and (ii) the contract amount. The purchase of an option on stock index
futures involves payment of a premium for the option without any further
obligation on the part of the Portfolio. If the Portfolio exercises an option on
a futures contract it will be obligated to post initial margin (and potential
subsequent variation margin) for the resulting futures position just as it would
for any position. Futures contracts and options thereon are generally settled by
entering into an offsetting transaction but there can be no assurance that the
position can be offset prior to settlement at an advantageous price, nor that
delivery will occur.
The Portfolio will not enter into a futures contract or related option (except
for closing transactions) if, immediately thereafter, the sum of the amount of
its initial margin and premiums on open futures contracts and options thereon
would exceed 5% of the Portfolio's total assets (taken at current value);
however, in the case of an option that is in-the-money at the time of the
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
INVESTMENT RESTRICTIONS
The investment restrictions numbered 1 through 12 below have been adopted by the
Fund with respect to each of the Portfolios as fundamental policies. Under the
Investment Company Act of 1940, as amended (the "Act"), a "fundamental" policy
may not be changed without the vote of a "majority of the outstanding voting
securities" of the Fund, which is defined in the Act as the lesser of (a) 67
percent or more of the shares present at a Fund meeting if the holders of more
than
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<PAGE>
50 percent of the outstanding shares of the Fund are present or represented by
proxy or (b) more than 50 percent of the outstanding shares. A fundamental
policy affecting a particular Portfolio may not be changed without the vote of a
majority of the outstanding voting securities of the affected Portfolio.
Investment restrictions 13 through 18 may be changed by vote of a majority of
the Fund's Board of Trustees at any time.
The investment policies adopted by the Fund prohibit each Portfolio from:
1. Purchasing the securities of any issuer, other than U.S. Government
securities, if as a result more than five percent of the value of a Portfolio's
total assets would be invested in the securities of the issuer, except that up
to 25 percent of the value of the Portfolio's total assets may be invested
without regard to this limitation.
2. Purchasing more than 10 percent of the voting securities of any one issuer or
more than 10 percent of the securities of any class of any one issuer. This
limitation shall not apply to investments in U.S. Government securities.
3. Selling securities short or purchasing securities on margin, except that the
Portfolio may obtain any short-term credit necessary for the clearance of
purchases and sales of securities. These restrictions shall not apply to
transactions involving selling securities "short against the box."
4. Borrowing money, except that (a) all Portfolios other than the Alger Capital
Appreciation Retirement Portfolio may borrow for temporary or emergency (but not
leveraging) purposes including the meeting of redemption requests that might
otherwise require the untimely disposition of securities, in an amount not
exceeding 10 percent of the value of the Portfolio's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made; and (b) the
Alger Capital Appreciation Retirement Portfolio may borrow from banks for
investment purposes as set forth in the Prospectus. Whenever borrowings
described in (a) exceed five percent of the value of the Portfolio's total
assets, the Portfolio, other than the Alger Capital Appreciation Retirement
Portfolio, will not make any additional investments. Immediately after any
borrowing the Portfolio will maintain asset coverage of not less than 300
percent with respect to all borrowings.
5. Pledging, hypothecating, mortgaging or otherwise encumbering more than 10
percent of the value of the Portfolio's total assets, except in connection with
borrowings as noted in 4(b) above.
6. Issuing senior securities, except that the Alger Capital Appreciation
Retirement Portfolio may borrow from banks for investment purposes so long as
the Portfolio maintains the required asset coverage.
7. Underwriting the securities of other issuers, except insofar as the Portfolio
may be deemed to be an underwriter under the Securities Act of 1933, as amended,
by virtue of disposing of portfolio securities.
8. Making loans to others, except through purchasing qualified debt obligations,
lending portfolio securities or entering into repurchase agreements.
9. Investing in securities of other investment companies, except as they may be
acquired as part of a merger, consolidation, reorganization, acquisition of
assets or offer of exchange.
10. Purchasing any securities that would cause more than 25 percent of the value
of the Portfolio's total assets to be invested in the securities of issuers
conducting their principal business activities in the same industry; provided
that there shall be no limit on the purchase of U.S. Government securities.
11. Investing in commodities except that the Alger Capital Appreciation
Retirement Portfolio may purchase or sell stock index futures contracts and
related options thereon if thereafter no more than 5 percent of its total assets
are invested in margin and premiums.
12. Purchasing or selling real estate or real estate limited partnerships,
except that the Portfolio may purchase and sell securities secured by real
estate, mortgages or interests therein and securities that are issued by
companies that invest or deal in real estate.
13. Investing more than 15 percent of its net assets in securities which are
illiquid by virtue of legal or contractual restrictions on resale or the absence
of a readily available market. However, securities with legal and contractual
restrictions on resale issued pursuant to Rule 144A of the Securities Act of
1933 may be purchased if they are determined to be liquid, and such purchases
would not be subject to the 15 percent limit stated above. The Board of Trustees
will in good faith determine the specific types of securities deemed to be
liquid and the value of such securities.
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14. Investing in oil, gas or other mineral leases, or exploration or development
programs, except that the Portfolio may invest in the securities of companies
that invest in or sponsor those programs.
15. Purchasing any security if as a result the Portfolio would then have more
than five percent of its total assets invested in securities of issuers
(including predecessors) that have been in continual operation for less than
three years. This limitation shall not apply to investments in U.S. Government
securities.
16. Making investments for the purpose of exercising control or management.
17. Investing in warrants, except that the Portfolio may invest in warrants if,
as a result, the investments (valued at the lower of cost or market) would not
exceed five percent of the value of the Portfolio's net assets, of which not
more than two percent of the Portfolio's net assets may be invested in warrants
not listed on a recognized domestic stock exchange. Warrants acquired by the
Portfolio as part of a unit or attached to securities at the time of acquisition
are not subject to this limitation.
18. Purchasing or retaining the securities of any issuer if, to the knowledge of
the Fund, any of the officers, directors or trustees of the Fund or Alger
Management individually owns more than .5 percent of the outstanding securities
of the issuer and together they own beneficially more than five percent of the
securities.
Except in the case of the 300 percent limitation set forth in Investment
Restriction No. 4, the percentage limitations contained in the foregoing
restrictions apply at the time of the purchase of the securities and a later
increase or decrease in percentage resulting from a change in the values of the
securities or in the amount of the Portfolio's assets will not constitute a
violation of the restriction.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities and other financial instruments for a
Portfolio are made by Alger Management, which also is responsible for placing
these transactions, subject to the overall review of the Fund's Board of
Trustees. Although investment requirements for each Portfolio are reviewed
independently from those of the other accounts managed by Alger Management and
those of the other Portfolios, investments of the type the Portfolios may make
may also be made by these other accounts or Portfolios. When a Portfolio and one
or more other Portfolios or accounts managed by Alger Management are prepared to
invest in, or desire to dispose of, the same security or other financial
instrument, available investments or opportunities for sales will be allocated
in a manner believed by Alger Management to be equitable to each. In some cases,
this procedure may affect adversely the price paid or received by a Portfolio or
the size of the position obtained or disposed of by a Portfolio.
Transactions in equity securities are in most cases effected on U.S. stock
exchanges and involve the payment of negotiated brokerage commissions. There is
generally no stated commission in the case of securities traded in the
over-the-counter markets, but the prices of those securities include undisclosed
commissions or mark-ups. Purchases and sales of money market instruments and
debt securities usually are principal transactions. These securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. The cost of securities purchased from underwriters
includes an underwriting commission or concession and the prices at which
securities are purchased from and sold to dealers include a dealer's mark-up or
mark-down. U.S. Government securities are generally purchased from underwriters
or dealers, although certain newly-issued U.S. Government securities may be
purchased directly from the U.S. Treasury or from the issuing agency or
instrumentality.
To the extent consistent with applicable provisions of the Act and the rules and
exemptions adopted by the Securities and Exchange Commission (the "SEC")
thereunder, as well as other regulatory requirements, the Fund's Board of
Trustees has determined that portfolio transactions will be executed through
Fred Alger & Company, Incorporated ("Alger Inc.") if, in the judgment of Alger
Management, the use of Alger Inc. is likely to result in price and execution at
least as favorable as those of other qualified broker-dealers and if, in
particular transactions, Alger Inc. charges the Portfolio involved a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions. Such transactions will be fair and reasonable to the Portfolio's
shareholders. Over-the-counter purchases and sales are transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere. Principal transactions are not entered
into with affiliates of the Fund except pursuant to exemptive rules or orders
adopted by the SEC.
In selecting brokers or dealers to execute portfolio transactions on behalf of a
Portfolio, Alger Management
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<PAGE>
seeks the best overall terms available. In assessing the best overall terms
available for any transaction, Alger Management will consider the factors it
deems relevant, including the breadth of the market in the investment, the price
of the investment, the financial condition and execution capability of the
broker or dealer and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In addition, Alger Management is
authorized, in selecting parties to execute a particular transaction and in
evaluating the best overall terms available, to consider the brokerage and
research services, as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended, provided to the Portfolio involved, the other
Portfolios and/or other accounts over which Alger Management or its affiliates
exercise investment discretion to the extent permitted by law. The Fund will
consider sales of its shares as a factor in the selection of broker-dealers to
execute over-the-counter transactions, subject to the requirements of best price
and execution. Alger Management's fees under its agreements with the Portfolios
are not reduced by reason of its receiving brokerage and research services. The
Fund's Board of Trustees will periodically review the commissions paid by the
Portfolios to determine if the commissions paid over representative periods of
time are reasonable in relation to the benefits received by the Portfolios. For
the fiscal year ended October 31, 1995, the Fund paid an aggregate of
approximately $82,777 in commissions to broker-dealers in connection with
portfolio transactions all of which was paid to Alger Inc. For the fiscal year
ended October 31, 1996, the Fund paid an aggregate of approximately $107,038 in
commissions in connection with portfolio transactions, to Alger Inc. For the
fiscal year ended October 31, 1997, the Fund paid an aggregate of approximately
$162,299 in commissions in connection with Portfolio transactions to Alger Inc.
The commissions paid to Alger Inc. during the fiscal year ended October 31, 1997
constituted 98% of the aggregate brokerage commissions paid by the Fund; during
that year, 96% of the aggregate dollar amount of transactions by the Fund
involving the payment of brokerage commissions was effected through Alger Inc.
Alger Inc. does not engage in principal transactions with the Fund and,
accordingly, receives no compensation in connection with securities purchased or
sold in that manner, which include securities traded in the over-the-counter
markets, money market investments and most debt securities.
NET ASSET VALUE
The Prospectus discusses the time at which the net asset values of the
Portfolios are determined for purposes of sales and redemptions. The following
is a description of the procedures used by the Fund in valuing the Portfolio's
assets.
The assets of the Portfolios are generally valued on the basis of market
quotations. Securities whose principal market is on an exchange or in the
over-the-counter market are valued at the last reported sales price or, in the
absence of reported sales, at the mean between the bid and asked price or, in
the absence of a recent bid or asked price, the equivalent as obtained from one
or more of the major market makers for the securities to be valued. Bonds and
other fixed income securities may be valued on the basis of prices provided by a
pricing service when the Fund's Board of Trustees believes that these prices
reflect the fair market value of the securities. Other investments and other
assets, including restricted securities and securities for which market
quotations are not readily available, are valued at fair value under procedures
approved by the Fund's Board of Trustees. Short-term securities with maturities
of 60 days or less are valued at amortized cost, as described below, which
constitutes fair value as determined by the Fund's Board of Trustees.
The valuation of money market instruments with maturities of 60 days or less is
based on their amortized cost which does not take into account unrealized
capital gains or losses. Amortized cost valuation involves initially valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. Although this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price a Portfolio
would receive if it sold the instrument.
PURCHASES AND REDEMPTIONS
Shares of the Portfolios are only available for investment through defined
contribution retirement plans (the "Plans") which elect to make the Fund an
investment option for participants in such Plans. Individuals, including
participants in such Plans, cannot directly invest in the Fund but may do so
only through a par-
-7-
<PAGE>
ticipating Plan. However, the Fund reserves the right to make shares of the
Portfolios available to other investors, as may be approved by the Board of
Trustees from time to time.
Only the Plans may be record holders of the shares of the Portfolios. Within the
limitations applicable to a Plan, a participant in such Plan (a "Participant")
may direct the Plan to purchase or redeem shares of the Fund. Participants in a
Plan cannot contact the Fund directly to request the purchase or redemption of
the shares. Instead, Participants must contact their Plan Sponsor or its agent
designated for the purpose of processing purchase and redemption requests.
References in the Prospectus and Statement of Additional Information to
shareholders are to Plan Sponsors as the record holders of the Fund's shares.
The assets of the Fund are not plan assets of any of the Plans.
Shares of the Portfolios are offered by the Fund on a continuous basis to Plan
Sponsors of defined contribution retirement plans and are distributed by Alger
Inc. as principal underwriter for the Fund pursuant to a distribution agreement
(the "Distribution Agreement"). The Distribution Agreement provides that Alger
Inc. accepts orders for shares at net asset value as no sales commission or load
is charged.
Purchases and redemptions of shares of a Portfolio will be effected on days on
which the New York Stock Exchange (the "NYSE") is open for trading. Such
purchases and redemptions of the shares of each Portfolio are effected at their
respective net asset values per share determined as of the close of regular
trading on the NYSE (normally 4:00 p.m. Eastern time) on that same day. See "Net
Asset Value." Payment for redemptions will be made by the Fund's transfer agent
on behalf of the Fund and the relevant Portfolios within seven days after
receipt of redemption requests.
The Fund may suspend the right of redemption of shares of any Portfolio and may
postpone payment for any period: (i) during which the NYSE is closed (other than
customary weekend and holiday closings) or during which trading on the NYSE is
restricted; (ii) when the SEC determines that a state of emergency exists which
may make payment or transfer not reasonably practicable; (iii) as the SEC may by
order permit for the protection of the shareholders of the Fund; or (iv) at any
other time when the Fund may, under applicable laws and regulations, suspend
payment on the redemption of its shares.
Payment for shares tendered for redemption is ordinarily made in cash. However,
if the Board of Trustees of the Fund determines that it would be detrimental to
the best interest of the remaining shareholders of a Portfolio to make payment
of a redemption order wholly or partly in cash, the Portfolio may pay the
redemption proceeds in whole or in part by a distribution "in kind" of
securities from the Portfolio, in lieu of cash, in conformity with applicable
rules of the SEC. The Fund has elected to be governed by Rule 18f-1 under the
Act, pursuant to which a Portfolio is obligated to redeem shares solely in cash
up to the lesser of $250,000 or 1% of the net assets of the Portfolio during any
90-day period for any one shareholder. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage or other costs in selling the
securities for cash. The method of valuing securities used to make redemptions
in kind will be the same as the method the Fund uses to value its portfolio
securities and such valuation will be made as of the time the redemption price
is determined.
MANAGEMENT
TRUSTEES AND OFFICERS OF THE FUND
The names of the Trustees and officers of the Fund, together with information
concerning their principal business occupations, are set forth below. Each of
the officers of the Fund is also an officer, and each of the Trustees is also a
director or trustee, as the case may be, of Castle Convertible Fund, Inc., a
registered closed-end investment company, The Alger Fund, The Alger American
Fund and Spectra Fund, registered open-end management investment companies for
which Alger Management serves as investment adviser. Fred M. Alger III and David
D. Alger are "interested persons" of the Fund, as defined in the Act. Fred M.
Alger III and David D. Alger are brothers. Unless otherwise noted, the address
of each person named below is 75 Maiden Lane, New York, New York 10038.
-8-
<PAGE>
<TABLE>
<CAPTION>
NAME, POSITION WITH
THE FUND AND ADDRESS PRINCIPAL OCCUPATIONS
<S> <C>
Fred M. Alger III (63) Chairman of the Board of Alger Associates, Inc. ("Associates"), Alger Inc.,
Chairman of the Board Alger Management, Alger Properties, Inc. ("Properties"), Alger Shareholder Services, Inc.
("Services"), Alger Life Insurance Agency, Inc. ("Agency"), Fred Alger International Advisory
S.A. ("International"), The Alger American Asset Growth Fund ("Asset Growth") and Analysts
Resources, Inc. ("ARI").
David D. Alger (54) President and Director of Associates, Alger Management,
President and Trustee Alger Inc., Properties, Services, International and Agency; Executive Vice President and
Director of ARI.
Gregory S. Duch (46) Executive Vice President, Treasurer and Director of Alger Management and
Treasurer Properties and Associates; Executive Vice President and Treasurer of Alger Inc.,
ARI, Services, and Agency; Director and Treasurer of International.
Mary E. Marsden-Cochran (45) Vice President, General Counsel and Secretary, Associates, Alger
Secretary Management, Alger Inc., Properties, ARI, Services and Agency (2/96-present); Secretary of
International (7/96-present); Associate General Counsel and Vice President, Smith Barney Inc.
(12/94-2/96). Blue Sky Attorney, AMT Capital (1/94-11/94).
Frederick A. Blum (44) Senior Vice President of Alger Inc.
Assistant Secretary and
Assistant Treasurer
Arthur M. Dubow (64) Trustee of the Arthur Dubow Foundation; private investor since 1985; Director of Coolidge
Trustee Investment Corporation; formerly Chairman of the Board of Institutional Shareholder
P.O. Box 969 Services, Inc.; formerly President of Fourth Estate, Inc.
Wainscott, NY 11975
Stephen E. O'Neil (65 Of counsel to the law firm of Kohler & Barnes PC; private investor since 1981; Director of
Trustee NovaCare, Inc. and Brown Forman Distillers Corporation; formerly President and Vice Chairman
805 Third Avenue of City Investing Company and Director of Centerre Bancorporation and Syntro Corporation.
New York, NY 10022
Nathan E. Saint-Amand, M.D. (60) Medical doctor in private practice.
Trustee
2 East 88th Street
New York, NY 10128
John T. Sargent (73) Private investor since 1987; Director of Atlantic Mutual Insurance Co.;
Trustee formerly Director of River Bank America.
14 E. 69th Street
New York, NY 10021
</TABLE>
No director, officer or employee of Alger Management or its affiliates will
receive any compensation from the Fund for serving as an officer or Trustee of
the Fund. The Fund pays each Trustee who is not a director, officer or employee
of Alger Management or its affiliates a quarterly fee of $1,500.
The Fund did not offer its Trustees any pension or retirement benefits during or
prior to the fiscal year ended October 31, 1997. The following table provides
compensation amounts paid to disinterested Trustees of the Fund for the fiscal
year ended October 31, 1997.
-9-
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
TOTAL COMPENSATION PAID TO TRUSTEES FROM
THE ALGER RETIREMENT FUND,
AGGREGATE THE ALGER FUND,
COMPENSATION FROM THE ALGER AMERICAN FUND,
THE ALGER CASTLE CONVERTIBLE FUND, INC. AND
NAME OF PERSON, POSITION RETIREMENT FUND SPECTRA FUND
------------------------ ------------------- ---------------------------------------
<S> <C> <C>
Arthur M. Dubow, Trustee $6,000 $28,250
Stephen E. O'Neil, Trustee $6,000 $28,250
Nathan E. Saint-Amand, Trustee $6,000 $28,250
John T. Sargent, Trustee $6,000 $28,250
</TABLE>
INVESTMENT MANAGER
Alger Management serves as investment manager to each of the Portfolios pursuant
to separate written agreements (the "Management Agreements"). Certain of the
services provided by, and the fees paid by the Portfolios to, Alger Management
under the Management Agreements are described in the Prospectus. Alger
Management pays the salaries of all officers who are employed by both it and the
Fund. Alger Management has agreed to maintain office facilities for the Fund,
furnish the Fund with statistical and research data, clerical, accounting and
bookkeeping services, and certain other services required by the Fund, and to
compute the net asset value, net income and realized capital gains or losses of
the Portfolios. Alger Management prepares semi-annual reports for the SEC and
shareholders, prepares federal and state tax returns and filings with state
securities commissions, maintains the Fund's financial accounts and records and
generally assists in all aspects of the Fund's operations. Alger Management
bears all expenses in connection with the performance of its services under the
Management Agreements.
For the fiscal years ended October 31, 1995, October 31, 1996 and October 31,
1997, Alger Management earned under the terms of the Management Agreements
$81,537, $87,258 and $136,841, respectively, in respect of the Alger Growth
Retirement Portfolio; $130,610, $223,623 and $251,536, respectively, in respect
of the Alger Small Cap Retirement Portfolio; $66,230, $80,088 and $59,911,
respectively, in respect of the Alger MidCap Growth Retirement Portfolio; and
$55,348, $58,658 and $44,688, respectively, in respect of the Alger Capital
Appreciation Retirement Portfolio.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP serves as independent public accountants for the Fund.
TAXES
The following is a summary of selected federal income tax considerations that
may affect the Fund and its shareholders. The summary is not intended to
substitute for individual tax advice and investors are urged to consult their
own tax advisers as to the federal, state and local tax consequences of
investing in the Fund.
Each Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). If
qualified as a regulated investment company, a Portfolio will pay no federal
income taxes on its taxable net investment income (that is, taxable income other
than net realized capital gains) and its net realized capital gains that are
distributed to shareholders. To qualify under Subchapter M, a Portfolio must,
among other things: (1) distribute to its shareholders at least 90% of its
taxable net investment income and net realized short-term capital gains; (2)
derive at least 90% of its gross income from dividends, interest, payments with
respect to loans of securities, gains from the sale or other disposition of
securities, or other income (including, but not limited to, gains from options,
futures and forward contracts) derived with respect to the Portfolio's business
of investing in securities; and (3) diversify its holdings so that, at the end
of each fiscal quarter of the Portfolio (a) at least 50% of the market value of
the Portfolio's assets is represented by cash, U.S. Government securities and
other securities, with those other securities limited, with respect to any one
issuer, to an amount no greater than 10% of the outstanding voting securities of
the issuer, and (b) not more than 25% of the market value of the Portfolio's
assets is invested in the securities of any one issuer (other than U.S.
Government securities or securities of other regulated investment companies) or
of two or more issuers that
-10-
<PAGE>
the Portfolio controls and that are determined to be in the same or similar
trades or businesses or related trades or businesses. In meeting these
requirements, a Portfolio may be restricted in the utilization of certain of the
investment techniques described above and in the Fund's prospectus.
CUSTODIAN
State Street Bank & Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, serves as custodian for the Fund pursuant to a custodian agreement under
which it holds the Portfolios' assets.
TRANSFER AGENT
Alger Shareholder Services, Inc., ("Services") 30 Montgomery Street, Jersey
City, New Jersey 07302, serves as transfer agent for the Fund pursuant to a
transfer agency agreement. Under the transfer agency agreement Services
processes purchases and redemptions of shares of the Portfolio, maintains the
shareholder account records for each Portfolio, handles certain communications
between shareholders and the Fund and distributes any dividends and
distributions payable by the Fund.
CERTAIN SHAREHOLDERS
Set forth below is certain information regarding significant shareholders of the
Portfolios. At February 2, 1998, Wells Fargo Bank, Trustee for Mentor Graphics,
owned beneficially or of record 57.38% of the Alger Small Cap Retirement
Portfolio. Northern Trust Company, Trustee for IHC 401K, owned beneficially or
of record 53.61% of the Alger Growth Retirement Portfolio. The Fred Alger &
Company, Incorporated et al Pension Plan and the Fred Alger & Company,
Incorporated et al Profit Sharing Plan (the "Alger Plans") owned beneficially or
of record 35.00% and 41.64%, respectively, of the Alger MidCap Growth Retirement
Portfolio; and 38.27% and 38.75%, respectively, of the Alger Capital
Appreciation Retirement Portfolio at February 2, 1998. The only participants in
the Alger Plans are past and present employees of Alger Inc. (a Delaware
corporation), Alger Management (a New York corporation), Services (a Delaware
corporation) and Analysts Resources, Inc. (a Delaware corporation), all of which
are, directly or indirectly wholly owned subsidiaries of Alger Associates, Inc.
("Associates") (a Delaware corporation). The shareholders identified above may
be deemed to control the specified Portfolios, which may have the effect of
proportionately diminishing the voting power of other shareholders of these
Portfolios. It can be expected, however, that this effect will diminish as other
investors purchase additional shares of the Portfolios. As of February 2, 1998,
Fred M. Alger III and David D. Alger were the majority shareholders of
Associates and may be deemed to control that company and its subsidiaries.
The following table contains information regarding persons known to the Fund who
own beneficially or of record five percent or more of the shares of any
Portfolio. Unless otherwise noted, the address of each owner is 75 Maiden Lane,
New York, New York 10038. All holdings are expressed as a percentage of a
Portfolio's outstanding shares as of February 2, 1998 and record and beneficial
holdings are in each instance denoted as follows: record/beneficial.
-11-
<PAGE>
<TABLE>
<CAPTION>
Alger Alger
Alger Alger MidCap Capital
Small Cap Growth Growth Appreciation
Retirement Retirement Retirement Retirement
Name and Portfolio Portfolio Portfolio Portfolio
Address (Record/ (Record/ (Record/ (Record/
of Shareholders Beneficial) Beneficial) Beneficial) Beneficial)
- --------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fred Alger & Company, 6.29% / 6.29% 15.09% / 15.09% 35.00% / 35.00% 38.27% / 38.27%
Incorporated et al
Pension Plan
Fred Alger & Company, 7.56% / 7.56% 16.09% / 16.09% 41.64% / 41.64% 38.75% / 38.75%
Incorporated et al
Profit Sharing Plan
Fred Alger & Company, * / * * / * 22.00% / 22.00% 21.09% / 21.09%
Incorporated
401(k) Plan
Wells Fargo Bank 10.26% / + * / * * / * * / *
T'tee Kelly Group Tax
Def Inv Pl
P.O. Box 9800
Calabasas,
CA 91378
U.S. Bank 8.14% / + * / * * / * * / *
Trustee for The
Spacelabs Issop
P. O. Box 3168
Portland, OR
97208
U.S. Bank 6.38% / + * / * * / * * / *
Trustee for Spacelabs
Med Retirement Plan
P. O. Box 3168
Portland, OR
97208
Wells Fargo Bank, Trustee 57.38% / + * / * * / * * / *
fbo Mentor Graphics
P.O. Box 9800
Calabasas,
CA 91302
Northern Trust Company * / * 53.61% / + * / * * / *
T'tee FBO IHC 401K
P.O. Box 92956
Chicago, IL 60675
Northern Trust Company * / * 8.45% / + * / * * / *
T'tee FBO IHC 403B
P.O. Box 92956
Chicago, IL 60675
Officers and Trustees *** / *** *** / *** *** / *** *** / ***
of the Fund in the
Aggregate**
- -------------
*Indicates shareholder owns less than 5% of the Portfolio's shares.
**Certain officers and Trustees of the Fund are participants in one or more of
the Fred Alger & Company, Incorporated Pension Plan, Profit Sharing Plan and
401(k) Plan and may therefore, as a group, be deemed to be indirect holders of
the following interests in the Portfolios: Small Cap Retirement Portfolio,
6.83%; Growth Retirement Portfolio, 12.69%; Midcap Growth Retirement Portfolio,
30.14%; Capital Appreciation Retirement Portfolio, 36.33%.
***Indicates group owns less than 1% of the Portfolio's shares.
+The Fund regards the underlying Plan as the beneficial owner.
</TABLE>
ORGANIZATION
The Fund has been organized as a business trust under the laws of the
Commonwealth of Massachusetts pursuant to an Agreement and Declaration of Trust
dated July 14, 1993 (the "Trust Agreement"). The word "Alger" in the Fund's name
has been adopted pursuant to a provision contained in the Agreement and
Declaration of Trust. Under that provision, Associates may terminate the Fund's
license to use the word "Alger" in its name when Alger Management ceases to act
as the Fund's investment manager.
Shares do not have cumulative voting rights, which means that holders of more
than 50 percent of the shares voting for the election of Trustees can elect all
Trustees. Shares are transferable but have no preemptive, conversion or
subscription rights. Shareholders generally vote by Portfolio, except with
respect to the election of Trustees and the ratification of the selection of
independent accountants. In the interest of economy and convenience,
certificates representing shares of a Portfolio are physically issued only upon
specific written request of a shareholder.
-12-
<PAGE>
Meetings of shareholders normally will not be held for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Under the Act, shareholders of record of no less than two-thirds of the
outstanding shares of the Fund may remove a Trustee through a declaration in
writing or by vote cast in person or by proxy at a meeting called for that
purpose. Under the Trust Agreement, the Trustees are required to call a meeting
of shareholders for the purpose of voting on the question of removal of any such
Trustee when requested in writing to do so by the shareholders of record of not
less than 10 percent of the Fund's outstanding shares.
Massachusetts law provides that shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Fund
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee. The
Trust Agreement provides for indemnification from the Fund's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility that the
Fund believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder paying the liability will be entitled to reimbursement from the
general assets of the Fund. The Trustees intend to conduct the operations of the
Fund in a manner so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund.
On April 12, 1996, the names of the Fund and its underlying portfolios were
changed as follows:
From: To:
The Alger Defined The Alger Retirement Fund
Contribution Trust
Alger Defined Contribution Alger Small Cap Retirement
Small Cap Portfolio Portfolio
Alger Defined Contribution Alger MidCap Growth
MidCap Growth Portfolio Retirement Portfolio
Alger Defined Contribution Alger Growth Retirement
Growth Portfolio Portfolio
Alger Defined Contribution Alger Capital Appreciation
Leveraged AllCap Portfolio Retirement Portfolio
DETERMINATION OF PERFORMANCE
The "total return" and "yield" described in the Prospectus as to each of the
Portfolios, are computed according to formulas prescribed by the SEC. These
performance figures are calculated in the following manner: A. Total Return--A
Portfolio's average annual total return described in the Prospectus is computed
according to the following formula:
P (1+T)n=ERV
Where: P = a hypothetical initial ayment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable
value of a hypothetical $1,000 payment
made at the beginning of the 1, 5, or 10
year periods at the end of the 1, 5 and 10
year periods (or fractional portion
thereof);
The average annual total returns for the Portfolios for the periods indicated
below were as follows:
Period from
Inception* Year-Ended
through 10/31/97 10/31/97
------------- --------
Alger Small Cap Retirement
Portfolio 23.79% 19.00%
Alger MidCap Growth
Retirement Portfolio 25.30% 28.58%
Alger Growth Retirement
Portfolio 18.77% 28.84%
Alger Capital Appreciation
Retirement Portfolio 20.23% 26.07%
* Commenced operations on November 8, 1993.
B. Yield--a Portfolio's net annualized yield described in the Prospectus is
computed according to the following formula:
a-b
YIELD = 2[(----- + 1)6 - 1]
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = The average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
IN GENERAL
Current performance information for the Portfolios may be obtained by calling
the Fund at the telephone number provided on the cover page of this Statement of
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<PAGE>
Additional Information. A Portfolio's quoted performance may not be indicative
of future performance. A Portfolio's performance will depend upon factors such
as the Portfolio's expenses and the types and maturities of instruments held by
the Portfolio.
From time to time, in advertisements or in reports to shareholders, the
performances of the Portfolios may be quoted and compared to those of other
funds and accounts with similar investment objectives. Similarly, the
performance of the Portfolios, for example, might be compared to rankings
prepared by Lipper Analytical Services Inc., which is a widely recognized,
independent service that monitors the performance of mutual funds, as well as to
various unmanaged indices, such as the S&P 500, the Russell 2000 Growth Index,
the Wilshire Small Company Growth Index, the Lehman Brothers
Government/Corporate Bond Index or the S&P MidCap 400 Index. In addition, the
evaluations of the Portfolios published by nationally recognized ranking
services or articles regarding performance, rankings and other Portfolio
characteristics may appear in national publications including, but not limited
to, BARRON'S, BUSINESS WEEK, FORBES, INSTITUTIONAL INVESTOR, INVESTOR'S BUSINESS
DAILY, KIPLINGER'S PERSONAL FINANCE, MONEY, MORNINGSTAR, THE NEW YORK TIMES, USA
TODAY AND THE WALL STREET JOURNAL and may be included in advertisements or
communications to shareholders. Any given performance comparison should not be
considered as representative of such Portfolio's performance for any future
period.
FINANCIAL STATEMENTS
The Fund's financial statements for the year ended October 31, 1997, are
contained in the Annual Report to Shareholders for that fiscal year, and are
hereby incorporated by reference. A copy of the Annual Report to Shareholders
may be obtained by telephoning the Fund at (800) 992-3362.
-14-
<PAGE>
APPENDIX
CORPORATE BOND RATINGS
Bonds rated Aa by Moody's Investors Service, Inc. ("Moody's") are judged by
Moody's to be of high quality by all standards. Together with bonds rated Aaa
(Moody's highest rating) they comprise what are generally known as high-grade
bonds. Aa bonds are rated lower than Aaa bonds because margins of protection may
not be as large as those of Aaa bonds, or fluctuation of protective elements may
be of greater amplitude, or there may be other elements present that make the
long-term risks appear somewhat larger than those applicable to Aaa securities.
Bonds that are rated A by Moody's possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present that suggest a susceptibility to impairment in the future.
Moody's Baa rated bonds are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Bonds rated Ba by Moody's are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class. Bonds which are rated B by Moody's generally
lack characteristics of a desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the contract over any
long period of time may be small.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through B. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
Bonds rated AA by Standard & Poor's Corporation ("S&P") are judged by S&P
to be high-grade obligations and in the majority of instances differ only in
small degree from issues rated AAA (S&P's highest rating). Bonds rated AAA are
considered by S&P to be the highest grade obligations and possess the ultimate
degree of protection as to principal and interest. With AA bonds, as with AAA
bonds, prices move with the long-term money market. Bonds rated A by S&P have a
strong capacity to pay principal and interest, although they are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions.
S&P's BBB rated bonds, or medium-grade category bonds, are borderline
between definitely sound obligations and those where the speculative elements
begin to predominate. These bonds have adequate asset coverage and normally are
protected by satisfactory earnings. Their susceptibility to changing conditions,
particularly to depressions, necessitates constant watching. These bonds
generally are more responsive to business and trade conditions than to interest
rates. This group is the lowest that qualifies for commercial bank investment.
Bonds rated BB and B by S&P are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. These ratings may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories. Debt rated BB has less near-term vulnerability to default
than other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions that could lead
to inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating. Debt rated B has a greater
vulnerability to default but currently has the capacity to meet interest
payments and principal repayments. Adverse business, financial or economic
conditions will likely impair capacity or willingness to pay interest and repay
principal. The B rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating.
A-1
<PAGE>
APPENDIX
(continued)
Bonds rated AAA by Fitch Investors Service, Inc. ("Fitch") are judged by
Fitch to be strictly high grade, broadly marketable, suitable for investment by
trustees and fiduciary institutions and liable to but slight market fluctuation
other than through changes in the money rate. The prime feature of an AA bond is
a showing of earnings several times or many times interest requirements, with
such stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions. Bonds rated AA by Fitch are judged by
Fitch to be of safety virtually beyond question and are readily salable, whose
merits are not unlike those of the AAA class, but whose margin of safety is less
strikingly broad. The issue may be the obligation of a small company, strongly
secured but influenced as to rating by the lesser financial power of the
enterprise and more local type of market.
Bonds rated Duff-1 are judged by Duff and Phelps, Inc. ("Duff") to be of
the highest credit quality with negligible risk factors; only slightly more than
U. S. Treasury debt. Bonds rated Duff-2, 3 and 4 are judged by Duff to be of
high credit quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.
COMMERCIAL PAPER RATINGS
Moody's Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. The rating Prime-1 is the highest commercial paper rating
assigned by Moody's. Issuers rated Prime-1, or related supporting institutions,
are considered to have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2, or related supporting
institutions, are considered to have a strong capacity for repayment of
short-term promissory obligations. This will normally be evidenced by many of
the characteristics of issuers rated Prime-l, but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample liquidity is maintained.
Commercial paper ratings of S&P are current assessments of the likelihood
of timely payment of debts having original maturities of no more than 365 days.
Commercial paper rated A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues deter mined
to possess overwhelming safety characteristics are denoted A-1+. Capacity for
timely payment on commercial paper rated A-2 is strong, but the relative degree
of safety is not as high as for issues designated A-1. The rating Fitch-1
(Highest Grade) is the highest commercial paper rating assigned by Fitch. Paper
rated Fitch-1 is regarded as having the strongest degree of assurance for timely
payment. The rating Fitch-2 (Very Good Grade) is the second highest commercial
paper rating assigned by Fitch which reflects an assurance of timely payment
only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
A-2
<PAGE>
INVESTMENT MANAGER:
Fred Alger Management, Inc.
75 Maiden Lane
New York, New York 10038
- --------------------------------------------------------------------------------
DISTRIBUTOR:
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
- --------------------------------------------------------------------------------
TRANSFER AGENT:
Alger Shareholder Services, Inc.
30 Montgomery Street
Box 2001
Jersey City, New Jersey 07302
- --------------------------------------------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS:
Arthur Andersen LLP
1345 Avenue of the Americas
New York, New York 10105
- --------------------------------------------------------------------------------
COUNSEL:
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
- --------------------------------------------------------------------------------
================================================================================
THE ALGER|MEETING THE CHALLENGE
RETIREMENT|OF INVESTING
FUND|
STATEMENT|
OF ADDITIONAL|February 25, 1998
INFORMATION|
================================================================================
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Financial Statements included in Part A:
Condensed Financial Information
(2) Financial Statements incorporated by reference into Part B:
For each Portfolio:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statements of Changes in Net Assets for the years ended
October 31, 1997 and October 31, 1996
Financial Highlights
Notes to Financial Statements
Report of Independent Public Accountants
(b) Exhibits
Exhibit No. Description of Exhibit
1 Agreement and Declaration of Trust [EDGAR 2/98]
1a Certificate of Amendment dated August 16, 1993
1b Certificate of Designation - Alger Defined Contribution
Leveraged AllCap Portfolio [EDGAR 2/98]
1c Certificate of Amendment dated March 30, 1996 (2)
2 By-laws of Registrant (1) [EDGAR 2/98]
3 Not applicable
4 Specimen Share Certificates (1)
5 Investment Management Agreements (1)
5a Investment Management Agreement for Alger Defined Contribution
MidCap Growth Portfolio (1) [EDGAR 2/98]
5a(i) Amendment dated September 11, 1996
5b Investment Management Agreement for Alger Defined Contribution
Leveraged AllCap Portfolio (1) [EDGAR 2/98]
5b(i) Amendment dated September 11, 1996 [EDGAR 2/98]
5c Investment Management Agreement for Alger Defined
Contribution Small Cap Portfolio (1) [EDGAR 2/98]
5c(i) Amendment dated September 11, 1996 [EDGAR 2/98]
5d Investment Management Agreement for Alger Defined Contribution
Growth Portfolio (1) [EDGAR 2/98]
5d(i) Amendment dated September 11, 1996 [EDGAR 2/98]
6 Distribution Agreement (1)[EDGAR 2/98]
6a Amendment dated September 11, 1996 [EDGAR 2/98]
7 Not applicable
8 Custody Agreement (2)
9 Transfer Agency Agreement (1) [EDGAR 2/98]
10 Opinion and Consent of Sullivan & Worcester (1)
11 Consent of Arthur Andersen LLP
<PAGE>
12 Not applicable
13 Form of Subscription Agreement (1) [EDGAR 2/98]
14 Not applicable
15 Not applicable
16 Schedule for computation of performance quotations provided in
the Statement of Additional Information
- -----------------
(1) Incorporated by reference to Registrant's Registration Statement (the
"Registration Statement") filed with the Securities and Exchange
Commission (the "SEC") on August 27, 1993.
(2) Incorporated by reference to Post-Effective Amendment No. 6 filed with
the SEC on February 27, 1997
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
Set forth below is information regarding the number of record holders of each
class of Registrant's securities as of February 24, 1998.
Title or Class Number of Record Holders
-------------- ------------------------
Alger Small Cap Retirement Portfolio 9
Alger MidCap Growth Retirement Portfolio 10
Alger Growth Retirement Portfolio 6
Alger Capital Appreciation Retirement Portfolio 6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, Registrant certifies that this Registration
Statement meets all of the requirements for effectiveness pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
New York and State of New York on the 25 day of February, 1998.
THE ALGER RETIREMENT FUND
By: /s/ David D. Alger
-------------------------------
David D. Alger, President
ATTEST: /s/ Gregory S. Duch
--------------------------------------
Gregory S. Duch, Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed below by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board February 25, 1997
- ----------------------------
Fred M. Alger III
/s/ David D. Alger President and Trustee February 25, 1997
- ---------------------------- (Chief Executive Officer)
David D. Alger
/s/ Gregory S. Duch Treasurer February 25, 1997
- ---------------------------- (Chief Financial and
Gregory S. Duch Accounting Officer)
* Trustee February 25, 1997
- ----------------------------
Nathan E. Saint-Amand
* Trustee February 25, 1997
- ----------------------------
Stephen E. O'Neil
* Trustee February 25, 1997
- ----------------------------
Arthur M. Dubow
* Trustee February 25, 1997
- ----------------------------
John T. Sargent
* By:/s/Gregory S. Duch
-------------------------
Gregory S. Duch
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
1 Agreement and Declaration of Trust
1(a) Certificate of Amendment 8/16/93
1(b) Certificate of Designation
2 Bylaws
5(a) Investment Management Agreement - MidCap Growth
5(a)(i) Amendment - MidCap Growth Investment Management Agreement
5(b) Investment Managment Agreement - Leveraged AllCap
5(b)(i) Amendment - Leveraged AllCap
5(c) Investment Management Agreement - Small Cap
5(c)(i) Amendment - Small Cap
5(d) Investment Management Agreement - Growth
5(d)(i) Amendment - Growth
6 Distribution Agreement
6(a) Amendment - Distribution Agreement
9 Transfer Agency Agreement
11 Consent of Independent Accounts
13 Subscription Agreement
16 Average Annual Return Computation
EXHIBIT 1
THE ALGER DEFINED CONTRIBUTION TRUST
------------------------------------------
AGREEMENT AND DECLARATION OF TRUST
------------------------------------------
Dated: July 14, 1993
Principal Office:
Fred Alger & Company Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
Address of Initial Trustee and Massachusetts Office:
Thomas E. Weesner, Esq.
Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
THE ALGER DEFINED CONTRIBUTION TRUST
AGREEMENT AND DECLARATION OF TRUST
INDEX
Page
----
RECITALS .................................................................... 1
ARTICLE 1. THE TRUST ................................................ 2
Section 1.1 Name ..................................................... 2
Section 1.2 Location ................................................. 2
Section 1.3 Nature of Trust .......................................... 2
Section 1.4 Definitions .............................................. 3
Section 1.5 Real Property to be Converted into
Personal Property ...................................... 7
ARTICLE 2. PURPOSE OF THE TRUST ..................................... 7
ARTICLE 3. POWERS OF THE TRUSTEES ................................... 7
Section 3.1 Powers in General ........................................ 7
(a) Investments ....................................... 9
(b) Disposition of Assets ............................. 9
(c) Ownership Powers .................................. 9
(d) Form of Holding ................................... 9
(e) Reorganization, etc. .............................. 9
(f) Voting Trusts, etc. ............................... 10
(g) Contracts, etc. ................................... 10
(h) Guarantees, etc. .................................. 10
(i) Partnerships, etc. ................................ 10
(j) Insurance ......................................... 10
(k) Pensions, etc. .................................... 11
(1) Power of Collection and Litigation ................ 11
(m) Issuance and Repurchase of Shares ................. 11
(n) Offices ........................................... 11
(o) Expenses .......................................... 11
(p) Agents, etc. ...................................... 11
(q) Accounts .......................................... 12
(r) Valuation ......................................... 12
(s) Indemnification. .................................. 12
(t) General ........................................... 12
Section 3.2 Borrowings; Financings; .................................. 12
Issuance of Securities ................................. 13
Section 3.3 Deposits ................................................. 13
Section 3.4 Allocations .............................................. 13
Section 3.5 Further Powers; Limitations .............................. 13
<PAGE>
-ii-
ARTICLE 4. TRUSTEES AND OFFICERS ..................................... 14
Section 4.1 Number, Designation, Election,
Term, etc. .............................................. 14
(a) Initial Trustee .................................. 14
(b) Number ........................................... 14
(c) Election and Term ................................ 14
(d) Resignation and Retirement ....................... 15
(e) Removal .......................................... 15
(f) Vacancies ........................................ 15
(g) Acceptance of Trusts ............................. 15
(h) Effect of Death, Resignation, etc. ............... 15
(i) Conveyance ....................................... 16
(j) No Accounting .................................... 16
Section 4.2 Trustees' Meetings; Participation
by Telephone, etc. ...................................... 16
Section 4.3 Committees; Delegation .................................... 17
Section 4.4 Officers .................................................. 17
Section 4.5 Compensation of Trustees
and Officers ............................................ 17
Section 4.6 Ownership of Shares and Securities
of the Trust ............................................ 17
Section 4.7 Right of Trustees and Officers
to Own Property or to Engage
in Business; Authority of Trustees
to Permit Others to Do Likewise ......................... 18
Section 4.8 Reliance on Experts ....................................... 18
Section 4.9 Surety Bonds .............................................. 18
Section 4.10 Apparent Authority of
Trustees and Officers ................................... 19
Section 4.11 Other Relationships Not
Prohibited .............................................. 19
Section 4.12 Payment of Trust Expenses ................................. 19
Section 4.13 Ownership of the Trust Property ........................... 20
ARTICLE 5. DELEGATION OF MANAGERIAL
RESPONSIBILITIES ........................................ 20
Section 5.1 Appointment; Action by Less than All Trustees ............. 20
Section 5.2 Certain Contracts ......................................... 21
(a) Advisory ......................................... 21
(b) Administration ................................... 22
(c) Distribution ..................................... 22
(d) Custodian ........................................ 22
(e) Transfer and Dividend
Disbursing Agency .............................. 22
<PAGE>
-iii-
(f) Shareholder Servicing ............................ 22
(g) Accounting ....................................... 23
ARTICLE 6. PORTFOLIOS AND SHARES ..................................... 23
Section 6.1 Description of Portfolios and Shares ...................... 23
(a) Shares; Portfolios; Series of Shares ............. 23
(b) Establishment, etc. of Portfolios;
Authorization of Shares ........................ 23
(c) Character of Separate Portfolios
and Shares Thereof ............................. 24
(d) Consideration for Shares ......................... 24
Section 6.2 Establishment and Designation
of Certain Portfolios; General
Provisions for All Portfolios ........................... 25
(a) Assets Belonging to Portfolios ................... 25
(b) Liabilities of Portfolios ........................ 25
(c) Dividends ........................................ 26
(d) Liquidation ...................................... 26
(e) Voting ........................................... 27
(f) Redemption by Shareholder ........................ 27
(g) Redemption at the Option of the Trust ............ 27
(h) Net Asset Value .................................. 28
(i) Transfer ......................................... 28
(j) Equality ......................................... 28
(k) Rights of Fractional Shares ...................... 29
(1) Conversion Rights ................................ 29
Section 6.3 Ownership of Shares ....................................... 29
Section 6.4 Investments in the Trust .................................. 29
Section 6.5 No Pre-emptive Rights ..................................... 29
Section 6.6 Status of Shares .......................................... 30
ARTICLE 7. SHAREHOLDERS' VOTING POWERS AND MEETINGS .................. 30
Section 7.1 Voting Powers .............................................. 30
Section 7.2 Number of Votes and Manner
of Voting; Proxies ...................................... 31
Section 7.3 Meetings ................................................... 31
Section 7.4 Record Dates ............................................... 31
Section 7.5 Quorum and Required Vote ................................... 32
Section 7.6 Action by Written Consent .................................. 32
Section 7.7 Inspection of Records ...................................... 32
Section 7.8 Additional Provisions ...................................... 32
<PAGE>
- iv-
ARTICLE 8. LIMITATION OF LIABILITY;
INDEMNIFICATION ......................................... 33
Section 8.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice .............................. 33
Section 8.2 Trustees' Good Faith Action;
Expert Advice; No Bond
or Surety .............................................. 33
Section 8.3 Indemnification of
Shareholders ........................................... 34
Section 8.4 Indemnification of Trustees,
Officers, etc........................................... 34
Section 8.5 Compromise Payment ........................................ 35
Section 8.6 Indemnification Not
Exclusive, etc. ........................................ 36
Section 8.7 Liability of Third Persons
Dealing with Trustees .................................. 36
ARTICLE 9 DURATION; REORGANIZATION;
AMENDMENTS .............................................. 36
Section 9.1 Duration and Termination
of Trust ............................................... 36
Section 9.2 Reorganization ............................................ 37
Section 9.3 Amendments; etc. .......................................... 37
Section 9.4 Filing of Copies of
Declaration and Amendments .............................. 38
ARTICLE 10 MISCELLANEOUS ............................................. 38
Section 10.1 Governing Law ............................................. 38
Section 10.2 Counterparts .............................................. 38
Section 10.3 Reliance by Third Parties.................................. 38
Section 10.4 References; Headings ...................................... 39
Section 10.5 Use of the Name "Alger".................................... 39
Signatures .................................................................. 39
Acknowledgments ............................................................. 41
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
THE ALGER DEFINED CONTRIBUTION TRUST
This AGREEMENT AND DECLARATION OF TRUST, made at Boston, Massachusetts
this 14th day of July, 1993 by and between the Settlor and the Trustee whose
signature is set forth below (the "INITIAL TRUSTEE"
W I T N E S S E T H T H A T:
WHEREAS, Kathleen M. Miskiewicz, an individual residing in Brookline,
Massachusetts (the "Settlor"), proposes to deliver to the Initial Trustee the
sum of one hundred fifty dollars ($150.00) lawful money of the United States of
America in trust hereunder and to authorize the Initial Trustee and all other
Persons acting as Trustees hereunder to employ such funds, and any other funds
coming into their hands or the hands of their successor or successors as such
Trustees, to carry on the business of an investment company, and as such of
buying, selling, investing in or otherwise dealing in and with stocks, bonds,
debentures, warrants, options, futures contracts and other securities and
interests therein, or calls or puts with respect to any of the same, or such
other and further investment media and other property as the Trustees may deem
advisable, which are not prohibited by law or the terms of this Declaration; and
WHEREAS, the Initial Trustee is willing to accept such sum, together
with any and all additions thereto and the income or increments thereof, upon
the terms, conditions and trusts hereinafter set forth; and
WHEREAS, it is proposed that the assets held by the Trustees be divided
into separate Portfolios, each with its own separate investment assets,
investment objectives, policies and purposes, and that the beneficial interest
in each such Portfolio shall be divided into transferable Shares of Beneficial
Interest, a separate Series of Shares for each fund, all in accordance with the
provisions hereinafter set forth; and
WHEREAS, it is desired that the trust established hereby (the "TRUST")
be managed and operated as a trust with transferable shares under the laws of
Massachusetts, of the type commonly known as and referred to as a Massachusetts
business trust, in accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Initial Trustee, for himself and his successors as
Trustees, hereby declares, and agrees with the Settlor, for himself and for all
Persons who shall hereafter become holders of
<PAGE>
-2-
Shares of Beneficial Interest of the Trust, of any Series, that the Trustees
will hold the sum delivered to them upon the execution hereof, and all other and
further cash, securities and other property of every type and description which
they may in any way acquire in their capacity as such Trustees, together with
the income therefrom and the proceeds thereof, IN TRUST NEVERTHELESS, to manage
and dispose of the same for the benefit of the holders from time to time of the
Shares of Beneficial Interest of the several Series being issued and to be
issued hereunder and in the manner and subject to the provisions hereof, to wit:
ARTICLE 1
THE TRUST
SECTION 1.1 NAME. The name of the Trust shall be
"THE ALGER DEFINED CONTRIBUTION TRUST",
and so far as may be practicable the Trustees shall conduct the Trust's
activities, execute all documents and sue or be sued under that name, which name
(and the word "TRUST" wherever used in this Agreement and Declaration of Trust,
except where the context otherwise requires) shall refer to the Trustees in
their capacity as Trustees1 and not individually or personally, and shall not
refer to the officers, agents or employees of the Trust or of such Trustees, or
to the holders of the Shares of Beneficial Interest of the Trust, of any Series.
If the Trustees determine that the use of such name is not practicable, legal or
convenient at any time or in any jurisdiction, or if the Trust is required to
discontinue the use of such name pursuant to Section 10.5 hereof, then subject
to that Section, the Trustees may use such other designation, or they may adopt
such other name for the Trust as they deem proper, and the Trust may hold
property and conduct its activities under such designation or name.
SECTION 1.2 LOCATION. The Trust shall have an office in Boston,
Massachusetts, unless changed by the Trustees to another location in
Massachusetts or elsewhere, but such office need not be the sole or principal
office of the Trust. The Trust may have such other offices or places of business
as the Trustees may from time to time determine to be necessary or expedient.
SECTION 1.3 NATURE OF TRUST. The Trust shall be a trust with
transferable shares under the laws of The Commonwealth of Massachusetts, of the
type referred to in Section 1 of Chapter 182 of the Massachusetts General Laws
and commonly termed a Massachusetts business trust. The Trust is not intended to
be, shall not be deemed to be, and shall not be treated as, a general
partnership, limited partnership, joint venture, corporation or joint stock
company. The Shareholders shall be beneficiaries and their relationship to the
<PAGE>
-3-
Trustees shall be solely in that capacity in accordance with the rights
conferred upon them hereunder.
SECTION 1.4 DEFINITIONS. As used in this Agreement and Declaration of
Trust, the following terms shall have the meanings set forth below unless the
context thereof otherwise requires:
"ACCOUNTING AGENT" shall have the meaning designated in Section 5.2(g)
hereof.
"ADMINISTRATOR" shall have the meaning designated in Section 5.2(b)
hereof.
"AFFILIATED PERSON" shall have the meaning assigned to it in the 1940
Act.
"BY-LAWS" shall mean the By-Laws of the Trust, as amended from time to
time.
"CERTIFICATE OF DESIGNATION" shall have the meaning designated in
Section 6.1 hereof.
"CERTIFICATE OF TERMINATION" shall have the meaning designated in
Section 6.1 hereof.
"COMMISSION" shall have the same meaning as in the 1940 Act.
"CONTRACTING PARTY" shall have the meaning designated in the preamble
to Section 5.2 hereof.
"COVERED PERSON" shall have the meaning designated in Section 8.4
hereof.
"CUSTODIAN" shall have the meaning designated in Section 5.2(d) hereof.
"DECLARATION" and "DECLARATION OF TRUST" shall mean this Agreement and
Declaration of Trust and all amendments or modifications thereof as from time to
time in effect. References in this Agreement and Declaration of Trust to
"HEREOF", "HEREIN" and "HEREUNDER" shall be deemed to refer to the Declaration
of Trust generally, and shall not be limited to the particular text, Article or
Section in which such words appear.
"DISABLING CONDUCT" shall have the meaning designated in Section 8.4
hereof.
"DISTRIBUTOR" shall have the meaning designated in Section 5.2(c)
hereof.
"DIVIDEND DISBURSING AGENT" shall have the meaning designated in
Section 5.2(e) hereof.
<PAGE>
-4-
"GENERAL ITEMS" shall have the meaning defined in Section 6.2(a)
hereof.
"INITIAL TRUSTEE" shall have the meaning defined in the preamble
hereto.
"INVESTMENT ADVISER" shall have the meaning stated in Section 5.2(a)
hereof.
"MAJORITY OF THE TRUSTEES" shall mean a majority of the Trustees in
office at the time in question. At any time at which there shall be only one (1)
Trustee in office, such term shall mean such Trustee.
"MAJORITY SHAREHOLDER VOTE," as used with respect to the election of
any Trustee at a meeting of Shareholders, shall mean the vote for the election
of such Trustee of a plurality of all outstanding Shares of the Trust, without
regard to Series, represented in person or by proxy and entitled to vote
thereon, provided that a quorum (as determined in accordance with the By-Laws)
is present, and as used with respect to any other action required or permitted
to be taken by Shareholders, shall mean the vote for such action of the holders
of that majority of all outstanding Shares (or, where a separate vote of Shares
of any particular Series is to be taken, the affirmative vote of that majority
of the outstanding Shares of that Series) of the Trust which consists of: (i) a
majority of all Shares (or of Shares of the particular Series) represented in
person or by proxy and entitled to vote on such action at the meeting of
Shareholders at which such action is to be taken, provided that a quorum (as
determined in accordance with the By-Laws) is present; or (ii) if such action is
to be taken by written consent of Shareholders, a majority of all Shares (or of
Shares of the particular Series) issued and outstanding and entitled to vote on
such action; PROVIDED, that (iii) as used with respect to any action requiring
the affirmative vote of "a majority of the outstanding voting securities", as
the quoted phrase is defined in the 1940 Act, of the Trust or of any Portfolio,
"MAJORITY SHAREHOLDER VOTE" means the vote for such action at a meeting of
Shareholders of the smallest majority of all outstanding Shares of the Trust (or
of Shares of the particular Portfolio) entitled to vote on such action which
satisfies such 1940 Act voting requirement.
"1940 ACT" shall mean the provisions of the Investment Company Act of
1940 and the rules and regulations thereunder, both as amended from time to
time, and any order or orders thereunder which may from time to time be
applicable to the Trust.
"PERSON" shall mean and include individuals, as well as corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, banks, trust companies, land trusts, business trusts or
other organizations established under the laws of any jurisdiction, whether or
not considered to be legal
<PAGE>
-5-
entities, and governments and agencies and political subdivisions thereof.
"PORTFOLIO" or "PORTFOLIOS" shall mean one or more of the separate
components of the assets of the Trust which are now or hereafter established and
designated under or in accordance with the provisions of Article 6 hereof.
"PORTFOLIO ASSETS" shall have the meaning defined in Section 6.2(a)
hereof.
"PRINCIPAL UNDERWRITER" shall have the meaning designated in Section
5.2(c) hereof.
"PROSPECTUS," as used with respect to any Portfolio or Series of
Shares, shall mean the prospectus relating to such Portfolio or Series which
constitutes part of the currently effective Registration Statement of the Trust
under the Securities Act of 1933, as such prospectus may be amended or
supplemented from time to time.
"SECURITIES" shall mean any and all bills, notes, bonds, debentures or
other obligations or evidences of indebtedness, certificates of deposit,
bankers' acceptances, commercial paper, repurchase agreements or other money
market instruments; stocks, shares or other equity ownership interests; and
warrants, options or other instruments representing rights to subscribe for,
purchase, receive or otherwise acquire or to sell, transfer, assign or otherwise
dispose of, and scrip, certificates, receipts or other instruments evidencing
any ownership rights or interests in, any of the foregoing and "when issued" and
"delayed delivery" contracts for securities, issued, guaranteed or sponsored by
any governments, political subdivisions or governmental authorities, agencies or
instrumentalities, by any individuals, firms, companies, corporations,
syndicates, associations or trusts, or by any other organizations or entities
whatsoever, irrespective of their forms or the names by which they may be
described, whether or not they be organized and operated for profit, and whether
they be domestic or foreign with respect to The Commonwealth of Massachusetts or
the United States of America.
"SECURITIES OF THE TRUST" shall mean any Securities issued by the
Trust.
"SERIES" shall mean one or more of the series of Shares authorized by
the Trustees to represent the beneficial interest in one or more of the
Portfolios.
"SETTLOR" shall have the meaning stated in the first "Whereas" clause
set forth above.
"SHAREHOLDER" shall mean as of any particular time any Person shown of
record at such time on the books of the Trust as a holder of
<PAGE>
-6-
outstanding Shares of any Series, and shall include a pledgee into whose name
any such Shares are transferred in pledge.
"SHAREHOLDER SERVICING AGENT" shall have the meaning designated in
Section 5.2(f) hereof.
"SHARES" shall mean the transferable units into which the beneficial
interest in the Trust and each Portfolio of the Trust (as the context may
require) shall be divided from time to time, and includes fractions of Shares as
well as whole Shares. All references herein to "Shares" which are not
accompanied by a reference to any particular Series or Portfolio shall be deemed
to apply to outstanding Shares without regard to Series.
"SINGLE CLASS VOTING," as used with respect to any matter to be acted
upon at a meeting or by written consent of Shareholders, shall mean a style of
voting in which each holder of one or more Shares shall be entitled to one vote
on the matter in question for each Share standing in his name on the records of
the Trust, irrespective of Series, and all outstanding Shares of all Series vote
as a single class.
"STATEMENT OF ADDITIONAL INFORMATION," as used with respect to any
Portfolio or Series of Shares, shall mean the statement of additional
information relating to such Portfolio or Series, which constitutes part of the
currently effective Registration Statement of the Trust under the Securities Act
of 1933, as such statement of additional information may be amended or
supplemented from time to time.
"TRANSFER AGENT" shall have the meaning defined in Section 5.2(e)
hereof.
"TRUST" shall have the meaning stated in the fourth "Whereas" clause
set forth above, as explained in Section 1.1 hereof.
"TRUST PROPERTY" shall mean, as of any particular time, any and all
property which shall have been transferred, conveyed or paid to the Trust or the
Trustees, and all interest, dividends, income, earnings, profits and gains
therefrom, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and which at
such time is owned or held by, or for the account of, the Trust or the Trustees,
without regard to the Portfolio to which such property is allocated.
"TRUSTEES" shall mean, collectively, the Initial Trustee, so long as he
shall continue in office, and all other individuals who at the time in question
have been duly elected or appointed as Trustees of the Trust in accordance with
the provisions hereof and who have qualified and are then in office. At any time
at which there shall
<PAGE>
-7-
be only one (1) Trustee in office, such term shall mean such single Trustee.
SECTION 1.5 REAL PROPERTY TO BE CONVERTED INTO PERSONAL PROPERTY.
Notwithstanding any other provision hereof, any real property at any time
forming part of the Trust Property shall be held in trust for sale and
conversion into personal property at such time or times and in such manner and
upon such terms as the Trustees shall approve, but the Trustees shall have power
until the termination of this Trust to postpone such conversion as long as they
in their uncontrolled discretion shall think fit, and for the purpose of
determining the nature of the interest of the Shareholders therein, all such
real property shall at all times be considered as personal property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to engage in the business of being an
investment company, and as such of subscribing for, purchasing or otherwise
acquiring, holding for investment or trading in, borrowing, lending and selling
short, selling, assigning, negotiating or exchanging and otherwise disposing of,
and turning to account, realizing upon and generally dealing in and with, in any
manner, (a) Securities of all kinds, (b) precious metals and other minerals,
contracts to purchase and sell, and other interests of every nature and kind in,
such metals or minerals, and (c) rare coins and other numismatic items, and all
as the Trustees in their discretion shall determine to be necessary, desirable
or appropriate, and to exercise and perform any and every act, thing or power
necessary, suitable or desirable for the accomplishment of such purpose, the
attainment of any of the objectives or the furtherance of any of the powers
given hereby which are lawful purposes, objects or powers of a trust with
transferable shares of the type commonly termed a Massachusetts business trust;
and to do every other act or acts or thing or things incidental or appurtenant
to or growing Out of or in connection with the aforesaid objectives, purposes or
powers, or any of them, which a trust of the type commonly termed a
Massachusetts business trust is not now or hereafter prohibited from doing,
exercising or performing.
ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1 POWERS IN GENERAL. The Trustees shall have, without other
or further authorization, full, entire, exclusive and absolute power, control
and authority over, and management of, the business of the Trust and over the
Trust Property, to the same extent as if the Trustees were the sole owners of
the business and property of the Trust in their own right, and with such powers
of delegation as
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may be permitted by this Declaration, subject only to such limitations as may be
expressly imposed by this Declaration of Trust or by applicable law. The
enumeration of any specific power or authority herein shall not be construed as
limiting the aforesaid power or authority or any specific power or authority.
Without limiting the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the business and
affairs of the Trust and may amend and repeal them to the extent that such
By-Laws do not reserve that right to the Shareholders; they may select, and from
time to time change, the fiscal year of the Trust; they may adopt and use a seal
for the Trust, PROVIDED, that unless otherwise required by the Trustees, it
shall not be necessary to place the seal upon, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust; they may from time to time in accordance with the
provisions of Section 6.1 hereof establish one or more Portfolios to which they
may allocate such of the Trust Property, subject to such liabilities, as they
shall deem appropriate, each such Portfolio to be operated by the Trustees as a
separate and distinct investment medium and with separately defined investment
objectives and policies and distinct investment purposes, all as established by
the Trustees, or from time to time changed by them; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the foregoing
of whom may be a Trustee; they may appoint from their own number, and terminate,
any one or more committees consisting of one or more Trustees, including without
implied limitation an Executive Committee, which may, when the Trustees are not
in session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in accordance with
Section 5.2 they may employ one or more Investment Advisers, Administrators and
Custodians and may authorize any Custodian to employ subcustodians or agents and
to deposit all or any part of such assets in a system or systems for the central
handling of Securities, retain Transfer, Dividend Disbursing, Accounting or
Shareholder Servicing Agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more Distributors, Principal
Underwriters or otherwise, set record dates or times for the determination of
Shareholders entitled to participate in, benefit from or act with respect to
various matters; and in general they may delegate to any officer of the Trust,
to any Committee of the Trustees and to any employee, Investment Adviser,
Administrator, Distributor, Custodian, Transfer Agent, Dividend Disbursing
Agent, or any other agent or consultant of the Trust, such authority, powers,
functions and duties as they consider desirable or appropriate for the conduct
of the business and affairs of the Trust, including without implied limitation
the power and authority to act in the name of the Trust and of the Trustees, to
sign documents and to act as attorney-in-fact for the Trustees. Without limiting
the foregoing and to the extent not inconsistent with the 1940 Act or other
applicable law, the Trustees shall have power and authority:
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(a) INVESTMENTS. To invest and reinvest cash and other property;
to buy, for cash or on margin, and otherwise acquire and hold,
Securities created or issued by any Persons, including Securities
maturing after the possible termination of the Trust; to make payment
therefor in any lawful manner in exchange for any of the Trust
Property; and to hold cash or other property uninvested without in any
event being bound or limited by any present or future law or custom in
regard to investments by trustees;
(b) DISPOSITION OF ASSETS. Upon such terms and conditions as they
deem best, to lend, sell, exchange, mortgage, pledge, hypothecate,
grant security interests in, encumber, negotiate, convey, transfer or
otherwise dispose of, and to trade in, any and all of the Trust
Property, free and clear of all trusts, for cash or on terms, with or
without advertisement, and on such terms as to payment, security or
otherwise, all as they shall deem necessary or expedient;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any and
all other rights, powers and privileges of ownership with respect to,
and to perform any and all duties and obligations as owners of, any
Securities or other property forming part of the Trust Property, the
same as any individual might do; to exercise powers and rights of
subscription or otherwise which in any manner arise out of ownership of
Securities, and to receive powers of attorney from, and to execute and
deliver proxies or powers of attorney to, such Person or Persons as the
Trustees shall deem proper, receiving from or granting to such Person
or Persons such power and discretion with relation to Securities or
other property of the Trust, all as the Trustees shall deem proper;
(d) FORM OF HOLDING. To hold any Security or other property in a
form not indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust, or of
the Portfolio to which such Securities or property belong, or in the
name of a Custodian, subcustodian or other nominee or nominees, or
otherwise, upon such terms, in such manner or with such powers, as the
Trustees may determine, and with or without indicating any trust or the
interest of the Trustees therein;
(e) REORGANIZATION, ETC. To consent to or participate in any plan
for the reorganization, consolidation or merger of any corporation or
issuer, any Security of which is or was held in the Trust or any
Portfolio; to consent to any contract, lease, mortgage, purchase or
sale of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any Security forming part of the Trust
Property;
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(f) VOTING TRUSTS, ETC. To join with other holders of any
Securities in acting through a committee, depository, voting trustee or
otherwise, and in that connection to deposit any Security with, or
transfer any Security to, any such committee, depository or trustee,
and to delegate to them such power and authority with relation to any
Security (whether or not so deposited or transferred) as the Trustees
shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depository or trustee as
the Trustees shall deem proper;
(g) CONTRACTS, ETC. To enter into, make and perform all such
obligations, contracts, agreements and undertakings of every kind and
description, with any Person or Persons, as the Trustees shall in their
discretion deem expedient in the conduct of the business of the Trust,
for such terms as they shall see fit, whether or not extending beyond
the term of office of the Trustees, or beyond the possible expiration
of the Trust; to amend, extend, release or cancel any such obligations,
contracts, agreements or understandings; and to execute, acknowledge,
deliver and record all written instruments which they may deem
necessary or expedient in the exercise of their powers;
(h) GUARANTEES, ETC. To endorse or guarantee the payment of any
notes or other obligations of any Person; to make contracts of guaranty
or suretyship, or otherwise assume liability for payment thereof; and
to mortgage and pledge the Trust Property or any part thereof to secure
any of or all such obligations;
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(j) INSURANCE. To purchase and pay for entirely out of Trust
Property such insurance as they may deem necessary or appropriate for
the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
consultants, Investment Advisers, managers, Administrators,
Distributors, Principal Underwriters, or other independent contractors,
or any thereof (or any Person connected therewith), of the Trust,
individually, against all claims and liabilities of every nature
arising by reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or
omitted by any such Person in any such capacity, including any action
taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person
against such liability;
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(k) PENSIONS, ETC. To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase, savings,
thrift and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the
Trust;
(1) POWER OF COLLECTION AND LITIGATION. To collect, sue for and
receive all sums of money coming due to the Trust, to employ counsel,
and to commence, engage in, prosecute, intervene in, join, defend,
compound, compromise, adjust or abandon, in the name of the Trust, any
and all actions, suits, proceedings, disputes, claims, controversies,
demands or other litigation or legal proceedings relating to the Trust,
the business of the Trust, the Trust Property, or the Trustees,
officers, employees, agents and other independent contractors of the
Trust, in their capacity as such, at law or in equity, or before any
other bodies or tribunals, and to compromise, arbitrate or otherwise
adjust any dispute to which the Trust may be a party, whether or not
any suit is commenced or any claim shall have been made or asserted;
(m) ISSUANCE AND REPURCHASE OF SHARES. To issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in Shares of any Series, and,
subject to Article 6 hereof, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares of any
Series, any of the Portfolio Assets belonging to the Portfolio to which
such Series relates, whether constituting capital or surplus or
otherwise, to the full extent now or hereafter permitted by applicable
law; PROVIDED, that any Shares belonging to the Trust shall not be
voted, directly or indirectly;
(n) OFFICES. To have one or more offices, and to carry on all or
any of the operations and business of the Trust, in any of the States,
Districts or Territories of the United States, and in any and all
foreign countries, subject to the laws of such State, District,
Territory or country;
(o) EXPENSES. To incur and pay any and all such expenses and
charges as they may deem advisable (including without limitation
appropriate fees to themselves as Trustees), and to pay all such sums
of money for which they may be held liable by way of damages, penalty,
fine or otherwise;
(p) AGENTS, ETC. To retain and employ any and all such servants,
agents, employees, attorneys, brokers, investment advisers,
accountants, architects, engineers, builders, escrow agents,
depositories, consultants, ancillary trustees, custo-
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dians, agents for collection, insurers, banks and officers, as they
think best for the business of the Trust or any Portfolio, to supervise
and direct the acts of any of the same, and to fix and pay their
compensation and define their duties;
(q) ACCOUNTS. To determine, and from time to time change, the
method or form in which the accounts of the Trust shall be kept;
(r) VALUATION. Subject to the requirements of the 1940 Act, to
determine from time to time the value of all or any part of the Trust
Property and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and from
time to time to revalue all or any part of the Trust Property in
accordance with such appraisals or other information as is, in the
Trustees' sole judgment, necessary and satisfactory;
(s) INDEMNIFICATION. In addition to the mandatory indemnification
provided for in Article 8 hereof and to the extent permitted by law, to
indemnify or enter into agreements with respect to indemnification with
any Person with whom this Trust has dealings, including, without
limitation, any independent contractor, to such extent as the Trustees
shall determine; and
(t) GENERAL. To do all such other acts and things and to conduct,
operate, carry on and engage in such other lawful businesses or
business activities as they shall in their sole and absolute discretion
consider to be incidental to the business of the Trust or any Portfolio
as an investment company, and to exercise all powers which they shall
in their discretion consider necessary, useful or appropriate to carry
on the business of the Trust or any Portfolio, to promote any of the
purposes for which the Trust is formed, whether or not such things are
specifically mentioned herein, in order to protect or promote the
interests of the Trust or any Portfolio, or otherwise to carry out the
provisions of this Declaration.
SECTION 3.2 BORROWINGS; FINANCINGS; ISSUANCE OF SECURITIES. The
Trustees shall have power to borrow or in any other manner raise such sum or
sums of money, and to incur such other indebtedness for goods or services, or
for or in connection with the purchase or other acquisition of property, as they
shall deem advisable for the purposes of the Trust, in any manner and on any
terms, and to evidence the same by negotiable or non-negotiable Securities which
may mature at any time or times, even beyond the possible date of termination of
the Trust; to issue Securities of any type for such cash, property, services or
other considerations, and at such time or times and upon such terms, as they may
deem advisable; and to reacquire any such Securities. Any such Securities of the
Trust may, at the discretion of the Trustees, be made convertible into Shares of
any Series, or may evidence the right to purchase, subscribe for or otherwise
ac-
<PAGE>
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quire Shares of any Series, at such times and on such terms as the Trustees may
prescribe.
SECTION 3.3 DEPOSITS. Subject to the requirements of the 1940 Act, the
Trustees shall have power to deposit any moneys or Securities included in the
Trust Property with any one or more banks, trust companies or other banking
institutions, whether or not such deposits will draw interest. Such deposits are
to be subject to withdrawal in such manner as the Trustees may determine, and
the Trustees shall have no responsibility for any loss which may occur by reason
of the failure of the bank, trust company or other banking institution with
which any such moneys or Securities have been deposited, other than liability
based on their gross negligence or willful fault.
SECTION 3.4 ALLOCATIONS. The Trustees shall have power to determine
whether moneys or other assets received by the Trust shall be charged or
credited to income or capital, or allocated between income and capital,
including the power to amortize or fail to amortize any part or all of any
premium or discount, to treat any part or all of the profit resulting from the
maturity or sale of any asset, whether purchased at a premium or at a discount,
as income or capital, or to apportion the same between income and capital, to
apportion the sale price of any asset between income and capital, and to
determine in what manner any expenses or disbursements are to be borne as
between income and capital, whether or not in the absence of the power and
authority conferred by this Section 3.4 such assets would be regarded as income
or as capital or such expense or disbursement would be charged to income or to
capital; to treat any dividend or other distribution on any investment as income
or capital, or to apportion the same between income and capital; to provide or
fail to provide reserves, including reserves for depreciation, amortization or
obsolescence in respect of any Trust Property in such amounts and by such
methods as they shall determine; to allocate less than all of the consideration
paid for Shares of any Series to the shares of beneficial interest account of
the Portfolio to which such Shares relate and to allocate the balance thereof to
paid-in capital of that Portfolio, and to reallocate such amounts from time to
time; all as the Trustees may reasonably deem proper.
SECTION 3.5 FURTHER POWERS; LIMITATIONS. The Trustees shall have power
to do all such other matters and things, and to execute all such instruments, as
they deem necessary, proper or desirable in order to carry out, promote or
advance the interests of the Trust, although such matters or things are not
herein specifically mentioned. Any determination as to what is in the interests
of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Declaration of Trust, the presumption shall be
in favor of a grant of power to the Trustees. The Trustees shall not be required
to obtain any court order to deal with the Trust Property. The Trustees may
limit their right to exercise any of their powers through express restrictive
provisions in the instruments evidencing or providing the terms for any
Securities of
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the Trust or in other contractual instruments adopted on behalf of the Trust.
ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.
(a) INITIAL TRUSTEE. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in which he accepts
such Trusteeship and agrees to the provisions hereof, the individual
whose signature is affixed hereto as Initial Trustee shall become the
Initial Trustee hereof.
(b) NUMBER. The Trustees serving as such, whether named above or
hereafter becoming Trustees, may increase (to not more than twenty
(20)) or decrease the number of Trustees to a number other than the
number theretofore determined by a written instrument signed by a
Majority of the Trustees (or by an officer of the Trust pursuant to the
vote of a Majority of the Trustees). No decrease in the number of
Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee pursuant to
subsection (e) of this Section 4.1.
(c) ELECTION AND TERM. The Trustees shall be elected by the
Shareholders of the Trust at the first meeting of Shareholders
immediately prior to the initial public offering of Shares of the
Trust, and the term of office of any Trustees in office before such
election shall terminate at the time of such election. Subject to
Section 16(a) of the 1940 Act and to the preceding sentence of this
subsection (c), the Trustees shall have the power to set and alter the
terms of office of the Trustees, and at any time to lengthen or shorten
their own terms or make their terms of unlimited duration, to elect
their own successors and, pursuant to subsection (f) of this Section
4.1, to appoint Trustees to fill vacancies; PROVIDED, that Trustees
shall be elected by a Majority Shareholder Vote at any such time or
times as the Trustees shall determine that such action is required
under Section 16(a) of the 1940 Act or, if not so required, that such
action is advisable; and FURTHER PROVIDED, that, after the initial
election of Trustees by the Shareholders, the term of office of any
incumbent Trustee shall continue until the termination of this Trust or
his earlier death, resignation, retirement, bankruptcy, adjudicated
incompetency or other incapacity or removal, or if not so terminated,
until the election of such Trustee's successor in office has become
effective in accordance with this subsection (c).
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(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust
or retire as a Trustee, by a written instrument signed by him and
delivered to the other Trustees or to any officer of the Trust1 and
such resignation or retirement shall take effect upon such delivery or
upon such later date as is specified in such instrument.
(e) REMOVAL. Any Trustee may be removed with or without cause at
any time: (i) by written instrument, signed by at least two-thirds
(2/3) of the number of Trustees prior to such removal, specifying the
date upon which such removal shall become effective; or (ii) by vote of
Shareholders holding not less than two-thirds (2/3) of the Shares of
each Series then outstanding, cast in person or by proxy at any meeting
called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than two-thirds (2/3) of the Shares of
each Series then outstanding and filed with the Trust's Custodian.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from
any reason, including an increase in the number of Trustees, may (but
need not unless required by the 1940 Act) be filled by a Majority of
the Trustees, subject to the provisions of Section 16(a) of the 1940
Act, through the appointment in writing of such other individual as
such remaining Trustees in their discretion shall determine; PROVIDED,
that if there shall be no Trustees in office, such vacancy or vacancies
shall be filled by vote of the Shareholders. Any such appointment or
election shall be effective upon such individual's written acceptance
of his appointment as a Trustee and his agreement to be bound by the
provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in the number of Trustees to be
effective at a later date shall become effective only at or after the
effective date of said retirement, resignation or increase in the
number of Trustees.
(g) ACCEPTANCE OF TRUSTS. Any individual appointed as a Trustee
under subsection (f), and any individual elected as a Trustee under
subsection (c), of this Section 4.1 who was not, immediately prior to
such election, acting as a Trustee, shall accept such appointment or
election in writing and agree in such writing to be bound by the
provisions hereof, and whenever such individual shall have executed
such writing and any conditions to such appointment or election shall
have been satisfied, such individual shall become a Trustee and the
Trust Property shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.
(h) EFFECT OF DEATH, RESIGNATION, ETC. No vacancy, whether
resulting from the death, resignation, retirement, removal or
incapacity of any Trustee, an increase in the number of Trus-
<PAGE>
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tees or otherwise, shall operate to annul or terminate the Trust
hereunder or to revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this Declaration of
Trust. Until such vacancy is filled as provided in this Section 4.1,
the Trustees in office (if any), regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by this Declaration. A written
instrument certifying the existence of such vacancy signed by a
Majority of the Trustees shall be conclusive evidence of the existence
of such vacancy.
(i) CONVEYANCE. In the event of the resignation or removal of a
Trustee or his otherwise ceasing to be a Trustee, such former Trustee
or his legal representative shall, upon request of the continuing
Trustees, execute and deliver such documents as may be required for the
purpose of consummating or evidencing the conveyance to the Trust or
the remaining Trustees of any Trust Property held in such former
Trustee's name, but the execution and delivery of such documents shall
not be requisite to the vesting of title to the Trust Property in the
remaining Trustees, as provided in subsection (g) of this Section 4.1
and in Section 4.13 hereof.
(j) NO ACCOUNTING. Except to the extent required by the 1940 Act
or under circumstances which would justify his removal for cause, no
Person ceasing to be a Trustee (nor the estate of any such Person)
shall be required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.
SECTION 4.2 TRUSTEES' MEETINGS; PARTICIPATION BY TELEPHONE ETC. An
annual meeting of Trustees shall be held not later than the last day of the
fourth month after the end of each fiscal year of the Trust and special
meetings may be held from time to time, in each case, upon the call of such
officers as may be thereunto authorized by the By-Laws or vote of the
Trustees, or by any two (2) Trustees, or pursuant to a vote of the Trustees
adopted at a duly constituted meeting of the Trustees, and upon such notice
as shall be provided in the By-Laws. The Trustees may act with or without a
meeting, and a written consent to any matter, signed by a Majority of the
Trustees, shall be equivalent to action duly taken at a meeting of the
Trustees, duly called and held. Except as otherwise provided by the 1940 Act
or other applicable law, or by this Declaration of Trust or the By-Laws, any
action to be taken by the Trustees may be taken by a majority of the
Trustees present at a meeting of Trustees (a quorum, consisting of at least
a Majority of the Trustees, being present), within or without Massachusetts.
If authorized by the By-Laws, all or any one or more Trustees may
participate in a meeting of the Trustees or any Committee thereof by means
of conference telephone or similar means of communication by means of which
all Persons participating in the meeting can hear each other, and
participation in a meeting pursuant to such means of communication shall
constitute presence in person at such meeting. The minutes of any meeting
thus
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held shall be prepared in the same manner as a meeting at which all participants
were present in person.
SECTION 4.3 COMMITTEES; DELEGATION. The Trustees shall have power,
consistent with their ultimate responsibility to supervise the affairs of the
Trust, to delegate from time to time to an Executive Committee, and to one or
more other Committees, or to any single Trustee, the doing of such things and
the execution of such deeds or other instruments, either in the name of the
Trust or the names of the Trustees or as their attorney or attorneys in fact, or
otherwise as the Trustees may from time to time deem expedient, and any
agreement, deed, mortgage, lease or other instrument or writing executed by the
Trustee or Trustees or other Person to whom such delegation was made shall be
valid and binding upon the Trustees and upon the Trust.
SECTION 4.4 OFFICERS. The Trustees shall annually elect such officers
or agents, who shall have such powers, duties and responsibilities as the
Trustees may deem to be advisable, and as they shall specify by resolution or in
the By-Laws. Except as may be provided in the By-Laws, any officer elected by
the Trustees may be removed at any time with or without cause. Any two (2) or
more offices may be held by the same individual.
SECTION 4.5 COMPENSATION OF TRUSTEES AND OFFICERS. The Trustees shall
fix the compensation of all officers and Trustees. Without limiting the
generality of any of the provisions hereof, the Trustees shall be entitled to
receive reasonable compensation for their general services as such, and to fix
the amount of such compensation, and to pay themselves or any one or more of
themselves such compensation for special services, including legal, accounting,
or other professional services, as they in good faith may deem reasonable. No
Trustee or officer resigning and (except where a right to receive compensation
for a definite future period shall be expressly provided in a written agreement
with the Trust, duly approved by the Trustees) no Trustee or officer removed
shall have any right to any compensation as such Trustee or officer for any
period following his resignation or removal, or any right to damages on account
of his removal, whether his compensation be by the month, by the year or
otherwise.
SECTION 4.6 OWNERSHIP OF SHARES AND SECURITIES OF THE TRUST. Any
Trustee, and any officer, employee or agent of the Trust, and any organization
in which any such Person is interested, may acquire, own1 hold and dispose of
Shares of any Series and other Securities of the Trust for his or its individual
account, and may exercise all rights of a holder of such Shares or Securities to
the same extent and in the same manner as if such Person were not such a
Trustee, officer, employee or agent of the Trust; subject, in the case of
Trustees and officers, to the same limitations as directors or officers (as the
case may be) of a Massachusetts business corporation; and the Trust may issue
and sell or cause to be issued and sold and may purchase any such Shares or
other Securities from any such Person
<PAGE>
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or any such organization, subject only to the general limitations, restrictions
or other provisions applicable to the sale or purchase of Shares of such Series
or other Securities of the Trust generally.
SECTION 4.7 RIGHT OF TRUSTEES AND OFFICERS TO OWN PROPERTY OR TO ENGAGE
IN BUSINESS; AUTHORITY OF TRUSTEES TO PERMIT OTHERS TO DO LIKEWISE. The
Trustees, in their capacity as Trustees, and (unless otherwise specifically
directed by vote of the Trustees) the officers of the Trust in their capacity as
such, shall not be required to devote their entire time to the business and
affairs of the Trust. Except as otherwise specifically provided by vote of the
Trustees, or by agreement in any particular case, any Trustee or officer of the
Trust may acquire, own, hold and dispose of, for his own individual account, any
property, and acquire, own, hold, carry on and dispose of, for his own
individual account, any business entity or business activity, whether similar or
dissimilar to any property or business entity or business activity invested in
or carried on by the Trust, and without first offering the same as an investment
opportunity to the Trust, and may exercise all rights in respect thereof as if
he were not a Trustee or officer of the Trust. The Trustees shall also have
power, generally or in specific cases, to permit employees or agents of the
Trust to have the same rights (or lesser rights) to acquire, hold, own and
dispose of property and businesses, to carry on businesses, and to accept
investment opportunities without offering them to the Trust, as the Trustees
have by virtue of this Section 4.7.
SECTION 4.8 RELIANCE ON EXPERTS. The Trustees and officers may consult
with counsel, engineers, brokers, appraisers, auctioneers, accountants,
investment bankers, securities analysts or other Persons (any of which may be a
firm in which one or more of the Trustees or officers is or are members or
otherwise interested) whose profession gives authority to a statement made by
them on the subject in question, and who are reasonably deemed by the Trustees
or officers in question to be competent, and the advice or opinion of such
Persons shall be full and complete personal protection to all of the Trustees
and officers in respect of any action taken or suffered by them in good faith
and in reliance on or in accordance with such advice or opinion. In discharging
their duties, Trustees and officers, when acting in good faith, may rely upon
financial statements of the Trust represented to them to be correct by any
officer of the Trust having charge of its books of account, or stated in a
written report by an independent certified public accountant fairly to present
the financial position of the Trust. The Trustees and officers may rely, and
shall be personally protected in acting, upon any instrument or other document
believed by them to be genuine.
SECTION 4.9 SURETY BONDS. No Trustee, officer, employee or agent of the
Trust shall, as such, be obligated to give any bond or surety or other security
for the performance of any of his duties, unless required by applicable law or
regulation, or unless the Trustees shall otherwise determine in any particular
case.
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SECTION 4.10 APPARENT AUTHORITY OF TRUSTEES AND OFFICERS. No purchaser,
lender, transfer agent or other Person dealing with the Trustees or any officer
of the Trust shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by such officer1 or to make
inquiry concerning or be liable for the application of money or property paid,
loaned or delivered to or on the order of the Trustees or of such officer.
SECTION 4.11 OTHER RELATIONSHIPS NOT PROHIBITED. The fact that:
(a) any of the Shareholders, Trustees or officers of the Trust is
a shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party (as defined in Section 5.2 hereof), or of or for any
parent or affiliate of any Contracting Party, or that the Contracting
Party or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust or any Portfolio, or that
(b) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or to the holders of Shares of any Series; PROVIDED, that, in the case
of any relationship or interest referred to in the preceding clause (i) on the
part of any Trustee or officer of the Trust, either (x) the material facts as to
such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are Less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
SECTION 4.12 PAYMENT OF TRUST EXPENSES. The Trustees are authorized to
pay or to cause to be paid Out of the principal or income of the Trust, or
partly out of principal and partly out of income, and according to any
allocation to particular Portfolios made by them
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pursuant to Section 6.2(b) hereof, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the business and affairs of
the Trust or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, Investment Adviser, Administrator,
Distributor, Principal Underwriter, auditor, counsel, Custodian, Transfer Agent,
Dividend Disbursing Agent, Accounting Agent, Shareholder Servicing Agent, and
such other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
SECTION 4.13 OWNERSHIP OF THE TRUST PROPERTY. Legal title to all the
Trust Property shall be vested in the Trustees as joint tenants, except that the
Trustees shall have power to cause legal title to any Trust Property to be held
by or in the name of one or more of the Trustees, or in the name of he Trust, or
of any particular Portfolio, or in the name of any other Person as nominee, on
such terms as the Trustees may determine; PROVIDED, that the interest of the
Trust and of the respective Portfolio therein is appropriately protected. The
right, title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office of a Trustee as provided in Section 4.1(c),
(d) or (e) hereof, such Trustee shall automatically cease to have any right,
title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to Section 4.1(i) hereof.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1 APPOINTMENT; ACTION BY LESS THAN ALL TRUSTEES. The Trustees
shall be responsible for the general operating policy of the Trust and for the
general supervision of the business of the Trust conducted by officers, agents,
employees or advisers of the Trust or by independent contractors, but the
Trustees shall not be required personally to conduct all the business of the
Trust and, consistent with their ultimate responsibility as stated herein, the
Trustees may appoint, employ or contract with one or more officers, employees
and agents to conduct, manage and/or supervise the operations of the Trust, and
may grant or delegate such authority to such officers, employees and/or agents
as the Trustees may, in their sole discretion, deem to be necessary or
desirable, without regard to whether such authority is normally granted or
delegated by trustees. With respect to those matters of the operation and
business of the Trust which they shall elect to conduct themselves, except as
otherwise provided by this Declaration or the By-Laws, if any, the Trustees may
authorize any single Trustee or defined group of Trustees, or any
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committee consisting of a number of Trustees less than the whole number of
Trustees then in office without specification of the particular Trustees
required to be included therein, to act for and to bind the Trust, to the same
extent as the whole number of Trustees could do, either with respect to one or
more particular matters or classes of matters, or generally.
SECTION 5.2 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time in their discretion and
without limiting the generality of their powers and authority otherwise set
forth herein, enter into one or more contracts with any one or more
corporations, trusts, associations, partnerships, limited partnerships or other
types of organizations, or individuals ("CONTRACTING PARTY"), to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for or on behalf of the Trust and/or any Portfolio, and/or
the Trustees, and to provide for the performance and assumption of such other
services, duties and responsibilities in addition to those set forth below, as
the Trustees may deem appropriate:
(a) ADVISORY. An investment advisory or management agreement
whereby the Investment Adviser shall undertake to furnish the Trust
such management, investment advisory or supervisory, administrative,
accounting, legal, statistical and research facilities and services,
and such other facilities and services, if any, as the Trustees shall
from time to time consider desirable, all upon such terms and
conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the
1940 Act or any applicable provisions of the By-Laws. Any such advisory
or management agreement and any amendment thereto shall be subject to
approval by a Majority Shareholder Vote at a meeting of the
Shareholders of the Trust. Notwithstanding any provisions of this
Declaration, the Trustees may authorize the Investment Adviser (subject
to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities of the Trust on behalf of the Trustees or may
authorize any officer or employee of the Trust or any Trustee to effect
such purchases, sales, loans or exchanges pursuant to recommendations
of the Investment Adviser (and all without further action by the
Trustees). Any such purchases1 sales, loans and exchanges shall be
deemed to have been authorized by all of the Trustees. The Trustees
may, in their sole discretion, call a meeting of Shareholders in order
to submit to a vote of Shareholders at such meeting the approval of
continuance of any such investment advisory or management agreement. If
the Shareholders of any Portfolio should fail to approve any such
investment advisory or management agreement, the Investment Adviser may
nonetheless
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serve as Investment Adviser with respect to any other Portfolio whose
Shareholders shall have approved such contract.
(b) ADMINISTRATION. An agreement whereby the agent, subject to the
general supervision of the Trustees and in conformity with any policies
of the Trustees with respect to the operations of the Trust and each
Portfolio, will supervise all or any part of the operations of the
Trust and each Portfolio, and will provide all or any part of the
administrative and clerical personnel, office space and office
equipment and services appropriate for the efficient administration and
operations of the Trust and each Portfolio (any such agent being herein
referred to as an "ADMINISTRATOR").
(c) DISTRIBUTION. An agreement providing for the sale of Shares of
any one or more Series to net the Trust not less than the net asset
value per Share (as described in Section 6.2(h) hereof) and pursuant to
which the Trust may appoint the other party to such agreement as its
principal underwriter or sales agent for the distribution of such
Shares. The agreement shall contain such terms and conditions as the
Trustees may in their discretion determine to be not inconsistent with
this Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws (any such agent being herein
referred to as a "DISTRIBUTOR" or a "PRINCIPAL UNDERWRITER", as the
case may be).
(d) CUSTODIAN. The appointment of a bank or trust company having
an aggregate capital, surplus and undivided profits (as shown in its
last published report) of at least two million dollars ($2,000,000) as
custodian of the Securities and cash of the Trust and of each Portfolio
and of the accounting records in connection therewith (any such agent
being herein referred to as a "CUSTODIAN").
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. An agreement with an
agent to maintain records of the ownership of outstanding Shares, the
issuance and redemption and the transfer thereof (any such agent being
herein referred to as a "TRANSFER AGENT"), and to disburse any
dividends declared by the Trustees and in accordance with the policies
of the Trustees and/or the instructions of any particular Shareholder
to reinvest any such dividends (any such agent being herein referred to
as a "DIVIDEND DISBURSING AGENT").
(f) SHAREHOLDER SERVICING. An agreement with an agent to provide
service with respect to the relationship of the Trust and its
Shareholders, records with respect to Shareholders and their Shares,
and similar matters (any such agent being herein referred to as a
"SHAREHOLDER SERVICING AGENT").
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(g) ACCOUNTING. An agreement with an agent to handle all or any
part of the accounting responsibilities, whether with respect to the
Trust's properties, Shareholders or otherwise (any such agent being
herein referred to as an "ACCOUNTING AGENT").
The same Person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into sub-contractual arrangements relative to any of the matters referred to in
subsections (a) through (g) of this Section 5.2.
ARTICLE 6
PORTFOLIOS AND SHARES
SECTION 6.1 DESCRIPTION OF PORTFOLIOS AND SHARES.
(a) SHARES; PORTFOLIOS; SERIES OF SHARES. The beneficial interest
in the Trust shall be divided into Shares having a nominal or par value of one
mil ($.00l) per Share, of which an unlimited number may be issued. The Trustees
shall have the authority from time to time to establish and designate one or
more separate, distinct and independent Portfolios into which the assets of the
Trust shall be divided, and to authorize a separate Series of Shares for each
such Portfolio (each of which Series, including without limitation each Series
authorized in Section 6.2 hereof, shall represent interests only in the
Portfolio with respect to which such Series was authorized), as they deem
necessary or desirable. Except as otherwise provided as to a particular
Portfolio herein, or in the Certificate of Designation therefor, the Trustees
shall have all the rights and powers, and be subject to all the duties and
obligations, with respect to each such Portfolio and the assets and affairs
thereof as they have under this Declaration with respect to the Trust and the
Trust Property in general.
(b) ESTABLISHMENT, ETC. OF PORTFOLIOS; AUTHORIZATION OF SHARES.
The establishment and designation of any Portfolio in addition to the Portfolios
established and designated in Section 6.2 hereof and the authorization of the
Shares thereof shall be effective upon the execution by a Majority of the
Trustees (or by an officer of the Trust pursuant to the vote of a Majority of
the Trustees) of an instrument setting forth such establishment and designation
and the relative rights and preferences of the Shares of such Portfolio and the
manner in which the same may be amended (a "CERTIFICATE OF DESIG-
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NATION"), and may provide that the number of Shares of such Series which may be
issued is unlimited, or may limit the number issuable. At any time that there
are no Shares outstanding of any particular Portfolio previously established and
designated, including any Portfolio established and designated in Section 6.2
hereof, the Trustees may by an instrument executed by a Majority of the Trustees
(or by an officer of the Trust pursuant to the vote of a Majority of the
Trustees) terminate such Portfolio and the establishment and designation thereof
and the authorization of its Shares (a "CERTIFICATE OF TERMINATION"). Each
Certificate of Designation, Certificate of Termination and any instrument
amending a Certificate of Designation shall have the status of an amendment to
this Declaration of Trust, and shall be filed and become effective as provided
in Section 9.4 hereof.
(c) CHARACTER OF SEPARATE PORTFOLIOS AND SHARES THEREOF. Each
Portfolio established hereunder shall be a separate component of the assets of
the Trust, and the holders of Shares of the Series representing the beneficial
interest in the assets of that Portfolio shall be considered Shareholders of
such Portfolio, but such Shareholders shall also be considered Shareholders of
the Trust for purposes of receiving reports and notices and, except as otherwise
provided herein or in the Certificate of Designation of a particular Portfolio
as to such Portfolio, or as required by the 1940 Act or other applicable law,
the right to vote, all without distinction by Series. The Trustees shall have
exclusive power without the requirement of Shareholder approval to establish and
designate such separate and distinct Portfolios, and to fix and determine the
relative rights and preferences as between the shares of the respective
Portfolios as to rights of redemption and the price, terms and manner of
redemption, special and relative rights as to dividends and other distributions
and on liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the Shareholders of the several Portfolios shall have
separate voting rights or no voting rights.
(d) CONSIDERATION FOR SHARES. The Trustees may issue Shares of any
Series for such consideration (which may include property subject to, or
acquired in connection with the assumption of, liabilities) and on such terms as
they may determine (or for no consideration if pursuant to a Share dividend or
split-up), all without action or approval of the Shareholders. All Shares when
so issued on the terms determined by the Trustees shall be fully paid and
non-assessable (but may be subject to mandatory contribution back to the Trust
as provided in Section 6e2(h) hereof). The Trustees may classify or reclassify
any unissued Shares, or any Shares of any Series previously issued and
reacquired by the Trust, into Shares of one or more other Portfolios that may be
established and designated from time to time.
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SECTION 6.2 ESTABLISHMENT AND DESIGNATION OF CERTAIN PORTFOLIOS;
GENERAL PROVISIONS FOR ALL PORTFOLIOS. Without limiting the authority of the
Trustees set forth in Section 6.1(a) hereof to establish and designate further
Portfolios, there are hereby established and designated the following (3)
Portfolio(s): The Alger Defined Contribution Small Capitalization Portfolio, The
Alger Defined Contribution MidCap Growth Portfolio and The Alger Defined
Contribution Growth Portfolio. The Shares of such Portfolios, and the Shares of
any further Portfolios that may from time to time be established and designated
by the Trustees shall (unless the Trustees otherwise determine with respect to
some further Portfolio at the time of establishing and designating the same)
have the following relative rights and preferences:
(a) ASSETS BELONGING TO PORTFOLIOS. Any portion of the Trust
Property allocated to a particular Portfolio, and all consideration
received by the Trust for the issue or sale of Shares of such
Portfolio, together with all assets in which such consideration is
invested or reinvested, all interest, dividends, income, earnings,
profits and gains therefrom, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be held by the
Trustees in trust for the benefit of the holders of Shares of that
Portfolio and shall irrevocably belong to that Portfolio for all
purposes, and shall be so recorded upon the books of account of the
Trust, and the Shareholders of such Portfolio shall not have, and shall
be conclusively deemed to have waived, any claims to the assets of any
Portfolio of which they are not Shareholders. Such consideration,
assets, interest, dividends, income, earnings, profits, gains and
proceeds, together with any General Items allocated to that Portfolio
as provided in the following sentence, are herein referred to
collectively as "PORTFOLIO ASSETS" of such Portfolio, and as assets
"BELONGING TO" that Portfolio. In the event that there are any assets,
income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular
Portfolio (collectively "GENERAL ITEMS"), the Trustees shall allocate
such General Items to and among any one or more of the Portfolios
established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and
any General Items so allocated to a particular Portfolio shall belong
to and be part of the Portfolio Assets of that Portfolio. Each such
allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Portfolios for all purposes.
(b) LIABILITIES OF PORTFOLIOS. The assets belonging to each
particular Portfolio shall be charged with the liabilities
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in respect of that Portfolio and all expenses, costs, charges and
reserves attributable to that Portfolio, and any general liabilities,
expenses, costs, charges or reserves of the Trust which are not readily
identifiable as pertaining to any particular Portfolio shall be
allocated and charged by the Trustees to and among any one or more of
the Portfolios established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The indebtedness, expenses, costs, charges and
reserves allocated and so charged to a particular Portfolio are herein
referred to as "LIABILITIES OF" that Portfolio. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Portfolios
for all purposes. Any creditor of any Portfolio may look only to the
assets of that Portfolio to satisfy such creditor's debt.
(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Portfolio may be paid with such frequency as the Trustees
may determine, which may be daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, to the Shareholders of that Portfolio, from
such of the income, accrued or realized, and capital gains, realized or
unrealized, and out of the assets belonging to that Portfolio, as the
Trustees may determine, after providing for actual and accrued
liabilities of that Portfolio. All dividends and distributions on
Shares of a particular Portfolio shall be distributed pro rata to the
Shareholders of that Portfolio in proportion to the number of such
Shares held by such holders at the date and time of record established
for the payment of such dividends or distributions, except that in
connection with any dividend or distribution program or procedure the
Trustees may determine that no dividend or distribution shall be
payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the
Trustees under such program or procedure, or that dividends or
distributions shall be payable on Shares which have been tendered by
the holder thereof for redemption or repurchase, but the redemption or
repurchase proceeds of which have not yet been paid to such
Shareholder. Such dividends and distributions may be made in cash or
Shares of that Portfolio or a combination thereof as determined by the
Trustees, or pursuant to any program that the Trustees may have in
effect at the time for the election by each Shareholder of the mode of
the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with subsection (h) of
this Section 6.2.
(d) LIQUIDATION. In the event of the liquidation or dissolution of
the Trust, the Shareholders of each Portfolio of
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which Shares are outstanding shall be entitled to receive, when and as
declared by the Trustees, the excess of the Portfolio Assets over the
liabilities of such Portfolio. The assets so distributable to the
Shareholders of any particular Portfolio shall be distributed among
such Shareholders in proportion to the number of Shares of that
Portfolio held by them and recorded on the books of the Trust. The
liquidation of any particular Portfolio may be authorized by vote of a
Majority of the Trustees, subject to the affirmative vote of "a
majority of the outstanding voting securities" of that Portfolio, as
the quoted phrase is defined in the 1940 Act, determined in accordance
with clause (iii) of the definition of "MAJORITY SHAREHOLDER VOTE" in
Section 1.4 hereof.
(e) VOTING. The Shareholders shall have the voting rights set
forth in or determined under Article 7 hereof.
(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Portfolio shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each week, to
require the Trust to redeem all or any part of his Shares of that
Portfolio at a redemption price equal to the net asset value per Share
of that Portfolio next determined in accordance with subsection (h) of
this Section 6.2 after the Shares are properly tendered for redemption;
PROVIDED, that the Trustees may from time to time, in their discretion,
determine and impose a fee for such redemption. Payment of the
redemption price shall be in cash; PROVIDED, HOWEVER, that if the
Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in Securities
or other assets belonging to such Portfolio at the value of such
Securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of
any Portfolio to require the Trust to redeem Shares of that Portfolio
during any period or at any time when and to the extent permissible
under the 1940 Act.
(g) REDEMPTION AT THE OPTION OF THE TRUST. Each Share of any
Portfolio shall be subject to redemption at the option of the Trust at
the redemption price which would be applicable if such Share were then
being redeemed by the Shareholder pursuant to subsection (f) of this
Section 6.2: (i) at any time, if the Trustees determine in their sole
discretion that failure to so redeem may have materially adverse
consequences to the holders of the Shares of the Trust or of any
Portfolio, or (ii) upon such other conditions with respect to
maintenance of Shareholder accounts of a minimum amount as may from
time to time be determined by the Trustees and set forth in the then
current Prospectus of such Portfolio. Upon such redemption the holders
of the
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Shares so redeemed shall have no further right with respect thereto
other than to receive payment of such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of any
Portfolio at any time shall be the quotient obtained by dividing the
value of the net assets of such Portfolio at such time (being the
current value of the assets belonging to such Portfolio, less its then
existing liabilities) by the total number of Shares of that Portfolio
then outstanding, all determined in accordance with the methods and
procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time. The Trustees
may determine to maintain the net asset value per Share of any
Portfolio at a designated constant dollar amount and in connection
therewith may adopt procedures not inconsistent with the 1940 Act for
the continuing declaration of income attributable to that Portfolio as
dividends payable in additional Shares of that Portfolio at the
designated constant dollar amount and for the handling of any losses
attributable to that Portfolio. Such procedures may provide that in the
event of any loss each Shareholder shall be deemed to have contributed
to the shares of beneficial interest account of that Portfolio his pro
rata portion of the total number of Shares required to be canceled in
order to permit the net asset value per Share of that Portfolio to be
maintained, after reflecting such loss, at the designated constant
dollar amount. Each Shareholder of the Trust shall be deemed to have
expressly agreed, by his investment in any Portfolio with respect to
which the Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of any
such loss.
(i) TRANSFER. All Shares of each particular Portfolio shall be
transferable, but transfers of Shares of a particular Portfolio will be
recorded on the Share transfer records of the Trust applicable to that
Portfolio only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of that Portfolio and at such other
times as may be permitted by the Trustees.
(j) EQUALITY. All Shares of each particular Portfolio shall
represent an equal proportionate interest in the assets belonging to
that Portfolio (subject to the liabilities of that Portfolio), and each
Share of any particular Portfolio shall be equal to each other Share
thereof; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section 6.2 that
may exist with respect to dividends and distributions on Shares of the
same Portfolio. The Trustees may from time to time divide or combine
the Shares of any particular Portfolio into a greater or lesser number
of Shares of that Portfolio without thereby changing the proportionate
beneficial interest in the assets belonging to that
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Portfolio or in any way affecting the rights of the holders of Shares
of any other Portfolio.
(k) RIGHTS OF FRACTIONAL SHARES. Any fractional Share of any
Series shall carry proportionately all the rights and obligations of a
whole Share of that Series, including rights and obligations with
respect to voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust or of the Portfolio to which
they pertain.
(1) CONVERSION RIGHTS. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that
holders of Shares of any Portfolio shall have the right to convert said
Shares into Shares of one or more other Portfolios in accordance with
such requirements and procedures as the Trustees may establish.
SECTION 6.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a Transfer Agent or similar agent for
the Trust, which books shall be maintained separately for the Shares of each
Series that has been authorized. Certificates evidencing the ownership of Shares
need not be issued except as the Trustees may otherwise determine from time to
time, and the Trustees shall have power to call outstanding Share certificates
and to replace them with book entries. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the use of
facsimile signatures, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any Transfer Agent or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders and as to
the number of Shares of each Portfolio held from time to time by each such
Shareholder.
The holders of Shares of each Portfolio shall upon demand disclose to
the Trustees in writing such information with respect to their direct and
indirect ownership of Shares of such Portfolio as the Trustees deem necessary to
comply with the provisions of the Internal Revenue Code, or to comply with the
requirements of any other authority.
SECTION 6.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in any Portfolio of the Trust from such Persons and on such terms
and for such consideration, not inconsistent with the provisions of the 1940
Act, as they from time to time authorize. The Trustees may authorize any
Distributor, Principal Underwriter, Custodian, Transfer Agent or other Person to
accept orders for the purchase of Shares that conform to such authorized terms
and to reject any purchase orders for Shares, whether or not conforming to such
authorized terms.
SECTION 6.5 NO PRE-EMPTIVE RIGHTS. No Shareholder, by virtue of holding
Shares of any Portfolio, shall have any pre-emptive or other right to subscribe
to any additional Shares of that Portfolio,
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or to any shares of any other Portfolio, or any other Securities issued by the
Trust.
SECTION 6.6 STATUS OF SHARES. Every Shareholder, by virtue of having
become a Shareholder, shall be held to have expressly assented and agreed to the
terms hereof and to have become a party hereto. Shares shall be deemed to be
personal property, giving only the rights provided herein. Ownership of Shares
shall not entitle the Shareholder to any title in or to the whole or any part of
the Trust Property or right to call for a partition or division of the same or
for an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. The death of a Shareholder during the continuance of the Trust shall
not operate to terminate the Trust or any Portfolio, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Declaration of Trust.
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Sections 4.1(c)
and (e) hereof, (ii) with respect to the approval or termination in accordance
with the 1940 Act of any contract with a Contracting Party as provided in
Section 5.2 hereof as to which Shareholder approval is required by the 1940 Act,
(iii) with respect to any termination or reorganization of the Trust or any
Portfolio to the extent and as provided in Sections 9.1 and 9.2 hereof, (iv)
with respect to any amendment of this Declaration of Trust to the extent and as
provided in Section 9.3 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or any Portfolio, or the
Shareholders of any of them (PROVIDED, HOWEVER, that a Shareholder of a
particular Portfolio shall not in any event be entitled to maintain a derivative
or class action on behalf of any other Portfolio or the Shareholders thereof),
and (vi) with respect to such additional matters relating to the Trust as may be
required by the 1940 Act, this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency) or any
State, or as the Trustees may consider necessary or desirable. If and to the
extent that the Trustees shall determine that such action is required by law or
by this Declaration, they shall cause each matter required or permitted to be
voted upon at a meeting or by written consent of Shareholders to be submitted to
a separate vote of the outstanding Shares of each Portfolio entitled to vote
thereon; PROVIDED, that (i) when expressly required by the 1940 Act or by other
law, actions of Shareholders shall be taken by Single Class Voting of all
outstanding Shares of each Series whose holders are entitled to vote thereon;
and (ii) when the Trustees
<PAGE>
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determine that any matter to be submitted to a vote of Shareholders affects only
the rights or interests of Shareholders of one or more but not all Portfolios,
then only the Shareholders of the Portfolios so affected shall be entitled to
vote thereon.
SECTION 7.2 NUMBER OF VOTES AND MANNER OF VOTING; PROXIES. On each
matter submitted to a vote of the Shareholders, each holder of Shares of any
Series shall be entitled to a number of votes equal to the number of Shares of
such Series standing in his name on the books of the Trust. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two (2) or more
Persons shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on behalf
of a Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, this Declaration of Trust or the
By-Laws to be taken by Shareholders.
SECTION 7.3 MEETINGS. Meetings of Shareholders may be called by the
Trustees from time to time for the purpose of taking action upon any matter
requiring the vote or authority of the Shareholders as herein provided, or upon
any other matter deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given or caused to be given by
the Trustees by mailing such notice at least seven (7) days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder at the Shareholder's address as it appears on the records of the
Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not less than ten
percent (10%) of the Shares then outstanding. If the Trustees shall fail to call
or give notice of any meeting of Shareholders for a period of thirty (30) days
after written application by Shareholders holding at least ten percent (10%) of
the Shares then outstanding requesting that a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least ten percent (10%) of the Shares then
outstanding may call and give notice of such meeting, and thereupon the meeting
shall be held in the manner provided for herein in case of call thereof by the
Trustees.
SECTION 7.4 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding thirty (30) days (except at or
in connection
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with the termination of the Trust), as the Trustees may determine; or without
closing the transfer books the Trustees may fix a date and time not more than
sixty (60) days prior to the date of any meeting of Shareholders or other action
as the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
SECTION 7.5 QUORUM AND REQUIRED VOTE. A majority of the Shares entitled
to vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
Majority Shareholder Vote at a meeting of which a quorum is present shall decide
any question, except when a different vote is required or permitted by any
provision of the 1940 Act or other applicable law or by this Declaration of
Trust or the By-Laws, or when the Trustees shall in their discretion require a
larger vote or the vote of a majority or larger fraction of the Shares of one or
more particular Series.
SECTION 7.6 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof or of the Shares of any particular Series as
shall be required by the 1940 Act or by any express provision of this
Declaration of Trust or the By-Laws or as shall be permitted by the Trustees)
consent to the action in writing and if the writings in which such consent is
given are filed with the records of the meetings of Shareholders, to the same
extent and for the same period as proxies given in connection with a
Shareholders' meeting. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
SECTION 7.7 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of a Massachusetts business corporation under the Massachusetts
Business Corporation Law.
SECTION 7.8 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
<PAGE>
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ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
The Trustees and officers of the Trust, in incurring any debts, liabilities or
obligations, or in taking or omitting any other actions for or in connection
with the Trust, are or shall be deemed to be acting as Trustees or officers of
the Trust and not in their own capacities. No Shareholder shall be subject to
any personal liability whatsoever in tort, contract or otherwise to any other
Person or Persons in connection with the assets or the affairs of the Trust or
of any Portfolio, and subject to Section 8.4 hereof, no Trustee, officer,
employee or agent of the Trust shall be subject to any personal liability
whatsoever in tort, contract, or otherwise, to any other Person or Persons in
connection with the assets or affairs of the Trust or of any Portfolio, save
only that arising from his own willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office or the
discharge of his functions. The Trust (or if the matter relates only to a
particular Portfolio, that Portfolio) shall be solely liable for any and all
debts, claims, demands, judgments, decrees, liabilities or obligations of any
and every kind, against or with respect to the Trust or such Portfolio in tort,
contract or otherwise in connection with the assets or the affairs of the Trust
or such Portfolio, and all Persons dealing with the Trust or any Portfolio shall
be deemed to have agreed that resort shall be had solely to the Trust Property
of the Trust or the Portfolio Assets of such Portfolio, as the case may be, for
the payment or performance thereof.
The Trustees shall use their best efforts to ensure that every note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer shall give notice that this Declaration
of Trust is on file with the Secretary of The Commonwealth of Massachusetts and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer, and not
individually, and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, or the particular Portfolio in question, as
the case may be, but the omission thereof shall not operate to bind any Trustees
or Trustee or officers or officer or Shareholders or Shareholder individually,
or to subject the Portfolio Assets of any Portfolio to the obligations of any
other Portfolio.
SECTION 8.2 TRUSTEES' GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. Subject to Section 8.4 hereof, a
Trustee shall be liable for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and for nothing else, and shall not be liable for errors of
judgment or mis-
<PAGE>
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takes of fact or law. Subject to the foregoing, (i) the Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, Investment Adviser, Administrator, Distributor or
Principal Underwriter, Custodian or Transfer Agent, Dividend Disbursing Agent,
Shareholder Servicing Agent or Accounting Agent of the Trust, nor shall any
Trustee be responsible for the act or omission of any other Trustee; (ii) the
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice; and (iii) in discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to the Trustees
by any officer appointed by them, any independent public accountant, and (with
respect to the subject matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the Trustees pursuant
to Section 5.2 hereof. The Trustees as such shall not be required to give any
bond or surety or any other security for the performance of their duties.
SECTION 8.3 INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder (or
former Shareholder) of the Trust shall be charged or held to be personally
liable for any obligation or liability of the Trust solely by reason of being or
having been a Shareholder and not because of such Shareholder's acts or
omissions or for some other reason, the Trust (upon proper and timely request by
the Shareholder) shall assume the defense against such charge and satisfy any
judgment thereon, and the Shareholder or former Shareholder (or the heirs,
executors, administrators or other legal representatives thereof, or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled (but solely out of the assets of the Portfolio of which such
Shareholder or former Shareholder is or was the holder of Shares) to be held
harmless from and indemnified against all loss and expense arising from such
liability.
SECTION 8.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to the
limitations set forth hereinafter in this Section 8.4, the Trust shall indemnify
(from the assets of the Portfolio or Portfolios to which the conduct in question
relates) each of its Trustees and officers (including Persons who serve at the
Trust's request as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or otherwise
hereinafter, together with such Person's heirs, executors, administrators or
personal representative, referred to as a "COVERED PERSON")) against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party
<PAGE>
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or otherwise or with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, except with respect to any
matter as to which it has been determined that such Covered Person (i) did not
act in good faith in the reasonable belief that such Covered Person's action was
in or not opposed to the best interests of the Trust or (ii) had acted with
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office (either and both
of the conduct described in (i) and (ii) being referred to hereafter as
"DISABLING CONDUCT"). A determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a
court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in Section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be paid
from time to time by the Portfolio or Portfolios to which the conduct in
question related in advance of the final disposition of any such action, suit or
proceeding; PROVIDED, that the Covered Person shall have undertaken to repay the
amounts so paid to such Portfolio or Portfolios if it is ultimately determined
that indemnification of such expenses is not authorized under this Article 8 and
(i) the Covered Person shall have provided security for such undertaking, (ii)
the Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested Trustees, or an
independent legal counsel in a written opinion, shall have determined, based on
a review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Covered Person ultimately will be found
entitled to indemnification.
SECTION 8.5 COMPROMISE PAYMENT. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 8.4 hereof,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (i) by a majority of a quorum of the
disinterested Trustees or (ii) by an independent legal counsel in a written
opinion. Approval by the Trustees pursuant to clause (i) or by independent legal
counsel pursuant to clause (ii) shall not prevent the recovery from any Covered
Person of any amount paid to such Covered Person in accordance with either of
such clauses as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not
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to have acted in good faith in the reasonable belief that such Covered Person's
action was in or not opposed to the best interests of the Trust or to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
SECTION 8.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article 8 shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article 8, a "DISINTERESTED" Person is one against whom none of the
actions, suits or other proceedings in question, and no other action, suit or
other proceeding on the same or similar grounds is then or has been pending or
threatened. Nothing contained in this Article 8 shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other Persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such Person.
SECTION 8.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE 9
DURATION; REORGANIZATION; AMENDMENTS
SECTION 9.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Portfolio or Series of Shares shall operate to
terminate the Trust. The Trust may be terminated at any time by a Majority of
the Trustees, subject to the favorable vote of the holders of not less than a
majority of the Shares outstanding and entitled to vote of each Portfolio of the
Trust, or by an instrument or instruments in writing without a meeting,
consented to by the holders of not less than a majority of such Shares, or by
such greater or different vote of Shareholders of any Series as may be
established by the Certificate of Designation by which such Series was
authorized. Upon termination, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, Securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of Section 6.2(d) hereof.
<PAGE>
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SECTION 9.2 REORGANIZATION. The Trustees may sell, convey and transfer
all or substantially all of the assets of the Trust, or the assets belonging to
any one or more Portfolios, to another trust, partnership, association or
corporation organized under the laws of any state of the United States, or may
transfer such assets to another Portfolio of the Trust, in exchange for cash,
Shares or other Securities (including, in the case of a transfer to another
Portfolio of the Trust, Shares of such other Portfolio), or to the extent
permitted by law then in effect may merge or consolidate the Trust or any
Portfolio with any other Trust or any corporation, partnership, or association
organized under the laws of any state of the United States, all upon such terms
and conditions and for such consideration when and as authorized by vote or
written consent of a Majority of the Trustees and approved by the affirmative
vote of the holders of not less than a majority of the Shares outstanding and
entitled to vote of each Portfolio whose assets are affected by such
transaction, or by an instrument or instruments in writing without a meeting,
consented to by the holders of not less than a majority of such Shares, and/or
by such other vote of any Series as may be established by the Certificate of
Designation with respect to such Series. Following such transfer, the Trustees
shall distribute the cash, Shares or other Securities or other consideration
received in such transaction (giving due effect to the assets belonging to and
indebtedness of, and any other differences among, the various Portfolios of
which the assets have so been transferred) among the Shareholders of the
Portfolio of which the assets have been so transferred; and if all of the assets
of the Trust have been so transferred, the Trust shall be terminated. Nothing in
this Section 9.2 shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations, and to sell, convey
or transfer less than substantially all of the Trust Property or the assets
belonging to any Portfolio to such organizations or entities.
SECTION 9.3 AMENDMENTS; ETC. All rights granted to the Shareholders
under this Declaration of Trust are granted subject to the reservation of the
right to amend this Declaration of Trust as herein provided, except that no
amendment shall repeal the limitations on personal liability of any Shareholder
or Trustee or the prohibition of assessment upon the Shareholders (otherwise
than as permitted under Section 6.2(h)) without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the provisions of
this Declaration of Trust (whether or not related to the rights of Shareholders)
may be amended at any time, so long as such amendment does not adversely affect
the rights of any Shareholder with respect to which such amendment is or
purports to be applicable and so long as such amendment is not in contravention
of applicable law, including the 1940 Act, by an instrument in writing signed by
a Majority of the Trustees (or by an officer of the Trust pursuant to the vote
of a Majority of the Trustees). Any amendment to this Declaration of Trust that
adversely affects the rights of all Shareholders may be adopted at any time by
an instrument in writing signed by a Majority
<PAGE>
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of the Trustees (or by an officer of the Trust pursuant to a vote of a Majority
of the Trustees) when authorized to do so by the vote in accordance with Section
7.1 hereof of Shareholders holding a majority of all the Shares outstanding and
entitled to vote, without regard to Series, or if said amendment adversely
affects the rights of the Shareholders of less than all of the Portfolios, by
the vote of the holders of a majority of all the Shares entitled to vote of each
Portfolio so affected. Subject to the foregoing, any such amendment shall be
effective when the instrument containing the terms thereof and a certificate
(which may be a part of such instrument) to the effect that such amendment has
been duly adopted, and setting forth the circumstances thereof, shall have been
executed and acknowledged by a Trustee or officer of the Trust and filed as
provided in Section 9.4 hereof.
SECTION 9.4 FILING OF COPIES OF DECLARATION AND AMENDMENTS. The
original or a copy of this Declaration and of each amendment hereto (including
each Certificate of Designation and Certificate of Termination), shall be kept
at the office of the Trust where it may be inspected by any Shareholder, and one
copy of each such instrument shall be filed with the Secretary of The
Commonwealth of Massachusetts, as well as with any other governmental office
where such filing may from time to time be required by the laws of
Massachusetts. A restated Declaration, integrating into a single instrument all
of the provisions of this Declaration which are then in effect and operative,
may be executed from time to time by a Majority of the Trustees and shall, upon
filing with the Secretary of The Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 GOVERNING LAW. This Declaration of Trust is executed and
delivered in The Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the construction and effect of every
provision hereof shall be subject to and construed according to the laws of said
Commonwealth.
SECTION 10.2 COUNTERPARTS. This Declaration of Trust and any amendment
thereto may be simultaneously executed in several counter-parts, each of which
so executed shall be deemed to be an original, and such counterparts, together,
shall constitute but one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
SECTION 10.3 RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records in the office of the Secretary of The
Commonwealth of Massachusetts appears to be a Trustee hereunder, certifying to:
(a) the number or identity of Trus-
<PAGE>
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tees or Shareholders, (b) the due authorization of the execution of any
instrument or writing, (c) the form of any vote passed as a meeting of Trustees
or Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration of Trust, (e) the form of any By-Law adopted,
or the identity of any officers elected, by the Trustees, or (f) the existence
or non-existence of any fact or facts which in any manner relate to the affairs
of the Trust, shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees, or any of them, and the
successors of such Person.
SECTION 10.4 REFERENCES; HEADINGS. The masculine gender shall include
the feminine and neuter genders. Headings are placed herein for convenience of
reference only and shall not be taken as a part of this Declaration or control
or affect the meaning, construction or effect hereof.
SECTION 10.5 USE OF THE NAME "ALGER". Fred Alger & Company Incorporated
("ALGER") has consented to the use by the Trust of the identifying name "Alger"
which is a property right of Alger. The Trust will only use the name "Alger" as
a component of its name and for no other purpose, and will not purport to grant
to any third party the right to use the name "Alger" for any purpose. Alger or
any corporate affiliate of Alger may use or grant to others the right to use the
name "Alger", as all or a portion of a corporate or business name or for any
commercial purpose, including a grant of such right to any other investment
company. At the request of Alger, the Trust will take such action as may be
required to provide its consent to the use of such name by Alger, or any
corporate affiliate of Alger, or by any Person to whom Alger or an affiliate of
Alger shall have granted the right to the use of the name "Alger". Upon the
termination of any investment advisory or management agreement into which Alger
and the Trust may enter, the Trust shall, upon request by Alger, cease to use
the name "Alger" as a component of its name, and shall not use such name or
initials as a part of its name or for any other commercial purpose, and shall
cause its officers and Trustees to take any and all actions which Alger may
request to effect the foregoing and to reconvey to Alger or such corporate
affiliate any and all rights to such name.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal,
for himself and his assigns, and has thereby accepted the Trusteeship as the
Initial Trustee of The Alger Defined Contribution Trust hereby granted and
agreed to he provisions hereof, all as of the day and year first above written.
/s/ Thomas E. Weesner
---------------------------
Thomas E. Weesner
<PAGE>
-40-
The undersigned Settlor of The Alger Defined Contribution Trust, hereby
accepts, approves and authorizes the foregoing Agreement and Declaration of
Trust of The Alger Defined Contribution Trust.
Dated: July 14, 1993
/s/ Kathleen M. Miskiewicz
--------------------------------
Kathleen M. Miskiewicz
<PAGE>
-41-
ACKNOWLEDGMENTS
M A S S A C H U S E T T S
Suffolk, ss.: July 14, 1993
Then personally appeared the above named Thomas E. Weesner and
acknowledged the foregoing instrument to be his free act and deed.
Before me,
/s/ Judith S. Benjamin
--------------------------------
Judith S. Benjamin
Notary Public
My Commission
[NOTARIAL SEAL] Expires 6-19-98
---------
M A S S A C H U S E T T S
Suffolk, ss.: July 14, 1993
Then personally appeared the above named Kathleen M. Miskiewicz and
acknowledged the foregoing instrument to be her free act and deed.
Before me,
/s/ Judith S. Benjamin
--------------------------------
Judith S. Benjamin
Notary Public
My Commission
Expires 6-19-98
----------
EXHIBIT 1(a)
THE ALGER DEFINED CONTRIBUTION TRUST
Certificate of Amendment of
The Declaration of Trust
The undersigned, being the Secretary of The Alger Defined Contribution
Trust (the "FUND"), a trust with transferable shares of the type commonly called
a Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the
authority conferred upon the Trustees of the Fund by SECTION 9.3 of the
Agreement and Declaration of Trust, dated July 14, 1993, (hereinafter the
"DECLARATION"), and by the affirmative vote of a Majority of the Trustees duly
cast at a meeting duly called and held on August , 1993, the Declaration is
hereby amended as follows:
I. The first sentence of SECTION 6.2 is hereby amended and restated to
read as follows:
"SECTION 6.2 ESTABLISHMENT AND DESIGNATION OF CERTAIN PORTFOLIOS;
GENERAL PROVISIONS FOR ALL PORTFOLIOS. Without limiting the authority of the
Trustees set forth in Section 6.1(a) hereof to establish and designate further
Portfolios, there are hereby established and designated the following three (3)
Portfolio(s): The Alger Defined Contribution Small Cap Portfolio, The Alger
Defined Contribution MidCap Growth Portfolio and The Alger Defined Contribution
Growth Portfolio.
IN WITNESS WHEREOF, the undersigned has set her hand and seal this 16
day of August 1993.
/s/ Nanci K. Staple
----------------------------
Nanci K. Staple
Secretary
<PAGE>
ACKNOWLEDGEMENT
STATE OF New York )
: ss.
COUNTY OF New York ) August 16, 1993
Then personally appeared the above named Nanci K. Staple and
acknowledged the foregoing instrument to be her free act and deed.
Before me,
/s/ Louise M. Ulitto
------------------------------------
Louise M. Ulitto
Notary Public
My commission expires:
LOUISE M. ULITTO
NOTARY PUBLIC STATE OF NEW YORK
NO. 24-4814711
QUALIFIED IN KINGS COUNTY
COMMISSION EXPIRES JANUARY 31, 1995
EXHIBIT 1(b)
THE ALGER DEFINED CONTRIBUTION TRUST
CERTIFICATE OF DESIGNATION
The undersigned, being the Secretary of The Alger Defined Contribution
Trust (hereinafter referred to as the "Trust"), a trust with transferable shares
of the type commonly called a Massachusetts business trust, DOES HEREBY CERTIFY
that, pursuant to the authority conferred upon the Trustees of the Trust by
Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated
July 14, 1993 (hereinafter referred to as the "Declaration of Trust"), and by
the affirmative vote of a Majority of the Trustees at a meeting duly called and
held on August 13, 1993 the Declaration of Trust is amended as follows:
(1) There is hereby established and designated the Alger Defined
Contribution Leveraged AllCap Portfolio (hereinafter referred to as the
"Portfolio"). The beneficial interest in the Portfolio shall be divided into
Shares having a nominal or par value of one mill ($.001) per Share, of which an
unlimited number may be issued, which Shares shall represent interests only in
the Portfolio. The Trustees shall have authority from time to time to authorize
separate Series of Shares for the Portfolio (each of which Series shall
represent interests only in the Portfolio), as they deem necessary and
desirable. The Shares of the Portfolio shall have the following rights and
preferences:
(a) ASSETS BELONGING TO THE PORTFOLIO. Any portion of the Trust
Property allocated to the Portfolio, and all consideration received by
the Trust for the issue or sale of Shares of the Portfolio, together
with all assets in which such consideration is invested or reinvested,
all interest, dividends, income, earnings, profits and gains therefrom,
and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the
same may be, shall be held by the Trustees in trust for the benefit of
the holders of Shares of the Portfolio and shall irrevocably belong to
the Portfolio for all purposes, and shall be so recorded upon the books
of account of the Trust, and the Shareholders of any other Fund who are
not Shareholders of the Portfolio shall not have, and shall be
conclusively deemed to have waived, any claims to the assets of the
Portfolio. Such consideration, assets, interest, dividends, income,
earnings, profits, gains and proceeds, together with any General
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Items allocated to the Portfolio as provided in the following sentence,
are herein referred to collectively as "FUND ASSETS" of the Portfolio,
and as assets "BELONGING TO" the Portfolio. In the event that there are
any assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any
particular Fund (collectively "GENERAL ITEMS"), the Trustees shall
allocate such General Items to and among any one or more of the Funds
established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and
any General Items so allocated to the Portfolio shall belong to and be
part of the Fund Assets of the Portfolio. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
the Funds for all purposes.
(b) LIABILITIES OF THE Portfolio. The assets belonging to the
Portfolio shall be charged with the liabilities in respect of the
Portfolio and all expenses, costs, charges and reserves attributable to
the Portfolio, and any general liabilities, expenses, costs, charges or
reserves of the Trust which are not. readily identifiable as pertaining
to any particular Fund shall be allocated and charged by the Trustees
to and among any one or more of the Funds established and designated
from time to time in such manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. The indebtedness,
expenses, costs, charges and reserves allocated and so charged to the
Portfolio are herein referred to as "LIABILITIES OF" the Portfolio.
Each allocation of liabilities, expenses, costs, charges and reserves
by the Trustees shall be conclusive and binding upon the Shareholders
of all the Funds for all purposes. Any creditor of the Portfolio may
look only to the assets of the Portfolio to satisfy such creditor's
debt.
(c) DIVIDENDS. Dividends and distributions on Shares of the
Portfolio may be paid with such frequency as the Trustees may
determine, which may be daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, to the Shareholders of the Portfolio, from
such of the income, accrued or realized, and capital gains, realized or
unrealized, and out of the assets belonging to the Portfolio, as the
Trustees may determine, after providing for actual and accrued
liabilities of the Portfolio. All dividends and distributions on Shares
of the Portfolio shall be distributed pro rata to the Shareholders of
the Portfolio in proportion to the number of such Shares held by such
holders at the date and time of record established for the payment
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of such dividends or distributions, except that in connection with any
dividend or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on Shares
as to which the Shareholder's purchase order and/or payment have not
been received by the time or times established by the Trustees under
such program or procedure, or that dividends or distributions shall be
payable on Shares which have been tendered by the holder thereof for
redemption or repurchase, but the redemption or repurchase proceeds of
which have not yet been paid to such Shareholder. Such dividends and
distributions may be made in cash or Shares of the Portfolio or a
combination thereof as determined by the Trustees, or pursuant to any
program that the Trustees may have in effect at the time for the
election by each Shareholder of the mode of the making of such dividend
or distribution to that Shareholder. Any such dividend or distribution
paid in Shares will be paid at the net asset value thereof as
determined in accordance with subsection (h) hereof.
(d) LIQUIDATION. In the event of the liquidation or dissolution of
the Trust, the Shareholders of the Portfolio shall be entitled to
receive, when and as declared by the Trustees, the excess of the Fund
Assets over the liabilities of the Portfolio. The assets so
distributable to the Shareholders of the Portfolio shall be distributed
among such Shareholders in proportion to the number of Shares of the
Portfolio held by them and recorded on the books of the Trust. The
liquidation of the Portfolio may be authorized by vote of a Majority of
the Trustees, subject to the affirmative vote of "a majority of the
outstanding voting securities" of the Portfolio, as the quoted phrase
is defined in the 1940 Act, determined in accordance with clause (iii)
of the definition of "MAJORITY SHAREHOLDER VOTE" in Section 1.4 of the
Declaration of Trust.
(e) VOTING. The Shareholders shall have the voting rights set
forth in or determined under Article 7 of the Declaration of Trust.
(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of the
Portfolio shall have the right at such times as may be permitted by the
Trust, but no less frequently than once each week, to require the Trust
to redeem all or any part of his Shares of the Portfolio at a
redemption price equal to the net asset value per Share of the
Portfolio next determined in accordance with subsection (h) hereof
after the Shares are properly tendered for redemption; PROVIDED, that
the Trustees may from time to time, in
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their discretion, determine and impose a fee for such redemption.
Payment of the redemption price shall be in cash; PROVIDED, HOWEVER,
that if the Trustees determine, which determination shall be
conclusive, that conditions exist which make payment wholly in cash
unwise or undesirable, the Trust may make payment wholly or partly in
Securities or other assets belonging to the Portfolio at the value of
such Securities or assets used in such determination of net asset
value. Notwithstanding the foregoing, the Trust may postpone payment of
the redemption price and may suspend the right of the holders of Shares
of the Portfolio to require the Trust to redeem Shares of the Portfolio
during any period or at any time when and to the extent permissible
under the 1940 Act.
(g) REDEMPTION AT THE OPTION OF THE TRUST. Each Share of the
Portfolio shall be subject to redemption at the option of the Trust at
the redemption price which would be applicable if such Share were then
being redeemed by the Shareholder pursuant to subsection (f) hereof:
(i) at any time, if the Trustees determine in their sole discretion
that failure to so redeem may have materially adverse consequences to
the holders of the Shares of the Trust or of any Fund, or (ii) upon
such other conditions with respect to maintenance of Shareholder
accounts of a minimum amount as may from time to time be determined by
the Trustees and set forth in the then current Prospectus of the
Portfolio. Upon such redemption the holders of the Shares so redeemed
shall have no further right with respect thereto other than to receive
payment of such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of the
Portfolio at any time shall be the quotient obtained by dividing the
value of the net assets of the Portfolio at such time (being the
current value of the assets belonging to the Portfolio, less its then
existing liabilities) by the total number of Shares of the Portfolio
then outstanding, all determined in accordance with the methods and
procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time. The Trustees
may determine to maintain the net asset value per Share of the
Portfolio at a designated constant dollar amount and in connection
therewith may adopt procedures not inconsistent with the 1940 Act for
the continuing declaration of income attributable to the Portfolio as
dividends payable in additional Shares of the Portfolio at the
designated constant dollar amount and for the handling of any losses
attributable to the Portfolio. Such procedures may provide that in the
event of any loss each Shareholder shall
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be deemed to have contributed to the shares of beneficial interest
account of the Portfolio his pro rata portion of the total number of
Shares required to be cancelled in order to permit the net asset value
per Share of the Portfolio to be maintained, after reflecting such
loss, at the designated constant dollar amount. Each Shareholder of the
Portfolio shall be deemed to have expressly agreed, by his investment
in the Portfolio, to make the contribution referred to in the preceding
sentence in the event of any such loss.
(i) TRANSFER. All Shares of the Portfolio shall be transferable,
but transfers of Shares of the Portfolio will be recorded on the Share
transfer records of the Trust applicable to the Portfolio only at such
times as Shareholders shall have the right to require the Trust to
redeem Shares of the Portfolio and at such other times as may be
permitted by the Trustees.
(j) EQUALITY. All Shares of the Portfolio shall represent an equal
proportionate interest in the assets belonging to the Portfolio
(subject to the liabilities of the Portfolio), and each Share of the
Portfolio shall be equal to each other Share thereof; but the
provisions of this sentence shall not restrict any distinctions
permissible under subsection (c) hereof that may exist with respect to
dividends and distributions on Shares of the Portfolio. The Trustees
may from time to time divide or combine the Shares of the Portfolio
into a greater or lesser number of Shares of the Portfolio without
thereby changing the proportionate beneficial interest in the assets
belonging to the Portfolio or in any way affecting the rights of the
holders of Shares of any other Fund.
(k) RIGHTS OF FRACTIONAL SHARES. Any fractional Share of any
Series shall carry proportionately all the rights and obligations of a
whole Share of that Series, including rights and obligations with
respect to voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust or of the Portfolio.
(l) CONVERSION RIGHTS. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that
holders of Shares of the Portfolio shall have the right to convert said
Shares into Shares of one or more other Funds in accordance with such
requirements and procedures as the Trustees may establish.
(m) AMENDMENT, ETC. Subject to the provisions and limitations of
Section 9.3 of the Declaration of Trust and
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applicable law, this Certificate of Designation may be amended by an
instrument signed in writing by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the
Trustees), PROVIDED THAT, if any amendment adversely affects the rights
of the Shareholders of the Portfolio, such amendment may be adopted by
an instrument signed in writing by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the
Trustees) when authorized to do so by the vote in accordance with
Section 7.1 of the Declaration of Trust of the holders of a majority of
all the Shares of the Portfolio outstanding and entitled to vote.
(n) INCORPORATION OF DEFINED TERMS. All capitalized terms which
are not defined herein shall have the same meanings as are assigned to
those terms in the Declaration of Trust filed with the Secretary of the
Commonwealth of Massachusetts.
The Trustees further direct that, upon the execution of this
Certificate of Designation, the Trust take all necessary action to file a copy
of this Certificate of Designation with the Secretary of State of The
Commonwealth of Massachusetts and at any other place required by law or by the
Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set her hand and seal this 16th
day of August, 1993.
/s/ Nanci K. Staple
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Nanci K. Staple
Secretary
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ACKNOWLEDGEMENT
State of New York )
) : ss
County of New York )
August 16,1993
Then personally appeared the above named Nanci K. Staple and
acknowledged the foregoing instrument to be her free act and deed.
Before me,
/s/ Louise M. Ulitto
----------------
Louise M. Ulitto
My Commission Expires
LOUISE M. ULITTO
NOTARY PUBLIC STATE OF NEW YORK
NO. 24-4814711
QUALIFIED IN KINGS COUNTY
COMMISSION EXPIRES JANUARY 31, 1995
7
EXHIBIT 2
THE ALGER DEFINED CONTRIBUTION TRUST
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By-Laws
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THE ALGER DEFINED CONTRIBUTION TRUST
By-Laws
Index
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Page No.
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RECITALS .............................................................. 1
ARTICLE 1 - SHAREHOLDERS AND SHAREHOLDERS'
MEETINGS ................................................ 1
Section 1.1 Meetings ................................................ 1
Section 1.2 Presiding Officer; Secretary ............................ 1
Section 1.3 Authority of Chairman of Meeting
to Interpret Declaration and By-Laws ................. 1
Section 1.4 Voting; Quorum .......................................... 2
Section 1.5 Inspectors .............................................. 2
Section 1.6 Shareholders' Action in Writing ......................... 2
ARTICLE 2 - TRUSTEES AND TRUSTEES' MEETINGS ........................... 2
Section 2.1 Number of Trustees ...................................... 2
Section 2.2 Regular Meetings of Trustees ............................ 2
Section 2.3 Special Meetings of Trustees ............................ 3
Section 2.4 Notice of Meetings ...................................... 3
Section 2.5 Quorum .................................................. 3
Section 2.6 Participation by Telephone .............................. 3
Section 2.7 Location of Meetings .................................... 3
Section 2.8 Votes ................................................... 4
Section 2.9 Rulings of Chairman ..................................... 4
Section 2.10 Trustees' Action in Writing ............................. 4
Section 2.11 Resignations ............................................ 4
ARTICLE 3 - OFFICERS .................................................. 4
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Section 3.1 Officers of the Trust................................... 4
Section 3.2 Time and Terms of Election.............................. 4
Section 3.3 Resignation and Removal................................. 4
Section 3.4 Fidelity Bond........................................... 5
Section 3.5 Chairman of the Trustees................................ 5
Section 3.6 Vice Chairmen........................................... 5
Section 3.7 President............................................... 5
Section 3.8 Vice Presidents......................................... 5
Section 3.9 Treasurer and Assistant Treasurers...................... 6
Section 3.10 Controller and Assistant Controllers.................... 6
Section 3.11 Secretary and Assistant Secretaries..................... 6
Section 3.12 Substitutions........................................... 7
Section 3.13 Execution of Deeds, etc................................. 7
Section 3.14 Power to Vote Securities................................ 7
ARTICLE 4 - COMMITTEES................................................ 7
Section 4.1 Power of Trustees to Designate
Committees........................................... 7
Section 4.2 Rules for Conduct of Committee Affairs.................. 8
Section 4.3 Trustees May Alter, Abolish, etc.,
Committees........................................... 8
Section 4.4 Minutes; Review by Trustees............................. 8
ARTICLE 5 - SEAL...................................................... 8
ARTICLE 6 - SHARES.................................................... 8
Section 6.1 Issuance of Shares...................................... 8
Section 6.2 Uncertificated Shares................................... 8
Section 6.3 Share Certificates...................................... 9
Section 6.4 Lost, Stolen, etc., Certificates........................ 9
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Section 6.5 Record Transfer of Pledged Shares....................... 9
ARTICLE 7 - CUSTODIAN................................................. 10
ARTICLE 8 - AMENDMENTS................................................ 10
Section 8.1 By-Laws Subject to Amendment............................ 10
Section 8.2 Notice of Proposal to Amend
By-Laws Required..................................... 10
<PAGE>
THE ALGER DEFINED CONTRIBUTION TRUST
BY-LAWS
These Articles are the By-Laws of The Alger Defined Contribution Trust,
a trust with transferable shares established under the laws of The Commonwealth
of Massachusetts (the "TRUST"), pursuant to an Agreement and Declaration of
Trust of the Trust (the "DECLARATION") made the 14th day of July, 1993, and
filed in the office of the Secretary of the Commonwealth. These By-Laws have
been adopted by the Trustees pursuant to the authority granted by Section 3.1 of
the Declaration.
All words and terms capitalized in these By-Laws, unless otherwise
defined herein, shall have the same meanings as they have in the Declaration.
ARTICLE 1
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SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
---------------------------------------
SECTION 1.1. MEETINGS. A meeting of the Shareholders of the Trust shall
be held whenever called by the Trustees and whenever election of a Trustee or
Trustees by Shareholders is required by the provisions of the 1940 Act. Meetings
of Shareholders shall also be called by the Trustees when requested in writing
by Shareholders holding at least ten percent (10%) of the Shares then
outstanding for the purpose of voting upon removal of any Trustee, or if the
Trustees shall fail to call or give notice of any such meeting of Shareholders
for a period of thirty (30) days after such application, then Shareholders
holding at least ten percent (10%) of the Shares then outstanding may call and
give notice of such meeting. Notice of Shareholders' meetings shall be given as
provided in the Declaration.
SECTION 1.2. PRESIDING OFFICER: SECRETARY. The Chairman of the
Trustees, or in his absence the Vice Chairman or Chairmen, if any, in the order
of their seniority or as the Trustees shall otherwise determine, and in the
absence of the Chairman and all Vice Chairmen, if any, the President, shall
preside at each Shareholders' meeting as chairman of the meeting, or in the
absence of the Chairman, all Vice Chairmen and the President, the Trustees
present at the meeting shall elect one of their number as chairman of the
meeting. Unless otherwise provided for by the Trustees, the Secretary of the
Trust shall be the secretary of all meetings of Shareholders and shall record
the minutes thereof.
SECTION 1.3. AUTHORITY OF CHAIRMAN OF MEETING TO INTERPRET DECLARATION
AND BY-LAWS. At any Shareholders' meeting the chairman of the meeting shall be
empowered to determine the construc-
<PAGE>
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tion or interpretation of the Declaration or these By-Laws, or any part thereof
or hereof, and his ruling shall be final.
SECTION 1.4. VOTING; QUORUM. At each meeting of Shareholders, except as
otherwise provided by the Declaration, every holder of record of Shares entitled
to vote shall be entitled to a number of votes equal to the number of Shares
standing in his name on the Share register of the Trust. Shareholders may vote
by proxy and the form of any such proxy may be prescribed from time to time by
the Trustees. A quorum shall exist if the holders of a majority of the
outstanding Shares of the Trust entitled to vote without regard to Series are
present in person or by proxy, but any lesser number shall be sufficient for
adjournments. At all meetings of the Shareholders, votes shall be taken by
ballot for all matters which may be binding upon the Trustees pursuant to
Section 7.1 of the Declaration. On other matters, votes of Shareholders need not
be taken by ballot unless otherwise provided for by the Declaration or by vote
of the Trustees, or as required by the 1940 Act, but the chairman of the meeting
may in his discretion authorize any matter to be voted upon by ballot.
SECTION 1.5. INSPECTORS. At any meeting of Shareholders, the chairman
of the meeting may appoint one or more Inspectors of Election or Balloting to
supervise the voting at such meeting or any adjournment thereof. If Inspectors
are not so appointed, the chairman of the meeting may, and on the request of any
Shareholder present or represented and entitled to vote shall, appoint one or
more Inspectors for such purpose. Each Inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of Inspector of Election or Balloting, as the case may be, at such
meeting with strict impartiality and according to the best of his ability. If
appointed, Inspectors shall take charge of the polls and, when the vote is
completed, shall make a certificate of the result of the vote taken and of such
other facts as may be required by law.
SECTION 1.6. SHAREHOLDERS' ACTION IN WRITING. Nothing in this Article 1
shall limit the power of the Shareholders to take any action by means of written
instruments without a meeting, as permitted by Section 7.6 of the Declaration.
ARTICLE 2
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TRUSTEES AND TRUSTEES' MEETINGS
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SECTION 2.1. NUMBER OF TRUSTEES. There shall initially be one (1)
Trustee, and the number of Trustees shall thereafter be such number, authorized
by the Declaration, as from time to time shall be fixed by a vote adopted by a
Majority of the Trustees.
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SECTION 2.2. REGULAR MEETINGS OF TRUSTEES. Regular meetings of the
Trustees may be held without call or notice at such places and at such times as
the Trustees may from time to time determine; PROVIDED, that notice of such
determination, and of the time, place and purposes of the first regular meeting
thereafter, shall be given to each absent Trustee in accordance with Section 2.4
hereof.
SECTION 2.3. SPECIAL MEETINGS OF TRUSTEES. Special meetings of the
Trustees may be held at any time and at any place when called by the Chairman of
the Trustees, any Vice Chairman, the President or the Treasurer or by two (2) or
more Trustees, or if there shall be fewer than three (3) Trustees, by any
Trustee; PROVIDED, that notice of the time, place and purposes thereof is given
to each Trustee in accordance with Section 2.4 hereof by the Secretary or an
Assistant Secretary or by the officer or the Trustees calling the meeting.
SECTION 2.4. NOTICE OF MEETINGS. Notice of any regular or special
meeting of the Trustees shall be sufficient if given in writing to each Trustee,
and if sent by mail at least five (5) days, or by telegram, Federal Express or
other similar delivery service at least twenty-four (24) hours, before the
meeting, addressed to his usual or last known business or residence address, or
if delivered to him in person at least twenty-four (24) hours before the
meeting. Notice of a special meeting need not be given to any Trustee who was
present at an earlier meeting, not more than thirty-one (31) days prior to the
subsequent meeting, at which the subsequent meeting was called. Notice of a
meeting may be waived by any Trustee by written waiver of notice, executed by
him before or after the meeting, and such waiver shall be filed with the records
of the meeting Attendance by a Trustee at a meeting shall constitute a waiver of
notice, except where a Trustee attends a meeting for the purpose of protesting
prior thereto or at its commencement the lack of notice
SECTION 2.5. QUORUM: PRESIDING OFFICER. At any meeting of the Trustees,
a Majority of the Trustees shall constitute a quorum. Any meeting may be
adjourned from time to time by a majority of the votes cast upon the question,
whether or not a quorum is present, and the meeting may be held as adjourned
without further notice. Unless the Trustees shall otherwise elect, generally or
in a particular case, the Chairman of the Trustees, or in his absence the Vice
Chairman or Vice Chairmen, if any, in the order of their seniority or as the
Trustees shall otherwise determine, or in the absence of the Chairman and all
Vice Chairmen, if any, the President, shall preside at each meeting of the
Trustees as chairman of the meeting.
SECTION 2.6. PARTICIPATION BY TELEPHONE. One or more of the Trustees
may participate in a meeting thereof or of any Committee of the Trustees by
means of a conference telephone or similar com-
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munications equipment allowing all persons participating in the meeting to hear
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
SECTION 2.7. LOCATION OF MEETINGS. Trustees' meetings may be held at
any place, within or without Massachusetts.
SECTION 2.8. VOTES. Voting at Trustees' meetings may be conducted
orally, by show of hands or, if requested by any Trustee, by written ballot. The
results of all voting shall be recorded by the Secretary in the minute book.
SECTION 2.9. RULINGS OF CHAIRMAN. All other rules of conduct adopted
and used at any Trustees' meeting shall be determined by the chairman of such
meeting, whose ruling on all procedural matters shall be final.
SECTION 2.10. TRUSTEES' ACTION IN WRITING. Nothing in this Article 2
shall limit the power of the Trustees to take action by means of a written
instrument without a meeting, as provided in Section 4.2 of the Declaration.
SECTION 2.11. RESIGNATIONS. Any Trustee may resign at any time by
written instrument signed by him and delivered to the Chairman, the President or
the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
ARTICLE 3
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OFFICERS
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SECTION 3.1. OFFICERS OF THE TRUST. The officers of the Trust shall
consist of a Chairman of the Trustees, a President, a Treasurer and a Secretary,
and may include one or more Vice Chairmen, Vice Presidents, Assistant Treasurers
and Assistant Secretaries, and such other officers as the Trustees may
designate. Any person may hold more than one office. Except for the Chairman and
any Vice Chairmen, no officer need be a Trustee.
SECTION 3.2. TIME AND TERMS OF ELECTION. The Chairman, the President,
the Treasurer and the Secretary shall be elected by the Trustees at their first
meeting and thereafter at the annual meeting of the Trustees, as provided in
Section 4.2 of the Declaration. Such officers shall hold office until the next
annual meeting of the Trustees and until their successors shall have been duly
elected and qualified, and may be removed at any meeting by the affirmative vote
of a Majority of the Trustees. All other officers of the Trust may be elected or
appointed at any meeting of the Trustees. Such officers shall hold office for
any term, or
<PAGE>
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indefinitely, as determined by the Trustees, and shall be subject to removal,
with or without cause, at any time by the Trustees.
SECTION 3.3. RESIGNATION AND REMOVAL. Any officer may resign at any
time by giving written notice to the Trustees. Such resignation shall take
effect at the time specified therein, and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
If the office of any officer or agent becomes vacant by reason of death,
resignation, retirement, disqualification, removal from office or otherwise, the
Trustees may choose a successor, who shall hold office for the unexpired term in
respect of which such vacancy occurred. Except to the extent expressly provided
in a written agreement with the Trust, no officer resigning or removed shall
have any right to any compensation for any period following such resignation or
removal, or any right to damage on account of such removal.
SECTION 3.4. FIDELITY BOND. The Trustees may, in their discretion,
direct any officer appointed by them to furnish at the expense of the Trust a
fidelity bond approved by the Trustees, in such amount as the Trustees may
prescribe.
SECTION 3.5. CHAIRMAN OF THE TRUSTEES. Unless the Trustees otherwise
provide, the Chairman of the Trustees shall preside at all meetings of the
Shareholders and of the Trustees. The Chairman, subject to the supervision of
the Trustees, shall have general charge and supervision of the business,
property and affairs of the Trust and such other powers and duties as the
Trustees may prescribe, and unless otherwise provided by law, the Declaration,
these By-Laws or specific vote of the Trustees, shall have and may exercise all
of the powers given to the Trustees by the Declaration and by these By-Laws.
SECTION 3.6. VICE CHAIRMEN. If the Trustees shall elect one or more
Vice Chairmen, the Vice Chairman or if there shall be more than one, such Vice
Chairmen in the order of their seniority or as otherwise designated by the
Trustees, shall preside at meetings of the Shareholders and of the Trustees, and
shall exercise such other powers and duties of the Chairman as the Trustees
shall determine.
SECTION 3.7. PRESIDENT. The President shall be the chief administrative
officer of the Trust and, subject to the supervision of the Chairman, shall have
general charge of the operations of the Trust and general supervision of the
personnel of the Trust, and such other powers and duties as the Trustees or the
Chairman shall prescribe. In the absence or disability of the Chairman, the
President shall exercise the powers and duties of the Chairman, except to the
extent that the Trustees shall have delegated such powers and duties to the Vice
Chairman or Chairmen,
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and except that he shall not preside at meetings of the Trustees if he is not
himself a Trustee.
SECTION 3.8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice President or, if there shall be more than one, the Vice
Presidents in the order of their seniority or as otherwise designated by the
Trustees, shall exercise all of the powers and duties of the President. The Vice
Presidents shall have the power to execute bonds, notes, mortgages and other
contracts, agreements and instruments in the name of the Trust, and shall do and
perform such other duties as the Trustees, the Chairman or the President shall
direct.
SECTION 3.9. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall be
the chief financial officer of the Trust, and shall have the custody of the
Trust's funds and Securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit all
moneys, and other valuable effects in the name and to the credit of the Trust,
in such depositories as may be designated by the Trustees, taking proper
vouchers for such disbursements, shall have such other duties and powers as may
be prescribed from time to time by the Trustees or the Chairman, and shall
render to the Trustees, whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the Trust. If no
Controller is elected, the Treasurer shall also have the duties and powers of
the Controller, as provided in these By-Laws. Any Assistant Treasurer shall have
such duties and powers as shall be prescribed from time to time by the Trustees
or the Treasurer, and shall be responsible to and shall report to the Treasurer.
In the absence or disability of the Treasurer, the Assistant Treasurer or, if
there shall be more than one, the Assistant Treasurers in the order of their
seniority or as otherwise designated by the Trustees or the Chairman, shall have
the powers and duties of the Treasurer.
SECTION 3.10. CONTROLLER AND ASSISTANT CONTROLLERS. If a Controller is
elected, he shall be the chief accounting officer of the Trust and shall be in
charge of its books of account and accounting records and of its accounting
procedures, and shall have such duties and powers as are commonly incident to
the office of a controller, and such other duties and powers as may be
prescribed from time to time by the Trustees. The Controller shall be
responsible to and shall report to the Trustees, but in the ordinary conduct of
the Trust's business, shall be under the supervision of the Treasurer. Any
Assistant Controller shall have such duties and powers as shall be prescribed
from time to time by the Trustees or the Controller, and shall be responsible to
and shall report to the Controller. In the absence or disability of the
Controller, the Assistant Controller or, if there shall be more than one, the
Assistant Controllers in the order of their seniority or
<PAGE>
-7-
as otherwise designated by the Trustees or the Chairman, shall have the powers
and duties of the Controller.
SECTION 3.11. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall,
if and to the extent requested by the Trustees, attend all meetings of the
Trustees, any Committee of the Trustees and/or the Shareholders and record all
votes and the minutes of proceedings in a book to be kept for that purpose,
shall give or cause to be given notice of all meetings of the Trustees, any
Committee of the Trustees, and of the Shareholders and shall perform such other
duties as may be prescribed by the Trustees. The Secretary, or in his absence
any Assistant Secretary, shall affix the Trust's seal to any instrument
requiring it, and when so affixed, it shall be attested by the signature of the
Secretary or an Assistant Secretary. The Secretary shall be the custodian of the
Share records and all other books, records and papers of the Trust (other than
financial) and shall see that all books, reports, statements, certificates and
other documents and records required by law are properly kept and filed. In the
absence or disability of the Secretary, the Assistant Secretary or, if there
shall be more than one, the Assistant Secretaries in the order of their
seniority or as otherwise designated by the Trustees or the Chairman, shall have
the powers and duties of the Secretary.
SECTION 3.12. SUBSTITUTIONS. In case of the absence or disability of
any officer of the Trust, or for any other reason that the Trustees may deem
sufficient, the Trustees may delegate for the time being the powers or duties,
or any of them, of such officer to any other officer, or to any Trustee.
SECTION 3.13. EXECUTION OF DEEDS. ETC. Except as the Trustees may
generally or in particular cases otherwise authorize or direct, all deeds,
leases, transfers, contracts, proposals, bonds, notes, checks, drafts and other
obligations made, accepted or endorsed by the Trust shall be signed or endorsed
on behalf of the Trust by the Chairman, the President, one of the Vice
Presidents or the Treasurer.
SECTION 3.14. POWER TO VOTE SECURITIES. Unless otherwise ordered by the
Trustees, the Treasurer and the Secretary each shall have full power and
authority on behalf of the Trust to give proxies for and/or to attend and to act
and to vote at any meeting of stockholders of any corporation in which the Trust
may hold stock, and at any such meeting the Treasurer or the Secretary, as the
case may be, his proxy shall possess and may exercise any and all rights and
powers incident to the ownership of such stock which, as the owner thereof, the
Trust might have possessed and exercised if present. The Trustees, by resolution
from time to time, or, in the absence thereof, either the Treasurer or the
Secretary, may confer like powers upon any other person or persons as attorneys
and proxies of the Trust.
<PAGE>
-8-
ARTICLE 4
---------
COMMITTEES
----------
SECTION 4.1. POWER OF TRUSTEES TO DESIGNATE COMMITTEES. The Trustees,
by vote of a Majority of the Trustees, may elect from their number an Executive
Committee and any other Committees and may delegate thereto some or all of their
powers except those which by law, by the Declaration or by these By-Laws may not
be delegated; PROVIDED, that the Executive Committee shall not be empowered to
elect the Chairman of the Trustees, the President, the Treasurer or the
Secretary, to amend the By-Laws, to exercise the powers of the Trustees under
this Section 4.1 or under Section 4.3 hereof, or to perform any act for which
the action of a Majority of the Trustees is required by law, by the Declaration
or by these By-Laws. The members of any such Committee shall serve at the
pleasure of the Trustees.
SECTION 4.2. RULES FOR CONDUCT OF COMMITTEE AFFAIRS. Except as
otherwise provided by the Trustees, each Committee elected or appointed pursuant
to this Article 4 may adopt such standing rules and regulations for the conduct
of its affairs as it may deem desirable, subject to review and approval of such
rules and regulations by the Trustees at the next succeeding meeting of the
Trustees, but in the absence of any such action or any contrary provisions by
the Trustees, the business of each Committee shall be conducted, so far as
practicable, in the same manner as provided herein and in the Declaration for
the Trustees.
SECTION 4.3. TRUSTEES MAY ALTER. ABOLISH5 ETC. COMMITTEES. The Trustees
may at any time alter or abolish any Committee, change the membership of any
Committee, or revoke, rescind or modify any action of any Committee or the
authority of any Committee with respect to any matter or class of matters;
PROVIDED, that no such action shall impair the rights of any third parties.
SECTION 4.4. MINUTES; REVIEW BY TRUSTEES. Any Committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees
ARTICLE 5
---------
SEAL
----
The seal of the Trust shall consist of a flat-faced circular die with
the word "Massachusetts", together with the name of the Trust, the words "Trust
Seal", and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
<PAGE>
-9-
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 6
---------
SHARES
------
SECTION 6.1. ISSUANCE OF SHARES. The Trustees may issue Shares of any
or all Series either in certificated or uncertificated form, they may issue
certificates to the holders of Shares of a Series which was originally issued in
uncertificated form, and if they have issued Shares of any Series in
certificated form, they may at any time discontinue the issuance of Share
certificates for such Series and may, by written notice to such Shareholders of
such Series require the surrender of their Share certificates to the Trust for
cancellation1 which surrender and cancellation shall not affect the ownership of
Shares for such Series.
SECTION 6.2. UNCERTIFICATED SHARES. For any Series of Shares for which
the Trustees issue Shares without certificates, the Trust or the Transfer Agent
may either issue receipts therefor or may keep accounts upon the books of the
Trust for the record holders of such Shares, who shall in either case be deemed,
for all purposes hereunder, to be the holders of such Shares as if they had
received certificates therefor and shall be held to have expressly assented and
agreed to the terms hereof and of the Declaration.
SECTION 6.3. SHARE CERTIFICATES. For any Series of Shares for which the
Trustees shall issue Share certificates, each Shareholder of such Series shall
be entitled to a certificate stating the number of Shares owned by him in such
form as shall be prescribed from time to time by the Trustees. Such certificate
shall be signed by the Chairman or a Vice Chairman, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Trust. Such signatures may be facsimiles if the
certificate is countersigned by a Transfer Agent, or by a Registrar, other than
a Trustee, officer or employee of the Trust. In case any officer who has signed
or whose facsimile signature has been placed on such certificate shall cease to
be such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he were such officer at the time of its issue.
SECTION 6.4. LOST. STOLEN. ETC. - CERTIFICATES. If any certificate for
certificated Shares shall be lost, stolen, destroyed or mutilated, the Trustees
may authorize the issuance of a new certificate of the same tenor and for the
same number of Shares in lieu thereof. The Trustees shall require the surrender
of any mutilated certificate in respect of which a new certificate is
<PAGE>
-10-
issued, and may, in their discretion, before the issuance of a new certificate,
require the owner of a lost, stolen or destroyed certificate, or the owner's
legal representative, to make an affidavit or affirmation setting forth such
facts as to the loss, theft or destruction as they deem necessary, and to give
the Trust a bond in such reasonable sum as the Trustees direct, in order to
indemnify the Trust.
SECTION 6.5. RECORD TRANSFER OF PLEDGED SHARES. A pledgee of Shares
pledged as collateral security shall be entitled to a new certificate in his
name as pledgee, in the case of certificated Shares, or to be registered as the
holder in pledge of such Shares in the case of uncertificated Shares; PROVIDED,
that the instrument of pledge substantially describes the debt or duty that is
intended to be secured thereby. Any such new certificate shall express on its
face that it is held as collateral security, and the name of the pledgor shall
be stated thereon, and any such registration of uncertificated Shares shall be
in a form which indicates that the registered holder holds such Shares in
pledge. After such issue or registration, and unless and until such pledge is
released, such pledgee and his successors and assigns shall alone be entitled to
the rights of a Shareholder, and entitled to vote such Shares.
ARTICLE 7
---------
CUSTODIAN
---------
The Trust shall at all times employ a bank or trust company having a
capital, surplus and undivided profits of at least Two Million Dollars
($2,000,000) as Custodian of the capital assets of the Trust. The Custodian
shall be compensated for its services by the Trust upon such basis as shall be
agreed upon from time to time between the Trust and the Custodian.
ARTICLE 8
---------
AMENDMENTS
----------
SECTION 8.1. BY-LAWS SUBJECT TO AMENDMENT. These By-Laws may be
altered, amended or repealed, in whole or in part, at any time by vote of the
holders of a majority of the Shares (or whenever there shall be more than one
Series of Shares, of the holders of a majority of the Shares of each Series)
issued, outstanding and entitled to vote. The Trustees, by vote of a Majority of
the Trustees, may alter, amend or repeal these By-Laws, in whole or in part,
including By-Laws adopted by the Shareholders, except with respect to any
provision hereof which by law, the Declaration or these By-Laws requires action
by the Shareholders. By-Laws adop-
<PAGE>
-11-
ted by the Trustees may be altered, amended or repealed by the Shareholders.
SECTION 8.2. NOTICE OF PROPOSAL TO AMEND BY-LAWS REQUIRED. No proposal
to amend or repeal these By-Laws or to adopt new By-Laws shall be acted upon at
a meeting unless either (i) such proposal is stated in the notice or in the
waiver of notice, as the case may be, of the meeting of the Trustees or
Shareholders at which such action is taken, or (ii) all of the Trustees or
Shareholders, as the case may be, are present at such meeting and all agree to
consider such proposal without protesting the lack of notice.
-------------------------------
EXHIBIT 5(a)
INVESTMENT MANAGEMENT AGREEMENT
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION MIDCAP GROWTH PORTFOLIO
October 15, 1993
Fred Alger Management, Inc.
75 Maiden Lane
New York, NY 10038
Dear Sirs:
The Alger Defined Contribution Trust (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
hereby confirms its agreement with Fred Alger Management, Inc. ("Alger") as
follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Alger Defined Contribution
MidCap Growth Portfolio (the "Portfolio") by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Agreement and Declaration of Trust and in its Prospectus and Statement of
Additional Information, as from time to time in effect, and in such manner and
to such extent as may from time to time be approved by the Board of Trustees of
the Fund. Copies of the Fund's Prospectus, Statement of Additional Information
and Agreement and Declaration of Trust, as each may from time to time be
amended, have been or will be submitted to Alger. The Fund desires to employ and
hereby appoints Alger to act as the investment manager for the Portfolio. Alger
accepts the appointment and agrees to furnish the services for the compensation
set forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of the
Fund, Alger will (a) act in strict conformity with the Fund's Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Portfolio in accordance with the Portfolio's investment objective
and policies as stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in
<PAGE>
effect; (c) make general investment decisions for the Portfolio involving
decisions concerning (i) the specific types of securities to be held by the
Portfolio and the proportion of the Portfolio's assets that should be allocated
to such investments during particular market cycles and (ii) the specific
issuers whose securities will be purchased or sold by the Portfolio; and (d)
supply office facilities (which may be in Alger's own offices); statistical and
research data; data processing services; clerical, accounting and bookkeeping
services; internal auditing services; internal executive and administrative
services; stationery and office supplies; preparation of reports to shareholders
of the Portfolio; preparation of tax returns, reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky authorities;
calculation of the net asset value of shares of the Portfolio; maintenance of
the Portfolio's financial accounts and records; and general assistance in all
aspects of the Fund's operations with respect to the Portfolio. In providing
those services, Alger will supervise the Portfolio's investments generally and
conduct a continual program of evaluaton of the Portfolio's assets.
In connection with the performance of its duties under his Agreement, it is
understood that Alger may from time to time employ or associate with itself such
person or persons as Alger may believe to be particularly fitted to assist it in
the performance of this Agreement, it being understood that the compensation of
such person or persons shall be paid by Alger and that no obligation may be
incurred on the Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for the Portfolio and selecting brokers or
dealers, Alger will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transactions, Alger will consider all factors it deems relevant including, but
not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
on a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, Alger may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which Alger or an affiliate exercises investment
discretion.
-2-
<PAGE>
4. INFORMATION PROVIDED TO THE FUND
Alger will keep the Fund informed of developments materially affecting the
Portfolio, and will, on its own initiative, furnish the Fund from time to time
with whatever information Alger believes is appropriate for this purpose.
In compliance with the requirements of Rule 31a-3 under the Act, Alger
hereby agrees that all records that it maintains for the Fund in respect of the
Portfolio are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon the Fund's request.
5. STANDARD OF CARE
Alger shall exercise its best judgment in rendering the services listed in
paragraph 2 above. Alger shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect Alger against any liability to the
Portfolio or to its shareholders to which Alger would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Alger 's reckless disregard of its
obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay Alger on the first business day of each month a fee for the
previous month at the annual rate of .80 of 1.00% of the Portfolio's average
daily net assets. The fee for the period from the date the Fund's registration
statement is declared effective by the SEC to the end of the month during which
its registration statement is declared effective shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination if this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Alger, the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect.
-3-
<PAGE>
7. EXPENSES
Alger will bear all expenses in connection with the performance of its
services under this Agreement. The Portfolio will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Fund who are not officers,
directors or employees of Alger or any of its affiliates; SEC fees and state
Blue Sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; charges of any independent pricing service retained to assist
in valuing the assets of the Portfolio; the Fund's proportionate share of
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Fund's existence; costs attributable to shareholder services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Fund and of the officers or
Board of Trustees of the Fund; and any extraordinary expenses. Fund-wide
expenses not specifically identifiable to the Portfolio or any other portfolio
of the Fund will be allocated to all portfolios pro rata on the basis of their
relative net assets.
8. REIMBURSEMENT TO THE PORTFOLIO
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses and distribution expenses and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Portfolio, Alger will reimburse the
Portfolio for such excess expense. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Alger now acts, will continue to act and may act
in the future as investment adviser to fiduciary and other managed accounts and
as investment manager to one or more other investment companies (including other
portfolios of the Fund), and the Fund has no objection to Alger so acting,
provided that whenever the Portfolio and one or more other accounts or
investment companies advised by Alger have available funds for investment,
investments suitable and appropriate for each will be
-4-
<PAGE>
allocated in accordance with a formula believed to be equitable to each entity.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the Fund
understands that the persons employed by Alger to assist in the performance of
Alger's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of Alger
or any affiliate of Alger to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall continue until October 15, 1995 and thereafter shall
continue automatically successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Board of Trustees of the Fund
or (ii) a vote of a "majority" (as defined in the Act) of the Portfolio's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Trustees who are not "interested
persons" (as defined in the Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on sixty (60) days' written notice, by
the Board of Trustees of the Fund or by vote of holders of a majority of the
Portfolio's outstanding voting securities, or upon sixty (60) days' written
notice, by Alger. This Agreement will also terminate automatically in the event
of its assignment (as defined in the Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust,
dated July 14, 1993, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of the
Portfolio by the undersigned officer of the Fund in his capacity as an officer
of the Fund. The obligations of this Agreement shall be binding on the assets
and property of the Portfolio only and shall not be binding on any other
portfolio of the Fund or any Trustee, officer or shareholder of the Fund
individually.
-5-
<PAGE>
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof
Very truly yours,
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
-----------------------------
Authorized Officer
Accepted and Agreed:
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
---------------------------
Authorized Officer
-6-
EXHIBIT 5(a)(i)
AMENDMENT
This is an amendment, made as of September 11, 1996, to that certain Investment
Management Agreement Dated October 15, 1993 (the "Management Agreement") between
Fred Alger Management, Inc. and the Alger Defined Contribution MidCap Growth
Portfolio (the "Portfolio"), a portfolio of The Alger Defined Contribution Trust
(the "Fund").
WHEREAS, the name of the Portfolio has been changed to the "Alger
MidCap Growth Retirement Portfolio" and the name of the Fund has been changed to
"The Alger Retirement Fund"; and
WHEREAS, the parties desire to amend the Management Agreement to
reflect such change;
NOW, THEREFORE, the parties agree as follows:
The Management Agreement is hereby amended to reflect the change of
name recited above by restating the first full paragraph thereof and the first
sentence of the paragraph indicated by the caption "1. INVESTMENT DESCRIPTION:
APPOINTMENT" to read as follows:
The Alger Retirement Fund (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of
Massachusetts, hereby confirms its agreement with Fred Alger
Management, Inc. ("Alger") as follows:
1. INVESTMENT DESCRIPTION: APPOINTMENT
The Fund desires to employ the capital of the Alger MidCap
Growth Retirement Portfolio (the "Portfolio") by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust
and in its Prospectus and Statement of Additional Information, as
from time to time in effect, and in such manner and to such extent
as may from time to time be approved by the Board of Trustees of
the Fund.
The parties acknowledge and agree that the foregoing amendment shall
have no effect on any of the terms and conditions of the Management Agreement
existing prior to the amendment, all of which shall remain in full force and
effect as part of the Management Agreement as amended.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first above written.
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
---------------------------------
ALGER MIDCAP GROWTH RETIREMENT PORTFOLIO
By: /s/ Gregory S. Duch
---------------------------------
EXHIBIT 5(b)
INVESTMENT MANAGEMENT AGREEMENT
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION LEVERAGED ALLCAP PORTFOLIO
October 15, 1993
Fred Alger Management, Inc.
75 Maiden Lane
New York, NY 10038
Dear Sirs:
The Alger Defined Contribution Trust (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
hereby confirms its agreement with Fred Alger Management, Inc. ("Alger") as
follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Alger Defined Contribution
Leveraged AllCap Portfolio (the "Portfolio") by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Agreement and Declaration of Trust and in its Prospectus and Statement of
Additional Information, as from time to time in effect, and in such manner and
to such extent as may from time to time be approved by the Board of Trustees of
the Fund. Copies of the Fund's Prospectus, Statement of Additional Information
and Agreement and Declaration of Trust, as each may from time to time be
amended, have been or will be submitted to Alger. The Fund desires to employ and
hereby appoints Alger to act as the investment manager for the Portfolio. Alger
accepts the appointment and agrees to furnish the services for the compensation
set forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of the
Fund, Alger will (a) act in strict conformity with the Fund's Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Portfolio in accordance with the Portfolio's investment objective
and policies as stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in
<PAGE>
effect; (c) make general investment decisions for the Portfolio involving
decisions concerning (i) the specific types of securities to be held by the
Portfolio and the proportion of the Portfolio's assets that should be allocated
to such investments during particular market cycles and (ii) the specific
issuers whose securities will be purchased or sold by the Portfolio; and (d)
supply office facilities (which may be in Alger's own offices); statistical and
research data; data processing services; clerical, accounting and bookkeeping
services; internal auditing services; internal executive and administrative
services; stationery and office supplies; preparation of reports to shareholders
of the Portfolio; preparation of tax returns, reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky authorities;
calculation of the net asset value of shares of the Portfolio; maintenance of
the Portfolio's financial accounts and records; and general assistance in all
aspects of the Fund's operations with respect to the Portfolio. In providing
those services, Alger will supervise the Portfolio's investments generally and
conduct a continual program of evaluaton of the Portfolio's assets.
In connection with the performance of its duties under this Agreement, it
is understood that Alger may from time to time employ or associate with itself
such person or persons as Alger may believe to be particularly fitted to assist
it in the performance of this Agreement, it being understood that the
compensation of such person or persons shall be paid by Alger and that no
obligation may be incurred on the Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for the Portfolio and selecting brokers or
dealers, Alger will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transactions, Alger will consider all factors it deems relevant including, but
not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
on a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, Alger may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which Alger or an affiliate exercises investment
discretion.
-2-
<PAGE>
4. INFORMATION PROVIDED TO THE FUND
Alger will keep the Fund informed of developments materially affecting the
Portfolio, and will, on its own initiative, furnish the Fund from time to time
with whatever information Alger believes is appropriate for this purpose.
In compliance with the requirements of Rule 31a-3 under the Act, Alger
hereby agrees that all records that it maintains for the Fund in respect of the
Portfolio are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon the Fund's request.
5. STANDARD OF CARE
Alger shall exercise its best judgment in rendering the services listed in
paragraph 2 above. Alger shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect Alger against any liability to the
Portfolio or to its shareholders to which Alger would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Alger' 5 reckless disregard of its
obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay Alger on the first business day of each month a fee for the
previous month at the annual rate of .85 of 1.00% of the Portfolio's average
daily net assets. The fee for the period from the date the Fund's registration
statement is declared effective by the SEC to the end of the month during which
its registration statement is declared effective shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination if this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Alger, the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect.
-3-
<PAGE>
7. EXPENSES
Alger will bear all expenses in connection with the performance of its
services under this Agreement. The Portfolio will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Fund who are not officers,
directors or employees of Alger or any of its affiliates; SEC fees and state
Blue Sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; charges of any independent pricing service retained to assist
in valuing the assets of the Portfolio; the Fund's proportionate share of
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Fund's existence; costs attributable to shareholder services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Fund and of the officers or
Board of Trustees of the Fund; and any extraordinary expenses. Fund-wide
expenses not specifically identifiable to the Portfolio or any other portfolio
of the Fund will be allocated to all portfolios pro rata on the basis of their
relative net assets.
8. REIMBURSEMENT TO THE PORTFOLIO
If in any fiscal year the aggregate expenses. of the Portfolio (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses and distribution expenses and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Portfolio, Alger will reimburse the
Portfolio for such excess expense. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Alger now acts, will continue to act and may act
in the future as investment adviser to fiduciary and other managed accounts and
as investment manager to one or more other investment companies (including other
portfolios of the Fund), and the Fund has no objection to Alger so acting,
provided that whenever the Portfolio and one or more other accounts or
investment companies advised by Alger have available funds for investment,
investments suitable and appropriate for each will be
-4-
<PAGE>
allocated in accordance with a formula believed to be equitable to each entity.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the Fund
understands that the persons employed by Alger to assist in the performance of
Alger's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of Alger
or any affiliate of Alger to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall continue until October 15, 1995 and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Board of Trustees of the
Fund or (ii) a vote of a "majority" (as defined in the Act) of the Portfolio's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Trustees who are not "interested
persons" (as defined in the Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on sixty (60) days' written notice, by
the Board of Trustees of the Fund or by vote of holders of a majority of the
Portfolio's outstanding voting securities, or upon sixty (60) days' written
notice, by Alger. This Agreement will also terminate automatically in the event
of its assignment (as defined in the Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust,
dated July 14, 1993, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of the
Portfolio by the undersigned officer of the Fund in his capacity as an officer
of the Fund. The obligations of this Agreement shall be binding on the assets
and property of the Portfolio only and shall not be binding on any other
portfolio of the Fund or any Trustee, officer or shareholder of the Fund
individually.
-5-
<PAGE>
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
---------------------------------
Authorized Officer
Accepted and Agreed:
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
----------------------------
Authorized Officer
-6-
EXHIBIT 5(b)(i)
AMENDMENT
This is an amendment, made as of September 11.1996, to that certain Investment
Management Agreement Dated October 15, 1993 (the 'Management Agreement") between
Fred Alger Management. Inc. and the Alger Defined Contribution Leveraged AllCap
Portfolio (the "Portfolio"), a portfolio of The Alger Defined Contribution Trust
(the "Fund").
WHEREAS, the name of the Portfolio has been changed to the "Alger Capital
Appreciation Retirement Portfolio" and the name of the Fund has been changed to
"The Alger Retirement Fund"; and
WHEREAS, the parties desire to amend the Management Agreement to reflect
such change;
NOW, THEREFORE, the parties agree as follows:
The Management Agreement is hereby amended to reflect the change of name
recited above by restating the first full paragraph thereof and the first
sentence of the paragraph indicated by the caption "1. INVESTMENT DESCRIPTION:
APPOINTMENT" to read as follows:
The Alger Retirement Fund (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of
Massachusetts, hereby confirms its agreement with Fred Alger
Management, Inc. ("Alger") as follows:
1. INVESTMENT DESCRIPTION: APPOINTMENT
The Fund desires to employ the capital of the Alger Capital
Appreciation Retirement Portfolio (the "Portfolio") by investing
and reinvesting in investments of the kind and in accordance with
the limitations specified in its Agreement and Declaration of
Trust and in its Prospectus and Statement of Additional
Information, as from time to time in effect, and in such manner
and to such extent as may from time to time be approved by the
Board of Trustees of the Fund.
The parties acknowledge and agree that the foregoing amendment shall have
no effect on any of the terms and conditions of the Management Agreement
existing prior to the amendment, all of which shall remain in full force and
effect as part of the Management Agreement as amended.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
FRED ALGER MANAGEMENT, INC.
By:/s/ Gregory S. Duch
-------------------------------------------
ALGER CAPITAL APPRECIATION RETIREMENT PORTFOLIO
By:/s/ Gregory S. Duch
-------------------------------------------
EXHIBIT 5(c)
INVESTMENT MANAGEMENT AGREEMENT
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION SMALL CAP PORTFOLIO
October 15, 1993
Fred Alger Management, Inc.
75 Maiden Lane
New York, NY 10038
Dear Sirs:
The Alger Defined Contribution Trust (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
hereby confirms its agreement with Fed Alger Management, Inc. ("Alger") as
follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Alger Defined Contribution
Small Cap Portfolio (the "Portfolio") by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Agreement and Declaration of Trust and in its Prospectus and Statement of
Additional Information, as from time to time in effect, and in such manner and
to such extent as may from time to time be approved by the Board of Trustees of
the Fund. Copies of the Fund's Prospectus, Statement of Additional Information
and Agreement and Declaration of Trust, as each may from time to time be
amended, have been or will be submitted to Alger. The Fund desires to employ and
hereby appoints Alger to act as the investment manager for the Portfolio. Alger
accepts the appointment and agrees to furnish the services for the compensation
set forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of the
Fund, Alger will (a) act in strict conformity with the Fund's Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Portfolio in accordance with the Portfolio's investment objective
and policies as stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in
<PAGE>
effect; (c) make general investment decisions for the Portfolio involving
decisions concerning (i) the specific types of securities to be held by the
Portfolio and the proportion of the Portfolio's assets that should be allocated
to such investments during particular market cycles and (ii) the specific
issuers whose securities will be purchased or sold by the Portfolio; and (d)
supply office facilities (which may be in Alger's own offices); statistical and
research data; data processing services; clerical, accounting and bookkeeping
services; internal auditing services; internal executive and administrative
services; stationery and office supplies; preparation of reports to shareholders
of the Portfolio; preparation of tax returns, reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky authorities;
calculation of the net asset value of shares of the Portfolio; maintenance of
the Portfolio's financial accounts and records; and general assistance in all
aspects of the Fund's operations with respect to the Portfolio. In providing
those services, Alger will supervise the Portfolio's investments generally and
conduct a continual program of evaluation of the Portfolio's assets.
In connection with the performance of its duties under this Agreement, it
is understood that Alger may from time to time employ or associate with itself
such person or persons as Alger may believe to be particularly fitted to assist
it in the performance of this Agreement, it being understood that the
compensation of such person or persons shall be paid by Alger and that no
obligation may be incurred on the Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for the Portfolio and selecting brokers or
dealers, Alger will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transactions, Alger will consider all factors it deems relevant including, but
not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
on a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, Alger may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which Alger or an affiliate exercises investment
discretion.
-2-
<PAGE>
4. INFORMATION PROVIDED TO THE FUND
Alger will keep the Fund informed of developments materially affecting the
Portfolio, and will, on its own initiative, furnish the Fund from time to time
with whatever information Alger believes is appropriate for this purpose.
In compliance with the requirements of Rule 31a-3 under the Act, Alger
hereby agrees that all records that it maintains for the Fund in respect of the
Portfolio are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon the Fund's request.
5. STANDARD OF CARE
Alger shall exercise its best judgment in rendering the services listed in
paragraph 2 above. Alger shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect Alger against any liability to the
Portfolio or to its shareholders to which Alger would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Alger '5 reckless disregard of its
obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay Alger on the first business day of each month a fee for the
previous month at the annual rate of .85 of 1.00% of the Portfolio's average
daily net assets. The fee for the period from the date the Fund's registration
statement is declared effective by the SEC to the end of the month during which
its registration statement is declared effective shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination if this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Alger, the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and Statement of Additional
Information from time to time in effect.
-3-
<PAGE>
7. EXPENSES
Alger will bear all expenses in connection with the performance of its
services under this Agreement. The Portfolio will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Fund who are not officers,
directors or employees of Alger or any of its affiliates; SEC fees and state
Blue Sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; charges of any independent pricing service retained to assist
in valuing the assets of the Portfolio; the Fund's proportionate share of
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Fund's existence; costs attributable to shareholder services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Fund and of the officers or
Board of Trustees of the Fund; and any extraordinary expenses. Fund-wide
expenses not specifically identifiable to the Portfolio or any other portfolio
of the Fund will be allocated to all portfolios pro rata on the basis of their
relative net assets.
8. REIMBURSEMENT TO THE PORTFOLIO
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses and distribution expenses and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Portfolio, Alger will reimburse the
Portfolio for such excess expense. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Alger now acts, will continue to act and may act
in the future as investment adviser to fiduciary and other managed accounts and
as investment manager to one or more other investment companies (including other
portfolios of the Fund), and the Fund has no objection to Alger so acting,
provided that whenever the Portfolio and one or more other accounts or
investment companies advised by Alger have available funds for investment,
investments suitable and appropriate for each will be
-4-
<PAGE>
allocated in accordance with a formula believed to be equitable to each entity.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the Fund
understands that the persons employed by Alger to assist in the performance of
Alger's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of Alger
or any affiliate of Alger to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall continue until October 15, 1995 and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Board of Trustees of the
Fund or (ii) a vote of a "majority" (as defined in the Act) of the Portfolio's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Trustees who are not "interested
persons" (as defined in the Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on sixty (60) days' written notice, by
the Board of Trustees of the Fund or by vote of holders of a majority of the
Portfolio's outstanding voting securities, or upon sixty (60) days' written
notice, by Alger. This Agreement will also terminate automatically in the event
of its assignment (as defined in the Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust,
dated July 14, 1993, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of the
Portfolio by the undersigned officer of the Fund in his capacity as an officer
of the Fund. The obligations of this Agreement shall be binding on the assets
and property of the Portfolio only and shall not be binding on any other
portfolio of the Fund or any Trustee, officer or shareholder of the Fund
individually.
-5-
<PAGE>
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
----------------------------------------
Authorized Officer
Accepted and Agreed:
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
--------------------------------------
Authorized Officer
-6-
EXHIBIT 5(c)(i)
AMENDMENT
This is an amendment, made as of September 11, 1996, to that certain Investment
Management Agreement Dated October 15, 1993 (the "Management Agreement") between
Fred Alger Management, Inc. and the Alger Defined Contribution Small Cap
Portfolio (the "Portfolio"), a portfolio of The Alger Defined Contribution Trust
(the "Fund").
WHEREAS, the name of the Portfolio has been changed to the "Alger Small Cap
Retirement Portfolio" and the name of the Fund has been changed to "The Alger
Retirement Fund"; and
WHEREAS, the parties desire to amend the Management Agreement to reflect
such change;
NOW, THEREFORE, the parties agree as follows:
The Management Agreement is hereby amended to reflect the change of name
recited by restating the first full paragraph thereof and the first sentence of
the paragraph indicated caption "1. INVESTMENT DESCRIPTION: APPOINTMENT" to read
as follows:
The Alger Retirement Fund (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of
Massachusetts, hereby confirms its agreement with Fred Alger
Management, Inc. ("Alger") as follows:
1. INVESTMENT DESCRIPTION: APPOINTMENT
The Fund desires to employ the capital of the Alger Small Cap
Retirement Portfolio (the "Portfolio") by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust
and in its Prospectus and Statement of Additional Information, as
from time to time in effect, and in such manner and to such extent
as may from time to time be approved by the Board of Trustees of
the Fund.
The parties acknowledge and agree that the foregoing amendment shall have
no effect on any of the terms and conditions of the Management Agreement
existing prior to the amendment, all of which shall remain in full force and
effect as part of the Management Agreement as amended.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
-------------------------------
ALGER SMALL CAP RETIREMENT PORTFOLIO
By: /s/ Gregory S. Duch
---------------------------
EXHIBIT 5(d)
INVESTMENT MANAGEMENT AGREEMENT
THE ALGER DEFINED CONTRIBUTION TRUST
ALGER DEFINED CONTRIBUTION GROWTH PORTFOLIO
October 15, 1993
Fred Alger Management, Inc.
75 Maiden Lane
New York, NY 10038
Dear Sirs:
The Alger Defined Contribution Trust (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
hereby confirms its agreement with Fred Alger Management, Inc. ("Alger") as
follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Alger Defined Contribution
Growth Portfolio (the "Portfolio") by investing and reinvesting in investments
of the kind and in accordance with the limitations specified in its Agreement
and Declaration of Trust and in its Prospectus and Statement of Additional
Information, as from time to time in effect, and in such manner and to such
extent as may from time to time be approved by the Board of Trustees of the
Fund. Copies of the Fund's Prospectus, Statement of Additional Information and
Agreement and Declaration of Trust, as each may from time to time be amended,
have been or will be submitted to Alger. The Fund desires to employ and hereby
appoints Alger to act as the investment manager for the Portfolio. Alger accepts
the appointment and agrees to furnish the services for the compensation set
forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of the
Fund, Alger will (a) act in strict conformity with the Fund1s Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Portfolio in accordance with the Portfolio's investment objective
and policies as stated in the Fund's Prospectus and Statement of Additional
Information as from time to time in
<PAGE>
effect; (c) make general investment decisions for the Portfolio involving
decisions concerning (i) the specific types of securities to be held by the
Portfolio and the proportion of the Portfolio's assets that should be allocated
to such investments during particular market cycles and (ii) the specific
issuers whose securities will be purchased or sold by the Portfolio; and (d)
supply office facilities (which may be in Alger's own offices); statistical and
research data; data processing services; clerical, accounting and bookkeeping
services; internal auditing services; internal executive and administrative
services; stationery and office supplies; preparation of reports to shareholders
of the Portfolio; preparation of tax returns, reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky authorities;
calculation of the net asset value of shares of the Portfolio; maintenance of
the Portfolio's financial accounts and records; and general assistance in all
aspects of the Fund's operations with respect to the Portfolio. In providing
those services, Alger will supervise the Portfolio's investments generally and
conduct a continual program of evaluation of the Portfolio's assets.
In connection with the performance of its duties under this Agreement, it
is understood that Alger may from time to time employ or associate with itself
such person or persons as Alger may believe to be particularly fitted to assist
it in the performance of this Agreement, it being understood that the
compensation of such person or persons shall be paid by Alger and that no
obligation may be incurred on the Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for the Portfolio and selecting brokers or
dealers, Alger will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transactions, Alger will consider all factors it deems relevant including, but
not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
on a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, Alger may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which Alger or an affiliate exercises investment
discretion.
-2-
<PAGE>
4. INFORMATION PROVIDED TO THE FUND
Alger will keep the Fund informed of developments materially affecting the
Portfolio, and will, on its own initiative, furnish the Fund from time to time
with whatever information Alger believes is appropriate for this purpose.
In compliance with the requirements of Rule 31a-3 under the Act, Alger
hereby agrees that all records that it maintains for the Fund in respect of the
Portfolio are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon the Fund's request.
5. STANDARD OF CARE
Alger shall exercise its best judgment in rendering the services listed in
paragraph 2 above. Alger shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect Alger against any liability to the
Portfolio or to its shareholders to which Alger would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Alger' 5 reckless disregard of its
obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay Alger on the first business day of each month a fee for the
previous month at the annual rate of .75 of 1.00% of the Portfolio's average
daily net assets. The fee for the period from the date the Fund's registration
statement is declared effective by the SEC to the end of the month during which
its registration statement is declared effective shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination if this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Alger, the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and Statement of Additional
Information as from time to time in effect.
-3-
<PAGE>
7. EXPENSES
Alger will bear all expenses in connection with the performance of its
services under this Agreement. The Portfolio will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Fund who are not officers,
directors or employees of Alger or any of its affiliates; SEC fees and state
Blue Sky qualification fees; charges of custodians and transfer and dividend
disbursing agents; charges of any independent pricing service retained to assist
in valuing the assets of the Portfolio; the Fund's proportionate share of
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Fund's existence; costs attributable to shareholder services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Fund and of the officers or
Board of Trustees of the Fund; and any extraordinary expenses. Fund-wide
expenses not specifically identifiable to the Portfolio or any other portfolio
of the Fund will be allocated to all portfolios pro rata on the basis of their
relative net assets.
8. REIMBURSEMENT TO THE PORTFOLIO
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses and distribution expenses and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Portfolio, Alger will reimburse the
Portfolio for such excess expense. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
9.SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Alger now acts, will continue to act and may act
in the future as investment adviser to fiduciary and other managed accounts and
as investment manager to one or more other investment companies (including other
portfolios of the Fund), and the Fund has no objection to Alger so acting,
provided that whenever the Portfolio and one or more other accounts or
investment companies advised by Alger have available funds for investment,
investments suitable and appropriate for each will be
-4-
<PAGE>
allocated in accordance with a formula believed to be equitable to each entity.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Portfolio. In addition, the Fund
understands that the persons employed by Alger to assist in the performance of
Alger's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of Alger
or any affiliate of Alger to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall continue until October 15, 1995 and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Board of Trustees of the
Fund or (ii) a vote of a "majority" (as defined in the Act) of the Portfolio's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Trustees who are not "interested
persons" (as defined in the Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on sixty (60) days' written notice, by
the Board of Trustees of the Fund or by vote of holders of a majority of the
Portfolio's outstanding voting securities, or upon sixty (60) days' written
notice, by Alger. This Agreement will also terminate automatically in the event
of its assignment (as defined in the Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust,
dated July 14, 1993, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of the
Portfolio by the undersigned officer of the Fund in his capacity as an officer
of the Fund. The obligations of this Agreement shall be binding on the assets
and property of the Portfolio only and shall not be binding on any other
portfolio of the Fund or any Trustee, officer or shareholder of the Fund
individually.
-5-
<PAGE>
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
--------------------------------
Authorized Officer
Accepted and Agreed:
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
-----------------------------------
Authorized Officer
-6-
EXHIBIT 5(d)(i)
AMENDMENT
This is an amendment, made as of September 11, 1996, to that certain Investment
Management Agreement Dated October 15, 1993 (the "Management Agreement") between
Fred Alger Management, Inc. and the Alger Defined Contribution Growth Portfolio
(the "Portfolio"), a portfolio of The Alger Defined Contribution Trust (the
"Fund").
WHEREAS, the name of the Portfolio has been changed to the "Alger Growth
Retirement Portfolio" and the name of the Fund has been changed to "The Alger
Retirement Fund"; and
WHEREAS, the parties desire to amend the Management Agreement to reflect
such change;
NOW, THEREFORE, the parties agree as follows:
The Management Agreement is hereby amended to reflect the change of name
recited above by restating the first full paragraph thereof and the first
sentence of the paragraph indicated by the caption "1.INVESTMENT DESCRIPTION:
APPOINTMENT" to read as follows:
The Alger Retirement Fund (the "Fund"), an unincorporated
business trust organized under the laws of the Commonwealth of
Massachusetts, hereby confirms its agreement with Fred Alger
Management, Inc. ("Alger") as follows:
1. INVESTMENT DESCRIPTION: APPOINTMENT
The Fund desires to employ the capital of the Alger Growth
Retirement Portfolio (the "Portfolio") by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust
and in its Prospectus and Statement of Additional Information, as
from time to time in effect, and in such manner and to such extent
as may from time to time be approved by the Board of Trustees of
the Fund.
The parties acknowledge and agree that the foregoing amendment shall have
no effect on any of the terms and conditions of the Management Agreement
existing prior to the amendment, all of which shall remain in full force and
effect as part of the Management Agreement as amended.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
FRED ALGER MANAGEMENT, INC.
By: /s/ Gregory S. Duch
---------------------------
ALGER GROWTH RETIREMENT PORTFOLIO
By: /s/ Gregory S. Duch
---------------------------
EXHIBIT 6
DISTRIBUTION AGREEMENT
October 15 , 1993
Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, NJ 07302
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, The Alger Defined Contribution Trust (the "Fund"),
an unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts, has agreed that Fred Alger & Company, Incorporated ("Alger")
shall be, for the period of this Agreement, the distributor of shares of
beneficial interest of the Fund.
1. SERVICES AS DISTRIBUTOR
1.1 Alger will act as agent for the distribution of each series of shares
of beneficial interest of the Fund (the "Shares") covered by the registration
statement, prospectus and statement of additional information then in effect
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act").
1.2 Alger agrees to use its best efforts to solicit orders for the sale
of the Shares at the public offering price, as determined in accordance with the
Registration Statement, and will undertake such advertising and promotion as it
believes is reasonable in connection with such solicitation. Alger agrees to
bear all selling expenses, including the cost of printing prospectuses and
statements of additional information and distributing them to prospective
shareholders.
1.3 All activities by Alger as distributor of the Shares shall comply
with all applicable laws, rules and regulations, including, without limitation,
all rules and regulations made or adopted by the Securities and Exchange
Commission (the "SEC") or by any securities association registered under the
Securities Exchange Act of 1934.
<PAGE>
1.4 Alger will provide one or more persons during normal business hours
to respond to telephone inquiries concerning the Fund.
1.5 Alger acknowledges that, whenever in the judgment of the Fund's
officers such action is warranted for any reason, including, without limitation,
market, economic or political conditions, those officers may decline to accept
any orders for, or make any sales of, the Shares until such time as those
officers deem it advisable to accept such orders and to make such sales.
2. DUTIES OF THE FUND
2.1 The Fund agrees to execute at its own expense any and all documents,
to furnish any and all information and to take any other actions that may be
reasonably necessary in connection with the qualification of the Shares for sale
in those states that Alger may designate.
2.2 The Fund shall furnish from time to time, for use in connection with
the sale of the Shares, such information reports with respect to the Fund and
the Shares as Alger may reasonably request, all of which shall be signed by one
or more of the Fund's duly authorized officers; and the Fund warrants that the
statements contained in any such reports, when so signed by one of more of the
Fund's officers, shall be true and correct. The Fund shall also furnish Alger
upon request with: (a) annual audits of the Fund's books and accounts made by
independent public accountants regularly retained by the Fund, (b) semi-annual
unaudited financial statements pertaining to the Fund, (c) quarterly earnings
statements prepared by the Fund, (d) a monthly itemized list of the securities
in each Portfolio, (e) monthly balance sheets as soon as practicable after the
end of each month and (f) from time to time such additional information
regarding the Fund's financial condition as Alger may reasonably request.
3. REPRESENTATIONS AND WARRANTIES
The Fund represents to Alger that all registration statements,
prospectuses and statements of additional information filed by the Fund with the
SEC under the 1933 Act and the 1940 Act with respect to the Shares have been
prepared in conformity
-2-
<PAGE>
with the requirements of the 1933 Act, the 1940 Act and the rules and
regulations of the SEC thereunder. As used in this Agreement the terms
"registration statement", "prospectus" and "statement of additional information"
shall mean any registration statement, prospectus and statement of additional
information filed by the Fund with the SEC and any amendments and supplements
thereto that at any time shall have been filed with the SEC. The Fund represents
and warrants to Alger that any registration statement, prospectus and statement
of additional information, when such registration statement becomes effective,
will include all statements required to be contained therein in conformity with
the 1933 Act, the 1940 Act and the rules and regulations of the SEC; that all
statements of fact contained in any registration statement, prospectus or
statement of additional information will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information when such
registration statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Shares. Alger may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus or statement of additional information as, in the
light of future developments, may, in the opinion of Alger's counsel, be
necessary or advisable. If the Fund shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Fund of a written request from Alger to do so, Alger may, at its option,
terminate this Agreement. The Fund shall not file any amendment to any
registration statement or supplement to any prospectus or statement of
additional information without giving Alger reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information, of whatever character, as the Fund may deem advisable,
such right being in all respects absolute and unconditional.
4. INDEMNIFICATION
4.1 The Fund authorizes Alger to use any prospectus or statement of
additional information furnished by the Fund from time to time, in connection
with the sale of the Fund's shares. The Fund agrees to indemnify, defend and
hold Alger, its several officers and trustees, and any person who controls Alger
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, liabilities and expenses
-3-
<PAGE>
including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) that Alger,
its officers and trustees, or any such controlling person, may incur under the
1933 Act, the 1940 Act or common law or otherwise, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any registration statement, any prospectus or any statement of additional
information, or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated in any registration statement, any
prospectus or any statement of additional information, or necessary to make the
statements in any of them not misleading; provided, however, that the Fund's
agreement to indemnify Alger, its officers or trustees, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of or based upon any statements or representations made by Alger or
its representatives or agents other than such statements and representations as
are contained in any registration statement, prospectus or statement of
additional information and in such financial and other statements as are
furnished to Alger pursuant to paragraph 2.2 hereof; and further provided that
the Fund's agreement to indemnify Alger and the Fund's representations and
warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover
any liability to the Fund or its shareholders to which Alger would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of Alger's reckless disregard of its
obligations and duties under this Agreement. The Fund's agreement to indemnify
Alger, its officers and trustees, and any such controlling person, as aforesaid,
is expressly conditioned upon the Fund's being notified of any action brought
against Alger, its officers or trustees, or any such controlling person, such
notification to be given by letter or by telegram addressed to the Fund at its
principal office in New York, New York and sent to the Fund by the person
against whom such action is brought, within ten days after the summons or other
first legal process shall have been served. The failure so to notify the Fund of
any such action shall not relieve the Fund from any liability that the Fund may
have to the person against whom such action is brought by reason of any such
untrue or alleged untrue statement or omission or alleged omission otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
4.1. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by Alger. In the event the Fund elects to assume the defense of any such suit
and retain counsel of good standing approved by Alger, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
-4-
<PAGE>
elect to assume the defense of any such suit, or in case Alger does not approve
of counsel chosen by the Fund, the Fund will reimburse Alger, its officers and
trustees, or the controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained by Alger or
them. The Fund's indemnification agreement contained in this paragraph 4.1 and
the Fund1s representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of Alger, its officers and trustees, or any controlling person, and
shall survive the delivery of any of the Fund's shares. This agreement of
indemnity will inure exclusively to Alger's benefit, to the benefit of its
several officers and trustees, and their respective estates, and to the benefit
of the controlling persons and their successors. The Fund agrees to notify Alger
promptly of the commencement of any litigation or proceedings against the Fund
or any of its officers or trustees in connection with the issuance and sale of
any of the Shares.
4.2 Alger agrees to indemnify, defend and hold the Fund, its several
officers and trustees, and any person who controls the Fund within the meaning
of Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the costs of investigating
or defending such claims, demands or liabilities and any counsel fees incurred
in connection therewith) that the Fund, its officers or trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act or common law or
otherwise, but only to the extent that such liability or expense incurred by the
Fund, its officers or trustees or such controlling person resulting from such
claims or demands shall arise out of or be based upon (a) any unauthorized sales
literature, advertisements, information, statements or representations or (b)
any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by Alger to the Fund and used in the answers to
any of the items of the registration statement or in the corresponding
statements made in the prospectus or statement of additional information, or
shall arise out of or be based upon any omission or alleged omission to state a
material fact in connection with such information furnished in writing by Alger
to the Fund and required to be stated in such answers or necessary to make such
information not misleading. Alger's agreement to indemnify the Fund, its
officers and trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon Alger's being notified of any action brought against
the Fund, its officers or trustees, or any such controlling person, such
notification to be given by letter or telegram addressed to Alger at its
executive office in New York, New York and sent to Alger by the person against
whom such action is brought, within ten days after the summons or other first
legal process shall have
-5-
<PAGE>
been served. Alger shall have the right of first control of the defense of such
action, with counsel of its own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or omission on Alger's
part, and in any other event the Fund, its officers or trustees or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify Alger of
any such action shall not relieve Alger from any liability that Alger may have
to the Fund, its officers or trustees, or to such controlling person by reason
of any such untrue or alleged untrue statement or omission or alleged omission
otherwise than on account of Alger '5 indemnity agreement contained in this
paragraph 4.2. Alger agrees to notify the Fund promptly of the commencement of
any litigation or proceedings against Alger or any of its officers or trustees
in connection with the issuance and sale of any of the Shares.
5. EFFECTIVENESS OF REGISTRATION
None of the Shares shall be offered by either Alger or the Fund under any
of the provisions of this Agreement and no orders for the purchase or sale of
the Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as required by Section 5(b)(2) of
the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 5 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to redeem its shares from any
shareholder in accordance with the provisions of the Fund's prospectus,
statement of additional information or articles of incorporation.
6. NOTICE TO ALGER
The Fund agrees to advise Alger immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect
or for additional information;
(b) in the event of the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement, prospectus or statement of
additional information then in effect or the initiation of any proceeding
for that purpose;
-6-
<PAGE>
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement, prospectus or statement
of additional information then in effect or that requires the making of a
change in such registration statement, prospectus or statement of
additional information in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendment to any
registration statement, prospectus or statement of additional information
which may from time to time be filed with the SEC.
7. TERM OF AGREEMENT
This Agreement shall continue until August __, 1995 and thereafter shall
continue automatically for successive annual persons ending on August of each
year, provided such continuance is specifically approved at least annually by
(a) the Fund's Board of Trustees or (b) a vote of a majority (as defined in the
1940 Act) of the Fund's outstanding voting securities, provided that in either
event the continuance is also approved by a majority of the Trustees of the Fund
who are not interested persons (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty, on sixty days'
written notice, by the Fund's Board of Trustees or by vote of the holders of a
majority of the Fund's shares, or on ninety days' written notice, by Alger. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act and the rules thereunder).
8. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of
Trust, dated July 14, 1993, together with all amendments thereto, is on file in
the office of the Secretary of the Commonwealth of Massachusetts.
9. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his capacity as an officer of the Fund. The obligations
of this Agreement shall be binding upon the assets and property of the Fund only
and shall not be binding upon any trustee, officer or shareholder of the Fund
individually.
-7-
<PAGE>
10. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and retaining the enclosed copy
hereof.
Very truly yours,
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
----------------------------------
Authorized Officer
Accepted and Agreed:
FRED ALGER & COMPANY, INCORPORATED
By: /s/ Gregory S. Duch
-------------------------------
Authorized Officer
-8-
EXHIBIT 6(a)
AMENDMENT
This is an amendment, made as of September 11.1996, to that certain Distribution
Agreement Dated October 15.1993 (the "Distribution Agreement") between Fred
Alger & Company, Incorporated and The Alger Defined Contribution Trust (the
"Fund").
WHEREAS, the name of the Fund has been changed to "The Alger Retirement
Fund"; and
WHEREAS, the parties desire to amend the Distribution Agreement to reflect
such change;
NOW, THEREFORE, the parties agree as follows:
The Distribution Agreement is hereby amended to reflect the change of name
recited above by restating the first full paragraph thereof to read:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, The Alger Retirement Fund
(the "Fund"), an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts, has agreed that Fred
Alger & Company Incorporated ("Alger") shall be, for the period of
this Agreement, the distributor of shares of beneficial interest
of the Fund.
The parties acknowledge and agree that the foregoing amendment shall have
no effect on any of the terms and conditions of the Distribution Agreement
existing prior to the amendment, all of which shall remain in full force and
effect as part of the Distribution Agreement as amended.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
FRED ALGER & COMPANY, INCORPORATED
By: /s/ Gregory S. Duch
-------------------------------
THE ALGER RETIREMENT FUND
By: /s/ Gregory S. Duch
-------------------------------
EXHIBIT 9
TRANSFER AGENCY AGREEMENT
AGREEMENT, dated as of October 15, 1993, between The Alger Defined
Contribution Trust (the "Trust"), a Massachusetts business trust, having its
principal office and place of business at 75 Maiden Lane, New York, New York
10038, and Alger Shareholder Services, Inc. (the "Transfer Agent"), a Delaware
corporation with principal offices at 30 Montgomery Street, Jersey City, New
Jersey 07302.
W I T N E S S E T H:
In consideration of the promises and mutual covenants set forth in this
Agreement, the Trust and the Transfer Agent agree as follows:
1. APPOINTMENT OF THE TRANSFER AGENT. The Trust appoints the Transfer Agent
as transfer agent for the shares of beneficial interest (the "Shares") of each
Portfolio of the Trust and as shareholder servicing agent for the Trust. The
Transfer Agent accepts the appointment and agrees to furnish these services in
accordance with the provisions set forth in this Agreement. As used in this
Agreement, "Portfolio" refers to each of the Alger Defined Contribution Small
Capitalization Portfolio, the Alger Defined Contribution MidCap Growth
Portfolio, the Alger Defined Contribution Growth Portfolio, or any other
Portfolio that may be created and designated by the Trust in accordance with the
provisions of the Master Trust Agreement of the Trust dated July 14, 1993 (the
"Declaration of Trust"). When the Trust creates and designates a new Portfolio,
the Trustees of the Trust shall notify the Transfer Agent in writing to the
effect that the Trust has established a new Portfolio and that it appoints the
Transfer Agent as transfer agent and shareholder servicing agent for the new
Portfolio. The notice must be received by the Transfer Agent within a reasonable
period of time prior to the commencement of operations of the new Portfolio in
order to allow the Transfer
<PAGE>
Agent, in the ordinary course of its business, to prepare to perform its duties
for the new Portfolio
2. DELIVERY OF DOCUMENTS. The Trust agrees, on or before the date this
Agreement becomes effective, but in any case, within a reasonable period of time
prior to the commencement of operations of the Trust for the Transfer Agent to
prepare to perform its duties under this Agreement, to deliver to the Transfer
Agent the following documents:
(a) A certified copy of the Declaration of Trust, as may be amended
from time to time;
(b) A certified copy of the By-laws of the Trust, as may be amended
from time to time;
(c) A copy of the resolution of the Board of Trustees authorizing the
execution and delivery of this Agreement;
(d) A specimen of the certificate for Shares of each Portfolio of the
Trust in the form approved by the Trustees, with a certificate of the
Secretary of the Trust as to such approval;
(e) All account application forms and other documents relating to
Shareholder accounts;
(f) A certified list of Shareholders of the existing Portfolios with
the name, address and taxpayer identification number of each Shareholder,
the number of Shares of the existing Portfolios held by each, the
certificate numbers and denominations (if any certificates have been
issued), lists of any accounts against which stop transfers have been
placed, together with the reasons for placing the stop transfers, and the
number of Shares redeemed by the Portfolios;
(g) A copy of the Distribution Agreement in effect between the Trust
and Fred Alger & Company, Incorporated, the distributor of the Shares of
the Trust;
(h) A copy of the Custodian Agreement in effect between the Trust and
National Westminster Bank NJ, the custodian of the assets of the Trust;
(i) An opinion of counsel for the Trust with respect to the validity of
the Shares and the status of the Shares under the Securities Act of 1933,
as amended (the "1933
-2-
<PAGE>
Act"); and
(j) A certified list of the authorized officers or any other authorized
person (an "Authorized Person") of the Trust, in the form set forth in
Exhibit 1 to this Agreement, authorized to execute any certificate,
instruction, notice or other instrument ("Written Instructions"), or to
give oral instructions ("Oral Instructions") on behalf of the Trust.
3. FURTHER DOCUMENTATION. The Trust agrees to also furnish from time to
time the following documents:
(a) Each vote of the Trustees authorizing the establishment and
designation of any new Portfolio and the original issuance of Shares;
(b) Each instrument establishing and designating a new Portfolio of the
Trust;
(c) Each Registration Statement of the Trust filed with the Securities
and Exchange Commission (the "Commission"), and each amendment with respect
to the Registration Statement;
(d) A certified copy of each amendment to the Declaration of Trust and
the By-laws of the Trust;
(e) Certified copies of each vote of the Trustees designating
Authorized Persons to give Written or Oral Instructions to the Transfer
Agent;
(f) Certificates as to any change in any officer or Trustee of the
Trust;
(g) Such other documents, certificates or opinions reasonably required
by the Transfer Agent as necessary or appropriate for the proper
performance of its duties under this Agreement.
4. REPRESENTATIONS OF THE TRUST
(a) The Trust represents to the Transfer Agent that all outstanding
Shares are validly issued, fully paid and non-assessable, the Trust further
represents that when Shares are issued by the Trust after the date of this
Agreement in accordance with the terms of the Declaration of Trust and the
current prospectus describing those shares, the Shares shall be validly
issued, fully paid and non-assessable.
-3-
<PAGE>
(b) In the event that any Portfolio of the Trust shall declare a
distribution payable in Shares, the Trust shall deliver to the Transfer
Agent written notice of such declaration signed on behalf of the Trust by
an authorized officer of the Trust, certifying (i) the number of Shares
involved, (ii) that all appropriate corporate action has been taken, and
(iii) that any amendment to the Declaration of Trust which may be required
to be filed has been filed and is effective. The notice shall be
accompanied by an opinion of counsel to the Trust relating to the legal
adequacy and effect of the transaction. The Transfer Agent shall be
entitled to rely upon the notice for all purposes.
5. POWERS AND DUTIES OF THE TRANSFER AGENT. Agent shall have the following
powers and duties:
(a) SHAREHOLDER INFORMATION. The Transfer Agent shall maintain a record
of the number of Shares held by each holder of record, which shall include
the holder's name or names, address and taxpayer identification numbers and
whether the Shares are held in certificated or uncertificated form.
(b) SHAREHOLDER SERVICES. The Transfer Agent will investigate all
Shareholder inquiries relating to Shareholder accounts and will answer all
correspondence from Shareholders and others relating to the Transfer
Agent's duties under this Agreement as well as such other correspondence as
may from time to time be mutually agreed upon between the Transfer Agent
and the Trust. The Transfer Agent shall keep records of Shareholder
correspondence and replies thereto, and of the lapse of time between the
receipt of the Shareholder correspondence and the mailing of such replies.
(c) SHARE CERTIFICATES. The Trust shall supply the Transfer Agent with
sufficient blank Share certificates for each Portfolio to meet the Transfer
Agent's requirements for the certificates. The Share certificates shall be
properly executed manually or, if authorized by the Trust, by facsimile.
The Trust agrees that, notwithstanding the death, resignation, or removal
of any officer of the Trust whose signature appears on the Share
certificates, the Transfer Agent may continue to countersign certificates
bearing such signature until otherwise directed by the Trust.
(d) LOST CERTIFICATES. The Transfer Agent shall issue replacement share
certificates in lieu of certificates which have been reported lost, stolen
or destroyed without any further action by the Board of Trustees or any
officer of the Trust, upon receipt by the Transfer Agent of properly ex-
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<PAGE>
ecuted affidavits and lost certificate bonds, satisfactory to the Transfer
Agent, naming the Trust and the Transfer Agent as obligees under the bond.
(e) MAILING COMMUNICATIONS OF THE TRUST TO SHAREHOLDERS; PROXY
MATERIALS. The Transfer Agent will address and mail to the Shareholders all
reports of the Trust, dividend and distribution notices and proxy material
for meetings of Shareholders. In connection with meetings of Shareholders,
the Transfer Agent will prepare Shareholder lists, mail and certify as to
the mailing of proxy materials, process and tabulate returned proxy cards,
report on proxies voted prior to meetings, act as inspector of election at
meetings and certify Shares at meetings.
(f) PROCESSING OF INVESTMENT CHECKS OR OTHER INSTRUMENTS. Upon receipt
of any check or other instrument drawn or endorsed to the Transfer Agent,
or identified as being for the account of the Trust, or drawn or endorsed
to the distributor for the purchase of Shares, the Transfer Agent shall
stamp the check or other instrument with the date of receipt, shall
promptly process the same for collection and, shall record the number of
Shares sold, the trade date and price per Share, and the amount of money to
be delivered to the custodian of the Trust for the sale of the Shares.
(g) ISSUANCE OF SHARES. Upon receipt of notification that the custodian
has received payment for the purchase of Shares, the Transfer Agent shall
issue to and hold in the account of the Shareholder, or if no account is
specified in the notification, in a new account established in the name of
the specified purchaser, the amount of Shares that the purchaser is
entitled to receive, as determined in accordance with applicable Federal
law or regulation.
(h) CONFIRMATION. The Transfer Agent shall send to the Shareholder a
confirmation of each purchase which will show the new Share balance, the
amount invested and the price paid for the Shares, or such other form of
confirmation as the Trust and the Transfer Agent may agree upon from time
to time.
(i) SUSPENSION OF SALE OF SHARES. The Transfer Agent shall not be
required to issue any Shares of the Trust where it has received Written
Instructions from the Trust or a written notice from any appropriate
Federal authority that the sale of Shares of the Trust has been suspended
or discontinued and the Transfer Agent shall be entitled to rely upon such
Written Instructions or written notification.
(j) TAXES IN CONNECTION WITH ISSUANCE OF SHARES. The Transfer Agent
shall not be responsible for the payment of
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<PAGE>
any original issue or other taxes that may be required to be paid in
connection with the issuance of any Shares.
(k) RETURNED CHECKS. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent
will: (i) give prompt notice of such return to the Trust or its designee;
(ii) place a stop transfer order against all Shares issued in exchange for
such check or order; and (iii) take such other action as the Transfer Agent
may deem appropriate.
(1) REQUIREMENTS FOR TRANSFER OR REDEMPTION OF SHARES.
(i) The Transfer Agent shall process requests from Shareholders to
transfer or redeem Shares in accordance with the procedures described
in the Trust's prospectus.
(ii) The Transfer Agent will transfer or redeem Shares upon receipt
of Written Instructions properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent reasonably may deem
necessary to evidence the authority of the person requesting such
transfer or redemption and the payment of stock transfer taxes, if any.
(iii) The Transfer Agent reserves the right to refuse to transfer
or redeem Shares until it is satisfied that the endorsement on the
instructions is valid and genuine, and for that purpose it will require
a guarantee of signature by a member firm of a national securities
exchange, by any national bank or trust company or by any member bank
of the Federal Reserve system. The Trust may authorize the Transfer
Agent to waive the signature guarantee in certain cases by Written
Instructions. The Transfer Agent also reserves the right to refuse to
transfer or redeem Shares until it is satisfied that the requested
transfer or redemption is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers or
redemptions that the Transfer Agent deems improper or unauthorized, or
until it is reasonably satisfied that there is no basis to any claims
adverse to such transfer or redemption.
(iv) In the case of redemption of Shares which have been purchased
within 15 days of a redemption request, the Trust shall provide the
Transfer Agent with instructions concerning the time within which such
requests may be honored.
(m) NOTICE TO CUSTODIAN AND TRUST: When Shares are
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<PAGE>
redeemed, the Transfer Agent shall, upon receipt of the instructions and
documents in proper form, deliver to the custodian and the Trust a
notification setting forth the number of Shares of the applicable Portfolio
to be redeemed. Such redemptions shall be reflected on appropriate accounts
maintained by the Transfer Agent reflecting outstanding Shares of the Trust
and Shares attributed to individual accounts.
(n) PAYMENT OF REDEMPTION PROCEEDS. The Transfer Agent shall, upon
receipt of the moneys paid to it by the custodian for the redemption of
Shares, pay to the Shareholder, his authorized agent or legal
representative, such moneys as are received from the custodian, all in
accordance with the redemption procedures described in the Trust's
prospectus. The Transfer Agent shall not process or effect any redemptions
in accordance with any Shareholder request upon the receipt of the Transfer
Agent of notification of the suspension of the determination of the net
asset value of Shares of the Trust.
(o) NOTICE OF DIVIDENDS OR DISTRIBUTIONS. Upon the declaration of
dividends or distributions by the Board of Trustees of the Trust on behalf
of a Portfolio of the Trust, the Trust shall furnish to the Transfer Agent
a copy of the vote of its Board of Trustees certified by the Secretary of
the Trust setting forth the date as of which Shareholders entitled to
payment shall be determined, the ex-dividend date, the date of payment, the
amount payable per Share, the total amount payable to the Transfer Agent on
the payment date and whether such dividend or distribution is to be paid in
cash at net asset value. On or before the payment date specified in the
vote of the Board of Trustees, if the dividend or distribution is payable
in cash, the Trust will cause the custodian of the Trust to pay to the
Transfer Agent sufficient cash to make payment to the Shareholders of
record entitled to the dividend or distribution.
(p) PAYMENT OF DIVIDENDS BY THE TRANSFER AGENT. The Transfer Agent
will, on the designated payment date, automatically reinvest all dividends
in additional Shares at net asset value (as determined on the payment date)
and mail to each Shareholder at his address of record, or such other
address as the Shareholder may have designated, a statement showing the
number of full and fractional Shares (rounded to three decimal places) then
currently owned by the Shareholder and the net asset value of the Shares
credited to the Shareholder's account in payment of the dividend or
distribution.
(q) INSUFFICIENT FUNDS FOR DIVIDEND PAYMENTS. If the Transfer Agent
does not receive sufficient cash from the
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<PAGE>
custodian to make dividend or distribution payments payable in cash to all
Shareholders entitled to the dividend or distribution, the Transfer Agent
will, upon notifying the Trust, withhold payment to all Shareholders until
such time as sufficient cash is provided to the Transfer Agent.
(r) INFORMATION RETURNS. It is understood that the Transfer Agent shall
file such appropriate information returns concerning the payment of
dividends, return of capital and capital gain distributions with the proper
Federal, state and local authorities as are required by law to be filed and
shall be responsible for the withholding of taxes1 if any, due on such
dividends or distributions to Shareholders when the Transfer Agent is
required to withhold taxes under applicable law.
(s) RECORD KEEPING AND OTHER INFORMATION.
(i) The Transfer Agent shall create and maintain all necessary
records in accordance with all applicable laws, rules and regulations,
including but not limited to records required by Section 31(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), and those
records pertaining to the various functions performed by the Transfer
Agent under this Agreement. All records shall be available for
inspection and use by the Trust during regular business hours. Where
applicable, the records shall be maintained by the Transfer Agent for
the periods and in the places required by Rule 31a-2 under the 1940 Act.
(ii)Upon reasonable Notice by the Trust, the Transfer Agent shall
make available during regular business hours the facilities and premises
employed by the Transfer Agent in connection with the performance of its
duties under this Agreement for reasonable visitation by any person
authorized by the Trust.
(t) OTHER DUTIES. The Transfer Agent shall perform such other duties
and functions and be compensated by such other duties and functions as may
from time to time be agreed upon in writing between the Trust and the
Transfer Agent.
6. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.
(a) The Transfer Agent will be entitled to rely upon instructions
believed to have been executed or orally communicated by an Authorized
Person and will not be held to have any notice of any change of authority
of any person until notified in writing by the Trust. The Transfer Agent
will also be entitled to process Share certificates which it
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<PAGE>
reasonably believes bear the proper manual or facsimile signatures of
officers of the Trust.
(b) The Transfer Agent may request Written Instructions from any
Authorized Person of the Trust and may seek advice from legal counsel for
the Trust or its own legal counsel, with respect to any matter arising in
connection with this Agreement. The Transfer Agent shall not be liable for
any action taken or not taken or suffered by it in good faith in accordance
with Written Instructions or in accordance with the opinion of counsel to
the Trust or counsel to the Transfer Agent. Written Instructions requested
by the Transfer Agent will be provided by the Trust within a reasonable
period of time. The Transfer Agent, its officers, agents or employees,
shall accept Oral or Written Instructions given to them by any person
representing or acting on behalf of the Trust only if said representative
is believed in good faith, by the Transfer Agent, its officers, agents or
employees, to be an Authorized Person. The Transfer Agent shall have no
duty or obligation to inquire into, or be responsible for, the legality of
any action taken in reliance upon Written or Oral instructions provided by
or on behalf of the Trust.
(c) Notwithstanding any provision of this Agreement, the Transfer Agent
shall be under no duty or obligation to inquire into, and shall not be
liable for: (i) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received for the Shares; (ii) the legality
of the redemption of any Shares or the sufficiency of the amount to be paid
for the Shares; (iii) the legality of the declaration of any dividend or
distribution by the Trust or the legality of the issuance of any Shares in
payment of any dividend or distribution; or (iv) the legality of any
recapitalization or readjustment of the Shares.
7. UNCONTROLLABLE EVENTS. The Transfer Agent will not be liable or
responsible for delays or errors by reason of circumstances beyond its control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots or failure of transportation, communication or power
supply.
8. STANDARD OF CARE. The Transfer Agent shall exercise its best judgment
in rendering the services provided for in this Agreement and shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust or its shareholders in connection with the matters to which this Agreement
relates, except that the Transfer Agent shall be liable for its willful
misfeasance, bad faith or gross negligence in the
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<PAGE>
performance of its duties under this Agreement or by reason of the reckless
disregard of its obligations and duties under this Agreement.
9. INDEMNIFICATION. The Trust agrees to indemnify and hold harmless the
Transfer Agent and its officers and directors from any and all loss, liability
and expense resulting from the performance of its duties under this Agreement,
unless such loss, liability or expense is the result of the Transfer Agent's own
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of the reckless disregard of its obligations and duties
under this Agreement.
10. COMPENSATION.
(a) The Trust will compensate the Transfer Agent for the performance of
its obligations under this Agreement in accordance with the fees set forth
in the Fee Schedule annexed to this Agreement as Schedule A. The Transfer
Agent will bill the Trust as soon as practicable after the end of each
calendar month, and said billings will be detailed in accordance with the
Fee Schedule. The Trust agrees to pay to the Transfer Agent the amount
billed promptly after the bill is received by the Trust.
(b) The Trust will reimburse the Transfer Agent for out-of-pocket
expenses incurred by the Transfer Agent in the performance of its services
under this Agreement, including without limitation the items specified in
the schedule of Out-of-Pocket Expenses annexed to this Agreement as
Schedule B. The schedule of Out-of-Pocket Expenses may be modified by the
Transfer Agent upon not less than 30 days' prior written notice to the
Trust. Reimbursement by the Trust for out-of-pocket expenses incurred by
the Transfer Agent in any month shall be made as soon as practicable after
the receipt of an itemized bill from the Transfer Agent.
(c) Compensation payable to the Transfer Agent for the performance of
its obligations under this Agreement with respect to a new Portfolio of the
Trust will be agreed upon by the parties at the time that the new Portfolio
prepares to commence its operations. The compensation agreed upon shall be
reflected in a Fee Schedule for that Portfolio, dated and signed by an
authorized officer' of each party to this Agreement, which Fee Schedule
shall be attached to Schedule A of this Agreement.
(d) Any compensation agreed to by the parties under this Agreement may
be adjusted from time to time by attaching to Schedule A of this Agreement,
a revised Fee Schedule, dated, and signed by an authorized officer of each
party to this Agreement.
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<PAGE>
11. AFFILIATION BETWEEN TRUST AND TRANSFER AGENT. It is understood that the
Trustees, officers, employees, agents and shareholders of the Trust and the
officers, directors, employees, agents and shareholders of the Trust's
investment manager and distributor, are or may be interested in the Transfer
Agent as directors, officers, employees, agents, shareholders or otherwise, and
that the directors, officers, employees, agents or shareholders of the Transfer
Agent may be interested in the Trust as Trustees, officers, employees, agents,
shareholders or otherwise, or in the investment manager and distributor as
officers, directors, employees, agents, shareholders or otherwise.
12. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth
above and thereafter shall continue in effect for successive annual
periods, provided such continuance is specifically approved at least
annually by the parties to this Agreement. Either party to this Agreement
may terminate this Agreement, without penalty, on 60 days' written notice
to the other party.
(b) In the event the notice of termination is given by the Trust, it
shall be accompanied by a vote of the Board of Trustees, certified by the
Secretary of the Trust, electing to terminate this Agreement and
designating a successor transfer agent or transfer agents. Upon such
termination and at the expense of the Trust, the Transfer Agent will
deliver to the designated successor a certified list of Shareholders of the
Trust (including the name, address and taxpayer identification number), an
historical record of the account of each Shareholder and the status of the
account, and all other relevant books, records, correspondence, and other
data established or maintained by the Transfer Agent under this Agreement
in the form reasonably. acceptable to the Trust. The Transfer Agent will
cooperate in the transfer of its duties and responsibilities under this
Agreement by providing, among other things, assistance from the Transfer
Agent's personnel in the establishment of books, records and other data by
the designated successor or successors.
13. AMENDMENT. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties or in the manner
expressly provided by this Agreement.
14. USE OF THE TRANSFER AGENT'S NAME. The Trust shall not use the name of
the Transfer Agent in any prospectus, statement of additional information,
Shareholders' report, sales literature or other material relating to the Trust
unless the proposed use
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<PAGE>
has previously been approved by the Transfer Agent. The Transfer Agent shall
approve all reasonable uses of its name in connection with its appointment under
this Agreement or as may be required by the Commission.
15. USE OF THE TRUST'S NAME. The Transfer Agent shall not use the name of
the Trust or material relating to the Trust on any documents or forms for other
than internal use unless the proposed use has previously been approved by the
Trust. The Trust shall approve all reasonable uses of its name in connection
with the appointment of the Transfer Agent under this Agreement or as may be
required by the Commission.
16. SECURITY. The Transfer Agent represents and warrants that, to the best
of its knowledge, the various procedures (including provisions for 24
hours-a-day restricted access) and systems, which the Transfer Agent has
implemented or will implement to safeguard from loss or damage attributable to
fire, theft, or any other cause the Trust's records and other data and the
Transfer Agent's records, data, equipment, facilities and other property used in
the performance of its obligations under this Agreement, are adequate and that
it will periodically review and make such changes in its procedures and systems
as in its judgment are required.
17. NOTICES. Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust or the Transfer Agent, shall be
sufficiently given if addressed to that party and receivable by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
The Alger Defined Contribution Trust
Attn: Mr. Gregory S. Duch
75 Maiden Lane
New York, NY 10038
To the Transfer Agent:
Alger Shareholder Services, Inc.
Attn: Mr. Gregory S. Duch
30 Montgomery Street
Jersey City, NJ 07302
18. ASSIGNMENT. This Agreement shall not be assignable
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without the written consent of the other party.
19. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York.
20. LIABILITY. This Agreement has been executed on behalf of the Trust by
the undersigned officer of the Trust in his capacity as an officer of the Trust.
The obligations of this Agreement shall be binding upon the assets and property
of the Trust only and shall not be binding upon any Trustee, officer or
shareholder of the Trust individually.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their authorized officers as of this day and year
first above written.
THE ALGER DEFINED CONTRIBUTION TRUST
By: /s/ Gregory S. Duch
----------------------------------
Gregory S. Duch, Treasurer
Attest:
/s/ Nanci Staple
- -------------------------
ALGER SHAREHOLDER SERVICES, INC.
By: /s/ Gregory S. Duch
----------------------------------
Gregory S. Duch, Treasurer
Attest:
/s/ Nanci Staple
- -------------------------
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated December 12, 1997 on the financial statements
of The Alger Retirement Fund for the year ended October 31, 1997 and to all
references to our Firm included in or made a part of the registration statement
of The Alger Fund filed on Form N-1A (Amendment No. 9), Investment Company Act
File No. 811-7986 with the Securities and Exchange Commission.
/s/ARTHUR ANDERSEN LLP
-------------------
ARTHUR ANDERSEN LLP
New York, New York
February 25, 1998
EXHIBIT 13
SUBSCRIPTION AGREEMENT
Subscription Agreement dated August __, 1993 between The Alger Defined
Contribution Trust, an unincorporated business trust organized under the laws of
the Commonwealth of Massachusetts (the "Fund"), and Alger Associates, Inc., a
Delaware corporation ("Associates").
WHEREAS, the Fund is an investment company registered under Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund proposes to issue and sell its shares of beneficial
interest, par value $.001 per share, to the public pursuant to a Registration
Statement on Form N-IA (the "Registration Statement") filed with the Securities
and Exchange Commission; and
WHEREAS, Section 14(a) of the 1940 Act requires registered investment
companies to have a net worth of at least $100,000 before making a public
offering of its securities;
NOW THEREFORE, the Fund and Associates agree as follows:
1. The Fund offers to sell to Associates, and Associates agrees to
purchase from the Fund, 3,400 shares of beneficial interest of the
Alger Defined Contribution Small Capitalization Portfolio at $10.00 per
share and 3,300 shares of beneficial interest at $10.00 per share of
each of the Alger Defined Contribution MidCap Growth Portfolio and the
Alger Defined Contribution Growth Portfolio (collectively, the
"Shares") on a date to be specified by the Fund prior to the effective
date of the Registration Statement.
2. Associates represents and warrants to the Fund that Associates is
acquiring the Shares for investment and not with a view to resale or
further distribution.
3. Associates' right under this Subscription Agreement to purchase the
Shares is not assignable.
4. The proceeds realized by Associates upon the redemption of any of the
Shares will be reduced by the proportionate amount of the unamortized
organizational expenses that the number of Shares redeemed by it bears
to the number of Shares that are outstanding at the time the Shares are
redeemed.
<PAGE>
IN WITNESS WHEREOF, the Fund and Associates have caused their duly
authorized officers to execute this Subscription Agreement as the date first
above written.
THE ALGER DEFINED CONTRIBUTION TRUST
By:---------------------------------
Authorized Officer
ALGER ASSOCIATES, INC.
By:---------------------------------
Authorized Officer
AVERAGE ANNUAL RETURN COMPUTATION
<TABLE>
<CAPTION>
The Average Annual Return for each Portfolio
was computed according to the following formula:
<S> <C> <C>
n
FORMULA: P(1+T) =ERV
Where: P = a hypothetical investment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical
$1,000 payment made at the beginning of
the 1, 5, or 10 year (or other) periods at the
end of the 1, 5, or 10 year (or other)
periods (or fractional portion thereof)
</TABLE>
<TABLE>
<CAPTION>
ENDING AVERAGE
PERIOD REDEEMABLE ANNUAL RATE
PORTFOLIO COVERED VALUE OF RETURN FORMULA *
------- ------- ------- ------- ------------
<S> <C> <C> <C> <C>
ALGER SMALL CAP
RETIREMENT: 11/8/93 (commencement
of operations)
through 10/31/97** 2,338.85 23.79% @RATE(2338.85,1000,3.98)
YEAR ENDED 10/31/97 1,189.98 19.00% @RATE(1189.98,1000,1)
ALGER MIDCAP GROWTH
RETIREMENT: 11/8/93 (commencement
of operations)
through 10/31/97** 2,454.35 25.30% @RATE(2454.35,1000,3.98)
YEAR ENDED 10/31/97 1,285.79 28.58% @RATE(1285.79,1000,1)
ALGER GROWTH
RETIREMENT: 11/8/93 (commencement
of operations)
through 10/31/97** 1,983.62 18.77% @RATE(1983.62,1000,3.98)
YEAR ENDED 10/31/97 1,288.40 28.84% @RATE(1288.40,1000,1)
ALGER CAPITAL
APPRECIATION
RETIREMENT 11/8/93 (commencement
of operations)
through 10/31/97** 2,082.01 20.23% @RATE(2082.01,1000,3.98)
YEAR ENDED 10/31/97 1,260.71 26.07% @RATE(1260.71,1000,1)
* LOTUS 123 @RATE FUNCTION:
@RATE(FV,PV,TERM) The periodic interest rate necessary for
present value "pv", to grow to future
value "fv", over the number of compounding periods in "term".
** Period equals 3.98 years.
</TABLE>
